Evening Post. THURSDAY, FEBRUARY 23, 1939. COST OF BLOODLESS WAR

Evening Post, Volume CXXVII, Issue 45, 23 February 1939, Page 12

Evening Post. THURSDAY, FEBRUARY 23, 1939. COST OF BLOODLESS WAR

AeroplanJstSy flying: blinds have instruments- to indicate: to; them- direction andi elevafitoi*,, and they consult both mstomientSy for the- double, purpose of going in the right direction and of keeping; aloft. In tlie same way, people of all shades of opinion study Britain's rearmament policy — they study her- political course for the purpose of ascertaining, direction, and they watch the financial barometer for assurance that, the Government will keep aloft in its financial flights, and not crash in bankruptcy. There are some people who believe that the political direction is right, that the financial method is right, and that the goal of peace will be attained with a margin of financial^ buoyancy. There are others whcs believe that, owing to Britain's finanicial sacrifice,, the political goal cff peace will be attained, but only at trie price of financial breakdown. Akd some pessimists think that both misfortunes will happen—bankruptcy and war also. For a Prime Minister a&out to borrow enormous sums, Mr. Chamberlain has spoken, on the second day of the House of Com mons debate, with remarkable candouir. He does not pretend that there are no limits to spending, whether; the spending; be for defence or ciffence. He states bluntly that, the arms race, "if it is- persisted in, will brinjg bankruptcy/ to every country in Burope." // persisted in, it will bring bankruptcy certainly to countries who spend out of loan in disprojiortion to revenue, and even ultiniately to countries who seek to proportion loan and revenue expenditures 'with the care that Sir John Simon revealed in his notable speech as Chancellor of the Exchequer. // persisted in, the arms race cobld certainly ruin all taxpayers, for thoagh borrowing lessens the immediate huxjAen on the taxpayer, nevertheless interest and (sinking fund,, plus the . new maintenance costs of unliroited' defence equipment, must crusty the taxpayer iin the long run. Sir John ! Simon has built up with great judgment a scheme proportioning rei venue and loan expenditures, the Prime Minister does not blink the fact of ultimate bankruptcy, if such i spending ii persisted in. He has, therefor^, all through this crisis, emphasised periodically the wisdom of an agjreed limitation of re-armainen£ by thie Powers—not only the wisdom of 'limitation, but the suicide of non-limitation. Quite recently in these / columns his past emphases on limitation —notably in March of last year —were recalled, and at the -same time financial figures and oj&nions from British sources were quoted which make the financial candour of Mr. Chamberlain's* latest speech quite understandable. In this speech he presents Elumope with two courses: limitation'and bankruptcy; but he does not sa.y that fear of bankruptcy is at all Ififcply to deflect Britain from her re-arftning plan, so long as international k conditions present no >hope of armaments limitation, and no practical pre-arranged basis for a conference thereon. The Government's cletermination to continue rearmings in present conditions, is just as delwnite as is its willingness to limit /rearmament if others will show tangiibfe sign of agreement. That possibility is the silver lining to the clouitU The dark side is the inevitability of bankruptcy, if "the bloodless Jwar" is persisted in; ultimate bart&ruptcy plus bloodshed. A- vital factor in the issue is what prafce the British Government can boarow at. In war, a dictatorship fights with its blood and its money, frtoth under compulsion; a democracy hopes to fight with its blood and its (money under voluntary contribution. |The doubling of the Defence Loan Act borrowing power—from 400 to 800 millions—is a searching test of democracy; and it should be noted that both the Prime Minister and the Chancellor of the Exchequer hint that there may be a still further increase in the limit of borrowing power under the Act. Their candour in this respect is equalled by Mr. Chamberlain's raising of the question whether the annual cost of the maintenance of these increased armaments, together with interest and sinking fund for defence loans, might not become more in the future than it would be possible to extract from the taxpayers out of current revenue. Lenders are certainly being given full notice of the gravity of the situation if the European leaders in the financial suicide race cannot be restrained. The reaction on lenders and taxpayers, according to the Press, is that Sir John Simon's revenue-loan allocation (revenue bearing 230 outj of 580 millions) is generally ap-l proved as not over-straining either

credit or taxation. As to maintenance, the "Daily Telegraph" thinks "there is^no question that when the five-year? programme of intensive rearmamefit is over we shall be able to meet tb£s higher maintenance charge out of The testing of the British loan market with these big defence loans will bte a crucial moment, and if that moment could be avoided, or if its iimpaqk could be reduced by a new peaci* spirit in Europe, Mr. Chaxjnberlain's policy would then be aeclMmed a success, and the bloodless/war would have saved a vast toll in i&uman life. But this rests in the lap* of the gods. Subject to Provideiitce, Europe is flying blind. Lribour's harking back to events sefyen years ago—to pre-Hitlerism— is, beside the mark. What is to spme extent within human vision is tihe continued financial buoyancy of and the political peace course iset by her in her flight into an unknown future. Study of this piece of political navigation and this economic buoyancy is the most practical study that the moment provides, for what else is likely to appease should the appeasement and re-armament effort in Britain collapse through overstrain? Judged from any standard, the eight hundred millions loan limit is a contribution to history. The hope of civilisation is that it be a decisive contribution.