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our system of air patrols adequate, time erected along the coast of Belgium and can we not devise some system of we do not believe that the navy, with patrol by air at sea which would give or without an army, can be used so us an immunity from air attack not as to produce decisive military results. absolute, indeed, but corresponding to In the Dardanelles, and in the East the immunity enjoyed by our coast generally, it might; on the coast of towns from bombardment by surface Belgium we doubt it. The conditions craft? We are not satisfied with the in the German operations in the Baltic answers usually given to such ques- were entirely different. Still, we are tions as these, and have a rooted objec- open to conviction on this point, which tion to our air defenses at home being is admittedly contentious. Lastly, governed by military ideas. The sea should our navy rest content with its is the region in which we should be exclusion by mines from a large area defended from raids. Secondly, can like the Baltic? Could we have done our navy be used more effectually in more to help Russia against the Gercombined operations with the army? man naval concentration than we It could certainly if we had used the apparently have? The question of the navy to better purpose in the Eastern Baltic is the most serious and searchMediterranean, but there it was usu- ing of all, and we find it exceedingly ally our army authorities who held difficult to reconcile ourselves to a back the military support necessary system which makes the Baltic a if naval power was to exert its full closed sea. For this is a permanent military effect. But against fortifica question. If we acquiesce now, we tions such as the Germans have by this acquiesce for good and all.

The Manchester Guardian.

WARTIME FINANCE.

(The colossal expenditures of the war, and the pressing problems which confront the different Governments and the financiers and business interests of the different countries are of so profound national concern that THE LIVING AGE proposes to print for the present, from week to week, a department specially devoted to their consideration. -Editor of THE LIVING AGE.)

PARLIAMENT AND FINANCE. With his incurable habit of saying the wrong thing, Mr. Bonar Law introduced a supplementary vote of credit of 400 millions in a speech full of jaunty optimism which can only have a bad effect. It will confirm public sentiment in its slipshod slackness with regard to finance, and it will not help the sales of National War Bonds, which already show a considerable dwindling after the opening rush. It will be remembered that the House was alarmed when, during the period covered by the first vote of credit for this financial year, the expenditure showed an increase of two

millions a day above the Budget estimate. It was explained at the time that exceptional circumstances had produced this increase, and there was every reason to expect that it would not continue. Because it has pot continued, and since that time the excess over the estimate has come down to about one million a day, the Chancellor of the Exchequer seems to think that all is well with finance, and proceeds to deal with the subject in a strain of airy carelessness, encouraging the country to follow its natural bent and do likewise. He dealt with the whole period from the beginning of the financial year to September 29th. During this period he admitted that the fact that most finds an average daily expenditure of these sums were, in his opinion, (presumably out of votes of credit) of some day recoverable, did not make £6,648,000, an increase over the esti-, any difference to the amount that we mate of £1,237,000 per day, of which have now to find for the war, and by the Army and Navy took £590,000, making this admission he knocked the miscellaneous services £306,000, and bottom out of his own argument. the amounts advanced to Allies and Because it is this problem of finding Dominions £341,000. Thus during the money for the war and of doing so in first half of the year the Budget esti- the right way that the nation has to mate has been exceeded by roughly be induced to face seriously, if it a million and a quarter a day. If this does not care to risk grave danger to rate is continued-and in the second its financial staying power. Moreover, half of the year it seems at least likely to treat all these assets as worth their to be exceeded, owing to the costs of cost price in his balance-sheet is an the Government's policy with regard example of very questionable .bookto wheat and its increase in the pay of keeping. We know that many of our soldiers and sailors—the Budget esti- Allies will be very seriously impovermate of expenditure will be increased ished by the war-much more so than by roughly 450 millions. And yet in we shall; that it will be impossible to the face of this staggering miscalcula- expect them to begin to pay us intertion the Chancellor made a speech est (unless we lend them the money which produced, we are told, a greatly to do so) for some time after the war; reassured feeling in the House. He did and that the repayment of the capital so by showing that a large part of this advanced is a matter for which we increased expenditure is spent upon have to wait for perhaps a generation, stocks which are afterwards sold or is or several. This being so, not many in other ways recoverable, and ought, respectable accountants would be intherefore, in the Chancellor's words, clined to put their signatures to the “not to be regarded as if it were a Chancellor's statement without a qualidead weight burden upon our expendi- fying footnote. Moreover, with regard ture." These items were as follows: to the biggest item-raw materials,

