The Sinking Fund * * * * Commenting on Mr.
Chamberlain's gloomy hints that the balance of his Budget may preclude tax reduction, Sir Robert Horne has adduced two authorities which tend to support the view that a balanced Budget does not necessarily presuppose full provision for the Sinking Fund. One of these is Sir Stafford Northcote, the " founder of the New Sinking Fund," who said that in certain circumstances " it would be a great deal better to devote your energies to reducing taxation instead of devoting them to the reduction of debt." The second is Mr. Boner Law who, supporting the Budget of 1922 in a time of deep trade depression, said : " The 'right course to take, with trade as it is, is for the Govern- ment to meet the expenditure without either adding to or deducting from the debt." Accepting the fact that in normal times the Sinking Fund should be religiously respected, we are bound to recognize that at certain crises, when the State is in danger—as during the War— there may be no choice but positively to increase the debt ; and so in like manner there may be lesser crises when we should postpone repayment. The question is whether this is a moment when income-tax reduction will serve the national economy better than the maintenance of Sinking Fund payments. There are strong reasons for holding that it is.
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