The force enabling the State to grant these easy terms
is, of course, its superior credit created by the guarantee of the taxpayer ; and to guard him, Mr. Balfour employs a most ingenious plan. The State contributes certain annual grants to local purposes in Ireland. These are, of course, until paid, in the hands of the Treasury ; and if there is default not to be met out of the Assurance Fund, the Treasury docks the defaulting district of the amount out of these contributions, compelling it, however, in the case of Education, to replace the sum by an addition to the local rates. In addition, if the local grants are not enough, one-fifth of the landlords' capital will be drawn upon, that sum being retained for that purpose as Consols in the hands of the Land Department. The capitalised value of these grants and the landlords' fifth is £33,000,000, and the security is therefore absolute,— better, in fact, than any creditor ever gets, because it is in the Treasury's own hands. The only defect of the scheme is that it is limited in amount to £33,000,000, which can be increased only as the instalments are paid in. They can of course, as they reduce the total mortgage, be reissued, and the whole process be gradually gone over again,—a clever provision, but too slow in its operation to be of serious importance to the scheme.
