ich themselves out of the dreadful
calamity of war is repugnant to one's sense of justice and gravely
detrimental to the war morale of the people.

Strictly from the economic point of view, the eighty per cent. war
profits tax is not entirely free from objection. Whether England did
wisely on the whole in fixing the tax at quite so high a rate is a
debatable point, and is being questioned by some economists of high
standing in that country, not from the point of view of tenderness for
the beneficiaries from war profits, but from that of national advantage.

Moreover, conditions in America and England are not quite identical and
I believe it to be a justifiable statement that British industry is
better able to stand so high a tax than American industry, for reasons
inherent in the respective business situations and methods.

However, everything considered, circumstances being what they are, I
believe the enactment of the proposed eighty per cent. war profits tax
to be expedient, provided that, like in England, the standard of
comparison with pre-war profits is fairly fixed and due and fair
allowance made, in determining taxable profits, for such bona fide items
of depreciation and other write-offs as a reasonably conservative
business man would ordinarily take into account before arriving at net
profits.

Amongst the principles of correct and effective taxation, which are
axiomatic, are these:

1. No tax should be so burdensome as to extinguish or seriously
jeopardize the source from which it derives its productivity. In
other words, do not be so eager to secure every possible golden
egg, that you kill the goose which lays them.

2. In war time, when the practice of thrift is of more vital
importance than ever to the nation, one of the most valuable
by-products which taxation should aim to secure is to compel
reduction in individual expenditures.

3. Taxation should be as widely diffused as possible, at however
small a rate the minimum contribution may be fixed, if only to give
the greatest possible number of citizens an interest to watch
governmental expenditure, and an incentive to curb governmental
extravagance.

It may safely be asserted that our war taxation runs counter to every
one of these tested principles.

II

The characteristic difference between the House Bill and the revenue
measures of Great Britain (I am not referring