he failure to impose taxation is notorious. Before the war
the aggregate French and British budgets, and also the average taxation
per head, were about equal; but in France no substantial effort has been
made to cover the increased expenditure. "Taxes increased in Great
Britain during the war," it has been estimated, "from 95 francs per head
to 265 francs, whereas the increase in France was only from 90 to 103
francs." The taxation voted in France for the financial year ending June
30, 1919, was less than half the estimated normal _post-bellum_
expenditure. The normal budget for the future cannot be put below
$4,400,000,000 (22 milliard francs), and may exceed this figure; but
even for the fiscal year 1919-20 the estimated receipts from taxation
do not cover much more than half this amount. The French Ministry of
Finance have no plan or policy whatever for meeting this prodigious
deficit, except the expectation of receipts from Germany on a scale
which the French officials themselves know to be baseless. In the
meantime they are helped by sales of war material and surplus American
stocks and do not scruple, even in the latter half of 1919, to meet the
deficit by the yet further expansion of the note issue of the Bank of
France.[153]

The budgetary position of Italy is perhaps a little superior to that of
France. Italian finance throughout the war was more enterprising than
the French, and far greater efforts were made to impose taxation and pay
for the war. Nevertheless Signor Nitti, the Prime Minister, in a letter
addressed to the electorate on the eve of the General Election (Oct.,
1919), thought it necessary to make public the following desperate
analysis of the situation:--(1) The State expenditure amounts to about
three times the revenue. (2) All the industrial undertakings of the
State, including the railways, telegraphs, and telephones, are being run
at a loss. Although the public is buying bread at a high price, that
price represents a loss to the Government of about a milliard a year.
(3) Exports now leaving the country are valued at only one-quarter or
one-fifth of the imports from abroad. (4) The National Debt is
increasing by about a milliard lire per month. (5) The military
expenditure for one month is still larger than that for the first year
of the war.

But if this is the budgetary position of France and Italy, that of the
rest of belligerent Europe is yet more desperate. In Germany the total
expenditu