Governments, municipalities and other public bodies. Let us take the
Governments and public bodies first, because the securities issued by
them are in some ways simpler than those created by companies.

When a Government wants to borrow, it does so because it needs money.
The purpose for which it needs it may be to build a railway or canal, or
make a harbour, or carry out a land improvement or irrigation scheme, or
otherwise work some enterprise by which the power of the country to grow
and make things may be increased. Enterprises of this kind are usually
called reproductive, and in many cases the actual return from them in
cash more than suffices to meet the interest on the debt raised to carry
them out, to say nothing of the direct benefit to the country in
increasing its output of wealth. In England the Government has
practically no debt that is represented by reproductive assets. Our
Government has left the development of the country's resources to
private enterprise, and the only assets from which it derives a revenue
are the Post Office buildings, the Crown lands and some shares in the
Suez Canal which were bought for a political purpose. Governments also
borrow money because their revenue from taxes is less than the sums that
they are spending. This happens most often and most markedly when they
are carrying on war, or when nations are engaged in a competition in
armaments, building navies or raising armies against one another so as
to be ready for war if it happens. This kind of debt is called
dead-weight debt, because there is no direct or indirect increase, in
consequence of it, in the country's power to produce things that are
wanted. This kind of borrowing is generally excused on the ground that
provision for the national safety is a matter which concerns posterity
quite as much as the present generation, and that it is, therefore, fair
to leave posterity to pay part of the bill.