War-Time Financial Problems | Page 2

of too much Strictness--Some Reforms necessary--Publicity, Education, Higher Ideals the only Lasting Solution--The Importance of Foreign Investments--Industry cannot take all Risks and no Profits
VIII THE YEAR'S BALANCE-SHEET The Figures of the National Budget--A Large Increase in Revenue and a Larger in Expenditure--Comparison with Last Year and with the Estimates--The Proportion borne by Taxation still too Low--The Folly of our Policy of Incessant Borrowing--Its Injustice to the Fighting Men
IX COMPARATIVE WAR FINANCE The New Budget--Our own and Germany's Balance-sheets--The Enemy's Difficulties--Mr Bonar Law's Optimism--Special Advantages which Peace will bring to Germany--A Comparison with American Finance--How much have we raised from Revenue?--The Value of the Pound To-day--The 1918 Budget an Improvement on its Predecessors--But Direct Taxation still too Low--Deductions from the Chancellor's Estimates
X INTERNATIONAL CURRENCY An Inopportune Proposal--What is Currency?--The Primitive System of Barter--The Advantages possessed by the Precious Metals--Gold as a Standard of Value--Its Failure to remain Constant--Currency and Prices--The Complication of other Instruments of Credit--No Substitute for Gold in Sight--Its Acceptability not shaken by the War--A Fluctuating Standard not wholly Disadvantageous--An International Currency fatal to the Task of Reconstruction--Stability and Certainty the Great Needs
XI BONUS SHARES A Deluge of Bonus Shares--The Effect on the Market--A Problem in Financial Psychology--The Capitalisation of Reserves--The Stock Exchange View--The Issue of Bonus-carrying Shares--The Case of the A.B.C.--A Wiser Variation from Canada--Bonus Shares on Flotation--An American Device--Midwife or Doctor?--The Good and Bad Points of both Systems
XII STATE MONOPOLY IN BANKING Bank Fusions and the State--Their Effects on the Bank of England--Mr Sidney Webb's Forecast--His Views of the Benefits of a Bank Monopoly--The Contrast between German Experts and British Amateurs--Bankers' Charges as affected by Fusions--The Effects of Monopoly without the Fact--The "Disinterested Management" Fallacy--The Proposal to split Banking Functions--A Picture of the State in Control
XIII FOREIGN CAPITAL The Difference between Aims and Acts--Should Foreign Capital be allowed in British Industry?--The Supremacy of London and National Trade--No need to fear German Capital--We shall need all we can get--Foreign Shares in British Companies--Can and should the Disclosure of Foreign Ownership be forced?--The Difficulties of the Problem--Aliens and British Shipping--The Position of "Key" Industries--Freedom to Import and Export Capital our Best Policy
XIV NATIONAL GUILDS The Present Economic Structure--Its Weaknesses and Injustices--Were things ever better?--The Aim of State Socialism--A Rival Theory--The New Movement of Guild Socialism--Its Doctrines and Assumptions--Payment "as Human Beings"--The "Degradation" of earning Wages--Production irrespective of Demand--Is that the Real Meaning of Freedom?--The Old Evils under a New Name--A Conceivably Practical Scheme for some other World
XV POST-WAR FINANCE Taxation after the War--Mr. Hoare's Scheme described and analysed--The Position of the Rentier--Estimates of the Post-War Debt--The Compulsory Loan Proposal--What Advantages has it over a Levy on Capital?--The Argument from Social Justice--Questions still to be answered--The Choice between a Levy and Stiff Taxation--Are we still a Creditor Nation?--Our Debt not a Hopeless Problem--Suggestions for solving it
XVI THE CURRENCY REPORT Currency Policy during the War--Its Disastrous Medievalism--The Report of the Cunliffe Committee--A Blast of Common Sense--The Condemnation of our War Finance--Inflation and the Rise in Prices--The Figures of the Present Position--The Break in the Old Relation between Legal Tender and Gold--How to restore it--Stop Borrowing and reduce the Floating Debt--Return to the Old System--The Committee's Sane Conservatism--A Sound Currency vital to National Recovery
XVII MEETING THE WAR BILL The Total War Debt--What are our Loans to the Allies worth?--Other Uncertain Items--The Prospects of making Germany pay--The Right Way to regard the Debt--Our Capital largely intact--A Reform of the Income Tax--The Debt to America--The Levy on Capital and other Schemes--The only Real Aids to Recovery
XVIII THE REGULATION OF THE CURRENCY Macaulay on Depreciated Currency--Its Evils To-day--The Plight of the Rentier--Mr Goodenough's Suggestion--Sir Edward Holden's Criticisms of the Currency Committee--His Scheme of Reform--Two Departments or One in the Bank of England?--Not a Vital Question--The Ratio of Notes to Gold--Objections to a Hard-and-fast Ratio--The Limit on Note Issues--The Federal Reserve Act and American Optimism--Currency and Commercial Paper--A Central Gold Reserve with Central Control
XIX TIGHTENING THE FETTERS OF FINANCE The New Meaning of Licence--The Question of Capital Issues--Text of the Treasury Regulations--Their Scope and Effect--The Position of the Stock Exchange--Wider Issues at Stake--Should Capital be set Free?--The Arguments for and against--Perils of an Excessive Caution--The New Committee and its Terms of Reference--The Absurdity of prohibiting Share-splitting--The Storm in the House of Commons--Disappearance of the Retrospective Clause--A Sample of Bureaucratic Stupidity
XX MONEY OR GOODS? "Boundless Wealth"--Money and the Volume of Trade--The Quantity Theory--The Gold Standard--How is the Volume of Paper to be regulated?--Mr Kitson's Ideal
INDEX

WAR-TIME FINANCIAL PROBLEMS

I
THE OUTLOOK FOR CAPITAL
September, 1917
The Creation of Capital--The Inducement--War and Capital
One of the questions that are now most keenly agitating the minds of the investing public and of financiers who cater for its wants, and also of employers and organisers of industry who are trying to see their way into after-the-war conditions, is that of the supply of capital. On this