pseudo-capitalisation of their earning power. A really fair and practicable levy would certainly be honeycombed with annual adjustments and payments for some period of years, and one must consider how far this would invalidate the economic case of the "outright cut," and make it no better than a high income-tax; indeed far worse, for the high income-tax does at least follow closely upon the annual facts as they change, or is not stereotyped by a valuation made in obsolete conditions. Imagine three shipowners each with vessels valued at L200,000, and each called upon to pay 20 per cent., or L40,000. One owning five small ships might have sold one of them, and thus paid his bill; the second, with one large ship, might have agreed to pay L8000 annually (plus interest) for five years; while the third might have mortgaged his vessel for L40,000, having no other capital at disposal. At to-day's values each might have been worth, say, L50,000, but for the tax. The first would actually have ships worth L40,000, so he would have borne the correct duty of 20 per cent. The second would have L50,000, bringing in, say, L5000 annually, and would be attempting to pay L8000 out of it, while the third would be paying L2000 a year out of his income and still be faced with an 80 per cent. charge on his fortune! His assessment is computed at one point of time, and liquidated at another, when its incidence is totally different. If one cannot have a levy complete at the time of imposition, it clearly ought not to be launched at a time of rapidly changing prices. But that is, perhaps, when the economic case for it is strongest. A DESPERATE REMEDY I do not rule the Capital Levy out as impracticable by any means, but as a taxation expedient I cannot be enthusiastic about it. It is a desperate remedy. But if our present temper for "annual" tax relief at all costs continues, we may _need_ a desperate remedy. Without a levy what kind of position can you look forward to? Make some assumptions, not with any virtue in their details, but just in order to determine the possible prospect. If in fifteen to twenty years reparation payments have wiped out 1000 millions, debt repayments another 1000, and ordinary reductions by sinking funds another 1000 millions, you will have the debt down to 5000 millions, and possibly the lower interest then effective may bring the annual charge down to some 200 or 225 million pounds. If the population has reached sixty millions the nominal annual charge will be reduced from L7 16s. by one-half, but if prices have dropped further, say half-way, to the pre-war level, the comparable burden will still be L4 10s. per head.