1939-09-29 — Page 25

Friday,

HONGKONG Telegraph

September 29, 1939.

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FINANCING THE WAR

Budget Debate In House Of Commons]

LONDON, Sept. 28 (Reater). -Speaking on the budget in the House of Commons to-day Sir John Simon, Chancellor of the Exchequer said the time was rapidly approaching when bor- rowing plans must be announced.

"Our object is to borrow from the genuine savings of the people at the lowest rate wo can." he declared.

He added that the irvel taxation proposed is going to inflet a most frightful blow on n great many homes which seem to be comfortable and well appointed..

The richer classes will have to revise their scale of living quite materially.

Sir John Simon appealed to them not to begin economising by diamf- ing staff,

The general debate on the com- miltes plage of the budget was then concluded

The budget debate was resumed ku the House of Commons to-day, when satisfaction was expressed in all quarters at the reduction of the bank rate,

A further reduction to two per cem,

is strongly urged,

Hope was expressed that the glit- edge market on the Stock Exchange will function as soon as possible.

As the city generally expected, the British monetary authorities to-day reduced the bank rate to three per cent, thus 4nking the first step towards facilitating defence borrow- ing.

With yesterday's budget, this re- duction seems to fall inte t

-3

ordinated scheme for financing this

war more efficiently than the last.

In effect the latter was nunced

WATCH ON THE DNIESTER-Looking across the Dniester River into Soviet Russia from Bessarabia. This photograph was takon at Tighina whore, although a bridge has just been built across the rivar over twenty years after the area was

OF

BIRTH BLOC IN

WESTERN FRONT

COSTLY DAWN

taken from Russia by Rumania, thora is still no traffic, the rail connection buing savorad. If Soviet Russia invados Bessarabia, it will almost certainly be at this point,

SOVIET-GERMAN EUROPE FORECAST

ATTACK TION

BY GERMANS REPULSED AND

SPECIAL TO THE "TELEGRAPH"'

(SPECIAL TO THE “TELEGRAPH")

BLOC

BERLIN, SEPT. 28 (UP).—THE FORMA-

OF A HUGE. ECONOMIC | ENCOMPASSING ALL OF EASTERN EUROPE AND DOMINATED BY GERMANY RUSSIA IS THE FINAL GOAL OF THE

mainly by inflation. The Government PARIS, Sept. 28 (UP). The Ger- make itself acutely felt on the MOSCOW TALKS, WELL-INFORMED

CIRCLES BELIEVE.

påld unduly dear for war loans bo-munx made a vain and costly local Western Front. cause investors could not lend cheap-attack south-end of Saarbruecken at

ly when it was expected that the money would have a lower purchasing power by the time the loans were repayable.

Inflation Exchowed

The Germans are still obliged to

the In Poland,

dawn, in an effort to dislodge the maintain a certain number of planes Russia, by her recent re-entry into Central

French from the hills where

Moreover, without taking in

French artillery menaces Saarbruce- account the losses of German planes European politics, has indicated that she is going

ken and the Saar Valley.

Throughout the night the Germans on the Polish front, others which have to play a more prominent role in the future in moved through the small forests, to been almost incessantly in the air This time the Government's objec-attack at a point just in front of the for the past three weeks will need European diplomacy. live seems to be eschewing infintion, outer Siegfried line pill-boxes be-a long overhaul. coupled with the cheapest possible tween Dschmishelm and Ommer- money for defence loans,

sheint,

The traditional Justification for a high bank rate as tending to repress borrowing for civilian purposes no longer obtains, because all types of lending are now directly controlled. Similarly the bank rate is no longer needed to protect sterling, now that the exchange control insulates the London monoy market from foreign disturbances.

The City is discussing the posal- bility of a subsequent further cut, restoring the bank rate to two per ernl.

City Reaction

City cricles are unanimous that the best feature of the budget is its Implied insistence to avold inflation. This determinution is typified in the choice of sound financial methods

of raising huge funds which the

Government deems necessary.

