War Finance, 1914-18.— Shortly after the beginning of the war Mr. D. Lloyd George, then Chancellor of the Exchequer, estimated the daily expenditure of Great Britain in the conflict at which he said was a diminishing gure. For the financial year 1913 14 the total revenue stood at $991,215,000, and the expenditure was $987,463,500. Owing to the general financial panic prevailing in. Europe during the pre-war international crisis, the Lon don Stock Exchange was closed on 31 July 1914 by order of the government, and it re mained closed till 4 Jan. 1915. On 2 Aug. 1914 a moratorium was proclaimed in Great Britain, which lasted till 4 December. On 6 August Parliament took the first vote of credit for war purposes —$500,000 000, and the second came on 16 November, for $1,125,000,000, when the Premier (Mr. Asquith) announced that $50000,000 had been advanced to Belgium and $4,000,000 to Serbia. Between August and No vember (1914) Treasury Bills to the amount of $450.000,000 were issued, and in the latter month the first great War Loan for $1,750,000,000 was issued in the form of stock at 95 per cent, redeemable in 1925-28, and bearing interest at 3%. The net yield was $1,615,0006000, which sum was intended to include the repayment of the Treasury Bills issued. The revenue rose rapidly. In 1914-15 it was $1,351,660,000, with expenditure of $5,568,270,000; in 1915-16 it was $1,684,000,000, with expenditure of$7,795,790,000. In 1916-17 the revenue rose to $2,667,140,000, and the expenditure to $10,990,565,000; in 1917 18 the revenue was estimated at $3,062,500,000 and the expenditure at $11,451,905,000. The highest point was reached in the Budget for 1918-19, which provided in round figures no less than $15,000 I I 1,000. with estimated revenue of $4,200,000,11 I, leaving the balance of $10,800,000,000 to be covered by loans. The additions to, revenue came chiefly from increases of the income and super tax, the customs and excise, from the new excess profits duty beginning with 60 per cent on profit in excess of that obtained before the war, and the heavy "luxury taxes)) imposed in 1918. The gradual rise in the war bill of Great Britain and the various votes of credit, loans, etc., by which the money was raised is shown in the fallowing sununary: On I March 1915 a vote of credit for $185,000,000 was passed to cover expenditure to that date. The total voted since the begin ning of the war to this date—eight months of war — amounted to $1,610,000,000, and rep resented the difference between the expenditure of the country on a peace footing and that on a war footing. The average cost of the war per day was now $7,500,000. On the same day (1 March) another vote of credit was passed for $1,250,000,000 to carry on the war for a period of somewhat more than three months. This was the largest vote of credit in the annals of the House of Commons. On 15 June 1915 a supplementary vote of credit (the 5th) for $1,250,000,000 was taken. The average daily expenditure had risen to $13,300,000, after standing at $7 500,000 for 240 days— in addition to the expenditure of the normal peace votes. On 20 July 1915 a supplementary vote of credit for $750,000,000 brought the total for the year up to $3,250,000,000, and a grand total of $5,560,000,000, since the outbreak of the war. On 15 SepC 1915 a vote of credit for $1,250,000 000 was raised to cover expenditure to the middle of November.. The daily cost of the war from 1 April to 30 June was given as $13,500,000; from 1 July to 17 July it stood at $15,000,000; and from 18 July to 11 Sept. 1915 it was over $17,500,000 per day. On 11 Nov. 1915, a fresh credit vote for $2,000,000,000 was taken, and two more on 21 Feb. 1916, one for $600,000,000 to cover the remainder of the financialyear, and one for $1,500000,000 to start the new finan cial year beginning on 1 April 1916. On this occasion the Premier stated that the total for votes of credit since August 1914 amounted to $10,400,000,000, with loans to Allies and do minions to date amounting to $844 500,000.
By 23 May 1916, when the Ilth vote of credit for $1,500 000,000 was taken, the daily expenditure on the war had risen to $23,750,000. On 24 July 1916 the 12th vote, for $2,250,000, 000, represented the largest sum ever asked for by any government in British financial history.
