"These Fierce Increases"

April is the month when England freshens herself for a new season, when showers brighten the turf at Ascot and Epsom and wandering Britons are homesick. April, too, is the month when His Majesty's Government gives a significant demonstration of its democratic character: in April the Chancellor of the Exchequer appears before a crowded House of Commons to "open" the budget, i. e., to ask the people's representatives to vote the taxes which the people will have to pay. Last April Chancellor of the Exchequer Sir John Simon appeared before the Commons with the highest peacetime budget in Britain's history --$6,610,000,000 (estimated at $5 to the pound), nearly half of which was to arm the country against the menace of Adolf Hitler--which the Commons passed and the people made ready to pay.

Last week it was not April, but Britain was no longer at peace, when Sir John Simon rose to open a new, extraordinary budget. Before him was the worn red leather dispatch box that had been used by Gladstone. Three famed predecessors of Sir John's sat in the crowded Commons as he opened the box and began drawing out sheaves of paper. There was Neville Chamberlain, who used to have the amiable boomtime duty of announcing surpluses. There was Winston Churchill, who in the years 1924-29 would accompany his budget demands with thumping gestures. And, tiny in his corner of the Liberal bench, sat snowy-haired David Lloyd George, who as Chancellor of the Exchequer in 1909 introduced his epoch-making "war-against-poverty" budget. That was the budget that pitted the House of Commons against the House of Lords in a two-year struggle for power--a struggle which ended only after King George V, by threatening to pack the House of Lords with new peers, forced them to pass the Parliament Act which established the supremacy of Commons.

In Germany, Adolf Hitler tells his people what he wants, and takes it. In Russia, Joseph Stalin does the same. In France, Edouard Daladier had promulgated sweeping socialistic measures by decree. In Great Britain, Sir John Simon opened the budget in September instead of April.

What he said in his cold, precise voice was as simple as it was devastating. Instead of the $3,768,000,000 of revenue estimated last April, the Government would need no less than $8,000,000,000 for the first year of its war against Adolf Hitler.

How should that staggering $8,000,000,000 be raised? Although he hinted (and the next day confirmed) that half the sum would be borrowed, all Sir John's emphasis was on direct taxation. The guiding principle, he informed his colleagues, would be to impose all the taxes the country could stand. Normal standards of what was popular no longer counted, said he; furthermore, one of his aims was to curtail civilian demands. "There must be restrictions directed against wasteful or unnecessary use of resources, restrictions which limit consumption of a long list of articles, the strictest economy all along the line."

Thereupon Sir John asked that the income tax be boosted to a basic rate of 35% through March 31, and for the following year to 3,7.5%--more than six times what the British taxpayer had to pay in 1914, 36% more than he had to pay last year and as much as ten times what U. S. taxpayers now pay. Exemptions must be slashed so that a single man earning $10 a week would have to pay a tax. What Sir John termed "these fierce increases" would bring the Government an additional $280,000,000 this year and $584,000,000 for the full year. To squeeze out another $20,000,000 surtaxes must be upped to 6 1/2% on $8,000 incomes, up to almost 50% on incomes of $120,000 or over. Any Briton earning $400,000 a year would pay four-fifths of his income to the Government.

Blandly Sir John continued to pound home the cost of the war to the people. Another penny a pint must be added to the tax on beer, another shilling and threepence on a quart of whiskey, another 3 1/2 pence on an ounce of tobacco, another penny a pound on sugar. These taxes would yield $266,000,000 during the full year.

Business must bear an even heavier burden. A universal excess profits tax of 60% would be substituted for the present tax which applies only to armament firms. The estate tax must be upped 10%. And at the end of the war, Sir John warned, the Government was very likely to propose conscription of wealth" by tapping unearned war profits, such as those produced by increased real-estate values.

"We should bear in mind," said he, "that however serious our problem may be, the financial problem which confronts Germany is infinitely greater. . . . Let us always remember that, except insofar as the war is financed either from the proceeds of taxation or ... loans which come from the genuine savings of the nation, it can only be financed by methods . . . which are essentially inflation."

No Labor Government would have dared to submit such a budget for the purpose of conscripting wealth. Yet that was exactly what this essentially Conservative Government's budget did. And, without one dissenting voice, the House of Commons passed it. One Conservative member merely remarked quietly that it would "bring socialism a little nearer."

It had indeed gone far toward bringing socialism to Britain. But the democratic forms remained. If Britain's people, who had already given up most of their personal liberties', now gave much of their property to the State, they did so in the belief that both liberty and the right to their earnings would become theirs again when the war ended. Whether their confidence was justified, no man knew last week. Britain's hardest task would be to win the war without losing it.

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