companies are henceforward to be limited and the whole balance above a statutory rate to be taken over by the State for the public good, this would be, in effect, the continuance on stricter lines of the Excess Profits Duty.  As a war measure the Excess Profits Duty has much to be said for it at a time when the Government, by its inflationary policy, is putting large windfalls of profit into the hands of most people who have to hold a stock of goods and have only to hold them to see them rise in value.  The argument that the State should take back a large proportion of this artificially produced profit is sound enough; but, if it is really to be the case that industry is to be asked for the future to take all the risk of enterprise and handover all the profit above a certain level to the Government, the reply of industry to such a proposition would inevitably be short, emphatic, unprintable, and by no means productive of revenue to the State.

VIII

THE YEAR’S BALANCE-SHEET

April, 1918

The Figures of the National Budget—­A Large Increase in Revenue and a Larger in Expenditure—­Comparisons with Last Year and with the Estimates—­The Proportions borne by Taxation still too Low—­The Folly of our Policy of Incessant Borrowing—­Its Injustice to the Fighting Men.

At first sight the figures of revenue and expenditure for the year ending March 31st are extremely satisfactory, at any rate on the revenue side.  The Chancellor anticipated a year ago a revenue from taxation and State services of L638 millions, and the receipts into the Exchequer on these accounts actually amount to L707 millions.  On the expenditure side, however, the increase over the Budget estimate was very much greater.  The estimate was L2290 millions, and the actual amount expended was L2696 millions.  Instead, therefore, of a deficit of L1652 millions having to be met by borrowing, there was an actual gap, to be filled by this method, of, roughly, L1990 millions.

To take the revenue side of the matter first, this being by far the most cheering and satisfactory, we find that the details of the revenue, as compared with last year’s, were as follows:—­

                 Year ending Year ending
                Mar. 31, 1918.  Mar. 31, 1917.  Increase.  Decrease. 
                        L L L L
Customs 71,261,000 70,561,000 700,000 —–­ Excise 38,772,000 56,380,000 —–­ 17,608,000 Estate, etc.,
  Duties 31,674,000 31,232,000 442,000 —–­
Stamps 8,300,000 7,878,000 422,000 —–­ Land Tax 665,000 640,000 25,000 —–­
House Duty 1,960,000 1,940,000 20,000 —–­ Income Tax and
  Super Tax 239,509,000 205,033,000