I can give no better evidence of the result of this taxation than to repeat what Reginald McKenna, Chancellor of the British Exchequer, said to me in London last August: 

“The English position is so sound,” he declared, “that if the war ended at the end of the current financial year, that is, on March the 31st, 1917, our present scale of taxation would provide not only for the whole of our peace expenditures and the interest on the entire National Debt but also for a sinking fund calculated to redeem that debt in less than forty years.  There would still remain a surplus sufficient to allow me to wipe out the excess profit tax and to reduce other taxes considerably.”

When I asked him to make this more specific, he continued: 

“The total revenue for the current year is $2,545,000,000.  Our last Peace Budget was $1,000,000,000.  Assuming that the war would end by next March 1st, you must add another $590,000,000 for interest and sinking fund on the war debt together with a further $100,000,000 for pensions which would make the total yearly expenditure for the first year of peace $1,690,000,000.  Deducting this from the existing taxation you get a surplus of $855,000,000.  Thus after withdrawing the $430,000,000 received from the excess profits tax there still remains a margin of $425,000,000.”

Indeed, to analyze British war finance to-day is to find something besides debits and credits and balances.  It is a great moral force that does not reckon in terms of pounds or pence.  There is no thought of indemnity to soothe the scars of waste:  no dream of conquest to atone for friendly land despoiled.

Money grubbing has gone, if only for the moment, along with the other baser things that have evaporated in the giant melting pot of the war.  In England to-day there are only two things, Work and Fight.  They are giving the nation an economic rebirth:  a new idea of the dignity of toil:  they have begot a spirit of denial that is rearing an impregnable rampart of resource.

Even more marvellous is the financial devotion of the French who present a spectacle of unselfish sacrifice that merely to touch, as alien, is to have a thrilling and unforgettable experience.

When you look into the French method of paying for the war you get the really picturesque and human interest details.  In place of taxation you find that the war is being paid, in the main, out of the savings of the people.  Instead of mortgaging the future, the Gaul is utilising his thrifty past.

Never in all history is there a more impressive or inspiring demonstration of the value of thrift as a national asset.  It has reared the bulwark that will enable France to withstand whatever economic attack the war will make.

The difference between the English and French system of war financing is psychological as well as material.  The average Frenchman has a great deal of the peasant in him.  He is willing to give his life and his honour to the nation but he absolutely draws the line at paying taxes.  This is why the French have made it a war of loans.