_United States Bonds._--The usual mode by which the government borrows money is by the issue of its bonds, obligations similar in most respects to promissory notes made by individuals. A government bond is simply a promise to pay a certain sum at a particular time and with interest at a certain rate. The bonds issued by the United States government are of two kinds: "registered" and "coupon" bonds. A registered bond is made out to the person who purchases it; a record is kept of it at the treasury department, and when it is transferred to another person the record must be changed so as to show the new owner. The advantage of such a bond is that if it is accidentally destroyed or lost the owner suffers no loss. The chief disadvantage is the difficulty in transferring it. A coupon bond is one which has interest coupons attached to it, which may be clipped off and presented to the treasury for payment as the interest becomes due. The government keeps no record of the owner and it may be transferred as any other personal property. If a coupon bond is lost or destroyed, however, the owner cannot collect the amount of the bond. United States bonds are issued in various denominations and for periods of time which vary widely. Usually bonds are sold to the highest bidder, but occasionally they are disposed of by negotiation with capitalists on the best terms that can be secured. During President Cleveland's administration $262,000,000 of bonds were sold to New York capitalists in this way. _Rate of Interest._--The rate of interest which United States bonds pay has varied from time to time. The Revolutionary War debt bore six per cent, and so did most of the civil war bonds. After the Civil War, however, the rate at which the government was able to borrow steadily declined, largely because of the desire of national banks to secure United States bonds (page 232). The rate of interest on bonds now outstanding ranges from two to five per cent. _Growth of the National Debt._--When the Constitution went into effect, the national debt, including the war debts of the states which were assumed by the national government, amounted to about $127,000,000; but by 1836 the debt was extinguished and there was a surplus in the treasury which was distributed among the states. The enormous expenses of the Civil War, however, had to be met largely by loans, and at the close of the conflict (1866) the interest-bearing debt was more than $2,000,000,000. During the next twenty years the debt was reduced to about $600,000,000, but this amount was increased between 1895 and 1899 to about $945,000,000 on account of bond issues to replenish the gold reserve and to meet a portion of the expenses of the war with Spain. On June 30, 1915, the interest-bearing debt stood at $969,759,090. In 1917-19 five bond issues aggregating more than $21,000,000,000 were made on account of the war with Germany.