h to cease with the fighting we should
thus now be able to see, more or less, how we stand. During the
fighting period the Government raised by taxation the sum of L2120
millions,[1] from which we have again to deduct L860 millions as an
estimate for normal peace taxation, if the war had not happened,
leaving L1350 millions as the net war taxation, and L4142 millions as
the net addition to debt from the war.

[Footnote 1: _Economist_, Nov. 16, 1918.]

But, of course, there are still some large and uncertain sums to come
in to both sides of the account. There is the cost of maintaining our
Army and Navy during the armistice period, the cost of demobilisation,
and the cost of putting an end to war munitions contracts running for
many months ahead, holders of which will have to be compensated. Who
has enough assurance to venture on an estimate of the cost of these
items? Shall we guess them at something between L1000 and L1500
millions? And when we have made this guess are we at the end of the
war's cost? Ought we not to include pensions to be paid, and if so, at
what figure? Fifty millions a year for thirty years? If so, there is
another L1500 millions. And interest on war debt, and for how long?

On the other side of the balance-sheet, the only asset that has not
yet been included in the calculation is the sum that we are going to
receive from Germany, Some cheery optimists think that it is possible
for us and for the Allies to make Germany pay the whole of our war
cost. If so, we have halcyon days ahead, for not only shall we be able
to repay the whole war debt but also to pay back to the taxpayer all
the L1350 millions that he produced during the war, unless, as seems
more likely, the Government finds other uses, or abuses, for the
money, and sets its motley horde of wasters to work again. But this
problem, of course, is not going to arise. It would not be physically
possible for Germany to pay the whole of the Allies' war cost, except
in the course of many generations, and, moreover, the Allies have
bound themselves not to make any such demand by the rider that they
added to President Wilson's peace terms, in giving their assent to
them as the basis on which they were prepared to make peace. Early
in November they stated that President Wilson's reference to
"restoration" of invaded countries should, in their view, be expanded
into a claim for compensation "for all damage done to the civilian
population of the Allie