much emphasis; they overlooked the
lurking qualification; and then were furiously provoked at having been
taken in. 'I do not know,' he wrote some years later to Northcote,
'where you find that I laid down any general maxim that all war supplies
were to be raised by taxes.... I said in my speech of May 8, revised for
Hansard, it was the duty and policy of the country to make _in the first
instance_ a great effort from its own resources.' The discussions of the
time, however, seem to have turned on the unqualified construction.
While professing his veneration and respect for the memory of Pitt, he
opened in all its breadth the question raised by Pitt's policy of loan,
loan, loan. The economic answer is open to more dispute than he then
appeared to suppose, but it was the political and moral reasons for
meeting the demands of war by tax and not by loan that coloured his
economic view. The passage in which he set forth the grounds for his
opinion has become a classic place in parliamentary discussion, but it
is only too likely for a long time to come to bear reproducing, and I
have taken it as a motto for this chapter. His condemnation of loans,
absolutely if not relatively, was emphatic. 'The system of raising funds
necessary for wars by loan practises wholesale, systematic, and
continual deception upon the people. The people do not really know what
they are doing. The consequences are adjourned into a far future.' I may
as well here complete or correct this language by a further quotation
from the letter to Northcote to which I have already referred. He is
writing in 1862 on Northcote's book on _Twenty Years of Finance_. 'I
cannot refrain,' he says, 'from paying you a sincere compliment, first
on the skill with which you have composed an eminently readable work on
a dry subject; and secondly, on the tact founded in good feeling and the
love of truth with which you have handled your materials throughout.' He
then remarks on various points in the book, and among the rest on
this:--

LETTERS TO NORTHCOTE

Allow me also to say that I think in your comparison of the effect
of taxes and loans you have looked (p. 262) too much to the effect
on labour at the moment. Capital and labour are in permanent
competition for the division of the fruits of production. When in
years of war say twenty millions annually are provided by loan say
for three, five, or ten years, then two