No large national debt has ever been paid, or in any way discharged, except by repudiation. The debt of the old French monarchy was wiped out with the "assignats."

The debt incurred in the American Revolution vanished in worthless "continental money?" The present debts of England, France, Austria, and other European countries, are so large, the constantly increasing demand for more extensive and costly armaments so pressing, so absolutely overwhelming, that the hope of any payment of the principal cannot be reasonably indulged. A national debt may be regarded, under the existing war policy of the world, as a fixed institution, an inevitable appendage of government.

The United States, which, up to the time of the great Rebellion, formed the only exception among the principal nations of the earth, has entered upon the same course. That general system of finance, of which national indebtedness forms so important a fact in its influence upon the industrial interests of mankind, deserves a careful consideration.

When William of Orange succeeded to the throne of England, Louis XIV., then at the zenith of his power, refused to acknowledge him as a legitimate monarch, and espoused the cause of the exiled Stuart. War, of course, followed. But fighting, in consequence of the invention of gunpowder, and the changes it gradually introduced into warfare, had become an expensive luxury; a game which kings, with their limited and uncertain revenues, could ill afford to play at, particularly for a great length of time. War with one so powerful as the Grand Monarque could not be safely commenced or successfully prosecuted, while every penny must be extorted from a reluctant and now independent Commons, and the taxes immediately assessed on the large land or other property holders of the realm.

Such was the difficulty which King William encountered; but, fortunately for his fame, he was a shrewd financier, as well as an able soldier. Up to this time, England had never had a permanent organized national debt, a national bank, or any regular and reliable system of revenue. Grants and subsidies had been voted, from time to time; duties and spocial taxes had been imposed; but these were not to be depended upon.*

The monarch might and did borrow money from time to time, in great emergencies, but on the most disadvantageous terms. The credit of the government was always low, because there was no regularity or system in the public finances. Men had no confidence in the responsibility or punctuality of the government. William changed all this. He borrowed for a specified period, and promised the punctual payment of the interest semi-annually, and the principal when due; and pledged "the public funds" for the fulfilment of his promises. Hence the public securities were called "the funds."

He negotiated loans and issued stocks. He granted annuities, upon the payment of specific sums. Interest and principal were secured by a pledge of the public funds, or revenues derived from various sources.

This put a new face upon the financial affairs of England: but something further was desirable; viz., an agency by which the national debt would be readily managed, and its semi-annual interest promptly paid.

This was accomplished by the incorporation of a national bank, consisting of the holders of the public stocks, to the amount of 1,200,000.

One thing more was wanting; viz., a permanent and sufficient income, to meet not only the interest on the accumulated debt, but the current expenses of the government, already large, and constantly increasing. To effect this, a land-tax was established; small, indeed, in amount, and upon a fixed valuation, so that it could not be increased with the increasing value of the land.

* That this has been disputed, on the authority of Mr. Macaulay, we are well aware; but we do not find any tiling in his statements that contradicts our views of the subject. Partial efforts, more or less successful, for the establishment of a thorough financial system, had already been made in England, Italy, and some other countries of Europe; but the great work was at length successfully inaugurated during the reign of William and Mary.

A system of duties on all imports was also enacted, and an excise laid upon all home manufactures and products. In short, a system of indirect taxation was adopted, far more general and effective than any which had before existed.

Thus was completed the grand triad of the system of finance, inaugurated by the English Revolution; viz., —