FOOTING THE BILL

Wanganui Chronicle, Volume 79, Issue 283, 3 December 1935, Page 6

FOOTING THE BILL

FOR BRITAIN’S DEFENCE PROBLEM OF A NEW LOAN POSSIBLE COURSES Lord Mcitistouc, speaking at South Wales Kegiunal c’uuierente of the National Saving.- Movement at Llandriudvd a \Vellj*. said: ••National savings continue tu in»tease. Taking the three great Stale saving., organisation?* tcgcther, on September J. 1933, there was standing io the credit of investors £1,21’1 JWt*,- ; in September, 1934. the figure was X! .L3G.OW.i_HM’ and on .'September 1 this year it is £l.27B,WhiMt’. •’.Mv suggestion is that we at vuce should use this national credit to do tiirec things. The iir-l i —ami this has I understand, the general approval Vt all parties in the .'State —to safeguard our national defences and tspecially the Navy. I he second i- io make the Navy independent of fuieigu -applies of fuel, and the third is to take this occasion to tidy up our ••! dv not believe it will add to tire burden of taxation. If the same unity *>: effort can in; found tor what 1 may • alt ’the great national happiness loan’ as lor the War Loan ( oavei:dcn. the whole operation can be Jinan.ej greatly it the advantage vi thv.hole country.*’ ‘Let us briedr consider the stale of ■ »ur detente l«»rccr.’* >ays the Econo- ” di-’Mi.-dng th.* question of a defence ka: in which it urge* armaments -hould be paid tor out of ie'Cnue and mt by messing the National debt. “After the Armistice ami tne -•nkiLg of the German fleet, the- Navy v 3s reduced considerably; and it *a> - ill to be built up Xu tne maximum strength agreed upon at Washington. Moreover, it has grown more and more out of dale with the passing vt tne last seventeen years. The great najoritv of our existing capital ships state from the war or immediate postwar ] .aval treaties were made alter we should expect to begin replacing As Powerful As Any. Lui although we ha'r nut sen €*ds'v begun our uaud replacement i-togramnit. the Navy it main- us jowertul as any in the wvrld. and more .mwerful than any in Europe. In capital bo’ps alone, despite obsolescence, vc remain overwhelmingly more powerful than any European nation: • hvu"h in aestroveis, submarines, and •Uu r A 1 , Nt' ' v.a** radical I .'’ diminished a tier the war. a ad no attempt was . ade to attain a one Power standard v.t" in relation to European nations, last spring, howe'er, an expansio i ■a, undertaken designed I- maintain -ur ait strength at least un a It'd .’•th Germans -. ■‘lf no fresh rballeuge is io.-ii.com_ ;.i ■ and nothing is dune in the wa.' ot ! mitatiou. it looks as though Great tutair. nay limi itself in the tiv.i having to reouild the Navy o series of yiais on the .sale oi me Washington and London I rent.es though tins s .de may be in. re.i'i.. • ■ file United Mates abandon all si. . • limitation of size or if Japan builds on a wildlv lavish scale . and of mealing .■-Pvoe: Standard Air loree. which on present indications seem. : kcly to mean some IAM ftonl hue machines. •‘Though we shall happily be spared ■anv necessity to inflate our land ■orces these’ two tasks will impose .’.err heave burden. It will ba greater still if some war-minded coun--7-v throws all discretion to the winds. 1- mac be very much less if elemenarv tommonsense—stimulated possibly l.v economic pressure—begins to make itself felt. ••WHeh of these will happen depends on the issue of the present crisis. If the League succeeds, whether by the threat or the use of collective force, in effecting an agreed settle-

nit'.:. :v. o iiiing- will ha\ e been de ii.-i'i-ly demonstrated; jirst, that collecthe ;-e< urity tan work; and, seeondI-. that Britain’s present forces are not in present conditions inadequate fulfil her collective obligations. Ibe problem would then once more become that of .supplementing collectt'e security with a collective limitation of armaments. A beginning has already been made in this direction y the Anglo German naval agreement of last summer. If, on the other hand, the League fails in the present crisis, faith in. the collective system will vanish, and the only liope of pi eventing an unlimited .'Cramide for armaments will be that economic exhaustion will induce the nation.-* to impose some maximum—albeit a \ery high one—on these competitive programme.-. •’For Great Britain, as fur other countries, therefore, the moment for decision has not arrived; and at such a moment it would be folly to launch our on a programme that would be regarded a- a challenge by the suspicious and a c"iiir>>ioti of despair by those who are seeking to establish the rule » t international law. “hi any ease, howe'er, it i< improvable that we shall escape without an* measure of rearmament. The question, therefore, remains whether it • s wise and proper that at this stage ;a our history we should proceed by way ut‘ loan.-. Our answer is emphati tally: N. . “It is true that ail the arguments m favour uf loans for public works hate been, and will be. brought forward in favour of this plan. And it indeed, true that in present condition- the raising of such a loan would hi ' t .-oiiie inflationary effects —though, of • ourse. the spending of it would be spread o'er many years, while its tlvut oh particular depressed industries v, <>uld l>e no greater than if the. ♦ xpenditure were made out of rev enue. “Against the argument for an intlationaiy a;maii.uiir luan there are two arguments which, in our ' iew. are decisive. The first is that loan expenditure designed to stimulate recovery snouid be exjivnded on >*<•• -i«tl a>sets, sur-ii as belter housing, which arc de siiable in them.-cl'» and will remain of lasting benefit to the nation. • De«G-weig’x Debt.” ’’Au armament.-’ loan is ‘deadweight ’ debt in the fullest sense of the term. I nlike earning assets, such as road.- and houses vt amenities which add tu feudal wealth and rateable value, an armaments ban will contribute nothing whatever towards it.amortisation and interest charges. “The second and final argument is political. If Great Britain gives Ihe lead in renewing its armaments by loan- o t which no one at the moment let is the burden, our example will be copied al! c-ver the world. And if on. c t e nations get it into their hea ls that we can get these pretty toys for nothing, and that such expenditure can incidentally make unemployment disappear a? if By magic, v-e may as well throw i i o n hand at <)n< e and bandvii hope <f saving the world from destruction. •‘We sincerely hope that whatexer the measure oi rearmament —if any—to whi.h we are dri'vn. we shall have the courage to meet it out of the tax re\. nue of the country and net attempt to disguise the burden which ■he t ton is < ondemned to bear.’ ■’