t rate of taxation we are not nearly meeting, out of
permanent taxes, the sum which will be needed when the war is over
for peace expenditure on the inevitably higher scale, pensions, and
interest and sinking fund on war debt.

IX

COMPARATIVE WAR FINANCE

_May_, 1918

The New Budget--Our own and Germany's Balance-sheets--The Enemy's
Difficulties--Mr Bonar Law's Optimism--Special Advantages which Peace
will bring to Germany--A Comparison with American Finance--How much
have we raised from Revenue?--The Value of the Pound To-day--The 1918
Budget an Improvement on its Predecessors--But Direct Taxation still
too Low--Deductions from the Chancellor's Estimates.

One of the most interesting passages in a Budget speech of unusual
interest was that in which the Chancellor of the Exchequer compared
the financial methods of Germany and of this country, as shown by
their systems of war finance. He began by admitting that it is
difficult to make any accurate calculation on this subject, owing
to the very thick mist of obscurity which envelops Germany's actual
performance in the matter of finance since the war began. As the
Chancellor says, our figures throughout have been presented with the
object of showing quite clearly what is our financial position. Most
of the people who are obliged to study the figures of Government
finance would feel inclined to reply that, if this is really so, the
Chancellor and the Treasury seem to have curiously narrow limitations
in their capacity for clearness. Very few accountants, I imagine,
consider the official figures, as periodically published, as models of
lucidity. Nevertheless, we can at least claim that in this respect the
figures furnished to us by the Government during the war have been
quite as lucid as those which used to be presented in time of peace,
and it is greatly to the credit of the Treasury that, in spite of the
enormous figures now involved by Government expenditure, the financial
statements have been published week by week, quarter by quarter, and
year by year, with the same promptitude and punctuality that marked
their appearance in peace-time. In Germany, the Chancellor says, it
has not been the object of German financial statements to show the
financial position quite clearly. It is, therefore, difficult to make
an exact statement, but he was able to provide the House with a series
of very interesting figures, taken from the statements of the German
Finance M