produced the better-which again means, the less there is to distribute among everybody the better. Is not this a palpable absurdity? Why not, then, reduce the number of workers still further? To travesty an old couplet, to those who say, "Our gain is great because our work is small," we reply, Then 'twould be greater if none worked at all.” The fallacy lies in this. The producers who are so jealous of competition forget that the unproductive consumers (whom they wish to remain so) have to be maintained out of the produce of their (the producers') labour; and the greater or lesser the disproportion of numbers, the heavier or the lighter the burden. It is just as in a strike for, say 5 per cent. difference in wages. Those at work may ultimately get some benefit, but meanwhile they have to support their mates who are out on strike, at an expense far exceeding the 5 per cent. difference in wages, and the more numerous the non-workers, the greater the expense. To keep the 3,000,000 soldiers out of the labour-market, the producers of Europe (combined labour, land, and capital) have to furnish their governments annually with £132,000,000—an absurdly heavy tax to pay for keeping down the number of producers, and for reducing the amount of production—a costly mode of securing an undesirable object!

CHAPTER X.

National Debts Incurred for War Purposes-Their Results and their Limits-General Remarks on the Destructiveness of War.

We now come to another of the "modes in which war is injurious." The various governments of the world are indebted to a number of private individuals in the vast aggregate sum of about £5,000,000,000. This amount, which was borrowed at various times and under various pretexts, those governments are under engagement to return, and meanwhile to pay annual interest thereon amounting to about £212,000,000. On the other hand, several governments have already declared themselves defaulters, have ceased paying the interest, and are not likely ever to pay the principal of their debts. Deducting these, there remain about £4,000,000,000 of unrepudiated national debts, on which the annual interest payable is about £170,000,000. Of the enormous principal in question, a portion (chiefly that lent to the United States and to our own colonies) has been borrowed for, and applied to, purposes of internal improvement, but, at the very least, three-fourths has been squandered on war expenses. The money is gone, the debt remains. Governments found it convenient, and deemed it not unjust, to borrow in the name, and for account, of posterity, and to mortgage the earnings of future generations in order to wage present war with greater efficiency. Accordingly, the world (Europe chiefly) has to pay a perpetual annuity of £170,000,000 in redemption of unauthorised

pledges, and in fulfilment of contracts to most of which the present generation has been vicariously bound.

We are not here seeking to disclaim our solidarity in, or to dispute our liability to, those arrangements, but we may be permitted to explain their origin and deplore their existence. Had the borrowing and funding system never been devised or adopted, wars must have proved infinitely less protracted, expensive, and wasteful, than they actually have been; and had the war-arbitrament system been superseded long ago (as Henry IV. of France and his wise minister Sully had planned) no war-loans would have been needful. These war-debts were to have been repaid in time of peace, but when peace came the debts were left untouched. With the exception of the United States, England, and a few minor instances, hardly any repayments have been made in diminution of these national debts. On the contrary, their tendency even in time of peace is still to increase, and no wonder, for funding is a far easier process than refunding. The present generation appears in no wise disposed to deal with. this legacy of debt otherwise than by handing it down to the next. Indeed, in case of a general European war, that legacy would go down to posterity frightfully increased in amount.

War in the present day is far more a question of finance and of money expenditure than in former times. Ironclads, improved rifles, and Krupp guns, require cash down. Hundreds of millions of pounds sterling would, in case of war, speedily be called for and absorbed, and the financial

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strain on some countries might become so intense as to lead to one of the two following results :The borrowing belligerent, who would, as his debt. increased and his credit declined, pay dearer and dearer for his loans, might burden his people with such a load of annual interest, that (1) either they could not continue to pay it, or that (2) if they did continue to pay it, the drain would absorb nearly all their annual savings- that is, the excess of their national production over national consumption. Let us cast a glance at both these contingencies.

In the first case, the indebted country would cease paying dividends on its debt, and would thus declare its insolvency. After this, there would be no more loans and very few wars for that wingclipped country. Its influence in the "councils of Europe," whatever that may be substantially worth, will become small; it will lose (if it be a loss) the haughty tone which provoked enmity, and the aggressive spirit which instigated attacks on its neighbours; it will subside into a "sadder and wiser" country, and it may in time, by cultivating the arts of peace, retrieve its financial fortunes, and finally redeem its forfeited honour.

In the second case, the honour of the country will have been saved, but its material interests seriously compromised. Let us trace the gradual operation of the war-loan system in a country until it reaches its extreme limit. Of course, if the money borrowed be strictly applied to the internal improvement of a country, as in railways, harbours, roads, &c., the additional taxes levied on the

people to pay the interest are more than counterbalanced by their share in the advantages accruing from such improvements. But it is far otherwise when the money is borrowed for war purposes. Money thus borrowed is no longer reproductive, but rapidly vanishes into gunpowder smoke; and the additional taxes levied on the people to pay the interest act as drains on the resources of the country for ever. The lenders' annual interest is paid, not out of the country's gains in return for capital reproductively employed, but out of the country's resources in return for money irretrievably squandered.

The fund-holder is not a producer like the ordinary capitalist. The capital of the latter employed in conjunction with land and labour, fructifies and creates wealth. The money of the former has been wastefully consumed, and creates nothing but a debt, and this debt, as long as it remains unpaid, constitutes the fund-holder an annuitant upon the loan-ridden country. As fresh exigencies arise, more money is borrowed; loan succeeds loan on more and more onerous terms; the number of unproductive annuitants (fund-holders, whether native or foreign) to be paid out of the earnings of the producers is multiplied; and the strain upon the resources of the country becomes more and more intense, until (for everything must have a term) the extreme limit of endurance is reached.

That limit we consider to be reached when the annual interest payable on the national debt equals or nearly approaches to the amount of the nation's annual savings. Nations seldom find themselves in