ke 85 for the price of its bonds, which are to carry 5 per cent.
interest, to be secured by a lien on the customs receipts, and to be
redeemed in thirty years' time by a cumulative Sinking Fund working by
annual drawings at par, or by purchase in the market if the bonds can be
bought below par. If the Republic's existing 5 per cent. bonds stand,
let us say, at 98 in the market, this gives the issuing house a good
prospect of being able to sell the new ones easily at 95, and so it has
a 10 per cent. margin out of which to pay stamps, underwriting and other
expenses, and commission to the intermediary who brought the proposal,
and to keep a big profit to themselves. From the point of view of their
own immediate interest there is every reason why they should close with
the bargain, especially if we assume that the Republic is fairly rich
and prosperous, and that there is little fear that its creditors will
be left in the lurch by default.

From the point of view of national interest there is also much to be
said for concluding the transaction. We may, with very good ground,
assume that it would also be intimated to the issuing house that a group
of Continental financiers was very willing to take the business up, that
it had only been offered to it owing to old standing relations between
it and the Republic, and that, if it did not wish to do the business,
the loan would readily be raised in Paris or Berlin. By refusing, the
London firm would thus prevent all the profit made by the operation from
coming to England instead of to a foreign centre. But there is much more
behind. For we have seen that finance and trade go hand-in-hand, and
that when loan-houses in the City make advances to foreign countries,
the hives of industry in the North are likely to be busy. It has not
been usual here to make any express stipulation to the effect that the
money, or part of it, raised by a loan is to be spent in England, but it
is clear that when a nation borrows in England it is thereby
predisposed to giving orders to English industry for goods that it
proposes to buy. And even if it does not do so, the mere fact that
England promises, by making the loan, to hand over so much money, in
effect obliges her to sell goods or services valued at that amount as
was shown on an earlier page.[6] On the Continent, this stipulation is
usual. So that the issuing house would know that, if they make the loan,
it is likely that English shipbuilders will