132 COMPARATIVE WAR FINANCE

proposed luxury tax he has left to be evolved by the
wisdom of a House of Commons Committee, and has
thereby given plenty of time to extravagantly
minded people to lay in a store of stuff before the
tax is brought into being.

Space will not allow me to deal fully with the
Chancellor's very interesting analysis of our position
as he expects it to be at the end of the financial
year on the supposition that the war was then over.
He expects a revenue then of £540 millions on the
present basis, making, with the yield of the new
taxes in a full year/ £654 millions in all, without
including the excess profits duty, and he expects an
after-war expenditure of £650 millions, including
£50 millions for pensions and £380 millions for debt
charge. It seems to me that his expectation of
after-war revenue is too high, and of after-war
expenditure is too low. He says that the estimates
have been carefully made, but that they include
" a recovery from the absence of war conditions/'
but surely the absence of war conditions is much
more likely to produce a diminution than a recovery
in taxation. Under the present circumstances, with
prices continually rising, the profits of those who
grow or hold stocks of goods of any kind auto-
matically swell. The rise in prices has only to
cease, to say nothing of its being turned into a fall,
to produce at once a big check in those profits, and
when we consider the enormous dislocation likely
to be produced by the beginning of the peace period
expectations of an elastic revenue when the war is
over seem to be almost criminally optimistic,