22 H. STANLEY JEVONS or twelve years they will pass through a lean period during which the net receipts, after providing working expenses and maintenance, fall short of the interest. The shortage will normally decrease from year to year, though it may do so irregularly if demand depends on the seasons. Such a net loss of interest for several years is, therefore, to be regarded as a normal expense of economic development with large pnblic works. The amount of such loss year by year can often be estimated beforehand with a fair degree of accuracy, and the loss anticipated in the whole series of years mnst be added to the original capital cost and be taken into account in determining whether the net earnings will eventually be more than enongh to pay the interest on the total capital cost. Moreover, as I shall show later, snch ?oss of interest can properly be paid out of borrowed capital.. There remains, however, one further consideration. If the period of waiting, before the anticipated return can be expected to equsl the interest charged, amounts to many years, the whole loss of interest may amount to a considerable sum, which a joint stock company, or a district board, or other local body, may not be finan- cially capable of bearing. A company must anticipate being able to pay a fair dividend within four or five years or it will have difficnlty in raising capital from the public, however good its ultimate Frospects may be. The inference is that it should be ?ar the duty of Government to undertake those public works, the revenues of which are bound to take many years to mature. The credit of Government is better than the credit of any local or private body could possibly be. It can, therefore, provide this deficit without difficulty, if needs be by further borrowings. It is in every way better able to wait for its returns than any other body; and hence waiting over long periods for returns should be s special part of its policy.
