It is clear, therefore, that the economic growth of Belgium
will be retarded in a great degree.[1] The same holds good of Germany,
though probably not to the same extent unless the theatre of war is
extended to cover a considerable part of the Empire. In the case of our own
country, provided it remains free from invasion, there will not be such a
large replacement of lost wealth and capital destroyed by the war, except
in the case of shipping; but in common with other States there will be the
war to pay for, and certain obligations to meet regarding the maimed and
the relatives of the slain. Taxation will be heavy, and therefore, on this
ground alone the accumulation of new capital will be retarded. Industrial
organisation, having been re-arranged and modified to meet the requirements
of the war period, will not resume its old form without a good deal of
creaking and jolting. And even if it could, it will not be able to face
the new conditions arising out of the war at all rapidly. There is every
prospect, therefore, of a time of great difficulty after the war is over,
before the normal course of industrial and commercial activity is fully
resumed. In all likelihood, we shall find that the relative importance
of our various industries will have altered to some extent, and that the
nature of our trade will have been modified also. Then also the relative
positions of our home and foreign trade may shift; in other words, if
the war lasts sufficiently long for new industries to develop and become
efficient, they may survive the competition of foreign goods after the
war; in which case, the goods which have hitherto been produced to buy the
foreign goods will not now be required for foreign trade. It may be that
on the return of peace, some European States, in order to give their
industries an opportunity to recover from the effects of the war, will
inaugurate new tariffs; there is, indeed, a strong possibility that on
these grounds, and because of the dependence of the United Kingdom on the
products of Germany, the Tariff Reform Movement here may be electrified
into life.

[Footnote 1: If Germany be required to compensate Belgium for the damage
done, these effects will in large part disappear; though the burden
would still remain. The difference would be that it would be more widely
distributed.]

2. _Possible Industrial Developments_.--But industrial changes will not be
confined to the direction and form which economic act