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of the war debts is not obscure. The 'money' which the governments got by printing notes, by borrowing from banks, or by inciting banks to give credit to customers in order to increase subscriptions to war loans (all pure inflation), they spent in buying goods and services. Thus prices and profits mounted up the faster, because this easy way of getting money made governments more careless in the rates they paid for what they bought. The immense and rapid profits—due to the expanding prices, with a lag of wages and a virtual elimination of competition—the recipients invested in war-loans, the only authorised and available investment. At the end of the war, in this country, the bond-holding class had established, by savings from these inflated war profits, a claim to deduct for the annual income of the people of this country, a sum of nearly £400 millions.^[1] With booming trade and high prices, this sum probably represented about 10 per cent, of the national income. With declining trade, falling prices and falling income, this fixed sum signifies an increasing percentage. If our national income fell to its pre-war level, the burden of war-interest would amount to between 15 per cent, and 20 per cent, of the total income. Now this burden differs from every other form of 'unearned income' in that, whereas rent, interest and profits are paid to the owners of some factor of production whose current productive use contributes to the increase of the real income of the country, no such claim can be made for the ownership of war

1. ↑ The interest on floating debt is here added to the annual interest on War Loans.