New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-18

on six months more of warfare, or, at
the outside, not more than twelve
months. Mr. Lloyd George proposed
no new taxes.
The second war budget was intro
duced by Mr. McKenna, Mr.. Lloyd
Georges successor, in September, WE.
The income tax and supertax were
again increased, a tax Of 80 per cent
was imposed on war profits, and many
indirect duties were imposed.
Sources of Revenue in 1916
When the time came to add up the
bill for the twelve months ended Marcn
81. 1916, it was found that the war
had cost el.559. 1887. The amount
paid out of revenue was 1886. lO6,o24,
or % per cent of the total cost The
bulk of the increase in revenue, as
compared with the preceding year,
came from the following taxes: Prop
erty and income tax, including super
tax. increase of 958 .92l 900; customs,
increase of G20,944,000; excise, increase
of 1897 900; estate, etc, duties, IN
crease of e2,6j3,000. Here again one
sees the income tax standing for more
than one-half of the total increase IN
revenue. Customs duties and excise
together represented only So per cent
of the increase. The excess profits
duty, which at the beginning was fixed
at so per cent, brought in during this
year only $4,000. II really did not
get into full swing until the succeeding
year.
In spite OF the enormous increase IN
revenues, only one-ffth of the cost of
the second year of war could be de-
frayed from taxation.
Tax Rates Increased
With the introduction of the war
budget for the year commencing April
l, 1916, the taxes were further in
creased. The income tax was revised
so that earned incomes up 10 1000 were
TO pay rs. Sd. in the pound; those be
tween $500 and 81, 600 were TO pay 2s.
3D. in the pound. and the tax was TO
be carried up by successive stages, the
maximum being IS. in the pound tor
% per cent? for all earned incomes
Of e2,500 per annum. The supertaX
remained unchanged.
Excise taxes were increased as fol-
lows: Sugar. from IS Id to lis per
hundredweight; cocoa, from I'D 70
AID per pound; coffee and chicory.
from Sd to AID per pound; tea, TO Is
per poupd.
The excess profits tax was increased
from 80 per cent to 90 per cent, and the
government now takes all profits in
excess of 20 per cent over normal
gains made by controlled establish
ments.r
"a. 4
ments. railway tickets, matches, min
eral waters and cider, motor cars and
Operations in Second Year
The second year under war condi-
tions ended on March 81, 1917. The
cost had mounted steadily during the
year, reaching the sum of f2,l9S.l12,710,
and exceeding the budget estimate by
500 900, 900. The revenue amounted TO
:J13, 427, $50, an increase of al 100000
over the estimate
The increase in revenue over the
year ended March 81, 1916, was 9236,-
60,7JS, the principal sources showing
the following changes: Excess profits
duty, increase of fl39,92O, 900; property
and income tax, including supertax, in
crease of f76,7i3,0O0; customs, increase
of l0,955,000; excise, decrease of a.
$4,000. In other words, 80 per cent of
the increase came from the new excess
profits duty, which had not really got
under way during the previous year,
and over % per cent Of the increase
came from this income tax. Less than
) per cent of the increase came from
customs, and the excise revenue ac-
tually decreased. indicating that the
tax was bearing so heavily on the
articles affected that people reduced
their consumption of them. Although
the revenue collected was two and one
half times that collected in the last
normal peace year, it paid for only
one-fourth the cost Of the war.
Money Raised by Borrowing
To sum up: The total cost of the
war from August 4, 1914, to March 81,
1917. was e4,277 ,0O6.53S, OF which 81
0Sl ,953,i50, or about one-fourth, was
paid from taxes. The remainder was
obtained by borrowing, the net amount
so obtained each year being as follows:
Eight months ended March 81, 1915,
fiOi,99l, 800; year ended March 81,
1916, 9l,164,5l5,6O7; year ended March
81, 1917. fl,625,454,9Sl; total, 49,
195.O53.SSS.
The record of the borrowing is as
Eight months ended March
81, 19l5-Treasury bills, e64. 900; 3
per cent exchequer bonds, 1929, e47.-
100000: 3l2 per cent war loan, 1926
1928, s296,000,000; total (disregarding
credit balances), s4O7,S50. 900. The 3,a
per cent loan was the first internal war
loan and was issued in November, 1914,
at 80. 1t therefore yielded 40 per
cent.
Year ended March 81, l9l6-Treasury
bills, s4SS,Sl8000; 3is per cent war
loan, l925-l92S (see aboye), $685., 1885,
900: Az per cent war loan, i925-i9i5,
s5S6,639,0 600; American loan, f50,S20,-
600; 8 per cent excise bonds, 1920,
53,6s9,O0O; other debt, fl0,250.-
0O0 ways and means advances, &c.
10000; total, 81 ,345. 9l0.064. Mote:
repaid to the Bank of
England) The AZ per cent internal
war loan, offered in June, 1915. was
issued at par. The previous 3ls per
cent loan was accepted in exchange for
this loan.
Year ended March 81, 19l7-Five per
cent exchequer bonds, 1919. f3l .255.-
200; 5 per cent excheouer bonds. 1920,
ss3 .03S, 600; per cent exchequer bonds,
1921. f62. 495. 900; per cent exchequer
bonds. 1920, sl60,95l 900; war expendi-
ture certificates, f23 SOL 900; war saw
ings certificates. f72 $50, 900; other debt
s3l3,290, 900; 4 per cent war loan. 1879
1912. and ; per cent war loan. l929-ls47
cup to March 10, 1910. f7sO.376,00o;
advances. ei97 $50 600; total
(disregarding credit balances), fl,72o,-
$4,000. The third internal war loan,
issued in January. 1917, was tremen'