Strong Measures to Balance Budget and Restore National Confidence London, Aug. 11.
The Premier, Mr. R. MacDonald, London.
Jeff Lossiemouth last night for
Apart from his two day meeting with Mr. H. 1, 8! the Amer-digest the weighty report, of the Economy Committee Which was published tion of Par-sport stressed importance of drastic econ amies if national bankruptey were to be avoided.
All the members of the committee are taking their holidays within easy distance of London so that a meeting can quite conVeniently be arranged, There was a sequel to Mr. Ram~ say MacDonald's spectacular interruption of his holiday at Downing Street this morning. The Premier arrived after travelling all night. He was visited by Mr. Philip Snowden and the King's pr: vate secretary. Mx, MacDonald afterwards was interviewed and said "urgent Governmental business" had brought him back, He declined to discuss the nature of this business or to comment on newspaper reports that Wonservative members of Parliament were appealing to him to form an emergency government, but it is understood his return is connected with the recent economy report and the general financial situation, "This is the second time business has interfered in Mr. MacDonald's, holiday as the Premier has just concluded Jong and confidential diseussions with Col, Stimson in the Scottish Highlands during walks on the moor and in the din: ng room of the farm house where the two mittee met at Downing-street this afternoon to take up the task "cutting their coat according to their cloth" on a national scale.
The last to reach London was the Foreign Secretary, Mr. Arthur Henderson, who, having to travel from the heart of Wales, was unable to arrive before late in the afternoon. As soon as he appeared the committee got down to work. Their de-Tiberations will probably conti until next week, and when they have decided on their program Government will probabl Conservatives to join ty" conference to con of Mr, Stanley Baldwin, who France, has decided to return to London immediately from Scotland.
According to & prominent walker quoted by the Londot 'Evening News," banks received inquiries regarding the financial situation from all' parts of the world,, The ancial position Britain, be said, was sound, but it] twas necessary to make it safe beyond all possible "misapprehension land for this purpose drastic economies were necessary, Aug. 18.
The next budget has already been tentatively balanced in City' circles by the severe pruning, Jef, social and defence services. So-ists, however, quickly, retort with "no cuts but morg taxes."
"The sporting element ever is introduced to rescue sterling, for it is seriously suggested: in" serious quarters that a State lottery loan, with yearly or half-yearly draws statesmen satin the evenings by|for bonuses, the light of of lamps. Me. Bfac-|rroftable Donald admitted their talks covered than might prove more international financial qu 'The Government's dete to balance the budget and to steps to recreate national cent fence. ig. reflected in' the announce iment that-a special meeting of the Cabinet "Economy Committe will today discuss the whole financial situation, 'The Government, however, is likely, to "propose that an "All Party' conference shi discuss the proposals of the Government The Conservatives, whil to support Government. towards effecting economies, express the opinion that the responsibility of initiating such legisla tion lies solely with the ment, Consequently, certain whether they will any ki Party tions.
Reports of a Cabinet split on the Te is the general view ¢hat, the Government can hardly launch a scheme of voluntary." conversion without a cut-and-dried programme of economy and that compulsory conversion, apart, from damaging Britain's reputation for maintainig the sanctity of contracts, would be manifestly" unfair.
'The banks and big insurance companies, who have promised. the Government' hearty" ce-operation, lean safely be trusted to insist upon the sanctity of contracts, and their fluence can be gauged from the fact that their holding in Government securities approximate £500,-)'p The "contemplated conversion scheme relates to. the 5 per. cent.
1 loan redeemable at par at the Government's option in 1920, but the fact that over—£2,000,000,000 of his loan is outstanding makes the onverson formidable " propos facing a _most within its own ranks. its supporters are adventing heavier' taxation rather than cts in social services.
Moreover the interest on the loan in a privileged position, not having income tax deducted at the source. "Hence the loan has proved tery attractive to overseas inves-
Kog. 12. round "that "the Government are "The opinion is steadily gamin
determined, at all costs, to balance] he: nation's budget According. to. the report of the! Economy Committee 120,000,000 has to be raised, or saved, in order: that a. clean balance sheet may be Dresented, andthe question now ing financial civsies is_wheexpenditure on. social service reduced. or taxation lev higher scale, agreed that the publication the report had the unfortunate fect of creating a. wrong impression abroad, though' the need. for sttinrunt economies fs not denied.
Te-is known that: many" members of the Government, azo firmly posed to any redaction in" social services. "On the other hand, businessmen throughout the coun: try tinge that industry" cannot be any fresh. burdens and their. op fons cannot be altogether ignored.
"This ie thes dificult. situation which the Government has to face. There ave pitfalls whichever path they choose" to take, and in. many imivters their defeat, followed by the dissolution of parliament, 33
Kaying harried back to London from interrupted "holidays, five members of the Government' con stituting the Cabinet economy com-loan bearing interest more in consonance with modern money rates would, it is estimated. save the Exchequer £20,000,000 annually.
Aug. 13.
It understood by Reuter from an authoritative source that the Cabinet economy committee has definitely decided the budget. must be balanced and that the fundamental principle to be applied in this respect Is equal sacrifice and effort on the part of all sections of the population.
Various classes of expenditure have been scrutinized from the point of view of effecting the economies and a decision has been Well-informed quarters assert that the committee came to the conclusion that the financial position of Great Britain was in every wa} sound, and that the recent fucius tions ' in sterling exchange were connection with the general state of Superficial. and had.not the least the country's finances. The present position is regarded as one of emergeney, vequiting emergency methods.
Government circles do. not re-
2ard the visit of the Conservattre
Text read from the printed page and cleaned; old type leaves the occasional error.