In the campaign for economy upon which the Spectator and
the Association of Chambers of Commerce have entered, Mr. McKenna has come forward as a valuable ally. As an ex-Chancellor of the Exchequer who is now the chairman of one of the greatest London banks, Mr. McKenna can insist with peculiar authority both in the need for economy and on the possibility of checking the extravagance of the departments. In his speech to the National Union of Manufacturers on Monday, he declared that we were suffering from an over-indulgence in virtue "—the virtue of willingness to pay taxes. We were, in fact, " gravely overtaxed." Mr. McKenna pointed out that the maximum tax- able capacity was the national surplus of goods produced and services rendered. In 1913-14 that surplus was estimated at £600,000,000, including the Government expenditure of £200,000,000 and savings of £400,000,000. An equivalent surplus to-day would be £1,400,000,000, but, as the out- put was less by a fifth, the actual surplus was less. Mr. McKenna held that a Budget of 11,000,000,000 was to be regarded as a maximum, otherwise none of the surplus would be left to provide new capital for industry. But Mr. Chamberlain's Budget, apart from realized assets, raises £1,116,000,000 in revenue this year, or more than we can afford.
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