FINANCIAL DEBATE

Dominion, Volume 8, Issue 2563, 10 September 1915, Page 6

FINANCIAL DEBATE

COMLUDING SPEECHES .. NO FEARS FOR THE FUTURE The Financial debate was resumed at 2.45 p.m. : < . : , Mr. R, A. WRIGHT (Wellington; Suburbs) said that the Budget grapplcq, with a stupendous: difficulty in a mas* terly fashion. The country was faced! with a war deficit of two millions] and the Government proposed to spread tha burden of new taxation fairly. He believed also that the country would willingly pay all tb*A it was asked ta pay. The Government- had endeavoured! to impose taxes which could not ba passed on to. the consumer, of whichl • he approved. The problem' of the in-j creasing cost of- living was still solved, but he was glad to see reference to it in the Bjidget. He hoped thai; ' thoj increased powers which it was pro} pesed to give to local bodies would help to reduce the cost of living. He was one who believed that the reason whj the cost of living continued to riso was that the world's production of foodstuffs was not keeping pace with tho increasa in the growth of the : world's popular tion. At present it was difficult-to' see how men in the city of Wellington could raise families on wages of £3 a week; He was glad to know that the Govern-} ment did not propose to reduce sala-> ries, because in his own experience of Now Zealand he had observed that any, general reduction of • salaries was ih«' variably followed by hardship all round* Ho agreed in the main with the tasa-i tion proposals in the Budget, but hii was heretic enough to believe that an export tax of one per cent, would pro-i vide a better means of taxing fanners'' incomes than the method now proposed/ He was willing to admit that an export tax was an unsound tax, which should not be imposed in normal times, but tho times were not normal now. Ha would be in favour of levying export taxes only on those products whicljj had increased in price. Cheese, Jor in* stance, was at 635. a cwt. before tha war, and at that rate.it returned a fair, profit. But on the outbreak of waif tho price jumped to 935., and the last .quotation he had seen was/755. a cwt< Surely no cheese producer would object to pay about 9d. a cwt. tax if he was making an extra profit of 12s. a cwt. Ho did not believe that the beer duty, should be levied according to specifia He would like to see the tax. doubled, and levied on the same basis ns now. As for the proposed tax on uon-intoxicating drinks, he feared that the cost of collection would absorb. a! lot of the revenue. He believed that motor-cars should pay an annual.tax, and this tax would certainly produce, ai lot : of revenue. He suggested,too, that a duty should be levied on all motor tires except _ those of British manufacture, especially as . there was danger of the American tires capturing the Now Zealand' market. He deprecated the cry for retrenchment. There was no need for panic, last year 'tha value of our exports was three mil* lions above that for the preceding year, and this year the exports in six months were two millions more than those for the corresponding six months of last year. In the face of such figures.he could not see any grounds ..for fear a* to tho future.

Patriotic Raffles. Mr. R. W. SMITH- (Waimarino) said that the Dominion appeared to be on the verge of another verv successful season, and ho thought tie soundest principle they could adopt was to. reach those, making extra profits. He had spoken to a number of farmers'who had favoured a, straight-out .land tax, but if this was levied it would be a hard* ship on those who had met reverses.He thought that a splendid opportunity had been presented for a revision of tho railway tariff, 60 that all might ba placed on the. same footing, but the 'tariff should be levelled up, and not levelled down. He did not think that we were likely to suffer a time of severe financial stress. Quite a number o£ people were going to havo a .lofc of loose money for investment, and if the local loan had been for £5,000,000 instead of £2,000,000 he felt that it would have been fully subscribed. So long as the borrowed money built up the resources of the Dominion it was well to go on. borrowing. Touching on another matter he strtngly favoured patriotic' raffes* The whole agitation for the suppression of these was due to a few narrow-mind-ed bigots who would not give a penny, themselves. If they wanted the money, for their own purposes they would raffle a threepenny doll for a thousand pounds and think that they had done something smart. (Laughter.) He thought thai anybody should be allowed to auction anything, so.long as the whole proceeds went for patriotio purposes. Ke'instanced one function where they sold a turkey which brought £20 or £30. . If they had stuck to tlio law they would uot have got that money - Labour and the Coalition Government.

