ELEVEN HUNDRED MILLIONS !
THE unprecedented volume of the subscriptions to the ' Transvaal Loan is in one way an unanswerable testimony to the solidity of British credit. It is true that the hopes which fifteen years ago must have inspired Mr. Goschen and the financiers who supported him have not been realised. They must have thought that the slow decline in the rate of interest which just then struck all economists, and drew from very able men the prophecy that ''Two per cent. would one day be the kind of standard which Five percent. ohm was,' would be continuous. An increased habit of expenditure, however, which has been as marked in the nations as in the richer classes, has made accumulation, on/this side at least of the Atlantic, slower than was ex- , while the still greater increase of industrial specu- flee has drawn off vast sums which formerly would have been invested in State bonds. It is, therefore, true that even Great Britain cannot borrow at 21 per cent., and that the hope of a 2 per cent. standard interest for first-class seeurity has become very shadowy and faint. But it also remains true that at the close of a great war, and during a cycle of unprecedented expenditure, there is no distrust of Great Britain; that she can raise at the market rate—just now 3 per cent.—any sum she requires, raise it instantly and without negotiations, from the whole world as well as from her own people. The great financiers, who really understand the relation between the wealth of a State and its debts, and who are exempt in pecuniary affairs from patriotic illusions, are as full of confidence as the people, at least five firms or syndicates of firms having separately offered to take up the entire loan of thirty millions. Grant that their object, and that of the mass of depositors, was the hope of a premium, still that hope of itself indicates confidence alike in the honesty and in the resources of the borrower, and confidence is the basis of credit. Great Britain may have a fit of lavishneds oh her-we think she has, and hope, it will soon be over- but-we are evidently far from the day when she will be embarrassed, when the necessities of defence, or even projects of aggrandisement, must be postponed for want of -money, and profitable experiments must be avoided for want cf national capital. With a great war but just finished, and all economists bidding her be careful, she can still take off some ten millions a year from her taxes, and when she needs money the world so competes for the privilege of supplying her that the small deposit demanded in order to test bona fides exoeeds the whole amount of' the loan. To say that the country is overburdened may or 'may not be reasonable ; to ask whether she is not wasteful is almost always beneficial, a certain tendency to waste being in the very blood of the people ; but to say that her credit is shaky or decaying is at best an exaggerae than 'tof the truth that as the peoples have plunged into business 'with a new energy, the competition for capital has slightly increased its rate of hire.
Ieet us not be misunderstood. We have no intention of defending undue expenditure, far less of encouraging it. We are on the side of the cautious, holding with Sir Robert Peel that money retained in the pockets of the Ple is more fruitful than money entrusted to the ury. Waste means inefficiency, and lavishness preduces only an appearance of content. We see all around us, and especially in the " progressive " nations, signs that civilisation is going to be enormously expensive to the community—just look at the bills for education in England and Fiance, and the way that in this country rates run. up—and that the new hunger for comfort which is everywhere disorganising labour will also produce demands on the community for aid in " improvements," like re- housing, old-age pensions, and possibly free medical service, seine of which will be successful and will be as costly as great wars. If there is a " submerged tenth " in this country, it must number four millions, or some eight hundred thoueand families ; and to rehouse it will cost at least £200 per family, or £160,000,000 sterling. We perceive, therefore, as strongly as any one the necessity for economy, and for avoiding any rash depletion of those reservoirs of capital which the States, our own included, may so greatly need. But we deprecate the kind of pessimism which diminishes energy, and makes every proposal involving outlay, however wise or profitable, seem a burden. It is economy that is wanted, not parsimony ; a distinct fitting of means to ends, not a declaration that no end is worth securing if it takes an expenditure of means to secure it. The way to make sure that we are not borrowing too much is to compare the amount raised with the national wealth, just as you would compare a mortgage with the income of the estate mort- gaged ; and there is no other way. The popular way, which is to divide the Debt by the population and state the amount of money per head owed at different periods, is very like nonsense. What has the number of the people to do with the matter ? You might as well compare the debt contracted by a syndicate of Rockefellers with the debt owing by a small Trade-Union, or assert that India could easily bear a Debt of £20 a head because Great Britain does. India would be utterly crushed out of cultivation, while Great Britain hardly remembers her indebtedness. The reason England is not crushed by her Debt and her gross taxation, as she was in 1816, is not because her popu- lation has so greatly increased, but because manufactures, and Free-trade, and industries of every description have made her wealthy instead of poor. These will seem trite observations to those who know, but men go on repeating the old fallacies in a way that is positively irritating. They argue as if the debt owing by a millionaire and the debt owing by a ten-pound householder must some- how or another be the same burden. It is not the same, any more than the - load of a pony is the same burden as the load of an elephant.
We wonder sometimes how far national wealth does con- duce to national strength, and find it difficult to think of a. perfectly convincing answer. That it does conduce to it in some degree would seem. to be self-evident, if only because a poor State cannot produce or maintain a great Fleet, but the degree in which it conduces is still matter for conjec- ture. The elements of national strength are too numerous to be completely reckoned up. Courage comes first, of course. A hundred thousand Sikhs would conquer the sixty millions of Bengal, and if the character of the dominant tribe did. not alter, would hold them down for centuries. No State is as poor as Montenegro, yet of the whole Balkan Peninsula she alone retained her indepen- dence, because her people were always prepared to die. The next requisite of greatness is probably the group of qualities which Lord Rosebery labels " efficiency,' and which can coexist, as Frederick the Great well knew, with very extreme poverty. The third is ability for organisation, which seems to be a separate faculty wanting in some great nations, witness Spain. And the fourth is a kind of pride of which patriotism is one most healthy and vigorous constituent. All these rank before wealth, especially in the day of battle. Nobody cashed Attila's Exchequer bills, and on the day of Sedan Prussia was a far poorer State than France. The Jingo rant about money, as if it could of itself make a great State, is childish nonsense, yet every statesman in Europe will recognise that in the scene of Friday week there is proof that Great Britain is among States exceptionally strong. The truth, if expressed without boasting or self-deprecia- tion, is, we believe, that, other things being equal, the possession of money develops a freedom of action which makes a State not only strong but energetic ; and it is energy which makes all forms of strength available.
Previous page
