1915-06-10 — Page 2

ISTIELATIONS

S. Moutrie & Co., Ltd. Co.,Ltd.

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THE HONGKONG DAILY PRESS, THURSDAY, JUNE 10TH, 1915.

THE WAR BUDGET STATEMENT.

OVER TWO MILLIONS A DAY.

RELIANCE ON THE NATION'S SAVINGS.

Mr. Lloyd George, in his Budget speecli in the House of Cominans on May 4th, and

Jer

REVENUE FONECAST.

Now E come to the forecast for next It is quite impossible for any Minister to present a reliable estimate of the probable expenditure. All he can do is to present alternative estimates, one based on the assumption that the war will last six months, and the other on the aseution that the war continues until the of the financial year.

Italco first of all the revenue from Exciso→

An increase of

Spirits. Owing to the bouvy forestal ments in February and March there will In many respects it is a very inconveni-be a considerable falling off in the revenue cut moment for reviewing the inauges of from spirits. 1. put the total revenue the year and the best methods of meeting from spirits at £23,100,000. them. So much depends on the develop of £16,120,000 upon last year.

Beer wo put at £32,900,000, an increase ments of the next two or three months' Wines.£2,350,000. from the military point of view that the tank of, the Chancellor who attempts now to reckon the sacrifices which it would be his duty to invite the country to make in order to meet the expenses of the war is almost an impossible one.

Experts will give you a very varied estimate as to the probable duration of the war, but, with all respect to their experience and power of prevision, the best of them cannot possibly tell at the present moment. The operations of the

TUNING AND REGULAR ATTENTION coming summer will alone enable us to

BEFORE

INCLUSIVE,

[31.4

form a dependable notion-not as to the altimate issue of the war, because that is not in doubt-loud cheers)-but as to its duration, and that is the question which concerna a Finance Minister when he is framing his estimates of the probable cxpchditure of the year, —

£1,335,000.

an

SIX MONTHS' MORE WAR

The Army The Navy The railways, compensation for bombardment, air raids, and miscellaneous civil ex- penditure Compensation, provision oỀ

canteena, etc., under the Defence of the Realm Acts........ Advances to Allies and

Dominions Votes of Credit

Total

Ecra

Now let us take another difficulty, and I think, a greater one, one which is full Piob,000,000 of complications. Britain in times of 190,000,000 || peace his the greatest international trade in the world, and Germany comes second. In both countries the imports exceed the exports, and both countries pay for their 11,000,000| imports in exactly the same way but not

to the same extent.

DIFFERENT PROBLEMS OF WAR AND 7,000,000

FINANCE MINISTERS. Take the year 1913. Our imports o 100,000,000 039,000,000 carded our exports, as far as I can recol- leet, by 130 millions. How is that paid} £700,453,000 As everyone knows, you do not pay it in

gold. You pay it Arst of all-by-freights... and other services, because most of the shipping is done in our own ships. very considerable part of the payment is made in freightage to our shipowners and other services such as insurance, bankers and commission, and things of that kind. That will probably account for 120 to 150 millions.

Deduct suspension of new Sinking

Fund £3,780,000, and the balance will be £780,678,000, That is on the assumption that the war comes to an end by Septem

ber.

"

TWELVE MONTHS' MORE WAR,

Tea. 50,000,000,

increase of £372,000.

Take the other assumption, of the war in anticipation of a probable increase in The National Debt, inside lixed debt There were considerable forestalments continuing throughout the finrcial your the tea duty. The amounted to charge, is 243 millions. The outside fixed £1,000,000, and but for them the increase debt charge, interest on money borrowed, would have been much greater. Cocoa, would be £30,726,000. The Road Improve and agar is down by £315,000. In regard taxation the same. The total for Conscli coffee, and chicory are down by £21,000, ment Fund would be the same, and local to tobacco we anticipate a loss of dated Fund purposes would be £1,168,000 of revenue this year as compar- £67,760,000.

with last year. The total from Custorns would be the sun, 300,071,000. Now

Ordinary supply services and Excise this year will be, according to come to Votes of Credit. bur estimates, £35,200,000, an inercase of last year. £18,097,000 upon the actual receipts of The Army

The Exchequer receipts last year from death duties were £23,392,100. This year wo anticipate that the Exchequer will rective Ev8,000,000, a decrease of $382,000.