Mr. A. H. HINDMABSH (Wellington South) referred, to tliq Coalition ment, and said that it was well known that when negotiations were going on the Labour Party was invited to send a 1 representative. Inasmuch as the new Government was to bo formed for the purpose of passing certain taxation proposals, it Became unnecessary for tha Labour Party to take an active part in its composition onco Sir Joseph Ward had decided to become a member of tho National Cabinet, for tlio Governments was then assured of a majority. Th'ein

action'- was consistent with the utmost loyalty. :■ Ho submitted that," quite apart from the war, tliey .could at all times be of ono mind in the administration of the country. for administration had to be for the good of the whole country, and it.was a big part of the Government's business. Dealing -with the land tax he said that it seemed to him. that tho land tax was never treated from tho point of Now Zealand, generally; there were always party factions to be considered. He advocated no exemptions, but under a certain amount would' liavo a small tax. No apology was necessary for the graduated land tax. It should not be referred to 'tis a war tax, and the impression left that it would )\e taken off after the war. Fallacy of the Export Tax. Mr. J. A. YOUNG (Waikato) said that ono of,'the problems which had confronted this country early hi the ' war was the provision of food stuffs for bur people. Tiio last speaker had accused the Government cf buying wheat ' abroad at a high : prico, when there; was enough in tlio country, but the fact was thaf'the wheat was urgently needed We could not havo carried on until next harvest but for the. importation of wheat by the' Government, but he was glad to learn that the'prospects of' an ample; yield from the New Zealand wheat harvest in the coming summer were giod. Generally,he approved of ■ 'the taxation proposals, but some which were proposed were against all 60und cconomio principles. .He referred to certain taxes ivhich were,, he, contended, taxes on industry, especially tho_ proposed duties on , kerosene and mineral oils. These were used 'for' lights; and motive power in the country much more than most people appeared to think, and the duty on benzine would bo a sore trial to dairy farmers. Ho advocated the total abolition of these taxes,, and .in order to make up for the loss of revenue he would; suggest heavier- taxation on alcoholic liquors. He disapproved altogether of tlie' proposed new method of assessing the beer duty. Replying to the argument of the member for Wellington' Suburbs that a fanner who had sold his cheese well Should not object to the payment of a small export tax, ho pointed out that it was possible even •when cheese was at a good price for a farmer to ■ mako'a loss on his whole year's operations. Ho therefore contended that it was very-much fairer to tax a farmer, on his incomo than to tax a farm produot as it was exported.

SIR JOSEPH WARD REPLIES DEFENDS HIS PROPOSALS : MEMBERS SUGGESTIONS REVIEWED • SIR. JOSEPH- WARD (Minister ;of finance) replied at .7.30. p.m. He said tfiat tho - financial debate had been singular in that he had not orice been oratoricaUy '-'viciously, attacked/' -and (ho found it almost impossible to con--to the new'conditions.. The criticisms, bad shown to. him how very j -difficult it was for honourable members ( without detailed figures: available to i'thein to arrive at correct conclusions. > Every ■ single one of the many suggestions mado by honourable members had i'been carefully considered by him, even the.bachelor tax. (Laughter.) [The first aim in imposing the new taxes ■'.■was t6 raise the necessary revenue, and a- second aim was to avoid taxation of tho necessaries of life. It was absolutely necessary that there should bo no "Uncertainty about the taxation; yielding ihe necessary funds to carry on the 'Affairs of tho country, and l our part in the war.. >If the Government -had gone . the full ■ distance that' it.-' might; reasonably havo gone, in imposing taxation, it should have imposed at least-£600,000 inoro taxation. Who could say whether :-very -.-much more additional. taxation, would not yet have to be imposed? 'In view of all these things it was absurd for member after member to risa and say "Get rid of the mortgage tax," '"Get-rid of the kerosene tax," and so on. ■ The National Government.

- It had been argued that', because wo liavo a National Government Ministers need not consider whether proposals to .be introduced wore likely, to influence . .votes or not. That was an argument to wliioh no se.lf-respecting Government [could listen. ' He believed that the establishment otii National Government ; .was the only tiling that could be' dono ■'ifor the country. He was in!the Government not as a competitor' of tho Prime Minister or any, other Minister, /hut .as 'an assooiato, to work loyally /■with him, to play the game straight, taking no advantage of anything that t took place under the Government to '.which the National Government had 1 succeeded. He had joined the Govternment for the purpose of helping this 1 country, in a time of national crisis to get into a strong, sound, and safe.condition; in order that New Zealand might come through the trial , well. The sacrifice the country was asked to make was ja.' mere fleabit-o to the. sacrifice made by 'the 1500 men who had laid down their Jives for their country', or the sacrifice to bo made by many, more who '.would fall in the fight. More sacrifices had been made in England by Bremen as well as by men," and tho people in New Zealand would likewise |lnake_ more sacrifices yet. The only 'question was how to do it. i

