The Daily News. TUESDAY, AUGUST 17, 1915. BRITAIN'S FINANCIAL PROBLEMS.

Taranaki Daily News, 17 August 1915, Page 4

The Daily News. TUESDAY, AUGUST 17, 1915. BRITAIN'S FINANCIAL PROBLEMS.

Although it is well known that Britain's expenditure has risen to enormous proportions, few people realise the serious nature of the problem that the (lovernment of the Homeland lias to face. Possibly the statement tliat the expenditure of the British Government has increased fivefold since !!li:i will not convey any clear idea of the position, b it it is a sufficiently startling announcement to eaiis-e the gravest anxiety as to how this enormous iiierens" is to be met, especially as (he chief items of revenue must of necessity have decreased in consequence of the war. Mr Lloyd (ieorgc has staled thai if the war lasts until the end of the current financial year (March SI, 19Ui) the British Finance Minister will have to find £1.13:1,000.000, of which £033,000.000 will be required by Britain and £'20(1,000,000 by onr allies and overseas dominions. Of this gigantic sum the doubling of the income tax and super tax would raise £271i,00D.0U0, leaving a deficit of £8(33,000,000 to be obtained by increased taxation or by borrowing. Under these circumstances it is not surprising that it was decided to float a national loan so as to utilise as far as possible the savings of all classes in the nation. The success ot that policy is already a matter of history, and its effect will lie to relieve to a very large extent the anxiety of the Government. It must .not be forgotten that before the JWtional loan was decided upon the British ffovcriinieni had already borrowed .C'l-30,01 >O,OOO and issued Treasury Bills up to £200,000,000. The taxation of war profits would furnish a considerable sum, for in certain large industries the gains from war conditions have been enormous, aad bv a tax of two-thirds it is stated that £100,000,000 could be obtained from shipping, mining, and subsidiary trades, and perhaps fifty millions from other war profits. An interesting question arises as to how Britain is to pay her debts, for pay she must if her edifice of finance and credit is to remain intact. Under present conditions it is inevitable that her imports must be abnormally high owing to the immense amount of war material obtained from abroad, wli'le her exports must be greatly lxdiicel, if only from the fact that a very large number of the men engaged in industrial pursuits are taking part in Hie war. Taking the figures at the end of May as i guide, the net imports were at a •early rate of £717.000,000, while the 1 \ports were only at the rate of C3ti1.000.000, leaving a balance on the wrong side of £380.000,000. As against this may be put £350,000,000 for interest in foreign investments, freight, and commissions, yet there still remains an adverse balance of £30,000,000, but to this must be added some £200,000;00) lent to the allies and the dauiiniims, aud

at least £50,000,000 for Italy, ami Hie payment for goods bought abroad for the British and allied Governments, raising the debit balance to £400,000,000. There are only two ways of casing tlie burden—increasing the exports and reducing (lie imports. .It will be at once apparent to all business intellects that to increase exports under present conditions would be extremely difficult, but there is 110 question that the ordinary imports can and should be materially reduced. The necessity for economy is paramount. Britain exports) nearly three hundred million pounds worth of food annually, about the same amount of raw material, and two hundred millions of manufactured articles. Every pound's worth of food wasted, of moat, petrol, rubber, tobacco, or any other article in wliieli economy can be exercised, means a pound's worth more in the bill against the nation. It is obvious, therefore, that not only should absolute necessities be alone obtained, but that everything that can be produced in the country should be so produced, and thereby help to keep the gold reserve and credit system intact. The need for and importance of economy is the one all important lesson for the people to take to heart, for it is one way in which every man, woman, and child can help the country in this supreme ordeal which it is undergoing. The position is that curtailment of private expenditure to the extent of £230,000,000 can alone he of Bervice. Britain is then faced with a complex problem that will need all the fervid patriotism and common sense of the the snhitjim?..' -It is inevitable that, with largely increased expenditure and diminished revenues, the measure of retrenchment must be wide and comprehensive. To some extent the situation in Britain is reflected in (he dominions. There is morally and actually tiie same need here for economy as in Britain. How can we logically or even honestly be lavish in expenditure and look to the Motherland to provide us with loans when she is faced with such colossal financial responsibilities already? It should be our duty and privilege to help instead of being a drag, and universal retrenchment in New Zealand would be a blessing instead of a hardship. We have profited largely out of war prices, and it is only just that we should at least carry our own financial burdens if we cannot lighten those of the Motherland.