Part 10

With regard to the figures given by Herr Bleibtreu, it may be remarked that they are enormously in excess over those compiled in well-informed quarters from the official casualty lists published by the German Government, and issued periodically. Down to July 31, 1918, these lists had contained a grand total of 4,624,256 names, but did not include naval or Colonial troop losses. Of the above figure the following are the permanent losses:

Killed and died of wounds 1,056,975 Died of sickness 75,988 Prisoners 335,269 Missing 267,237 --------- Total 1,735,469

These statistics are merely the names published down to July 31, 1917, and are not to be taken as the actual total casualties, as the lists are always at least several weeks behindhand. But even allowing for this fact, Bleibtreu's estimate for the killed in action and prisoners alone is considerably more than double those officially acknowledged by Berlin, and nearly equal to the total casualties admitted in the official lists from all causes. Of this remarkable discrepancy there can be only two possible explanations. Either the German Government has throughout the war systematically falsified its casualty lists--and there is good reason to believe that this is the case--or else Bleibtreu has been put up by the German Staff to publish a set of statistics intended deliberately to mislead the Allies.

Great Britain's Finances

Heavy War Taxes Levied

The new British budget for 1918-19 was introduced in the House of Commons April 23. It included some sweeping changes in taxes and gave important data of expenses. The estimate for 1918 in round numbers is $15,000,000,000; the estimated revenue is $4,200,000,000, leaving a balance to be covered by loans of $10,800,000,000. The actual expenditures in 1917-18 were $13,481,105,000; the revenue was $3,536,175,000; the deficit met by loans was $9,944,930,000.

Under the new budget the tax on incomes is increased from $1.25 in $5 to $1.50 in $5. Under the new rate the increased tax begins at an income of $2,500 a year. On an income that is wholly earned--such as a salary--the tax is as follows:

Income. Tax. Income. Tax $2,000 a year $157 2,500 a year 225 3,000 a year 375 4,000 a year 600 5,000 a year 750 10,000 a year 2,250

Where the income is wholly unearned the tax is as follows:

TAXES ON UNEARNED INCOME

Income. Tax $2,000 a year $210 2,500 a year 300 3,000 a year 455 5,000 a year 947 10,000 a year 2,635

The super tax in the new law begins at an income of $13,750, and the total taxes paid on the following incomes, including income tax and super tax, are as follows:

TOTAL INCOME AND SUPER TAX

Income. Tax $15,000 a year $4,802 20,000 a year 6,812 25,000 a year 8,937 30,000 a year 11,187 40,000 a year 15,937 50,000 a year 20,937 100,000 a year 47,187 500,000 a year 255,187

The tax on $500,000 incomes is a little over 50 per cent. In the case of a tax-payer whose total income does not exceed $4,000 an allowance of $125 is granted in respect of his wife and an allowance of a like amount in respect of any dependent relatives whom he maintains; also an allowance of $125 in respect of children under 16 years of age.

TAXES ON COMMODITIES

Checks require a stamp of 4 cents, also promissory notes. The excess-profit rate remains at 80 per cent. The tax on spirits is raised to $7.50 a gallon; on beer to $12.50 a barrel; on tobacco to $2.04 a pound, the effect of which will increase the price 4 cents an ounce, while the cheapest cigarette, now 6 cents for ten, will be 7 cents for ten. The tax on matches is increased so that they will be sold at 2 cents a box instead of 1-1/2 cents. An additional duty of $3 a hundredweight is levied on sugar, so that sugar heretofore selling at 11-1/2 cents a pound will now have to be sold at 14 cents a pound.

A tax of 16-2/3 per cent, is levied on the sale of luxuries, including jewelry, and of articles above a certain price when they become articles of luxury; also on hotel and restaurant bills. This tax will be collected by means of stamps. The new postage rate is raised to 3 cents an ounce; on book packages exceeding one ounce an extra charge of 1 cent will be levied. Letters to the United States will cost 3 cents instead of 2 cents. Post-cards in England will be 2 cents instead of 1 cent, and the parcel rate, under seven pounds, 18 cents, and between seven and eleven pounds, 25 cents.

LUXURIES HEAVILY TAXED

The tax on luxuries is a new tax in England, and is following the method adopted in France Dec. 31, 1917. The tax on luxuries in France is levied at the rate of 10 per cent. on the retail selling price of the scheduled articles. All payments of less than 20 cents are exempted. The schedule consists of two lists, one comprising articles taxed irrespective of price at 10 per cent., and the other, articles taxed when the retail price exceeds certain specified amounts, as follows:

_Taxed Irrespective of Price._--Photographic appliances, gold or platinum jewelry, billiard tables, silk hosiery and underwear, artistic bronze and iron work, horses and ponies for pleasure purposes, curiosities and antiques, sporting guns, books, servants' liveries, gold watches, perfumery, soaps and dentifrices, paintings and sculpture, pianos, (other than cottage pianos,) tapestry, truffles, pleasure boats, and yachts.