The new taxation appears to be fairly spread over all classes. Con- sequently, it is not expected that any section of the Stock Exchange will be heavily affected, as witness to- day's initial precautionary towering of prices, with subsequent recovery _on_more_mature consideration of the

situation,

to

Apart from air activity the only THREAT TO NEIGHBOURS

outstanding feature of to-day's opera-

At dawn, the Germans started tanks tions was a small German attack in Well-informed cireles in Berlin confirm reports that roaring down the hill across Saar- the region west of Saarbruceken. bruceken the Assweller Road. The impression gleaned was that the Soviets have demanded from Estonia and received However, despite the cold, the French the German. command was trying to permission to erect naval bases on the coast of Estonia. were maintained at full strength in sound all sectors in turn in an attempt the trenetis all

Right. French to guess the French intentions. machine-gunners mowed down the fre from the

Luxembourg Startlod Germons and direct French artillery battered the tanks. Within an hour, the Germans with

drew.

The night communique sald, "A local attack by our troops in the region immediately east of Moselle was carried out favourably. We took prisoners."

R.A.F. Reconnaissanco LONDON, Sept. 20 (Reuer).— During yesterday and last night R.A.F. aircraft carried out further reconnaissances into Germany and on the Western Front, and in spite of opposition, brought back valuable information.

busey.

All aircraft returned safely to their

Power Of Air Arm

They also believed that Russian aspirations extend to Bessarabia and point out that Russia had never SPECIAL TO THE "TELEGRAPH" abandoned her claims to this strip of territory, which the LUXEMBOURG, Sept. 26, (UP)-Versailles Treaty accorded Following the fight of several planes

of unknown nationality over the to Rumania. capital at 4 a.m., the Grund Duchy

was frightened shortly The new bloc is believed to be population afterwards by very heavy gunfire in envisaged by Moscow and Berlin

south-easterly direction.

exclusive as defining their economic sphere of influence and would include both the Baltics and the Balkans.

It is learned that the French made recently taken positions. acounter-attack near Perl from the

Swedish Ship Torpedoed

Crew Rescued By A report from Schengen Bays that

Norwegian Warships for an hour and a half, the German an effort will be made to call all the the French heavy artillery heiled, Well-informed sources belteve'thai |

OSLO, Sept. 28 (Reuter).- positions in the forests around Borg, The bombardment was so heavy that together in the near future to discuss was sunk outside of territorial roughly six miles north-east of Perl. Foreign Ministers of these countries The Swedian cargo ship Nyland the sky appeared to be an ocean of the future of Eastern Europe. flames.

It is understood that the Soviet-waters off Stavanger this morn- PARIS, Sept. 28 (Reuter).—Al- The shelling was started again at German negotiators at Moscow have ing. though the close-co-operation of the 1 p.m., and had not yet stopped at already tentatively British and French air forces is 4 p.m. mentioned for the first time in to day's French communique, the power of the allied air arm is beginning to

To-day's reduction of the bank rate to three per cent has not surprised the City. Although no immediate effect on the frozen gilt-edge market rd. to be fairly spread over all types La expected, the psychological in- of capitul. fluence on the restoration of financial confidence is of prime importance.

Well-informed etreles believe that it is not intended to allow the existing gilt-edged minima to be further reduced, owing to the necessity, sooner or later of new defence loans.

French Wor Credit SPECIAL TO THE "TELEGRAPH" PARIS, Sept. 28 (UP),The Bank of France's statement discloses that the Government has drawn a billion francs as part of the twenty-five billion war credit the Bank establish. ed on October 29 last year as n national defence measure,

Italian Restrictions SPECIAL TO THE "TELEGRAPH" ROME, Sept. 28 (UP).-By an official decree Issued to-day. Stock Exchanges throughout Italy will

operate only between the hours of 9.30 and 11 am, until further notice. Bank Rate Reduction SPECIAL TO THE "TELEGRAPH"

LONDON, Sept. 28 (UP). The bank rate was reduced by one per cent to three per cent, to-duy.

