Chapter 17 - Paying for the War

Posted in The Forgotten People

As a great war loan is about to be launched by the Government, it seems appropriate that I should this week say something about the importance and significance of war finance, and why, in a phrase, we must spend less if we want to fight more.

We must not regard such questions as being either remote or merely technical. They possess both gravity and urgency. We must, every one of us, back the Government's efforts to see that no civil action, no civil spending, no notions of ordinary comfort or personal advantage must be allowed to stand in the way of doing all that we physically can to win this war.

The financing of this great struggle is not, as some of us may imagine, a mere matter of collecting cash from those who have it and spending the proceeds of the collection upon paying fighting men and adequately equipping them with arms. Wars are not fought with money, but with men and materials. How do we get men and materials? The answer surely is, by subtracting them or diverting them from the ordinary affairs of life.

If hundreds of thousands of men go into the armed forces they can no longer live their ordinary lives in a civil way. If scores of thousands of men and women go into munitions production they can no longer do their ordinary work in civil production. If hundreds of thousands of tons of materials go into the munitions factories they can no longer go into civil factories. If millions of pounds of purchasing power go into the war effort they can no longer go into civil buying.

In brief, a war effort is a subtraction from normal civil effort. We cannot have it both ways. We cannot have our cake and eat it too. That is why the Government must ask us to go without things we normally buy, if we are to have those military things without which we cannot fight.

Let me put the matter in another way from the point of view of the ordinary citizen. I do not want to appear pedantic on such a question, but I am firmly convinced that the golden rule of citizenship is that each of us should act as he would wish all other citizens to act. That is why individual decisions are of such immense moment. That is why every citizen must test this matter for himself and be earnest to discover his own duty.

John Jones is in steady employment and earns £8 per week. This is more than he was earning before the war. If he spends all his £8 on his current desires at the shops and other people act in the same way, the civil business turnover will increase very much: the big department stores will have record sales, and the demand for civil goods and civil services and civil factory production will not fall, but rise. And, as we have seen, because no man can at the same time be a soldier and a civil worker, and no piece of metal can at the same time be used for a shell case and also for some household article, the civil demand set up by John Jones and all those who think with him will, if it is satisfied, keep some men out of war service and some materials out of war production.

Now, listener, if you happen to be John Jones, drawing your £8 per week, you may want to retort to me "Nonsense! It's the big man who has the purchasing power. Let him economize! Let him subscribe to the loans!" But you will be wrong. The Government is attending to the so-called "big men": an income tax of fifteen or seventeen shillings in the pound instead of five shillings before the war is a pretty effective economiser. And out of what is left we are still expecting that the big man will be able to put something into war loans.

But the bulk of the purchasing power of Australia is not in the hands of big men. In 1940 - 41 the individual incomes of Australians totalled £800,000,000. Of this total £560,000,000 represented incomes up to £400 a year. In other words, seventy per cent of the total of individual incomes is earned by people whose individual earnings do not exceed £8 a week. If you think for a moment you will realize that it is in this group that the greatest increase in wartime emoluments has occurred - as a result of overtime, war loadings and much more constant employment. It has been calculated that in the first two years of this war the income of this group increased by a total of £70,000,000.

I mention these facts because I want you, Mr John Jones, to understand your own importance in war finance. If you want Australia to put forward £250,000,000 of war effort this year, your contribution is essential. For the fact is that if you say no, and all others in your position have the same point of view, the war effort will not be achieved.

And what goes for John Jones goes for everybody, big and small. Not one of us can stand out. If we do not buy less and spend less on our own civil requirements, Australian troops will not get their full equipment and we shall fight this war under grave, and perhaps overpowering, handicap. We have never before had a war like this one, and we pray God we shall never have another. This is not a war in which subscription to war loans can be the safe investment of the rich, or the casual handing over of an easily acquired and easily spared surplus. "All-in war" is not a mere pithy phrase. We must not use it as a substitute for clear thought or resolute action; it must be a stark reality. "All" does not mean "some"; above all, it does not mean "a few".

Now, listeners, it is necessary to be quite frank about this problem, and to ask ourselves how we are measuring up to our responsibilities. It is a poor and demeaning pastime to criticize the other fellow when our own conduct falls short of reasonable standards. Great Britain has forty-five million people, and we have seven million. We have for years enjoyed conditions of life unsurpassed anywhere in the world, and materially better, more comfortable, and more conducive to saving than those obtaining in Great Britain. Since the war broke out, the level of taxation in Great Britain has risen to saturation point. I do not think anybody will seriously suggest that British taxes have not "socked" the rich to the limits of endurance.

Salary- and wage-earners in Great Britain, particularly those on the smaller incomes, pay more taxes than in Australia. Yet, since the war broke out, Great Britain had raised, up to the end of October 1941, £1,737,000,000 of war loans and £385,000,000 in national savings certificates. The corresponding figures in Australia, from the outbreak of war up to the end of January 1942 are: War loans, £113,000,000; war savings certificates, £30,000,000.

A short calculation will show that, on a population basis, to compare with the effort in Great Britain, we should have subscribed £260,000,000 in war loans and very nearly £60,000,000 worth of war saving certificates.

Subscriptions to national savings certificates in Great Britain or war savings certificates in Australia are expected to be made by those of limited means, for the limit of individual holdings in Great Britain is £500, and in Australia £250.

These figures and comments constitute a real challenge to us to decide whether we are really pulling our full weight and making our full individual share of sacrifice necessary to sustain a winning war effort.

When I say this I am in no sense intending to use the language of complaint. That there were, until the incursion of Japan into this war, many thousands of people in Australia who regarded the war as distant and perhaps not dangerous, can scarcely be denied. But, while such a point of view exhibited not only a want of knowledge but also an absence of clear thought, it was human enough in all conscience. We never see distant dangers as clearly as we see near ones. Bushfires assume more dreadful proportions the nearer they come to your own house or your own farm. The danger of an invasion of Great Britain, quite naturally, viewed more philosophically from this distance than the danger of an invasion of Darwin is at this moment.

Having regard to these considerations, it must be said that the Australian public has responded well to the call for funds. But in this year of 1942 it must, if it is to do the job, respond twice as well. No man should run away with the idea that there is much real patriotism involved in taking a few war savings certificates during the year so that he can cash them at Christmas-time in order to buy a new suit of clothes. The Government wants two things, and I hope I have been able to make them both clear to you tonight.

First, it wants the use of your money - every penny of if that you can spare after providing for a modest and decent way of life - and it wants that money not for a month or two, but for years. Second, it does not want your money merely as money. It wants you to hand funds to it for war expenditure so that you will not be spending that money on those competing goods and services which use up man power and materials urgently and grimly needed for war.

I do beg of you that you will not allow yourselves to be side-tracked by any foolish theory that we can go on living and spending as if we were at peace, and that by some mystery of the financial system soldiers can still be raised and paid and equipped and the country fight its way out of its deadly peril.

What I have said to you is not one-sided, or political. In reality, I am merely trying to reinforce, with such authority as you may accord to my knowledge and experience, what the Government of the day is in substance saying to you. On this great matter which touches and concerns the sinews of war, we must all be prepared to back our Government, and by so doing save ourselves.

13 February, 1942