THE BRITISH BUDGET

Hokitika Guardian, 30 April 1925, Page 2

THE BRITISH BUDGET

LATEST CABLE NEWS

AUSTRALIAN AND N.Z. CAUI.E ASSOCIATION .MOST FAVOURABLE .MOMENT. LONDON, April 28. Air Churchill 0 announcing the return to the gold standard said such return was the long settled policy of the lountry; the only question had been the difficult- and delicate one of how and when. The report of the Chamberlain Committee in that connection had convinced the Government, which intended to follow the committee’s recommendations in oveiy respect.

Mr t hun,hill emphasised that this was the most favourable moment to return to the gold standard, in view of the political and economic stability at both sides of the Atlantic it, would he unnecessary to adopt gold coinage. The Chancellor appealed to all classes to continue to use notes and lie would introduce a bill providing that until otherwise provided by a proclamation, Bank of England and Treasury notes would lie convertible to gold only at the option of the Bank of England. The right of tendering bullion at the Mint to he coined would be confined in future, legally, to the Bank of England. whicli would be required to sol! gold bullion in amounts of not less than four hundred and five ounces in exchange for legal tender at the fixed price of £3 17s 10d per standard ounce.

THE ESTIMATES. LONDON, April 29

In his budget speech. Air Churchill out. i mates .the expenditure for R!2o at C7!)B,•IlKLOOO sterling and the revenue at £B2li,(.Co,bJd: with a siiiplus of £2liO.O:i(l,OCO. The expenditure estimated is £9.100.0!I!) over that of last year’s Budget and £3i .000.00.) ovei the actual expenditure last year. Air Churchill said this disappointing result was due to the rapid p-oiiti-eal changes in the last three years not conducing to economy, and to his inability to searchingly scrutinise the Estimates. The Cabinet, he said had agreed to establish a Standing Committee of tlu* Cabinet to oveiaaul the recurrent expenditure in addition to the. Treasury’s annual scrutiny. “Wo ought,” he said, “to aim to get a reduction in the supply and the expenditure of not less than ten millions per year. Tie believed the revenue would steadily expand, and that, resolute efforts would enable a yearly mitigation of the heavy burden ol taxation to lie made, lie pointed out hist year’s remissions in taxation meant a progressive loss ol revenue ol fourteen millions.

lie anticipated a gradual slow improvement in trade, but he did not feel justified in budgeting for any Mibstantial increase in trade. The rates of death (lutes were exceedingly small, and those” on the largest estates would he. increased, yielding 84,*T)0.0;X« revenue in the present year, and ten millions in a lull year.

Besides the new duties on certain luxuries ami hops, there would bo a small additional duty on imported beer, to countervail the tax on t* ,c homo brewer. The McKenna duties would produce £1.009.000 a- year and three millions in a full year.

The <ost of the ordinary income tax red novo ills of (id would be three . millions this year, and 7-V indiums in a full year. The reduction of the super tax would rest £(.(500.099 (bis seal and ten millions in a full year.

The compulsory pension insurance

si homo would niiVct fifteen million people. The employers and workers would each contribute at the rate of four-pence for each man and twopemv for each woman. The scheme would operate in successive stages, beginning ,m the. -111). .January, P.!2li. The State s ultimate capital liability was estimated at 750 millions sterling. He remarked Rml. the Bndgel did not include provision tor inlcr-Allied debt repayments io Britain, toil he was budgeting for nine and a hail millions sterling from (iermany. whereas twelve millions were received under this head yesterday.

The new taxation would yi'.'ld 2311),230.000. bringing the surplus up to £'3;i,B3O,COJ. The new taxation should yield twenty million. Alter the current year, he would propose legislation following the resolutions ot the Economic Conference of 1923. concerning the liability of Dominion Governments trading or owing property in Britain, and legislation for income tax relief in favour of the high <*mn-nussione-rs redding in Britain, tie concluded, amid cheers, with a peroration emnhasisiiig the non-class ami non-party nature i.f Ins proposals. He was aiming at apportioning the burdens proportionately to the ascent ol the ladder of wealth, liberating production of new wealth from the shackels of taxation, and promoting contentment and stability, and so making Britain truly the home of all its people. The II nuse of Commons agreed to all the Budget resolutions after brief speeches by Mr Philip- Snowden and Mr Lloyd George.

