hat the absolutely necessary expenditure
will be enormously enhanced to meet the interest on the National Debt.
Assuming that the War were to end in the spring of 1919, the debt will
probably amount to about seven thousand millions after allowing for
loans due from the Allies and Dominions so far as they are likely to be
then recoverable. Taking interest at 5 per cent. with a sinking fund of
only half per cent., it is estimated that the permanent annual charge in
respect of the Debt will then be about 380 millions. No doubt part of
the Debt bears interest at a lower rate than 5 per cent., but a portion
has been borrowed at a higher. This is on the assumption that the War
will end within this financial year. Even if the War does end within the
financial year, much of the expenditure occasioned by it must go on
during the period of demobilisation, and during part of that period the
Debt will probably go on growing, as it can hardly be expected that
sufficient revenue can be raised by taxation to meet this continued
expenditure directly due to the War. There will also be for many years
to come a very heavy expenditure on pensions, and, whatever other
savings may be effected, the duty of providing pensions for injured and
disabled sailors and soldiers is paramount, and the provision must be
made generously.

It seems highly probable, therefore, that the annual Debt service will
ultimately amount to nearly 400 millions, and may be much more if the
War goes on over 1919. It is a gigantic burden to bear. Mr. Bonar Law
has stated in the House of Commons that a loan of one thousand millions
represents the labour of ten million men for a whole year, so we may
take it that the annual charge for the National Debt will require the
whole labour of four million men to meet it, and that this charge will
be continuous for many years. The normal expenditure after the War,
apart from Debt service, has been reckoned to be 270 millions. It will
certainly be more unless rigid economy is practised and all the new
schemes which are being proposed involving expenditure of money are
carefully scrutinised to see whether the expenditure is such as the
country ought to undertake in view of its financial obligations. As the
Debt service will be practically constant and irreducible unless revenue
largely exceeds the total annual expenditure, which is very improbable,
it is clear that a strong effort must be made to reduce this expenditure
and also, s