Taxes on Wines. I; He proposed to discuss certain of the jsuggestions about new taxes which had been made by honourable members. (Some had asked why the duty on champagne was. not increased. They would be surprised to learn that all the money j'tbat could be obtained from such an t extra tax was £800 a year.' And if the ji-extra duty had been imposed wo would jhave' had no importation of champagne, land we would not hare had the £800, [and no champagne in tho country. The ji.whole' amount of duty collected on j'champagno last year was £5500. As yto. the duty on other wines there was a ffcreaty with South Africa by which 'South, African wines were to-be imported New Zealand subject to an'imfjwrt duty of 2s. per gallon. The duty W Australian, wine was'ss..'a gallon. The only duty the, Government could 'increase was the ss. duty on Australian wine, and if that were .iincreascd the South African wines would capture the market, and tho Treasury would ,haye"'l6st. This was surely aivery >eood reason, for leaving wine out of account." • : ' '.

Tax on Bachelors, j"'And the idea of taxing bachelorsl' "Honourablo mombers forgot that there 'were spinsters in the raimtry. . .'Why jn the name of conscience should they Deleft, out? , -An hon. member: That is what wo .want to avoid. 'Laughter.) • ' Sir Joseph Ward said that there woro .hundreds and hundreds of single men in New Zealand who were supporting widowed mothers, sisters, or'otner relatives. What a nice thing it would be to'impose a tax on bachelors hero while there was no tax on bacholors in ''Australia! Why, if he were a single man he would leave a country which singled him out for such a tax. An hon. mombor: Not in war time I Sir Joseph Ward oaid that it was not Safe to rely too much on tho patriotism'of all people. In his opinion the bachelors were doing just as well for ihe country as the married men, and he feared that married men had an exaggerated idea of their importance. Tax on Amusements. Honourable members had suggested that amusement tirtkots should bo taxed. (Hear, hear.) He had considered very carefully, and had come to "the conclusion that the necessary measures to secure revenue from this source would be so cumbersome and difficult, and would cost £o much, that for the

amount he-thought to got—about £-10,000 or £50,000—110 did not consider the schomo worth trying. He had dropped it-. Under tho Government proposals a great deal more money would bo taken from proprietors of picture theatres by way of incomo tax than cou'd bo obtained by a stamp duty on tickets. Sundry other Sohomes.

A proposal, had been made that instead of a tax on motor-cars, or in addition to it, we should havo a tax 011 motor tires. ' But it would havo required a duty of 25 per cent, on motor tires to produce the same amount of revenue as would be produced by a tax of 10. per, cent, on motor-cars. The imposition of a: duty of 25 per cent, on motor tiros would mean that no tires would be imported, after such timo as the Dunlop Company or some other tire manufacturers could establish works in New Zealand. All the, tires would be wade here, and there would bo 110 revenue. , Also the taxation of tires would impose a-heavy burden on such men as taxi-cab proprietors. . ■ ■ A suggestion had. been made, that thero should be graduated cheque duty and graduated receipt duty. The objection to graduated stamp duty on cheques .was that a man would have to cany about two cheque books, one for cheques under, say, £10, and one for cheques above that amount. There were objections to graduated receipt stamp duty also.

Objection had been made to the mortgage tax, which ono honourable- member had described as a tax on debts. So it was. But if wo had no mortgage tax we could not get any land tax. He might suggest at some time in the future that the tax be done away with altogether, and a different system of taxation inaugurated. ,• But this could not be done this year. The reason why the tax was in existence was that without it we could not get any land revenue. All a man, would have had to do to escape land tax, would have been to get his land mortgaged. In the proposals to be introduced for taxation of motor-cars he had provided for a surtax of 10 per cent, additional on cars- of other than British manufacture. Amerioan cars would havo a duty of 20 per cent.