MR SNOWDEN'S COMMENT. ! LONDON, April 29. • Mr Snowden reserved his thunder for the protective duties, especially the -McKenna Duties, which, he declared. the Labourites would repeal at the first opportunity. As regards Imperial preference, the ex-Chanccllor was not opposed to rebates which were not of a protoitive character, but Air Churchill's duties are protective, and they consequently invited siren nous opposition. Air Lloyd George similarly, regretted the revival of this controversial issue, but be was generally congratulatory, pending a closer examination of the proposals. The report of the Currency Committee. to which Mr Churchill referred expressed the opinion that the domestic circulation of gold was a luxury which wa.s dispensable. Britain was not likely t.) afford it for a lew years, but the* ■esiabiitiUM nut iomil li.il.it of using paper currency would be sufficient to prevent the absirptioii of an appreciable quantity ol gold into domestic- circulation. If there were such a risk, the committee is ol opinion that legislation will he essential to prevent the abnormal circulation of gold till tlie gold standard is firmly c-tablished. '1 he coinage ol half-sovereigns in any case should not be resumed. The Committee recommends that, as soon as parity is restored. the Bank of England Is* authorised to prepare for printing its own notes. The experience necessary to enable the amount of the fiduciary issue to be fixed should have" boon gained by the end *>l 192*. ami the transfer of note issue tiiulil be ejected early in 1928. or perhaps before. GOLD STANDARD. PRESS COAIM ENT. LONDON. April 29. The return to the gold standard is featured by the news;! ipers as the most important aspect of the Budget from the viewpoint of world finance. It is calculated to facilitate the stability of prices, restore the confidence of traders, and encourage business dealings all over the world. The “Morning Post’s” city editor expresses the opinion that it. will be dif-

licult io determine how the. money market may l*e affected. For the next few days it may easily witness violent movements in American exchange on London, amending to the extent to which the present developments have been preceded by speculative operations in sterling; but shortly things will settle down, ami sooner or later, Exchange must be affected by financial and economic, developments, whether expressed in ordinary trade movements, or by buying or selling securities. He holds therefore that unless it is shown that our economic position is suflicient-J^ !v strung to maintain American exchange, dearer money might have to ho resorted to for a while. The importance of the protective measures in the shape of reserve dollar credits in tlio I’nit-od States i.s recognised. Such credits nuiv be regarded as constituting a reserve winch is unlikely to bo lightly encroached upu... ••The Financial Times” says that the fact that- the whole Empire will m i simultaneously, apart from the adhesion of foreign countries, who wilL 10110-w suit, is a remarkable achievement. The decision is the best thing that could have hap;cued in the interests of British credit and prestige. Behind the gold reserves stands the credit which the Government has obtained from the I'nited States, recourse to which, the paper is eonil- Vdent. need not be frequent or exten-

Immediately the Budget details \Vere known, sterling on the London mat kot reached -IS4 and closed at eveniiA unlv a trille lower. T NEW YORK, April 28.

The Stock Market here has hailed the British announcement of the return to gold as the most far-reaching step toward stabilisation since the acceptance of the Dawes Elans, and this sentiment i.s reflected in a generally improved tone in the finame and the commodity markets, while the depression following the German elections has Goon completely lorgotton. * Following on sterling gains, almost all the European exchanges advanced while stocks showed relief from persistent progression:!! pressure, which has recently kept them in an unsettled

state. The financial leaders are enthusiastically claiming that the British action mean’s that good money will perdominate throughout- the world, thus enabling businessmen everywhere to carry ,m operations with ail asuranee that no erratic movement of the exchanges will throw their calculations out of joint thus causing big losses. Confidence had been entirely restored, and it is considered that the international markets for raw materials and foodstuffs will immediately improve. Mr. lie,rtc-s (Chairman of the Empire Devclo] ment Cnion), says: It is satisfactory that the’ resolutions of the imperial Conference will be carried out. Tlu*v will have a must encouraging effect'upon commerce, which depends upon Imperial trade. Nevertliless, the Imperial trade protagonists are still

unsatisfied. Air. Smith, the chairman of tlw Ciuematgraph Renters’ Society, declares that the roim posit ion of the duty no foreign films is a preposterous thing a.s there is no British film industry needing protection. The motor industry is delighted at tlu* reimposition of duties on motors.

THE INSURANCE PROPOSALS -

LONDON. April 28.

The effect of the insurance proposals is that: the men will contribute fouipenre weekly and the women twopence weekly, and employers will contribute similarly towards new benefits. The Slate’s contribution will be the funds necessary to make the benefits immediately available. Business men are of the opinion that the extra l'ourpence will he a handicap to many industries, hut that, eventually the. scheme will result in a reduction in local rates which would be a

compensation. •p|„. | Minor Flirty frankly applauds 11,0 pensions to widows, hut they grnm1,1,. t i,. u the scheme is made a contributory cue. Their chief regret is that Mr. Philip Snowden did not embaik upon a pensions policy in 1924. LONDON. April 28. Miss Wilkinson, Labour's woman M.l\, runs iciors that Air. Churchill lws given an unnecessary pension to able bodied widows. He should have limited the scheme to the widows with children or to elder widows. Air. Lloyd George, speaking in tho House of Commons, said he welcomed the insurance extensions, but be hoped the Government would not make the -c----conlribnlions from the employers and the employees during the existing unemployment. lie said he regarded the whole scheme as betraying an ingenious, a resourceful. and an exceedingly audacious mind.

LOBBY* OPINION. LONDON. April 28. Comment is general on the Budget. The Parliamentary loldiv opinion is generally complimentary to the cleverness of pbe budget, and to the ability with which the various interests are balanced in it. The general impression is that the outstanding features are the return to the gold ot a nd'ii rd and the extension of the health insurance to thirty million people.