The shock of the new taxation, announced by Sir John Simon in is supplementary war budget, practical- ly halted trading on the Stock Ex- change.

Prices were drastically lower in bil sections and reluctance to set the prices of some industrials almost entirely eliminated trading in that group.

Welcomed By Pross LONDON, Sept. 28 (Reuter)The war-time budget was welcomed on the whole in to-day's morning papers The "Daily Telegraph" and the "Daily Mall believe that the full weight of the new taxation might have been imposed more gradually, the Both these Journals, with "Times" says that the Chancellor's Li avoiding wasto statement on Government, expenditure must be Tulfilled

the "Daily Mail" in wanting a more

maya: "Nobody here or anywhere can

A further steadying Influence was the reduction of the bank rate to three per cent.

Consequently leading issues mostly

on the day.

NEUTRALITY ACT

NEW BILL APPROVED

an n It is presumed that she was at agreed permanent frontier, which differs tacked by a foreign submarine. only slightly from the demarcation The crew of 29 were, rescued by line.

Norwegian warships.----

Berlin-Moscow-Tokyo Pact?

Explosion Hoard

SPECIAL TO THE "TELEGRAPH"

SPECIAL TO THE "TELCORAPH" OSLO,

28 Sept.

(UP) The BUCILAREST, Sept. 28 (UP).—An eventual triple alliance between Swedish steamer Nyland was ter- Berlin, Moscow and Tokyo looms, In pedoed off Kvitsocy to-day.

and the view of observers in Bucharest, The crew of 20 were rescued as a possible result of the current taken ashore at Tanager. conferences in Moscow.

The inhabitants of Arendal this

on the day, or slightly higher Congress Committee reported that the Japanese afternoon sighted a submarine mok-

Wall Street was easy.

Debate On Budget

LONDON, Sept. 28 (British Wire- less) The House of Commons de- bate un the budget resolution was and meant.

Takes First Step

Ambassador Moscow had an intering towards the cast. They heard an view with the Soviet Foreign Minis-explosion at sea, but is was not clear ter. This is considered in Bucharest whether It was the submarine or n diplomatic quarters as an indication Norweglan coastguard stallon which that the scope of the present fred. WASHINGTON. Sept. 28 German-Soviet negotiations may be Was Within Rights

SPECIAL TO THE "TELEGRAPH"

resumed in the committee of ways (UP)-The Foreign Relations widened and may possibly have far LONDON, Sept. 28 (Reuter).—An

Mr. Pethick Lawrence, Labour.

said the Chancellor was right in de elding to start at once with heavy new taxation, He had limposed un- precedented burdens.

Committee of the Senate has reaching effects in the Far East If

Admiralty statement says that the the European war is continued.

Like the approved, by 16 votes to 7, the!

Russo-German non-commander of the German destroyers new Neutrality Bill, which will aggression pact, the Russo-Japanese which took off seven British seamen Swedish steamer was within now come before the Senate. "armistice" is considered by many from

The proposed Bill provides for the competent observers as the first step his rights under international law. "Unpalatable as it may be. I am elimination of the existing embargo towards closer co-operation and pos forced to the conclusion

that the on the sale to belligerents of armssible alliances. chancellor's prospective faxation for and ammunitions and other imple 1940-41 of which he spoke yesterday,ments of war. cannot be his last word. The new

cognised as necessary?"

