In twelve months of war Great Britain has been able to buy and to pay for nearly 900 million pounds of Colonial and foreign produce and goods for home consumption and for war purposes. In addition she has found something like 350 million pounds of money for her Allies, Colonies, and customers. She has met her own war expenses, amounting to 1,000 million pounds, exclusive of the 350 million pounds supplied to her Allies and Colonies for war purposes. This great amount of money has been found with surprising ease. But it is during the current year that we shall feel the severest strain. We have to maintain upon the seas a Fleet even more powerful than that of last year, to provide our Allies, Colonies, and friends with at least 400 million pounds in loans, and to support in the field forces numbering nearly four million men, which will cost anything up to 2,000 million pounds. And in spite of these gigantic liabilities we find to-day that British credit stands practically unimpaired, while that of Germany is rapidly falling, and may soon vanish altogether. If the War has done nothing else, it has given the world such an example of financial stability as has never been seen.
It is the deliberate opinion of Sir George Paish that our position after the War will be just about where we stood at the beginning. We shall have sold a great many of our foreign securities, but, on the other hand, we shall have bought others from our Allies, customers, and Colonies, and, on balance, neither our home nor our foreign wealth will have been appreciably reduced. What we shall have lost will be our new savings. This loss amounts already to about 600 million pounds; if the War lasts another year it will have reached 1,000 million pounds in comparison with what our wealth would have been but for the War.
Of course, we shall have created a great debt. Already our debt, including the pre-war debt, is about 2,200 million pounds, and the debt charge and current Government expenses are about 300 million pounds. But it must be remembered that some 100 million pounds of this is interest which accrues to British investors, and that a large part of this interest will still be available for new capital purposes. Our losses in men will be grievous. But it must be recalled that one lesson of the War is that the whole nation is learning to work harder and more efficiently and that, in consequence, it is very doubtful whether our productive capacity has been seriously, if at all, reduced. When our men return from the War we shall have an enormous supply of labour available, and for the full employment of that labour we shall be able to find the capital. Will Germany be in anything like so favourable a position?
The bold and courageous policy of Mr McKenna in grappling adequately with the problem of finance has secured the emphatic approval of the entire nation. New burdens have been cheerfully shouldered; the country has shown unmistakably that it is prepared to make any sacrifices to win the War, and we have seen the income-tax doubled with far less protest than would have been aroused by the addition of a penny a few years ago. The nation has set itself to meet the cost of the War in the only possible way, by reducing all unnecessary expenditure, public and private, and devoting itself to the maintenance of our essential services, anxious only that so long as efficiency is secured money shall not be spared. We have boldly faced the enormous additional taxation rendered necessary by the gigantic war expenditure, and therein we have a tremendous advantage over Germany, who is only now beginning to consider the new taxes that will be required, and does not seem particularly gratified by the prospect with which she finds herself faced. Ominous mutterings of the coming storm are already to be heard, and when that storm breaks not even the iron discipline with which the Prussians have dragooned the entire German people will suffice to protect them from the wrath of those whom they have so grossly deceived. I do not know whether the German Government will dare to attempt to impose anything like the taxation which would be necessary to make provision for the war debt, but I am at least certain that as matters stand in Germany to-day the people have neither the will nor the ability to find the money. They have been fed with lying assurances that the money is to be found by someone else, and their rage and disappointment when they find out how they have been deceived will, beyond doubt, lead to consequences little foreseen by the light-hearted blunderers who set half the world in flames eighteen months ago.
I do not think that either now or in the future we need fear any comparison between the financial position of Britain and of her enemy. We are, and always have been, a far wealthier nation than the Germans; our credit is good, while Germany’s is tottering to complete collapse; our resources in capital are as yet not seriously touched; our trade, even though its volume be diminished by the withdrawal of men for the Army and for munition making, still goes on as far as we can carry it. The real financial strength of the British Empire has as yet not been fully marshalled for the fray, and should the day ever come when money must be found beyond the resources of ordinary taxation there are vast reservoirs of strength which will yield supplies in abundance. For we are in this War to win—let there be no mistake about that—and to gain a complete and lasting victory there is no sacrifice that our people, properly instructed, will refuse to make. “To the last man and the last shilling” if necessary must be our motto. Our people ask only for a definite and a strong lead; if they get that, we need have no fear of the outcome of the greatest struggle we have ever been called upon to wage.
Chapter Eight.
The Invisible Hand.
I may fairly claim to have taken perhaps a leading part in bringing home to the people of this country a realisation of the perils to which our foolish good nature has exposed us in the matter of the spy danger.