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The few items in this list are representative. Space does not permit to analyse the imports of luxuries in greater detail. Production has been thrown out of gear throughout the world. Hence the imports of Great Britain have been reduced largely because the exporting nations could not export as usual. Many of the luxuries imported into Great Britain come from France, Germany, Austria-Hungary, Italy, and Turkey. A glance at this list shows that in some instances the imports of luxuries have fallen severely, perhaps because the exporting countries could not send the goods. In other cases the imports of luxuries are as large as usual or even larger than usual. The importation of almonds, oranges, chocolates, currants, raisins, fruit preserved in sugar, greatly increased notwithstanding the War, while the imports of manufactured silks, confectionery, flowers, watches, and motor cars and parts diminished only slightly. If the consumption of imported luxuries was very much as usual, we may safely estimate that the consumption of home-made luxuries was also very much as usual.

Luxurious expenditure cannot easily be checked by voluntary effort, but it can easily be diminished by legislation. Amusements, especially those of the worthless kind, might be taxed, and the importation of foreign luxuries can be stopped completely, or almost completely, by prohibitive enactments. A short while ago the Government explained in the House of Commons that in blockading Germany foreign luxuries were not stopped because their importation, while not increasing Germany's military strength, weakened and damaged her financial position. One of the greatest financial problems for England consists in paying for her enormous imports. The most obvious step for improving Great Britain's financial position consists in ruthlessly cutting off the importation of all imported luxuries. The import duties put on motor cars, cinematograph films, &c., are a small step in the right direction. Import duties should without delay be put on all imported

luxuries, and even on those manufactured necessities. which can be produced in this country. The question of fiscal purism, the question of Free Trade and Tariff Reform, questions of party politics and of vote-catching, should not be allowed to undermine the financial position of this country at a time when it fights for its very life.

The War is costing Great Britain about £2,000,000,000 a year. It will probably before long cost considerably more. This country will, as I have endeavoured to show, be able to make up, and more than make up, for her War expenditure, however large it may be, by vastly increasing production, by reorganising, by Americanising, her industries. But the victory of the Entente Powers obviously depends very largely on Britain's financial strength. The immediate need of the country is therefore labour and thrift. Strenuous labour and careful thrift are required to tide this nation over the anxious months of war which will determine whether the world will become German or Anglo-Saxon, subject or free.



It seems likely that the War will swallow approximately onehalf of Great Britain's national wealth. So far it has cost this country more than £3,000,000,000. Before it is over the British war expenditure may be increased to £5,000,000,000 or £6,000,000,000. To that gigantic sum will have to be added pensions for incapacitated soldiers, war widows, and orphans, and compensation for losses. caused by the War, which together may require another £1,000,000,000. If, finally, we make due allowance for the financial value of the precious lives lost it will appear that the War will absorb about £7,500,000,000, a sum which is approximately equal to one-half of Great Britain's national wealth.

Opinions as to the economic consequences of the War are divided. Some assert that the gigantic losses incurred will industrially cripple Great Britain and all Europe and that, they will greatly strengthen the industrial and financial predominance of the United States. They tell us that Great Britain will decline economically and politically, and become another Belgium; that the United States will become the leading Anglo-Saxon nation for the same reason for which Carthage became the heir to the world empire created by Phoenicia, her mother State; that Washington will eventually become the capital of a great Empire; that war-ruined and pauperised Europe will become practically an American dependency; that the world will become

1 The Nineteenth Century and After, October, 1916.

American. That view is widely held on the other side of the Atlantic, where it is causing lively satisfaction. Other people vaguely believe that Great Britain is the richest country in the world,' and that the United Kingdom can easily bear the gigantic financial burden which the World War has laid upon its shoulders. In considering a great economic problem the doctrinaire turns to theory while the practical statesman applies to experience for guidance. Experience is no doubt the safer guide. Let us then consider the problem of the economic future from the practical, and particularly from the British, point of view.

The widely held opinion that Great Britain is the richest country in the world' is erroneous. According to the 'World Almanac and Encyclopedia' of 1916, the American equivalent of Whitaker's Almanack,' the national wealth of the British Isles, the British Empire, and the United States is as follows:

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From the same source we learn that the insurances in force came to £6,231,120,800 in the United States and only to £1,174,042,400 in Great Britain.

According to the American estimate the wealth of the United States is considerably more than twice as great as that of the United Kingdom, and is nearly 50 per cent. larger than that of the British Empire as a whole. As, during recent years, American wealth has been growing about three times as fast as British wealth, there is apparently much reason for believing that, owing to the heavy handicap imposed upon the United Kingdom by the War, the United States will in future outpace economic Great Britain at a faster and more furious rate than ever.

Let us glance at the foundations of America's vast wealth.

The United States are infinitely richer than Great

Britain because they possess a greater population and far greater developed natural resources. While Great Britain has 47,000,000 inhabitants the United States have 105,000,000 people. In man-power the United States are more than twice as strong as the United Kingdom. Only 6 per cent. of the inhabitants of the world are Americans, yet among the nations of the earth the United States are the largest producers of wheat, maize, oats, tobacco, cotton, timber, cattle, pigs, coal, petroleum, iron and steel, copper, silver, zinc, lead, aluminium, woollen and cotton goods, leather, silk, &c. The relatively small number of Americans produce one-fifth of the world's wheat, gold and silver, one-fourth of the world's zinc, one-third of the world's oats, iron ore, pig iron, and lead, two-fifths of the world's steel, coal, and tobacco, one-half of the world's aluminium, three-fifths of the world's copper, two-thirds of the world's cotton, petroleum, and maize. 'God's own country,' as the Americans call it, has indeed been blessed.

The United States are far ahead of all other nations not only in developed and exploited natural resources but also in mechanical outfit. The engine-power of the United States is vastly superior to that of Great Britain and of the British Empire. According to the last British and American Censuses of Production the manufacturing industries of the United States employ 18,675,376 horse-powers, while the British industries employ only 8,083,341. I have shown in the previous chapter that per thousand workers the American industries employ from two to three times as many horse-powers as do the identical British industries. An even greater superiority in the employment of laboursaving machinery will be found in mining, agriculture, inland transport, &c. Besides, the United States have available in their water-falls at least 40,000,000 horse-powers, of which, in 1908, 5,356,680 horse-powers were developed, while the water-powers possessed by the United Kingdom are quite insignificant. America's superiority in mechanical

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