t and stuff to fight with
the war can go on. There is bankruptcy, but the bankruptcy of States is
not like the bankruptcy of individuals. There is no such thing among
States as an undischarged bankrupt who is forbidden to carry on. A State
may keep on going bankrupt indefinitely and still carry on. It will be
the next step in our prophetic exercise to examine the differences
between State bankruptcy and the bankruptcy of a subject of the State.

The belligerent Powers are approaching a phase when they will no longer
be paying anything like twenty shillings in the pound. In a very
definite sense they are not paying twenty shillings in the pound now.
That is not going to stop the war, but it involves a string of
consequences and possibilities of the utmost importance to our problem
of what is coming when the war is over.

The exhaustion that will bring this war to its end at last is a process
of destruction of men and material. The process of bankruptcy that is
also going on is nothing of the sort. Bankruptcy destroys no concrete
thing; it merely writes off a debt; it destroys a financial but not an
economic reality. It is, in itself, a mental, not a physical fact. "A"
owes "B" a debt; he goes bankrupt and pays a dividend, a fraction of his
debt, and gets his discharge. "B's" feelings, as we novelists used to
say, are "better imagined than described"; he does his best to satisfy
himself that "A" can pay no more, and then "A" and "B" both go about
their business again.

In England, if "A" is a sufficiently poor man not to be formidable, and
has gone bankrupt on a small scale, he gets squeezed ferociously to
extract the last farthing from him; he may find himself in jail and his
home utterly smashed up. If he is a richer man, and has failed on a
larger scale, our law is more sympathetic, and he gets off much more
easily. Often his creditors find it advisable to arrange with him so
that he will still carry on with his bankrupt concern. They find it is
better to allow him to carry on than to smash him up.

There are countless men in the world living very comfortably indeed, and
running businesses that were once their own property for their
creditors. There are still more who have written off princely debts and
do not seem to be a "ha'p'orth the worse." And their creditors have
found a balm in time and philosophy. Bankruptcy is only painful and
destructive to small people and helpless people; but then for them
everything i