Next in bulk are the " terminable " annuities. These may be terminable at the end of a certain period or at the death of the holder. Life annuities, both upon individual lives and upon the tontine plan,1 are old favourites. But as forms of original loans they are giving way to the perpetual bonds. Life and other terminable annuities have the advantage of affording an easy means of debt payment; and in this respect, on account of the accurate knowledge of the amount to be paid, those terminating at a definite time are the preferable. But inasmuch as the annual payments must be larger than the interest by an amount calculated to equal the principal or cost at the termination of the period, these annuities impose a heavier constant burden upon the taxes. In the case of perpetual bonds no provision is obligatorily made for amortisation, and consequently the fiscus has better control over the expenditure for this purpose. At a time of great pressure on the revenues the perpetual bonds offer a better means of raising money than the terminable annuities, inasmuch as they will impose a smaller burden for the time being.

1 This plan, now made familiar again by its adaptation to life-insurance business, is to make over in succession to the surviving members of a group of annuitants the shares of the members who die. The last survivor gets the whole amount, until his death closes the account.

But when the difficulty is over, it is not infrequently the practice to turn some portion of the debt into the form of terminable annuities, as that imposes upon future officials a fixed policy of debt payment. The investing public finds little or no absolute advantage in this form, for it is relatively hard to save up the principal again, coming as it does in driblets, and the salable value of the security decreases continually, so that the command over the remaining portion of the principal is never good.