The “National Debt”--as it came to be called--remained a permanent institution, in connection with which all the citizens had to be taxed in order to provide interest for the rich lenders. Latterly these burdens of national debt have become overwhelming, and at the present moment about a twelfth of everything that English people produce is taken from them and handed over as interest to the comparatively few wealthy residents in England and abroad who lent great sums to the Government during the war. It is true that whenever a loan is raised the Government provides not only interest but what is called a “sinking fund”--that is, an extra amount of taxation every year which is dedicated to paying back the whole of the loan slowly. But long before a loan is paid off some new occasion arises compelling the Government to borrow again on a large scale, and the total debt perpetually increases. The result is that all the great modern European nations are now loaded with a debt really larger than any of them can bear, and that therefore they have all taken steps to lighten that burden by various tricks not at all straightforward. Some of them pay back in money which appears the same as the money which they borrowed, but which has a very different value. They have borrowed for a war, say, £1,000, representing 100 tons of wheat. Then they debase the currency, so that a sum still called £1,000 will only buy 20 tons of wheat, and in this way they can pretend to pay the lender back, although they are really cheating him of four-fifths of what he lent. Two countries, Germany and Russia, have pushed this so far that the lenders are now not really paid anything at all. A man who lent the German Government, for carrying on the war, money which during the war would have bought a million tons of wheat, is now (October, 1923) paid back in money called by the same name but able only to purchase a tenth of a ton--which is the same as saying that he is not paid back at all. Of all European countries that fought in the war our own has been the most honest in this matter, but even in England a man who lent the equivalent of 1,000 sheep, say, and who was promised interest at the rate of 50 sheep a year, is only getting 25 sheep a year on account of the change in the value of money. In this matter of loans we must distinguish between _internal loans_ and _external loans_. An _internal loan_ is borrowed from one’s own people. It involves taxing and impoverishing one set of citizens in order to pay interest to and enrich another set. But the country as a whole is no poorer. An _external_ loan is borrowed from foreigners, and the interest on it is dead loss to the country. Also, it cannot be paid in debased currency. A government can cheat its own nationals by paying them in false money. But it has to pay foreign lenders in real money. A foreign loan is real. It must be (as a rule) paid in gold. England thus pays millions a year to America.