if the Bank of England had been empowered and instructed to have an
issue of its own £1 notes ready, it may at least be contended that the
moratorium, which was so bad a financial beginning of the war, might
have been avoided.

But this opening crisis was a short-lived matter, and was promptly
dealt with, thanks to the energy and courage of Mr Lloyd George, who
was then Chancellor of the Exchequer, and saw that things had to be
done quickly, and took the advice of the City as to what had to be
done. The measures then employed erred, if at all, on the side of
doing too much, which was certainly a mistake in the right direction
if in any. What is much more evident is the fact that not only had
there been no attempt to provide against just such a jolt to our
financial machine as took place when the war began, but that, quite
apart from the financial machinery of the City, no reasoned and
thought-out attention had been given to the great problems of
governmental finance which war on such a scale brought with it. There
is, of course, the excuse that nobody expected the war to be on this
scale, or to last so long. The general view was that the struggle
would be over in a few months, and must certainly be so if for no
other reason because the economic strain would be so great that the
nations of Europe could not stand it for a long time. On the other
hand, we must remember that Lord Kitchener, whom most men then
regarded as representing all that was most trustworthy in military
opinion, made arrangements from the beginning on the assumption that
the war might last for three years. So, while some excuse may be made
for our lack of financial foresight, it does seem to have been the
duty of those whose business it is to manage our finances to have
thought out a complete scheme to be adopted in case of war if at any
time we should be involved in one on a European scale. Instead of