1 SEPTEMBER 1917, Page 15


(To am Dorton or THE "Sexcerron."1 Sus—Your. correspondent " Inquirer " does not appear correctly to appreciate the effect of a country repudiating its.iuternal Debt. Such Debt is both a liability and an asset—a liability of the uatiou as a whole, an asset of the individual members who hold the Debt. If the Debt were repudiated, those who held it would lose, and the taxpayers who did not would gain, but the total national wealth would neither be increased nor diminished. It would- remain as before. Nor would the national income be affected. It would also remain as before. The difference would be that the income of the general busty of taxpayers would be increased—in respect that they would not be taxed for the service of the Debt— at the expense of the holders of the Debt, who would no longer obtain the interest which had been guaranteed to them by