work involved will be lost to England.

On the other side of the account there are plenty of good reasons
against the business. In the first place the terms offered are so
onerous to the borrower that it may safely be said that no respectable
issuing house in London would look at them. In effect the Republic
would be paying nearly 6 per cent, on the money, if it sold its 5 per
cent. bonds at 85, and the state of its credit, as expressed by the
price of its bonds in the market, would not justify such a rate. The
profit offered to the issuing house is too big, and the commission
demanded by the intermediary is so large that it plainly points to evil
practices in Barataria. It means that interested parties have made
underhand arrangements with the Finance Minister, and that the Republic
is going to be plundered, not in the fine full-flavoured style that
ruled in earlier generations, but to an extent that makes the business
too disreputable to handle. Any honourable English house would consider
that the terms offered to itself and the conditions proposed by the
emissary were such that the operation was suspicious, and that being
mixed up with suspicious business was a luxury that it preferred to
leave alone.

On other grounds the loan, well secured as it seems to be, is not of a
kind to be encouraged. We have supposed its purpose to be, firstly, to
meet a deficit in a Budget, and secondly, to pay for naval expansion.
Neither of these objects is going to improve the financial position of
the Republic. Covering a deficit by loan is bad finance in any case, but
especially so when the loan is raised abroad. In the latter case it is
most likely that the borrowing State is outrunning the constable, by
importing more goods than it can pay for out of current production.