than a recovery in taxation.  Under the present circumstances, with prices continually rising, the profits of those who grow or hold stocks of goods of any kind automatically swell The rise in prices has only to cease, to say nothing of its being turned into a fall, to produce at once a big check in those profits, and when we consider the enormous dislocation likely to be produced by the beginning of the peace period expectations of an elastic revenue when the war is over seem to be almost criminally optimistic.

The Chancellor arrived at his after-war debt charge of L380 millions by estimating for a gross debt on March 31, 1919, of L7980 millions, which he reduces to a net debt of L6856 millions by deducting half the expected face value of loans to Allies, L816 millions, and L308 millions for loans to Dominions and India’s obligation.  But is he, in fact, entitled to count on receiving any interest at all from our Allies for some years to come after the war?  If not, then on that portion of our debt which is represented by loans to Allies we shall have to meet interest for ourselves.  He also gave an imposing list of assets in the shape of balances in hand, foodstuffs, land, securities, building ships, stores in munitions department, and arrears of taxation, amounting in all to nearly L1200 millions.  It is certainly very pleasant to consider that we shall have all these valuable assets in hand; but against them we have to allow, which the Chancellor altogether omitted to do, for the big arrears of expenditure and the huge cost of demobilisation, which is at least likely to absorb the whole of them.  On the whole, therefore, although we can claim that our war finance is very much better than that of our enemies, it is difficult to avoid the conclusion that it might have been very much better than it is, and that it is not nearly as good as it is represented to be by the optimistic fancy of the Chancellor of the Exchequer.

X

INTERNATIONAL CURRENCY

June, 1918

An Inopportune Proposal—­What is Currency?—­The Primitive System of Barter—­The Advantages possessed by the Precious Metals—­Gold as a Standard of Value—­Its Failure to remain Constant—­Currency and Prices—­The Complication of other Instruments of Credit—­No Substitute for Gold in Sight—­Its Acceptability not shaken by the War—­A Fluctuating Standard not wholly Disadvantageous—­An International Currency fatal to the Task of Reconstruction—­Stability and Certainty the Great Needs.

As if mankind had not enough on its hands at the present moment, a number of well-meaning people seem to think that this is an opportune time for raising obscure questions of currency, and trying to make the public take an interest in schemes for bettering man’s lot by improving the arrangements under which international payments are carried out.  Nobody can deny that some improvement is possible in this respect, but it may very well be doubted whether, at the present moment, when very serious problems of rebuilding have inevitably to be faced and solved, it is advisable to complicate them by introducing this difficult question which, whenever it is raised, will require the most careful and earnest consideration.