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202 , ECONOMIC INQUIRIES AND STUDIES
and when- it was also almost the sole Stock Exchange
security, its redemption of course affected credit gener-
ally. But now, in comparison with the great forces in
the market, the redemption does not seem specially im-
portant to the security upon which it is exercised.
The redemption is, in fact, for the benefit of all high-
class stocks, not specially for the benefit of English
Government stocks j and upon this large mass it does
not seem to exercise a very great influence.
The gain to us, therefore, from the reduction of debt
must apparently be limited to the direct gain j the in-
direct gain from the effect upon credit generally, or
from the effect upon the special credit of the Govern-
ment not being material. As regards this direct gain,
assuming all the payment made for the redemption of
debt to be an additional saving of the community which
would not otherwise be made, then the country gains
about £25,000 annually for every million applied to
the payment of debt. The application of a hundred
.millions would accordingly save to the country annually
£2,500,000, which is hardly a perceptible item in .the
aggregate income of the country. It is about equal to
the annual present which sugar bounty countries are
alleged to give to our sugar consumers by means of the
bounty.
But if the payment is not an additional saving at all,
but a transfer from one holder to another, as appears
to be the case while so much of the income of the
Government is derived from taxes on capital, the ques-
tion may well arise whether the redemption of debt in
present conditions is of any use to the State. The
direct gain in the last case is absolutely nil. What the
Government gains, the community as a whole loses j
and so the resources of the State are actuaI1y unchanged
by the process.
The general effect of this argument is accordingly
to show that there is no necessity at the present time
for our reducing debt or for accumulating a reserve
against emergencies. We seem to gain nothing by the