The Bay of Plenty Times THURSDAY, MAY 2nd, 1940 FINANCING THE WAR

Bay of Plenty Times, Volume LXVIII, Issue 13025, 2 May 1940, Page 4

The Bay of Plenty Times THURSDAY, MAY 2nd, 1940 FINANCING THE WAR

The British Budget .shows to some extent the costliness of war. It is costing 1 Britain this financial year nearly £2.700.000.000, and Britain is only one belligerent. France is spending billions of francs, and the cost to Germany must run into astronomical figures. Then we have the neutrals. Holland and Belgium are spending heavily and so are Sweden and Switzerland, while Finland has gone through her troubles. All the Balkan States, and Turkey and Italy, have spent and are spending enormous sums, and so arc the Dominions. It is obvious that each country named is financing in its own way. Germany is playing with paper money and inflation cannot be hidden from view. What is the best way of financing the; war so as to avoid troubles when peace is restored? The British method is obviously, the best, that is to pay out of current earnings through taxation, relying on loans to a limited extent. The merit of this is that when the war ends and war expenditure eases off. it would be possible to ease the taxation, and the burden of debt would be relatively small. Even 'so it is difficult to see how even Britain can escape inflation. The only question is, how much? Normal methods of financing cannot obtain, for the Governments are dealing with astronomical figures. -All the belligerents are obliged to import raw materials on a large scale, and the transfer of funds to foreign countries to pay for the raw materials is in itself a tremendous problem. In peace times the formal method of payment is by exports/ that is goods are made to pay for goods, but just now trade is very disturbed and every country is endeavouring to export rather than import, except the belligerents, who must have the raw materials they require, at whatever cost. Britain is endeavouring to bring about some'equilibrium between imports and exports, and is taking active measures to increase her exports. We feel sure she will succeed. There is not'an industry catering for human wants that is not to be found in Britain, and all industries are to be supported by the Government in efforts to increase exports.' The people id£ are. urged to help in this matter by purchasing less imported goods. As a matter of fact British exports are up to, if they do not exceed, the,pre-war level, but that is not quite enough. An increase of 25 per cent should be possible, more especially as Germany is ruled out of foreign trade by the blockade. The United States is anxious to help Britain, and as one American newspaper suggested, the best way to help the Allies is by reducing the tariff, which would allow more foreign goods to be imported into the country. THOUGHT FOR THE DAY Two men look out through the self-same .bars; one sees the mud, and one the stars.—Frederick Langbridge,