The Wanganui Chronicle "Nulla Dies Sine Linea." WEDNESDAY, APRIL 28, 1915. AFTER THE WAR.

Wanganui Chronicle, Issue 20340, 28 April 1915, Page 4

The Wanganui Chronicle "Nulla Dies Sine Linea." WEDNESDAY, APRIL 28, 1915. AFTER THE WAR.

The substance of an extremely important memorandum which was issued oy the British Tariff Commission. last m'on^h is Just.to hand. The memorandum deals w^th the new financial anl industrial problems created by the war, nnd is the result of a detailed inquiry, In the course of which the Commission had the assistance of-a very large number of representatives of manufacturing, merchanting, and banking industries of the Mother Country. -The evidence gathered,' says the memorandum, showsv that .two decisive facts of the situation are 'as folfows «— . 1. A permanent increase of at least one'hundjred. millioh v |K>wnds hi'the normal national expenditure. To endeavour to obtain,this suni from a. mere increase on direct .taxes jiwquld be to place an undue "and jneqrii table, burden upon capital and industry; the. new revenue- must be obtained by enlarging the productive power of the community. ,At the same time a basis should be found for the economic partnership which overseas States of the Empire have Jong desired and f which the facts of the war have proved to., be as-much in our interests slu theirs: .*. --. 2. The ability of the Empire to provide industrial materials which have become a monopoly of foreign countries. The cutting off by-war of German supplies "of aniline- dyes has brought great and increasing embarrassment to leading British industries, and illustrates a condition of dependence which all agree must now cease.'

In a careful review of the financial sit-1 uation the Commissioners say: "Ijb is difficult to see'how on any calculations . i normal budgets can now be less than ■ £300,000,000." This view is based-on, an expectation that the total cost of the war will reach at least £1,100,000,000. The interest alone on this sum would reach .£35,000,000 a'year, while management and sinking fund would bring it ,iip to £45,000,000. In addition to this inevitable increase in expenditure the pensions and allowances for disabled soldiers, widows, and dependants, ' liabilities arisng from the various financial measures incurred in connection with the-war, and the probability that for some years a mnch larger army establishment than before the war will be maintained, all have to be provided for. " "Before the war," Continues tha memorandum, "the situation was that both taxation and expenditure had in-' creased more rapidly than national wealth-or income; that direct taxes had vi;eacHed-;iit-:level at which it could no longer be held that they were borne entirely by the taxpayer and "not shifte"d on to the. working classes; and that the indirect taxes, such as those on tea, sugar, and beer, were of a kind which pressed -with undue severity upon the poorer members of. the community." In the opinion of the Commission it appears extremely unlikely that the vast sums required itnder the now standard of expenditure can be raised by the mere reorganisation of these particular taxes, or increases in the rates at which they are levied. It therefore becomes necessary to examine what changes in the fiscal system can be made which will solve the problem of raising an increased revenue.' " I " War conditions/ have disclosed for , the first time to many of the firms whom the Commission have consulted the extraordinary degree of dependence on foreign countries to which essential industries have been reduced, both for the supply of necessary materials and i for the disposal of their products. Exf rcep.tr' in ■ very few cases there is an urgent 1 demand coming from business people thati tVte- c.qnntry should now consider, without prejudice, the best way of removing'the:.dangers arising from this dependence-upon foreign supplies in time of peYice as well...as of war, and there is a general, desire to see adopted whatever measures may prove necessary, whether they are^ in harmony or not with the policy hitherto pursued by this country." . - L The remarkable response made throughout the Empire -to the. call of the _.Motherland is emphasised, nnd the. "memorandum adds:— " . ■; I

•"' The war has also disclosed-the remarkable latent powers of the Unite 1 Kingdom and the other nations of the Empire..^. It is not; too much to. say, on the evidence available since the war be-

gan, that if during the last ten cr twenty years the great communities of the British Empire had been consciously and deliberately working together under the leadership of the United Kingdom in the full spirit of Imperial co-opera-tion, such an organisation would have rendered improbable many of the difficulties which have had to be faced since the war began." - The inquiry conducted by the Tariff Commission has covered a wide field, and indicates that the war has made more than ever necessary a frank reconsideration of_the whole relations of the State towards commerce, especially in regard to finance and tariffs. In this investigation two points overshadow all others':—- ■ ■> . ■ " The increased strain on industry and, generally on the nation involved in the development of our system of direct taxation on present lines. The absolute necessity for changing the policy of the country so as to provide within the Empire those essential materials the production of which has, under our present system, been allowed to fall into the hands of countries with which we are a,t war." The memorandum shows that in the year 1915-16 the burden of direct taxation has increased by an average of £40 for each direct taxpayer, raising his liability to £140, per annum, and it ■ continues:—" Such heavy burdens- are bound"to react on industry in two ways. They may be 'met.entirelyor partly out of the accumulations which\ alone provide the capital for progressive indusi trial development. Unless this capital is available industrial development is restricted or starved, and British indus-

try must fall behind that of competing and more lightly taxed countries. The v new direct taxes may also be added to the cost of production, and in th*t w*> be shifted on to the consumer by an increase in the price of the article. The crisis in respect of aniline dyes is regarded as typical in many ways of Brit-

ish commerce as a whole. There is on

all hands a'fear that as soon as the war is- 1 over German makers would destroy any unprotected industry created in the United Kingdom by. dumping. % Looking at the peobleimas sl whoWand 'n its more permanent aspects, it appears to the great body of those engaged m production that the, war has made it.

increasingly necessary to proceed forthwith to develop the enormous reserve- of

industrial and agricultural resources oi this country^, and link up the United Kingdom with the rest of "the British

Empire in measures of Imperial organisation, which shall bring into play the practicaily illimitable capabilities of the Empire as a whole. . Within. the countries that comprise the Empire there is every conceivable, product that is required, . and no economist would question the proposition that, provided this

organisation is carried butj there must inevitably follow a vast,, increase in the productive power ,and the wealth of all the countries which are affected," In brief, this.important memorandum, based on exhaustive and careful inquiry, makes it clear that there is a wide concurrence in the view that in the absence of the security arising'from some form of tariff it is impossible to attract capital for the 'neee^ary enlargement of. British/ works seemg -the-certainty that the- end of the war 'will be followed by a renewal of German competition in all its former efficiency.