GERMANY'S DEFICIT 121

on velvet. A year hence the German War Debt will
be not less than £8000 millions. The interest on that
will be at least £400 millions, a sinking fund at
| per cent, will be ^40 millions. Their pension
engagements, which will be much higher than ours
owing to their far heavier casualties, have been
estimated at amounts ranging as high as £200
millions. The Chancellor was sure that he was
within the mark in saying that it will be at least
£150 millions. Their normal pre-war expenditure
was £130 millions, so that they will have to face
a total expenditure at the end of the war of £720
millions. On the other side of the account their
pre-war revenue was £150 millions. They have
announced their intention of this year raising
additional permanent Imperial revenue amounting
to £120 millions. From the nature of the taxes the
Chancellor considers it very difficult to believe that
this amount will be realised, but, assuming that it
is, it will make their total additional revenue £185
millions. That, added to the pre-war revenue, gives
a total of £335 millions, showing " a deficit at the
end of this year, comparing the revenue with the
expenditure, of £385 millions at least/' The Chan-
cellor added that if that were our position he would
certainly think that bankruptcy was not far from
the British Government.

Another point that the Chancellor was able to
make effectively, in comparing our war revenue with
Germany's, was the fact that, with the exception
of the war increment tax, scarcely any of the addi-
tional revenue has been obtained from the wealthier