BRITISH BUDGET

Manawatu Standard, Volume LII, Issue 120, 21 April 1932, Page 7

BRITISH BUDGET

FINANCIAL MEASURES. CONTINUED EFFORT NECESSARY. LONDON NEWSPAPER COMMENT. (United Press Association—By Electric Telegraph.—Copyright.) LONDON, April 20. Newspaper editorials all voice the country’s disappointment that there is to be no remission of taxation, but recognise the Government’s difficulties and hope that its financial will lead to better times. ' The Morning Post says that the Budget is even sterner than the least hopeiul prophets anticipated. The Times says: “It is a hard Budget based neither on vague optimism nor clever dishonest stratagems. The only passage in the speech which cheered all parts of the House was Mr Chamberlain’s almost perfunctory reference to economy, in which, apart from the Ministry of Labour vote, only £14,000,000 are saved.” The iNews-Ghronicle describes the Budget as a “carry-on” Budget, which proves that the country is by no means out of the wood. “All classes must steel their hearts to continued effort,” says the newspaper. The Daily Mad says: “Mr Chamberlain has faced the gravest situation courageously and firmly. His measures will greatly enhance his reputation and strengthen foreign confidence in the solidity of British finance. Everyone hopes that he is right in predicting that the worst of the economic blizzard is past. If otherwise, the estimates may prove to be over-generous.”

EXCHANGE STABILISATION

PLANS.

The City naturally regards the exchange stabilisation plans as the most important feature ot the Budget and cordially approves of them. The Financial Times says: “The need for such a fund Ls self-evident. The tide of liquid capital has set so strongly toward Britain that it might cause sterling to soar in the absence of a balancing influence and reduce our trade advantage, while dislocation might follow any subsequent marked outward movement of funds. The existence of a large exchange fund is a safeguard against the Budget situation being thrown out of balance and a warning to speculators that resources are available to prevent injury to sterling trading interests.” The Daily Herald’s city editor interprets the decision as meaning that the Government has now definitely decided to embark on a prolonged period of currency management. Another matter of comment is the new preference for colonial sugar. A director of Tate and Lyle, refiners, said that he considered it would not affect prices in Britain, as the duty was paid by the producers. It -was surprising that there was no additional preference for the Dominions. Presumably this was being left for Ottawa.

FINANCIAL METHODS.

CONFIDENCE IN BRITAIN,

THE CURRENCY PROBLEM,

Received April 21, 11 a.m. LONDON, April 20. In the debate on the Budget, Sir Samuel Horne said that the country was in a sounder position than during the past two years. The confidence of the whole world in our financial methods had been restored, despite the sacrifices, "which the people would prefer to endure a little longer rather than imperil their confidence. Matters- were developing hopefully for the conversion of the five per cent. War Loan, which would considerably lessen the expenditure. TARIFFS OVERSHADOWED.

Currency now overshadowed tariffs. Mr Chamberlain ought to inform the business world of his objective in the management of the value of the pound. His aim should be to raise and maintain price levels a long way above the present rates. Prices were now below the level of 1913, though costs were immensely higher. With a loan of £150,000,900 it would be possible to keep the pound at any level desired, and a revival of confidence would prevent it going too low. The problem would be to prevent it going too high. The natural result of the Treasury control would be to raise prices, which was the first necessity to prosperity. We did not consider tho position intolerable in 1928 when prices were 29 per cent, above those of tho present. The Lausanne Conference would have the fato of the world in its hands. Sir Samuel Hoare said that he was glad Britain would speak with revived authority and would be able to show that altruistic compromise was the real road to enlightened self-interest. No nation could possibly profit by its neighbour’s distress. Colonel J. C. Wedge-wood agreed that the only thing that mattered was tho currency policy. Surely the Natioaiil Gpvemment could have a national policy on this- subject and tell us whether there was going to be a reinflation of prices. SUGAR PREFERENCE.

Mr L. C. Amery said that the sugar preference might have been more generous and should be extended to the Dominions, even if it entuiled adding a farthing a pound to foreign sugar. Our monetary policy, wliicn would meet the Dominions’ interests as well as ours, would be as important a subject for discussion at Ottawa as the fiscal policy. Only by getting back to the price levels of 19Z8-9 could the production of Britain and the Empire be revived. SIGNS OF IMPROVEMENT. GENUINE SINKING FUND. BRITISH CREDIT ENHANCED. (British Official Wireless.) Received April 21, 12 noon. RUGBY, April 20. Although keen disappointment is felt at the absence front the Budget statement of any remission of taxation, it is generally felt that the signs of improvement, although apparent, are not yet sufficiently marked or stable to justify any relaxation of effort. The Times says: “Mr Neville Chamberlain has given the country a genuine sinking fund which should entail a real net redemption of debt of no less than £32,500,000, and which in a year when incomes have shrunk and world - prices are lower represents a very creditable step which should enhance British credit.” It is emphasised that the exchange equalisation account for which the Chancellor is seeking powers to borrow up to £150,000,000 will not lead to an increase in the debt in the ordinary sense. He merely desires to invest paper pounds in gold or foreign gold currencies. Latelv there has been a considerable foreign demand for

sterling, which is the paper pound, and its dollar value has risen from about 3.23 to about 3.80 dollars. This demand has been partly due to the measures so effectively taken to balance the Budget, but partly also to a loss of confidence in other currencies. Tho Daily Telegraph says: “This account should serve as a powerful and efficient instrument for the defence of sterling in any emergency and for the maintenance of the financial stability which is . the root of British prosperity as a great nation.” The Manchester Guardian agrees that the measures to protect sterling against embarrassiig fluctuations, such as those of recent weeks, were certainly needed, although they only make an earlv move for international co-operation on currency problems that are more urgent. The Daily Mail thinks the Budget will add to" the confidence abroad in British national finance. Tire Daily Express thinks the nation which has risen so splendidly through great adversity deserved a Budget reflecting more imagination, hope and faith. The Daily Herald says it' was apparently framed in the expectation that the Government would remain in power for another three or four years. The Daily News describes it as a “carry on,” but while open to criticism it is more satisfactory than might at any time have been feared. The Morning Post, while welcoming its soundness, regrets the absence of iron and steel taxation concessions. It thinks the Budget notable lor the constructive measure of establishing an exchange equalisation account. Tho Budget proposals had little effect on the stock markets, although the disappointment at the absence of a reduction in the beer duty reacted on brewery, shares. SECOND BUDGET SUGGESTED. (British Official Wireless.) Received April 21, 1 p.m. RUGBY, April 20. Mr S. Baldwin, replying to a Parliamentary question as to the desirability. of having a second budget after the Lausanne and Ottawa Conferehces, said he was unable to go beyond the Chancellor’s statement that proposals might have to be submitted to Parliament later to give effect to the measures agreed upon at Lausanne. ,