TRANSACTIONS OF SECTION P. 251 



It is considerwl by the author that iiiterimi*erial comriiunication should be 

 mainly regarded from the standpoint of 



1. Its political value; 



2. For defence purposes ; and 



3. As a means fur developing inter-iin[)erial trade and so helping to increase 

 produittion. 



We require to note American cable and wireless enterprise in thie direction. 



The recently established Telegraph Communications J?oard, first urged by the 

 author seventeen years ago. is intended for generally controlling and developing 

 inter-iniperial telegraphic and aerial communication in national and public in- 

 terests. By this scheme all of the several (lovernnient Departments concerned 

 (strategic at^ well as civil) are rejaresented by delegates who meet periodically 

 to discuss and settle all matters germane to the subject. This should do much 

 towards improving the previously existing arrangements by which the Post 

 Office alone represented the Ciovernment. 



Besides increased cable and wireless fat-ilities being necessary and the war 

 devastations made good, it is highly desirable that improved methods of mes- 

 sage condensation be introduced so as to get the best results from existing 

 facilities. 



The field open to inter-imperial air communication is considerable; air 

 organisation and air routes are among the important questions of the day, while 

 the rationing of all aerial mail communications should be insisted upon.' 



3. The S])cri(il Tn.ralion of Biishiess I'rofih hi rclnilon In Hip PrrxenI 

 Position of National Finance. By Dr. J. C. Stamp, C.B.E} 



On the present facts, permanent revenue on the existing basis will fail to 

 meet the permanent expenditure by a large margin, variou.sly, estimated at from 

 50 to 150 million pounds, and probably )iot actually, far from the latter figure. 

 Three alternative ways of meeting thi.s deficit are presented : — (1) A substantial 

 increase of income and supertax rates ; (2) a levy on capital ; (3) the taxation of 

 business profits. The increase in income tax would entail either such rates 

 on the higher incomes as might seriously hinder the accumulation of capital, or 

 such a considerable addition to the burden upon working-class incomes as would 

 make the proposition a serious one from a political point of view. The second 

 contains such elements of difficulty as to make it probable that it would fail to 

 commend itself as fair and just to more than a very small proportion of the 

 payers — a serious outlook for any impost. Those economists -who support it do 

 so distinctly upon the basis of a commutation of future high rates of income 

 tax, but the proposal receives its main impetus from those M'ho for themselves 

 give no guarantee either of non-repetition, or of a relaxation of future taxation, 

 but rather indicate that they propo.=e to be free to impose high taxation for 

 new social objects. Moreover, there is a failure to do justice as between people 

 whose fortunes have changed, and injustices may arise through expedients to 

 make the tax workable in practice, which so far has been an aspect but super- 

 ficially dealt with. The levy would fall aiike upon well-gotten gains saved up 

 as the result of pure thrift and the gains of profiteering. It would do nothing 

 towards taking special toll of profiteering elements in future trading. Just as 

 graduated taxation reaches the differences of ability to pay according to the 

 (iwnnnt of individual income, so something is wanted to search out those classes 

 of gain which serve no functional purpose in that they are a rental surplus the 

 taxation of which has no evil effects upon supply. The plea that the stiffer 

 taxation of higher incomes automatically achieves this is so often invalid as tx) 

 be of little worth as a main principle. These gains must be ' tapped ' higher 

 up the stream of distribution. The basis of the old Excess Profits Dutv was 

 special ability of businesses measured by their success compared with their o\im 

 past history before the war. This endowment of the successful would be unsuit- 

 able for permanent application. But the method tried in the United States 

 and Canada, suitably modified, has features of permanent value. It submits 



* See Economic Journal, December, 1919. 



