252 MEETING THE WAR BILL

money, and by inflation. When it is raised by
taxation the sacrifice is obvious, and, in nearly all
cases, inevitable : we pay our larger war taxes and
so we have less to spend on ourselves, and so we go
without things. A few people raise money to pay
taxes during war by borrowing or drafts on capital,
but they are probably so exceptional that their case
need not be considered. We transfer our buying
power to the Government to be used for the fighters,
and so we set free the labour and material that used
to go in providing us with comforts and pleasures;
our competition for goods is reduced, and so the
Government is able to get what it needs out of the
nation's production, which is pro tanto relieved of
our demand. The same thing happens when the
Government gets money for the war by borrowing-
money that we save. We reduce expenditure, and
transfer buying power to the State and diminish our
demand on the nation's production, or that of its
foreign supplies. If the whole war cost had been
met by these two methods there need have been
little or no increase in prices here, and the cost of the
war would have been, about half what it has been.
Of the two methods, taxation is obviously the
cleaner, simpler and more honest. By borrowing,
the State hires those who have a margin to put part
of it at the disposal of the State at a time of national
crisis, instead of taking it from them outright. As
most of the taxation involved by the subsequent
debt charge falls on those who have a margin (as it
obviously should) the result is that the people who
subscribed to the loans are afterwards taxed to pay