ton instead of on an _ad
valorem_ scale, but this fault could easily be corrected. Special
exceptions in favour of Colonies or Allies, or for the supply of certain
places, might be made by arrangement in consideration of some equivalent
favour, or to meet some particular need.

The other suggestion involves more difficulties, and is of a more
far-reaching character. Would it not be possible to replace to some
extent the excess profits duty, which cannot be permanent, by a duty on
"excess dividends," that is, on the amounts paid out of the profits of a
business for the use of capital above a certain percentage? The excess
profits duty, in spite of all its anomalies and the difficulties of
assessment, has saved the financial situation during the War; a tax on
excess dividends might "save the situation" afterwards. When a business
is successful, paying, as many businesses have recently done, dividends
of 30 to 50 per cent., and sometimes even more, the return made to those
who have invested money in them is clearly excessive. From such
profitable businesses those who have the responsible management no doubt
may generally get better remuneration, possibly the workmen may get a
small bonus or share in such profits, but those who by a mere stroke of
good luck have embarked their money in these businesses, shareholders
who very likely know nothing whatever about the conduct of them, benefit
enormously. Such a tax would not discourage thrift or prevent a person
from getting a reasonable return on his savings. Take the case, say, of
two professional men. Both, by hard work and using up their lives in the
effort, manage to make a fair income and bring up their families. One of
them, to make provision for the future, invests L2,000 in safe
securities with fixed rate of interest, and L2,000 in some company whose
business is of a more or less speculative character, but by good fortune
becomes able to pay a dividend of 30 per cent. The other invests a like
sum in firm securities, and L2,000 in another company which turns out a
failure. Neither of them has anything to do with the conduct of the
business of the company in which he invests, but one has got a tip from
some friend or other who thinks he knows of a good thing. The work of
the two men is exactly the same; it is a mere fluke that one gets a huge
return and the other puts his money into a company which, without any
fault on his part, brings in nothing.

The tax suggested wo