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 Lending to foreign Governments for public purposes requires the most careful scrutiny. It is really only desirable when the public purpose is a railway or a harbour or an irrigation scheme which can be shown to be as certain as is humanly possible to bring in a revenue that will fully cover the service of any loan that is to be spent on it; and even then there is always the doubt whether the scheme would not be likely to be more successfully handled, from every point of view, by a judicious combination of local and foreign capital working under a concession that is fairly drawn and fairly administered in the interests of the concessionaires and of the community.

Moreover, the scheme must not only produce a revenue big enough to meet the service of the loan, it must also, by means of improved transport facilities or production of some article that is in demand abroad, increase the export trade of the borrowing country and so enable it to meet the "invisible import" of demands for interest and redemption. A foreign loan that merely enables the citizens of a country to take in one another's washing with greater ease and mutual profit will be a burden on its exchange each half year as remittances have to be made to New York and London to meet interest and sinking fund, and there is no increase in goods