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Defence Finance.
The British people are now in a mood to accept without com- plaint financial demands for defence purposes of such a magnitude as would have astounded them a few years ago.
When Sir John Simon, the Chancellor of the Exchequer, recently told the nation that the total expenditure on defence this year will be $730,000,000, of which nearly £500,000,000 will be raised by borrowing, no one was
greatly surprised or moved by these astonishing figures.
The British defence budget for a single year is now seven times that of 1932, or equal to the whole national budget of a few years
ago. It is equal to the whole national debt in august, 1914. Five- sixths of the borrowing powers asked for by the Government last February, to cover a period of three years, have already been
exhausted,
A considerable proportion of the money needed for rearmament
has been raised fairly easily. For five years up to 1937 normal trade had been steadily expanding, and revenue from income tax
correspondingly increased. The revenue had thus been able to cover
a very substantial part of the extra defence costs without large
changes in taxation.
Perhaps the :ost interesting, and encouraging, part of Sir John Simon's speech was that in which he referred, in reply to
some of his critics, to the social services. In spite of the
enormous sums now being spent on rearmament, he said, £50,000,000
more was being spent this year on social services than was spent
out of revenue seven or eight years ago. What other country, he
asked, could have achieved that?
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