232 THE ECONOMIC CONSEQUENCES OE THE PEACE ch.

expenditure for one month is still larger than thatfor the first year of the war.

But if this is the budgetary position of France and Italy, that of the rest of belligerent Europe isyet more desperate. In Germany the total expendi-ture of the Empire, the Federal States, and the Com-munes in 1919-20 is estimated at 25 milliards ofmarks, of which not above 10 milliards are coveredby previously existing taxation. This is withoutallowing anything for the payment of the indem-nity. In Russia, Poland, Hungary, or Austria sucha thing as a budget cannot be seriously consideredto exist at all. 1

Thus the menace of inflationism described aboveis not merely a product of the war, of which peacebegins the cure. It is a continuing phenomenon ofwhich the end is not yet in sight.

All these influences combine not merely to pre-vent Europe from supplying immediately a sufficientstream of exports to pay for the goods she needs toimport, but they impair her credit for securing theworking capital required to re-start the circle of ex-change and also, by swinging the forces of economic

1 On October 3, 1919, M. Bilinski made his financial statement to thePolish Diet. He estimated his expenditure for the next nine months atrather more than double his expenditure for the past nine months, andwhile during the first period his revenue had amounted to one-fifth of hisexpenditure, for the coming months lie was budgeting for receipts equal toone-eighth of his outgoings. The Times correspondent at Warsaw reportedthat "in general M. Bilinski's tone was optimistic and appeared to satisfyhis audience " !