Stamps-Last year, $7,577,000; this year, £4,500,000 only, a decream of £1,077,000.

moment to forecast the probable expendi. £60,000. ture upon the war, Proposals which

-

Larid Tax---L689,000, an increase of This is not, therefore, a suitablo House Duty£1,000,000, an increase of Property and Income Tax, including LEAVING FOR HOME might be appropriate to shors cam-super-tax.103,000,000, an increase of

paign would be inadequate for a prolong. £33,601,000. ed war. and vice versa, and 1 frankly, Land Value Duties.-£350,000. (Ironi-1 admit I should not have chosen this cal Opposition laughter.)

Very useful. opportunity for reviewing the finance of 1 think you can build three submarines the year and making proposals to Parlin out of that Land value dutica-ure-down ment if it had not been for the obligation by £62,000. The total revenue from the Lbrowu upon me by the Provisional Inland Revenue Department is Collection of Taxes Act. But even now a £140,500,000, an increase of £39,170,000 review of the finances of the year may The total tax revenue from Customs and serve some useful purpose, because it will Excise and Inland Revenue will be make the people of the country more fully £235,700,000, an increase of £46,305,000 understand the dimensions of the task dver last year. which we have undertaken,

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ALLSOPP'S

BRITISH PILSENER

BEER.

I should like to call attention to the cost of the war up to the end of the finan cial year. For the first eight months the war cost in round figures £360,000,000 This includes advances to our Allies to the amount of $52,378,000, ̄and a sum of money which was expended in the pur- chase of wheat, suger, and other commo- dities which will afterwards be resold, Our forces in the field have ingreased rapidly. Enormous orders for equipment are maturing for payment, and therefore, the cost is a increasing one.

The second feature in the figures of inst year is the wonderful buoyancy of the income tax and super-tax. The yield of income tax attributable to the first Budget of 1914 was £10,000,000. The forecast made in November of the yield on the inene tax as increased by the rate levied by the House at that time was £53,000,000; the actual yield was £50.270,000, yield of the super-lax in November, attri- butable to the first Budect, was £8.135.000 Although the rate was increased in November I did not anticipate that 'I Ehould recive more than 28,400,000 last As a matter of fact, the actual ymar, yield proved to be £10,120,000, so that the iatal excess of actual yield of income tax and super tax over the estimates of November was nearly £3,000,000.

The

NOK-TAX REVENUE.

Post Office, £30,400,000, 88 against 20,660,000, an increase of £750,000, due to the large number of letters posted in consequence of the war.

£300,000,000 146,000,000

A

That meant

thousands of millions of money invested Then we have interest upop several abroad. Thear two items together copie to

that there are 250 millions due to us. It 350 millions, against an adverse balance, of course, of 130 millions.

countries you do not send it in cash. you invest large sums of money in foreign is that difference which practically re- presents our investments abroad..

It

That is the position during times of The Navy

peace. Come to a period of war. The Railway,

compensatito, for bombardments, would be

Committes will realize the difficulty of doubled

2,000,000 financing gigantic operation of b And compensation, the provi

kind. It affects the two rival countries sion of canteens, etc., under

differently. Our imports have increased, the Defence of the Roadm

We are not merely paying for the pur- Act

10,000,000 chase of war munitions. Four millions to Allies and Advances

of our men have been taken from industry, -Dominions-vizzera 200,000,00 Two millions or more to engaged in them

Army, either at the front or in training Total

£1,136,414,000 to go there, and you have another cons Deduct suspension of the new

sideration-the millions who are engaged Sinking Fund

3,760,000 in doing nothing but turning out mani-

tions of war. Net Total £1,152,654.000 The cost of the war on the average throughout the year, apart from advances to our Dominions and Allies, will be some thing like £2,100,000 day. It is less than 22,000,000 now, and gradually it will be £2,000,000. I will come to the final balance-sheet on these two assumptions.

