ut, in fact, it is well known that
by no means all that the Government has borrowed for war purposes has
been provided in this way. Much of the money that the Government has
obtained for war purposes has been got not out of genuine savings
of investors, but by arrangements of various kinds with the banking
machinery of the country, or by the simple use of the printing-press,
with the result that the Government has provided itself with an
enormous mass of new currency which has not been taken out of anybody
else's pocket, but has been manufactured by or for the Government.

The consequence of the profligate use of this dishonest process is
that general rise in prices, which is in effect an indirect tax on the
necessaries of life, involving all the injustice and ill-feeling which
arises from such a measure. It is inevitable that the working classes,
finding themselves subjected to a rise in prices, the cause of which
they do not understand, but the result of which they see to be a great
decrease in the buying power of their wages, should believe that they
are being exploited by profiteers, that the rich classes are growing
richer at their expense out of the war, and that they and the country
are being bled by a set of unpatriotic capitalist blood-suckers. It
is also natural that the property-owning classes, who find themselves
paying an Income Tax which they regard as extortionate, should
consider that the working classes by their continuous demands for
higher wages to meet higher cost of living, are trying to exploit
the country in their own interests in a time of national crisis, and
displaying a most unedifying spirit. The social result of this evil
policy of inflation, in embittering class against class, is a matter
which it is difficult to exaggerate. Some people think that it was
inevitable. This is too wide a question to be entered into now, but
at least it must be contended that if it is inevitable the extent to
which it is being practised might have been very greatly diminished.

Do we mean to go on to the end of the war with this muddling policy of
bad finance? If we still insist on believing that the war cannot last
another six months, and there is therefore no need to pull ourselves
up short financially and put things in order, then we certainly shall
do so. But we should surely recognise that there is at least a chance
that the war may go on for years, that if so our present financial
methods will leave us w