THE BRITISH BUDGET

Evening Post, Volume LXXXIX, Issue 147, 23 June 1915, Page 6

THE BRITISH BUDGET

Mr. M'Kenna'e first Budget is a truly tremendous document, but it is not of the kind which the Parliamentary correspondent of The Times had led us to expect when he predicted that it would be the "most terrific instrument" in the financial history of Great Britain. It was natural to infer from this prophecy that another sharp turn would be .given to the screw of taxation, but that terror is postponed for the present. Taxation alone would, of course, be utterly inadequate to cope with the position. Even after the drastic increases in the incometax, the super-tax, and the Customs and excise duties which were effected in November, the revenue realised last year only amounted to £226,694,400, against an expenditure of £560,474,000. But during the first four months of that financial period the country was at peace, and the cost of the war has been steadily increasing as its operations have grown both in extent and in intensity. In the Budget speech which Mr. Lloyd Georga delivered on 4th May, he estimated the revenue for the year 1915-16 at £270,332,000, and the expenditure at -£1,132,654,000. There was thus a prospective deficit' of £862,322)000. These figures show a, wide divergence from Mr. M'Kenna's estimate, which speaks of the deficit as only £518,000,000. In the absence of details it is impossible to say how this great difference is arrived at. One common pitfall in these comparisons is that sometimes the gross expenditure is spoken of, and sometimes the war expenditure only. But the whole expenditure for the year before the war wae less than £200,000,000, and the addition of a similar amount would only account for less than two-thirds of the difference in question. There can certainly bo no change in the basis of calculation to; account for even an appreciable proportion of the apparent difference between ths two estimates. Nearly £3,000,000 a day is Mr. M'Kenna's estimate of the preeent rate of expenditure on the war. It was not long before Christmas when Mr. Asquith estimated it at £2,000,000; but Mr. Lloyd George's estimate of the gross expenditure for the year already cited shows that he was already allowing, for something liko the increase of 50 per cent, which- forms the basis of Mr. M'Kenna's calculations. " If further large sums are required," Baye Mr. M'Kenna, " there must be further taxation, but the time is not yet." H© considers that it is best to take , one step at a. time, and when the step is as large a one as that which he has asked the Houce of Commons to take this procedure is unquestionably a sound one. It "is a loan without limit for which he has asked and obtained authority. Everybody is invited to become a partner in the transaction, and tho smallest contribution will be thankfully received. Not merely is provision being made for the sale of tbonds from £5 to £25 through the Post Office, but accommodation is also provided for the shillings of the working man. " War loan vouchers, " we are told, " for 5s or multiples will be on sale at the Post Offices, trade unions and other offices, with 5 per cent, interest for every complete month until it reaches £5, v when the vouchers will be exchanged for a bond." The bonds will apparently bear interest at 4£ per cent., which is the rate authorised for the loan. Even in this country Buch terms would be very attractive, but in Great Britain, wSth a rate of interest averaging perhapß 2 per cent, below. ours, tho inducement is proportionately greater. The new Chancellor of the Exchequer makes a powerful appeal both to the patriotism and the eelf-interest of every possible investor from the millionaire to the humble housewife, whose surplus half-crowns are ordinarily deposited in a teapot or a stocking. ' ' He who subscribes now," saj-s Mr. M'Kenna., "will be doing an act of mercy and a benefit to himself and the country. He who saves to subscribe will be better able to bear the strain after the war." The national margin of saving in normal tiroes in Mir United Kingdom is *-st imaled at iJIOOjOUO.OOO a veiir, Under

the influence of the dual appeal which the Chancellor of the Exchequer now makes, the Amount ordinarily available against an emergency should be immensely 'increased. And the effect of drawing in the small investor will be to mako tho great loan as truly national in its scope a-s tho -war which it is to help in financing.