ism 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.

It may be said that the nationalisation of railways could be carried
out, not by a cash payment, but by a paper exchange of existing Railway
Stocks into newly created Irish Government Stock, the amount of the
existing net receipts being guaranteed. But, unless the Irish Government
could actually borrow in cash the sum required, at a rate equal to that
nominally put on the new stock, the shareholders would be robbed of a
capital sum equal to the amount of the discount on the stock, _i.e._ the
amount of the market quotation below par, or issue price. There will be
sellers of the new stock from the beginning, and what the public will
give for it, and not the nominal figure put upon it by the Irish
Government, will be its real value. The Irish Government may issue the
Railway Stock at 3-1/2 per cent., but if they could borrow the sum
required only at 4-1/2 per cent., the new stock will at once find its
level at about 77 instead of 100, and the capital value of Irish
railways will be reduced from, say, L45,00