Greymouth Evening Star. AND BRUNNERTON ADVOCATE. THURSDAY, JUNE 1st, 1915. THE COST OF WAR.

Greymouth Evening Star, 1 July 1915, Page 4

Greymouth Evening Star. AND BRUNNERTON ADVOCATE. THURSDAY, JUNE Ist, 1915. THE COST OF WAR.

L? it were possible .to " ; tagger 'humanitv with mere figures. Mr. I-1f?y;l .George had the chance of do" mi; ro ':!:it;Tuesday, evening, when ho in-orb: -l 1': iiJu's Budget for '1915-1G for inspection'• by the House of s;:\& Ihei London correspondent of a contemporary. It was ii.pl to be ' expected that in tbor.o' abnormal < times- this year's Budget would bfl like other. Budgets. It is s''fp ■'• nay that tile oldest Parliamentary h.:;■'<! • was .iinableto recall so singular "ah an mial. financial statement as that made by Mr; Lloyd George. It . was unusual not merely on account of the prodigious figures -with which it dealt, but because it was impossible for the Chancellor of the Exchequer- to present the customary "final balance-sheet." Another •unusual""feature was that no changes of taxation, except two, trifling alterations regarding income tax and life insurance, were announced. The income . tax is to remain as settled- in the 'autumn, namely, 2s 6d on unearned incomes and Is 6d on earned .'incomes'. As to the taxes on alcoholic .drinks, they, do 'not. seem likely _ to. survive the opposition to which they 'were subjected during the discussion that ensued upon the Budget-speech. This was anparentlv .brought home I to, Air Llovd George when Mr Austen Chamber-' ■iahi indicated .that the Unmnisls: would have to oppose the new .duties, if. whey were pressed forward. The Ohancet'ov of the Exchequer declared hia

confer again withi/reprofiotitativcs of the trade,. «)i'd made, jt' cohfr that no fr-oiiumjfl-ranity would dietgr' him from taking sifch iction as would.'secure unity on 1 lie question,-; ' Here of'the Chancellor of ’ho Exchequer s-* prodigious, figures Cost of war up. to Alarcli 31, apart fioifi aciyanOtyt of £52,378.QCG to Dorilh nions arid Allies' «•-. £207,416,009 Existing amount id. national*'''' debt ... m.... 1,165,800,000 Estimated revenue'for present financial ye'ar ... .270,330,000 Increase oyer last year’s revenue ... 64,397.000 COST OF SIX MONTHS OF WAR. Total expenditure-, 790,450.000' Revenue on existing basis of taxation ' 267,232,000 j Gross deficiency ... £523,226,000 Deduct — * hispension of sinking £3,780,fX)0 Extra taxation 3.100,000 5,880.000 Deficit ... ; £515,000,000; COST OF TWELVE MONTHS OF WAR. Total expenditure £1,132,,000,000 Revenue on existing basis of taxation, etc.. ... 270,000,000Deficit ... ‘ £862,000,0Q0-, The methods by which the defificiency. is to he met are to he announced' later in the year. The estimated average daily cost of the war to Great Britain alone, if it continues throughout the year, Is no less than £2,100,000 per day. In addition to finding this money Britain will, it seems, have to advance very large suras to her Allies and to the Dominions on war account. The Chancellor of the Exchequer made no secret of : the difficulties with which he is faced in’, having to raise such a vast sum of money for financing the;war. While claiming that; we were the richest country in Europe, and .pointing, .out’ that wo had £4,000.000,000 invested in colonial and foreign securities!, lie . compared the State with a firm possessing large-, assets, and said every business man recognised how difficult it was in timeV-pf-' stress to liquify the assets. “It is just as well."’ he remarked,'amid cheers, •■“thS?'..' the House of Commons should know what ■ mu' difficulties are. We can overcome them if we put our backs to it and do it , together.” When he observed that we had practically to finance the ]. urdiasq of most of our Allies from abroad, somebody asked, “Why?” Mr Lloyd George was again cheered" when ho replied thatthe Allies were all acting together, and that if wo could help our friends in arty way we were hound to do so. This reference to the help we are giving to our Allies led up to an important pronouncement on the subject of recruiting. “We have raised enormous numbers of men,” Mr Lloyd George remarked, “but 1 say. speaking purely from the point of view of finance, that the time has come when there’ should he a discrimination so that recruiting shall-' not interfere with the output of munitions of war, and that it shall interfere as little ns possible with-the output of those com-

