to men of wealth. I thought it a point and a fact of
sufficient importance as bearing upon our own taxation program to
deserve to be made generally known. That this might be considered
as either a suggestion or a threat of what capital might do during
the war, never, I confess, entered my mind, _for it would, of
course, be little short of treason for capital and capitalists to
take advantage of Canada's propinquity while the war is on._

You speak of the possibility of legislation to prevent this. If
capital meant to leave the country to evade taxation, there would
have been ample time and opportunity for it to do so during the
past six weeks. The price of exchange would indicate if that had
been done to any appreciable extent, and proves, as a matter of
fact, that it is not being done. If it were being done, I quite
agree with you that legislation should be sought to prevent it and
to punish the attempt. But I am entirely certain that moneyed men
will not think of evading whatever sacrifice may be required of
them by their country under war conditions.

What I meant to intimate in saying that capital and men of
enterprise would seek Canada if there was no income tax, or only a
moderate one, in that country, whilst America at this time imposed
excessive and practically punitive income taxation, was this:

Capital has a long memory. Capital is proverbially timid. I am not
referring only to large aggregations of capital but to all capital.
I am not referring only to the capital and capitalists of to-day,
but to those who accumulate capital by practising thrift and to
those who by invention, by conspicuous organizing or other ability,
by originality of method, etc., are instruments in the creation of
capital and will be, presumably, amongst the future owners of
capital.

The possessors of capital, present and future, would not easily
forget if, in the very first year of the war capital in this
country were to be taxed at far higher rates than prevail in any
European country after three years of war. Even if such
extraordinary taxation was removed at once, after the termination
of the war, capital would remain disquieted by the fear that the
machinery of excessively high income taxation, once used and found
easy of motion, might be used again for purposes of a less serious
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