DEFERRED PAY, ALLOWANCES AND RATION 29

public to government loans of £900 million (£350in exchange for foreign assets, £150 from de-preciation funds and £400 from new savings) lesssuch amount as accrues for investment ingovernment funds etc., from overseas borrowingand from the proceeds of sales of gold; for thetotal increased expenditure of the Governmentis not £950 million a year but (on our assumptions)£1,850 million. For reasons we have alreadygiven, the additional savings would have to comelargely from the income group with £5 a week orless and would require a change in their habitsof expenditure for which there is no evidence.

For these same reasons the amount by whichthe potential expenditure of the lower income-groups has to be curtailed will be more or lessthe same whichever method is adopted. Inflationwill be the most burdensome alternative, sincethis will inevitably bring some advantage to theentrepreneur class, and might cost the worker20 per cent in terms of the real value of his earn-ings. Inflation will also be the most burdensomeon the smallest incomes,—a defect it shares witha general sales-tax. New taxes, such as a sales-tax or a wages-tax, or old taxes aided by infla-tion are alike in that they finally deprive theworkers of the benefit of their earnings from theirheavier burden of labour. They will work harder,but, as a group, they will never derive any per-sonal benefit from it. That is what will happen,will inevitably happen, if the Treasury and theTrade Union leaders agree on the one thing wherethey will find agreement easiest, namely to drift