In four years of fighting, the government spent a total of $43 billion on the war effort, including $11 billion in loans, which it funneled to its poorer Continental allies, principally France and Russia. To pay for all this, it raised about $9 billion, or 20 percent, through additional taxes and almost $27 billion by long-term borrowing, both domestically and in the United States. The remainder it borrowed from banks, including a large chunk from the Bank of England. As a result, the quantity of money in circulation within Britain doubled in four years, doubling prices with it.
