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LAINU & WATER 
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War-Time Expenditure 
By T. H. Pensoii 
EVERYONE is by now fully awake to the fact 
that under present circumstances it is a duty 
to curtail expenditure in various specified direc- 
tions, and that in the near future it may be 
necessary to do without some things altogether. The 
reasons for such self-denial are evident. We are largely 
dependent on external supplies, and these are at the 
present time very much restricted. In the ordinary 
way our expenditure is limited onlj' by our income ; 
now other conditions prevail, and it may not be unpro- 
fitable to look into the question of wartime expenditure 
and to see how the way in which we dispose of our income 
is affected by the mere fact that the nation is at war. 
The Economic Position 
Of the many changes in the national life brought about 
ny the outbreak of war, none perhaps are so generallj- 
felt, and yet so vaguely understood, as those which 
affect' the economic well-being of the community. In 
this country the economic changes of the last 2| years 
have taken place slowly and without violent upheaval of 
any kind. This may be assigned to two main causes : 
(i) The tvay our armies were recruited ; (2) the work of 
the na\'y in keeping open the seas. 
The continuance for a long time of the voluntary system 
meant that the withdrawal of labour from our industries 
was very gradual, and when compulsory service was at , 
length introduced, it was httlcmore than an acceleration 
of a movement that had been going on for some consider- 
able time. The navy on the other hand enabled us to 
maintain our overseas trade and to secure from abroad 
our regular supplies of raw material and food. 
The- present" state of things, however, is very different- 
from that which prevailed prior to the events of August 
1914. The cumulative result of the changes that have 
taken place since then may be briefly summarised thus : 
Large numbers of men have been withdrawn for military 
service from our industries, trades and professions. 
Large numbers of men and women are in Government 
service, or at any rate employed on what is generally 
known as " war work." 
Women are in many -cases engaged in work, both in- 
tellectual and j>liysical, formerly done by men. 
The National Debt has increased enormously and 
accumulated wealth has been greatly diminished. 
Business incomes and salaries have not for the inost 
]3art suffered, bui the Stale has to a faf greater extent than 
before become the general paymaster — the source 0/ income 
" earned." as wcjl as "unearned." 
The withdrawal of ships for war purposes and maritime 
losses due to submarine attacks have diminished the 
amount of transport available, so thait many commodities 
are relatively scarce and dear. 
All this points to the fact that we are living under 
entirely new conditions, and the question is, are we as a 
nation and as individuals adapting ourselves to them, 
and cutting our coats according to our cloth ? It is 
hardly possible to realize the inner meaning of the changes 
that have taken place, or to understand why and how 
these changes should affect the question of domestic 
expenditure, without some clear imderstanding of the 
economic organisation of society as a whole. I'he subject 
is of practical importance to every member of the com- 
munity who is striving to co-operate intelligently with • 
the (lovernment in its great work of directing all the 
national resources towards the one goal — the bringing of 
the war to a speedy and victorious 'conclusion. 
Economic Life in General 
Under modern conditions the satisfaction of human 
needs is a very complicated process. It may be said to 
consist of two parts : 
(i) The spending of one's income in order to olitain that 
which is desired, wliicli from the consumer's ]'>oint of view, 
seems to depend only on wliether he can afford to buy 
Vvhat is offered for sale. 
(2) The various stages of production necessary before 
■ the goods get into the hands of the retail trader. 
It is with the former part only that, as consumers, we 
come into immediate contact. We take the latter for 
granted. Its operations are to a certain extent hidden 
from us and therefore not altogether realized, but it is 
important not jto lose sight of the fact that though 
unseen and possibly imheeded it is really controlling and 
regulating that part of the process which lies more upon 
the surface. A concrete example will serve to illustrate 
the point : " A " is in need of a new overcoat which he 
feels he can well afford. He goes to- the tailor's and buys 
one ready made. The satisfaction of his want appears to 
depend on a suitable garment being in stock. The coat 
is there and he buys it, but behind this very simple 
transaction there is quite a long history of forethought 
and effort on the part of sheep farmers, shipping com- 
panies, merchants, spinners, weavers and dyers, all of 
whom had a share in producing the necessary cloth. 
Skilled workmen, too, are needed for the actual making 
of the garment, and this in\-olves years of training and 
experience. 
The illustration is a very simple and a very homely 
one, but it serves to bring out the di.f.tinction referred 
to. . On the one hand, there is the individual concerned 
with getting his wants supplied, and in making his income 
go as far as it will. His purchases are, to a large extent 
regulated by his standard of living. Certain things have 
through habit come to form part of what he considers 
necessary or normal expenditure, 'and so long as his income 
is adequate and the various objects of desire are still 
being offered for sale, it dods not occur to him to live 
differently from what'he has been accustomed to. 
On the other hand, there are the numberless persons 
whose unconscious co-operation has resulted in the shops 
being supplied with goods to suit the different classes of 
buyers. There is the foresight, the enterprise, the 
prudence which made such, supplies possible. The goods 
arc offered for sale, but what was their past history ? 
Were they produced at home or were they imported ? If 
they were imported, what was given in exchange for them '! 
Was their production an advantage or disadvantage to 
the community as a whole ? Did their transport require 
shipping and labour that could better have been devoted 
to other purposes ? These are questions which in wartime 
assume a .special importance, and the answers to them 
throw a good deal of light on what may be called the 
ethics of wartime expe'nditure. 
On the outbreak of war everyone was told that " busi- 
ness as usual " was the only motto for patriotic people. 
Later on various forms of expenditure were publicly 
denounced, and it was everywhere proclaimed, to give a 
single instance, that to dress extravagantly was un- 
])atriotic. The platform, the stage, and the press were 
all used to advocate economy and retrenchment ; and 
quite recently it has been made a point of honour not 
to consiime more than a regulated quantity of certain 
articles of food. It is evident that there has been a 
considerable change in the attitude of the Government 
towards this question of expenditure. 
At the beginning of the war an abrupt change of one's 
manner of living was likelj' to cause more harm to 
the industrial and trading community than woidd be 
compensated for by the saving effected, but with the 
progress of time, trade and industry have adapted them- 
selves to war conditions, and at the present time the 
imperative duty is to moderate one's desires, to eschew 
luxuries, to cut down superfluous expenditure. This is 
jjortly accounted for by the Government's need of money 
and a consequent necessity to save and lend, and also by 
•the difiiculty of getting from abroad our usual supplies 
of food and other articles. These, however, are special 
reasons for economy under the present peculiar circum- 
stances, and not the general economic cause for the 
phenomenon that in time of te>ar expenditure must be 
controlled by other forces than those u'hich operate in 
time of peace. In order to see this quite clearly it is 