On the assumption that it is a six months'

How is it affecting Germany? war. the total expendi. ture will be £790,458,000. The revenue on Germany practically both imports and ex the existing basis of laxation will be ports have been cut off by the Navy. We £287,232,000. The gross deficiency will be have both got to maintain ourselves, and 523,226,000. The suspension of the new feed our populations, and our manufac Sinking Fund and the additional taxa turers, and that has got to be done either tion which I have already indicated out of the produce of our own country, (28,100,000) would be £6,880,000. The for out of the accumulated reserves, or by deficit to be made up by some process or importation from abroad. Germany other would be £510,346,000.

cannot import from abroad. This has got

•

We have not merely to buy musicas of war, but materials for munitions of war, abread, and also food. We have got to buy things which in the ordinary. course we would have bought at home. our imports have increased enormously.. Our exports have gone down very con siderably. It is inevitable.

everything.

Crown Lands £550,000, decrease £15,000, Receipts from Suez Canal shares and odds and ends, £2,002,000, an increase of £725,000, not from the Canal shares,

What are the figures on the assumption to depend entirely upon what she can pro- but from certain sums of money coming of the war lasting for the year? From the duce at home and upon accumulat›d_ro- in, I think, froin one of the Colonies. total of £1,126,131,000 deduct revenue on serves of material-copper, iron, and

Miscellaneous, £1,700,000, na ngainst existing basis of taxation and the suspen- £3,0 17,000. There is a considerable dropun of the new Sinking Fund and addi- there. The increase last year was largely tional taxation. The deficit to be made That is the sum of due to the great demand for silver coin-up is £862,332,000 age; that shows a drop of £4,217,000. The money this country will have to raise, in tutal non-lax revenue is thus £34,032,000, addition to what has been already im- the total revenue £270,332,000, an increase posed in the course of the current tinan of £43,638,000 upon last year.

cial year.

THE INCOME TAX, AND ENDOWMENT POLICIES.

nude to

The real

Let the Committee observe the difference between the two problems. From the point of view of a War Minister Britain is better off; from the point of view of & Finance Minister our difficulties are greater for the time being. In a protract- ed war a British War Minister has a' great and increasing advantage over his Ger- man rival, but a German Finance Minis ter has not the same difficulty in financing purchases from abrond. (" Why ??) Be A cance there art no purchases from

The financing of such a gigantiosum must be a grave operation, even for such a rich country as ours, and especially if we over have to look forward to a war carried into the next financial year. The references to our accumulated wealth does abroad. not overcome the difficulty.

REA COMMAND, GREAT ARMY, AND MONEY-FINDING,

The margin of imports ever exports in an ordinary year is 130 millions, and the argia of ports over exports this year am only looking at what happened during the last few months—will be '448 millions.

Wo

I should like to say a word about inconje tax Infere I pass from the revenue, The only alterations we propose to submit to the House are alterations in the income tax of slight character in respect of which we gave a pledge last year in refer certainly the richest country in Europe. We are an enormously rich country- ence to insurance companies. The present I am not sure we are not the richest coin. method of computation of liability is try in the world in proportion to our unfair to the British life asurance co population. We have four thousand mil. panies against outside companies, and it lions invested in foreiga, and Colonial is unfair to life insurance companies as TWO AND A HALF-MILLIONS IN A WEEK.

securities of the best description. In against composita companies.

