The Hawaiian gazette., 1874-12-09
National Debt.
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Mr.. Dudley Baxter has lately read paper be-
fore the London Statistical Society on the inter
esting subject Of National Debts. They belong
to the peculiar developments of modern civiliza-
ton. The year ls4s is taken as new starting
point, from which TO estimate the nature aod the
extent of these financial operations. Previous
TO the date mentioned-the outburst Of new
democratic era OF railroads. steamships, and cleo
trc telegraphs-the researches OF the exact sta
tislician are bafled by the inaccuracy Of the re-
cords. Leaving. then, the prehistoric period Of
figures which preceded, it appears, the year Of
revolutions, he commences with balance Of in-
debtedness then roughly estimated ut 100000
pounds sterling. 10 25 years from lS4S to 1873,
this amount rapidly rose in the first six years at
the rate of twenty millions year; in the next
six, at the rate Of fifty millions and during the
remaining period up TO the present time at the
rate OF 200 millions year. Thus, the total
amount Of national debts is estimated to have
reached at least 1850 millions pound sterling,
showing an increase Of nearly double the indebt-
edness believed to be in existence in ls4S, from
WHICH ptElOu u uOlc uCCutulC csAlluhtC Eau 10
made If this increase goes on at the present
rate, during the next twenty five years. the total
national liabilities will amount to 10000 millions
pound sterling. The annual charge on that
amount ut the rate of 5 per cent. will be 500 mil
lions, an amount equal TO the present aggregate
public revenues OF oil the States Of Europe and
North America. At the head of the lst of
countries paying q low interest stands the
United Kingdom with 785 millions at 81
per cent. on market price. Then follows little
Denmark at the same price with II millions.
Next to these comes Holland with so millions,
Belgium with 36, and Germany with lac millions,
all at per cent. Then comes India with 100
millions at fraction over per cent, and after
India, Canada with % millions and Australia
with SO millions, both at y. The list OF the
countries which pay these low rates of interest
closes with Sweden, which has a debt Of nearly
seven millions bearing market rate not quite
reaching per cent. Among the countries which
pay moderate though not low rate of interest
the United States stands first, with a debt of
526 millions, carrying interest at present market
price slightly in excess Of per cent. Brazil
comes nexs, with 63 millions ut the same rate
Then Russin with 345 millions, and France with
900 millions ct OF lOths After these, Chill
and the Argentine Republic take rank at about
per cent on debt of &c millions. Then there
is an array Of countries with good resources and
good credit, but nevertheless paying higher
rate or these Austria owes 800 millions, and
pays ~ per cent. interest Italy owes 365 mil
lions, aud pays rather more than 8 per cent. /;
Turkey. l29 millions, at lO24 and Egypt &c mil
lions, at 8; besides many other smaller States
with smaller Indebtedness. In the black list Of
countries which pay excessive interest, or no in
terest at all, Spain stands foremost, owing 3I3
millions, bearing interest at quotations which
reach l616 per cent. Close on her heel comes
Mexico, with 70 millions ut TX per cent? Vene-
zuela, with l6 millions. at % per cent i; Greece,
with II millions, at IS; and finally Honduras,
with millions, at sc per cent.
Something like an argument has been attempt.
ed to show that there is a connection between o
temperate climate and pecuniary thrift. Mr..
Baxter infers that hot climate is associated
somehow with pecuniary recklessness. Happily
it has not yet been proved that the rate II in
terest rises with the temperature. No signs Of
this tendency have shown themselves here, and
we should be disposed to think that the argument
based upon geographical distribution is rather
strained The governing nations no doubt at
present inhabit temperate regions. But it has
not always been so and Rome or Carthage would
no doubt have stood higher in the money market
of their times than the Hyperboreans, if the
money market had then existed for the purpose
Of negotiating national securities.
The question involved in the profit and loss
account on public loans is very interesting one.
Strange to say the balance is not to the credit oil
the lenders, if Mr.. Baxter's figures are correct.
He shows profit Of l56 millions against loss
of 235 millions. The losses have been distribute
ed over 1900 mi lions. and these latter have al
most invariably been made on stocks at low and
moderate rates OF interests. The moral of all
this is OF course, very beautiful 1t shows that
lending to strong, trustworthy States, who know
their own value and who refuse to give high in-
terest, is good and profitable business. 1t shows
equally that lending to weak, untrustworthy
States, is bad business, matter what the inter
est may be. 1t shows, also, that perhaps the best
policy, in such great coufederacy of states as
the British Empire, is that we should lend money
to ourselves rather than to retrogradng states,
such as Spain. or Mexico, or some of the South
American Republics. There is ample scope for
judicious reproductive investments Of money 10
the Eugiish-speAkiug States in America. in Aus
traIia, and even in South Africa. British and
German capital for Great Britain aud Ger
many are now the great producers Of capital for
lending-may fad ample scope for safe and pro-
6table investments in these vigorous communities
which 10 every part of the world are growing up
into manhood. ,.-r
nau~erouS Rock