Nelson's history of the war. Vol. XI., The struggle for the Dvina, and the great invasion of Serbia

72 HISTORY OF THE WAR.

tion of Germany has been depressed to a point at which there is little or no margin of reserve. We in these respects apparently and ostensibly stand in a better position.” But he was no less right when he went on to insist that if Britain were to sustain the burden there was need of sacrifices and of a universal retrenchment unparalleled in her history. For the German difficulty was one of gradual pinching and embarrassment, but in Britain’s problem there were elements which might bring the whole economic machine to a sudden stand. still.

Germany was virtually a complete economic unit, self-sustained and self-sufficing. She had little foreign trade, and for her the business of foreign exchanges and foreign credits had practically ceased. She had so organized her production of food and war stores that she could provide all her actual staple requirements from within her own borders. That is to say, she was only concerned with internal payments, and these, so long as her people believed in the certainty of victory, could be made with ease. She could increase paper currency indefinitely so long as she had printing presses to make the notes. The “ goods > were in Germany ; she had only to manufacture the *“ money ” to facilitate their transference to the hands of the Government ; and while her people trusted to the credit of the state there would be no trouble about the transfer. No doubt it was a perilous foundation to lay for the future, but the wheels of war have never stopped in deference to an economic purism.

Britain had this problem also. She had to raise money internally to pay her troops in the field and

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