LAND AND WATER 
January G, 1916. 
foreign debt, the establishment of a foreign credit, 
and export trade balancing import. 
The limits of the first category are sharp and 
very narrow. If all the gold in the country were 
exported in the first year of a war to pay for 
necessities from abroad it would not nearly meet the 
bill. But of course the hypothesis is absurd. 
Even in time of peace, the medium of exchange 
(which is in the main a mass of instruments of 
credit), reposes upon a certain gold reserve. In 
time of war it is the first and most necessary pre- 
caution which every nation observes, to export 
as little as it possibly can of its gold, to withdraw 
all it possibly can even from domestic circulation, 
and to centralise the' whole stock as far as possible 
under national control. This first form of payment 
is almost neghgible. ■ 
The second form of payment is apparently 
largely available for such a traffic, if a nation 
jjosscsses, as does Great Britain, very large foreign 
investments. But it is in reality severely limited 
by the market available for the purchase of these 
foreign investments. A man resident in this coun- 
try possesses an estate in the Argentine, or rather 
a share in it, in the shape of stock, which he holds 
in some Argentine Company. Beef is needed for 
the army. He is taxed to pay for the beef. The 
demand for the beef goes to the Argentine. Let us 
suppose, to make the problem simple, that he pays 
his tax by selUng his Argentine stock. That is an 
example of the release of debt, and of the obtaining 
of foreign supply without corresponding export 
at the moment. What is happening in practice 
under the complex veil. of modern finance is that 
he is going to the Argentine owner of beef and 
offering him in exchange for the beef the possession 
of so many acres of Argentine land. He is losing 
what was English control over powers of production 
and transferring it to Argentine possession. 
One man can do this with ease and rapidity. 
He has a market. A hundred men can do it with 
a hundred moderate holdings. But many 
thousand men with such holdings cannot do it, 
nor a few men with very large holdings if they 
enter the market at once. The purchasers are not 
available. To put it in ordinary terms the liquida- 
tion of such assets can only be gradual. However 
successful the operation is, moreover, and in pro- 
portion to its success, you are impoverishing your 
own country and enriching the foreigner. 
The third method of obtaining imports, with- 
out corresponding exports at the moment, is the 
creation of a credit. That is, the persuading of 
the foreign producer to let you have the goods 
on your own promise to give him more goods in ex- 
change at some future date. It is a postpone- 
ment of export. 
This method though less limited than the first 
is more limited than the second, and has no very 
great powers of expansion. A nation at war must 
promise very high rates of profits upon such a 
transaction, because it is a gamble upon its future 
power to pay. Even if that future power be 
believed in by the foreign country, it is a novel and 
doubtful method which the modem machinery of 
commerce cannot extend over a very wide field 
Another way of putting it is that if you try to 
float a loan for your nation at war among the 
citizens of another nation you have to offer very 
high rates of interest and you cannot be certain of 
more than a comparatively small total result. 
There remains the fourth method — export : 
the only natural and stable one. and the 
only one capable of producing a permanent 
equilibrium. 
As to the number of mobilisabli- men with- 
drawn by export produce from the moliilisable 
strength of a nation in this position that is a matter 
of expert calculation to which I do not pretend. 
Those who have spent years upon the matter 
and who are best informed ha\e arrived at very 
different results. There is a wide margin between 
the maximum estimate and the minimum. 
But the point to remember is that e\'en the 
minimum calculation withdraws from the possible 
mobilisable strength of the nation dependent upon 
import a very large proportion of mobilisable. 
In the case of Great Britain and Ireland, certainly 
not less than a sixth, and perhaps more. 
(2) The second category of the men who 
must be withdrawn from the mobilisable strength 
of such a country as Gi^eat Britain is the man- 
power required to build, repair and conduct the 
ships and other instruments for bringing such im- 
ports to the island and taking such exports out. 
SHIPPING. 
It matters little whether the ships are owned, 
built, manned and repaired within Great Britain, 
or whether the carrying trade is carried on by 
foreigners ; for in the second case Great Britain 
would have to produce extra goods for export 
equivalent to all this cost in man-pow-er. She 
would have to pay for the freight of the foreign 
ships. But the alternative is purely academic, 
for as a matter of fact much the greater part of 
our necessary exports and imports takes place in 
English ships, largely manned and wholly directed 
by people in these islands, and built and repaired 
and added to by people in these islands ; coaled 
by the labour of people within these islands, and 
of course necessarily loaded and unloaded by the 
labour of people within these islands. 
It is here that the expression " and other 
instruments " comes in. 
In much of the discussion that has taken place 
with regard to recruitment,' men have confined 
themselves to the actual produce of necessary 
exports within the factories, the actual manning 
and repairing of the ships which carry the goods. 
But the absolutely essential connecting hnks arc 
also very expensive in men. 
Any day in the streets of Manchester what 
you will notice (if j'ou are a stranger) especially 
distinguishing that town is the perpetual procession 
of heavy lorries loaded with textile goods on their 
way from one process to another, or from the last 
process to the dock or the railway station. To a 
less extent you will notice the corresponding 
arterial flow of raw material from the ship to the 
factory. 
Every system ot docks in the kingdom has its 
similar necessary complement of vehicles for 
distribution. Such and such a proportion of all 
our railway labour is absorbed in this flow in and 
out of export and import. 
Here again it is for experts to calculate what is 
the minimum number required of adult male labour 
of military age to build, command, in some part 
to man, and to repair ships ; to berth and wharf 
them ; to load, and unload them, and to take the 
goods by horse traction and motor from the 
factory to the ship or from the ship to the factory 
Here, as in the case just quoted, there are 
many different calculations widely separate. But 
even the minimum is a very serious item. It is 
