shipped from any country;
that is to say, for the time being they turn the exchange against us.
On the other hand, it is a well-known commonplace that imports of
securities have to be balanced by exports of goods or services; and
as the times when our export trade is most active are those when most
foreign securities are being placed in London, it follows that any
restrictions placed upon the issue of foreign securities in London
will hinder rather than help that recovery in our export trade which
is so essential to the restoration of our position as a creditor
country.

Moreover, our rulers must remember this, that in War-time, when all
the letters sent abroad are subject to the eye of the Censor, it is
possible to control the export of British funds abroad; but that in
peace time (unless the censorship is to continue), it will not be
possible to check foreign investment by restricting the issuing of
foreign securities in London. If people see better rates to be
earned abroad and more favourable prospects offered by the price
of securities on foreign Stock Exchanges, they will invest abroad,
whether securities are issued in London or not. As for the curious
suggestion that the profits of industrial 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 Incessa