Impost on Spirits. • Some honourable members had urged that the duty on spirits should be made £1 per gallon instead of 17s. as proposed. -In Australia the duty was now 17s. a>gallon, pnd as the allowances for the strength of spirits were less gener--oils here than in Australia, our duty was to I)e higher: than theirs, and theirs was at present the highest in the world. The advice he had had on the subject .was that a duty of 17s. per gallon was the highest that could be safely charged commensurate with the present _ retail prices. When the duty was raised to 17s. in Australia an attempt was made to pass on the duty by increasing the retail prices. That attempt was abandoned, but the' fact that, it was ma.de showed that ihe rate could not with safety be much more. increased. And the Government wanted the revenue. He was, not discussing the matter from the point of view either of the Temperance Party or, the Trade, but simply with reference.to the question: How much money, does the . country want from . spirits ? When the Controller of Customs advised -that wo had reached the limit of safety it was surely the business, of the Government to submit proposals which would.be likely, to secure to us ;the necessary, revenue. If tho dutywere increased to :205.: it would I certainly reduce the amount of spirits imported. Some would argue that this would bo a good thing. That was not his point of view. He Was concerned only with getting as much revenue as possible from ..spirits,; and,.therefore he did not' se^vlQ.rP^rai;'impoiia.tidii r . The New Beer' Taxes.

Dealing with tho now beer duty, Sir Joseph Ward read a letter from the Comptroller of Ousfrims "'(Mr. Montgomery) bearing oh the matter, and said that to a' large extent his judgment would be influenced by the Comptroller. The Comptroller explained that the excise ' duty was imposed in 1880 at the rate of 3d. per gallon, and it had not sinoe been altered. No distinction was made between light and dark ales, and the tax was collected by means of stamps affixed to the barrels. There were many objections to this system of collecting the tax. In the new system of taxing on specific gravity the stamps would be done away with, and it was 'expected to raise an additional £55,000. The brewers would havo to bear the cost of ; supervision, md it would be more strict than in the past. The specific gravity would bo choc lied by a supervising officer, and a, tovy penalty was imposod for falsely ento •- mg the specific gravity. Tho Customs Department preferred the.proposed system .to the old one, from tho.point of view of guarding tne revenue of the country. ; Personally', he thought that it was a good thing to provide for the drinking of light ales, but he' did not want' to take any credit for this proposal; tho. credit for it belonged to thn Prime Minister.

A member: It is a bit rough on Speights I ' Mi - . Massey: Well, Speights agree to it, as a. matter, of fact. Mr. Lee: The brewers delight in the change. . Sir Joseph Ward said that they would got more revenue under this system than under the old one.. Mr. J. V. Brown (Napier): It will Mil the small brewor.

Sir Joseph Ward said that he had heard a suggestion tihat" a ~ member of the Ministry (Mr. Myers), who was interested in the Trade, had been interested in suggesting tho new proposal, No proposal had been made by Mr. Myers to 'tho Government or to any member, and oil the only time the matter came up in Cabinet for consideration, when Mr/ Myers was there, he immediately asked to be allowed to retire, and ihe took no part, oither directly or indireotly, in ihe matter. "I am making that statement from tto point of viow of preventing tiny wrong •impression existing in tho minds or anybody." Approved by the Brewers. Continuing, he pointed out that the Comptroller of Customs said that he had reason to believe that the brewers met in Wellington, and after having the system explained to them, all agreed that it was the best system. Amongst | those mentioned were Speight and Co., who had been referred to as approving of it. They had sent a communication to. the Prime Minister saying .that tkey distinctly approved of tho sy6tem. When the Customs Department assured him iiiat tlioy would get the Tevonuo from this tax he saw no reason why it should not havo been considered., '

Mr. Lee: Why not double the increase i* Sir Joseph Ward said that if it appeared that the'brewers' profits were going to be increased under tho new tax, tho Government wa6.guarded by tho system in oporation which would make them pay a doublo amount of income tax. As far as he could judge, by tho proposals contained in the Budget, and the alteration in the other taxes, tlicy were increasing tho amount upon tho brewers by about £87,000. Tlio Government wanted to prevent this tax being paused on to tho man who took his glass of beer. He was informed that 85 per cent, of the workers were drinkere, and as tiioy were entitled to their glass of beer, it was tihe duty of the Government to provont the tax )>eing passed on to them. As to the mi'MOnUvl increaso on cigarettes, lie said that already the tax was 17s. W, per thousand, and if tboy increased the tax on. cut-up tobacco the tobacco would be, imported in plugs and cut lip hereThe Mineral oil Tax. By the mineral «il taxes it was expected to get £184,000/ and ho could ae-.

