The effect on industry of unnecessary national expenditure is immediate, direct, and, at these times, absolutely calamitous. The greater the national expenditure the higher necessarily must be the taxation required to provide for the interest on, and the redemption of the debt. Every penny absorbed in unnecessary taxation is so much money diverted from reproductive industry. If a manufacturer is paying 6_s._ 8_d._ in the £ in income-tax and super-tax, the effect is the same as if he worked as a bond-slave to the Government for four months in the year, during which time the Government appropriated the whole of the output of his factory. Lowering of Taxation For the restoration of industry an immediate reduction of taxation is imperatively required. The dangerous height to which taxation has mounted operates with devastating results on industry. Many business firms have had to sell securities to pay their taxes; these have been purchased by American investors. The Government points with pride to the improvement of American exchange; at whose expense? Certainly, in part, at that of British industry. While firms have thus to sacrifice capital assets, or even to borrow money to pay current taxation, industry can never be restored, and each month it continues, the period of industrial convalescence is materially prolonged. Case after case has come before my personal observation where employers, content to make a small margin of profit or no profit at all, but only sufficient to cover standing charges and prime costs, have deliberately decided, when faced with certain loss owing to the grinding burden of taxation, rather than embark any new capital in extending their businesses, or in adding to them some new branch of industry which would have provided employment for many men, to put their money on bank deposit or invest it in gilt-edged securities. The effect of such a course on industry and unemployment is disastrous. If initiative and enterprise, which, in this country, form the life-blood of industry, are to escape extinction, then taxation on industry must speedily be reduced. The directions in which business men are pressing for alleviation from the insupportable oppression of taxation are in the reduction of the rate of income-tax, exemption from super-tax of reserves invested in the business, and abolition of the corporation profits tax. The latter falls entirely upon the ordinary shareholders in addition to income-tax; preference shareholders and debenture holders are not mulcted, but receive in full their prescribed rate of dividend or interest less income-tax. The corporation tax thus operates as a severe deterrent on initiative, especially in regard to the starting of new, and extension of existing, enterprises. There is also a growing volume of opinion in favour of funding certain annual national expenditure, e.g. pensions, as an alternative to raising the necessary expenditure by taxing.