OUR SYSTEM OF WAR FINANCE.

Dominion, Volume 9, Issue 2784, 31 May 1916, Page 5

OUR SYSTEM OF WAR FINANCE.

DEBATE IN THE HOUSE OF COMMONS THE TAX ON AMERICAN SECURITIES By Telegraph—Press Association—Copyright London, May 29. In the House of Commons, on the'discussion on the Consolidated I'und Bill, members criticised the system of financing the war on short-time bills, 'and urged a permanent loan. Sir 1\ G. Banbury declared that the teeling in the city was that the limit of safety as regards the issue of Treasury Bills bad been almost reached. The Chancellor of the Exchequer (Mr. K. M'Kenna) said that the Government policy could well be defended, but it was impossible under the rules of debate. The Bill was reported without amendment. Mr. M'Kenna, in moving the additional income tax of 3s, on American securities, said the proposal was novel, but it was necessary to provide against the adverse balance of trade with America and tho export of gold. Loans raised in America had proved insufficient, but the purchase of American securities operated as a complete success, enabling us to pay our way and preserve a substantial balance i tlie Uniten States for payment of our liabilities. British owners generally bad come forward patriotically, but the flow during recent weeks had dwindled to a trickle. Somo holders needed a spur to remind tltem of their duty to the country. Tlie flow had already greatly increased, but„if two shillings proved an insufficient spur, he would ask the House to raise tho tax even to twenty shillings. Sir Edward Carson: "Why not act now?"

Mr. M'Kenna said there were great difficulties.

Sir P. G. Banbury declared that the proposal was grossly unfair. The Government should not single out particular investments. We were returning to the days of Isaac of York. It was a bad precedent to use the income tax as a penal instrument.

Mr. William Rutherford said the proposal was sheer robbery, dishonest, and mean. Let the Government introduce a Bill employing simple compulsion. Several mombers denounced the tax as inequitable 'and revolutionary. Others argued that when men were compelled to serve in the army tho least the Govern, ment could do was to oompel the sale of securities in order to provide munitions and food. The opportunity to sell was a great opportunity to serve the country. Tho tax was passed without a division. Mr. Runciman (President of the Board of Trade) said that the Government was considering the question of the meat supply. The consumption per head, had continually decreased during the war period. Mr. Tennant said that ho believed that sufficient steel helmets had been issued for all the troops under Shell fire. In France the percentage of- head wounds was 12.35.