ion of the Money Market, by WALTER BAGEHOT. Edited with a
new Preface by HARTLEY WITHERS. "There is no city man, however
ripe his experience, who could not add to his knowledge from its
pages."--_Financial News_.

"Blest paper credit! last and best supply!
That lends Corruption lighter wings to fly:
Gold imp'd by thee, can compass hardest things,
Can pocket States, can fetch or carry Kings;
A single leaf shall waft an Army o'er,
Or ship off Senates to a distant Shore;
A leaf, like Sibyl's, scatter to and fro
Our fates and fortunes, as the winds shall blow;
Pregnant with thousands flits the Scrap unseen,
And silent sells a King, or buys a Queen."

POPE, _Moral Essays_.

PREFACE

At a time when Finance is of greater importance than ever before, it
is hoped that this small volume may be of interest and value to the
public, and help the application of war's lessons to the problems that
face us in peace.

The contents, with the exception of the last article on "Money or
Goods?" (which appeared in the Trade Supplement of the _Times_ for
December, 1918), have already been published in _Sperling's Journal_,
from September, 1917, to March, 1919; they have been left as they were
written, except for a few verbal corrections.

I desire to express my thanks to the Editors of _Sperling's Journal_
and of the _Times_ for their kind permission to reprint the articles.

H. WITHERS.

June, 1919.

CONTENTS

I
THE OUTLOOK FOR CAPITAL
The Creation of Capital--The Inducement--War and Capital

II
LONDON'S FINANCIAL POSITION
London after the War--A German View--The Rocks Ahead--Our Relative
Position secure--Faulty Finance--The Strength we have shown--The Nature
and Limits of American Competition--No other likely Rivals

III
WAR FINANCE AS IT MIGHT HAVE BEEN--I
Financial Conditions in August, 1914--No Scheme prepared to meet the
Possibility of War--A Short Struggle expected--The Importance of Finance
as a Weapon--Labour's Example--The Economic Problem of War--The
Advantages of Direct Taxation--The Government follows the Path of Least
Resistance--The Effect of Currency Inflation

IV
WAR FINANCE AS IT MIGHT HAVE BEEN--II
The Changed Spirit of the Country--A Great Opportunely thrown
away--What Taxation might have done--The Perils of Inflation--Drifting
stupidly along the Line of Least Resistance--It is we who pay, not
"Posterity"

V
A LEVY ON CAPITAL
The Objects of the Levy--