FINANCE-PUBLIC An PRIVATE
AN ANNUAL WARNING
BY ARTHUR W. KIDDY.
Amur two months hence public interest will doubtless once again be centred in the Budget If—as seems unlikely at the moment—there should be a prospect of a surplus, there will be the Usual -speculation as to whether taxation is to he .relieved, and if—as seems to be more probable—there are doubts as to how the Chancellor is to establish an equilibrium, there will be the Usual excited talk about the need for economy. It is, however, I am-' afraid,, thoroughly indicative of the feeble and spasmodic attention which is given to the National Finances of the country, even by the taxpayer who complains of the burden of taxation, that, with almost unfailing regularity, the public fails to that it is now, Some two months previous to the presentation of the Budget, that-vigilance is needed if there is to be economy in Public Expenditure. - - • _ THE NEW ESTIMATES., During the next few weeks the Houie of Commons will be considering, first, the Supplementary Estimates of Expenditure for the current year, and a little later the Estimates of :Expenditure for the new year. The former arc of less moment than the latter in the sense that they are practically confirmatory of Expenditure already incurred, while even when they have been passed by the Commons, it does not follow that -before the end of the fiscal- year in March considerable savings may not have been effected. It is, however, in the new Estimates, which go to form the Expenditure side of the Budget to be presented in April, that we get evidence of the sincerity and ability of the Government in the matter of economy for the new year, and it is those Estimates which demand scrutiny not only from the House of Commons but from the public if the Budget is to be_of a satisfactory character. When Once the Estimates of Expenditure have been passed in Parliament, the last word has really been said so far as outlays for the coming year are concerned, for whatever the total may be, the money has to be raised whatever imposts may have to be made in the way 'of taxation. It is at the present moment, therefore,- that the public should be on the alert to see how far economy plans have materialized for the next Budget. _ ECONOMY IMPERATIVE.
It seems the more necessary to stress this point at the present time because some of the utterances of Mr. Winston Churchill have undoubtedly been of a disappoint- ing character. In what follows it must not be supposed that there is any prejudice in the mind of the City against Mr. Churchill. Such is far from the case. • The sympathies of the City are always with a Chancellor engaged in a difficult task. The City cannot forget, however, that, a year ago, Mr. Churchill introduced a Budget in which, for the first time since the War, there was an increase in the estimated Expenditure, although the Government had come in pledged to economy. In the course of his Budget speech, the Chancellor dwelt strongly upon the need for economy and gave the impression that even the estimates for the current year were subject to material revision. Some months, nevertheless, elapsed before anything further was heard of the Economy Com- mittee, and in the interval the Chancellor made one or two speeches of a very depressing character indicating that the- difficulty was to prevent even a further expansion in outlays. It is true that in his recent. speech at Leeds, Mr. Chfirchill said some very excellent things with regard to the cutting down of Expenditure, and implored his countrymen to support him in such economies, but unfortunately the speech rather failed in effect -because it followed upon a statement of the extent to which expenditure must first of all automatically expand before the economies were put into effect: In other words, the country was left with the impression that even when all economies had been effected, it would be fortunate if it escaped a further increase_ in_taxation. This, in the view of the _City at all events, is scarcely the way to inspire enthusiasm for economies. In view of the present appalling size of the Expenditure—quite apart' from increased charges on the Debt—when compared with pre-War outlays, the Nation has the right to insist either upon some drastic curtailment or upon being told in language which is perfectly intelligible why such cuts cannot be made.
MR. PEASE AND AMERICAN CRITICISM.
In a recent criticism which appeared in an American newspaper concerning conditions in this country, the question was raised as to why the cost of administering the Government of Great Britain, with its 44,000,000 population, should exceed the expenditure of a wide-spread land of 112,000,000 people like the United States by more than £120,000,000 per annum. I agree with Mr. Beaumont Pease, who, when referring to this criticism in his recent speech to the Shareholders of Lloyds Bank, said that practically the entire excess of Britain's expenditure over that of the United States lies in the matter of her Debt Interest, but even when that point has been admitted, I think there. is good ground for asserting that, apart from the Debt Interest, our expenditure should be materially below that of the United States in everything pertaining to civil expenditure. I am glad, too, that in dealing with. the oft-discussed criticism of conditions in this country by a certain candid American critic Mr. Beaumont Pease was far more inclined to welcome the frank statements concerning our shortcomings than he was disposed to resent those observations where the critic probably overshot the mark. "It is our duty," said Mr. Beaumont Pease, "to profit by the plain speaking of our candid friend and to take what steps are possible to remedy those criticisms which we recognize as well- founded. We cannot shut our eyes to the fact that much of what has been said about our conditions is true, and that the task before us is by no means light."
EVIDENCE OF TRADE ACTIVITY.
It must not be supposed, however, from this quotation from Mr. Beaumont Pease (which I must confess I have rather dragged from its exact setting, in support of My pleas for a reduction in National Expenditure) that the Chairman of Lloyds Bank was in pessimistic mood concerning the general outlook in this country. On the contrary, his speech has commanded the greatest attention in commercial circles, not so much as constituting a contribution to the general optimism characterizing the Bank Meetings as offering in one or two directions concrete evidence of greater stirrings in trade. Mr. Pease, for example, after referring to the fact that it was really only in certain key industries that depression has been profound during the year, gave a very practical demon- stration Of the evidence afforded by his own banes figures of demands made upon the bank for financing fresh commercial activity. As a result of an analysis taken of new loans made by Lloyds Bank to their customers for the yetii ended June last, it was shown that such new loans 'amounted to £44,000,000 in all, that they were granted toevery kind of industry, composed of thirty-two different varieties, and that out of the total only £2,800,000 represented loans to companies or individuals requiring assistance to tide them over bad times and to cover trading losses. All the other loans were for the purpose of financing extended trade.
Mr. Pease then dealt at some length with the difficult situation with which this country has been confronted after great wars, and he drew very encouraging inferences from the comparison. He referred, of course, with satis- faction to the good results which, so far, have attended Our return to gold, and in concluding that part of his Speech relating to the general financial situation, he said : My conclusion is that our feet are now on the road to recovery, and that the measure of our progress will depend upon ourselves and our united efforts."
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