Evening star., 1938-04-26

per cent higher. or s11 10000, 900.
BY the Associated Press.
LONDON, April 26-The British
government jolted the nation today
by boosting the income tax from 25
per cent to 27la per cent to help pay
the costs of the staggering rearma-
ment program
Sir John Simon, chancellor Of the
exchequer, in his annual budget
speech before a shocked House of
Commons, announced the income tax
would be raised from S shillings in the
pound to shillings pence Grom
sl.25 to $l.3712 in $500.
Presenting the budget bill for the.
1s3S-39 fiscal year beginning April
u. Sir John announced the govern
ments total needs as 944 1895, 900
pounds s4,72l 900 ,OOo), an increase
of 8l,500000 pounds (s407 500 ,o00)
over the previous year.
Leading Shares Drop on.
Financial quarters were disappoint-
ed. Leading shares declined sharply
in after-hours trading. Brokers said
details OF Sir Johns speech had "a
most unsettling and Disappointing ef-
feet"
Imperial Chemical dropped shil-
ling 3 pence go cents to 81 shillines
S775).
The budget included 253,25o, 900
pounds Hl,266,25o OOO for arma-
ments expenditures. but this did not
include so.o00,o0o pounds ($45o, ,oo0.- :
00o) to be borrowed to meet additional
costs of the defense program.
The chancellor also announced an
increase in the duties on tea and oil.
The higher tax on tea will reach into
the pocketbook Of virtually every fam.
lily in the land. rich or DOOR. The
higher income and oil taxes also will
hit most of them.
Secret Purchases Revealed.
To an intent House he disclosed that
the Government already had bought
"sufhcient supplies of wheat, whale
OIL and sugar" to maintain civilian
needs for the first few months if war
broke out.
the government made the pur-
chases secretly early this year, the
chancellor told cheering audience.
He said secrecy was necessary to
prevent prices being raised through
Knowledge that the government was
coming into the market"
He declined to disclose the amount
OF stocks on hand or exactly how long
1t was estimated they would last.
But the announcement indicated the
scale on which Britain is preparing
against war
Sir John disclosed that the govern
ment broke through red tape and did
not even apply to Parliament for
statutory authority" to purchase the
supplies. He added that legislation au-
thorizing the purchases and making
supplementary appropriations for
them would be introduced shortly,
Borrowings Not Included.
Sir Johns budget figure of 944,39s,.
600 pounds for the fiscal year did not
include 100000 pounds (s450,o00,-
O0O) borrowed money already appro.
prlated for rearmament.
Thus, while the years total national
defense expenditure will be 343 $50 900
pounds s1,716,250,O0O, the amount
included in the budget is only 253,25O,-
600 pounds 1896, ,25O, ,000).
The nation concentrated much more
attention on the chancellors speech
than on any statement of foreien
policy
Scrubwomen and porters wanted to
know II they would have to pay more
for their tea or beer Capitalists were
eager to know whether income and
business profits taxes would be boosted
The House was jammed to hear the
closely guarded secrets of the budget
which only the cabinet knew before
Sir John arose to speak at 3:44 pm.
(9:44 am, E. S. IT,.
Sir John announced new measures
designed to halt tax lodging, dealing
with "revocable trusts, settlements and
one-man companies abroad"
He said he must provide 10000. 600
pounds ($50,0Oo, ,000) for civil supple
mentary estimates, which will cover
air raid precautions, purchase of food
stocks "and other purposes where
secrecy is less necessary"