Why do we Spend More?

Dominion, Volume 23, Issue 85, 4 January 1930, Page 17

Why do we Spend More?

£B9O Millions every Year on Armaments

, t V N his speech at the'Labour Party Conference at Brighton, Mr. HenderI son appealed for a decisive move forward towards disarmament, I but he added with justice that that would be possible only if public I opinion demanded it. Public-opinion must demand it in more countries than one, and it cannot be pretended that on the Continent of Europe public opinion is very vocal or insistent in its demands. “For that reason, expectation regarding the outcome of the first World Disarmament Conference must not be pitched too high. There is no reason to believe that the Conference will fail. It will almost certainly result in limitation; it may in some cases result in reduction.

“But the road Is strewm with obstacles, and progress is likely to be slow and painful. The best hope for a world which, as our Supplement shows, is now spending nearly £9OO million a year on armaments, is that belief in the authority of a new international law based on the League Covenant and the Kellogg Pact will continue to grow

“On the long view the prospect is hopeful. On the short view 'we may need to be rather more patient than we like.”—“The Economist.”

Mr. P. Jacobsen, formerly a member of the Economic Section of the Secretariat of the League of Nations, has prepared for the “Economist” a remarkable supplement on “The Armaments Expenditure of'the World.” which in view of the approach of Armistice Day has a special significance:

“Europe, as a whole, spends annually on armaments £524 million (13,230 million gold francs), or £4O-45 million more than in 1913, in spite of reductions of armaments of certain countries under the terms of the peace treaties. If the amounts spent by Germany are deducted, the totals for the other countries are—Pre-war, £386 million; post-war, £487 million.

“These figures mean that European countries other than Germany devote to armaments almost as much in real values (account being taken of the rise in prices) as they did before the war, and considerably more than their average expenditure in the period 1909-1913. In order to bring the armaments of those countries down to the level obtaining in 1908 there would have to be .an average reduction of approximately 30 per cent, from the level of 1928.

“The present world expenditure on armaments shown in the various national budgets is something like £B9O million (22,390 million gold francs) per annum, of which 60 per cent, is expended by European countries, about 20 per cent, by the United States, and 20 per cent, by the rest of the world.

“But if account is taken of the fact that the extra-budgetary charges resulting from compulsory military service, strategic railways, etc., are considerably higher in Europe than in the United States, it is probably fair to say that of the world's real ' outlay on armaments two-thirds are expended by Europe, one-sixth by the United States, and one-sixth by the rest of the world. .' .

“Compare with these data the fact that the income of 120 million inhabitants in the United States, estimated at a total of SO,OOO million dollars, is about as large as that of the 480 million inhabitants of Europe, and considerably higher than that of the rest of the world. The United States, with about 35 per cent, of the income of the world, accounts for under< 17 per cent, of the world’s armaments expenditure, while Europe, with a similar income, is responsible for 66 per cent.

“The total armaments expenditure of the British Empire is shown in the following table: —■

“Note.—Of the Indian figure a part only is effectively expended in sterling, the greater portion being paid in rupees, which now have the value of 1/6, instead of 1/4, as in 1913. “Even allowing for the rise in prices, the total expenditure is as high as in 1913.

♦lncluding ordinary pensions (but not war pensions), whenever data are available. “The foregoing table shows that, of the countries which were victorious in the war, Great Britain and France have somewhat reduced the portion of their national income devoted to armaments, while in Italy the percentage has risen. In Germany, on the contrary, the defence expenditure represents a much smaller proportion of the national income—l. 3 per cent, in 1928, against 4.6 per cent, before the war. “The same may be said of Austria, while in Hungary the percentage is slightly higher. In Sweden the expenditure has been somewhat reduced, and in Switzerland the cost of the militia is about as low as before the war. The relatively high percentage in the case of Finland represents the heavy outlay by a new country for defence purposes. The figures for Poland and Roumania, if available, would probably show similar results. “It will be seen that the United States of America and Australia spend only about 1 per cent, of their national income on armaments, or less than any European country, whether disarmed under the terms of the Peace Treaties or otherwise. ' If full data were available, it would probably be found that Europe as a whole spent on armaments at least 3 per cent, and perhaps not far from 4 per cent, of its aggregate income.”

Country £'s (000,000's omitted) 1913 1928 Percentage •‘Increase Great Britain .. 77 115 49 India —A* 44 100 The Dominions 9 12 33 ■ ■ 1 —* ■ ■ i ' '*» - •—— Total IOS 171 57

Countries ARMAMENTS AND National Currency NATIONAL INCOMES. ' (000,000’s Estimated National Income omitted). Armaments Expenditure* Armaments Expenditure as a Percentage of National Income Currency Year Great Britain £ 1913 2,250 77 3.4 1928 3,800. 115 3.0 France ... Franc 1913 37,500 2,062 5.5 1928 250,000 11,400 4.6 Italy ... Lira 1913 20,000 737 3.2 » 1928 110,000 4,761 4.6 Germany ..., ... Mark 1913 45,000 2,056 4.6 192S 60,000 7661.3 Austria ... Schil1928 7,500 90 1.2 ling Hungary .... ,.. Pengo 1928 5,000 114 2.3 Sweden .... ... Krona 1913 3,000 ■ 87 2.9 1928 6,000 150 2.5 Switzerland ... Franc 1913 4,000 55 1.4 1928 6,000 86 1.5 Finland .... ... Marka 1928 15,000 600 4.0 Czecho - Slovakia Ke. 1927 60,000 1,900 3.2 U.S.A ... Dollar 1913 34,400 491 1.4 1938 80,000 S68 1.1 Australia ... £ 1925 635 6 0.9