COST OF WAR

Dominion, Volume 10, Issue 3029, 16 March 1917, Page 5

COST OF WAR

HUGE ANNUAL CHARGES PAST-TIME WAR BILLS ~ A. days ago the Federal Prime . Minister estimated that the Commonwealth had already incurred an unproductive war debt of 131 .millions, while it was expected that, another 78 millions would be ,• necessary to see us through this, year, and that after the war is over a further 70 millions would be needed;for repatriation purposes and other matters of a kindred naturo connected with the aftermath of war. .When it is remembered that prior to August, 1914, the Commonwealth had practically no unproductive debt, tho financial events of the past year and a half will be recognised as having proceeded with giant stride. Compared "with the other countries involved, our position is by no means so overwhelming. Wo havo a small population and a. large country. As ( the land gradually becomes more thickly settled, tho burden will surely become lighter and lighter. In themeantime, however, it is heavy enough', as everyone who has already received :liis income tax assessment will not fail to realise. It is interesting in this connection to compare tho cost of the present with previous wars. Hie total expenditure caused by tho Crimean War (from 1854 to 1856) has been estimated at 340 millions, to which Russia contributed 160, Great Britain 74, and France 66 millions storling. Tho daily war expenditure of Russia probably averaged about one-sixteenth i,of the daily average in this war; but in the war with Japan Russia's daily expenditure rose to above one-fifth of its present figure. The war of France and Italy against Austria in 1859, cost about 50 millions sterling. In the American Civil War the North spent over 500 millions sterling, and put over 2} millions of men into the field. It lias been calculated that the total expenditure of Federals and Confederates; was 1000 millions, and that 2000 millions more must be allowed for,the destruction of property and decline of production. The market value of tho slaves, in_ whose emancipation the war ended, was estimated at 160 millions sterling. The expenses of the Danish war in 1864 ' ware about £14,000,000, while the six weeks' campaign of ; 1866 cost about sixty-six millions. The FrancoGerman war of 1870-71 threw a burden of 506 millions on France, including an indemnity of 225 which more than, covered Germany's budget expenses. The privations and commercial losses of the French people have "® ll Jf't at another 500 though the hostilities only lasted from •July to January. According to Bloch, Russia spent on the war of 1877-8 161 sterling, and Turkey perhaps about half that, figure. The Boer war, as officially stated, # cost the British Exchequer 250 millions storling. The Russo-Japanese War seems to cost the two belligerents (who were largely financed by Paris and i about 200 millions apiece in cash. The ; financial results of tho Balkan Wars ; left Turkey and all the small Stated ; except Rumania in a bankrupt or semi- i bankrupt condition.

According to a calculation macle on March 1, 1916, the actual cost of the present war for tho first year was about 3750 millions sterling. But tho expenses of the second year may prove to be nearly double. Among tho belligerents Great Britain alone paid a small portion of tho cost by enormous additions to taxation. Italy has mado sufficient additions to its tax revenue to enable it to pay interest on tho new war debt. All the other Continental Powers iiavo suffered a- heavy loss of revenue, hut they have paid by privation, and'by issues of depreciating currency, as well as by loans and borrowings from their State banks.

It is possible, of course, and in some tases certain, that the debts eontraotcd will not be paid. Confiscation will be more or less severe, according to the condition of the public revenue and credit in each of the belligerent countries after tho war. Tho currency may !be depreciated' or the interest taxed. Pensions must be provided for. For many years to como tho bolligerent States will havo to pay an enormous annual sum in war pensions to disabled men, to widows and orphans. As tho war continues, tho claims for such pensions multiply, while the means of paying them dwindles. At first both sides cliorished high hopes of success as a result of crushing victories, until military attraction, and finally financial exhaustion camo to be discussed.

.What is the total cost of the war to date? For the first year'it lias been ; put at about 3750 millions sterling, , involving, at o per cent., an annual , dead-weight burden of 187 millions { sterling on tho nations engaged. Mr. . .I'. W Hirst estimates the oost for the second year at 7000 millionß sterling. That would bring the annual deadweight charge for interest up 540 millions sterling 'annually. Durin" the last six months, with Rumania added, rapidly rising prices, and hi;; her rates of interest, the daily 1 cost must have grown considerably. The following table is given on tho . authority of Mr. Hirst: — Cost Debt ofwar. charge. Millions Millions ~ sterling, sterling. Jrirnt twelTe months 3750 1871 Second twelve months ... 7000 350* Fifth half-year 3750 1874 ITotal to end of Jan., 1917 8.500 725 Another six months—making a three years' war—at the rate of the last sixmonths—will bring up the totals to 18.250 and 912 respectively.