it is sincerely to be hoped that our next fiscal year will be marked by a much higher revenue from taxation, a considerable decrease in expenditure, and a consequently great improvement in the proportion of war’s cost met out of revenue, on what has been done in the past year.  At our present rate of taxation we are not nearly meeting, out of permanent taxes, the sum which will be needed when the war is over for peace expenditure on the inevitably higher scale, pensions, and interest and sinking fund on war debt.

IX

COMPARATIVE WAR FINANCE

May, 1918

The New Budget—­Our own and Germany’s Balance-sheets—­The Enemy’s Difficulties—­Mr Bonar Law’s Optimism—­Special Advantages which Peace will bring to Germany—­A Comparison with American Finance—­How much have we raised from Revenue?—­The Value of the Pound To-day—­The 1918 Budget an Improvement on its Predecessors—­But Direct Taxation still too Low—­Deductions from the Chancellor’s Estimates.

One of the most interesting passages in a Budget speech of unusual interest was that in which the Chancellor of the Exchequer compared the financial methods of Germany and of this country, as shown by their systems of war finance.  He began by admitting that it is difficult to make any accurate calculation on this subject, owing to the very thick mist of obscurity which envelops Germany’s actual performance in the matter of finance since the war began.  As the Chancellor says, our figures throughout have been presented with the object of showing quite clearly what is our financial position.  Most of the people who are obliged to study the figures of Government finance would feel inclined to reply that, if this is really so, the Chancellor and the Treasury seem to have curiously narrow limitations in their capacity for clearness.  Very few accountants, I imagine, consider the official figures, as periodically published, as models of lucidity.  Nevertheless, we can at least claim that in this respect the figures furnished to us by the Government during the war have been quite as lucid as those which used to be presented in time of peace, and it is greatly to the credit of the Treasury that, in spite of the enormous figures now involved by Government expenditure, the financial statements have been published week by week, quarter by quarter, and year by year, with the same promptitude and punctuality that marked their appearance in peace-time.  In Germany, the Chancellor says, it has not been the object of German financial statements to show the financial position quite clearly.  It is, therefore, difficult to make an exact statement, but he was able to provide the House with a series of very interesting figures, taken from the statements of the German Finance Ministers themselves.