sure the members that ho had as much consideration for the fishermen as any othor momber of the Housed and as much consideration for persons using petrol for engines. If it had been possible to separate these matters and individualise the. class of oils used, in those industries, be would havo cut Lhem out, but unfOTtunately it did not appear to be possiblo to do so. . Au alternative to this tax was an increase upon some of the necessaries of life. It was just as well to understand that, and, further, lio was against import and) export taxes.A member: Put it on picture shows I Sir' Joseph Ward': That is all very well, but .having gone deliberately in the direction of obtaining money from those quarters, could we say we wero gping to do it again in another way? Mr. Witty: "What about theatres?" •Sir Joseph Ward: "When other members are making up a: Budget they will probably do what they think fit, but I have been considering what were the best avenues. Before this war is over the members may have to turn to other avenues." Ho pointed out that thero bad been a tax on kerosene of 6d. per gallon. He had looked up to see what were the general opinions when that tax was taken off,i and it was then said that it was 110 use to the people, that it was unnecessary, and that it was a plea to popularity. The public had had the benefit of it all these years, and now, when it was proposed to put a portion of it 011 again, he was told that it was going to ruin them. He had beard a member talking about the men in the backblocks. Did any member mean to tell him that any ordinary home in the backblocks spent £37 a year in this branch?

'A 1 member: £7. Sentimental Exaggeration. Sir Joseph Ward said that he had made it his business to inquire as to how many people used kerosene, and he thought that there had been a good deal of sentimental exaggeration voiced. If one-half of the people in this country used kerosene in tlieir homes the tax would come to 3s. 4d. per head, but no one said' that half the people used kerosene. If. one-sixty-Fourth of the population used it, roughly 15,800 people, it would come to £3 12s. per head. Prom information he had he believed it would not cost ss. per head, but even making it £1 it was the only item in the whole of the Budget that was being asked'from that section of the community. Tho fishermen's case was one deserving of consideration, and he had already asked if it was not possible to havo the class of oil they used imported' separately, free of duty. It might bo possiblo to do that for the class of oil used for working engines.

Ho wanted to know where tho extra £194,000 was coming from before lie let the mineral oil tax go. Ono member 'said a tax of 2d. on tea, and another an increase 011 beer, out there would be the samo objections from other sections of the community. As to the suggestion to make tho postage rate 2d., he Said that they did not want to impose an excessive amount in any ono direction, with tho exception tlm the adjustment of the land and incomo tax was to. obtain revenue and put tho burden on the shoulders of those best able to boar it. In tho country tliero wero 111,337 dwellings, and of that number 8817 wero uninhabited. A great number of homes used acotylene. Tho really important point about it all was that tho Government needed the revenue. ' ' Land and Income Tax,

He spoke of the land and the income taxes., Tho object of the graduated land ho said, was to burst up largo holdings. It was applied to town properties to increase the revenue, but as town properties could not be.cut up it ....was., not wise jiow.to put the. increSse oii town property, especially as the incomo tax increases would ai) como from tho towiis and not from the country. The oxoinption of. G por cent.-on the capital value of his land, ;md : of £300 a year lis.-well, allowed to the farmer, pyt .the farmer on a very much better basis in regard to income ,tax than the business mail in tho towns. He . admitted that in several respects our methods of taxation had developed faults,- which by and by could be put right. He wished to assure the House that. there would be no difficulty about assessing and collecting the inooine tax farmers.were to be asked to pay. When the income tax was first imposed there was a cry from business men- that it .would never work—a far louder cry than was- now being raised on behalf of farmers—but it had worked quite well. Mr. Noswortiky: it hasn't been a success. , , : Sir Joseph Ward: lam not disoussing that point now. It has brought us .the necessary revenue! It has worked quite well from that point of view. He added that he was advised that this now proposal would not bo difficult to work. ' . . The Paper Money Scheme. He wished to talk of the proposal to establish a paper currency, and so raise money for the State. In a normal year the note issue of all tho banks in Now Zealand was ££,700,000. Now, in war time, it was* £2,600,000, and there was a proper gold reserve behind tho notes all' the time. If-the Government were to give effect to what was suggested by some honourable membors, and substitute for the Jrnnk noto issue a State issue, the cost of the sdheme, together with loss of revenue from bank notes, would absorb all the saving in interest which those honourable members hoped: would be made. And if £1,700,000 was the total note issue which tho public would absorb, it would not bp possible to get the people to absorb such an issue as £5,000,000, an amount which had been mentioned. Ho referred to what had taken place in tho Commonwealth of Australia. At the .outset it was estimated that the limit of issue.would be £15,000,000. Now it was £34,000,000, and recently it had been announced that the issue was to bo raised to £45,000,000. If wo had a large population and a State bank and a State note issue,, things might ■be different, but this country was associated under Acts of the Legislature with the Bank of New Zonlaud, and ft waa not, he thought, feasible to give effect to the proposals made.

