MONEY FOR ARMS

Evening Post, Volume CXXVIII, Issue 26, 31 July 1939, Page 9

MONEY FOR ARMS

BUDGETS OF NATIONS

GREAT RISE IN SIX YEARS

PAST & FUTURE WARS

M. Louis Marlio (France), vicepresident of an important chemical and elactro-metallurgical company, spoke of the burden or armaments under which most European and some non-European countries were suffering at the tenth congress of the International Chamber of Commerce at Copenhagen, says the "Manchester Guardian." He showed how startlingly armaments, expenditure had grown since the beginning of the century in relation to the total annual public (State) expenditure of the various nations and also in relation to national incomes. "A general recovery of industrial activity has taken place, within the last few years, and as a result the economic situation wears an air of improvement." said M. Marlio. "Turning to the financial situation, however, we find a much gloomier picture. Public expenditure on armaments is increasing steadily, bringing in its train a heavier burden of taxation and repeated recourse to borrowing to such an extent that it is no longer possible to talk of 'budgets,' so great is the lack of balance between State revenue and expenditure. There can be no doubt that the recovery of recent years has; been largely brought about by this! heavy spending, and this is a par-! ticularly disturbing feature of the j present situation. It is high time to pause and ask ourselves whether we are not paying far too high a price for this artificial recovery in economic activity." EXPENDITUSES COMPARED. j M. Marlio then dealt with expenditure on arms in the period before the war, taking first the year 1900. Total military expenditure in France represented 28 per cent, of State expenditure and 3.9 per cent, of national income. In Germany, excluding the cost of a military expedition in Asia, arms expenditure represented 37 per cent, of State expenditure and 2.6 per cent, of national income. In Italy military expenditure represented only 19 per cent, of total public expenditure. .M. Marlio took the years 1913, when armaments were growing rapidly, 1928, the period of disarmament, and the present to show the rising cost of armaments. In tabular form the percentages are:— AS PERCENTAGE OF TOTAL STATE EXPENDITURE. (Estimated) 1913 1928 1939 Germany 55 9.1 $ France 40.4 _5 50 Britain 3« 14 47 Italy ..., 2V.2 28 45-4S United States Bti 22f — Japan 3G.5 27 72.5 ■[•Federal Budget. § Unknown. AS PERCENTAGE OF NATIONAL INCOME. (J_>timated) 1913 102S 1939 Germany 4.2 1.3 20* France 5._ 4.6 20 Britain 3.4 3 12-13 Italy 3.2 4.3 25-30 United States 1.4 1.1 Japan ? ? 30 ♦Estimated for 1937; today's percentage must be far greater. A SIX-FOLD INCREASE. '•Notwithstanding that 1913 was a year of heavy re-armament," said M. Marlio, "the ratio between armaments expenditure and total public expenditure was between 30 and 40 per cent., with the exception of Germany and the United States, in which cases the calculations were based on the Empire and Federal Budgets, which gave a misleading idea of the position. Today the 50 per cent, mark has been reached and passed. As for the ratio between armament expenditure and national income, in 1913 it ranged between 3 and 5 per cent. Today it ranges between 20 and 30 per cent, or more—in other words, has increased more than sixfold." He pointed out that while 1928 showed decreases in expenditure postwar development was marked by a large increase in national debts, because of the tremendous expenditure which the war involved. Thus 55 per cent, of the 1928-29 British Budget went to pay for war debts incurred in the past, and 15 per cent, was spent in preparing for a possible future war. Therefore 70 per cent, of the 1928-29 Budget was ear-marked for war expenditure. Such was the position in 1928. What today's figures are may well be imagined! How different the case of Sweden, free from war for 100 years! Only 20 per cent, of the 1928 Swedish Budget went to pay for past wars and to prepare for future war. For this year, 1928, it was reckoned that in France out of every 100 francs paid to the Government in taxes about 40 francs were used for debt services, 11 francs to pay for war pensions, and 19 francs for Army and navy expenditure, making a total of 70 francs out of a hundred; that is much the same proportion as in the United Kingdom. RISE IN RECENT YEARS. Of the armaments race from 1936-39 he pointed out that expenditure of the seven Great Powers—Germany, France, Italy, Japan, United Kingdom, United States, and U.S.S.R.—rose by 500 per Cent, from 1932 to 1938. Armaments expenditure in the United States in 1939 was roughly twice as much as in 1938, rising from 1000 to 2000 million dollars. Thi. figure would probably be exceeded by a wide margin, but in spite of its size it was still very small in proportion to the American national income. "To sum up the manner in "which the position has worsened during the past ten years," he said, "armaments expenditure rose from 1928 to 1939 to such an extent in Germany, the United Kingdom, France, Italy, and Japan that: 1. Total expenditure on armaments by these five countries increased more than sixfold from 1928 to 1939. The total figure for all five countries together in 1938 has been assessed at some 10,000,000,000 dollars by the Foreign Policy Association of New York. Today's figure is certainly much larger. 2. The ratio of armaments expenditure to total public (State) expenditure rose from 20 per cent, in 1928 to about 50 per cent, in 1939. Add to this the cost of national debt services, war pensions, and other unproductive expenditure which total variously from country to country between 20 and 30 per cent, or more, and it is obvious that little remains for current expenditure, at the most probably 15 to 18 per cent, of the total public expenditure. MONEY FOR NORMAL EXPENSES. Leaving out of consideration in the national debt charges t>e small proportion representing past expenditure apart from military expenditure, out of every 100 francs, 100 marks, 100 lire paid by the taxpayer, barely 18 or 20 per cent, of this sum is applied.to the normal expenses of the States. All the rest goes to pay for past wars and to prepare for a new one. 3. The ratio of armaments expendi-