s for a certain period, after which, if it is a case of a
loan, the transaction is closed by repayment of the advance, which again
is effected by a transfer of goods. When our country doctor subscribes
to an Australian loan raised by a colony for building a railway, he
hands over to the colony money which a less thrifty citizen would have
spent on pleasures and amusements, and the colony uses it to buy railway
material. Thus in effect the doctor is spending his money in making a
railway in Australia. He is induced to do so by the promise of the
colony to give him L4 every year for each L100 that he lends. If there
were not enough people like him to put money into industry instead of
spending it on themselves, there could be no railway building or any
other form of industrial growth. It is often contended that a
reconstruction of society on a Socialistic basis would abolish the
capitalist; but in fact it would make everybody a capitalist because the
State would have to make the citizens as a whole go without certain
immediate enjoyments and work on the production of the machinery of
industry. Instead of saving being left to the individual and rewarded by
a rate of interest, it would be imposed on all and rewarded by a greater
productive power, and consequent increase in commodities, enjoyed by the
community and distributed among all its members. The advantages, on
paper, of such an arrangement over the present system are obvious.
Whether they would be equally obvious in practice would depend on the
discretion with which the Government handled the enormous responsibility
placed in its hands. But the essential fact that capital can only be got
by being saved, and earns the reward that it gets, would remain as
strongly in force as ever, and will do so until we have learnt to make
goods out of nothing and without effort.

Going back to our doctor, who lends railway material to an Australian
colony, we see that every year for each L100 lent the colony has to send
him L4. This it can only do if its mines and fields and factories can
turn out metals or wheat or wool, or other goods which can be shipped to
England or elsewhere and be sold, so that the doctor's L4 is provided.
And so though on both sides the transaction is expressed in money it is
in fact carried out in goods, both when the loan is made and the
interest is paid. And finally when the loan is paid back again, the
colony must have sold goods to provide repayment, unl