nioclitics we export abroad, which enable us to purchase munitions for ourselves and our Allies.” But he added: “Within those limits there is a great'room for adding to the number of recruits in this coinrtry.”' In dealing with the possible methods of financing the war, the Chancellor dismissed the suggestion that, the' currency should be hinted by means of pap fir;- arid said that the sale of existing securities and tlio creation of hew! securities by borrowing abroad would be only helpful within limits. He foreshadowed future taxation of war profits, but said that it would be necessarily primarily to depend on the savings of the community. He put the ordinary. savings of Hie nation at from £300,.000,000 to £400,000,000 a year, but said that in time of war they ought ■to be doubled. He pointed out that during the Napoleonic wars our ancestors began by taxing themselves to the extent of l-7th of their income, and ended with a tax of 2-71'hs of their income. And with this “gentle hint” the Chancellor wound up his seventh and most important annual Budget speech. If was the shortest he had made, for lie was on his feet only an hour and a quarter. Between the dry bread of the Chancellors statistics concerning ; cost ot the war, we may find sandwiched some small elements of comfort. The war is costing Britain over £2,ooo,Cipo per day, but we have: the knowledge..', that it was costing Germany three mih, lions per day some month's ago, and' since then she has been compelled to develop her efforts on the Eastern frontier to an enormous extent. At a superficial glance sbe seems to be meet- -. ing this enormous drain on her Resources with ease, but if one looks lalittle closely, into matters, it will' be found that (.is Mr. Idoyd’ George puts it), “there are many ; girders- in the German financial , bridge -• which are. made of paper, and no .amount of paint and varnish, will disguise that fact.’! Her note circulation is only half covered by her holding of coin and bullion, while our own active note circulation is covered far more adequately. As a result, the value of 100 German marks has fallen to 85 or lower. No one wants German money. It is depreciated, and this must enhance the cost of-Hying. Teuton bankers in New York have made great efforts to check this depreciation of German credit,, hut others who are hot Teutons are‘of opinion that she is on the verge of a momentous financial fiasco. The position can best be illustrated by the experience of a Swede who; entered Germany with £6 in English gold. This was taken from him and instead lie was presented with German bank notes. On leaving the country, and entering Holland, his remaining' bank notes only fetched 78 of their face value. Danish banks ‘have ’ gone so far as to refuse to take any. more paper From Germany, As to the vaunted loans, every device, including; absolute compulsion, has been resorted to in order to make them a success, while foreign creditors in Denmark and Switzerland have had war loan scrip foisted upon them in payment of-‘their accounts. Compare our qwn case. While Germany's foreign trade-is at a; standstill, ours goes on. While her workers have had !o pour’-thdiy savings ijito the lap of the GuteVnment,- pur ovhr are putting money by on,’ the rate' some: three to four hundred millions VT-yeaS*-'firming a great!,fund available for in- " vestment, in /uture national /loans. The . increased income tax has been paid with an’ v alacrify which has delighied the Chancellor of the Exchequer, and ! amounts to a-good deal more, than he ;

ever expected. The income, of - the nation totals £2,400,000,000, and we have £4,000.000.000 [invested hi foreign and colonial [securities. Our war burden is indeed a big one, but Britain’s financial back is very broad, and pur supply of “silver bullets’;’ necessary for carrying on the war is not in the least likely to prove inferior to the enemy’s. “Tino is on our side,t even if the war is to be decided by a process of financial attrition. t 1 ' : f