608 



TRANSACTIONS OF SECTION F. 



a total service, including interest and Sinking Fund of the old debt, of, say, 

 70,000,0(X)/., or, better, 75,fK)0,000Z. per annum, which compares with 25,000,000/. 

 to 30,000,000?. in the few years preceding 1914-15. To this must be added the 

 cost of after-war pensions and allowances, say 15,000,0007. per annum. 



' Some idea of what this means can be gathered by comparing the actual 

 figures for the national revenue and expenditure of 1907-08 (i.e., before the 

 Super-tax, Old Age Pensions, and National Insurance were introduced, and when 

 income tax was Is. in the pound), the first Budget of 1914-15 (representing 

 normal peace figures and including a proposed income tax rate of Is. 4rf. in 

 the pound), and a year after the War, the last-mentioned reckoned on normal 

 taxation only : 



' The figures in the last column are set down to give a picture of what in all 

 probability will have to be faced. They are based on a normal peace basis a few 

 years hence. Neither a reduction of armaments nor the adoption of Universal 

 Military Service is assumed, but just the normal increase of 4,000,0007. per 

 annum for the Army and Navy to which we became accustomed before the War. 

 The principal income-tax rate is taken at Is. 2d. in the pound, being the general 

 rate ruling for some years before the War, and the other revenue items are 

 based on present taxation and on the assumption that the reduction caused bj' 

 the after-effects of the War will be moderate. Thus, on figures which are 

 moderately estimated and which may easily? prove too favourable, there will — 

 on the basis of normal taxation and a normal income tax of Is. 2d. — be an 

 amiual deficit of 125,000,0007. on an expenditure of 305,000,0007., and half of 

 this deficit will be due to the increased debt service plus pensions and allow- 



'- Editor's Note. — For these figures Mr. Kitchin accepts sole responsibility. 



