Evening star., 1940-12-08
Deficits From War
Are Headache for
British Financiers
Shortage Is Increasing
At Yearly Rate Of
3.6 Billion Pounds
BY H. J. J. SARGENT.


$4,000, 900 day. or something like
$4,000, ,000, 900 yearly. These fantastic
figures perhaps might be better un-
derstood If I said they represent
about the whole Of this nations an
nual income just before the outbreak
ef war.
It Is difficult to separate war eX-
penditure from nonwar expenditure
In total war, practically every penny
paid out might be scheduled as COM
ing within war estimates, but taking
. reasonably conservative stand
point it can be said that between
three and four billions a year are
earmarked directly for war purposes:
the balance goes less directly into
the struggle.
This country's purchases from
the United States have lately in
creased enormously. Food, NUM-
tions, machinery, raw materials of
avery kind have not only been bought
In quantities hitherto undreamed of,
but contracts for future deliveries
have been and are being placed in
ever-increaSing volume British ex-
penditure in the United States is not
yet given here in figures, but the
daily amount must be exceedingly
high. The question is how these
astronomical figures of expenditure
are going to be balanced. Taking
one week with another, deficit reve-
nue. over expenditure stands at be-
tween 10 and 80 million sterling, or
about f3,600,000,000 a year.
Headaches for Financiers.
How this shortage is going to be
met has provided headaches for
financiers and treasury exports for
a long time. There has been an
immense drive for the sale of savings
certificates and war bonds, and on
the whole the country has responded
well. The small investors can be re-
lied upon to subscribe between 20
and 80 million sterling a week and
banks place most Of their deposits at
the disposal of the government. But
these are credit transactions and one
shudders to think of the load that is
being prepared for old man posterity.
IL has become the fashion in this
country, when people talk about who
Is going to shoulder burdens of war
10 say that Mr. Posterity or Mr.. P.
is the goat for that job. Income
tax. surtax and now a heavy pur-
chase tax, which has just come into
operation, will help relieve the situ-
atlon' out you have to consider
vicious circle of an Impoverished
country being taxed and being fur
tner impoverished by that very taxa
tlon. That is the situation which
may last number of years, but
which. in my opinion, is not likely
to be permanent.
l remember that during and i'm
medlately after the last great war
IL was said that this country would
never recover its former prosperity.
That the standard of living would be
permanently reduced, and so IN
Nothing of the sort happened What
ola happen was that the wealth of
the country was soon regained. but
was more evenly distributed than
was the case before 1914
Great fortunes, consisting largely
OF Dig estates. disappeared partly
through taxation during the life
time Of the soldiers and nartIv
through death and succession duties
out much OF that wealth remained
IN the country, which, as a result
OF q better distribution of national
income and national fortune was On
the "hole more healthy, and made
ior more contented country than
IN the previous generation. I fore
see something of the same sort han
penlng at the end of this war if un-
Ger the good providence of God
Britain emerges victorious.
Oomplacency Is Danger.
Inc one real danger this country
mas 70 guard against is complacency
eltner IN It's warlike operations mr.
IN lts industry. The Englishman
mas tradition of complacency. He
looks back on history which as a
RUE mas brought him more profits
tnan losses and more successes in
tne neld than defeats: and he saws
70 himself, Dat! I'll get through
tnls Just as I got through the last
war and through 20 wars before the
last one. I don't exactly know how
IL is going to be done, but we'll do
It," - uo
IL may be doing him an Injustice
IN putting those words into his
mouth, but I believe I am right all
the same.
The peril this country is now far
Ing Is that it takes too satisfied
view of its industrial war effort
only the other day Labor Minister
Bevln was telling the nation that
BRITAIN Will have outstripped Ger
many IN munitions production
WITHIN the next six months. We also
have been told that British aircraft
production already has overtaken
Germany's.
These facts no doubt are true
but somehow there is at the back
OF my uninstructed mind a certain
doubt, when 1 look at the financial
hg,lres I have quoted above and
also ponder on UNEMPLOYMENT
figures. These show that in October
there were over 100000 people un-
employed in Britain, an increase of
5000 over September and $4,000 over
August.
No doubt some of these unem-
ployed lost their jobs through the
process of evacuation, but there
must be hundreds of thousands
whom industry has not yet man
aged to absorb. I look with some
apprehension on this fact when
remember that not only is every
adult in Germany employed, but
millions of Poles and other sub
tugated people-practically slave
labor-are being drafted into Ger
man war factories.
Caroline Hood