return, however, there will be very grave disturbance and dislocation
in industry, and it will have once more to face the problem of
providing goods, not for a Government which will take all that it can
get, but for a public, the demands of which will be uncertain, and
whose buying power will be unevenly distributed, and difficult to
calculate. The process, therefore, which postpones taxation during
the war period to the peace period seems to be extraordinarily
short-sighted from the point of view of the nation's economic
progress. Recovery after the war may be astonishingly rapid if all
goes well, but this can only happen if every opportunity is given to
industry to get back to peace work with the least possible friction,
and a heavy burden of after-war taxation, such as we shall inevitably
have to face if our Chancellors of the Exchequer continue to pile up
the debt charge as they have done in the past, will be anything but
helpful to those whose business it will be to set the machinery of
industry going under peace conditions.

As things are, if we continue to add anything like L2000 millions a
year to the National Debt, it will not be possible to balance the
after-war Budget without taxation on a heavier scale than is now
imposed, or without retaining the Excess Profit Duty, and so stifling
industry at a time when it will need all the fresh air that it can
get. Apart from this expedient, which would seem to be disastrous from
the point of view of its effect upon fresh industry, the most widely
advertised alternative is the capital levy, the objections to which
are patent to all business men. It would involve an enormously costly
and tedious process of valuation, its yield would be problematical,
and it might easily deal a blow at the incentive to save on which the
supply of capital after the war entirely depends. A much higher rate
of income tax, especially on large incomes, is another solution of the
problem, and it also might obviously have most unfortunate effects
upon the elasticity of industry. A tax on retail purchases has much to
be said in its favour, but against it is the inequity inseparable from
the impossibility of graduating it according to the ability of the
taxpayer to bear the burden; and a general tariff on imported goods,
though it would be welcomed by the many Protectionists in our midst,
can hardly be considered as a practical fiscal weapon at a time when
the need for food, raw material, and all