War-Time Financial Problems

by Hartley Withers

IX COMPARATIVE WAR FINANCE 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

X
INTERNATIONAL CURRENCY
An Inopportune Proposal—What is Currency?—The Primitive System of
Barter—The Advantages possessed by the Precious Metals—Gold as a
Standard of Value—Its Failure to remain Constant—Currency and
Prices—The Complication of other Instruments of Credit—No Substitute
for Gold in Sight—Its Acceptability not shaken by the War—A
Fluctuating Standard not wholly Disadvantageous—An International
Currency fatal to the Task of Reconstruction—Stability and Certainty
the Great Needs

XI
BONUS SHARES
A Deluge of Bonus Shares—The Effect on the Market—A Problem in
Financial Psychology—The Capitalisation of Reserves—The Stock Exchange
View—The Issue of Bonus-carrying Shares—The Case of the A.B.C.—A
Wiser Variation from Canada—Bonus Shares on Flotation—An American
Device—Midwife or Doctor?—The Good and Bad Points of both Systems

XII
STATE MONOPOLY IN BANKING
Bank Fusions and the State—Their Effects on the Bank of England—Mr
Sidney Webb's Forecast—His Views of the Benefits of a Bank
Monopoly—The Contrast between German Experts and British
Amateurs—Bankers' Charges as affected by Fusions—The Effects of
Monopoly without the Fact—The "Disinterested Management" Fallacy—The
Proposal to split Banking Functions—A Picture of the State in Control

XIII FOREIGN CAPITAL The Difference between Aims and Acts—Should Foreign Capital be allowed in British Industry?—The Supremacy of London and National Trade—No need to fear German Capital—We shall need all we can get—Foreign Shares in British Companies—Can and should the Disclosure of Foreign Ownership be forced?—The Difficulties of the Problem—Aliens and British Shipping—The Position of "Key" Industries—Freedom to Import and Export Capital our Best Policy

XIV
NATIONAL GUILDS
The Present Economic Structure—Its Weaknesses and Injustices—Were
things ever better?—The Aim of State Socialism—A Rival Theory—The New
Movement of Guild Socialism—Its Doctrines and Assumptions—Payment "as
Human Beings"—The "Degradation" of earning Wages—Production
irrespective of Demand—Is that the Real Meaning of Freedom?—The Old
Evils under a New Name—A Conceivably Practical Scheme for some other
World

XV
POST-WAR FINANCE
Taxation after the War—Mr. Hoare's Scheme described and analysed—The
Position of the Rentier—Estimates of the Post-War Debt—The Compulsory
Loan Proposal—What Advantages has it over a Levy on Capital?—The
Argument from Social Justice—Questions still to be answered—The Choice
between a Levy and Stiff Taxation—Are we still a Creditor Nation?—Our
Debt not a Hopeless Problem—Suggestions for solving it

XVI
THE CURRENCY REPORT
Currency Policy during the War—Its Disastrous Medievalism—The Report
of the Cunliffe Committee—A Blast of Common Sense—The Condemnation of
our War Finance—Inflation and the Rise in Prices—The Figures of the
Present Position—The Break in the Old Relation between Legal Tender and
Gold—How to restore it—Stop Borrowing and reduce the Floating
Debt—Return to the Old System—The Committee's Sane Conservatism—A
Sound Currency vital to National Recovery

XVII MEETING THE WAR BILL 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

XVIII
THE REGULATION OF THE CURRENCY
Macaulay on Depreciated Currency—Its Evils To-day—The Plight of the
Rentier—Mr Goodenough's Suggestion—Sir Edward Holden's Criticisms of
the Currency Committee—His Scheme of Reform—Two Departments or One in
the Bank of England?—Not a Vital Question—The Ratio of Notes to
Gold—Objections to a Hard-and-fast Ratio—The Limit on Note Issues—The
Federal Reserve Act and American Optimism—Currency and Commercial
Paper—A Central Gold Reserve with Central Control