Current History, Vol. VIII, No. 3, June 1918 online

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_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.


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.


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

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.


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

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


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.


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.


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

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.


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

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

3. As regards other industries, protection by means of customs
duties or Government assistance in other forms should be afforded
only to carefully selected branches of industry, which must be
maintained either for reasons of national safety or on the general
ground that it is undesirable that any industry of real importance
to our economic strength and well-being should be allowed to be
weakened by foreign competition or brought to any serious extent
under alien domination or control.

4. Preferential treatment should be accorded to the British oversea
dominions and possessions in respect of any customs duties now or
hereafter to be imposed in the United Kingdom, and consideration
should be given to other forms of imperial preference.

5. As regards our commercial relations with our present allies and
neutrals, the denunciation of existing commercial treaties is
unnecessary and inexpedient, but the present opportunity should be
taken to endeavor to promote our trade with our allies, and
consideration should be given to the possibility of utilizing for
purposes of negotiation with them and present neutrals any duties
which may be imposed in accordance with the principles laid down


In view of the danger that the admission of the principle of protection,
even to a limited extent, may give rise to a widespread demand for
similar assistance from other industries, and consequently to an amount
of political pressure which it may be very difficult to resist, the
committee further recommends:

That a strong and competent board, with an independent status,
should be established to examine into all applications from
industries for State assistance, to advise his Majesty's Government
upon such applications, and, where a case is made out, to frame
proposals as to the precise nature and extent of the assistance to
be given.

Before recommending tariff protection for any particular industry it
should be the duty of the board to consider forms of State
assistance other than, or concurrent with, protective duties, such
as bounties on production, preferential treatment (subject to an
adequate standard of quality and security against price rings) in
respect of Government and other public authority contracts, State
financial assistance, and also whether the position of the industry
could not be improved by internal reorganization.

The board should also have constantly in mind the safeguarding of
the interests of consumers and of labor, and should make
recommendations as to the conditions which for these purposes should
be attached to any form of Government assistance, whether by means
of a tariff or otherwise.

The committee reports adversely on the changing of weights, measures,
and coinage to the metric system.



Finland Under German Control

Events of the Period of Chaos and Foreign Invasion Preceding the Fall of

Civil war, later complicated by the German invasion, has been the
central fact in the history of Finland since the declaration of its
independence in December, 1917. The internecine strife was precipitated
by the coup d'état which the Finnish Socialists effected in January,
1918. It so happened that the representatives of the propertied classes
had the majority in the Diet which severed the century-old connection
between Finland and Russia. As for the Government which this Diet has
set up to rule the independent republic, all its members belong to
middle-class parties. Headed by Mr. Svinhufud, a Young-Finn leader, it
includes one Svekoman, two Agrarians, three Old-Finns, and six

The dissatisfaction of the Socialist elements, which are very strong in
Finland, with this régime soon grew so intense that they decided to
overthrow it by armed force. The Red Guard, that is, detachments of
armed workmen organized by the Finnish Labor Party, seized Helsingfors,
dissolved the "bourgeois" Government, and formed a Socialist Cabinet
under the leadership of Senator Kullervo Manner. The revolutionists did
not, however, succeed in capturing Mr. Svinhufud and his associates.
These fled north and established their headquarters at Vasa,
(Nikolaystadt,) on the Gulf of Bothnia. Since then the half-starved
country has been the arena of bloody clashes between the Red troops and
the forces supporting the Vasa Government, which consist largely of
middle-class elements and are known as the White Guards.

It is an open secret that Russia rendered substantial assistance to the
Finnish revolutionists. Most of the weapons in their possession are from
Russian arsenals, and Russian soldiers who lingered on in Finland even
after the Bolsheviki had agreed to withdraw the Russian troops stationed
there have been fighting shoulder to shoulder with the Finnish Red
Guards. It is reported that on several occasions the Finnish Red Guards
were reinforced by Red Guards from Petrograd. Moreover, in its
organization the Finnish Socialist Workmen's Republic is a copy of the
Russian Soviet Republic. The Red Finns have the same hierarchy of
Soviets, and they affect the administrative terminology of the


The Finnish Socialists should not, however, be treated as identical with
the Russian Bolsheviki. The difference between them is probably due to a
difference of civilization, for culturally the dissimilarity between a
Russian and a Finn is as great as it is linguistically and ethnically.
It is noteworthy that unlike the Bolsheviki they regard their own rule
as a transitional, provisional régime. Speaking on Feb. 14, 1918, at the
first meeting of the Finnish Central Soviet, Kullervo Manner, President
of the Commissariat of the People of Finland, said among other things:

One of the foremost aims of the great revolution of Finland's
workers is to build the proud edifice of a political democracy on
the ruins of the fallen power of the Junkers. * * * As soon as the
enemy of the people has been defeated throughout the country shall
the people of Finland be given an opportunity through referendum to
accept a new Constitution. The People's Commissariat intends shortly
to put before the Central Soviet a proposal for a fundamental law

Online LibraryVariousCurrent History, Vol. VIII, No. 3, June 1918 → online text (page 10 of 30)