That does not include Govern- This is almost entirely due to the eas We propose another alteration. There addition to that we have a vast accumu.

ment purchases abroad, and it does not in- with which these two taxes were collected. have been indications of iste that effortslated wealth of our own at home. The tax was due on January 1st. and in have brita

circumvent the

clude the purchases of our Allies abrond. But every business man realizes how We have got to finance the whole of that. the week ending the 9th of that month income tax, and specially the amper difficult it is at tinies of general stress for We have got to finance the difference be nearly two and a half millions was pard, tax, by cuts of the development arms possessing the most valuable assets £20.000 being received in a single day of the endowment policy

unmortgaged assets--to liquefy them our imports and our exports. (Cheers.) Still more unusual, the remith-fide endowment policy is a very for immedine use.

have got to finance Government purchases tances were very often accompanied by valuable contribution to the life of

which are not included in our ordinary letters testifying the readiness with which this country, but when you have got a bave got enormous wealth invested to finance the imports and purchases of Let us see that the difficulties arc. We trade imports. We have got practically people enclosed the cheques. (Cheers and scheme for an endowment policy for ve home and abroad The difficulty is that most of our Allies from abroad. ("Why?") laughter.)

The number of super-tax payers now really sa insurance (Hear, hear practically the only countries, with one For a most obvious reason. We are all

exception, where you could realize that ranches 26,600, the number added by the specially when it is accuspanied by cir-wealth-aar af war. All the markets where acting together. Each has got to put its.. financial proposals of last year being calars pointing out that when you throw securities could be realized, with the

best in. This is where we can help, and 12.000 Additional returns continue to the income tax in this is really an invest- come in so that the total number of new maut that gives you your money back with exception of the United States, are the if we can help we are bound to do it.

markets of belligerent countries. The Wo, have got between £350,000,000 and super-tax payers will probably reach 41 per cent, and when what enables you United States market is & restricted mar C400,000,000 which this country will have to do that is a heavy income tax and super-ket. It was never so good a market as to find in order to finance purchases from I will now say a word about the revenue tax.

this country except for its securities, not abroad. These problems show the import- from Customs and Excise. The Novem- I think we must put an end to it. MACOREGOR&Co. her estimate of revenus from these soure:( Her, bear")--and it is vincli better bry probably it is the richest country in which would have the effect of diminish- because it is not an enormously rich coun-ance of our taking no avoidable steps was £74,900,000.

We actually received that it should be done before it develop the world, taking its resources into ing the value of our exports abroad. 50,930,000, an increase of seven millicas further. We therefore propose that there account, but it is a country which has

the estimate. Of that seven millies should be an alteration which would disused its resources in the main for its own termine the part they should wish Britain I think the Allied Powers-ought-te-de-

age, including endowments, and the criminate between the bond-fide insur-

obvious, altempt to evade the income tax and supertax.

SOLE AGENTS:

CALDBECK,

15,000

WINE & SPIRIT MERCHANTS, due to forestalments notably in spirits, it was estimated that three millions were tea, and tobacco; £2,182,000 is due to increased consumption of spirits; E330,000 is due to increase in consumption of beer over and above the November estimate, and £1,000,000 is due to increased con- sumption of tubates, largely attributable no doubt, to the gifts which have been to the troops.

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"enormous

Your have there development.

to take and the best service she can render natural Britain can keep command of the seas resouces there are millions of square She has done so and she will maintain miles with every kind of mineral and complete control to the end.

That is an agricultural possibility, It would take invaluable service, and it is essential to Now I come to the expenditure for the America, however, a generation and more the ultimate success of our arme, especially year. The National Debt Service inside before she develops her resources to any in a prolonged war, and the longer tho the fixed debt charge is £24,000,000. That thing approaching this country. There war-the-moi-this-command-of-the-sea- includes a certain sum for sinking fund fore, America absorbs all her spars capital | counts, This increase of £2,182,000 due to the which 1 shall deduct later on because it for that purpose. Before the war a great What is the scend service which Britain increased consumption of spirits repre- is obvious you cannot continue the sink deal of her capital was absorbed in purcan render? She can, of course, maintain sents that during that period 2,000,000 ing fund with a war going on.

