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 going abroad to be turned into dollars and pounds. It may be that schemes, such as road making, may be shown to be going to produce, indirectly, a great increase in revenue and in exports without actually themselves putting any money into the hands of the local Finance Minister, and it would be absurd to deny that these beneficent results might follow in some instances. Nevertheless, very exacting scepticism on such a point is certainly to be encouraged because foreign money is such an expensive luxury for a borrower and the ease with which it is sometimes raised is so great a temptation to slack and wasteful administrators that it is much safer to confine its use to public works in which it will pay for itself.

Foreign money is an expensive luxury to the borrower because its effect is essentially different from that of money borrowed at home. Domestic loans redistribute the income of the citizens, by transferring interest from the pockets of the tax-payers to those of the, but do not reduce the income of the nation as a whole. They have awkward economic and social effects because the charge for them is to a great extent taken from industry and enterprise and handed over to who may be mere idlers; but when taxation is soundly imposed and only falls on