I
THE OUTLOOK FOR CAPITAL
The Creation of Capital--The Inducement--War and Capital
II
LONDON'S FINANCIAL POSITION
London after the War--A German View--The Rocks Ahead--Our Relative
Position secure--Faulty Finance--The Strength we have shown--The Nature
and Limits of American Competition--No other likely Rivals
III
WAR FINANCE AS IT MIGHT HAVE BEEN--I
Financial Conditions in August, 1914--No Scheme prepared to meet the
Possibility of War--A Short Struggle expected--The Importance of Finance
as a Weapon--Labour's Example--The Economic Problem of War--The
Advantages of Direct Taxation--The Government follows the Path of Least
Resistance--The Effect of Currency Inflation
IV
WAR FINANCE AS IT MIGHT HAVE BEEN--II
The Changed Spirit of the Country--A Great Opportunely thrown
away--What Taxation might have done--The Perils of Inflation--Drifting
stupidly along the Line of Least Resistance--It is we who pay, not
"Posterity"
V
A LEVY ON CAPITAL
The Objects of the Levy--Its Origin and History--How it would work in
Practice--The Attitude of the Chancellor--The Effects of the Scheme in
discouraging Thrift--Its Fallacies and Injustices--The Insuperable
Obstacles to its Application--Its Influence on Production--One of the
Tests of a Tax--Judged by this Test the Proposed Levy is doomed
VI
OUR BANKING MACHINERY
The Recent Amalgamations--Will the Provinces suffer?--Consolidation not
a New Movement--The Figures of the Past Three Decades--Reduction of
Competion not yet a Danger--The Alleged Neglect of Local
Interests--Shall we ultimately have One Huge Banking Monopoly?--The
Suggested Repeal of the Bank Act--Sir E. Holden's Proposal
VII
THE COMPANIES ACTS
Another Government Committee--The Fallacy of imitating
Germany--Prussianising British Commerce--The Inquiry into the Companies
Acts--Will Labour Influence dominate the Report?--Increased Production
the Great Need--Will it be met by tightening up the Companies Acts?--The
Dangers 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