thousand
millions. It follows that the balance annually saved and invested,
either at home or abroad, is normally between three hundred and four
hundred millions.

Upon a nation so circumstanced, and with such habits, there has
suddenly descended--for we did not anticipate it, nor prepared the way
for it--the thundercloud of war--war which, as we now know well, if we
add to our own direct expenditure the financing of other countries,
will cost us in round figures about a thousand millions in the year.
Now how are we, who normally have only three hundred or four hundred
millions to spare in a year, to meet this huge and unexpected
extraordinary draft upon our resources?

The courses open are four. The first is the sale of investments or
property. We have, it is said, invested abroad something like four
thousand millions sterling. Can we draw upon that to finance the war?
Well, there are two things to be said about any such suggestion. The
first is that our power of sale is limited by the power of other
countries to buy, and that power, under existing conditions, is
strictly limited.

The second thing to be said is this: That, if we were to try, assuming
it to be practicable, to pay for the war in this way, we should end it
so much poorer. The war must, in any case, impoverish us to some
extent, but we should end it so much poorer, because the income we now
receive, mainly from goods and services from abroad, would be
proportionately, and permanently, reduced. I dismiss that, therefore,
as out of the question.

Similar considerations seem to show the impracticability on any
considerable scale of a second possible expedient, namely, borrowing
abroad. The amount that could be raised in any foreign market at this
moment, in comparison with the sum required, is practically
infinitesimal, and, if it were possible on any considerable scale, we
should again have to face the prospects of ending the war a debtor
country, with a huge annual drain on our goods and our services, which
would flow abroad in the payment of interest and the redemption of
principal. That again, therefore, for all practical purposes, may be
brushed aside.

There is a third course--payment out of our gold reserve, but that
need only be stated to be discarded. We cannot impair the basis of the
great system of credit which has made this City of London the
financial centre and capital of the world.

There remains only one course, the one we have come