The Pahiatua Herald PUBLISHED EVERY EVENING. SATURDAY, MAY 2, 1925. THE BRITISH BUDGET.

Pahiatua Herald, Volume XXXIII, Issue 9922, 2 May 1925, Page 4

The Pahiatua Herald PUBLISHED EVERY EVENING. SATURDAY, MAY 2, 1925. THE BRITISH BUDGET.

An outstanding feature of Mr IVinston Churchill’s Budget is the definite announcement that Britain is prepared one© more to discharge all her foreign liabilities in gold, th© deduction taking effect from Tuesday last. So far as legislative sanction is concerned all that will be needed, apparently, will be til© issue of a special license to the Bank of England to export specie immediately, instead of waiting for th© expiry of the embargo at the end of this year. Other and highly important arrangements, including negotiations with the United States Federal Reserves Board and the establishment of credits in New York to support sterling in the event of depreciation, have been facilitated by the Close connection that exists between the Treasury and the central banking institution in Britain as in the United States. These arrangements, which have been in. hand, most probably, during the last three months, should ensure that there is no undue drain upon the gold reserves of the Bank of England from across the Atlantic. As was to be anticipated, an attempt

has been made by the Imperial Government to induce the Empire to act unitedly in the matter of returning to gold settlements, and Australia has taken an early opportunity' of echoing the London announcement. South Africa proposed to make the change on her own account on July Ist next, irrespective of the action of other parts of the Empire, but she is robbed of the initiative by the Imperial Government’s decision. There remain Canada and New Zealand among the Dominions. Canada’s currency is linked so closely to that of her neighbour the United States that she is not likely to raise at voice dissentient to the Anglo-Ame-rican agreement on the subject. New Zealand’s position in the matter does not seem to be yet defined, possibly owing to l the very serious illness of Mr Massey, who holds the portfolio of Finance. There seems to be no reason, connected with either the gold resources of the banks or the liabilities of the Government why this country should fail to fall in line with other parts of the Empire, and Sir Francis Bell’s’ reference to licenses to export may be taken to mean that no legal obstacle will be placed in the way of commercial transactions in gold. The result should be of assistance to the producers of this country in the direction of reducing the very heavy exchange -charges at present incurred in the transmission of money from London to New Zealand. The general improvement in trade, accompanied by better prices for foodstuffs and raw materials, anticipated in City circles in London, also offers an agreeable prospect to the people of this country. For the present, at any rate, it seems to be agreed amongst bankers throughout the- Empire that it would bei unwise to let the public handle gold as an item of the domestic currency all of a sudden. Turning to other features of the Budget, the most important seems to be the further reduction in income tax. It has been computed that every penny of income ta-x in Britain, yields between 4J and 5 millions sterling, so that reducing the normal rate from 4s 6d to- 4s in the pound, would mean that Mr Churchill is sacrificing anything up to thirty millions. He, however, puts the loss at a much lower figure. The rate in the financial year before the war was Is 2d in the pound. From March 1918. to March, 1922, it stood at 6s; for the year ended March, 1923, it was ss, and last year 4s 6d. Relief is also promised in the matter of super tax, to a small extent. The only increases of taxation mentioned are the reimposition of wliat is known, as the ‘M’Kenna Luxury Tax,’’ which was never a very large revenue-pro-ducer, and a moderate increase in the Death Duties. Obviously a good many economies in expenditure are proposed.