BRITAIN'S FINANCES

King Country Chronicle, Volume XXXIII, Issue 4806, 5 July 1939, Page 2

BRITAIN'S FINANCES

0 CONSERVATION EFFORTS. APPEAL TO INVESTORS. SPEECH BY CHANCELLOR. The Chancellor of the Exchequer (Sir John Shi on) ‘ speaking at the British Bankers’ Association dinner in London on May 8, referred to control of foreign borrowing as an example of a type of problem with which the Government was faced in the present unprecedented times. “If we were at war,” he said, “control of the country’s economic

life would necessarily have to be more complete. But conditions today are so far from normal that the country needs some of the restraint which war-time controls would impose. Imports are inevitably increased and exports decreased by the claims of rearmament. “The main avenues through which capital can flow abroad are effectively controlled by the Foreign Transactions Advisory Committee. But private purchases of foreign securities could, if not restrained, amount to a considerable drain. The Government’s Aim. “They could be stopped completely only by measures of inspection and control which I would be reluctant to impose unless the need is in-

evitable. Our principle is to seek powers from Parliament to impose prohibitions whenever that is the only way of attaining a necessary object without delay or without excessive cost. “At present there is no reason to think that the appeals we have made to refrain from foreign investment have fallen on deaf ears, and we have been justified in relying on the voluntary co-operation to secure the Govei’nment’s object which we have found every class willing to give. “This co-operation between the City and the Government, influencing investors to refrain from sending out of the country money which is the property of British citizens, should undoubtedy be the best way of preserving this element of our financial strength.

“The country is undoubtedly richer than it was 20 years ago. We still have a substantial reserve of taxable capacity, as ought to be the case. “On the other hand, even if it had been possible to cover the whole cost of rearmament by current taxation, this would have caused a tremendous dislocation of business in all directions, to say nothing of the overwhelming strain of so vast a burden suddenly imposed on the taxpayers. “Borrowing, therefore, of a substantial amount was justified to enable the country to adapt itself more easily to the sudden increase in armament production.” Mr. Colin F. Campbell, president of the association, who presided, said that in his opinion economic develop-

ments of the last few years possessed, in common with some political developments, all the outward signs of ultimate collapse. “A widening of the area of exchange stability and freeing of the channels of trade must be achieved unless the world is to be condemned to perpetual economic crisis followed by disaster,” he added.

“In accordance with what we be lieve to be the wishes of the Gov-

ernment, I think I can speak for all bankers in saying that we are endeavouring to do our utmost to discourage the transfer abroad of funds, a practice which might be detrimental to the present national financial position.”