_Taxed Above Specified Prices, (approximately shown in U.S. money.)_--Pet dogs, $8; other pets, $2; smokers' requisites, $2; bicycles, $50; silver jewelry, $2; picture frames, $2; walking sticks, $2; chinaware table service, $40; single pieces, 39c to $3; men's headwear, $4; women's hats, $8; women's footwear, $8; men's footwear, $10; chocolates, 75c per pound; corsets, $10; men's suits, $35; women's costumes or mantles, $50; scissors, $2; lace and embroidery machine made, 35c per yard; handmade, $1.83 per yard; artificial flowers, $2; furs, $20; gloves, $1.58; furniture, $300 per suite; mirrors, $4; motor cycles, $400; watches, $10; handkerchiefs, $3.66 per dozen; umbrellas, $5; feathers, $5; clocks, $20; photographs, $8 per dozen; cottage pianos, $240; curtains, $20; carpets, $3.62 per yard; pajamas and dressing gowns, $16; horse carriages, $200; bird cages, $2.

Payments for goods bought before Jan. 1, 1918, are exempt from the tax.

AMERICA'S ASSISTANCE

In presenting the budget the Chancellor of the Exchequer stated that the expenditures in the past year exceeded the estimate by $2,030,000,000. He referred to America's assistance as follows:

The extent of the assistance of the United States and our advances to the Allies last year amounted to $2,525,000,000. In addition to this the United States have advanced to all the Allies no less a sum during the year than $4,750,000,000. Of this sum approximately $2,500,000,000 was advanced to us and $2,250,000,000 to the Allies.

The House will see, therefore, that, whereas this year we advanced to the Allies approximately the same amount as last year, $2,525,000,000 as against $2,700,000,000, the United States advanced in addition $2,250,000,000; that is to say, the total advances by us and by the Government of the United States are $4,775,000,000, as against $2,700,000,000 by us alone last year.

The House would notice that our advances to the Allies are approximately the same amount as the advances made to us by the Government of the United States. This is satisfactory. It means that it is only necessary for us to lean on the United States to the extent that the other Allies lean upon us, or that, in other words, after nearly four years of war we are self-supporting.

But it is almost absurd that we should be borrowing with one hand while we are lending with the other. The result is that our accounts are inflated apparently, and in fact to that extent our credit is weakened. I have therefore been in communication with Mr. McAdoo, the Financial Minister of America, and Mr. Crossley, the head of the United States Financial Mission, and I suggested as regards advances to the Allies a course which, if adopted, will have the effect of lessening to a considerable extent our burden, while in no way increasing the total obligations of the United States.

THE TOTAL BRITISH DEBT

In referring to the total debt the Chancellor of the Exchequer made the following statement:

The national debt, on the estimates which I have submitted to the House, will at the end of the present year, (March 31, 1919,) amount to $39,900,000,000. Previously, in counting our liabilities, I have deducted altogether advances to Allies and Dominions. I do not propose to adopt that course today. We cannot ignore what is happening in Russia; though, even yet, I do not admit--I do not believe--that we should regard the debt of Russia as a bad debt, because, sooner or later, in spite of what is happening now, there will be an ordered Government in that country.

By the end of this year the total amount due by the Allies to us will be $8,110,000,000, and I should hope that we should be able to deduct Dominion and obligation debts, making a total of $5,920,000,000. The amount of our national debt at the end of last year was $29,250,000,000. The amount of our liability on the basis I have stated is $34,280,000,000, and, taking 5 per cent. on this amount as the rate of interest, the total comes to $1,900,000,000. This, added to the normal expenditure, makes a total amount of $3,400,000,000.

Now, how is that to be met? Taking the Inland Revenue taxation alone, it amounts to $2,700,000,000. The Inland Revenue officials have assured me that they have made a very careful and a very conservative estimate. Taking this estimate, there remains a deficit on the full year of $550,000,000.

To make good this $550,000,000 I shall impose new taxation which, on the full year, will bring in $570,000,000. The Inland Revenue, in their estimate of result of existing taxation, take no account whatever of the excess profits duty, but that duty, as I have pointed out, is expected to yield $1,500,000,000.

