DEFENCE LOAN

Hawke's Bay Herald-Tribune, Issue 155, 19 July 1937, Page 8

DEFENCE LOAN

(British Official Wireless.)

British Chancellor Defends Borrowing TRADE FACTORS

(iteceivea iu, J.u.iO a.m.; BUGBY/'July 17. Tfee third reading of the Finance Bill passed the House.of Goiumons. Bir John fcjimon, the Chancellor of the Exchequer, dealt with the criticisms of the Government 's resort to borrowing to supplement the main contributions providod year by year by the taxpayers. He drew a distinction between borrowing for immediate current needs that came to be critieised in 1931 and the present borrowing for a programme which was designed to give secyrity for a generation tq taxpayers and which was accompa'nied by large contributions from taxpayers. In 1931 there was no provision for repayment. The provision now being made included a specific arrangement for the rerlemption of what was borrowed over 25 yea'rs and a charge on the dofence loan ot' an annat ty. Whai was happening under the national dofence loan was having no damaging effect on credit. Referring to the suggestions that slumps always followed periods - of prosperity Sir John Simon said he could not accept such a calvpnistic view when as at present the expansion of trade waa healthy. He described as a fallacy Opposition criticism that the present trade prosperity was of a temporary and artificia] nature due to a great extent to the expansion of armaments. An immense and sustained improvement in trade had taken place long before. He was not disputing that the additional expansion of armaments did not inerease the volume of our trade, but it was not the original or main cause of the present' trade prosperity and it did not follow that later' we were going to fall back into the depths of a depression.