The Daily News. FRIDAY, NOVEMBER 12, 1915. OUR FINANCIAL STRENGTH.

Taranaki Daily News, 12 November 1915, Page 4

The Daily News. FRIDAY, NOVEMBER 12, 1915. OUR FINANCIAL STRENGTH.

Sir George Pai.sh, one of the editors of the Statist, has a very confident article in a recent issue of that paper on the financial strength of Great Britain, Tie is a great authority on bis subject and declares that "it is evident that the British people, with their seas open to their commerce, and with their income and their wealth undiminished by the war, are able to meet their great war expenditures, however long they may last. How large an indebtedness an old nation can incur without serious strain and without much discomfort is shown liy the experience of Great Britain in the Napoleonic wars of a century ago," he says. ''ln 1810, after the wars were over, Great, Britain's population was about 20,000,000, her accumulated wealth was no more than £2,500,000,000, and her income did not exceed £300,000,000, yet she incurred a debt of £895,000,000, with an annual interest charge of £3.1,000,000. It is true that at that time the taxation of the poor was heavy, but, on the other hand, tbe taxation of the rich was light, and no one ever doubted the country's power to meet a debt charge which called for 11 per cent, of the nation's annual income, or to carry a debt that was equal to over one-third of the nation's total wealth and to three times the nation's annual income. Such a debt charge would, however, severely strain the powers of a young country, as the latter would probably owe abroad the greater part of tbe sum borrowed." We are told that the British obligation of nearly £900.000.000 in 1 SIO was debt incurred for purely liliproductive purposes. and the interest upon if bad to come out of an income not appreciably increased by the creation of tbe debt. And the British people experienced no difficulty in meeting this great burden of interest, which was equal to 11 per cent, of their total income. Moreover, in 1810 the total annual expenditure of the Government reached £05,000,000—a sum equal to over 25 per cent, of the nation's entire income. Great as may be the debt lMoix«d in the present

gigantic.' war, and great as may be tbe Governmental expenditure thereafter, the burden of the interest and expenditure will be nothing like as great as was tbe burden of interest and expenditure in 1810 and in succeeding years in relation to the power of the country to bear it. 'At tbe present time the population of Great Britain is nearly 47,000,000, while her accumulated wealth is in the neighborhood 0f£17,000,000,000. Prior to the war now being waged the amount of British debt had been reduced to 1700,000,000, and the interest charge was 110 more than £ 17,341,000—a sum equal to less than three-quarters of 1 per cent, of tbe nation's income. Moreover, (lie total Governmental expenditures of the country (excluding the reproductive services—the Post Office, telephones, etc., which yield a substantial profit) were only £105,000,000, equal to less than 7 per cent, of the ntUdfen'9 income, against a proportion of 23 per cent, in ISIG. This expenditure in 1913-T4 included the large sums which the Government wa.s paying for education, sickness and old age—expenditures which, until a few years ago, were paid entirely by individuals and not by the Government. The burden on the wealthy relatively to their wealth has not increased, while the. burden on the great mass of the people has been greatly reduced in proportion to their incomes. The nation's total income in 1843-44 was about £400,000,000, and in 1913-14 it was £2,400,000,000, a more than fivefold growth. The great increase in the margifi of income in excess of taxation both actually and in proportion to population will be evident from the following statement:

Income Taxation per head, per head. £ £ ISU-ns 13 .1.1 18.W-60 ......... 24,1 2.2 1013-14 ......... 52.1 3.5 Tbe burden of taxation in England has thus been growing smaller from decade to decade over the last century until it has become quite unimportant in comparison with the national income available for paying it. A century ago the great mass of the British people were burdened with indirect taxation, while tbe burden of direct and indirect taxation falling on rich people was insignificant. Now there is practically no burden of taxation on the great mass of the people, and only a very moderate burden upon the rich. in no country in the world, with the exception of the United States, has the burden of taxation been as light as it has been in Great Britain in proportion to the income. What other country can show absence of taxnlion upon practically all necessaries of life and upon most comfort--, and that it draws its revenue almost entirely from the taxation of luxuries? Including alcohol and tobacco the wage-earning classes pay in taxation about 4 per cent, of their incomes, Furthermore, it should be borne in mind that the wageearning clashes receive back in free education, in health insurance, and in oldage pensions about two-thirds of the sum they contribute in taxes. Prior to the present war the national income of Great Britain, which had doubled itself in about 30 years to some £2,400,000,000 a year, was growing rapidly, and seemed lihelv to double itself again in another generation, and the wealth of the nation was increasing at the rate of some £400,000,000 per annum, and was also in a fair way to increase another 100 per cent, in three decades, while the moral, mental and physical condition of tbe British people was rising to a higher level in consequence of the much greater amount of attention paid to matters of health and of edneation than formerly. Thus, when war broke, out the income and wealth of the British people were liiuih greater than they had ever before been either actually or in proportion to population. Since the war commenced the new savings of the British people have been applied to war, and consequently the wealth of the country has not increased; nevertheless, it has not diminished. It is tiue that the debt of Great Britain has been increased from £700,000,0011 to £1,300,000,000, and when the last war loan is paid up it will be raised to about £1,000,000,000. But as all the new .loans have been subscribed by the British people themselve?, the creation of this debt Ims not diminished the wealth of the British nation. Had | the money been raised abroad the matter would have presented an entirely different aspect. Thus the great strength of the British financial situation will be evident. The debt so far incurred, including the new loan, is equal to less than one year's income, whereas the debt created in 1810 was equal to three years' income, and tbe taxes so far imposed on the British people aj'e equal to less than 10 per cent, of their great income, whereas in ISM the taxes were equal to nearly 2.1 per cent, of Uie small income they then enjoyed. Moreover, at present taxation confined entirely to luxuries and comforts, and the whole of the supplies of necessary food, clothing and raw materials are free of taxation.