ENGLISH FINANCE 537 



passed, which directed that a sum of 500,000 should be placed to the credit of the 

 Development Fund annually for four years, beginning with 1910-11; and the Finance 

 Act of 1909-10 transferred a sum equal to the "net proceeds of the duties " 

 opmentana on motor spirit, and on licences for motor cars, to the Road Improvement 

 Fund. According to the Act of 1909, 400,000, in addition to the 500,000 

 g ranted bv that Act was voted to the Development Fund, and 

 the Board in 1910 was made to consist of 8 members instead of five. The 

 half million was paid into that fund again in 1911-12; but by the Finance Act of 1911, 

 13 millions were set aside from surplus revenue to be paid to this fund during the years 

 ending in March 1913, 1914, and 1915. To the Road Improvement Fund was paid in 

 1910-11 over 860,000, and in 1911-12, 1,209,800. In 1912-13 this fund was estimated 

 to reach 1,225,000. The functions and duties of the Road Board are indicated by its 

 title. As for the Development Fund, that is used for the promotion, by government de- 

 partments, colleges, institutions, or persons, not trading for profit^ by means of a grant 

 or a loan, of agriculture, forestry, drainage, harbours, fisheries, transport, stock, and 

 so forth, in many cases by way of experiment. By means of these two Funds about 

 ij millions a year are now used so as to benefit property; and that aspect may have 

 to be reconsidered in any reform of local taxation. 



The National Insurance Act of 1911, though a measure of great social and financial 

 interest, does not enter into the finances of this period, beyond the appropriation of 

 2.8 millions in 1912-13. 



The National Debt, which was left at 711.4 in 1908-9, had been further reduced to 

 674.7 millions in March, 1912; the total " dead weight " Debt being lower by 36.7 

 millions. Together with the 43! millions paid off under Mr. Asquith (in- 

 Nattonai eluding i i. 8 millions for 1905-6, as provided in Mr. A. Chamberlain's 

 Debt 1908-13, Budget), this makes a reduction of over 80 millions during seven years. 

 The disposal of the surpluses of the second period is worth notice. The 

 small deficit left by Mr. Asquith in 1908-9 was followed by the confusion of the finances 

 in 1909-10, at the rejection of the Finance Bill by the Lords, but the conjoint years 1909- 

 lo-n yielded a surplus of 5.6, and 1911-12 yielded 6.5 millions, which strictly should 

 have gone to the " Old " Sinking Fund. From the first of these two, as already stated, 

 i| millions were placed to the credit of the Development Fund. Another i| millions 

 were used to provide Sanatoria for the treatment of tuberculosis, and 250,000 as a loan 

 to the East African Protectorate. In June 1912 the Chancellor of the Exchequer an- 

 nounced that from the 1911-12 surplus of 6.5 millions nearly i million would be re- 

 quired for Naval purposes, and 500,000 would be advanced to Uganda and East Africa 

 as a loan. In this connection also it should be recollected that not only was the action of 

 the " New " Sinking Fund suspended in part in 1909-10, owing to the confusion of that 

 year, but that the Debt Service Charge was reduced from 28 to 24.5 millions. 



The political controversies which have centred round " Lloyd George finance " are 

 still too acute for final criticism. To it are attributed by its opponents the largely in- 

 creased export of British capital and the fall in the value of Consols and other " gilt 

 edged " securities. Whether the incontestable growth of British investments abroad is 

 a good thing or a bad thing for the nation is, however, itself a matter of controversy. 

 The price of Consols, whatever may have been the influence of politics, has undoubtedly 

 been affected by a number of other causes, such as the extension of trustee stocks, and 

 particularly the opportunities offered by a bounding commerce for more remunerative 

 investments. The drop from 113^ in 1897, when the interest was 2f, or even from 89! 

 in December 1905, when the interest was 2^ per cent, to 72 J in October 1912, is in itself 

 a serious one. But it points rather to the importance of maintaining the Sinking Fund 

 than to any actual decline in British credit. In so far as the price of Consols is a test of 

 British credit, they compare favourably with any national securities elsewhere. On 

 November 15, 1912, Consols at 2^% were 755 (equivalent to over 96 at .3%), and Ger- 

 many % were 76-78. 



(W.'M. J. WILLIAMS.) 



