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220 ECONOMIC INQUIRIES AND STUDIES
that recourse has been had to direct taxation to an
excessive extent, and that the additions to indirect
taxation, while yielding so little money, have placed
. the particular duties from which the amount is derived
at too high a point. The obvious criticism is that the
cadres of our indirect taxation are much too limited,
and that in a time of real stress our entire fiscal system
must be revised, while the issue has been raised as to
the necessity of revising the "System even in time of
peace. In this connection, however, we can only note
the question and pass on. The discussion of different
systems of taxation can hardly be made incidentally
in the course of an article on the economics of the
war. I f, however, the opinion is well founded that the
war must lead to a· complete revision of our military
and naval methods for defence of the Empire these
questions as to the methods of taxation can only be
postponed.
There remains finally a question as to the indemnity
to be paid by the South African Republics when the
war is finished, as we assume it will be, by the com-
plete success of the British arms. What should the
indemnity be, and how will it be raised? We have
already pointed out that inevitably the financial arrange-
ments for the South African Republics at the close of
the war must involve large borrowing, and this will be
the case whether the indemnity is large or small. In
order to be put upon their legs again the communities
of South Africa must borrow largely, not merely to
pay an indemnity, but for the purposes of adding the
necessary machinery for the mines, permanent way
and plant for railways, and other expenditures which
are necessary to re-establish and develop their economic
position. Their financial circumstances must also be
considered with reference to the extent of the military
occupation which will be for some time necessary.
But these are all questions for the future, and can
hardly perhaps be discussed until it is seen in what
way the final settlement will shape itself.