1940-03-07 — Page 9

Keynes's Amended Plan Compulsory Savings

REPAYMENT BY CAPITAL LEVY

MR. J. M. KEYNES HAS OUTLINED NEW ⋅ PRO- POSALS IN CONNECTION WITH THE “DEFER- MENT OF EARNINGS” SCHEME WHICH HE AD- VANCED LAST NOVEMBER.

Mr. Keynes said that he had made his revision in the light of many suggestions that had reached him. He had learned more from those who asked that such a scheme should be made the opportunity for enforc- ing a greater equality of sacrifice than from those who objected in principle to any departure from the voluntary system, by which a man was his own judge of the sacrifices he should make.

CAPITAL LEVY

sable. He also referred to inflation, as MR. WELLES'S PLANS

an alternative and said that if they were to avoid it a drastic remedy was- necessary.

"THE RIGHT SOCIALIST SOLUTION"

י

Mr. Keynes said he thought he could justly claim that he had given them the right Socialist solution. It was a planned social scheme aimed at in- creased equality and it snatched new social advantages out of the exigency of war, and it was the solution which best preserved the rights and interests in the individual.

By preserving the right to personal choice they could harmonise the de- mands of the war and the overriding interests of the community as a whole. Mr. Keynes said that he had to enter

a caveat on the more immediate posi- tion. His outline was for the next financial year. Heaven knew what the position would be after that. He was

not putting on the mantle of the pro- phet or attempting to deal with that more distant task.

People, he said, were asking why they should not go on as they were doing. They were living as they were

GUESSES AND

DENIALS

(SPECIAL TO “CHINA MAIL") ·

London, To-day. The Copenhagen corres- pondent of the “Daily Ex- press" reports that Mr. Sum- ner Welles, U.S. Under- Secretary of State, will sum- mon a conference in London towards the end of this week at which will attend the U.S. Ministers in Norway, Den- mark, Sweden and Finland.

After their return to their posts the Ministers will hold lengthy talks with the Foreign Ministers of the countries to which they are accredited.

for two reasons. One was because the authorities were running down our ultimate resources of stocks and for- eign reserves at a far greater pace than we could prudently continue, and However, the U.S. Ambassador in the other was that there was almost a London, Mr. Joseph Kennedy, declar- breakdown in the programme of raised yesterday he knew nothing of Mr. ing output and export.

Welles' alleged intentions to call such

conference. Havas.

It should also be withdrawable to meet special emergencies, and a pledge should be given that the amount of the Replying to questions, he said he la deferred pay should be released after had based his scheme on single in- the war from the proceeds of a capi- comes only. Deferred pay should not tal levy or, perhaps preferably, a capi-be taken into account in any means tal tax.

Mr. Keynes said that he was assum- 1~trade union, friendly society, or ap- ing that the Government's expenditure proved society under the Health In- would be increased by somewhere be-surance Act, or, failing such a choice, tween £1,500,000,000 and £2,000,000,- with the Post Office Savings Bank, so 000 a year, and he had taken the that the very large sums accruing middle figure of £1,750,000,000. He could, if so desired, remain under reckoned that some £500,000,000 working-class control and form a pool would be got from capital sources, of wealth on a scale which had never about £400,000,000 from voluntary been available previously. savings (including investment of re- serves by banks, insurance companies, and building societies), and some £500,000,000 from tax revenue with out doing anything more novel or drastic than had been done already.

THE OVER- £6-A-WEEK INCOME

That left a hard core of between £450,000,000 and £500,000,000 for which there was no obvious source, except further savings. To his budget he had to add £100,000,000 for fami- ly allowances and £50,000,000 for various concessions, so that £600,000,- 000 would have to be found. That was an enormous figure, but he did not think it would involvė a very drastic reduction in the consumption of the community as a whole, because he was assuming we would increase our national output and therefore the na- tional income by something like £825,- 000,000 a year.

7

If the deferment of pay was accept- ed, said Mr. Keynes, he thought there would be no excessive risk to the Treasury in adopting the proposals made on many hands of the "iron |ralion”—a limited class of necessaries

the price of

test.

