The Evening Star WEDNESDAY, MAY 3, 1922.

Evening Star, Issue 17958, 3 May 1922, Page 4

The Evening Star WEDNESDAY, MAY 3, 1922.

Sib Robert Hoene has presented a Budget which appears to A Budget Of indicate that the financial Hope, corner has been turned at last. A long climb lies ahead. Hard work and rigid economy must bo the motto for years to come, but it can bo practised to tho cheering accompaniment of hope. Fears of national bankruptcy—undoubtedly entertained by a. few people, though seldom or never expressed openly—have been dispelled. Tho nation’s taxable capacity is to be exploited no further in tho direction of tho limit of endurance. It would bo interesting to know what the French political leaders think of Britain’s financial policy under war and post-war strain. Their own has throughout been in marked contrast with Britain’s, Franco made no real effort to balance her Budgets. These were framed with the idea that German reparation payments would make up the big deficit which postponement of increased taxation involved year by year. On tho other hand, Britain has sedulously set herself all along not only to pay her way but to reduce her foreign indebtedness, and to do this without taking Gorman reparations into account at all. As Sir Robert Homo says, ho has always looked on tho possibility of receipts from Germany ns windfall's. Altogether the position is one calculated to create envy of Britain in France. The latter country may not still bo indulging in tho process of inflation, which has provided in Russia a vivid instance of where it finally leads to—complete industrial and commercial collapse; but tho franc still stands at a discount of nearly 50 per cent, compared with tho pound sterling. On the other hand, the British Chancellor of tho Exchequer K-ays that “the improved value of tho pound l sterling is tiro first proof of our payment of external debt.” Britain is treading tho Spartan path of deflation. Tho evil of inflation is that it causes high prices; tho evil of deflation is tiiat it causes unemployment. Evidently fccauso unemployment has become unbearasly acute a partial let-up is proposed in deflation process; it is not proposed to - a*ko provision in this year’s Budget for ’ fujAhcr debt redemption. If tiro easing of taxation and a temporary cessation of the debt reduction policy gives tho hopedfor iSiimilus to trad© and' industry, the improWfinent in national prosperity will bo rofletOcd in tho national revenue, and douMecs such a surplus would bo devoted t 2 on } feat Sir’(Robert Horne

is not budgeting for it. Ho is prepared to “ wait and sec.” Curiously enough, his severest critic over this matter appears to bo the man with whom JJmt phrase is inseparably associated ; Mr .Asquith thinks Unit Sir Robert Homo is “ indulging in a great gamble.” This is not a fair represent at ion of tho situation. It is true that the Government postponed! far too long the making of a real effort to curb tho profligacy of departmental expenditure; but now that eo big a proportion of tho decides economy recommendations have been adopted—though one would have expected to see their effect more clearly mirrored in the estimated expenditure for tho current year than a mere reduction to £910,000,000, ns compared with £1,079,189,000 actually spent last year—there is no gambling about a proposal lor a temporary suspension of tho sinking fund, together with an easing of tho burden of taxation. Had there been a proposal to borrow in order to meet current expenditure it would 1 have been a gamble, but Sir Robert Horne proposes nothing of the sort. His Budget does two things which were becoming really indispensable : it brings relief and inspires hope. It will probably help to stabilise Mr Lloyd George's Government at a time when the political situation was becoming distinctly “ rocky ”; and wo shall bo bitterly disappointed if it docs not greatly assist to stabilise British trade and industry and mark the beginning of a return to national prosperity.