ar heavier casualties, have been estimated at
amounts ranging as high as L200 millions. The Chancellor was sure
that he was within the mark in saying that it will be at least L150
millions. Their normal pre-war expenditure was L130 millions, so that
they will have to face a total expenditure at the end of the war of
L720 millions. On the other side of the account their pre-war revenue
was L150 millions. They have announced their intention of this year
raising additional permanent Imperial revenue amounting to L120
millions. From the nature of the taxes the Chancellor considers it
very difficult to believe that this amount will be realised, but,
assuming that it is, it will make their total additional revenue L185
millions. That, added to the pre-war revenue, gives a total of L335
millions, showing "a deficit at the end of this year, comparing
the revenue with the expenditure, of L385 millions at least." The
Chancellor added that if that were our position he would certainly
think that bankruptcy was not far from the British Government.

Another point that the Chancellor was able to make effectively, in
comparing our war revenue with Germany's, was the fact that, with the
exception of the war increment tax, scarcely any of the additional
revenue has been obtained from the wealthier classes in Germany.
Taxation has been indirect and on commodities which are paid for by
the masses of the people. "The lesson to be drawn from these facts is
not difficult to see. The rulers of Germany, in spite of their hopes
of indemnity, must realise that financial stability is one of the
elements of national strength. They have not added to their financial
stability." The reason for this failure the Chancellor considers to be
largely psychological. It is, in the first place, because they do not
care to add to discontent by increased taxation all over the country,
but "it is still more due to this, that in Germany the classes which
have any influence on or control of the Government are the wealthier
classes, and the Government have been absolutely afraid to force
taxation upon them."

It is certainly very pleasant to be able to contemplate the financial
blunders by which Germany is so greatly increasing the difficulties
that it will have to face before the war is over. On the other hand,
we have to recognise that the Chancellor, with that incorrigible
optimism of his, has committed the common but serious error of
over-stating his case by l