n all is said and done, the fact that a
war should put many half-bankrupt concerns on their legs, and make
fairly prosperous companies three or four times more prosperous
than before the war, is an influence in an undesirable direction.

FOOTNOTES:

[Footnote 33: Moreover, as I hope to suggest later, even these losses to
a few individual _industries_ do not necessarily imply losses to the
_capital_ involved, which in some cases has been diverted or adapted to
other industries more appropriate to the times. For a review of Trade
profits in 1916 see the _Manchester Guardian_, January 1, 1917.]

[Footnote 34: See Appendix I.]

[Footnote 35: Quoted in the _New Age_, March 16, 1916.]

[Footnote 36: April 8, 1916, from the "City" article by Emil Davies.]

[Footnote 37: My italics.]

[Footnote 38: The rise in freights is a good example of the way in which
abnormal profits are extorted from the public as soon as any scarcity
puts them at the mercy of the trader. (See above, p. 45.) The rise in
freights is unalloyed profit, for the shipping companies have no
increased risk, since the Insurance Companies are guaranteed by the
State.]

[Footnote 39: Which was first drafted in a letter to _The Garton
Foundation_ more than a year ago.]

[Footnote 40: April 29, 1916. One might also mention for its
verisimilitude the situation described at the end of Mr. F. Brett
Young's novel _The Iron Age_ (Secker, 1916), in which the insolvent
ironworks of Mawne are saved in the nick of time by the declaration of
war.]

Sec. 2

Trade lives on Increasing Demand

All war, whatever temporary dislocation of business it may involve, must
ultimately, as a principal form of destruction, assist the intensive
cultivation of demand which constitutes nearly the whole of modern
trade. The industrial revolution of the nineteenth century with all its
labour-saving machines was originally an economy of necessary
production; by the middle of the century it overshot its mark, and
hastened the world to the brink of the opposite disaster of
over-production. In the present commercial era we are still suspended
over that dreadful brink. Nothing can stop the accelerated flux of
mechanical production; and we are saved from falling into the abyss only
by the unnatural increase of ordinary consumption. The consumption of
the ordinary markets, even when stimulated by the most violent tonics of
advertisement, is strictly limited, and the limi