War-time financial problems

250 MEETING THE WAR BILL

it will be possible for us to secure payment even for
all the civilian damage that we have suffered.

It thus appears that the net cost of the fighting
period has been somewhere in the neighbourhood
of £5500 millions, taking our loans to Allies at half
their face value; and that the armistice and de-
mobilisation period is likely to cost another ^1000 to
£1500 millions more, to say nothing of pensions and
debt charge that will go on for years (unless the
supporters of Levy on Capital have their way and
wipe the debt out), and that against this further
expenditure we can set whatever sum is recovered
from Germany.

Seeing that our total pre-war debt was £710!
millions, or, omitting what the Government returns
call the Other Capital Liabilities, £653! millions,
these figures of war debt and war cost are at first
sight somewhat appalling. But there is no reason
why they should terrify us, and there are several
reasons why they are, when looked at with a dis-
criminating eye, much less frightening than when we
first set them out.

In the first place, we have always to remember
that these figures are in after-war pounds, and that
the after-war pound is, thanks to the profligate use
by our war Governments of the printing-press and the
banking machine, just about half the size, when
measured in actual buying power, of the pre-war
pound. Any one who pays £100 in taxes to-day
thereby surrenders claims to about the same amount
of goods and~service as he did if he paid ^50 in taxes
before the war. So that in making any comparison