Millions. foodstuffs and ships-one must feel Loans to Allies and Dominions.. 61%2 again considerable doubt as to whether In hands of Treasury Agents.. 152 the price paid by the Government Advances to Dominions ....... 24 will necessarily be recovered by it. Raw materials, food and ships. ..7412 In view of the example pointed out Payments on behalf of Allies.... 372 by the Expenditure Committee's re

port of 26 million pounds worth of Total ...................179

Australian wheat, which is rapidly Deducting this sum from 22272 mildeteriorating because the Government lions, the increase during the half- bought it first and then began to year, we get the comfortable little think about shipping it, we feel that sum of 4372 millions, or only about a for this item also there should be quarter of a million a day instead of considerable reserve for contingencies. a million and a quarter shown Mr. Bonar Law, however, thinks that by the figures of expenditure; and because so much of the Government these arithmetical gymnastics ap- expenditure has now gone into articles pear to have delighted and re- or securities which may perhaps some assured the House. Mr. Bonar Law day be turned into money, he is justified in refraining from imposing Law, so long as he can merely keep further taxation. And here again he pace with service of the debt-and as indulged in an essay in bookkeeping Mr. McKenna showed, it is very doubtoptimism, and also contrived to mis- ful whether he is so doing—not only lead the House rather seriously by feels satisfied himself, but misled the maintaining that the "principle on House by a statement which implies which we had always hitherto gone" that this is the principle on which our was that at the end of the financial war finance has all through been based. year there ought to be sufficient taxa. In an interesting analysis of the tion, without counting excess profits position of the debt, he took the total duty, when peace comes to bear the National Debt at roughly £5,000 normal expenditure of the country.” millions on September 29th, and havHe maintains that he examined the ing deducted from it loans to Allies of problem from this point of view, and £1,100 millions, loans to Dominions that if he had found that this would £160 millions, responsibilities taken not be so, he would have introduced a by the Indian Government £66,000,000, new Budget. It would be interesting he makes a total of £1,326,000,000. to know on what figures Mr. Boşar He thus, again making the comfortable Law based his estimate. If he is assumption that all our loans to Allies expecting that peace expenditure will are as good as cash, brings down the be on anything like the old basis, he total of our net debt to £3,674 millions, involves himself in a dilemma which and having deducted the National was later pointed out by Mr. McKenna. Debt at the beginning of the war, Since the yield of taxation is based on which he puts at £645 millions, he the present level of prices, it is clear leaves us with a net war debt of that if the Government of the country roughly £3,000 millions. From these can be carried on on anything like the figures he proceeded to the usual song pre-war figures, the yield from taxa- of triumph based on a comparison tion would not be on anything like the between our finance and Germany's. present level. Moreover, what did the The fact that German finance is very bad Chancellor mean by saying that this indeed is only comforting if it means principle which he laid down was the that German staying power for the one "on which we had hitherto always war is thereby weakened. But in view gone"? Whom does he mean by "we"? of German discipline and docility and If he means the present Government, readiness to believe official statements, no doubt he is right, but the present it does not necessarily follow that this Government is the most profligate in is so. Otherwise the fact that German extravagance and the most slipshod war finance has been very bad indeed in finance that we have had since the is no comfort to us because ours is very war. To say nothing of our ancestors, bad. Mr. McKenna endorsed Mr. who paid nearly half the cost of the Bonar Law's views that a suppleNapoleonic War out of revenue, in mentary budget was unnecessary. April 1916, Mr. McKenna, who was Nevertheless, the pace at which we are by no means a Paladin in taxation, piling up debt, a considerable part budgeted for a surplus "on the basis of which has been raised abroad (a of peace expenditure after another year fact on which the Chancellor carefully of war, and all its expenses,” of 85 laid no stress) is causing a good deal of millions. He was thus able to antici- concern among thinking men in the pate, if peace came, a considerable City, who are able to see more clearly margin for relief. Yet Mr. Bonar than the Chancellor that this policy

has bad results during wartime, and may have still worse ones to be faced when the war is over.

In the subsequent very thinly attended debate perhaps the most illuminating remark fell from Sir J. Walton, who said that he had spent the recess in Scotland, and could tell “How many landowners there are chortling over the splendid bargains that they have made with this incompetent Government in finance.” Such is our financial leadership in the fourth year of the costliest war ever fought. Surely it is high time to improve it.

The Economist.

AMERICA's TASK.

