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ARE WE LIVING ON CAPITAL? 295
ture of sums which are quite insignificant compared
with those which have been mentioned. If the great
war:; did not involve loss of capital or waste of capital,
clea~ly the little wars need hardly enter into considera·
tion. The South African War, from which we are now
emerging, has called (or a mdre serious effort. The war
estimates for two years in succession have been close
upon £90,000,000 sterling annually, as compared with
.l20,000,ooo, which was the figure before the war. The
whole of the difference is not due to the war, but we
are dealing here with the question o( armaments in the
most general fashion; and the fact of £90,000,000 ster-
ling for Army estimates, added to about £30,000,000
more for the Navy at the same time, makes a total
expenditure on armaments for two years of about
£ 120,000,000 a year. This is even a larger figure than
the amount that was spent annually about a hundred
years ago, in the great war with France. We have seen,
however, that even the great war with France, notwith-
standing the much smaller resources of the country
at that time, compared with the present, did not, in
fact, result in any waste of capital, but the reverse,
the accumulation of capital going on in the country
the whole time. It is not surprising, therefore, to find
that the recent expenditure on the South African War
hardly seems to have disturbed the ordinary course
of business in the country. Whatever the exact pro-
portion of the outlay to the resources of the country
may be, we have evidently been paying (or it out of
income, and not out of capital. Of course, it is quite
true that the Government as a Government has been
borrowing largely in order to meet the expenditure.
The borrowings, apparently, amount to something over
£100,000,000 altogether in about two years. But, al-
though the Government borrows, it may none the less
be quite true that, as far as the whole community is
concerned, the entire outlay is defrayed out of income.
Those who provide the Government with the money
provide it out of income, and not out of capital, and