it is hardly safe to count on American example to improve the standard of war finance which has been so lamentably low in Europe in the course of the present war.  According to their original estimates the proportion of war cost borne out of taxation seems to have been on very much the same level as ours, and this has all through the war been very much lower than the results achieved by our ancestors at the time of the Napoleonic and Crimean wars.

On this point the proportion of our expenditure, which has been borne out of revenue, the Chancellor stated that up to the end of last financial year, March 31, 1918, the proportion of total expenditure borne out of revenue was 26.3 per cent.  On the estimates which he submitted to the House in his Budget speech on April 22nd, the proportion of total expenditure met out of revenue during the current financial year will be 28.3 per cent., and the proportion calculated over the whole period to the end of the current year will be 26.9 per cent.  These proportions, however, are between total revenue and total expenditure during the war period.  The proportion, of course, is not so high when we try to calculate actual war revenue and war expenditure by deducting on each side at a rate of L200 millions a year as representing normal expenditure and revenue and leaving out advances to Allies and Dominions.  On this basis the proportion of war expenditure met out of war revenue up to March 31, 1918, was, the Chancellor stated, 21.7 per cent.  For the year 1917-18 it was 25.3 per cent., for the current year it will be 26.5 per cent., and for the whole period up to the end of the current year 23.3 per cent.  The corresponding figures for the Napoleonic and Crimean wars are given by Sir Bernard Mallet in his book on British Budgets as 47 per cent. and 47.4 per cent.  So that it will be seen that, judged by this test, our war finance, though very much better than Germany’s, is not on so high a standard as that set by previous wars.  It is true, of course, that the rate of expenditure during the present war has been on a scale which altogether dwarfs the outgoing in any previous struggle.  The Napoleonic War is calculated to have cost some L800 millions, having lasted some twenty-three years.  Last year we spent L2696 millions, of which near L2000 millions may be taken as war cost, after deducting normal expenditure and loans to Allies.

Nevertheless, this argument of the enormous cost of the present war does not seem to me to be a good reason why the war should be financed badly, but rather a reason for making every possible effort to finance it well Are we doing so?  At first sight it is a great achievement to have increased our total revenue from L200 millions before the war to L842 millions, the amount which we are expected to receive during the current year on the basis of the proposed additions to taxation, without taking into account any revenue from the suggested luxury tax.  But, as I have