DEFENCE BILL IS NOT WAR MEASURE.

Auckland Star, Volume LXVIII, Issue 48, 26 February 1937, Page 7

DEFENCE BILL IS NOT WAR MEASURE.

BRITISH DEBATE.

No Justification for Fear, Says Chancellor. EEPLY TO OPPOSITION. British Official NVirele^s. (Received 1.30 p.m.) RUGBY, February 25. Mr. Neville Chamberlain, Chancellor of the Exchequer, moving the second reading in the House of Commons of the Defence Loans Bill, welcomed the absence from the Opposition's rejection motion of a suggestion made by Mr. C. R. Attlee, Leader of the Opposition, that the bill was "a war measure."

It would be very unfortunate, the Chancellor declared, if any apprehension of imminent war were created at a time when there was no reason or justification for anv such fears.

Mr. Chamberlain twitted the Labour party on its repeated affection of ignorance of the relations which the Government's rearmament programme bore to their foreign policy. "He challenged Labour speakers to say whether they considered British arms should not be used for any of "the purposes described by Mr. Eden, or whether they considered they should be used for any purpose in addition.

Not until they ceased evading such straight-forward questions and gave a plain answer was he called upon seriously to deal with such obscurely insinuated criticisms.

Mr. Chamberlain said that no matter in the whole of the problems connected with the rearmament programme had received more continuous or more concentrated attention than the prevention of excessive prices.

"I have no hesitation in saying that nothing that human ingenuity can devise, or human effort can achieve to this end, has been left undone."

The Chancellor complained of exaggeration in a statement that the proposals would adversely affect national credit. National credit had been steadily built up during the last six years during a crisis when other countries added to their debts. It had been necessary to suspend the Sinking Fund, but in three years, 1933 to 1930, there were realised surpluses amounting to over £40,000,000 in addition to debt redemption of £32,500,000, and making a total of £72,500,000.

The Unemployment Insurance Fund had also been put in a solvent condition and reserves accumulated which, if no distribution took place, would reach by the end of the present vear a sum between £52,000,000 and £60,000,000. In 1931 the interest on the British national debt was £282,500,000. This year the debt eharge would be about £210,500,000, so that the saving of £72,000,000 in interest alone would be almost sufficient to cover the average rate of borrowing contemplated in the bill. At the same time the standard of life had been protected by a provision of constantly increasing the sum -for social services. Referring to the prediction that the Government's policy would cause inflation, the Chancellor called attention to the speech of Mr. J. M. Keynes, in which the latter expressed the opinion that it would be possible for the Treasury to raise £400,000,000 by borrowing without causing inflation.

BRITAIN CAN PAY. Huge Armament Loan Well Within Nation's Capacity. EMINENT ECONOMISTS VIEW. (•B«elrnJ 9.30 a.m.) LONDON, February 25. Mr. J. M. Keynes; presiding at the National Mutual Assurance Company's annual meeting, emphasised 'that the rearmament loan was well within the nation's capacity. There was no reason why they should pay more than 3 per eent. He points out that it is a popular error to suppose that money is now exceptionally cheap. Oil the contrary, there was not a single five-year period between 1837 and 1914 when the average yield of long-term gilt-edged stock was as high. Yet Britain's existing capital per head was 50 per cent greater. Sinking funds of public boards, huge repayments that building societies were collecting, the steady growth of savings banks' deposits and the large sums which industry was putting to reserve from profits, should amount to over £400,000,000 in a single year.

PEER IN DEFENCE. LEAGUE AND PEACE FRONT. British Official Wireless. (Received 1.30 p.m.) RUGBY, February 25. Viscount Halifax, Lord Privy Seal, speaking at Southampton, defended Britain's rearmament programme. Referring to the League of Nations he said there was a strong body of opinion for abolition of sanctions, but there was a strong opinion also that a League of Nations, from which sanctions had been withdrawn, would be too light a thing to perform the duties that mapkind expected of it.

"It is the view of the Government^that the peace front might be immensely strengthened by a system of regional pacts whereby certain areas of the world, sharing common interests in those areas, would be prepared to unite themselves by pact to do more than the Covenant imposes, namely, say in advance that if peace were disturbed in those areas they would be prepared to fight to preserve it.

"I would regard it as frankly dishonest of this country to sign pacts, or to undertake obligations arising out of ti'em. unless we knew we were in a osition to be able to carry them out if che need arose."