_November_, 1917

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.


A legend current in the City says that the Imperial War Committee, or
whatever was the august body entrusted with the task of thinking out
war problems beforehand, had done its work with regard to the Army and
Navy, transport and provision, and everything else that we should want
for the war, and were going on to the question of finance next week,
when the war intervened. Whatever may be the truth of this story, the
events of the war confirm the opinion that if it was not true it ought
to have been. We are continually accused of not having been ready for
the war; but, in fact, we were quite ready to do everything that we
had promised to do with regard to military and naval operations. Our
Navy was ready in its place in the fighting line, and the dispatch
with which our Expeditionary Force was collected from all parts of the
kingdom, and shipped across to France, was a miracle of efficiency and
practical organisation. It is true that we had not got an Army on a
Continental scale, but it was no part of our contract that we should
have one. The fighting on land was in those days expected to be done
by our Allies, assisted by a small British force on the left flank of
the French Army. That British force was duly there, and circumstances
which were quite unforeseen made it necessary for us to undertake a
task which was no part of our original programme and create an Army
on a Continental scale, in addition to doing everything that we had