BRITISH FINANCE

Taranaki Daily News, 1 August 1931, Page 7

BRITISH FINANCE

“CONFIDENCE ESSENTIAL”

CHANCELLOR’S EXPLANATION UNEMPLOYMENT PROBLEM • DENTAL OF, “BANKRUPTCY” CONVERSION OF WAR LOAN British Wireless. Rugby, July 30. The'budgetary position was the subject of an important statement in the House of Commons by the Chancellor of the Exchequer, Sir. P. Snowden, during the debate on the second reading of the Consolidated Fund Appropriation BilL Mr. Neville Chamberlain (Con.), referring to the financial position,, said, his most important criticism of the Budget was the relation between the Exchequer and the unemployment insurance fund. The Chancellor had only postponed the inevitable reckoning. There was, however, no foundation for want of confidence in British stability. ‘•This is a time when a lightlyspoken word or even a wrongly-turned sentence may have the most serious consequences,” said Mr. Snowden, lhe position of Britain in this respect is peculiarly sensitive because we are the great money market of the world, and it is essential that confidence throughout the world should be maintained in the stability of the London money market.”

Foreign credits were held in London to the extent of probably hundreds of millions sterling, Mr. Snowden continued. He was exceedingly grateful to Mr. Chamberlain for the testimony he had given to ithe fundamental soundness of the financial position in London and in the country generally.

Referring to Mr. Chamberlain’s criticism of the Budget, Mr. Snowden said that, although it would be a sounder course if they could maintain the unemployed from current revenue, he could not accept the contention that borrowin" was analogous to creating a burden comparable to war debt borrowing. The alternative was to increase taxation, before which they must hesitate. The depression had deepened since the Budget had been presented, and supplementary expenditure of nearly. £8,0Q0,000 had been authorised. In addition, as the result of tho acceptance of Mr. Hoover’s moratorium proposal, there was a. further burden on the Budget of nearly £11,000,000. That was a very seriduS position, but Mr. Snowden believed it was a fact that, with the exception of perhaps one country, Britain’s position was more satisfactory than that of any other in the world. There was an impression abroad that the budgetary position of Britain was hopelessly bankrupt. Nothing could be further from the truth, declared Mr. Snowden amid general cheers. He admitted that he had prepared a scheme for a huge conversion of war loan, by whjch very large savings. in interest would be effected, and which, but for the recent financial developments, would have been floated before now.