aug. 21.
QUITE one of the most important political features of the cur-vent year is the determined attack now being made upon Mr. Austen Chamberlain, Chancellor ut the Exchequer, over the main-! tenance of the Excess Profits Duty. There is nothing particularly new in this baiting of a Minister, and the interest of the matter is in the subject of the dispute rather than the manner in which it is being conducted. Based on the principle that no undertaking should be allowed unduly to gain by the economic situation created by the war and that the greater part of any such advantage should revert to the] people, the Excess Profits Duty was introduced by Mr. McKenna, while Chancellor of the Exchequer in Mr, Asquith's government. It was welcomed by the nation at large as an indication that all the money expended in war should not go to the enrichment of the few and that a reasonable, proportion of it should return to the national coffers to reduce the amount which the demands of war made ie necessary to borrow. As a war measure, the Excess Profits Duty served two admirable purposes: it tended to reduce the total of money raised-in loans, and, by making the returns on money invested in other than war bonds less attractive than they might otherwise have been, lessened the tendency of commercial ventures to attract money which it was imperative should be lent to help in the winning of the war. That it served those two ends there can be no possible doubt, and irksome as it undoubtedly was, harsh as its application in some instances might have been, it would be rash to assert that at the time of its introduction this new system of taxation was anything but well conceived. Money had to be obtained quickly in substantial amounts and Mr, McKenna's innovation secured it.
Now, a new Chancellor of the Exchequer is in bad odour for continuing it, and is actually blamed by the originator of the tax himself, who is loud in his denunciation of its application to resent times. It was, he says, a war tax and invented as such.
Against that view it will be urged that the economic situation created by the war has not yet passed away, and that to remove the tax would be to put money into the hands of private individuals when it should still be going towards solving the financial problems set the nation by the lately concluded struggle. That, indeed, appears to be Mr. Chamberlain's attitude.
In effect Mr. McKenna says that a Budget of £1,000,000,000 is as much as the nation can carr: since the present revenue is on!
000,000, that the tax must; ropped at once, expenditure must be reduced and production increased. In other words we should not pay off any of our war debt at present because we cannot do it. That Mr. Chamberlain is raising these large amounts for this specific purpose is common knowledge. Judged purely on its merits it is difficult to see how such a policy can be wrong as tending to improve the credit of the country, but there is also the test of expediency to be considered.
To a certain extent the belief) that the Government is throwing away money is unquestionably correct, but in the main this is' being don: under pressure. The advocates of social progress are unwilling to await a readjustment of our finances, and their demands are being met to a degree! which, in the circumstances, 13} somewhat unjustifiable. It is such an expenditure as the £50,000,000; on bread, the huge sum devoted to the subsidization of railways and the like which are running away with enormous sums of money in the aggregate. Tt would be an admirable thing to pay our war debt off promptly, a beau geste financially, and one which would go a long way towards rehabilitating the economic situation, but the Chancellor is being bled by Members of Parliament with pet schemes of one sort and another and, in the result, Mr. Chamberlain—will probably have to agree to a slower repayment of the War Debt. In the meantime to abolish the Excess Profits Duty because it is irksome seems utter foolishness. Being in the nature of a levy on profits it cannot and does not affect the payment of the enhanced wages that are now the order of the day, it enables the nation collectively to regain some of the money that is being obtained from it individually over and above the normal profits of the trader, and it renders unnecessary the imposition of any new form of taxation. Eventually it will have to go, but the time is not yet. The country needs money and the Excess Profits Duty is as good a way of getting it as many another form of taxation.
Text read from the printed page and cleaned; old type leaves the occasional error.