“Let us sum up.  England’s reputation for honest business dealing and for trustworthy administration has suffered.  Her insular inviolability has been put in question.  The ravages of war have undermined the achievements of many generations.  Her free gold market has broken down.  The flow of capital towards London will fall off, for those who cannot borrow there will no longer send deposits.  The surplus shown in her balance-sheet will contract.  Foreign trade will also decrease.  Hand in hand with this fall, free trade, that mighty agent in the development of England’s supremacy, will, in all probability, give place to protection.  Stock Exchange business will grow less.  Rates of interest will be permanently higher.”

How much truth is there in all this?  Has our reputation for honest dealing and for trustworthy administration suffered?  Surely not in the eyes of any reasonable and unprejudiced observer.  In the course of the greatest war in history, fought by Germany with weapons which have involved the violation of the most sacred laws of humanity and civilisation, England has acted with a respect for the interests of neutrals which has been severely criticised by impatient observers at home.  As for our “insular inviolability” having been put in question, it certainly has not, so far, suffered any serious damage.  Our Fleet has defended us from invasion with complete success, and the damage done by marine and aerial raiders to our property on shore is negligible.  Our free gold market is said to have broken down.  The proof of the pudding is in the eating.  Germany, when the war began, immediately relieved the Reichsbank from any obligation of meeting its notes in gold, and frankly went on to a paper basis.  England has already shipped well over 200 millions in gold to America to finance her purchases there and those of her Allies.

It may be true that capital will not flow to London if London is not in a position to lend, but we see no reason why London should not be able to resume her position as an international money lender, not perhaps immediately on the declaration of peace, but as soon as the aftermath of war has been cleared away and the first few months of difficulty and danger have been passed.  The prophecy that foreign trade will decrease may also be true for a time owing to the destruction of merchant shipping that the war is causing.  This possibility, however, may be remedied between now and the end of the war if the great programmes of merchant shipbuilding which have been undertaken by the British and American Governments are duly carried out.  In any case, even if foreign trade decreases, there is no reason whatever to expect that England’s will decrease faster than that of other nations.

In all these problems we have to look for the relative answer and to consider not whether England has suffered by the war, for it is most obvious that she has, but whether she will have been found to have suffered more than any competitor who may threaten her after-war position.