COST OF WAR.

Lyttelton Times, Volume CXVII, Issue 17279, 21 September 1916, Page 9

COST OF WAR.

BRITAIN’S NATIONAL DEBT.

WONDERFUL FINANCIAL ACHIEVEMENT.

[From Ottr Covrwstovdext.] LONDON, August 10.

What will Great Britain’s national debt amount to by the time we can th'nk about turning swords into ploughshares? As a result of two years of war tho debt has been increased by fully £2,100,000,000, while if we include currency notes not covered by the gold held against them, tho amount must be increased by at least one hundred million pounds. When Mr M’Kenna made his Budget statement early in April last he mentioned that the pre-war debt amounted to £651,000,000. this figure leaving out sundry amounts borrowed for what may bo considered reproductive purposes, such as public works, offices, telegraphs, telephones, etc. Adopting the same basis for comparison, the national debt bad risen to £1,109,000,000 bv tho end of March. 1915, and to £2.140.000.000 bv March 31, 1916. The official return of the national debt at the close of the last financial year has not yet been issued, so that wo liavo only tho Chancellor’s statement of tho gross total, and we are still waiting to learn the exact amount of tho 4$ per cent loan that is outstanding. Wo know, however, that tho cash received for the 4J per cent war loan amounted to £593,000,000, and including tho amounts converted of tho 3i per cent war loan, of consols, etc., a total of £9OO 000,000 roughly can be arrived at. Taking this as representing the per cont loan, the outstanding interestbearing debt at the end of July amounted to at least £2,750,000,000. If the war lasts until the end of March, 1917, and if tho Chancellor’s estimate of expenditure is not exceeded, tho national debt will then have grown to the stupendous figure of 3440 millions, for Mr M’Kenna anticipated a total expenditure for tho year (April 1, 1916-March 31, 1917 of 1825 million pounds, of which 500 million pounds was to be obtained from revenue. 1.50 MILLIONS INTEREST. Taking the debt as it stands to-day the annual interest chargo thereon is—allowing for 1 per cent sinking fund something like 150 million pounds' per annum. This looks a fearsome figure and how is John Bull to face it? In this connection it is pointed out that in the last pre-war Budget the annual, national expenditure was put at a little over £200,000,000. In that amount there Avas included £23.500.000 for debt service. Tho actual revenue received in 191-1-15 was £227.000.000, and in 19.1516 it was £337,000,000, while for the current vein - tho estimate is for over £500.000,000. If £200,000,000 is taken, to be our normal rate of expenditure we are raising an excess of £300,000,000 this year, and such an amount Avil! pay interest and sinking fund on the present debt more than twice over. Evou if tho national debt were to rise to as much as 4000 millions, interest at 4 per cent, and a 1 per cent sinking fund would (as one financia 1 writer blithely puts it) “ only call for £240,000,000,”• which is still a good deal less than tho excess revenue rve are noAv providing. The country can certainly he proud of its financial achiavomgnts so far —indeed, there are not a feAV who regard the 5s income tax as needlessly high under existing conditions. And it must not bo forgotten that a very substantial portion of the debt represents advances to onr Allies and to the Dominions, which ivill be recovered. It has been estimated that these advances Avill at the end of March, 1917, amount to 800 millions, but it now appears that one thousand millions is more likely-to bo nearer the mark. These feAV figures will gtee the reader some idea of the magnitude of the financial burden ihfoAvn upon the Old Country by the Avar. It may safely be said that two years ago not one man in a hundred thousand imagined that Great Britain would ever be called upon to shoulder such an appalling financial load, but the Old Country is bearing up very Avell indeed, under it, and is still a very long way indeed from financial exhaustion.