But in the modern world, and for the last two hundred years or so, nearly all states have also had to raise taxation _in order to pay interest upon the State loans_. A State loan, or _national debt_, arises in this way. The State needs a great quantity of goods for a particular purpose--usually for the very unproductive purpose of waging a war. It has to get a lot of metal for its munitions and guns, and quantities of food to feed the soldiers, and coal to transport them. Now there are two ways in which a state gets these. The first is to get the whole amount, as it is needed, directly from the people, by a very heavy tax levied at the time. That was what was done for hundreds of years before the second method was attempted. The king of a country, wishing to wage war, would ask his subjects for contributions, and he could not wage war upon a scale more than these contributions would meet. But about two hundred years ago there began (and since then has very largely increased), the second method, which is that of _national loans_. The State is, let us say, taking in ordinary taxation from its citizens about one-tenth of their produce. Suddenly it finds itself involved in a much higher expenditure, amounting to, say, half the produce of the country. If it asked for half the produce right away as a tax people might refuse to pay it, or it might make the policy of the State--the war, for instance, which the Government wanted to wage--so unpopular that the State could not pursue that policy or wage that war. So the Government had recourse to _borrowing_ from the citizens, promising to pay, to those who lent, interest in proportion to what they borrowed, as well as the capital itself. Thus they would _take_ in taxation for a war money from a farmer equivalent to _ten_ loads of wheat; but they would also _borrow_ from him _one hundred loads_ of wheat, promising to give him as interest _five_ loads of wheat every year for any number of years until they should ultimately pay back the whole hundred loads as well. When these national loans began the Governments honestly intended to pay back what they borrowed. But the method was so fatally easy that, as time went on, the debt piled up and up until there could be no question of repaying it: all the State could do was to pay the interest out of taxation. It remained indebted to private rich men for the principal, that is, the whole original sum, and meanwhile, through further wars, this hold of the rich men upon all the rest of the community perpetually increased.