LAND &? WATER 
November 28, 1918 
Making Good : By Hartley Withers 
THE longer one looks at the problems of alter-war 
linance, the more evident it becomes that no 
insjenious devices or new-fangled monetary- leger- 
demain nre going to be of any use towards 
solving them, and that we have got to fall back 
on the good old copv-book virtues and the philosophy of the 
late Dr. Smiles. It i» very tiresome. It would be much 
pleasanter just to wave "a wand and set the printers to 
work and make ever\body rich and happy by multiplying 
the number of claims to" wealth. But it does not work. 
You can onlv make people rich and happy, on the material 
side, by multiphing the good things that arc wealth instead 
of tiie paper that transfers claims to them. Moreover, two 
and two still make four, and a man or a nation who has a 
debt to pay can only do so by working hard and consuming 
little. AH these platitudes are here set down because they 
are apt to be forgotten in the enthusiasms of a time when 
a number of adroit politicians are drawing pretty pictures 
for the edification of an electorate the greater part of which 
has heartily despised education, especially on the economic 
side of things. In view of mucli of the wisdom that is written 
and talked in these times, about paying off debt with cur- 
rency based on international bonds, setting up special institu- 
tions for lending money to every one who liolds War Loan 
or War Bonds— thereby practically making these securities 
into currency— or simply divorcing our currency altogether 
from all connection with gold, and printing it as fast as 
spend-thrift Governments desire, one sometimes wonders 
what sort of a monetary world our reconstructing enthu- 
siasts are going to create. On the industrial side of affairs, 
the omens are not too encouraging if we judge it merely by 
the nostrums proposed by politicians. One- side seems to 
be proposing to develop trade at a time of much doubt and 
difficulty bv putting up barriers and restrictions ; while the 
other demands that everybody should be made comfortable 
all round at the expense of an apparently bottomless fund 
which is to be provided by the taxpayer. The awkward 
necessity for getting to work and working as hard as possible 
and with hearty goodwill altogether seems to be forgotten. 
And yet it is only by means of hard work that the necessary 
stream of good things to meet all these needs can be started 
and kept running. It is clear that it would be unfair to all the 
workers who have, by their industrial effort, made victory- 
possible, that they should be turned adrift when war work 
is over, and left to find work as best they can under peace 
conditions. On the other hand, there is the danger that if 
they are organised and regimented and shepherded beyond 
a certain point, the process of getting back to a genuine 
industrial basis, on which their own prosperity ultimately 
depends, may be seriously retarded. Another danger, that 
might become very real if the extremists on the Labour side 
took charge, lurks in the prejudice against the man who 
makes money too fast. It is a very natural one when we 
consider how unevenly the prizes of industrial success are 
distributed. But any "attempt to give it practical expression 
and to establish what is called a "national maximum" 
— by which any surplus above a certain income would be 
forfeited to the State — would have a most deadening effect 
on enterprise just when enterprise needs all the encourage- 
ment that it can get. After all, people can only earn big 
profits in these days by providing some article for which 
there is a great demand. If only one had- enough confidence 
in the public's use of its spending power to feel sure that 
demand is only centred on things that are worth having, 
one could proceed to the happy conclusion that big profits 
are only possible to those who provide a public benefit and 
produce it cheaply. If this cheerful conclusion is not yet 
possible, that is because the last thing about which the 
average citizen of both sexes exercises much thought or 
intelligence is the spending of money. But even as it is, 
big gains are only to be got by providing the public with 
something that it thinks it wants and by organising produc- 
tion in such a way that the want is met on terms most favour- 
able to the consumer and to the producer, and to all who 
work for both of them. The principle of the Excess Profits 
Duty was an excellent one in war time, when all the condi- 
tions were artificial and the free play of competition no 
longer existed ; but, even so, it had bad effects in checking 
effort and encouraging extravagance. Under peace condi- 
tions- to which we have to get back as ([uickly as we can — 
we want to encourage every one to make as much as they 
can and to spend it wisely, not on stupid vulgarity and 
ostentation, but on the expansion and equipment of industry 
so that they may leave the world better off in plant, machin- 
ery, and organisation than they found it. That the big 
earner should be more highly taxed than the small is e\-i- 
dently fair and right on the principle of putting the taxation 
on in proportion to the ability of the taxpayer to hear it. 
