Mr. McKenna's tone in announcing these figures was extraordinarily cheerful. "We have every reason," he said, amid the applause of the House of Commons--"to be proud of the manner in which British credit has stood the strain." The truth is that by March next, at the present rate of expenditure, our total indebtedness (deducting the advances to our Allies) will almost exactly equal "one year's national income," i.e., the aggregate of the income of every person in the country. But if a man having an income of L5,000 a year, were to owe a total of L5,000, we should not consider his position very serious. "We shall collect a revenue in one year equal to 20 per cent. of the whole debt (i.e., 522 millions sterling), and we shall be able to pay, _out of existing taxation_, the interest on the debt, and a considerable sinking-fund, and shall still have left a large margin _for the reduction of taxation_"--words which left a comfortable echo in the ears of the nation. Meanwhile British trade--based on British sea-power--has shown extraordinary buoyancy, the exports steadily increasing; so that the nation, in the final words of the Chancellor, feels "no doubt whatever that we shall be able to maintain our credit to the end of the war, _no matter how long it may last_." But do not let it be supposed that this huge revenue is being raised without sacrifice, _without effort_. It means--for the present--as I have already pointed out, the absorption by the State of five shillings in the pound from the income of every citizen, above a moderate minimum, and of a lesser but still heavy tax from those below that minimum; it means new and increased taxation in many directions; and, as a consequence, heavy increases in the cost of living; it means sharply diminished spending for large sections of our population, and serious pinching for our professional and middle classes. But the nation, as a whole, makes no lament. We look our taxes in the face, and we are beginning to learn how to save. We have our hearts fixed on the future; and we have counted the cost. The money then is no difficulty. Our resisting power, our prosperity even, under the blows of war, have been unexpectedly great. But what are we getting for our money? In the case of the Navy, the whole later course of the war, no less than the Battle of Jutland, has shown what the British Navy means to the cause of the Allies. It is as I have said, the root fact in the war; and in the end, it will be the determining fact; although, of itself, it cannot defeat Germany _as we must defeat her_; at any rate in any reasonable time. Then as to the Army. Take first of all the administrative side. To what--in the last four months--has come that wonderful system of organisation and supply I tried to sketch in my fourth Letter, largely in the words of some of the chief actors in it?