12 
LAND & WATER 
March 
1917 
well to keep in (he mind'?; eyo tlTo bare outline of the 
economic strncliire. 
As economic society is at ])resent conslilMtcd no 
individual is in a jxisition to supi)ly all his iiwa wants 
(.lirectly. Everyfin*- rtnideis some service for which others 
arc wiilinf; to pav, and thus obtains an income by means 
of which indirectly the daily wants are satisfied ; but 
these things which satisfy the daily wants are themselves 
the embodiment of the services of others. Hence 
economic life is ;i constant exchanf<e and interchange of 
services, and the various members of society may be 
regarded as contribiitinii their services to a great fund. 
PEACE 
Aatotini' avcula3ie /or' 
prtwifs consumpfton^ 
<^^ Amoimf' pnxkiced -^- 
WATL 
B 
fbrprivatB can — 
SumpfiorL 
> Amatuit'- - ■^ -produced — *■ 
a e 
IjccBSSiye: 
pin-aCe^ 
lexpeaditiice 
AmoufttaKulaile 
£brprTvaf^e Cisvz— 
sumptton. 
K- Aaiount'- --r-produced- 
eacli contriluition luuing a \-alue assigned to it and 
each contributor iH'ing entitled to draw from that fund 
scr\iccs of etpial ' value contributed by others. 
Generally s\)eaking, the income of an indixndual is 
equivalent in terms of money to his contribulion to this 
fund of services : his exiiendftiue is the total amoimt he 
withdraws from it. I'nder normal conditions it is 
c\idt*nt that more cannot be taken out than is put in, in 
other words that expenditure cannot exceed income. 
The exact form of service that each demands depends on 
individual titstcs and habits. Some i)eople spend all 
their income on food, clothing, shelter, education or enjoy- 
ment ; others spend f)nly a portion of their income in 
this way, obtaining with the remainder such things as ^ 
machines or raw materials which in course of time will 
lead to an increase in the amount of service rendered 
and a conse{|uent increase of income or claim to future 
withdrawal from the fund. It has been said that the 
indixidual cannot withdraw from the fund more than 
he puts into it. It is hardly nqcessary to say that the 
total amount withdrawn by the whole community cannot 
exceed the total amount put into it, or in other words 
that what the community consumes cannot exceed what 
the conunuuitv i)roduces imless, of com-se, the nation, 
as it has^^to du in time of war, spends more than its income, 
a state "of things which involves the consumption or 
using up of its accumulated wealth. 
Ihis is a very brief and very imperfect sketch of the 
economic structure of any commimity, whether in a state 
of peace, fir in a state of war. It now becomes necessary 
to point out the special features which in wartime* force 
themselves upon our attention. No mention has yet 
been made of tkc fact that the State lays cl^xim to some 
part of the great fund of service referred to abo\e. In 
time of peace this forms, especially in recent times, a 
somewhat considerable deduction from the amount 
available for the general expenditure of jJie community, 
but in time of war this is enormously increased. Instead 
rif helping to make the various commodities needed for 
general consumi)tion, many millions are serving in the 
army or navy ; many millions more, both of mon and 
women, are engaged in supplying the needs of those so 
serving. The ser\ice of all these taken together may be 
described as' National defence. 
The three diagrams whi<li are published on this 
page will show X\\\> difference more dearly. Diagram 
" A " repri'sents the amount axailablc for consump- 
tion in time of peace ; diagrams " B " and " C " 
in time of war. It is assumed that the total amotint 
])roducctl a, b, c, d, is the same in both cases, but in 
peace the amount withdrawn for piuposes of the Slate, 
e, b, c, f. is much sinallcr than it is in war, and conse- 
fjuently the amount axailable for satisfj'ing the needs of 
the community, a, e, f, d, is much greater in the former 
case than in the latter. It thus becomes evident that 
whereas there is the same number of jjeople to be fed, 
clothed, housed, etc., and (if incomes are on an average 
tmdiminished) the same cap.'tciiy of buying, the amount 
that is available fur consumption is enormously reduced. 
If, then, people maintain their former rate of expenditure 
what they buy must be coming from outside the country 
for which no equivalent can be given in exchange. This 
excessi\e import, therefore, must be paid for out of 
accunnilatcd wealth, and the country, in addition to bciiij^ 
impoverished kv the enormous icar expenditure necessitated, 
is also being impoverished by the personal expenditure of 
those members of the community n'ho have failed to grasp 
the realities of the economic situation. 
In diagram C the part g, a, d, h, represents this excess 
of consumjition o\er production. ; 
Need for Greater Kconomy 
To these general considerations which must always 
affect expenditure in time of war must now be added 
those more special considerations already referred to 
which affect our OAvn country at this jiarticular time. 
We are dependent to a very large extent on our Dominions 
and on foreign countries for supplies of fo(jd and raw 
material for both civil and military purposes. The 
regular supply of these depends on shipi)ing, and the 
amount of shipping a\ailablc has been \ery nuich ri'duced 
. by military and naval requirements and by submarine 
perils. Besides this, the fmancial position of the country, 
both now and after the war, is a very serious concern to 
every member of the community. \Ve have a war 
exjx'nditure of about six millions a day, and' this is 
being largely met, not out of income, but out of ca])ital. 
It is the duty of everyone to try and replace tl.e capital 
which is being consumed, which can only be done by 
the strictest personal economy. Our industrial position 
afterthe war depends very largely on the capital available 
to support industrial and commercial enterprises. Capital 
can only be increased by sa\ing, anil saving imi>lies a 
conscious refraining from imnecessavy ex^xnditure. 
The situation then is briefly this : 
(i) Govcrni-nont purposes absorb so much of tlio labour 
]X)wer and of the production of (he country, that a corres- 
jionding reduction in tlie amount (inlinarily Consiuned 
jjccomes imperative. 
(2) That the diminisliod amount whicli is available for 
consumptioii has to serve two .jjurposcs : 
(a) —it must supply home needs. 
(1>) — It must pay for our imports. 
If we do not cut down luxuries we cannot pay for imported 
necessaries. 
(j) Any future war loan that ntay lie needed and capital 
for future enterprises de|XMid on i)resent saving. 
(4) Shortage' of food is general and the amount available 
for consumption in this country is restricted by shipping 
and other difticulties. 
Surely no further arginnent is needed to show that 
jxitriotism, duty and self-interest alike demand a most 
careful consideration of this problem. 
Self-restraint and self-denial are the necessary con- 
ditions of wartime expenditure. When so much less 
-labour is available for civilian needs, it is evident that 
it must be devoted to producing t'ither the things which 
are most urgently needed, or things which can b; exported 
to. pay for the imports we cannot do without. It is 
necessary, therefore, not only to spend less, btit to spend 
wisely, and to take into consideration the essential fact 
that the spending ponder of the individual is in very many 
cases greater than the productive capacity of the community 
to supply his leants, and that it is only by cutting down 
and regulating expenditure thai the difficulties of the situa- 
tion can l)e overcome. 