Assuming--an assumption that may last for half an hour [laughter]--that the income tax remains at 5s, that should reach $375,000,000. Of course, that must be supplemented. It depends upon the state of trade and credit, but I think I am quite safe in saying that this amount, which they have left out of their reckoning, is more than sufficient to counter-balance any error made with regard to existing taxation.

GERMANY'S WAR DEBT

He followed this with a statement contrasting the financial condition of Great Britain with that of Germany, as follows:

Up to June, 1916, according to the statement of the German Financial Minister, the monthly German expenditure was $500,000,000; it is now admitted to be $937,500,000, which means a daily expenditure of $31,250,000, which is almost the same as ours. But it does not include such matters as separation allowances. As to the war debt, the German votes of credit up to July amounted to $31,000,000,000. Up to 1916 they imposed no new taxation at all, and in that year they proposed a war increment levy. Assuming that their estimates were realized, the total amount of taxation levied by the German Government was $1,825,000,000, as against our own amount.

This amount is not enough to pay the interest of the war debt which Germany has accumulated up to the end of the year. The German balance sheet, reckoned on the same basis as ours, will, with interest, sinking fund, pensions, and pre-war expenditures, be a year hence $3,600,000,000; and with additional permanent imperial revenue of $600,000,000 they will make their total additional revenue $925,000,000 per annum, and this amount, added to the pre-war revenue, makes a total of $1,675,000,000, showing a deficit at the end of the year of $1,925,000,000.

If that were our position I should say that bankruptcy was not far from the British Nation.

The German taxes have been almost exclusively indirect, imposed on commodities paid for by the mass of the people and not upon the wealthier classes, who control the Government and on whom the Government is afraid to put extra taxation.

Trade After the War

Important Report by a Commission of British Experts and Economists

Great Britain's policy with reference to future trade is outlined in the final report of the Committee on Commercial and Industrial Policy After the War, of which Lord Balfour of Burleigh was Chairman, and which included in its membership Arthur Balfour, (ex-Master Cutler of Sheffield,) also the heads of the various Boards of Trade, the textile trades, with representatives of the shipping and shipbuilding industries, finance, engineering, metal trades, coal, electrical, iron and steel associations, national transport workers, and distinguished economists.

Shipping policy after the war is not dealt with in the report, but, in view of the world shortage of tonnage, the committee express the opinion that, while it may be desirable to impose for a limited period some restriction on the use of British ports by enemy vessels, any policy which might tend to check the use of English ports by foreign shipping generally would be inexpedient. They, however, urge that, in accordance with the Paris Conference resolutions, the exaction of reparation in kind from enemy countries should, in the interests of the reconstruction of industry and the mercantile marine, be carried out as fully as may be practicable.

In a general survey of the position of British industry and overseas trade in 1913, prior to the war, the committee found that the United Kingdom had taken only a limited share in the more modern branches of industrial production, and that certain branches had come to be entirely, or very largely, under German control, and in numerous branches foreign manufacturers had secured a "strong, or even predominant, position." They found that British merchants and manufacturers had also been encountering successful competition in overseas trade. They believe that the knowledge gained during the war will be a valuable asset in the development of British industry.

As to the measures which should be adopted during the transitional period, the committee reaffirm the main recommendations of their interim report, namely:

Transition Period

(a) The prohibition of the importation of goods from enemy origin should be continued, subject to license in exceptional cases, for at least twelve months after the conclusion of the war, and subsequently for such further period as may be deemed expedient.

(b) The Paris resolutions relating to the supply of the Allies for the restoration of their industries can be carried into effect if a policy of joint control of certain important commodities can be agreed upon between the British Empire and the Allies. Any measures should aim at securing to the British Empire and the allied countries priority for their requirements, and should be applied only to materials which are mainly derived from those countries and will be required by them. This policy should be applied as regards the United Kingdom by legislation empowering the Government to prohibit the export, except under license, of such articles as may be deemed expedient, and, as regards the British Empire and the allied countries, the Government should, without delay, enter into negotiations with the various Governments concerned, with a view to the adoption of suitable joint measures in the case of selected commodities of importance.

The Government should consider, in consultation with the Allies, the expediency of establishing after the war a joint organization on the lines of Commission Internationale de Ravitaillement for dealing with the orders of the allied Governments for reconstruction purposes, and with such private orders as they may find it expedient to centralize.

It is pointed out that the prolongation of the war and the entry into it of the United States have increased the importance of a considered policy directed toward assuring to the British Empire and the Allies adequate supplies of essential raw materials during the period immediately following the conclusion of peace, and that the extent to which the Paris resolutions which bear upon this vital question can be carried into effect depends upon the co-operation of the Governments concerned.

