LETTERS TO THE EDITOR.
THE INVESTORS' GRIEVANCE.
[To THE EDITOR OP THE "SPECTATOR."] SIR,—It was a surprise to me to find my article in the Investors' Review criticised in the Spectator of December 14th, under the heading of " The Investors' Grievance ; " and it was a still greater surprise when I found that one side of my argument had been given such prominence that the other, and far more important, part of my case had been entirely overlooked. I hope you will afford me a little space for explaining what I mean. I have the greatest sympathy with the investor, large or small—particularly the small—who finds his market spoiled and disturbed by the action of his own Government; but it was not to champion his cause that I wrote my article. My main object was to point out how unfairly the present system tells on the entire body of tax- payers, and how injurious it is to the whole nation ; so I may legitimately disclaim any intention of narrowing the subject to a mere question of a middle-class grievance, as you put it, and may claim instead that I was treating a matter of political and national importance. You may be right in describing my contentions as "nonsense," and in saying that the nation " benefits, as a whole, by every rise in the value of its bonds." At present, Console are quoted at 107;x,—say 107 for simplicity's sake. On a debt of about £660,000,000, this means a clear loss to the State of £46,200,000 on redemp- tion,—i.e., £46,200,000 over and above par value. But, as pointed out in my article, every purchase of the Government will tend to drive the price of Consols higher and higher, so that in reality the total loss will probably be infinitely greater. Whatever it may be, it is already a large sum, and promises to grow to something gigantic ; and it all comes out of the pockets of the great body of taxpayers, and goes into the bands of the comparatively limited number of holders of the funds. That hardly seems " benefiting the nation as a whole"; it reads more like an extremely bad bargain. As for "borrowing at a low rate," fortunately we do not require just now to borrow at any rate at all, whilst I think I have proved pretty clearly in my paper that our chances of raising loans in time of war do not depend in the slightest degree upon whether or not we reduce our present indebtedness. - I must protest also against your making it appear that I pro- posed "to pledge all surpluses for the relief of agriculture or for the purchase of old-age pensions." I mentioned these claimants, amongst many others, as showing that the funds now used for redemption might find other useful ends; but I only suggested them casually, and I went on to say that money spent on the Army and Navy was a better insurance against war risks than the cancelling of debt, whilst the best of all— the ideal aim—would be to reduce our present very heavy taxation. Further, you ask whether I " would seriously advise the British Government to enter the market as a gigantic promoter of profitable speculations." All I can say in reply is that I leave that to the London County Council, with the Daily Chronicle as its adviser, and that I hardly think you would have noticed my article if it had contained any remark even hinting at anything so absurd as that, or as the "gigantic war reserve" also spoken of by you. Finally, as to using surpluses " to be honest and pay our debts with them," I am not aware that my proposal was in any way dishonest, whilst, as to paying debts, there is a considerable difference between paying what we owe, and paying (31 13 now) what we owe, plus a good deal more that we do not owe. Your comparison with Prussia does not seem to me to hold good. There, a grandmotherly and semi-socialistic State refuses to relieve taxpayers by reducing the rate on its bonds. Here, where the rate has already been reduced, Government is placing an ever- increasing.burden on our shoulders by redeeming its obliga- tions at an ever-increasing price. And that is something more than.a mere " Investors' Grievance."—I am, Sir, Sac.,
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