PAYING FOR WAR

Evening Post, Volume CXXX, Issue 156, 30 December 1940, Page 6

PAYING FOR WAR

BIGGER DEMANDS NEXT YEAR

INFLATION TENDENCY

MUST BE CONTROLLED

"The cost of war today is tremendous," the Prime Minister (Mr. Fraser) stated last night. "We all know by now what sacrifices are involved, and we are agreed that these must be borne proportionately. The war budget this year totals £37,500,000. It is being met in several ways, principally by increased taxation, by loans, and by the prudent use of credit. Next year these war costs will show further increases.

"More and more production is needed if we are to bear this financial burden successfully, and it must be borne in mind also that increased production is needed at a time when more and more men are being absorbed into military service, and thus decreasing the supply of labour. It is obvious that greater effort on the part of those who remain at home is urgently required. We have surmounted the difficulties of the past year with creditable success. Comparing our experience with that of other countries, we must consider ourselves fortunate. During the coming year difficulties will inevitably increase. With every section of the community determined to take its full share of these burdens, there is no need to be doubtful of the result.

"There is in wartime always a tendency towards inflation. This must be controlled. There is an equal tendency for prices to rise. The prices of essential commodities must be stabilised, unless real wages are to be left to lag behind the cost of living, thus leading to unwarranted burdens on wage-earners and people on fixed incomes."