Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-12
OF BUDGET
RUSHED IN LONDON
Macdonald Recalls Cabinet
From Vacations for Spe-
CiaI Session.
BY the Associated Press.

BY the Associated Press.
LONDON, August 1.-THE big Five"
of the British cabinet went into session
today at 10 Downing street, the resi-
dence OF Prime Minister Macdonald, to
inaugurate balance the budget" cam
paign.
Mr.. Macdonald presided over the con-
ference. Others present were Philip
Snowden, chancellor Of the exchequer;
j, H. Thomas. dominions secretary;
William Graham, secretary Of the Board
Of Trade and Arthur Henderson, foreign
secretary.
Macdonald and the leaders Of the
labor cabinet cut short their holidays
to consider the recent report of the
economy committee which recommends
shearing $480,000,000 a year from the
Government expenditures.
Hurries From Scotland.
Mr.. Macdonald had hurried down
from Scotland; Chancellor Philip Snow
den drove In from his home In Surrey;
J. H. Thomas, dominions secretary,
came no from the South coast; William
Graham. secretary of the Board of
Trade, crossed from the continent, and
Foreign Secretary Arthur Henderson re-
turned from the west of England.
The importance of Mr.. MacDonald's
summons is indicated by the fact that
only the most urgent national problems
ever bring the cabinst ministers back
to their London desks during the brief
Summer holidays.
The first move in Downing street was
issuance OF a definite denial Of reports
Mr.. Snowden might retire from the
cabinet. Although he recently submitted
to serious operation, the chancellor Is
said to have recovered completely.
Split Is Denied.
Reports Of split in the cabinet over
the. economy issue also were denied and
it was asserted Mr.. Macdonald and his
colleagues are determined to balance
the budget and to escape the possibility
of $500, 00o, 900 deficit predicted by
the economy report If national expendt-
lures continue on the present scale.
The meeting, which began this morn
ing, will continue tomorrow and there
after 1t is expected the Conservative
and Liberal leaders will be asked to CO.
operate in an economy drive.
Legislation viii be necessary to put
some OF the economy report recon-
mendations into effect, ana since some
Of the measures are OF q highly con-
troverSial nature, the cooperation Of
the opposition would be valuable.
Apprehension Revealed.
Meantime the government is direct
ing its efforts to disstpaCe feeling Of
apprehension regarding the nations
finances, an illustration of which was
provided yesterday by the Newcastle
Chamber of Commerce IN adopting a
resolution asserting that unless econo-
mics are effected Immediately the ma
tons credit may be seriously endan-
gered.
Sir Arthur Sutherland, sponsor of the
resolution, described the present situa-
ton as the most serious financial crisis
Great Britain ever has seen. The reso-
luton urged special session Of Parha-
ment to effect a national saving Of half
a billion dollars year.
Similarly, today F. r. A. Shorts,
chairman OF the Gresham Trust, Ltd,
painted a gloomy picture of conditions
at that firms general meeting.
Paints Gloomy Picture.
The basic industries of iron, steel,
coal, shipping, cotton and wooden man
ufacturing are in IAN appalling state"
he said.
Unemployment is growing worse
every day" he declared Our export
trade-the lifeblood of the country-is
declining month by month, and we are
losing our overseas markets.
This country is on the edge Of an
abyss Every day that economies are
postponed makes their accomplishment
more difficult: but I am not without
hope that the common sense of our
leaders and our people will shortly re-
assert itself and that we shall be once
more on the road to prosperity"
Political and financial circles are
specializing as to the methods of drastic
retrenchment open to the government.
Suggestions center mainly on CONVEX
sion of the governments loans, espe-
cially the 5 per cent war loan, OF which
about e. 600 GOO, coo Is outstanding.
Tax Hike Predicted.
BY reduction of the interest on this
loan, it is figured, f20 900, 600 annually
might be saved, while If the conversion
was extended to other loans the yearly
savings might reach 35 or 40 million
pounds.
Another possibility which many We
gard as certainty Is a considerable
increase in taxation-a method which
is sure to raise loud protests in this
already hiphIv taxn6 country