citizens of this unthrifty people—­that the worst thing to do with money is to save it there will be bad times ahead for our industry and commerce, which can only get the capital that it needs if somebody saves it.  Mr Hoare’s elaborate calculations led him to conclusions involving a tax of 11s. 6d. in the pound on unearned income.  This figure is, I hope, needlessly high.  To arrive at it he assumed that peace might be concluded towards the end of 1919, and that when peace conditions are fully re-established—­which will take, he thinks, three years, the National Debt will amount to L10,000 millions, involving annual interest of L500 millions, which, added to the total Rente of the country in 1913 (which he made out to be L520 millions), will make a total Rente in 1923 of L1020 millions.  His view is that the burden of the National Debt should be thrown by means of the income tax upon the national Rente, not taxing it out of existence, but by such a scale of taxation as would reduce the net Rente of the country to approximately the level at which it stood before the war.

There is good reason to hope that Mr Hoare’s figures will not be reached.  He took L10,000 millions merely as a round sum.  Mr Bonar Law, it will be remembered, worked out our net debt on March 31st next at L6856 millions, taking credit for half the estimated amount of loans to Allies as a good asset.  If we prefer as sounder bookkeeping to write off the whole of our loans to Allies for the time being and to apply anything that we may hereafter receive on that account to Sinking Fund, the debt, on the Chancellor’s figures, will amount on March 31st (if the war goes on till that date) to L7672 millions.  Even if the war went on for six months more it ought not to bring the debt up to more than L9000 millions at the outside.  It is quite true, as Mr Hoare says, that the return to peace conditions will be a gradual process, and that expenditure will not come back to a peace basis all at once.  Demobilisation and other matters which were left, by our cheery Chancellor, out of the airy after-war balance-sheet that he so light-heartedly constructed, may cost L1000 millions or more before we have done with them.  But against them we can set a string of recoverable assets which, in the Chancellor’s hands, footed up a total of L1172 millions—­balances in agents’ hands, due debts (apart from loans to Allies), land, securities, ships, buildings, stores In Munitions Department, arrears of taxation, and so on.  With his 11s. 6d. in the pound on unearned and 6s. in the pound on earned incomes, Mr Hoare expects a revenue of L620 millions, “or enough to provide for the interest of the debt with a 1 per cent.  Sinking Fund, and leave L20 millions towards the Supply Services.”  But Mr Bonar Law anticipated a total peace Budget (if the war ended by March 31st next) of L650 millions.  This was probably too low, but we may at least hope that Mr Hoare has gone rather further than was necessary to be on the safe side.