Could the Irish Government borrow L50,000,000, and at what rate?  To borrow at a higher rate than the present return on Irish railway capital, namely, 3.77 per cent., would be to incur a loss on working the railways, from the outset, which Irish ratepayers or taxpayers would have to make up.  The net receipts, at the time of the Commission’s Report, were, in round figures, L1,600,000, and thus to borrow L50,000,000, even at 4 per cent., would mean an annual loss of L300,000 a year, even if there were no sinking fund.  A 10_s._ per cent sinking fund would increase the total annual loss to L550,000.

But, could an Irish Government Guaranteed Railway Stock be issued at 4 per cent.?  Would Ireland’s credit stand better than that of Hungary, whose 4 per cent. gold rentes stand at 92, or of the Argentine, which has to borrow at nearly 5 per cent.?  There are grave doubts whether the large sum required would be subscribed at all, at even 4 1/4 per cent, or 4 1/2 per cent. basis.  It is not likely that English investors would take up such a loan, seeing that they have consistently fought shy of Irish investments, and they are not likely to change their views upon the break up of the Union.

It may be said that the sum required could be raised in Ireland—­that patriotic feeling would stimulate the operation, and the large sum of money (over L50,000,000), lying on deposit at the Irish banks may be referred to as available.  Patriotism that has not financed the Irish Parliamentary Party will not be likely to finance a gigantic railway loan.  Nor is the large sum appearing as banking deposits really free money available for investment.  With increase of deposits, the items of loans and advances in banking accounts have also correspondingly increased, and they largely balance each other.  Not only is the money deposited by one customer lent to another, and therefore already utilized, but, to a large extent well known to bankers, the deposits, i.e. the credits to particular accounts, represent money lent to the persons having these accounts, and are not, in fact, their own free balances.  So also credits in the accounts of one bank, figure as debits on the balance sheet of another bank.  There probably has been in recent years considerable saving in Ireland, but it is also certain that those savings have largely gone, and will continue rightly to go in improvements of farms, which the Land Acts and Land Purchase Acts have made worth improving for their possessors.  Those who have not saved enough borrow, and the bank advances represent largely the capital required by farmers and traders.  The deposits, therefore, are being well used, and are not dead money.  Divert them to any large extent to another purpose, and there will probably be a contraction of banking credit, which Irish farming and industry will be the first to feel.

PURCHASE BY STATE PAPER.