is generally followed by a composition involving a permanent
reduction in debt and interest. Investors who have suffered these
unpleasantnesses are likely to remember them for many a long year, and
to remember also the name of the issuing house which fathered the loan
that was the cause of the trouble.

There are thus many good reasons why it is the business of a careful
issuing firm to see not only that any loan that it offers is well
secured, but also that it is to be spent on objects that will not
impair the productive capacity of the borrowing country by leading it
down the path of extravagance, but will improve it by developing its
resources or increasing its power to move its products. On the other
hand, the temptation to undertake bad business on behalf of an
importunate borrower is great. The profits are considerable for the
issuing house and for all their followers in the City. The indirect
advantages, in the way of trade orders, conferred on the lending
country, are also profitable, and there is always the fear that if
London firms take too austere a view of what is good business for them
and the borrowing countries, the more accommodating loan-mongers of
foreign centres may reap the benefit, and leave them with empty pockets
and the somewhat chilly comfort conferred by the consciousness of a high
ideal in finance.

One of the most unsatisfactory features about the monetary arrangements
of society, as at present constituted, is the fact that the reward of
effort is so often greater with every degree of evil involved by the
effort. And to some extent this is true in finance. Just as big
fortunes are made by the cheap-jacks who stuff the stomachs of an
ignorant public with patent medicines, while doctors slave patiently for
a pittance on the unsavoury task of keeping overfed people in health;
just as Milton got L5 for "Paradise Lost," while certain modern
novelists are rewarded with thousands of pounds for writing romances
which would never be printed in a really educated community; so in
finance the more questionable--up to a certain point--be the security to
be handled, the greater are the profits of the issuing house, the larger
the commissions of the underwriters and brokers, and the larger are the
amounts paid to the newspapers for advertising. As has already been
observed, that part of the City that lives on handling new issues has
been half starved since the war began, because its activities have been