PROBLEM OF RAW MATERIALS

The committee reports that it will be necessary to continue for a considerable period after the war some portion of the control of home and foreign trade in order to secure adequate supplies of foodstuffs and raw material. It does not regard it as practical to attempt to make the empire self-supporting in respect of numerous raw materials. It notes that the Board of Trade already has set up a committee to investigate the question of the supply of cotton and it recommends special inquiries as regards each commodity. "The object to be kept in view should be that the empire may be capable in an emergency of being independent in respect of the supply of every essential commodity of any single foreign country."

The committee advises against the exclusion of foreign (other than present enemy) capital from sharing in the development of the empire's resources, but recommends:

(a) Complete disclosure, as far as is practicable, of the extent of foreign holdings in any particular case.

(b) That mineral and other properties are not secured by foreign concerns in order to prevent the development of those properties, and to check competition in supply; and

(c) That in the case of commodities of great imperial importance, the local Government concerned should have some measure of control over the working of the properties.

These principles, if accepted, should be brought to the notice of the Governments of other parts of the empire, with a view to the adoption of a uniform policy.

ALIENS IN BUSINESS

The committee expresses the opinion that it would not be desirable to impose special restrictions against the participation of aliens in commercial and industrial occupations. It recommends, however, that such occupations as pilot and patent agent should be confined to British-born subjects, and suggests that foreign commercial travelers operating in the United Kingdom should be registered and hold licenses, that the registration of title to property should be compulsory, and that such registration should involve a declaration of the nationality of the owner.

The committee deems it unwise to restrain the establishment or the continuance of agencies or branches of foreign banks or insurance companies in the United Kingdom, but foreign insurance companies should be required to make a deposit proportionate to the business done. Foreign banks should be required to pay the income tax.

The committee considers it necessary to impose special restrictions on the subjects of enemy countries, and that this can best be done by means of stringent permit and police regulations, but it does not believe that attempts should be made to prevent enemy subjects from establishing agencies or holding interests in commercial or industrial undertakings.

A plan for the maintenance and development of industries essential to national safety, called "Key Industries," is proposed, as follows:

Synthetic dyes, spelter, tungsten, magnetos, optical and chemical glass, hosiery needles, thorium nitrate, limit and screw gauges, and certain drugs.

SPECIAL INDUSTRIES BOARD

The committee recommends the creation of a permanent special industries board, charged with the duty of watching the course of industrial development and recommending plans for the promotion and assistance of the industries enumerated above. With reference to industries generally the committee thinks that the individualist methods hitherto adopted should be supplemented by co-operation and co-ordination of effort in respect of

1. The securing of supplies of materials.

2. Production, in which we include standardization and scientific and industrial research; and

3. Marketing.

The report recommends the formation of combinations of manufacturers, strong, well organized associations and combinations, to secure supplies of materials, especially the control of mineral deposits in foreign countries. In order to facilitate increased production it recommends:

That an authority should be set up which should have the right, after inquiry, to grant compulsory powers for the acquisition of land for industrial purposes and the diversion or abolition of roads or footpaths.

That there should be a judicial body with compulsory powers to deal with the question of wayleaves required for the development of mineral royalties and the economical working of collieries and mines.

The committee believes in the formation of organizations for marketing the manufactured products of the country and deems it inexpedient for the Government to enter into any policy aiming at positive control of combinations (trusts) in the United Kingdom. It recommends that combinations be legalized, so as to be enforceable between members. It welcomes the establishment of the British Trade Corporation to co-ordinate and supplement existing financial facilities for trading purposes. As a general rule the members think it would be undesirable that the State should attempt to provide capital for industrial purposes, but as the re-establishment of industry on a peace basis will be profoundly affected by taxation, currency, and foreign exchanges, they recommend that these matters be taken up by the Treasury, in consultation with the banking and commercial interests.

TARIFF REGULATIONS

With reference to tariff the committee recommends a protective tariff only on industries "which can show that, in spite of the adoption of the most efficient technical methods and business organization, they cannot maintain themselves against foreign competition, or that they are hindered from adopting these methods by such competition."

The general fiscal policy as finally adopted by the committee is as follows:

1. The producers of this country are entitled to require from the Government that they should be protected in their home market against "dumping" and against the introduction of "sweated" goods, by which term we understand goods produced by labor which is not paid at trade union rates of wages, where such rates exist in the country of origin of the goods, or the current rates of that country where there are no trade union rates. We recommend that action be taken in regard to "dumping" on the lines (though not necessarily in the precise form) adopted in Canada.

2. Those industries which we have described as "key" or "pivotal" should be maintained in this country at all hazards and at any expense.