SEPARATION ALLOWANCES AND PENSIONS

Dominion, Volume 10, Issue 3144, 24 July 1917, Page 7

SEPARATION ALLOWANCES AND PENSIONS

Sir,—The public owe you a deep debt of .gratitude for the way in which .you have opened your columns for discussion of the sibovo debatable questions. Air. von Haast and Mr. Craigie, M.1.'., have both suggested means for finding tlio money needed for these worthy objects. Their proposals amount to, simply, si tax on wealth. In plain language they both seem to advocate a,k i vy 01 , two shillings in tho pound on capital. That is on tho excess of assets owned by each 'individual over his debts. Mr. von Haast's suggestion is to niako a flat impost, and Mr. Craigie's a graduated one, exempting whoso balance tff capital is less than £2'M. Perhaps if llieso gciitlcmuli considered the nialter a, litllo more they would sec that their proposals would entail a great <le;il of hardship, and have si deleterious effect on the commcrciai liealth of th'u Dominion. Tt must bo b.orno in mind that conditions here arc not like those in other uuiintries, but aro thos? of a young and developing Bottlemenf. Most of our mercantile undertakings financo on bank overdrafts because their cash capital is not. largi" ■enough to euablo them to hold HiiUicient reserves of slock nor to finance their clionts who are in their turn alt-o hampered for cash capital. What would bo Iho. effect of'tlio. adoption of tho proposals on a merchant''with si capital of, say, 'This might . be. represented by 41120,001) slock, ,£IOO,OOO book debts, premises 4!70,00U, but cash in haud practically nothing, perhaps one day's receipts, which have to be paid into his .Iju'nk'Juiuwdiatcly 10, reduce his overdraft, lake tho other side of tho account. :flis ba'uk overdraft stands at, p,y, JMO,OOO with'ii limit of ,ESO,OOO; his'tfado creditors' amount lo .i'JIOjOOO, and his net profit on paper for si year amounts, to £15,000 or 7i per cent, per annum on the capital risked. For the purpose of neseesins the wealth las the levy would bo made- on. -2215,000. That would mako the amount to bo paid ■£21,500,, nut. in. addition to this, land (as and income tax would have to bo paid, making a grand total of about 4330,000. Tho bank of the merchant would not find the money required, so ho would havo lo press hie debtors li> pay before the, usual time. The effect might be bankruptcies and loss in all directions. However, it. cannot be disputed that the. 10 per cent, levy could bt> made without hardship, aJid. would perhaps be well worth a trial, provided if wore made on the cash capita-l held in tho Dominion, and also thai all amounts down to -S2lO were called upon. In the ordinary banks and in. tlio. I'.O. Savings Bank a huge amount of frea'cash is held, on deposit.- A. 10 .por cent.'levy on this could bo collected with a. minimum of trouble, and would produce something in thevioinity of -£6,000,000. This would be a fiuo result, and it would luivo none of the ill-effects that a levy on paper capital would, have. Building 'societies' ami other institutions have also a great clea.l.of idle caeb held.on deposit and this could also be drawn upon, easily. A further point is that the man who has his capital sunk, for the good of tho country, "In development, of bush lands, or who parts with it to givo financial assistance.to others, should be encouraged as .against the individual who does not, use' his money for tho good of the- community as well sis for tho profit of himself. Tho levy could bp made on all cash balances at Juno 30 last. A further advantage, no doubt would bo tli.it idlo capital flhguld be encouraged into many, at present, neglected industries. A. niillio'i or two invested into iron and stcoi manufacturing might bo tho, foundation of wliat may yet bo our most essential industry both from an economical and military standpoint. In., the various pleas made for better separation allowances, etc., great stress has been laid on the fact tha-t these should bo given as a. matter of right. The contra, sido of Iho picture has been presented by the Ministers and others in warnings that it would not be prudent to go in' for ;i scale so lavish that the credit of tho Dominion ■would collapse under tho strain. Tho economic factor seems to bo left out more 'than it should bo. If the full amounts decided' upon by the Second Division ]joague aro granted, tho following will be aonie , of the accruing benefits:— (1) Tho standard of living won't bo lowered. This means that there-will bo «, good local demand for ' our primary products—butter, meat, etc. With a shortage of ships as an immediate possibility, a good market in tho Dpminion may provo to be- of first importance- to tho faiinoi". (2) families will bo able to maintain their .present homes. The house-owner will get-his rents paid, and in. turn his spending, power will not bo reduced. (3) Tho families of men at the front won't be forced .into the labour miirkot. There will be less danger of unemployment for thoso who now toil for their livings. Again, this will buttress tho spending power of the country. . (■!) The. children of met at the front will be better fed and bettor educated, which will mean better equipment to face th-3 keen competition with other nations which must follow the end of tho war. (5) Proper medical 'attention ' ran be commanded, and consequently less -strain wi'l be thrown on hospital and charitable aid boa.rds. , ■■ In this connection, it might assist our legislators if they perused some works bv L. Chiozza Money, M.P. This grout authority, the .friend and trusted adviser of Mr. Lloyd George, in his recent book, entitled: "Things That Matter," and' in. his chapter on higher wages points out the. fallacies of the sirgumonts of those win) hold that higher wages siro of m> permanent benefit io tho Commumvoal(h. Ho shows that the added spending power of tho community iufiises eiic'h strength to tho circulation of the lifoblood of industry that all, oven the man who has to pay the higher wages, are ultimately gainers. Jf this argument is true sibout higher wages, it follows that it has almost equal force in favour of better (separation allowances and pensions. Of course, it would not apply to a soldier's pay, at least, not lo that which ho spoilt outside of tho Dominion even on a friendly soil. In conclusion, Messrs. Craigio and von Hsuist would do well to concentrate on tho essimlieil point, which is to obtain the authority of Parliament for the scalo of allowances sisked for. They will only injure tho cause thsy seek to assist, if they persist in advancing confitcatory taxing innovations sinlugqiiislic to syiiinwthotie but powerful interests. Ihe revenue required will bo easily "btuined through tho present ishnnnele with u little sidjustmont. The financial udiinvomoiits of Iho British Government provide Ihe proof aud parallel.—T inn, etc..