H4 THE YEAR'S BALANCE-SHEET

but is by no means in the interests of the country as
a whole, or of the taxpayers who now and hereafter
have to find the money for paying for the war. In
so far as the war's needs have to be met abroad,
borrowing abroad is to some extent inevitable if the
borrowing nation has, not the necessary resources
and labour available to turn out goods for export
to exchange against those which have to be pur-
chased abroad, but in so far as the war's needs are
financed at home, the policy of borrowing is one
that should only be used within the narrowest
possible limits. By its means the Government,
instead of making the citizens pay by taxation for
the war as it goes on, hires a certain number of
them to pay for it by promising them a rate of
interest, and their money back some day. The
interest and the sinking fund for redemption have
to be found by taxation, and so the borrowing pro-
cess merely postpones taxation from the war period
to the peace period. During the war period taxation
can be raised comparatively easily owing to the
patriotic stimulus and the simplification of the
industrial problem which is provided by the Govern-
ment's insatiable demand for commodities. When
the days of peace return, however, there will be very
grave disturbance and dislocation in industry, and
it will have once more to face the problem of pro-
viding goods, not for a Government which will take
all that it can get, but for a public, the demands of
which will be uncertain, and whose buying power
will be unevenly distributed, and difficult to calcu-
late. The process, therefore, which postpones taxa-