It is impossible to study the reports from New York and Washington without becoming increasingly impressed by the skill which is being exercised in mobilizing the resources of the States for the financing of the war. Those who have the best knowledge of the American character and American methods were convinced that when the United States came to take part in the war her efforts would be of a very whole-hearted character. But there were some who were doubtful whether it would be possible to sufficiently liquefy the resources of the country to deal with the colossal figures represented by war expenditure, and particularly by America's grants to the Allies. Previous to 1914 the riches of America, though very great, were of an infinitely less liquid character than in some other countries, and notably our own. Three years ago, therefore, there would have been few who could have imagined that in the fourth year of the war America would be granting foreign loans to the extent of hundreds of millions annually, and, in addition, be financing unprecedented activity in her home industries at a time when the

financial facilities usually granted by Lombard Street were diverted for our own use and those of our Allies in meeting war expenditure. And yet the apparently impossible thing has become an accomplished fact. To a considerable extent, of course, the power of America to grasp the situation received its initial impetus from the huge purchases of the Allies in the United States during the first two years of the war, thus giving the country a favorable trade balance of unprecedented magnitude. This in itself, however, would not have been sufficient without the vast improvement effected in the banking system of the country and the wonderful ingenuity displayed by financiers and statesmen alike ever since America came into the war on the side of the Allies. And now, according to the latest reports, it is clear that co-operation between Washington and bankers throughout the country is becoming increasingly close, though in Wall Street there seems to have been a passing disturbance in securities. The President has called for “the mobilization of the whole gold reserve of the nation under the supervision of the Federal Reserve Board.” This is undoubtedly the right course to pursue, if, as we imagine, it is a prelude to employing such gold reserves in the most efficient manner, that is to say, giving those who control it the fullest power for the expansion and contraction of credit facilities as may be required. We mention “contraction” as well as expansion, though it is needless to add that, so long as present abnormal conditions continue, it is expansion rather than contraction which will be required. The time for contraction may come at a later period. Meanwhile, however, America may be assured that those who are watching her efforts at the present time, both friends and foes alike, are im

pressed not only with the energy displayed, but with the manifest signs of ever-improving organization. No one knows better than Germany that it is

The London Post.

organization as well as effort which spells victory, and of such organization there are abundant signs in America today.

BOOKS AND AUTHORS.

Readers who, in the midst of all that is stern, practical and tragic in present-day existence, can still find pleasure in tales of nymphs and fauns, will enjoy Eden Phillpotts's quaint and imaginative tale of “The Girl and the Faun" (J. B. Lippincott Co.). Decorated borders on every page throw the story up in strong relief, and four colored illustrations by Frank Brangwyn interpret the text.

Under the title “Mystery Tales for Boys and Girls" (Lothrop, Lee & Shepard Co.) Elva S. Smith, an expert librarian, has collected twenty-six selections in prose and verse, appealing to the youthful imagination. The collection opens with Poe's “The Gold-Bug"; there are four selections from Washington Irving, and three from Sir Walter Scott; and Macaulay, Moore, Longfellow, Hawthorne, and Alfred Noyes are among the other authors drawn upon. There are several selections also, in translation, from German, French and Swedish authors.

obvious reasons for resorting to them, but to those who wish so to regulate their meals as to avoid dieting as a painful necessity.

Encased in a jacket, and decorated with end pieces which show a dainty and tranquil princess ruthlessly borne away on the shoulders of a most unprepossessing giant, Miss Frances Jenkins Olcott's “Tales of the Persian Genii” (Houghton Mifflin Co.) makes an instant appeal to young readers who have a yearning for wonder tales. Beguiled by these decorations, and by four highly-imaginative pictures in color by Willy Pogany, they will find a collection of Oriental tales, drawn from ancient Persian sources, and skillfully retold in such a way as to interest young readers of today without losing their Eastern flavor.

The distinguishing quality of the series of "Children of Other Lands Books” (Lothrop, Lee & Shepard Co.) is that they are not mere descriptions written from the outside by chance travelers, but actual narratives of personal experiences by writers who describe their own childhood. As all roads once led to Rome, so the roads traversed by all of these writers led to America, and, out of full hearts and vivid memories, they tell the story of their early years. The latest volume is "When I Was a Girl in Holland" by Cornelia de Groot, and it is simply and directly written, in a style quite as likely to arrest the attention of young readers as the tales of the professional purveyors of young people's fiction,

It is a beguiling and extremely slender figure which decorates the cover of Vance Thompson's "Eat and Grow Thin Calendar for 1918" (E. P. Dutton & Co.) and within, through page after page for each month, are given “Mahdah" menus, changing with the seasons and devised with a view to achieving the re ult indicated on the cover, yet by no means unattractive. The suggestions are adapted not only to those who have

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