Britain Now Heads Armament Race

Manawatu Times, Volume 62, Issue 37, 13 February 1937, Page 7

Britain Now Heads Armament Race

Growing Cost of Defence Bill For New Capital Up to £400,000,000 (British Official Wireless).

itUGBY, Feb. 11. ( To meet the rapidly-growing i expenditure on the'defence pro-] gramme, the Government is taking powei’s to raise capital orj to use Budget surpluses for de-j fence purposes over a period oF five years and to a maximum fixed for the time being at £400,000,000. j This important announcement ] was made at question time in the j House of Commons by the Chancellor of the Exchequer, Mr. Neville Chamberlain, who recalled that in his last Budget he had said that the exceptional nature of the defence programme made it in- : equitable that the whole cast should fall upon the revenue in a! single five-year period. The gen-! eral experience of the last twelve months had in no way relieved the, urgency of the heavy task nor lightened the cost of raising the forces to a proper standard of defensive strength. It had only confirmed his earlier judgment. Revenue Insufficient. “The defence expenditure is growing at a pace which makes it impossible to meet it entirely out of revenue,’’ ho said. “How much may be made available out of current revenue and in what manner must be left to the Budget Statement. So far, however, as revenue must be supplemented by appropriations from capital, it is necessary to ask for preliminary statutory authority. The Government therefore proposes forthwith to introduce a Bill which will authorise the raising of capital or alternatively the use of any realised Budget surpluses for defence purposes over a period of time.” Neither the total amount to be raised, nor the total period over which it must be spread could at present be predicted he proceded. Flexibility and adaption to changing circumstances was the essence of tho defence programme. B\u traditional usage required that upward limits not to be exceeded unless by further statutory authority should be specified in a Bill, and the Government proposed to ask for general power to raise capital or to use realised surpluses for defence expenditure up to a sum not exceeding £400,000,000 spread over a period not exceeding five years. Supervision by Parliament. The Chancellor then described provisions for service and redemption of any capital raised and for safeguarding Parliamentary control. Tho Bill authorising tho action proposed would not itself give authority for any expenditure. The whole of tho proposed expenditure of the defence departments, both normal and exceptional, would continue to be laid before the House of Commons. No sums would be apxfiicd from capital or from realised surpluses towards meeting expenditure save with the knowledge of and after the approval of l’arliament, which would in this way control in each succeeding year both the total expenditure on defence and the proportion in which it was to be met from capital. Provision would be made annually on the defence votes for interest on the new debt, and also, after the end of the borrowing period, for redemption of the debt within thirty years. Facilities for Debate. At the end of the Chancellor’s statement, the Leader of the Opposition, Mr. C. R. Attlee called attention to the 6erious import of a proposal unprecedented in times of peace, and asked for the laying of a White Paper on Defence before the House was called upon to reach a decision. The Prime Minister, Mr. Baldwin, promised to consider whether a White Paper would be the best means of presenting the information which the House might desire to have iu advance of a general debate, for which he offer ed facilities. Mr. Chamberlain was asked whether his statement meant that soon after tin Bill giving the authorisation for raising large sums of money was passed there would in fact be issued stock fo< the purpose of raising the money. Tho Chancellor replied: “I cannot possibly answer that question to-day.” MAGNITUDE OF SUM CAUSES ASTONISHMENT. PROPOSALS MAY LEAD TO BOOM CONDITIONS. Received Friday, 9.55 p.m. LONDON, Feb. 12. Mr. Chamberlain’s loan announce ment was made after tho close of busi ness and did not affect prices on the Stock Exchange. The market is already dull and unlikely, in tho opinion of the Times city editor, to derive much encouragement from the statement. Conditions for the raising of a loan art hardly favourable at present. The Times, in an editorial, says the scale of British rearmament i 3 wholly conditioned by the re-armament of others and the failure of nations to agree upon stabilisation which is still earnestly sought by Britain. The Daily Mail’s political correspondent says it is assumed a rise in the income tax will now be smaller than anticipated. Members of the Commons in close touch with tho Government, express the opinion that it will not excel;! three pence. The Daily Telegraph’s political corre-

