xii THE DEPRESSION OF TRADE 197 



We supposed that a very large portion of the community 

 had borrowed money, and the consequence is they all 

 suddenly become poorer by the amount of the interest they 

 have to pay. Consequently not only do the shopkeepers 

 lose their temporary increase of trade, but they do less 

 trade than they did before that increase began. The last 

 state of these men is in fact much worse than the first. 



Increased War Expenditure. 



We will now consider the next real cause of the 

 depression, and that is the enormous increase of military 

 and naval expenditure, which also began about the same 

 time and has been continued almost up to the present 

 day. It is a curious thing that up to the year 1874 our 

 whole military expenditure had been for many years 

 stationary. It was stationary at about 24,000,000 

 some years it was a little more, some years a little less. 

 Then there commenced a sudden increase, corresponding 

 with that of all the other nations of Europe, though not to 

 so great an extent ; and from that time from 1874 to the 

 present year (1885) it has increased rapidly till it is now 

 29,000,000 or 30,000,000. But that is nothing to the 

 increase which has gone on with the other nations of Europe. 

 They also had previously a tolerably fixed amount of war 

 expenditure. But then two great events happened one 

 the Franco-German war, and the other the wonderful and 

 continuous progress in the applications of science to war- 

 like inventions. Not only did iron-clad ships rapidly 

 increase in size, weight, and cost, but very soon steel 

 began to be used, and cannons were made larger 

 and larger in size. Every kind of projectile was improved 

 till they have become works of art of the most costly 

 description. The torpedo was invented, and in fact an 

 amount of skill and science was devoted to this one 

 destructive art perhaps greater than has been devoted to 

 any other art in the world. The result was that owing to 

 the dread of the increasing power of Germany, and the 

 necessity of rivalling her in the application of science to 

 destruction, the great military nations of Europe immedi- 



