BRITAIN LIKELY TO FINISH YEAR WITH DEFICIT

Wanganui Chronicle, Volume 83, Issue 2, 4 January 1939, Page 7

BRITAIN LIKELY TO FINISH YEAR WITH DEFICIT

BUDGET WILL NOT BALANCE EXPENDITURE ON ARMS LONDON, Jan. 2. It is estimated, that the British Budget will show a £75,000,000 deficit compared with 1937 if the last quarter of 1938-39 does not exceed 1937-38 and revenue increases accordingly. It was anticipated for the whole year that the Budget would balance, but with additional armaments expenditure it is now believed that the Chancellor of the Exchequer, Sir John Simon, will need £200,000,000 new revenue. If half of it is borrowed, threby doubling the original borrowing programme for 1939-40, there will remain £100,000,000 to obtain by taxation. Signs of Better Trade. There are signs of better trade, said Sir John Simon, discussing the prospects of 1939. He added that this was not mere optimism on his part, but a conclusion reached from evidence. He emphasised the improvement in the United States of America and said that the general conclusion was that the serious and sudden drop had stopped and the curve of trade was rising. The Dail} 7 Mail’s city editor states that the creation of a fighting fund of several millions to help the liner section of British shipping to resist sub-

sidised companies’ threats throughout the world, are under discussion in London and Liverpool. It is not regarded as a subsidy but as a bargaining weapon to compel foreign competitors to see reason. The continuance of holiday conditions restricted business on the London Stock Exchange, but the market sentiment was unexpectedly optimistic, resulting in an impressive number of small but well distributed price gains. Colonial bonds were strongly supported, the Australian conversion loan narrowing from a discount of 3i to 11. Other Australian and New Zealand issues advanced a fraction.