the fighters, and so we set free the labour and material
that used to go in providing us with comforts and pleasures; our
competition for goods is reduced, and so the Government is able to get
what it needs out of the nation's production, which is _pro tanto_
relieved of our demand. The same thing happens when the Government
gets money for the war by borrowing money that we save. We reduce
expenditure, and transfer buying power to the State and diminish our
demand on the nation's production, or that of its foreign supplies. If
the whole war cost had been met by these two methods there need have
been little or no increase in prices here, and the cost of the war
would have been about half what it has been. Of the two methods,
taxation is obviously the cleaner, simpler and more honest. By
borrowing, the State hires those who have a margin to put part of it
at the disposal of the State at a time of national crisis, instead of
taking it from them outright. As most of the taxation involved by
the subsequent debt charge falls on those who have a margin (as it
obviously should) the result is that the people who subscribed to the
loans are afterwards taxed to pay themselves interest and to repay
themselves their debt.

This subsequent taxation falls on them all alike in proportion to
their ability to pay, or would if the income tax was more equitably
imposed; those who have subscribed their fair share to the loans have
an offset, in the interest that they receive, against the taxation;
those who subscribed less are properly penalised, those who subscribed
more are properly benefited. If only the income tax did not make the
position of fathers of families so unjust, the whole arrangement would
look, at first sight, quite fair, though rather absurd and clumsy,
involving all this subscribing and taxing and paying back instead of
an outright tax and having done with it. But in fact a very grave
inequity is involved by this business of borrowing for war, and laid
upon just the people whom we ought, above all, to treat most fairly,
namely, those who fight for us. The soldiers and sailors risk their
lives for a pittance during the war, while their brothers and sisters
and cousins and uncles and aunts, left at home in security and
comfort, earn bloated profits and wages, and put them, or part of
them, into War Loans; then when the fighters come back, very likely
with their business and connection ruined or lost, they are expected
to c