THE CONSCRIPTION OF WEALTH

Dominion, Volume 10, Issue 3089, 21 May 1917, Page 6

THE CONSCRIPTION OF WEALTH

Mr. W. D. Runt, referring to the subject of the conscription of wealth, in his speech from the chair at the annual meeting of shareholders of Wright, btephenson, and Co. on Friday last, said :—

"All of yon will have no doubt noticed the correspondence and articles that have appeared from time to time in the public Pre?s on the question of conscription of wealth. 1 think that a conscription of wealth is l>eing effectively carried out at the present time, and I-can think of ano more efficient and effective' way of doing this than by way of income tax. In order to give you some further idea of its effect, I will tell you that,if we take the income tax that the company will have to pay this year, which has been, allowed for. in the accounts now under, review, and add to this tbe income tax that the employees of tho company will .pay out of their earnings from the company and quite apart from any outside sources of income that they may have; these added together, which all come from the earnings of the company, will come to more money than the dividends that we have paid our shareholders, and the amount that the company is carrying forward and adding to its reserves over and above this, is not moro than is rendered necessary by the dictates of prudence to safe guard the Dosition of the company. "You will see, therefore, from tliis that Ihe State is practically taking half the earnings of the company that would be available for distribution in any prudently managed concern. Let us suppose for a moment that the preachings of some of the advocates of conscription of wealth were listened to by Parliament and they came along to us and said: TVe are not satisfied with half your available income, w e .want your capital or a large portion mt' ow, ol "' ca P ita ' is not in cash. Ihe capital of no commercial or industrial concern is in cash. Our capital consists largely of buildings, plant, stocks ol goods, book debts, etc. If the Gov> eminent were conscripting; wealth wo could neither realise our premises and stocks, or call in our advances to customers, because there would be nobody with capital to buy ihe one or lend to the other. All we could do would be to say to the Government: 'There are dur assets-, we cannot convert them into cash; take them and do what you like with them,' and if the Government took the lot, the only, way it coiild make use of them would be to continue to carry on our business as a going concern, aiid 1 will undertake to say that if our business were carried nn under Government management and under Government stroke, it would not only fail to yield the profits that we are now makhi" from it, but it would fail to earn tho'amount that is now being paid from it to the boverinnent by way of income tax.' The taxation now imposed is the most effective conscription of wealth that can pos' sibly be adopted. The Government says to us: Work away as hard as you can and ii you make £2 give us £\; if y vu lose £i you pay the loss yourself.' From the Government's point of view tho arrangement is 'Heads I win; tails you lose, and. 1 fail to see how it could make a better .arrangement. Mind you, the directors are not complaining, "and I. .nil sure you, as shareholders, are not complaining either. We are-all proud to think that wo are not only maintaining <iud strengthening our business, but we are at the eame time making such substantial contributions to the State."