of acceptances, and with the present expanded base of
the Bank would, without war, have the ability to discount
$3,000,000,000, or three times our national debt, there is now no large
business offering. The discount credits can therefore be measurably
turned to the war-loan account. One of the biggest acceptance houses
in London told me that the post-moratorium bills, or the new
acceptances made after the moratorium, could not amount to more than
80,000,000 pounds, or $400,000,000.

With the liquidation on account of pre-moratorium bills and the absence
of new business I should estimate that the London money market was able
to take care of the 350,000,000 pounds loan put forth in November by
the government without much regard to the investing community.

With expanding trade and confidence, English investment interests can
absorb the major part of this huge loan before next summer, when
another loan of about equal size must be put forth, according to
present calculations. This second loan will probably be for three or
four hundred millions pounds sterling, bear 4 per cent, and issue at
par. The November loan was issued at 95 per cent and it was announced
in Parliament that the Bank of England would loan the issue price at
one per cent under the Bank rate.

That the loan was fully subscribed is not contradicted by the small
fraction of discount soon quoted on the full-paid loan. One could
fully pay the loan, taking the discounts on undue maturities and sell
at a fraction under 95 and still make a profit.

I believe the estimate of an annual English surplus for investment of
$2,000,000,000 per annum is far too low. This figure is upon the basis
that only about 20 per cent of the river of interest, dividends, and
profits flowing annually to British pocket-books is available for
reinvestment.

In the present war stress and with economy practised to-day more by the
capitalist classes than the laboring classes, the amount of money for
reinvestment should be far greater than this.

English finance will cut its cloth according to the pattern. If there
is only $2,000,000,000 per annum of surplus earnings to put into the
war, that money will be spent; and if England has 50 or 100 per cent
more, that money likewise will be spent, but spent so judiciously that
the largest possible sum from it is kept in channels of English trade.
The British Empire will work and finance the fight thus within a
circle, and right on it