Max Beer November 1907
Transcription: Ted Crawford
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Dear Comrade,— In “Justice” of the 16th last, comrade Bennington asked for information on the National Debt. He wished also to know who the creditors were. The following note may perhaps enable him to inquire into the sources for himself. The best books on the subject are Fenn’s “Compendium of English and Foreign Funds” (16th edition 1898) and McCulloch’s “Taxation and the Funding System,” part III. (1845). From the question as to the creditors it would appear that comrade Bennington might need further help, which he would find in Palgrave’s “Dictionary of Political Economy.” The creditors are, of course, the holders of Consols. About 75 per cent. of the National Debt was raised on usurious and wasteful terms, as the following instances might show: In 1781, Government issued stock to the amount of 18,000,000 for 12,000,000 actually borrowed. In 1797, a Government loan was contracted by giving £175 Consols for £100 cash. From 1803 to 1814 the proportion was 169:100, that is for every £100 borrowed, the State signed away to the creditors an IOU for £168. And those were the years in which most at the national Debt was contracted. According to McCulloch, the nation has been paying ever since for interest from six to seven millions sterling more than was right. And the City patriots pocketed them with the proud consciouness of having served their country well, and of having saved Europe by their example.