cm 



TRANSACTIONS OF SECTION F. 



total amount of revenue, any diminution of import due to the increased rate of 

 taxation would, at the present time, be of great advantage to the nation, in so 

 far as it would diminish the total sum of our imports. If the excessive taxation 

 did not seriously diminish the imports, the Exchequer would of course gain in 

 revenue. An increase of indirect taxation in the shape of Excise duties is also 

 desirable, and no great harm could be done at the present time by driving this 

 taxation up to or near a point at which it ceased to be productive. The 

 Exchequer would get at least the same revenue as hitherto', and there would be 

 a growth of saving available for loans, or alternatively the Government would 

 get increased revenue.' 



Direct taxation raises less controversy, and we think that the Income Tax 

 might be raised beyond its nominal rate of 2s. 6d., especially if its graduation 

 were improved and if it were extended, necessarily at a lower rate of charge, to 

 a much greater number of taxpayers. Two considerations, however, must be 

 borne in mind : a greatly increased tax (1) adds to the risk of false declarations 

 or concealments of income, and (2) may deprive the Government of subscriptions 

 •to its loans. In order to obtain some definite estimate of the total cost of the 

 War it is necessary to assume that it will end on a certain date. Mr. Joseph 

 Kitchin, who has furnished the Conference with a very valuable and exhaustive 

 memorandum, assumes merely for purposes of calculation tliat hostilities will con- 

 tmue until the end of November next, and that a further three or four months 

 will be taken up by negotiations and the final ratification, during which expendi- 

 ture will be on a heavy though on a reduced scale. On this assumption he 

 works out the cost of the War as follows : ' Exclusive of (1) some 2(X), 000,000/. 

 lent to the Dominions and our Allies, which will in due course be repayable ; 

 (2) some 30,000,000?. spent in the purchase of wheat, meat, sugar, and other 

 commodities, which may be re-sold at cost ; and (.3) 80,000,000/. per annum 

 representing the normal cost (1914-15 Budget) of our Army and Navy under 

 peace conditions, the direct cost of the War to the United Kingdom may be put 

 as follows : 



4 months to 100,000,000 

 end Novem- 

 ber 1914 



do. March 1915 > 180,000,000 



Direct Cost of "War 



Extra Revenue Raised 



Income and Excise and 

 Super Tax i Customs 



Total 



do. July 1915 I 240,000,000 

 do. Nov. 1915 ' 280,000,000 

 do. March 1916 j 150,000,000 



(armistice 



period) 

 Interest on 



War Debt to 



March 31, 



1916 



280,000,000 12,800,000 6,000,000 



670,000,000 

 50,000,000 



46,400,000 



20,200,000 



18,200,000 



61,800,000 



£1,000,000,000 £59,200,000 £26,200,000 £80,000,000 



' The extra revenue raised is judged by comparing the actual revenue of 

 1914-15 and the Budget for 1915-16 with the first Budget (prepared under peace 

 conditions) for 1914-15. The figures of the Budget for 1915-16 are taken not- 

 withstanding the dropping of the increased beer, spirit, and wine duties included 

 in it, since the revenue from these sources is not likely to be afiected ; indeed. 

 Lord Lansdowne gave figures in the House of Lords on July 6 indicating that 

 a higher revenue than that assumed in the Budget will be received. The total 



