r
present finance to go so wrong? In the first place, perhaps, we may
put the bad example of Germany. Then, surely, our rulers might have
known better than to have been deluded by such an example. In the
second place, it was the cowardice of the politicians, who had not the
sense in the early days of the war to see how eager the spirit of the
country was to do all that the war required of it, and consequently
were afraid to tax at a time when higher taxation would have been
submitted to most cheerfully by the country. There was also the absurd
weakness of our Finance Ministers and our leading financial officials,
which allowed our financial machinery to be so much weakened by the
demands of the War Office for enlistment that it has been said in the
House of Commons by several Chancellors of the Exchequer that it is
quite impossible to consider any form of new taxation because
the machinery could not undertake it. There has also been great
short-sightedness on the part of the business men of the country, who
have failed to give the Government a lead in this important matter.
Like the Government, they have taken short views, always hoping that
the war might soon be over, and so have left the country with a
problem that grows steadily more serious with each half-year as we
drift stupidly along the line of least resistance.

Such war finance as I have outlined--drastic and impracticable as
it seems--would have paid us. Taxation in war-time, when industry's
problem is simplified by the Government's demand for its product,
hurts much less than in peace, when industry has not only to turn out
the stuff, but also find a buyer--often a more difficult and expensive
problem. There is a general belief that by paying for war by loans we
hand the business of paying for it on to posterity. In fact, we can
no more make posterity pay us back our money than we can carry on war
with goods that posterity will produce. Whatever posterity produces it
will consume. Whatever it pays in interest and amortisation of our
war debt, it will pay to itself. We cannot get a farthing out of
posterity. All we can do, by leaving it a debt charge, is to affect
the distribution of its wealth among its members. Each loan that we
raise makes us taxpayers collectively poorer now, to the extent of the
capital value of the charge on our incomes that it involves. The less
we thus charge our productive power, and the more we pay up in taxes
as the war goes on, t