included a Customs and Excise Duty on matches, which was
increased two years later. In 1918 the stamp duty on cheques
was increased from id. to 2d., despite considerable protest from
bankers and others that it would produce very undesirable con-
sequences. A still more important change affecting the customs
of the people was the abolition of the id. postage on letters. In
1918 the minimum charge for letter carrying was raised to ijd.,
and that for postcards to id. In 1920 the minimum postage for
inland letters was raised to 2d. for a weight not exceeding 3 oz.,
an extra d. being charged for every additional ounce. For inland
newspapers the charge for postage was fixed at id. for weights
not exceeding 6 ounces. Inland parcel rates were raised to gd.
for weights up to 2 lb., and is. for weights between 2 and 5 pounds.
In the three financial years ended March 31 1918 indirect taxation actually diminished, the yield in the last of these years being smaller than in the first. In 1915-6 the produce was 1273 millions, in 1916-7 134! millions, and in 1917-8 n8j millions. But direct taxation, which in 1915-6 yielded 1313 millions, gave 348 millions in 1916-7, and no less than 473 millions in 1917-8. In the 1918 Budget indirect taxation was screwed up. The duty on spirits was raised from 145. gd. to 305., while the beer duty was increased from 255. to 503. per standard barrel. Tobacco duty, which was raised by is. iod. per lb. in 1917, was increased from 6s. sd. to 8s. 2d. in 1918.
In 1916 there was much criticism of the Government's financial methods. Bank Rate was raised to 6%, and Treasury Bills were put " on tap " at 6 % discount. Six per cent Exchequer Bonds were also put on sale. But the payment of these high rates for money (see MONEY MARKET) at a time of active inflation when money was abundant met with severe criticism. It was ostensibly designed to attract foreign money to London, but eventually it was decided to abandon the " dear money " policy and to offer a special rate, above the domestic rate, for foreign moneys. The year 1916 witnessed a new innovation in borrowing. What was described as the " continuous loan " principle was introduced in that year namely, the daily offering of war securities instead of the flotation of fixed period subscription loans of the old fash- ioned variety. At first this type of borrowing was not very suc- cessful, but with the introduction of modern publicity methods in 1917 the continuous loan plan became a very remarkable success.
The following are the aggregate figures for the British financing of the war from Aug. i 1914 to Nov. 16 1918, five days after the Armistice was signed:
Total expenditure 8,656, 198,215 Balance . . 6,141,062
Yield of revenue 2,220,235,719 Net borrowings 6,442,103,558
iotal
.8,662,339,277
Total
. 8,662,339,277
In the tables below and on the next page are shown revenue and expenditure for the 12 years ended March 1920-1.
An important feature of English finance during the war period was the borrowing of money abroad, especially during the period of actual hostilities. The first loan was raised in the autumn of 1915, when the British and French Governments jointly and severally issued a loan for 500,000,000 dollars in New York. The position of Great Britain's foreign debt on March 31 1921 is shown below:
Foreign Debt, 1921.
Debt to :
In Currency.
In Pounds Ster- ling at Par of Exchange.
U.S.A. Government Total to U.S.A. Canadian Government Total to Canada Sweden ... Straits Settlements. Mauritius. Allied Government.
$4.196.818,000 4,733,214,000 132,326,000 257.326,000 Kr. 12,500,000
Rs. 8,071,300
862,362,000 972,704,000 27,190,000 53.339,000 826,000 7,656,000 538,000 126,500,000
The total foreign debt, expressed in pounds sterling at the par of exchange, was, on March 31 1921, 1,161,563,000, a decrease of 117, 151,000 on the total as on March3i 1920, and of 23,287,- ooo from the highest point reached on March 31 1919.
The figures of the deadweight debt, which included the foreign debt, were as follows in each of the financial years 1909-20:
1909-10 1910- I
I9II- 2
1912- 3 . 1913- 4 1914- 5
713,245,000 685,232,000 674,744,000 661,474,000 651,270,000 1,108,817,000
1915- 6 . 1916- 7 . 1917- 8 . 1918-9 . 1919-20 . 1920- i .
. 2,140,749,000 . 4,011,446,000 . 5,871,851,000 7,434.949,000 7,829,000,000 7.573,000,000
The amount of advances and loans to the Allies on March 31 1921 was made up as follows:
Russia .... France .... Italy .
561,400,000
557,000,000
Belgium (war) . Belgium (reconstruction) Serbia .... Portugal, Rumania, Greece
nd c
ther
- s
94,400,000 9,000,000 22,100,000 66,200,000
TOTAL
1,786,900,000
Loans to the Dominions were made up on the same date as
follows: Australia . New Zealand . Canada S. Africa . Other Dominions TOTAL
90,000,000
29,600,000
13,800,000
7,500,000
3,100,000
144,000,000
Further tables show income-tax rates, and the yield for total direct taxation, 1910-21.
Revenue 1910-21 (ooo's omitted).
1>)(X) I<>
1910-1
1911-2
I9I2-3
I9I3-4
I9H-5
1915-6
1916-7
1917-8
1918-9
1919-20
1920-1
Cus'o.ns
30,348
33,HO
33,649
33,4*5
35,450
38,662
59,606
70,561
71,261
102,780
149,360
134,003
Excise ....
31,032
40,020
38,380
38,000
39,590
42,313
61,210
56,380
38,772
59,440
133,663
199,782
Motor Vehicle Duties .
-
7,073
Estate, etc., Duties
21,766
25,452
25,392
25-248
27.359
28,382
31,035
^1,232
31,674
30,262
40,904
47,729
Stamps (exclusive of Fee &
Patent Stamps)
8,079
9,784
9,454
10,059
9,966
7,577
6,764
7,878
8,300
12,438
22,586
26,591
Land Tax ....
150
1,220
750
700
700
630
660
640
665
630
680
650
House Duty ....
560
3,080
2,130
2,000
2,000
1-930
1-990
1,940
1,960
1,850
1,960
1,900
Property & Income Tax (inc.
Super Tax) ....
13,295
61,946
44,804
44,806
47-249
69-399
128,320
205,033
239,509
291,186
359,099
394,146
Excess Profits Duty
140
139,920
220,214
285,028
290,045
219,181
Corp. Profits Tax .
650
Land Value Duties
520
481
455
715
412
363
521
685
664
663
20
TOTAL ....
105,230
175,162
155,040
154,753
163,029
189,305
290,088
514,105
613,040
784,278
998,960
1,031,725
Postal Service
18,220
I9,22O
19,650
20,300
2I,I9O
20,400
24,100
24,350
25,260
29,400
31,000
36,100
Telegraph Service .
3,090
3,175
3.105
3,100
3,080
3,000
3,350
3.350
3,500
3,800
4,850
5,200
Telephone Service Crown Lands (Net Receipts)
1,720 480
i,955 500
2,945 530
5,775 530
6,530 530
6,250 545
6,450 550
6,400 650
6,600 690
6,800 760
8,300 680
8,200 660
Receipts from Sundry Loans,
"
etc. ....
1,269
1,234
1,281
i,4i9
1,580
1,277
2,432
8,056
'6,05-6
11,679
14,952
30,771
Miscellaneous.
1,688
2,604
2,539
2,925
2,304
5,917
9,797
16,517
52,148
52,303
280,829
313,329
TOTAL REVENUE
I 51,696
203,851
IT,(K)()
188,802
198,243
226,094
336,767
573-428
707,235 | 889,021
1,339,571
1,425,985
