STRAIN STOOD WELL

Evening Post, Volume CXXXII, Issue 60, 8 September 1941, Page 6

STRAIN STOOD WELL

BRITAIN'S WAR COSTS

STILL GREATER EFFORTS

REQUIRED

MORE SAVINGS

y RUGBY, September 6; The financial position of Britain is standing up well to the strain of the heavy cost of the war, said Sir Kingsley Wood, Chancellor of the Exchequer, at Edinburgh. While expressing confidence that "if we could avoid the perils of inflation we should be able to carry on successfully during the present financial year without recourse to further taxation," the Chancellor gave a warning that in order to reach the objective that had been set for voluntary savings, still greater efforts were required during the next few months. "Recently we have been spending £12,500,000 daily, of which £10,500,000 is for war purposes," the Chancellor continued. "At no time have considerations of finance been permitted to hamper or retard our efforts. As those efforts develop still further . and we reach our full offensive strength, if increased monetary provision is required there will be no financial sacrifice we shall not be prepared to make. "We have willingly imposed on ourselves the heaviest financial burdens —not for our; own account alone, but for the common cause of freedom and justice. There are no citizens in any country who now voluntarily bear such heavy and almost crushing taxation as those of Britain. CREDITS TO RUSSIA. "There are not only our own financial needs. There are, in particular, those of our brave Russian allies to j whom we have undertaken to give all! possible help. They 'told us that they would not wish any financial help to be< provided as a gift, but they have asKed for credit in go far as the i help which we give them is not matched by the supplies they send us. To this we most willingly agreed, and no monetary limit will be placed on'this assistance which we so gladly give to Russia. "Besides drastic taxation, we' have taken many painful but necessary steps. To meet the essential daily expenditure of the forces on essential materials and equipment from abroad we depend mainly upon our reserves of gold and foreign exchange which we held at the beginning of the war. We have controlled all foreign exchange transactions. We have requisitioned the foreign securities, held by, pur people, especially securities .having dollar value, and for some time we have been selling such securities and using the dollar proceeds to meet our needs in the United States. "Our holdings pf saleable securities have not been sufficient, however, to meet those needs, and we have had to turn to less readily marketable assets. It would riot have been easy to sell these on satisfactory terms, but the American Government has come again to our aid by agreeing to lend us, ion the security of various dollar investments, over 100,000,000 dollars. DANGER OF CRIPPLING ;■'-..■ '■. ; INITIATIVE..'-. . , , After giving credit for the help being given by'"the United States and the Dominions "and liidia, the Minister continued:— ' ; "He must be an exceedingly lucky man who can make a fortune today. If a man with £1000 a year earns an extra £250 he must pay £112--'bf that increase in taxation. If a man with £10,000 a year earns another £5000 he must pay £4562 of the increase in taxation. A danger may be that such a process might cripple initiative and make for extravagance—a danger we have tried to mitigate by concessions recently made in the Budget. "Our; people have willingly accepted the sacrifices and drastic adjustments in .their daily lives which so many have undoubtedly had,to make. This year's tax collection is ,so far very satisfactory, and taxpayers are meeting promptly and willingly the demands being made-on them. I have been specially gratified by the number of taxpayers who; are making advance payments of taxes before they are due. "The keynote of the recent ■ Budget was not so much the imposition of. taxation to provide funds for,' war as the use of the whole mechanism of the financial system to ward off the dangers of inflation. Taxation and savings are not the only courses we are pursuing to keep prices from rising. We have deliberately adopted a bold experiment—the policy of stabilisation. We have succeeded in preventing a further rise in the cost of living index number above the j range which I specified in my Budget speech. The average prices of articles of food outside the index number have also been practically stationary. ' - TEST OF DEMOCRACY. "These are all considerable achievements, and mean much to our people. The success, of stabilisation does not depend on the Government alone but on the full co-operation and response of the whole community and the self-" restraint of both employers and employees. It is the test of democracy. '"With all our heavy taxation, we are obviously still very far from providing all the funds needed for carrying on the war and; meeting the inflationary danger. To do this nearly £2,000,000,000 must be lent this financial year out of genuine savings. This can be done and is being done in many ways, but the most important is saving by individuals out of current income. Good progress is being made, and it is particularly gratifying to see the growth of small savings and subscriptions to the larger issues. It is one of the best signs of the time. In the quarter ended June •30 small savings were 12 per cent, higher than in the previous quarter, and we sold 38 per cent, more of the larger securities. "WARSHIP WEEKS" OFFENSIVE, "The continuous expansion in the national income,1 which is both the sign and the result of the high state of industrial activity in the war effort, affords a continually increasing opportunity for subscriptions to new Government issues. All this promises well for the great new savings offensive which will be launched during the autumn and winter in a series of 'warship weeks.' Let us make it our aim that by the end. of the series there, is not a single ship, from the smallest harbour defence craft to the largest battleship afloat, which cannot look to some community within these islands as its proud and grateful foster-parents. "The Army and the Navy are daily increasing in strength, £Lnd the Air Force* is raining heavier and heavier blows on the enemy. Industrial workers are laboiaring to produce munitions in still greater volume, and the civil defence services are strengthening and perfecting the protection necessary for the factories and homes of the people. We must see to it that this great savings movement does not lag behind but goes forward in still greater strength."—B.O.W.