It seems to me, however, that the drawbacks are very considerable.  In the first place, I have not seen any really practicable scheme of redeeming debt by means of a levy on capital In so far as the levy is paid in the form of surrendered War Loans, it is simple enough.  In so far as it is paid in other securities or mortgages on land or other forms of property, it is difficult to see how the assets acquired by the State through the levy could be distributed among the debt holders whom it is proposed to pay off.  Would they be forced to take securities, mortgages on land, furniture, etc., as the Government chose to distribute them, or would the Government have to nurse an enormous holding of various forms of property and gradually realise them and so pay off debt?

Again, a great injustice would surely be involved by laying the whole burden of this oppressive levy upon owners of accumulated property, so penalising those who save capital for the community and letting off those who squander their incomes.  A characteristic argument on this point was provided by the New Statesman in a recent issue.  It argued that, because ordinary income tax would still be exacted, the contrast between the successful barrister with an Income of L20,000 a year and no savings, who would consequently escape the capital levy, and the poor clergyman who had saved L1000 and would consequently be liable to it, fell to the ground.  In other words, because both lawyer and parson paid income tax, it was fair that the former should escape the capital levy while the latter should have to pay it!

But needs must when the devil drives, and in a crisis of this kind it is not always possible to look too closely into questions of equity in raising money.  It is necessary, however, to look very closely into the probable economic effects of any suggested form of taxation, and, if we find that it is likely to diminish the future wealth production of the nation, to reject it, however attractive it may seem to be at first sight.  A levy on capital which would certainly check the incentive to save, by the fear that, if such a thing were once successfully put through, it might very likely be repeated, would dry up the springs of that supply of capital which is absolutely essential to the increase of the nation’s productive power.  Moreover, business men who suddenly found themselves shorn of 10 to 20 per cent. of their available capital would find their ability to enter into fresh enterprise seriously diminished just at the very time when it is essential that all the organisers of production and commerce in this country should be most actively engaged in every possible form of enterprise, in order to make good the ravages of war.

VI

OUR BANKING MACHINERY

February, 1918

The Recent Amalgamations—­Will the Provinces suffer?—­Consolidation not a New Movement—­The Figures of the Past Three Decades—­Reduction of Competition not yet a Danger—­The Alleged Neglect of Local Interests—­Shall we ultimately have One Huge Banking Monopoly?—­The Suggested Repeal of the Bank Act—­Sir E. Holden’s Proposal.