nominee.

If not otherwise stated, it is always understood that an annuity is
payable yearly, and that the annual payment (or rent, as it is sometimes
called) is L1. It is, however, customary to consider the annual payment
to be, not L1, but simply 1, the reader supplying whatever monetary unit
he pleases, whether pound, dollar, franc, Thaler, &c.

The annuity is the totality of the payments to be made (and received),
and is so understood by all writers on the subject; but some have also
used the word to denote an individual payment (or rent), speaking, for
instance, of the first or second year's annuity,--a practice which is
calculated to introduce confusion and should therefore be carefully
avoided.

Instances of perpetuities are the dividends upon the public stocks in
England, France and some other countries. Thus, although it is usual to
speak of L100 consols, the reality is the yearly dividend which the
government pays by quarterly instalments. The practice of the French in
this, as in many other matters, is more logical. In speaking of their
public funds (_rentes_) they do not mention the ideal capital sum, but
speak of the annuity or annual payment that is received by the public
creditor. Other instances of perpetuities are the incomes derived from
the debenture stocks of railway companies, also the feu-duties commonly
payable on house property in Scotland. The number of years' purchase
which the perpetual annuities granted by a government or a railway
company realize in the open market, forms a very simple test of the
credit of the various governments or railways.

_Terminable Annuities_ are employed in the system of British public
finance as a means of reducing the National Debt (q.v.). This result is
attained by substituting for a perpetual annual charge (or one lasting
until the capital which it represents can be paid off _en bloc_), an
annual charge of a larger amount, but lasting for a short term. The
latter is so calculated as to pay off, during its existence, the capital
which it replaces, with interest at an assumed or agreed rate, and under
specified conditions. The practical effect of the substitution of a
terminable annuity for an obligation of longer currency is to bind the
present generation of citizens to increase its own obligations in the
present and near future in order to diminish those of its successors.
This end might be attained in other ways; for instance, by setting aside
out of revenu