Tentative proposals have been mooted in England for the flotation of defence loan in order to bring British armaments up to recently-revealed requirements. This proposal had @irect connection with. the present isis which Is developing out of the Halo-Abyssinian trouble. Whether the need for increased armament proved or not, the "Economist" has uttered a strong objection to such a Joan on principle. After recognizing that the arguments brought forward In favour of a public works development Joan will be mobilized on behalf of this new proposal the financial weekly points on. that inflationary Jeffects could not be avoided and it adds:
Against the argument for an me fAatlonary armament loan there are we arguments which In our view are Gecisive. "The frst is that loan. penditure "designed" to. stimulate Fecovery should be expended on social assets, such as better housing, which are desirable' in. themselves. and. will main of lasting benefit to the nation, 'An armaments Joan fa "dead weight debt in the fullest sense of the term, Unitke' earning assets, such as Toads land houses or amenities: which add to Social wealth and. rateable ton and interest charges. second and final argument Is. political, Tf Great Britain. gives. the Toad. In' ree tations get it into their heads that we can get these pretty toys for nothing, find that such' expenditure can incl dentally" make unemployment dia-appear as it by magic, ws throw in our hand Abandon hope of saving destruction' We sincerely hope that Whatever the measure of rearmament "iany=—to which we are: driven, we Shan have' the courage to. meet ut of the tax revenue of the country and not attempt to disguise the burden. which the nation is" condemned. to dear.
If the crisis in Europe should take sinister turn—a development against which all statesmen are endeavouring to work—It might be dimeult to avoid which has precedent behind time. Otherwise improbable that the National Government will ignore canons of finance which have been usually held in firm Fespect by successive Chancellors of the Exchequer.
Text read from the printed page and cleaned; old type leaves the occasional error.