or spend it in riotous living, they know that they will presently
impoverish themselves, and that they will be the sufferers. But in the
case of a young country, with all its financial experience yet unbought,
there is little or no reason for supposing that its rulers are aware
that they cannot eat their cake and have it. They probably think that by
borrowing to meet a deficit or to build a Dreadnought they are doing
something quite clever, dipping their hands into a horn of plenty that a
kindly Providence has designed for their behoof, and that the loan will
somehow, some day, get itself paid without any trouble to anybody.
Moreover, if they are troubled with any forebodings, the voice of common
sense is likely to be hushed by the reflection that they personally
will not be the sufferers, but the great body of taxpayers, or in the
case of actual default, the deluded bondholders; and that in any case,
the trouble caused by over-borrowing and bad spending is not likely to
come to a head for some years. Its first effect is a flush of fictitious
prosperity which makes everybody happy and enhances the reputation of
the ministers who have arranged it. When, years after, the evil seed
sown has brought to light its crops of tares, it is very unlikely that
the chain of cause and effect will be recognized by its victims, who are
much more likely to lay the bad harvest to the door not of the bad
financier who sowed it, but of some innocent and perhaps wholly virtuous
successor, merely because it was during his term of office that the crop
was garnered. So many are the inducements offered to young States, with
ignorant or evil (or both) rulers at their head, to abuse the facilities
given them by international finance, that there is all the more reason
why those who hold the strings of its purse should exercise very great
caution in allowing them to dip into it.

There is yet another reason why the attitude of an issuing house, to a
borrowing State, should be paternal or even grand-motherly, as compared