dy so rampant among the happy-go-lucky citizens of this
unthrifty people--that the worst thing to do with money is to save it
there will be bad times ahead for our industry and commerce, which can
only get the capital that it needs if somebody saves it. Mr Hoare's
elaborate calculations led him to conclusions involving a tax of
11s. 6d. in the pound on unearned income. This figure is, I hope,
needlessly high. To arrive at it he assumed that peace might be
concluded towards the end of 1919, and that when peace conditions are
fully re-established--which will take, he thinks, three years, the
National Debt will amount to L10,000 millions, involving annual
interest of L500 millions, which, added to the total Rente of the
country in 1913 (which he made out to be L520 millions), will make a
total Rente in 1923 of L1020 millions. His view is that the burden of
the National Debt should be thrown by means of the income tax upon the
national Rente, not taxing it out of existence, but by such a scale of
taxation as would reduce the net Rente of the country to approximately
the level at which it stood before the war.

There is good reason to hope that Mr Hoare's figures will not be
reached. He took L10,000 millions merely as a round sum. Mr Bonar Law,
it will be remembered, worked out our net debt on March 31st next at
L6856 millions, taking credit for half the estimated amount of loans
to Allies as a good asset. If we prefer as sounder bookkeeping to
write off the whole of our loans to Allies for the time being and
to apply anything that we may hereafter receive on that account to
Sinking Fund, the debt, on the Chancellor's figures, will amount on
March 31st (if the war goes on till that date) to L7672 millions. Even
if the war went on for six months more it ought not to bring the debt
up to more than L9000 millions at the outside. It is quite true, as
Mr Hoare says, that the return to peace conditions will be a gradual
process, and that expenditure will not come back to a peace basis all
at once. Demobilisation and other matters which were left, by our
cheery Chancellor, out of the airy after-war balance-sheet that he so
light-heartedly constructed, may cost L1000 millions or more before
we have done with them. But against them we can set a string of
recoverable assets which, in the Chancellor's hands, footed up a total
of L1172 millions--balances in agents' hands, due debts (apart from
loans to Allies), land, securities, ships,