HUGE RESOURCES

Gisborne Herald, Volume LXVI, Issue 20054, 28 September 1939, Page 6

HUGE RESOURCES

WIDE MARGIN YET ASSISTANCE TO VICTORY RATIONAL PROPOSALS Cl! BRUNO Y COMP A lil SO N (British Official Wireless.) Reed. 1.15 p.m. RUGBY, Sept. 27. The severity of the tax increases announced by the Chancellor of the Exchequer, Sir John Simon, in the House of Commons to-day was not unexpected and the proposals which, apart from minor criticisms, received the approval of the Opposition leaders who spoke later, have been generally accepted by the public as a demonstration first of the determination of the country, at whatever cost, to sec the war through to victory, and secondly of the immense resources upon which the Government can call in the struggle which, lies ahead. The Liberal leader, Sir Archibald Sinclair, expressed this attitude when he said: “Severe as the Budget is, it does not bring us even remotely within the range of the limit of our national financial strength and the people will accept the present and further sacrifices which may become necessary as a means to victory which they are resolved to obtain. The rational nature of Sir John Simon’s plans for obtaining the additional £220,500,000 in a full year by additional taxation superimposed on the lax system itself, estimated in the last Budget to yield £942,310,000, is contained in a passage in his speech in which the Chancellor explained that the economic problem of the war was to secure a reduction of private demands on industry corresponding to the enormous expansion of the Government’s demands. If the Government did not secure such a reduction (here would he competition between the Government and civilian demands upon the available resources and, therefore, ills first duty was to use taxation as an instrument for curtailing the civilian expenditure and directing it into the proper channels. The Chancellor sketched the rough order of priority of the demands, starting with those in connection with the direct prosecution of the war. Next came the need to increase the home oroduction of food. Another demand for which provision must be made was the maintenance of the export trade.

The same point was made by the President of the Board of Trade, Mr. Oliver Stanley, in an answer before Sir .John Simon rose to make his 75minute statement. Mr. Stanley said that the Government would use every effort to ensure the country's exporting capacity was used to the best advantage.

The scale of {he war effort was brought home to the Home by the Chancellor's remark that the Royal Air Force to-day cost from three to seven times more than, in 1918 and that, broadly, it was true to say a division in tin: field would cost nearly twice as much as one did in the later years of the last war.

Before lie sat down, Sir John Simon gave an assurance that all unnecessary expenditure in British Government deonr'.ments would be stringently curtailed and lie appealed, at the same time, for the avoidance of waste in any form by the public. Sir John Simon concluded by a comnarison of the financial position and the prospects of Britain and Gerii

many. He said: This emergency Budget will indicate the gravity of the financial problems involved in waging war, but let us take a few moments of comfort by way of comparison. However serious our problem may be, the financial problem confronting Germany is infinitely greater. The pound sterling remains, when all is said and done, an accepted mpdittm of international trade.

’’The pound sterling is available for all uroper purposes at the official rate of exchange which is published daily. “On the other hand, even before the war. the official rate of the German mark really meant nothing _at allThere were 50 different kinds of marks, each showing a different degree of depreciation. At present the German mark has no position as international currency and is likely rapidly to lose its value as internal currency.

“The inflationary tendency in Germany is bound to develop further under war conditions