22 chapters
7 hour read
Selected Chapters
22 chapters
WAR-TIME FINANCIAL PROBLEMS
WAR-TIME FINANCIAL PROBLEMS
by Works by Hartley Withers THE BUSINESS OF FINANCE. 6s. net. Second Impression. "He treats of the subject mainly in its relation to industry, and smooths the path for those who find the way rather thorny. Timely and instructive."— Financial Times . OUR MONEY AND THE STATE. 3s. 64 net. Second Impression. "It should be read at once by every taxpayer. Mr. Withers' latest book can be most heartily commended,"— Morning Post . STOCKS AND SHARES. 6s. net. Fifth Impression. "It is a good book, it is su
1 minute read
Read Chapter
Read Chapter
PREFACE
PREFACE
At a time when Finance is of greater importance than ever before, it is hoped that this small volume may be of interest and value to the public, and help the application of war's lessons to the problems that face us in peace. The contents, with the exception of the last article on "Money or Goods?" (which appeared in the Trade Supplement of the Times for December, 1918), have already been published in Sperling's Journal , from September, 1917, to March, 1919; they have been left as they were wri
5 minute read
Read Chapter
Read Chapter
WAR-TIME FINANCIAL PROBLEMS I
WAR-TIME FINANCIAL PROBLEMS I
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 subject there are two contradictory theories: one considers that owing to the destruction of capital during the war, capital will be for many
17 minute read
Read Chapter
Read Chapter
II
II
October , 1917 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. Will the prestige of the London money market be maintained when the war is over? This is a question of enormous importance, not only to every one who works in and about the City, but to all who are interested in the maintenance and increase of England's wealth. Like all other questions about
20 minute read
Read Chapter
Read Chapter
III
III
November , 1917 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. A legend current in the City says that the Imperial War Committee, or whatever was the august body entrusted with the task of thinking out war problems beforehand, had
21 minute read
Read Chapter
Read Chapter
IV
IV
December , 1917 The Changed Spirit of the Country—A Great Opportunity 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." In the November number of Sperling's Journal I dealt with the question of how our war finance might have been improved if a longer view had been taken from the beginning concerning the length of the war and the measures that would be necessary for raising the money. The subje
18 minute read
Read Chapter
Read Chapter
V
V
January , 1918 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. By some curious mental process the idea of a levy on capital has come into rapidly increasing prominence in the last few months, and seems to be gainin
16 minute read
Read Chapter
Read Chapter
VI
VI
February , 1918 The Recent Amalgamations—Will the Provinces suffer?—Consolidation not a New Movement—The Figures of the Past Three Decades—Reduction of Competition 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. Banking problems have lately loomed large in the financial landscape. It will be remembered that about a year and a half ago a Committee was appointed to consider th
20 minute read
Read Chapter
Read Chapter
VII
VII
March , 1918 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. Every week—almost ever
18 minute read
Read Chapter
Read Chapter
VIII
VIII
April , 1918 The Figures of the National Budget—A Large Increase in Revenue and a Larger in Expenditure—Comparisons with Last Year and with the Estimates—The Proportions borne by Taxation still too Low—The Folly of our Policy of Incessant Borrowing—Its Injustice to the Fighting Men. At first sight the figures of revenue and expenditure for the year ending March 31st are extremely satisfactory, at any rate on the revenue side. The Chancellor anticipated a year ago a revenue from taxation and Stat
18 minute read
Read Chapter
Read Chapter
IX
IX
May , 1918 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. One of the most interesting passages in a Budget speech of unusual interest was that in which the Chanc
20 minute read
Read Chapter
Read Chapter
X
X
June , 1918 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. As if mankind h
18 minute read
Read Chapter
Read Chapter
XI
XI
July , 1918 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. Of the many kinds of Bonus shares, the one which has lately been most prominent in the public eye is that which is produced by the capitalisation of a reser
16 minute read
Read Chapter
Read Chapter
XII
XII
August , 1918 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. A few months ago, writing in this Journal on the subject of banking amalgamations, I referred to on
25 minute read
Read Chapter
Read Chapter
XIII
XIII
September , 1918 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. Many things that are now happening must be
23 minute read
Read Chapter
Read Chapter
XIV
XIV
October , 1918 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. Most people will admit that there are many glaring faults in the present ec
17 minute read
Read Chapter
Read Chapter
XV
XV
November , 1918 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. Under this heading two very interesting articles were contributed to the October is
18 minute read
Read Chapter
Read Chapter
XVI
XVI
THE CURRENCY REPORT December , 1918 Currency Policy during the War—Its Disastrous Mediaevalism—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. Among the man
21 minute read
Read Chapter
Read Chapter
XVII
XVII
January , 1919 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. A table published week by week by the Economist shows that from August 1, 1914, to November 9, 1918, the Government paid out £8612 millions sterling. From this we have to deduct an estimate o
23 minute read
Read Chapter
Read Chapter
XVIII
XVIII
February , 1919 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. Everyone has read, and mos
19 minute read
Read Chapter
Read Chapter
XIX
XIX
March , 1919 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. A contrast between libert
19 minute read
Read Chapter
Read Chapter
XX
XX
December , 1918 [Footnote 1: This was the latter of two articles contributed to the Times Trade Supplement in answer to a series in which Mr Arthur Kitson had attacked our banking and currency system suggested an inconvertible paper currency.] "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. In the November Trade Supplement an endeavour was made to answer Mr Kitson's rather vague and general insi
13 minute read
Read Chapter
Read Chapter