94 ON TAXATION 



with our friends the more truly necessary we 

 shall find such accuracy to be — it is not in the 

 consumption of capital by Government that we 

 should see objectionable courses, for the Govern- 

 ment must consume capital, having no alternative; 

 it is the discrimination, or want of discrimination, 

 in choosing the particular capital to be used up, 

 that is properly criticised. 



We have spoken of the nation necessarily 

 using its capital for its expenses, and of annexing 

 capital, that is, the capital of individuals, for 

 that purpose. Both propositions are correct, but 

 it occasionally happens that the capital annexed 

 is not that of a citizen of the nation ; as when 

 a foreign company has to find the duty on their 

 goods sent to the nation levying the duty. The 

 payment of such a duty is sometimes disguised ; 

 the price obtained by the seller in such a case 

 falls, and in that manner the duty is paid. 



As regards discrimination in choosing the 

 capital to be annexed, suppose that at a par- 

 ticular time, in a certain country, there were a 

 shortage of rolling-stock, so that the agricultural 

 produce of the country, instead of being all 

 rapidly moved to the great markets, was largely 

 left stored in granaries ; and suppose at this time 

 unusually good prices from abroad might be had 

 for such produce. At such a time manufac- 

 turers of rolling-stock would not only v^7ork their 

 hardest, they would also put into their business 

 all the capital they made in the form of profits. 

 Any great failure, at such a time, to attend to 

 these points would, as a result, bring about loss 



