The Audacious War

by Clarence W. Barron

England's war finance is not wholly measured in her expenses or loans to other countries. In a single issue of a London paper you can count daily reports of more than a dozen charitable funds connected with the war-work. These funds range all the way from "Aid to the Mine-Sweepers," "Gloves for the Soldiers," and the "Servian Relief and Montenegrin Red Cross Funds" up to the "Prince of Wales's Fund."

This last was over $20,000,000 before Christmas. The suddenness of this war may be illustrated by this fact: A friend of mine, who is managing director of a big English concern, has assumed the responsibility for seven years past of keeping in England one year's supply of everything that his company was likely to require from the Continent. This was at a cost to his company of many thousands of dollars. With dogged determination he stuck to the same policy for 1914, although in January of that year it was clear to him that Germany could not afford to go to war. While he was happy over his judgment, he admitted in conversation with me in December, 1914, that in January, 1914, the outlook was less indicative of a general European war than it had been for many years.

Thirty per cent of the workmen of his factory had gone to the war and his company was providing 250,000 pounds sterling a year to maintain the wages of the workmen at war up to the same amount as they would receive if they had stayed at home. He said that in one of his offices, of 80 men eligible for the work, 78 had enlisted, and, what was wonderful, the women were glad to take up the heavy work abandoned by the men,—something they would have refused to do in all ordinary times. On the whole, the output of this concern and its efficiency were materially increased, not diminished, by the war.

It is figured that troops at the front mean an expenditure of one pound per man per day, and that English troops in training mean an expenditure of not less than ten shillings per man per day.

The war expenses of Great Britain must thus be above one million pounds per day and steadily increasing. Indeed, the best economic estimate I have of the cost of the war to England is 500,000,000 pounds the first year.

While the English declare that they are fighting for their children and their grandchildren, they are not willing to leave to them the full load of the war-cost, and gladly do they assume all possible burdens in the present time.

The income tax, which began in 1842 at two pence in the pound, has now been doubled from one shilling and three pence to two shillings and six pence in the pound. This is on the average, and takes nearly one eighth of a man's income. There are very great variations in this tax. The rate I have given is the rate on dividends. Upon wages and salaries the tax is somewhat less.

The income tax is also apportioned over a three years' average. The supertax raises the contribution of the wealthy to one fourth of their incomes, although on the average it is figured to take only an eighth.

It is expected that the income tax may be further increased, possibly doubled, next year. I was not surprised therefore to find American millionaires with houses in London returning to New York and making sure of their American citizenship.

Every penny in the pound in the tax rate produces 2,500,000 pounds sterling, or $12,500,000, nearly one half the national income tax of the United States for 1913. Indeed, the English income tax for the year ending March 31,1915, is estimated to produce 75,000,000 pounds sterling, or about twelve times the income tax of the United States and from less than half the number of people. In other words, the income tax of Great Britain per capita is this year twenty-five times that of the United States.