relied on them to come to his rescue if the general revenue of a country failed to supply his interest, might be uncomfortably disappointed, even if the railways or State forests or whatever the asset might be were definitely pledged to the service of the loan. State management of railways is often extravagant and bad, but even if the Government were willing to sell or lease its transport system to a body representing foreign creditors, and give it power to carry out reforms in order to produce a larger revenue, it would be extremely difficult to make such reforms effective.
The real advantage, from the point of view of the investor, of Government debts is the fact that behind them is the whole wealth of all the inhabitants of the country, in so far as the said inhabitants can be induced to part with it for public purposes; and the existence of particular assets and sources of revenue, even if definitely pledged and assigned to the service of debt, is a certain protection to the investor and makes a loan look safer, and may even sometimes make the borrower more careful in expenditure; but if the worst happens, Government has to be carried on, or thinks so, and the first charge on every item in every country's revenue, whatever arrangements may be made to the contrary, is ultimately the amount that, in its opinion, is
