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290 ECONOMIC INQUIRIES AND STUDIES
to make a similar investigation respecting the increase
or decrease of English investments abroad, and. the
increase or decrease of foreign investments in fing-
land, which is another side of the same economic pro-
cesses ..
For our present purpose, however, nothing that is
likely to be found in such investigations can affect the
main conclusion that. as a nation, we are not living on
our capital, which is establi~hed directly by the evid·
ence of the increase of the national property, and of the
increase of such property per head which we find in
the Income Tax returns.
I propose next to deal with the question of nations
wasting capital on war and armaments, perhaps the
more practical of the two questions at the present time.
What I have to say first of all on this head is to point
out some conspicuous cases on record of the expendi.
ture of vast sums for those purposes without capital
being diminished, with capital, on the contrary, in·
creasing all the time. Such cases do not show, of
course, that capital may not be wasted in this way, but
they raise a presumption that ordinary expenditure in
time of peace, great as it may be, may not involve an
actual diminution of the capital of the nations con-
cerned, however mischievous some of the effects may
be. There may, in fact, be a loss of means for the
moment, for no one can eat his cake and have it, but
momentary loss of means, however serious, is not the
same thing as a diminution of capital, and must not be
confounded with it.
The first illustration I have to give is that of the ex-
perience of England during the great war with France,
at the end of the eighteenth and the beginning of the
nineteenth century. During the latter part of the war
-especially, enormous sums were expended. Theannual
amount fo"r some years towards the close of the war,
including what was raised by loans as well as what was
raised by taxation, amounted to about £100,000,000