es practically have a monopoly on the American money sent
abroad for war purposes, let us briefly look at the equity behind the
Thing known as National Honour. Its first and foremost bulwark is
Wealth. Take England first. The wealth of the United Kingdom is
$90,000,000,000: the annual income of the people $12,000,000,000. To
this you can add the wealth, resource and income of all her far-flung
colonies and the immense amount of money due to her from foreign
countries. Unlike France and save for a few Zeppelin raids, the Empire
is absolutely free from the ravage of war. The principal assault has
been upon her income, for her great Principal is still intact.

In examining the methods adopted by England and France to meet the cost
of the war, you find a sharp difference of procedure which is
characteristic of the countries. Following the British tradition,
England is trying to make the war "pay its way" with taxation. Out of a
total expenditure of $9,500,000,000 for the current year, no less than
$2,500,000,000 was raised by taxation. The rest was obtained by loans at
home and abroad.

The income tax alone will serve to show the enormous increase in
tribute. From .04 per cent on small incomes to 13 per cent on large ones
before the war it has risen to 1 per cent on small incomes to over 411/2
per cent on big ones. Again, 60 per cent of all excess profits earned
since the war are surrendered to the State.

I can give no better evidence of the result of this taxation than to
repeat what Reginald McKenna, Chancellor of the British Exchequer, said
to me in London last August:

"The English position is so sound," he declared, "that if the war ended
at the end of the current financial year, that is, on March the 31st,
1917, our present scale of taxation would provide not only for the whole
of our peace expenditures and the interest on the entire National Debt
but also for a sinking fund calculated to redeem that debt in less than
forty years. There would still remain a surplus sufficient to allow me
to wipe out the excess profit tax and to reduce other taxes
considerably."

When I asked him to make this more specific, he continued:

"The total revenue for the current year is $2,545,000,000. Our last
Peace Budget was $1,000,000,000. Assuming that the war would end by next
March 1st, you must add another $590,000,000 for interest and sinking
fund on the war debt together with a further $100,000,000 for pensions
which would