The Timaru Herald. WEDNESDAY, JULY 22, 1925. THE CHANCELLOR'S DILEMMA

Timaru Herald, Volume XCVIII, 22 July 1925, Page 8

The Timaru Herald. WEDNESDAY, JULY 22, 1925. THE CHANCELLOR'S DILEMMA

It is characteristic of Mr Churchill that ii© snould attempt, to eniorco ins lcieas upon ins oaumes coi--ien gates. Pus appointment as Uhancellpr oi the .exchequer camo as a surprise to all sections ot poiitical in ought, and it was generally amiciiiated that Ins masterrul ways would cause tne I'rimei Minister many anxious moments, Tne Budget was to Air Uiiurciiul both an opportunity and a source' ot danger. i\ow, however, it is very generally agreed that tlie present chancellor or the jixohe.pier lias done little to ennanee the jiopiuarity or the Conservative rainy; on the contrary, many or tne provisions oi the it ud get have g-reviously undermined the prestige or Air Paidwms supporters, partioumriy in the muustrial ceinres. In the course or a. speecn m tlie Uudget, debate All* nloyd tieorge tooK a line that aroused murmurs oi interested approval from the industrialists, who followed lnm wherever he went —and he traversed the whole financial country in tfiei attempt to show that the Uudget had ocen prepared without regard to that industry whose condition was the dominant factor of the national situation, The income of Britain was down by 15 per cent, as compared with l'J 15, and she spent one-quarter of it, as compared with one-eighth. Her capital liabilities were £iU,OO(J,UUD,I>OO; Germany's £iSU,UOO,t)I)U.. tie was spending £120,000,(10(1 on armaments; tiermany, whom the Allies weio bullying to reduce armaments, £25,000,000. The next terrain to be surveyed was the Pensions tocheme, which was found to contain the land mine of £24,000,000 new burden on industry. Air nloyd tieorge urged that incometax relict should have been entirely devoted to allowances tor capital repairs. Any lurcher sui. pi us should have gone to the relief oi industrial rates. Air Philip Snowden (loimeriy Chancellor of the Exchequer) said that ms successor had been as waste iui of ingeunity as of money. He had £20, 000,000 surplus, and might have introduced a, oneclause hfinance Bill to take 6d ofi the income-tax. Mr (Snowden urged that the direct taxpayers, whom the returns showed to be becoming richer, were being let olf, whereas the indirect taxpayers—i.e., the wage-earners — whose income had dropped bj, £500,000,001) in four years, were being put, upon. In the last three years tne former had been relieved to the extent of £154,000,000; the fatter only £51,000,000. The lung's Speech delivered on December 0, stated that "economy in every sphere is essential if we are to regain our industrial and commercial prosperity.” Presumably All* (Jhui'ehiii has overlooked this statement of policy. The Prime Minister’s speech on tho occasion of the opening of Parliament, contained the disquieting admission that "for three years jl have done what T never did before. T have been iiviug- oh capital and borrowing. T Know that there are many men in the same condition.” Mr UnurchilPs uudget dissipates tne dream that the Baldwin (iovermnent understands the facts and are going bravely to grapple with them. JN ot only is mere, in the present, increased expenditure, but in tho future, owing to the vast liabilities of new commitments, taxation must rise'. Here we set forth tlie liabilities that Britain has. hastily accepted in the last three years: £>

1923 Precipitate agreement to pay the United States ....... 1.100.000,000 1924 Housing liabilities OOO.UUO.OOU 1925 Insurance State liabilities ........ 746,000,000

£2,346,000,000 It sliould be observed that the capital liabilities under the Insurance -tliii do not include those oi me employer and employee, wnicii wotuu swell the amount to a much laryer sum. Wliere tnen, is tne "economy" whicli was promised to tlie nation 'i Mr Baldwin admitted that the present was a “most nitt'icuit time" and a

"time oi suffering 1 ," for the great industries or the country; yeti the Prime Minister proceeded lo endorse a linanciai policy designed to bind his. (Jovernmeiu jimmy and immediately to the vast liabilities, of the new insurance scheme j indeed the totai annual expenditure for pensions will ultimately reach otbUjiUU.UUU according to the Uovernment actuaries. Where is the "economy" promised to the nation f Ml Unuroiull proposes to reduce the naval vote and thus iijiptnil the safety of the itmpire. irence the first rate Cabinet crisis that has developed at florae. VVhat will Mr Baldwin dor' London press comment suggests that the Prime Minister dare not risk the resignation of the hirst .Lord of the Admiralty and the Sea Lords who have warned the Ministry of tile growing gravity of the international naval outlook. On tho otlicr hand, Mr Churchill may not prove very tractable. lie may laney he can make a popular appeal by demanding- induced deieuce ! votes as an alternative of his resignation. Doubtless tho dilemma of the 1 Chancellor is keenly appreciated; lie cannot make bricks without straw. But a nation that has for long years worked out its own salvation behind the bulwarks afforded by a powerful Navy, is not likely to tolerate tho cheeseparing policy

of a Chancellor who gives tho impression of having many millions available to enable him m initiate measures that although pressing do not provide lor (indefence of the Empire, wim.-ii should bo tlie first call on Ho national purse, or secure He hearths and homes of the peo, ' against enemies within am.

without.