PUBLIC

The name given to the public funded debt due by government. The practice of borrowing money in order to defray a part of the war expenditure began, in this country, in the reign of William III. In the infancy of the practice it was customary to borrow upon the security of some tax, or portion of a tax, set apart as a fund for discharging the principal and interest of the sum borrowed. This discharge was, however, very rarely effected. The public exigencies still continuing, the loans were, in most cases, either continued, or the taxes were again mortgaged for fresh ones. At length the practice of borrowing for a fixed period, or, as it is commonly termed, upon terminable annuities, was almost entirely abandoned; and most loans were made upon interminable annuities, or until such time as it might be convenient for government to pay off the principal. In the beginning of the funding system, the term fund meant the taxes or funds appropriated to the discharge of the principal and interest of loans; those who held government securities and sold thpra to others selling, of course, a corresponding claim upon some fund. But after the debt began to grow large, and the practice of borrowing upon interminable annuities had been introduced, the meaning attached to the term fund was gradually changed; and instead of signifying the security upon which loans were advanced, it has, for a long time, signified the principal of the loans themselves. Owing partly, perhaps, to the scarcity of disposable capital at the time, but far more to the supposed insecurity of the revolutionary establishment, the rate of interest paid by government in the early part of the funding system was, comparatively, high. But as the country became richer, and the confidence of the pubHc in the stability of government was increased, ramisters were enabled to take measures for reducing the interest, first In 1710, and again in 1749. During the reigns of William III. and Anne, the interest stipulated for loans w^s very various. But in the reign of George II. a different jiractice was adopted. Instead of varying the interest upon the loaa according to 480 FUR. the state of the money market at the time, the rate of interest was generally fixed at three or three and a half per cent.; the nece ary variation being made in the principal funded. Thus, suppose government were anxious to borrow, that they preferred borrowing in a 3 per cent, stock, and they could n.ot negotiate a loan for le than 4A per cent., they effected their object by giving the lender, m return for every 1.00/. advanced, 150/. 3 per cent, stock; that is, they bound the country to pay him or his a ignees Al. 10s. a year in all time to come, or otherwise to extinguish the debt by a payment of 150Z. In consequence of the prevalence of this practice, the principal of the debt now existing amounts to nearly two fifths more than the sum actually advanced by the lenders. Some advantages are, however, derivable, or supposed to be derivable, from this system. It renders the management of the debt, and its transfer, more simple and commodious than it would have been had it consisted of a great number of funds bearing different rates of interest: and it Is contended that the greater field for speculation afforded to the dealers in stocks bearing a low rate of interest has enabled government to borrow, by funding additional capitals, for a considerably le payment on account of interest than would have been nece ary had no such increase of capital been made. 5ee National Debt. FUNERAL (Lat. fun us), may be defined generally as the last rites performed to a deceased person, of whatever nature they may be, whether of interment, burning,, embalming, . Among the ancients ceremonies of tliis nature were accompanied by proce ions, and gladiatorial combats, caWeAfuneral games; and were usually followed, particularly where the deceased was of high rank or otherwise distinguished, by a discourse, or funeral oration, pronounced in his praise. (See SEprLTiRE, Rites of.) [s. 493]