122 COMPARATIVE WAR FINANCE

classes in Germany. Taxation has been indirect and
on commodities which are paid for by the masses of
the people. " The lesson to be drawn from these
facts is not difficult to see. The rulers of Germany,
in spite of their hopes of indemnity, must realise
that financial stability is one of the elements of
national strength. They have not added to their
financial stability/' The reason for this failure the
Chancellor considers to be largely psychological. It
is, in the first place, because they do not care to add
to discontent by increased taxation all over the
country, but " it is still more due to this, that in
Germany the classes which have any influence on or
control of the Government are the wealthier classes,
and the Government have been absolutely afraid to
force taxation upon them/'

It is certainly very pleasant to be able to con-
template the financial blunders by which Germany
is so greatly increasing the difficulties that it will
have to face before the war is over. On the other
hand, we have to recognise that the Chancellor, with
that incorrigible optimism of his, has committed the
common but serious error of over-stating his case
by leaving out factors which are in Germany's
favour, as, for instance, that Germany's debt is to a
larger extent than ours held at home. Since the
war began we have raised over £1000 millions by
borrowing abroad. Our public accounts show that
"the item of " Other Debt," which is generally
believed to refer to debt raised abroad, now amounts
*° £958 millions, while one of our loans in America,
which is separately stated in the account because