This sum was to carry the war to the end of October, and on the Ilth of that month an other vote of $1,500,000,000 was designed to last till Christmas. A vote of $2,000,000,000 on 14 Dec. 1916 brought the total expenditure since the beginning of the war to 000, while the daily cost for the last 63 days had been $28,550,000. On 12 Feb. 1917 two
votes of credit for broke •the "record)) of the previous July • the daily ex penditure had risen to $28,950,000; total since August 1914, $21,500,000,000; advances to Allies and the dominions, total, $4,450,000 000. On 15 March 1917 a vote for $300,000,000 was taken and the national expenditure reached about $30,000,000 per day, A vote for $2,500 000,000 on 9 May 1917 was estimated to pay war ex penses to about the 1st of August; by this time British loans to her Allies and colonies at tained to $10,000,000 daily. Thegreatest vote of all came on 24 July 1917, when $3,250,000,000 was asked for and granted, bringing the amount voted for 1917-18 to $7,500,000,000, and for the whole war to date, $27,460,000,000. An other $2,000,000,000 was voted on 30 Oct. 1917 and a further sum of $2,750,000,000 on 12 De cember. A government White Paper issued in May 1918 estimated the cost of the war to Great Britain at 31 March 1918 to be $63,750, 000,000, of which sum $46,525,000,000 had been spent on the army, navy, service and muni tions and ordnance works, and that Treasury loans amounted to $8,750,000,000.
During 1918 further votes of credit were taken: $2,500,000,000 on 18 June, when the daily expenditure was stated to be $34,240,000, with debts due from Allies. $,850,000,000 and from British dominions, $1,030,000,000; on 2 Au gust a vote of brought the total for the current year to $9,000,000,000. On 1 Aug. 1918, Russia owed Great Britain $2,940 000,000; France, $2,010,000,000; Italy, $1,565,000 000; Belgium, Greece and Serbia together, $595,000, 000. At the end of July 1918, United States loans to Great Britain amounted to $3,345,000, 000. The first British war loan has been men tioned above (November 1914) ; the second yielded $3,080,000000; the third, of $5,000,000, 2 000, was opened Oct. 1917 and was to remain open till further notice. The loan reached the $5,000,000,000 mark on 15 Aug. 1918. The Chancellor of the Exchequer had decided to ask the country to lend the money as it was needed, at 100 million to 125 million dollars per week. For over 10 months money had flowed in stead ily at an average weekly rate of $110,000,000. On 13 Nov. 1918, two days after the signing of the armistice, a vote of credit for $3,500,000,000 was taken, when the chancellor stated that Great Britain's debts abroad were not expected to exceed $5,000,000,000, and that the country could easily bear this if labor and capital worked harmoniously together.
Lfacal Finance.— To give an absolutely ac curate account of the finances of local authori ties in the United Kingdom is impossible owing to the complicated relationship of the various local authorities to each other and to the central government, and also because the three king doms, England, Scotland and Ireland, have en tirely different systems and methods of account keeping. The aggregate debt in 1913-14, including of course the f74,000,000 of debt to the central government mentioned above, is stated (after deducting accumulated sinking funds) at about 1655,000,000, but about f70,000,000 of this con sists of the debt of harbor and dock trustees which is secured only on the harbors and docks, and in no way upon the taxes of any locality, and therefore ought not to be reckoned as local debt. The remainder represents capital invested in (taking the larger of the various items ap proximately in order of magnitude) waterworks, street and road improvements, schools, drain age, gasworks, tramways, electric works, work houses, asylums and the irmumerable other works and buildings required by modern civi lized and especially urban communities. The aggregate annual repayments of debt and pay ments to sinking funds amount to a little over 2 per cent on the total, but the annual addi tions considerably exceed this amount, so that the debt increased nearly L300,000,000 in the first 13 years of this century. In this period however there have been two exceptional in creases. In 1903 the capital of the London water companies was converted into debt of a board representing the various local authorities within the area of supply; this added about i46,000,000 without much altering the liabilities of the inhabitants or owners of the area con cerned. In 1909 an addition of f23,200,000 was made by a similar conversion of dock com panies' capital into stock of the Port of London Authority. About half the total capital has been raised for purposes which are often pro vided for by private enterprise, such as water works, gasworks, docks, electric works, tram ways and cemeteries, and the other half for purposes which are seldom so provided for in modern communities.