About the Loan. The member for Wellington East had specially referred to the' Sinking Funds, urging that tlie.y should be suspended. The Government would not abandon the sinking funds. He argued that sinking funds wero specially necessary to tliis country because of tho social legislation passed by our Parliament, antl they wero necessary in order that our credit should be always secure. He was glad that tlioro had been no objection to tho loan. A register would be kept of the bonds, but tho bonds would not be legal tender, payable to bearor, otherwise they would go from hand to hand like bank notes. This could not bo permitted. Ho did not approve of tho. proposal that wealthy people should bo allowed to anticipate the payment of death duties by buying scrip in the loan. He had no fea.ru for tho success of the flotation. One insurance [company had applied for £355,000, an d he had no doubt that thero would be other heavy demands.

Miscellaneous Suggestions. | In reply to those honourablo gentlemen who had expressed doubt as to whether the increased rates of taxation would actually provide, the rovenuo required he could givo tho assurance that ill ovory class aJlowance had been'made' for shrinkage on account of tho higher charges. In the Telegraph ' Department provision had been mado for a.'29 per cent, shrinkage. _ A similar provision had been made in estimating the increased revonuo from tho Railway Department. A proposal had ogoii yiscto U) afiftonn. jjicoiiis taxbattbt_ Ho ocmld inforan

honourable members that prior to 1881 that system was in vogue, but was found to be unsatisfactory, and the present system of taxing banks was adopted. He was not sure whether tho increased tax on bank-notes would not drive notos out of circulation. Ho believed that tho banks ought to pay more taxes, and in order to ensure that there should bo no loss of revenue by the withdrawal of notos, and to ensure that banks made enough contribution, he would consider amendments to the law in respect to tho method of levying taxation on banks.

He had said in the debate that racehorse owners would hnve to pay special income tax on the winnings of their horses. They would pay 1 per cent, of stakes won, and as it was calculated that, about 10 por cent, of the stakes won represented profit made, the tax would be at the rato of 10 per cent, on profits.' Again, ho would repeat that m approaching tho subject it was- not proper to consider whether horso Taces ought to take place. It ought te be approached fairly, and as in business income tax was charged on profits made after payment of all expenses, bo allowance for expenses should bo made to racehorse owners. A suggestion had been made that the income tax exemption should be reduced from .£3OO to £200. But tho reduction would. produce. only £8500, and the assessment work of the . Department would be trebled. He did think, however, that something might be done by which tho exemption should bo cut down until it should automatically disappoar m c»s where men received largo incomes. This might yet' be embodied in our legislation. Mr. Lee: t'ut it in at one?. • Sir Joseph Ward said that unfortunately the chango would invoivo a groat deal of Departmental work. Reasonable Economy Necessary.

There wasi tie believed, no need for alarm about Now Zealand, because tho country was very strong in production. We wo passing through oxtraordmary times,, and no one could tell what opposition would bo in a year or two from now. It was, therefore, our uusuigss to exercise cconomy. And it was tho bounded duty of the Public economise. There were votes in tho Estimates which would never ''ex-pended,-and every Department would be instructed to practise economy. -In® member for Wellington East had suggested that we might save £450,000 a year on the Estimates. Ho believed it was tho duty of private employers not to commence discharging employees. It was of tho utmost importance that men should continue at their ordinary work. When the whole taxation system as proposed was in operation,; it looked as if we cd,lid nieot our obligations. This would depend entirely on the length of tho war. But if there was reasonable economy exercised in public expenditure tho country ought to be in a strong position when the war was over. It might- bo necessary to make some adjustment in the proposed new taxes when the Bills were before the House, but lie would have honourable members know that the National Government ought not to he embarrassed by sectional influences, leaving the Government without a majority, or without the support of nlLthe strength of tlie combined parties in the House. He adjured members to exercise discretion in attacking tho Government until the war was over, or unt3 we knew whero the country was going to be when the war was over. (Applause.) Mr. left the Chair at 9.4 p.m., and the House wont into Committee oil the Estimates.' _ Tlie first item was passe(l,in two minutes, and progress was reported. The House rose at $.11. p.m.