Came Mr. Montagu, the Financial Secretary of the Treasury, the reputed "budget genius" of the Government. Britons must be prepared, he told them, "during the year ahead, to disgorge to the State _not less than one-half of their entire income_, either in the form of taxes or loans." Lord Reading's borrowing commission to America was still on the water, the ink on its $500,000,000 "credit loan" in New York not yet dry. "I estimate our expenditure for the year," said Mr. McKenna, the Finance Minister, in the House of Commons, at "seven billions, nine hundred fifty million dollars" (only he spoke in pounds). "As our total estimated revenue, inclusive of new taxes, is one billion, five hundred twenty-five million dollars, the deficit for the year will be six billion, four hundred twenty-five million dollars. We have now to contemplate a Navy costing for the current year $950,000,000, an Army costing $3,575,000,000, and external advances to our Allies (Russia, France, Italy, Serbia and Belgium) amounting to $2,115,000,000."
Then the merciless Chancellor of the Exchequer acquainted Parliament with his scheme for raising a part of this Brobdingnagian revenue. Free trade must be partially shelved. There will be a revenue tariff on "luxury" imports. Income-tax in 1916 will be forty per cent. higher and will amount altogether to about fifty cents on every five dollars earned. Even the man with $650 a year will pay, while "plutocrats" with incomes above that figure will be mulcted even more relentlessly. He of $25,000 will pay $5,150, and nabobs with $50,000, $100,000 and $500,000 per annum (England has several in the latter category) will contribute, respectively, $12,650, $30,150 and $170,150. War is hell. No wonder a parliamentary wag, on the day Mr. McKenna introduced "Conscription of Wealth," interrupted with a merry "Why don't you take it all?"
Up to December, 1915, the Government had asked Parliamentary sanction for war credits aggregating $6,500,000,000. But even this staggering total (the war was now costing $25,000,000 a day) was planned to carry the campaign only up to the middle of November. The $500,000,000 loan transaction in the United States only produced funds to be spent there, and it was but half of what was asked. It only indirectly relieves the situation at home. Allowing for the deficit carried over from last year, the latest budget proposes taxes amounting to $1,525,000,000 and loans aggregating $6,425,000,000 for the fiscal year 1915-16. But even the most patriotic experts in Threadneedle Street acknowledge the utter impossibility of raising $6,425,000,000 of genuine money by public loan in Britain per year. They reluctantly predict that the Government will soon be driven to extend its use of fictitious money and paper--on the excoriated German model. The war has already eaten toward the bottom of the stockings and the strong-boxes of Britain where American securities are stored.