r
us--within limits, say, up to thirty years. In view of all that they
have made and we have lost by this war waged for the cause of all
mankind, this would seem to be reasonable concession on America's
part.

XVII

MEETING THE WAR BILL

_January_, 1919

The Total War Debt--What are our Loans to the Allies worth?--Other
Uncertain Items--The Prospects of making Germany pay--The Right Way to
regard the Debt--Our Capital largely intact--A Reform of the Income
Tax--The Debt to America--The Levy on Capital and other Schemes--The
only Real Aids to Recovery.

A table published week by week by the _Economist_ shows that from
August 1, 1914, to November 9, 1918, the Government paid out L8612
millions sterling. From this we have to deduct an estimate of the
amount that the Government would have spent if there had not been a
war, so that we are at once landed in the realm of conjecture. The
last pre-war financial year saw an expenditure of L198 millions, and
it is safe to assume that this figure would have swollen by a few
millions a year if peace had continued, so that we may take at least
L860 millions from the above total as normal peace expenditure for the
4-1/2 years. This gives us L7752 millions as the gross cost of the
war, as far as the period of actual fighting is concerned. From this
figure, however, we are able to make some big deductions. There are
loans to Allies and Dominions, and some other much more readily
realisable assets than these. We do not know the actual figure of the
loans to Allies and Dominions during the war period, because they are
not included in the weekly financial statements. The amount that we
borrow abroad is set out week by week--at least, that is believed to
be the meaning of the cryptic item "Other Debt"--but the amount that
we lend to Allies and Dominions is hidden away in the Supply Services
or somewhere, and we only get occasional information about it from the
Chancellor in the course of his speeches on the Budget or on Votes of
Credit. In his last Vote of Credit speech, on November 12, 1918, Mr
Bonar Law gave the chief items of the loans to Allies, and a very
interesting list it was. The totals up to October 19, 1918, were L1465
millions to Allies and L218-1/2 millions to Dominions. The Allies
were indebted to us as follows:--Russia, L568 millions; France, L425
millions; Italy, L345 millions; smaller States, L127 millions.[1]

[Footnote 1: Parliamentary Debates, Vol. 110,