Let me give you a homely and familiar illustration.  During the war the nation has borrowed something that is equivalent to a pair of boots.  When the time comes for paying back the loan it repays something which is equivalent to two pairs or, possibly, even to three pairs.  If the total number of boots produced has not altered, you will see what an increasing “pull” this is upon production.  There are, of course, two ways in which this increasing pull—­while a great boon to the person who is being repaid—­must be an increased burden to the individual.  Firstly, if the number of people making boots increases substantially, it may still be only one pair of boots for the same volume of production, if the burden is spread over that larger volume.  Secondly, even supposing that the number of individuals is not increased, if the arts of production have so improved that two pairs can be produced with the same effort as was formerly necessary for one, then the debt may be repaid by them without the burden being actually heavier than before.

Now, coming back to the general problem.  The two ways in which the alteration in price level can be prevented from resulting in a heavier individual burden than existed at the time when the transaction was begun, are a large increase in the population with no lower average wealth, or a large increase in wealth with the same population—­which involves a greatly increased dividend from our complex modern social organism with all its mechanical, financial, and other differentiated functions.  Of course, some of the debt burden is responsive, so far as the annual charge is concerned, on that part of the floating debt which is reborrowed continually at rates of interest which follow current money rates, but, even so, the burden of capital repayment remains.  An opportunity occurs for putting sections of the debt upon a lower annual charge basis whenever particular loans come to maturity, and there may be some considerable relief in the annual charge in the course of time by this method.

What are the prospects of the two methods that I have mentioned coming to our rescue in this “long distance” problem?  It is a problem to which our present “short distance” contribution is, you will admit, a very poor one, for we have not so far really made any substantial contribution from current revenue towards the repayment of the debt.

A CENTURY OF THE NATIONAL DEBT

Historical surveys and parallels are notoriously risky, particularly where the conditions have no precedent.  They ought, however, to be made, provided that we keep our generalisations from them under careful control.  Now, after the Napoleonic wars we had a national debt somewhat comparable in magnitude in its relation to the national wealth and income with the present debt.  What happened to that as a burden during the 100 years just gone by?  If it was alleviated, to what was the alleviation due?  I would not burden you with a mass of figures, but I would just give you one or two selected periods.  You can find more details in my recent book on Wealth and Taxable Capacity.  We had a total debt of—­