THE NATIONAL DEBT
THE ORIGIN OF THE DEBT
In the fifth book of the Wealth of Nations Adam Smith has provided a clear account of the origin and development of the different forms of public indebtedness. He has shown how at the outset loans were raised without the pledging of particular sources of revenue to the payment of interest and the repayment of principal; how subsequently there developed the practice of mortgaging particular “funds” for limited periods of time until the principal of the loan should be repaid; and how finally these “funds” came to be mortgaged in perpetuity.
The origin of the public debt of Great Britain lies in the practice of borrowing upon the security of particular taxes granted by Parliament, a practice which ...
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