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 them by the madness of the Imperial Government assisted by that of its neighbours; but when a State's credit is not first-rate—and if it is it seldom needs to borrow abroad—it is likely to be a dangerous debtor because of its limited powers of taxation. The Australian States, of course, having been in existence before the Federation, are in a class by themselves.

Municipal debts abroad and such issues as the Port and Harbour Trust securities produced by India and the Dominions often have a more solid appearance than the debts of the Central Governments, because less subject to the shifting gusts of politics and free from the economic waste of expenditure on armaments which eats into the financial strength of all Central Treasuries. It is easy to persuade oneself that whatever may happen to the Government of a country its principal cities must go on and its great ports must be thronged with ships, which will pay harbour dues.

I still lie awake o' nights sometimes because many years ago a City of Moscow loan came out and friends of mine who had a little money to invest asked me what I thought of it and I answered very much in the terms of the above paragraph. Experience has now