COST OF DEFENCE

Otago Daily Times, Issue 23671, 1 December 1938, Page 11

COST OF DEFENCE

EXPENDITURE BY BRITAIN STATEMENT BY CHANCELLOR AN INCREASE NECESSARY (British Official Wireless) < United Press Association) (By Electric Telegraph—Copyright) RUGBY, Nov. 29. In view of the further expenditure on defence now contemplated the Chancellor of the Exchequer has decided that some increase in the limit of £400,000,000 authorised by the Defence Loans Act of 1936 borrowing in connection with the rearmament programme is necessary. For some time the suggestion has been made in both parliamentary and financial circles that, with a view to allaying anxiety on thcpart of industry an trade with regard to the future incidence of the cost of rearmament, the Chancellor should make some statement in anticipation of the Budget, ano was in reply to a question in the House of Commons on these lines that Sir John Simcn announced today that he had come to the conclusion that some further borrowing powers would be needed, and that it-was his intention at the appropriate time next year to ask Parliament to pass legislation for this purpose. While emphasising ihat it would be neither desirable nor practicable to depart from the rule providing anticipation of estimates or provisions of the Budget, the Chancellor said he recognised that the considerable increases in defence expenditure vvhich had already been announced I rought to the forefront the question of how they should be met. The Act of 1936 had authorised borrowing up to £400,000,000. and by the end of the present financial year they would have met the cost of rearmament out of borrowed money to the extent of about £180.000,000. Some £220,000,000, therefore, remained, so that 'he problem of authority to borrow was not urgent. But he thought at the time that new commitments had been incurred that they should prepare a plan in advance. Sir John Simon added that it would be impossible to mention figures in anticipation of the new 3ill, but he made the statement in order to remove uncertaintv as far as he could. AUSTRALIA'S PROGRAMME PROBLEM OF FINANCE SYDNEY, Nov. 30. The Sydney Morning Herald's' Canberra correspondent says the* problem of finding money to finance the expanded defence programme is; causing the i-sderal Cabinet increasing concern. Most of the Ministers are now reconciled to the fact that heavy borrowing wi 1 " be under-, taken to finance next year's pro-* gramme, and it is even likely that borrowing on the London market will be resumed. The salient features of the new programme, it is understood, will be the provision of a line of batteries of high-powered long-range coastal guns along the east coast and the creation of a military force and au air force strong enough to deal wrtf any landing force. \ The Minister of Defence (Mr C*. A Street), detailing the defence exipansion in the House of Represerjtatives, stated that plans had. beep made to prepare merchant vessels on the Australian register for the mounting of defensive armament. '