like, Madame de Staël, whose new novel Delphine' was (in December 1802) the chief conversation' in Paris; a fact which suggests the observation, 'there is no difference more striking between Frenchmen and Englishmen than the importance the former place in every trifle of this sort. You would think some great event had happen'd by the sensation this book causes.' She reads with delight an Italian translation of Apollonius Rhodius, and envies Granville his power of reading it in the original. Other books she studies for information-Maurice on Indian Antiquities, Weld's American Travels, and, no doubt to keep up with Granville and to follow Napoleon's campaigns, Rulhière on Poland. Then again she studies the philosophers and theologians, discusses the portrait of Hobbes at Hardwick, and questions the orthodoxy of Paley. And once she confesses to a mild imposture; when she visits the Paris Library, she has prepared herself to show off a little, and makes a great effect by asking for the Virgil with Petrarch's notes and the Dante written out by Boccaccio.'

This brief survey will give some idea of the interest and wide scope of Lady Bessborough's letters, which form as good and complete a view of the politics of England, of the upper ranks of English and French society, of the gossip of the day, and of the books that people were reading, as it would be possible to find. If we add the many letters from Canning, the bright references to his conversation and speeches and to those of Fox, Hawkesbury, Granville, Windham and many other statesmen, the first-hand accounts of Russia, Austria, and Spain and-by no means the last in importance-the descriptions of Ireland in and after 1798, it will be evident that these letters, with their short connecting-links of narrative, form a book of arresting interest and of permanent value.

HUMPHRY WARD.

Art. 14.-RETRENCHMENT AND THRIFT.

Committee on Retrenchment in the Public Expenditure. First, Second, Third, and Final Reports. [Cd. 8086, 8139, 8180, 8200.] Wyman, 1915-16.

FINANCE has always proved one of our most effective weapons in the great wars in which we have hitherto been engaged, and it may be safely affirmed that we have never been involved in any conflict in which economic influences are destined to play a greater part than in the present. The magnitude of our economic task has at last been appreciated by the great mass of the people. For the year ending March 31, 1916, the war expenditure, including the cost of civil government, amounted to 1,559,000,000l.; and the revenue from taxation, etc., reached 329,766,000l., leaving a balance of 1,229,000,000Z. which has been raised by loans, etc. For next year, if the present rate of expenditure is not exceeded, the expenditure will be about 1,825,000.000l., and the revenue may be expected to realise 502,000,000l., leaving a deficiency of 1,323,000,000l. The dead-weight amount of our national debt (including the debt as it stood in March 1915) at the end of March 1917 may, therefore, amount to 3,600,000,000l., involving an annual charge for interest and sinking fund of about 180,000,000l.

Before the war the national income of the United Kingdom amounted to about 2,300,000,000l. per annum ; for the year 1915 it probably amounted to 2,600,000,0007., and for the current year it may be estimated to amount to not less than 2,700,000,000l. It will be seen, therefore, that our burden involves a total expenditure by the Government of a sum equivalent to not less than twothirds of the entire estimated national income. In order to form a sound conclusion as to our ability to bear this burden we must consider the national expenditure under all headings, and I have prepared the following provisional estimate for the year ending March 31, 1916.

The above estimates have been based mainly upon the paper which the late Sir Robert Giffen read before the British Association in 1903, and the paper read before the same Association in 1912 by Mr Rew. Due allowances have been made for the growth of population and for the very great rise in the price of foodstuffs and raw materials. Since the outbreak of war there has been an average increase in the cost of living of about 30 per cent.

The past year's operations may, therefore, be summarised as follows:

On the whole the British people have responded wonderfully well to the demands which have been imposed upon them by the war. It must be remembered that no lead in the direction of economy was given to them until the war had been in progress for a considerable

time. Broadly speaking, the result of the year's operations has been that we have increased our savings from an average of about 350,000,000l. per annum to well over 600,000,000l., a remarkable achievement considering the increase in the cost of living.

Taking the governmental and civil expenditure together, the year to March 31, 1916, has closed with a deficit of about 650,000,000l., the bulk of this amount having been covered by the sale of some of our foreign investments in the United States, by the raising of loans in that country, and by the calling in of our credits in the Overseas Dominions and in neutral countries. As a matter of fact, we have overcome the financial difficulties of the first twenty months of the war with astonishing ease, but the outlook for 1916-17 gives cause for some anxiety. The national income for the coming year may be increased to 2,700,000,000l.-in view of the needs of the army, I do not consider that we can reasonably expect that it will exceed that figure-and, if the cost of living does not rise further, the position at the end of March 1917 should be roughly as follows:

The process of balancing the national income and expenditure can only be satisfactorily accomplished by increasing the national income on the one hand and by diminishing the national expenditure upon the other. For the reasons stated above, we cannot depend upon any material increase of the national income; and it is of the utmost importance that the energies of the nation should be concentrated upon the problem of the reduction of expenditure.

This problem may be considered under four heads, viz. : (1) The reduction of the civil expenditure of the Imperial Government. (2) The reduction of the war expenditure of the Imperial Government. (3) The reduction of Local

Government Expenditure. (4) The reduction of private expenditure.

In the face of this great crisis in the national finances and the pressing necessity for universal and sweeping economies in public and private expenditure, the House of Commons approached the question of retrenchment in a spirit of characteristic feebleness and timidity. After an energetic campaign by Bankers and City men in favour of thrift and retrenchment, Mr Asquith announced on July 20, 1915, that a Retrenchment Committee of twelve members, with the Chancellor of the Exchequer as Chairman, had been appointed. The terms of reference were as follows:

'To enquire and report what savings in public expenditure can, in view of the necessities created by the war, be effected in the Civil Departments without detriment to the interests of the State.'

The result has been exactly what might have been anticipated from an enquiry conducted under such limited powers. The Committee has been debarred from reporting upon the war expenditure, which, for the year to March 31, 1916, represents an outlay of 1,465,000,000l. out of a total expenditure of 1,559,000,000l. Their activities have, therefore, been confined to the criticism of expenditures amounting to 124,000,000l.; and even in this limited field they were informed that they were not to criticise expenditure arising out of questions of policy already decided by Parliament. The experiences of the Committee in connexion with Irish expenditure afford a luminous illustration of the hopelessness of looking for any material reduction of civil expenditure from the House of Commons as at present constituted. On Dec. 15 the Committee issued the following White Paper:

'In view of the pressure of Parliamentary business upon the Chancellor of the Exchequer, we were invited to turn our attention to the expenditure on Irish services under the Chairmanship of the Chief Secretary. Mr J. P. Boland, M.P., Sir J. Lonsdale, M.P., and Mr W. Kavanagh consented to join us for the purpose; but the Irish Nationalist party subsequently decided not to nominate any members to serve on the Committee, and Mr Boland, therefore, did not attend any meeting.