Foreign News: Compulsory Thrift

From the packed galleries of the Canadian House of Commons last week came gasps of surprise as lean, sandy-thatched Finance Minister James Lorimer Ilsley presented his new budget. Then, from the people who must pay the bill, came applause.

Besides being almost eight times prewar budget size, and nearly as large as Canada's entire national income in 1939, the new $3,900,000,000 bill called for what amounted to compulsory savings for corporations and individuals. Excess-profits taxes were upped from 75% to 100%, with the provision that 20% would be returned after the war, with interest. Similarly, part of the increased income tax on individuals will be recognized as savings and returned. Example: a married man in the $5,000 class, whose present tax is $1,000, will have a total tax of $1,878—$500 of it refundable. By such means Canada, which is still boosting its war budget, will continue to meet 52% of its war bill on a pay-as-you-go basis.

The U.S. watched with more than the usual mild interest in foreign finance. For Canada and the U.S. have often tested economic measures for each other.