The New York herald., 1921-12-01
British Financial Policy.


Englishmen rather habitually see
themselves in cloud OF gloom, espe-
cially in matters of Government
finance, but they do not feel compli-
mented when a foreigner agrees with
their pessimistic introspection. Sir
ROBERT HORNE, British Chancellor Of
the EXchequer, went before Parlia-
ment the other day and presented a
darkspicture of the budget prospects
for the current year ending with
next March. This is the usual au-
tumn procedure.
AS our own budget system is now
getting into operation it may not be
out of place to observe the methods
used by the British executive to
anchor the budget and keep Parlia-
ment from spending so much on its
own pet schemes as to put the bal
ance on the wrong side.
The most startling revelation made
by the Chancellor Of the Exchequer
was that the budget would show a
deficit of from f30,000,000 to 100000
900 next March unless that sum were
received from Germany toward the
expenses of the British army Of oc-
cupation on the Rhine. This state
ment smote Parliament with keen
disappointment, because 1t was in
sharp contrast with the estimates
of last April foreshadowing a surplus
of fS4,000,000 ordinary and f93,000,-
900 extraordinary, or total surplus
of f177,O00,00 on March 81, 1922,
without counting on any receipts
from Germany.
If the Chancellor Of the Exchequer's
autumn forecast should prove to be
accurate it would reflect a sharp
reversal in British financial policy,
which has been to get back by dras-
tic reduction in expenditures to a
pay as you go basis. 1t would suffer
also by comparison with last years
budget, which wound up with sur
plus of f234,000,000. The figures
spoke eloquently for themselves, but
the Chancellor Of the Exchequer did
not rest there, apprehensive, no doubt,
that Parliament would not grasp the
lesson. The disappearance of the
prospect for budget surplus he laid
chiefly at the door of expenditures
authorized in supplementary bills
initiated by Parliament itself and Of
the money laid out during the coal
strike last spring. He warned against
further fiscal legislation calculated to
throw the budget out of balance.
So much for the purpose Of holding
in leash the spending proclivities of
legislators. Lest others, having no
control Of the Government purse
strings, might look on the picture
as an evidence of failure to fulfil
the Exchequer's economy pledge, he
added qualifications which were in
effect notice that premature tears
were uncalled for. The possibility
of a deficit, he explained, rested on
the assumption that the worst would
happen; that Parliament would pass
more money bills calling for supple
mentary expenditures: that other
contingencies similar to the coal
strike would arise; that revenue
would fall below expectations.
The facts were that although only
seven months of the fiscal year had
passed, and the last quarter of the
twelvemonth always brought the
largest receipts, the revenue thus far
had been extremely satisfactory. The
income tax and the estate duty had
exceeded expectations, and under
almost all heads our revenue during
the present year has been surprls-
ingly good"
IL the fact that Britain depended
upon the receipt of f30,000,000 or
gao, 100000 from Germany to make
the budget balance gave anybody
anxiety, the Chancellor of the Ex-
cheduer was not that person. Ger
many has had difficulty in meeting
her regular reparations payments.
But the world has had in the past
ample evidence showing that British
financial policy lays small store by
anything except cash in hand.
Regarding the German contribu.
ton, "the money has been paid and
most of II is in the United Kingdom; ;
It is merely question Of ratification
by the French Government Of the
agreement" made with the other
Powers last August. So the budget