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 winning and of its probable solvency at the end of the struggle, and have no patriotic incentive to "feed the guns" that are not fighting their battle. It has the effect, very pleasant for the time being, of inducing the foreign subscribers to the loans to make the necessary sacrifice, in return for a rate of interest which has afterwards to be paid for out of taxation. But with this difference that the subsequent taxation, instead of being paid by the citizens of the borrowing nation and distributed among certain of their members, is paid to people in a foreign country and so is a much more effective drain on the national wealth. The interest and sinking fund, by which the loan is redeemed, can only be paid to the foreign creditors by the debtor nation's either selling abroad so much more of goods and services, or buying abroad so much less of goods and services. In either case its own enjoyment of goods and services is to that extent reduced.

Number four is easy and at first sight pleasant for everybody, but is, in fact, quite the worst way of raising money for war or any other purpose. When a Government borrows from banks it does not take money out of anybody's pocket or anybody's bank balance.