Probably you think that all this talk about exports and imports, and the necessity for saving, is very dull, and you are eager to hear of stirring deeds by land and sea. We shall come to them in good time; but I must claim a little more of your patience before I begin the story of the year's fighting. Always remember that when the money which a nation possesses, or can borrow, gives out, it must cease to fight, and must make peace with its foes. That nation wins which has money to continue the struggle when the resources of its opponents are exhausted.
How do we obtain money with which to carry on the war? There is only one place where it can come from, and that is from the pockets of the British people. In time of peace the money for carrying on the government is raised by various kinds of taxes. People with incomes above a certain sum per year have to pay to the Government so much money for every pound which they earn or receive from investments. Those who have a lesser income do not pay what is called income tax, but you must not suppose that they go scot free. Spirits, beer, tea, coffee, tobacco, sugar, cocoa, dried fruits, and other things have to pay a duty--that is, a certain sum is added to their price, and this sum goes to the Government.
In time of war, when the expenses of the Government are much greater than they are in time of peace, the old taxes are raised and new taxes are imposed. In September 1915, for example, the taxes were raised some 40 per cent. Money is also raised from the savings of the people. They are asked to lend money to the State at a certain rate of interest, with the promise that the sum which they lend shall be paid back again in full at the end of a certain period. Of course, this interest has also to be provided by the taxpayers. Three hundred and fifty million pounds were borrowed in November 1914, but by June 1915 it was found necessary to borrow more money, and a loan of nearly six hundred millions--"far and away beyond any amount ever subscribed in the world's history"--was placed at the disposal of the Government. One feature of this loan was the attempt to get persons of small means to participate in it. Vouchers for 5s., 10s., and £1 were issued, and working men, and even school children, were encouraged to buy them. Unfortunately only about five millions were raised in this way, and later in the year other arrangements were made, in the hope of bringing in more money from the savings of the working classes. In September the people of the United States lent the British and French Governments one hundred millions, and this money was used to pay for some of the munitions and other things which we were buying from America.