rmingly high. I believe
this condition of affairs, to a certain extent at least, could be
alleviated by appropriate measures and that every effort should be made
to that end. But a huge increase in the income tax and unwise business
taxation will not accomplish this. It will, in fact, rather accomplish
the opposite, apart from lessening employment.

LETTERS

I

The Income Tax

Dear Sir:

I fully agree with you in the principle of your conceptions of the
duties of moneyed men towards the country. They must be willing not
only to surrender such part of their income, indeed of their
fortune, as the necessities of the country require, they must be
ready not only to relinquish their affairs and to put their time,
their energies, capacities and experience at the disposal of the
Government in time of war, but they must be prepared to offer their
very lives if the country calls for them. Those are the duties, of
course, of every citizen, but they are doubly the duties of those
who have won success. I am firmly convinced that capitalists as a
class will not fail in them during the war.

My article on war taxation was not written with any idea of
questioning these manifest and uncontrovertible truths, but solely
with the purpose of contributing to the discussion of the taxation
proposals certain considerations which I believe to be well founded
in economics and history no less than in experience and reason, and
the disregard of which would be apt, I think, to lead to
consequences gravely detrimental to the commonwealth.

The question to which my article addressed itself was not what
sacrifices capital should and would be willing to bear if called
upon, but what taxes it was fair, reasonable and, above all, to the
public advantage to impose on capital, seeing that there is a point
at which the country's economic equilibrium would be thrown out of
gear and at which the incentive to use capital constructively and
productively and to take those business risks which are incident to
all business activity, would be killed.

I greatly regret if what I said on the subject of Canada being free
from income tax gave the impression of being a suggestion for the
evasion by wealthy men of taxation during the war. The fact that
capital is not subject to income tax in Canada was, of course, well
known