BRITISH DEFENCE BILL

Press, Volume LXXIII, Issue 22017, 15 February 1937, Page 9

BRITISH DEFENCE BILL

"£400,000,000 LOAN NOT IMMINENT"

EARLY CONSIDERATION BY PARLIAMENT LONDON, February 12. The bill seeking authority for the Treasury to raise capital or to use realised budget surpluses for defence expenditure up to £400,000,000 will be presented to Parliament without delay. The necessary financial resolution will come before the House of Commons on Wednesday when there will be full opportunity for a debate.

Commenting on the Government's proposals, "The Times" says: "There is no question of throwing the new Government loan of £400,000,000 on the market, nor do the signs go to show that such a loan is immediately imminent. Technically, the announcement does little more than create the framework of a highly orthodox financial operation, and to leave the details to be filled in later. "It is most strongly to be hoped that this fresh evidence of British determination and capacity to carry through the defence programme will prove to be constructive in the highest sense of strengthening the efforts which are simultaneously being pursued by the Government to call a halt all over the world to the disastrous policies of putting fists into the mail and piling up expenditure pyramidically."

"Rare Emergency" The "Morning- Post" says: "Borrowing for defence in time of peace is certainly rare, but so, happily, are emergencies of the kind with which we are now confronted." The "Daily Telegraph" welcomes the announcement as an assurance that rearmament is being pushed forward with full energy, and states that the system chosen is elastic. The "Daily Herald" strongly opposes the Government's proposals. It states that the loan will place a much greater part of the burden on the working man. The loan will be inflationary, increasing the monetary demand for all goods and services. It regrets that the money for defence is not to be raised by taxing the rapidly mounting profits of industry. The "Daily Mail" declares that the amount is inadequate and states that the Government should have stipulated for £1,000,000,000 at least. The "Financial News" says: "There is nothing whatever in the Chancellor's statement or in the White Paper .containing the financial resolution which suggests that Government borrowing on a large scale is imminent."

• The newspapers point out that the suggested interest rate of 3 per cent., while it may in part be a guide to probabilities, does not refer to the rate payable to investors, but to internal Treasury arrangements.

"LOANS INEVITABLE"

PLAN NOT CONSIDERED DANGER TO CREDIT (BBITISH OPMCIAL WIKEizSS.) RUGBY, February 12. The First Lord of the Admiralty (Sir Samuel Hoare), in a speech at Birmingham, said that the defence programme must inevitably cost scores of mjllions. "We shall find the money as we have found it in past emergencies," he said, "and we.shall find it wisely and fairly, holding the balance between all classes of the community and between sums that can rightly be regarded as capital expenditure and sums that must be found by annual taxation.

"While it is essential that a great part of the expenditure should be paid for in the annual budget, it is not reasonable that the deficiencies of many years should- be entirely met by the taxpayers of the present year or the years immediately before us," continued the First Lord. "On this account there is every justification for finding a substantial part of the expenditure from loans to be repaid over a term of years. "Wj do not like loans of this kind, but in the present circumstances loans are inevitable. Wisely and carefully administered. I do not believe that it will shake our credit or endanger the supply of cheap money which is so essential to British industry. A strong defence, sound finance, and a contented, united people and Empire, are the aims on which the Government's mind is constantly fixed."