Last December Secretary McAdoo estimated that the expenses for the current fiscal year would be $18,775,919,000. We know now that they will not exceed $13,870,000,000. This in part, explains why we are borrowing now "only $3,000,000,000 and oversubscriptions," instead of the $10,000,000,000 which we had expected to borrow. Another factor contributing to the same result is the underestimate of the income and excess profit taxes. We supposed that each would yield about $1,200,000,000. The best present estimate is that the total of the two taxes will be from $500,000,000 to $1,000,000,000 greater than that. Hence we do not have to borrow so much money as we thought we did.

This diminished expenditure is a source of encouragement, and of the opposite. It is in part due to our inability to keep abreast with the program. When we have no ships to send supplies across the water, we have no supplies to pay for. When we do not build ships up to schedule we are saving the expense of building them. All this is quite axiomatic. But only in part does it account for the improved treasury showing. Mr. McAdoo and his associates undoubtedly thought it best to impress their fellow-countrymen with the seriousness of the situation by very ample estimates; as it turned out, too ample. And all these figures include, of course, our loans to the allies, which are, theoretically, an investment whatever we may think of them as security.

Another most gratifying phase of war financing is the very large proportion of our present expenditures which we are raising by taxation. Mr. Longworth, in the House the other day, pointed out that England had met 20 percent of her war expenditures by taxes; France and Italy each about 16 percent; Russia and Germany not more than 10 or 11 percent. The United States, on the basis of these reduced war expenditures, will be raising 45 percent through taxes. This does not, of course, include loans to the Allies. Neither does it include the larger estimate of the yield of income and excess profit taxes. If these be taken into account, it is not unreasonable to suppose that half of our national expenses for the current fiscal year we shall meet out of taxation.

No one can doubt that it is good financing to pay for a war, or for anything else in the world, out of current revenues as nearly as possible in distinction from bonded indebtednesses. Debt is a millstone around the neck of a nation. Fortunate are the people who pay as they go. To keep as near that ideal as possible should be the desideratum of all statesmanship. Our enemies, who commonly belittle our activities, should at least know that, stupendous as has been our war preparation, we are paying an unprecedented fraction of it out of current taxation. Boston Herald