payment of this interest need not necessarily diminish production,
and it may probably help in checking consumption. It will not impair
the total wealth of the world as a whole; it will merely affect its
distribution. And since it will mean that a considerable part of the
world's output will, for this reason, be handed over to the holders of
the various Government debts, who, _ex hypothesi_, will be people who
have saved money in the past, it is at least possible that they may
devote a considerable amount of the spin so received to further saving
or increasing the supply of capital available.

II

LONDON'S FINANCIAL POSITION

_October_, 1917

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.

Will the prestige of the London money market be maintained when the
war is over? This is a question of enormous importance, not only
to every one who works in and about the City, but to all who are
interested in the maintenance and increase of England's wealth. Like
all other questions about what is going to happen some day, the answer
to it will depend to a very great extent on what happens between the
present moment and the return of peace. To arrive at an answer we have
first to consider on what London's financial prestige has been based
in the past, and on this subject we are able to cite in evidence the
opinion of an enemy. Our own views about the reasons which gave us
financial eminence may well be coloured by national and patriotic
prejudice, but when we take the opinion of a German we may be pretty
sure that it is not warped by any predisposition in favour of English
character and achievement.

A little book published this year by Messrs. Macmillan and Co.,
entitled "England's Financial Supremacy," contains a translation of
a series of articles from the _Frankfurter Zeitung_, and from this
witness we are able to get some information which may be valuable, and
is certainly interesting.

The basis of England's financial supremacy is recapitulated as follows
by this devil's advocate:--

"The influence of history, a mighty empire, a cosmopolitan Stock
Exchange, intimate business connections throughout the whole world,
cheap money, a free gold market, steady exchanges, an almost unlimited
market for capital and an excellent credit system, an elastic system
of com