A table published week by week by the Economist shows that from August 1, 1914, to November 9, 1918, the Government paid out L8612 millions sterling.  From this we have to deduct an estimate of the amount that the Government would have spent if there had not been a war, so that we are at once landed in the realm of conjecture.  The last pre-war financial year saw an expenditure of L198 millions, and it is safe to assume that this figure would have swollen by a few millions a year if peace had continued, so that we may take at least L860 millions from the above total as normal peace expenditure for the 4-1/2 years.  This gives us L7752 millions as the gross cost of the war, as far as the period of actual fighting is concerned.  From this figure, however, we are able to make some big deductions.  There are loans to Allies and Dominions, and some other much more readily realisable assets than these.  We do not know the actual figure of the loans to Allies and Dominions during the war period, because they are not included in the weekly financial statements.  The amount that we borrow abroad is set out week by week—­at least, that is believed to be the meaning of the cryptic item “Other Debt”—­but the amount that we lend to Allies and Dominions is hidden away in the Supply Services or somewhere, and we only get occasional information about it from the Chancellor in the course of his speeches on the Budget or on Votes of Credit.  In his last Vote of Credit speech, on November 12, 1918, Mr Bonar Law gave the chief items of the loans to Allies, and a very interesting list it was.  The totals up to October 19, 1918, were L1465 millions to Allies and L218-1/2 millions to Dominions.  The Allies were indebted to us as follows:—­Russia, L568 millions; France, L425 millions; Italy, L345 millions; smaller States, L127 millions.[1]

[Footnote 1:  Parliamentary Debates, Vol. 110, No. 114, p. 2560.]

Some of these debts may be written off at once, and that cheerfully, seeing that they have been lent brothers-in-arms who have been hit much harder than we have by the war, and had nothing like our financial strength.  The question is, what figure ought we to put on this asset in deducting it from gross war expenditure in order to arrive at a guess at the real cost?  We take our loans to Dominions, of course, as good to the last penny.  Mr Bonar Law, in his Budget speech last April, took our loans to Allies at half their face value.  Strict bookkeeping would probably demand a lower figure than 50 per cent.; but let us follow the ex-Chancellor’s example and take loans to Allies, which we will estimate at L1480 millions up to November 9th, as good for L740 millions, and loans to Dominions at L220 millions up to the same date, a total of L960 millions, to be deducted from gross war cost.  Concerning L740 millions of this sum, however, there is a certain amount of doubt.  No one questions for a moment the solvency of France and Italy, but in view of the pressure that the war