The Otago Witness. (WEDNESDAY, JUNE 23, 1916.) THE WEEK.

Otago Witness, Issue 3250, 28 June 1916, Page 43

The Otago Witness.

(WEDNESDAY, JUNE 23, 1916.) THE WEEK.

WITH WHICH IS INCORPORATED THE 80 U't'IIEItN MEHCTJRY.

"Nunqua;n allud natcra, allud sapicntia, dixit.* —JUYEXAIj. "Good nature and good sense must ever join."— Pope. Lord Revelstoke, who, apart from his position as director of the Financial Bank of England, is one of Stability the leading authorities upon and Economic financial "matters ,in the Pressure. United Kingdom, has made to an American interviewer a statement which is worthy of attention. Despite nearly two years of war waged upon a scale of exhaustion previously deemed impossible, the editice of London credit stands firm.' This is all the more marvellous when it is realised that Great Britain is bearing the enormous burden, of financing all the Allied nations, and which consequently constitutes London the world's financial clearing house. Lord Revelstoke attributes this eminently satisfactory result to two main causes; first, to tlie bold and courageous financial policy adopted by the British Government immediately upon the outbreak of the war, which precluded all possibility of a financial panic; and, secondly, to the command of the seas maintained by the British Navy. Tn this latter connection, and as revealing the service and continuance of Britain's naval dominance, it is stimulating to read of the King's visit to the Grand Fleet, when after inspecting all the ships engaged in the recent battle, he went to the base, "where the great striking force of the Grand Fleet lies moored in long lines." Thanks to the ceaseless vigilance and proved invincibility of the British fleet it has been possible to maintain the even flow of British exports, this being the key to the financial posit'ori. The maintenance of Great Britain's export trade has also been made possible owing to two other main causes; 6rstly, the sound financial policy of the British. Government, and, secondly, thanks to the use of what Lord Revelstoke aptly styles "the great reservoir of women's labour previously untouched." It is interesting to nolo in passing Lord Revelstoke's opinion that Britain does not grudge America her gain in financial strength since 1914, since "both nations believe in using their money for the development of newer countries, thus increasing the world's prosperity." This statement is of the utmost importance, coming as it does right upon the heels of the resolution of the Paris Conference. The publication oi the text of these resolutions has elicited from the Frankfurter Zeitung the defiant declaration that when there new economic regulations are decided upon by the eight' Allied nations, Germany, Austria, Bulgaria, and Turkey will also have a say in the matter. "No peace can be conducted," says this German authority, "that does

not leave our economic strength room for the fullest expansion which it previously had. Any oilier -peace will only lead to a repetition in the shortest time of tho world's present, disaster." Exactly what this fullest expanckrn enjoyed "by Germany previous to the war meant, has been exposed by Mr Hughes in one of his cbaractcr'-tically vigorous utterances: "Some i t* the Allies before the war were so completely enmeshed in Germany s toils that they were obsessed with the fear that peace would find them again in the enemy's economic- grip. The Allies must not look to Britain in vain." It is this financial superiority, established and maintained right from Military the beginning of the war, Victory. which atones in a large measure for Great Britain's many military deficiencies. This same financial superiority has also enabled Britain to supply without faltering or flit)chink all the, economic needs of the Allies. ' It is this very financial superiority whipS" >:ives point and weight t,o the Pari- Conference, and which promises to render futile all Germany's threats of economic retaliation. Mr Lloyd George, however, insists that whatever the economic and financial pressure brought to bear upon the enemv, "only military victory will destroy Prussian militarism and civilisation from a repetition of the present calamity." Presumably Mr Lloyd Georsre. from the knowledge gained as Minister of Munitions, knows whereof he speaks, and he would scarcely way so enthusiastic concerning the "smashing military victory" thai will bring peace unless he believed that such a victory was within sight. Just as Lord Revelstoke's statement was primarily intended for American consumption, so Mr Lloyd Georae's words were intended first of all for French cars, which fact tends- to explain the added emphasis in either ease. One reason why the British Minister of