PARLIAMENT TO

MEET LESS OFTEN

London, To-day.

five

which the Government would do all in its power to prevent The Prime Minister told the Com- from rising. This was very much on mons yesterday that the House would the lines of Sir John Simon's present only meet three times a week after days proposals, which were

excellent in Easter instead of on the themselves but looked extremely odd instituted temporarily at the begin- standing without any indication of ning of this month.-Reuter. how the resulting

financial problem was going to be met.

--

(Continued from Next Col.)

Denial Of Report

Berne, To-day.

Mr. Sumner Welles, U.S. Under- Secretary of State, yesterday definite- ly denied he would, call a con- ference in London of the U.S. Minis- ters to Scandinavia.

Mr. Wolles left for Paris last night and plans to go to London at the beginning of next week and then return to Rome and 800 Signor Mussolini, after spending a day in Paris en route between London and Rome.

"SILENT AS A CARP" Mr. Welles told reporters he would remain "as silent as a carp" about his conversations.

He would communicate no official-

It is considered significant that Mr. Welles did not deny a report that he had invited Dr. Hjalmar Schacht,

former head of the German Reichs- bank and Hitler's financial wizard, to visit America-Reuter.

It was important to prevent the Mr. Keynes maintained that the spending of the increased war income whole policy hung together. Without because that would make it possible the source of deferred pay they could pean Observer," will probably come information he received to any other to maintain the average

aggregate not afford family allowances, and with to London next week. He is expect-European Government. consumption of the people earning less his scheme he thought they could ed to stay for two or three days. than £5 weekly at the pre-war stan- make a solid foundation for their

Before that, he will visit the French dard. "Taking everything together," financial policy based on social jus-Government and was expected to he said, "my proposals would mean | tice, adequate, not perhaps to the leave for France last night.-Reuter. that the aggregate consumption of final requirements of the war, but ade- those with more than £5 a week quate to the requirements so far as would be reduced by one-third and those below that figure would be un- changed." Statistics showed that the group between £5 and £10 paid a smaller percentage of its income in taxation than the group below £5, and his scheme would fall more heavi- ly on the former group than on the lower one.

FAMILY ALLOWANCE "My proposal," said Mr. Keynes, "is to defer the pay of a certain percent- age of earnings in excess of a basic minimum income.' He said his formula would mean that a married man with no young family, if he had 55s. a week would have 3s. 6d. de- ferred. At 75s. it would be raised to 10s. 6d.; at 100s. to 15s.. 101⁄2d.; £300 a year, £40; £600, £76; and £1,000, £135; and so on upwards.

An objection to his original proposal was that it was not equitable for families with young children. As an offset to the deferment of pay in such cases he proposed a universal family allowance of 5s. per every child up to 15, to be paid out of the national revenue. That would mean that all families with young children would have more cash than before, and in addition they would have their de- ferred pay accumulating as subsequent security,

Mr. Keynes said that it must be made clear that the withheld pay was truly deferred pay, the property of the man, and not a concealed tax under: another name. He should be allowed to deposit it with any approved body I

they could see them at the moment.

Reports Inaccurate

Zurich, To-day.

the

Some people might say that an in- crease in voluntary savings was an A statement has been issued on be- alternative, but if our expenditure half of Mr. Sumner Welles refuting passed £1,500,000,000-as it was ab- widely circulated reports about solutely bound to do if our war efforts talks he had in Rome and Berlin. reached anything like their maximum All these reports are inaccurate and then he honestly thought that the unfounded, says the statement. voluntary system did not seem fea- Reuter.

Rose Room

PENINSULA

HOTEL

Reaching London During Next Week

London, To-day. According to the American Embas- sy in London, Mr. Sumner Welles, President Roosevelt's personal "Euro- (Continued in Preceding Col.)

From 9 p.m.

To 1 a.m.

TO-NIGHT

Dinner Dance

WITH ART CARNEIRO & HIS MUSIC

TEA DANCE 5 to 7 p.m. SUNDAY NEXT

THE HONGKONG & SHANGHAL HOTELS ITD.

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