spondent says unofficial estimates place | the defence expenditure of the next I five years at £1,200,000,000. 1 “Let countries throughout the world , mark tho determined effort we are makjing,” said Sir Samuel Hoare at Bir- ! mingham. “Let them remember that ; when we put our hands to a great task we are willing to make great sacrifices. Though we might be slow in starting, |we are remarkable for the way in which we eventually reach tho winning I post. A great empire that is also weak , is a menace to stability and a tempta- : lion to an aggressor. ’ ’ j Liberal members of the Commons will meet shortly to decide on their i attitude. In the meantime they express .' astonishment at the magnitude of the sum. I The executive of the Parliamentary I Labour Party met immediately after ; t lie announcement and unanimously ex- ! pressed the opinion that tho plan should I bo opposed. Mr. Pethick-Lawreuec, a member of the executive and financial 1 secretary to tho Treasury in the last Labour Government, said after the . meeting that it would lead to boom conditions in which there will be a vast rake-off in the shape of windfall profits, followed almost certainly by a depresi sion, the brunt of which would be borne , by tho workers in the shape of a reduced standard of life. NOTHING TO CRITICISE Received Friday, 9.45 p.m. BERLIN, Feb. 11. Official circles find nothing to criticise in the news of the loan. The official • spokesman said: “We take it now that Britain is making use of her rights. As ‘ a matter of course we shall remember this when we are criticised.” FEELING IN ROME Received Friday, 9.55 p.m. ROME, Feb. 11. The astronomical figure of the loan when converted into the lire, is taken as final proof that Britain is now at the head of the armaments race. WELCOMED BY FRANCE Received Friday, 9.55 p.m. PARIS, Feb. 11. The news is welcomed but it is rogretted such an expenditure is necessary. Britain and France would have preferred a strong League and disarma- ‘ ment. GERMANY AND DEMAND FOR COLONIES I LIBERAL LEADER THINKS IT SHOULD BE CONSIDERED Received Friday, 7 p.m. LONDON, Feb. 11. Germany’s claims to colonies and mandates should be considered, declared -Sir Archibald Sinclair, Liberal : leader, at Pontypridd. The attainment of a real lasting peace depends mainly on our power to convince Hitler we are , loyal to the League and firmly resolved , to join other peace-lovers in the risistance of aggression. Peace also depends on our power to convince Hitler that , we ■wish to co-operate with Germany on the basis of equality and fully consider . her colonial and other grievances subi jeet to the indisjiensable conditions that there will be a general peace settle , ment involving Germany agreeing to : join in a measure of international disarmament, submit all international disputes to arbitration, grant all nations (including Russia,) the equality of rights , and status she herself demands, also i give the natives of any restored colony the same guarantees against oxploita- | tion, conscription and militarism as in • mandates, and guaranteeing the open i door for trade. Germany is entitled to claim similar guarantees from others. BRITAIN SHORT OF IRON AND STEEL LONDON, Feb. 12. i A official of the British Iron land Steel Federation declares that ■Britain must get an extra two million tons of scrap iron for the year's production. The shortage of steel, how/ever, was not confined to Britain. The 'United States, which exported large quantities of steel to Europo in the past, now needs its entire output to meet home requirements. Paris reports that reserve steel stocks have long been exhausted, while Rome reports state that the Government is j rationing steel and private consumers I have to give place to requirements for ‘ national defence. At Berlin constructional activity is held up as military requirements are taking all the available steel. At Brussels the steel situa-i tion is serious, owing to shortage coke, and production is declining by 20 to 25 per cent. The Japanese Government has suspended the import duty on pig iron and steel, though this means a huge decrease in customs revenue. SOUTH AFRICA PREPARES EXTENSIVE MANUFACTURE OF MUNITIONS CAPETOWN, February 11. The Government is taking a census 1 of war materials in South Africa and has formed a War Supplies Board to I decide what could be manufactured in the Union in the event of it being cut • off from the rest of the Empire, and

how to mobilise without paralysing the civil population. Imperial Chemical Industries has secured, a contract to erect a munitions factory at Pretoria. Britain is supplying 100 Hawker Hartebeest aeroplanes at a nominal cost of £2OO each and another 100 will be built at Pretoria, thereby enabling one thousand pilots to be trained. One flight of interceptor fighters has been ordered.

The Government is acting ou the principal that the best insurance for peace is preparedness for war.