should believe that they are being exploited by profiteers, that the rich classes are growing richer at their expense out of the war, and that they and the country are being bled by a set of unpatriotic capitalist blood-suckers.  It is also natural that the property-owning classes, who find themselves paying an Income Tax which they regard as extortionate, should consider that the working classes by their continuous demands for higher wages to meet higher cost of living, are trying to exploit the country in their own interests in a time of national crisis, and displaying a most unedifying spirit.  The social result of this evil policy of inflation, in embittering class against class, is a matter which it is difficult to exaggerate.  Some people think that it was inevitable.  This is too wide a question to be entered into now, but at least it must be contended that if it is inevitable the extent to which it is being practised might have been very greatly diminished.

Do we mean to go on to the end of the war with this muddling policy of bad finance?  If we still insist on believing that the war cannot last another six months, and there is therefore no need to pull ourselves up short financially and put things in order, then we certainly shall do so.  But we should surely recognise that there is at least a chance that the war may go on for years, that if so our present financial methods will leave us with a burden of debt which is appalling to consider, and that in any case, whether the war lasts another six months or another six years, a reform of our financial methods is long overdue, is inevitable some time, and will pay us better the sooner it is set about.

IV

WAR FINANCE AS IT MIGHT HAVE BEEN—­II

December, 1917

The Changed Spirit of the Country—­A Great Opportunity thrown away—­What Taxation might have done—­The Perils of Inflation—­Drifting stupidly along the Line of Least Resistance—­It is we who pay, not “Posterity.”

In the November number of Sperling’s Journal I dealt with the question of how our war finance might have been improved if a longer view had been taken from the beginning concerning the length of the war and the measures that would be necessary for raising the money.  The subject was too big to be fully covered in the course of one article, and I have been given this opportunity of continuing its examination.  Before doing so I wish to remind my readers once more of the great difference in the spirit of the country with regard to financial self-sacrifice in the early days of the war and at the present time, after three years of high profits, public and private extravagance, and successful demands for higher wages have demoralised the public temper into a belief that war is a time for making big profits and earning big wages at the expense of the community.  In the early days the spirit of the country was very different, and it might