chasing German securitice at a low price. gallons more spirits and 17,000,000 gallons For the first time

kuve

ave They were dumped upon the markets of great Army and put the whole of our more, beer than was anticipated were con heavy debt charge in respect of borrowing the United States by those who were in tiny an exactly the same footing as Con- sumed.. The Cominittee would like to for the war. The figures which I have a hurry to realize them in order to get tiental Powers have done. What is the The third service she can. know what effect the now doties have had given will show what difference the war ready-cash They did this and realized, third service? on the production of beer. In December will make in the fixed debt charges of this often at low 5gures, but it absorbed render is the service she rendered during tha Napoleonic wars-to bear the main it decrcased 28 per cent., in January 22 country. There is an expenditure which certain amount of ready cash in America. per cent, in February 22 per cent, in is going to remain after this war, and

Let us now look at the problem on the burden of financing the Allied countries March 17 per cent. On the other hand, very beary expenditure Hear, assumption that the war will last the their necessary purchase; for carrying. the net increase in the consumption of hear and for the first time I have got whole twelve months of the financial on the war, purchases outside their own to budget for that in my anaual statement difficulties will be more readily overcome the Allics with the manufacture and If it is a six months war the country morts especially, and also helping spirits was in December 3 per cent, in January 6 per cent, in February 15 per The annual fixed debt charg 19 cent., and March 25 per cent.

£21,500,000. For a full year the outside If the war lasts for the twelve months equipment of munitions of war. fixed debt charge, which

will meas

it will involve the raising of £1,132,00

Britain can do the first. She can also THE NATIONAL DEBT.

interest on the money borrowed, will be of money in the country for the year one do the cord within limits if she is to. The next item of revenue to which I £30,726,000, so there will be: £55,250,0 way or another, and that is the great do the first and last. I think that is im- should like to call attention is the death payable in respect of interest, or, if you difficulty which any Finance Minister will pertant. We have raised enormous num- duties, which on the whole have more than deduct the whole of the sinking fund he confronted with

Of that sumbers of men in this country, and I say it, realized our expectations. Unhappily something, not far from £50,000,000 in C270,000,000 could be raised by taxes. But speaking purely from the point of view the number of casts relieved or exempted interest alone in respect of money bor- that is out of the inerms of the people of finance that the time has come when under the Death Duties (Killed in War) rowed for the present-war-and-for-debt of the country, and there is a balance there should be discrimination 30 that

of £882,000,000 to be raid. Of that Act reaches a total of 512. The exemption charges in the past, allowed amounts to £102.426. The last We have only taken a token vote for the sum I think I have said 200 millions recruiting shall not interfere with the item to which I need refer is the National Army and Navy, because we find it im- would be money ve should be advancing output of the munitions of war, and it Deba As a result of the war the National possible to distinguish between the ordin- to other countries, but that does not shall interfere as little as possible with Debt has been increased by a sum ofury peace expenditure and the expendi- lessen the dificulty in the least degree, the output of those commodities which we £155,000,000, so that it now stands at the ture on the war, and therefore wo propose The difficulty is not the indebtedness but export abroad, and which enable us to prodigious figure of £1,165,802,000. The that the whole expenditure for the Army of raising the money for the purpuss of purchase munitions for ourselves and for total reduction in pre-war liabilities up and Navy should practically be covered meeting liabilities. We are raising our Allies Within these limits there ik to and including last year by the present by the votes of Credit. This is where the money not merely for ourselves but for still great room for adding to the number Government, excluding the Telephone real difference between Estimate A (if the other countries not so fortunately placed of recruits in this country. (Cheers.)

That is the Debt, was £107,000,000. All that is swept war lasta six months longer) and Estimate as we are. ("Hear, bear." away by two months of war.

B (twelve months longer) comes in. one-problem

(Continued on Page 3)

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