ess it meets its
debts by raising another. But when a loan is well spent on a railway
that is needed for the development of a fertile or productive district,
it justifies itself by cheapening transport and quickening the output of
wealth in such a manner, that the increased volume of goods that it has
helped to create easily meets the interest due to lenders, provides a
fund for its redemption at maturity, and leaves the borrower better off,
with a more fully equipped productive system.

Since, then, there is this close and obvious connection between finance
and trade, it is inevitable that all who partake in the activities of
international finance should find their trade quickened by it. England
has lent money abroad because she is a great producer, and certain
classes of Englishmen are savers, so that there was a balance of goods
available for export, to be lent to other countries. In the early years
of the nineteenth century, when our industrial power was first beginning
to gather strength, we used regularly to export goods to a greater value
than we imported. These were the goods that we were lending abroad,
clearly showing themselves in our trade ledger. Since then the account
has been complicated by the growth of the amount that our debtors owe us
every year for interest, and by the huge earnings of our merchant navy,
which other countries pay by shipping goods to us, so that, by the
growth of these items, the trade balance sheet has been turned in the
other direction, and in spite of our lending larger and larger amounts
all over the world we now have a balance of goods coming in. Interest
due to us and shipping freights and the commissions earned by our
bankers and insurance companies were estimated before the war to amount
to something like 350 millions a year, so that we were able to lend
other countries some 200 millions or more in a year and still take from
them a very large balance in goods. After the war this comfortable state
of affairs will have been modified by the sales that we are making now
in New York of the American Railroad bonds and shares that represented
the savings that we had put into America in former years, and by the
extent of our war borrowings in America, and elsewhere, if we widen the
circle of our creditors. The effect of this will be that we shall owe
America for interest on the money that it is lending us, and that it
will owe us less interest, owing to the blocks of its securities th