money market, our Stock Exchange
and our Insurance business. A certain amount of Government control
will inevitably have to continue for a time after the war, but the
sooner we rid ourselves of it the sooner we shall restore to the
London money market those qualities which, after the reputation that
it has for honesty, soundness and straight dealing, were most helpful
in building up its eminence.

Above all, we have to work hard both in finance and industry and
commerce. Finance, which is the machinery for handling claims for
goods and services, can only be active and effective if industry and
commerce are active and effective behind it, turning out the goods and
services to meet the claims that finance creates. A great industrial
and commercial output, with severe restriction of unnecessary
consumption so that a great margin may go into capital equipment, will
soon repair the ravages of war, bring down the price of credit and of
capital and make London once more the place in which these things are
most cheaply and freely to be bought.

Finally, if we want to restore London as a place in which all the
financial transactions of the world were centred, we must remember
that we cannot do so if we restrict the facilities given to foreigners
to come here and settle and do business. It is not possible to be an
international centre with an insular sentiment.

III

WAR FINANCE AS IT MIGHT HAVE BEEN--I

_November_, 1917

Financial Conditions in August, 1914--No Scheme prepared to meet the
Possibility of War--A Short Struggle expected--The Importance of
Finance as a Weapon--Labour's Example--The Economic Problem of
War--The Advantages of Direct Taxation--The Government follows the
Path of Least Resistance--The Effect of Currency Inflation.

A legend current in the City says that the Imperial War Committee, or
whatever was the august body entrusted with the task of thinking out
war problems beforehand, had done its work with regard to the Army and
Navy, transport and provision, and everything else that we should want
for the war, and were going on to the question of finance next week,
when the war intervened. Whatever may be the truth of this story, the
events of the war confirm the opinion that if it was not true it ought
to have been. We are continually accused of not having been ready for
the war; but, in fact, we were quite ready to do everything that we
had promised to do with regard to military and naval op