[To THE EDITOR OP THE "SPECTATOR."] SIR,—Your note to Mr.
Barker's letter in last week's issue gives a general answer to his exaggerated pessimism ; but with your permission I should like to reply to his numerous questions, as one so often finds other people making the same inquiries. (1) He begins by asking why Great Britain is no longer the banker of the world. If he means by this that London has lost her position and power as the most potent factor in the financial operations of the world, then I venture to say he is entirely wrong, as every one who has any acquaint- ance with the City very well knows. London is the only centre where there is a free market in gold, and she still holds her supremacy in everything that appertains to haute finance. (2) His next question shows equal ignorance. It is beyond a doubt that the bulk of the money wanted for the expenses of the South African War was raised in this country, and it was only a small portion which was offered abroad. (3) Then comes that common conundrum : Why have Consols fallen from 114 to 8s? Is Mr. Barker aware that the rate of interest has been reduced to 21 per cent., and that on a 3 per cent. basis Consols would be at par, whereas German 3 per cent. are quoted 82, and United States 4 per cent. would only be equal to 93,—not a bad indication of the relative credit of the three countries ? (4) I do not understand what be means by the next question, unless he refers to the tranaactions men- tioned in the following two. All the London " tubes " were not built with foreign capital. The Central, the Bakerloo, and the Hampstead are English companies, and it is only the Metropolitan and the District which were electrified by Mr. Yerkes and his group of American financiers, and a very poor bargain they have made too, and one we are well out of. (5) As regards the shipping deal, it is well known that the vendors made one of the handsomest profits in modern times, and have never had any cause to regret it. (6) Any one who has recently been trying to purchase land has found that owing to improved agricultural conditions the price has tended upwards, and the drop in houses has generally taken place in old leasehold properties. (7) The nation has recently pur- chased at enormous figures a Velazquez and a Franz Hats, and our collection of pictures is admitted on all hands to be the finest in the world. (8) And now I come to the diamond test, and I fear I must admit that America is a larger buyer of precious stones than we are, and I hope she may long con- tinue to be so, and that we may put our money into wises investments.
To say that British capital is being taxed out of exist- ence by Death-duties and Income-tax is playing with your readers, as can be surely proved by the increasing revenue that is yearly derived from both sources. If statistics are worth anything, they traverse your correspondent's state- ment regarding the incomes of the masses and the classes, as it has been clearly established that these are greater than they ever were before, and larger than in any other country in Europe ; and so far from Great Britain living on her capital, she has in the last threeyears paid off more than forty millions of her Debt, whereas the tendency of other nations is to increase theirs. If some nations like ourselves engage in costly wars, and others indulge in reckless speculation, the Bourses of the world are upset, values shrink, and confidence is undermined, and it is from the effects of these causes that we are now suffering. None the less, I believe the majority of your readers are with you in deploring and resenting Mr. Lloyd Qeorge's recent speeches. He never refers to the wealthy classes without exhibiting a malign tone of antagonism and a truculent delight at the prospect of plundering their "hen- roosts," It is not thus that former Chancellors of the Exchequer have faced the necessity of increased taxation. A dangerous element is being introduced into our financial operations, and it looks as if the unsound Socialistic legislation that has recently been entered on in the form of non-contributory old- age pensions, involving a heavy increasing burden on the nation, is going to be followed by equally unsound Socialistic methods of raising the money to enable us to bear it.—I am,
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