In a paper read before the Actuarial Society of New South Wales last year I tried to clear up my own ideas about the nature or modern money, of loanable capital, and especially of the huge War Loans and Debts, swelling now to figures which three years ago would have been considered incredible and impossible. I reached certain conclusions which were obviously not in accord with those commonly held by economists and practical financiers. This was, no doubt, very presumptuous on my part. At any rate, a good many people have thought it their duty to tell me it was, and at the same time to hint at retribution to come for me and any misguided people who might agree with my heresies.

Naturally, therefore, I approach my task to-night with some fear and trembling, for it may be that I shall have once more to say things which will call down the wrath of the stern deities of Finance. On this account, and also because the subject is naturally difficult and technical, I shall need all your patience and forbearance.

As this lecture is a continuation of the paper referred to, it seemed desirable to recapitulate the principal arguments and conclusions of the latter. It is impossible to deal intelligibly with Loans, Paper Money, and Taxation without some clear conception of what modern money and loanable capital really are.