But to expect industrial enterprise to be keen and active 
when it is told that anyone who earns more than a certain 
sum per annum will hand over the whole ^surplus to the 
State is about as sensible as to expect to create a race of 
good runners by enacting that all who go beyond a certain 
pace shall have a leg cut off. We have to make the best 
possible use of human nature as it is. At present most of 
us work best if we see before us the chance of a big monetary 
gain, generally, perhaps, not because we hanker after money 
for its own sake, but because a big bank balance is the rough 
test of success in practical work. It is quite possible that 
human nature may be developed in such a way that mcst 
people will be ready and glad to work for the public good. 
But until that day comes, or some other way has been found 
of organising industry, a great mistake will be made if the 
big earner and successful organiser is to be penalised for his 
prowess. 
Prices : Rise or Fall 
A correspondent has set an uncomfortable trap for me l)y 
wanting to know what is to be the future course of prices. 
To answer the question with any certainty, one would have 
to be able to forecast the economic history of the human 
race for the next year or two. But it is a very important 
problem to most people who are engaged in any kind of 
business. Wholesale houses, as this correspondent points 
out , at present hold stocks which in value would be probably 
three times what the same bulk would have represented 
before the war. "In many cases," he adds, "the bulk itself 
is larger." This is very good news from the point of view of 
the country as a whole, since, it shows that we have plent}' 
of goods on hand ready to be exported in exchange for the 
raw material that we shall have to buy abroad. As 
to scarcity of raw material, it is certainly likely that in various 
articles of consumption — notably food and clothes — it may 
be some time before depletion can be made good. The 
fertility of the earth has been reduced in many countries 
during the war by lack of nourishment for the soil, and the 
big meals required for the maintenance of the fighting men 
and munition workers have caused inroads on the world's 
flocks of sheep and cattle. Wool, hides, and leather seem 
likely to be scarce ; on the other hand, experts tell us that 
the rest which the fishing fields huve had during the war 
has produced a great harvest of fish read\' to be caught as 
soon as the mines can be swept up, and the wrecks removed, 
and the trawlers can get to work again. But the whole 
problem is complicated by the uncertain question of the pace 
at which ships can be set free for carrying goods. Scarcity 
has been one cause of the rise in prices, lack of transport 
facilities another, and yet another is the financial question 
of the great addition to currency and the consequent depre- 
ciation of the buying power of money. Scarcity can be 
cured slowly in some cases, more quickly in others ; transport 
will be needed for taking home the armies, but should surely 
be more plentiful almost at once. Currency inflation is not 
likely to be diminished. Something may be done in that 
direction if, for example, our Government is able to dispose 
quickly of some of its saleable a.ssets in the shape of ships, 
food, etc., and uses the money to redeem floating debt held 
by bankers, who have manufactured credit for Government 
against it. On the other hand, however, the legitimate 
demands of enterprise for credit may cause a net addition 
to the total volume of buying power. Then there is the 
further question as to how far the w-orld-wide demand for 
goods will be effective — that is, how many of the people 
who want things will be able to pay for them. In the neutral 
countries these are probably plent\- of buyers with ready 
money available. We know that there are large balances 
held in London on neutral account which will be used in 
purchases of our pj'oducts and of goods shipped to this coun- 
try. Other nations, especially poorer warring Powers, will 
have to be given financial help before their demand can be 
made effective. So that if credit and capital are available, 
the world-wide demand may help to maintain prices and 
prevent a rapid collapse which, however pleasant to the 
consumer, might have bad effects on trade and the confi- 
dence of traders. 