A "cash and carry" clause is sub-

Neutral Zone

Tokyo Understanding? These observers point out

that

The men were the crew of a irawler which had previously been (sunk in the North Sea, and they were rescued by the Swedish vessel! Crown Princess Margareta.

the German destroyers stopped

(Reuter)~~~

direct taxes are heavy but are re-stituted, providing that war materials Moscow's re-entrance on a large scale Swedish vessel and demanded vert Turning to Indirect taxes, Mr. of all types may be sold to ball into European diplomacy is likely to the British seamen be handed over. Fethick Lawrence said they must be, ferred in the United States and that standing or Parrangement with prisoners of war, the they can be

Eurents, provided that title is trans have been preceded

an" under- The seamen should be treated as and would be borne with fortitude. the materials are not To-day's lowering of the Bank rate American ships.

carried in Japan, whereby Tokyo, will have a statement concludes, but they can be from 4 to 3 per cent, was warmly welcomed by Labour spokesman, who days' commercial credits.

The new Bill also provides for 90 free hand in Für Eastern politics and legally interned as enemy subjects will be unhampered by the Soviet. of military age, just as German sub- however urged early restoration of

That Russia, by obtaining control jects in this country are interned, the pre-war rate of two per cent.

over the Baltic countries, seeks to

Soviet Ship Attacked Low Interest Rates Urged

recover her former outlets to the He showed concern that In the

Baltic Sea, is believed here to be

MOSCOW, Sept. 28 of War-

accompanied by the desire to gain approaching programme

Kreater influence in Turkey and the The Soviet steamer Polner was attack- led by an unknown submarine as she borrowing, the Chancellor should see but the Treasury took appropriate

Dardanelles.

Germany's share in any such ar was chicring Narva Bay early this wireless steps to keep down interest rates, and taken up by the

rangement between the three powers moming, according to his point was

would most likely be absolute message from the captain, and re- Liberal speaker Mr. Graham White maintaining low interest rates, who also urged the importance of

come predominance throughout ported by "Tase."

Sir J. Wordinw-Milne, Con- servative, accepted the budget with deep resignation, saying the whole anxious to help the country was Government in every way.

Mobilising Resources

National Sir George Schuster, Liberal, wellknown financial expert,

Off Americas

Panama City Conference Deciding Limits

NEW YORK, Sept. 28 (Reu- ter)-Details of the proposals in connection with the extension of American territorial waters, put before the Pan-American

the Balkan States, ·

European's 4th Offence

#

The message states that the Polner was forced on the rocks near the Vigrund Bank.

Rescue parties have been sent, but the crew is in no danger,

Crow Internod

LONDON, Sept. 28 (Reuter)--The

D. M. Bateman, of Messrs. Jardine, Brilles tying-boat which was forced

$20 by Mr. Forrest at Central Magis patrol between the Faroe Islands and

The Daily Express" agrees with and a forwer finance member of the Conference at Panama City, are Matheson and Company was fined down in north-east Iceland while on

Government of India, spoke of the given by a correspondent. gradual imposition of taxes, but responsibility of the government to The zone, he says, excludes a band tracy this morning for parking be-feeinnd, has returned to England.

When the machino landed in Ice- have 3 well-prepared policy for of six miles around Canada and the yond the time limit at the Peddar now doubt our intention to take the mobilising the resources of the notion possessions of European countries.

Street car park on September 18. It land, the crew were interned, war seriously."

Within this band the belligerents was defendant's fourth conviction for In such way as to keep them fully employed, by absorbing any left idle would be free to fight,

a like offence. Belligerent submarines could pra fine of $5 was imposed on G. R. falling to keep to his loft, side while as the result of the drasile curtallment of private activities which budget through the zone, but would be Horridge, Imperial Chemical Indus-driving in Stubbs Road on Septem- ber 14, was fixed for October 12. interned directly they entered terti- tries, for a similar offence. proposals would effect.

Several speakers dwelt on the forial waters and ports of an Ameri- Hearing of the stimmons against Mr. F. G. Nigel pleaded not guilty

LB. Holmes, of 199 The Penk, for for defendant. Importance of economy.

Stock Exchange Reaction SPECIAL TO THE TELEGRAPH" LONDON, Sept. 29 (Reuter).-The Stock Exchange markets quickly be- came steadier as the extra burdens imposed by the buget were consider

can country.

1

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