50 WAR FINANCE AS IT MIGHT HAVE BEEN

either by taxation or by loans raised exclusively out
of real savings, the rise in prices which has made the
war so terribly costly, and has raised so great a
danger through the unrest and dissatisfaction of the
working classes, might have been to a great extent
avoided, and the higher the rate of taxation had
been, and the less the amount provided by loans, the
less would have been the seriousness of the problem
that now awaits us when the war is over and we
have to face the question of the redemption of the
debt.

In this matter of taxation we have certainly done
much more than any of the countries who are
fighting either with us or against us. Germany set
the example at the beginning of the war of raising
no money at all by taxation, puffed up with the vain
belief that the cost of the war, and a good deal more,
was going to be handed over to her in the shape of
indemnities by her vanquished enemies. This
terrible miscalculation on her part led her to set a
very bad example to the warring Powers, and when
protests are made in this country concerning the low
proportion of the war's costs that is being met out
of taxation it is easy for the official apologist to
answer, " See how much more we are doing than
Germany/' It is easy, but it is not a good answer.
Germany had no financial prestige to maintain ; the
money that Germany is raising for financing the war
is raised almost entirely at home, and she rejoices
in a population so entirely tame under a dominant
caste that it would very likely be quite easy for her,
when the war is over, to cancel a large part of the