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Full text of "War-time financial problems"

io8       THE YEAR'S BALANCE-SHEET

revenue, and to a certain extent on the effort that
it has made in providing this enormous sum of money
from the proceeds of taxation and State services.
But when this much has been admitted we have to
hasten to add that the figures are not nearly so big
as they look, and that there is much less " to write
home about/' as the schoolboy said, than there
appears to be at first sight. Those champions of
the Government methods of war finance who main-
tain that we have, during the past year, multiplied
the pre-war revenue, of roughly, 200 millions by
more than 3!, so arriving at the present revenue of
over 700 millions, are not comparing like with like.
The statement is perfectly true on paper, and ex-
pressed in pounds sterling, but then the pound ster-
ling of to-day is an entirely differentvarticle from the
pre-war pound sterling. Owing to the system of
finance pursued by our Government, and by every
other Government now engaged in the war, of pro-
viding for a large part of the country's goods by
the mere manufacture of new currency and credit,
the buying power of the pound sterling has been
greatly depreciated. By multiplying the amount of
legal tender currency in the shape of Treasury notes,
of token currency in the shape of silver and bronze
coinage, and of banking currency through the bank
deposits which are swollen by the banks1 investments
in Government securities, the Government has
increased the amount of currency passing from hand
to hand in the community while, at the same time,
the volume of goods to be purchased has not been
increased with anything like the same rapidity, and