PERSONAL AND BUSINESS LOANS

fore prefer to avoid such a fluctuating income stream,and to secure instead a more uniform one. This uni-formity is secured by the loan, which so far as theyare concerned, spreads the expenditures over part or allof the period during which the public improvement isexpected to last. We see, therefore, that this class ofloans also exemplifies the theory of the relation of bor-rowing and lending to the time shape of an incomestream. The motives which have been described as oper-ating in the case of private loans operate in the sameway with public loans. Borrowing by a public corpora-tion shifts to the purchasers of bonds in first instance theburden of war expenditure or the cost of improvements.The taxpayers repay the bondholders when the bondsare finally paid. The effect is the same in public borrow-ing as in private borrowing, the shape of the incomestream of the public borrower is changed in the samemanner. There is present also a rate of return over cost,though one difficult to put in figures because publicbenefits are not usually reduced to money values.

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