Mumt'ons dfeired to encourage the brave- j hearted French nation may be found m the statement of the Daily Chronicle that "unless the slow, steady German advance on Verdun is interrupted it must end m the fall of the town." And although it may be, and doubtless is to some extent, true that the French commanders value this hotly-contested ground solely as a means of bleeding the enemy, the moral pffect of the capture by the Germans ot this coveted fortress would by no means be negligible. Possibly it was with the knowledge that Germany may eventually succeed "in this great military adventure which caused Mr Lloyd George to pay homage to the gallant French defenders ot Verdun, "whose almost superhuman courage and tenacity have held the Bosches at bay " And in view of the diminishing military strength of France there is profound truth in the statement: 'lt is not the ground gained or lost on a short distance that matters on the western front, it is the lives lost." Mr L:oyd George dees not anticipate a speedy military victory over the enemy, although he believes that the victory will be a sure one He is confident because the production of munitions is increasing, and thereby is adding every week to the strength of the Allies ; and because of the lesson of Verdun, that big guns and heavy explosives will play an even greater part in future battles. There is force m Mr Llovd George's contention that peace forced 'upon Germany because of her impoverished food material would be a moral victory for the Kaiser, since he would be able to say: "We defeated our enemies in every battlefield, we crushed Belgium, held " the richest industrial department of France, drove back the Russians, hurled the British from Gallipoli and were forced to make peace onlv because the enemy starved our women and children."

Russia, however, has made already a forceful reply to a part- of The Situation the Kaiser's 'imaginary alleIn the East, gation, in the completion of the occupation of Bukowina, taking great booty and many prisoners. This unexpected and successful Russian advance against the Austnans, made possible by a great concentration of heavy guns and munitions, after the German "plan, was accompanied in its later stages by a more picturesque and less scientific sort of warfare. Of such was the fine cavalry charge across the river Strvpa, which is said to have recalled the fighting of the Napoleonic era. It must have been a stirring sight after the monntonv of many months of trench warfare to have -witnessed that charge headed by the regimental colonel, adjutant, captain, and standard bearer. "After the chaplain had blessed the men," so runs ihe account, "squadron after squadron charged until the "fields were covered with hundreds of horsemen, lances, and unsheathed sabres glisteniitg in the sun." And although many of the"brave Russians fell in the course of their mad career, the charge was a complete success, 2000 prisoners being captured. The situation on the Eastern front is improving daily, since in addition to the Russian occupation of the Bnkowina, matters are improving at Salonika. The prompt measure taken by the Allies have had their effect upon Greece. -King Constantine has gone into temporary retirement, a new Ministry is being formed, and the policy of shuffling and double dealing indulged in by that section of the Greek nation who favoured Germany's arms and ambitions would seem to be at an end. There is ground therefore for assuming that another crisis is approaching in the great war. It is possible that the Germans may obtain temporary success in the West, but the triumph will be short lived, and even the fall of Verdun may be averted through the increased activity on the part of the British arti'.lerv and troops. "Pressure is increasing on every front," says a recent London message, "and the aerial reconnaissances are of an unparalleled nature, and the activity of the Allies everywhere is bewildering the enemy." The message concludes by stating that the general military situation is such that great decisions are to be expected shortly. Two other factors which indirectly effect the general situation are the war between Mexico and the United States, and the revolt of Arabia agalns the rule of the Turk. America may safely be trusted to settle her own trouble, but the revolt of the Arsbs is significant as tending towards the downfall and disintegration of the Turkish Empire : and incidentally the growing disfavour with which Germany is regarded throughout the people of the Orient.

The Budget proceeds upon the principle ■ —winch few persons within War Taxation the Dominion will dare Within publicly to contest —that the Dominion, profits made as a result of

the war shall he made to contribute towards the cost of the war. There exists a conflict of opinion as to whether the tax of 45 per cent, on war profits proposed in the Financial Statement is a .sufficiently heavy impost; hut as we suggested last week, this war tax will generally be regarded as the first instalment of the application of a righteous principle, leaving room for another few turns of the screw should the war expenditure of the future unhappily necessitate it. Until the Government bring down the Finance Bill, embodying this and other of the taxation proposals', the method by which- the war profits are to be computed will roh be known. Obviously, however, there may bo difficulty in distinguishing between profits which ai*e the fruit of ordinary business skill and acumen, and profits which are directly traceable to rises in prices caused by the war. In the method of computing and in the process of taxation of these war profits there will be room both for discrimination and for exemption ; and on the other hand it is equally essential to safeguard lest these qualifying conditions he abused. While in many respects the

Budget proposals have given general satisfaction, there is one proposal which merits and is receiving wholesale condemnation—viz., the suggested Avar bonus to public servants where salaries do not exceed £315 per annum. Why public servants in receipt of satisfactory salaries, and who are entitled to retiring allowances of a substantial nature, should be_ specially signalled out for this benefit is difficult of comprehension. The estimable argument for the granting of this war bonus is the increased cost of living, but this presses equally upon all classes in the community. It is a manifest injustice that a non-civil servant in receipt of leas than £315 per annum should be taxed in order that a civil servant in receipt of the same salary may receive a war bonus. Such a proposal 'ought never to have found a place in the Budget; and it should be given short shrift and a happy despatch. —■• " ' 1