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ESSAYS IN PERSUASION

PART

Government can exert on it by curtailing orexpanding its capital programme is limited.Suppose, which is putting the case extremelyhigh, that the effect might be as much as J percent. This, applied to the £2000 millions ofWar Loan, which are ripe for conversion,would represent a difference in the annual debtcharge of £$ millions annually. Compare thiswith the expenditure of the UnemploymentFund—over £$o millions last year.

Moreover, in the course of (say) ten years itis not unlikely that a situation will arise—asused to happen from time to time before thewar—when for world reasons the rate of in-terest will be abnormally low—much lower thanwe could possibly hope for by Treasury con-trivances in the exceptionally unfavourable en-vironment of abnormally high world rates. Thiswill be the moment for a successful conversionscheme. Even, therefore, if the Treasury couldconvert to-day at a saving of J per cent or J percent, it might be extremely improvident to doso. A premature conversion for an inconsider-able saving would be a grave blunder. We musthave the patience to wait for the ideal conjunc-ture of conditions, and then the Chancellor of theExchequer of the day will be able to pull offsomething big.

But apart from budgetary advantages anddisadvantages, there is a deep-seated confusionof thought in hindering on these grounds thecapital development of the country. The rateof interest can fall for either of two opposite