NOTES AND COMMENTS

New Zealand Herald, Volume LXX, Issue 21560, 3 August 1933, Page 8

NOTES AND COMMENTS

TAXATION ON- MINING How excessive taxation can destroy goldmining enterprise was emphasised by Sir George Albu at the annual meeting of General Mining and Finance Corporation, Limited, in Johannesburg. Complaining that "reasonable taxation," of which assurance had been given at the general election, had been greatly exceeded, ho "said that the incentive to prospect new areas had been destroyed and the confidence of European inTestors undermined. It was therefore difficult to obtain the enormous, capital necessary ,for schemes projected only a few weeks previously. Sir George added that in tho long run the Government's revenue would be actually lower in consequence of its prohibitive taxation proposals. Regarding tho immediate future, 50 per cent of the gross profits of the industry would be taken by the Government. He pointed out that, since the commencement of the Union, direct taxation had risen from 10 per cent to about 50 per cent. The .-new taxation proposals represented the biggest mistake that had ever been committed by any Government in Soutll Africa from the point of view not only of shareholders, but also of its effect on the State as a whole. The Government's proposals were bound to discourage the expansion of the industry. For the sake of balancing" iD one year the accumulated deficits of several years, tho Government had placed a stranglehold on the future prospects of goldmining. The Government would have to accept the unenviable responsibility for its unfortunate policy when the ill effect of the new taxation on the whole country came to be felt.

THE ECONOMIC STRUCTURE Concluding an article in the Times Trade and Engineering Supplement entitled "Raising the Price Level — Where and of. What?" Sir Arthur M. Samuel, M.P., writes:—"What we and the whole world would like to see is a rise in the international price level. Yet the United States has shown us, so far, that it is hopeless to try to bring about an international rise by artificial means. The Lnited States has, as a nation, not yet grasped that fact. Nothing except a disaster will prove to it that the highest tariffs, the highest wages, economic isolation, and 13,000.000 unemployed are really not evidences of prosperity. But we know that the defect in the universal economic structure is that secondaries are too dear in relation to primaries; that the demand for and sale of primaries depend upon the exchange rates (values) of primaries expressed in terms of secondaries; that the purchasing power of the world lies mainly in primaries; that until the price of secondaries comes down there can be little improvement in the demand for primaries, which demand in turn will raise 'the composite price at wholesale of the principal foodstuffs and raw materials entering into inteAational trade.' (Macmillan Report, par. 266). That rise will help to heal the world's economic troubles; Yes; it will help to heal; but of itself it will not heal. No nation, even in conditions of profound peace, can continue as a trading community, or, indeed, exist as a political entity if it fails to observe faithfully all contractual obligations. The decay of common honesty, evident everywhere in recent years, is a major cause contributing to the world's malaise. An international rise in prices is not worth the paper upon which the prices are to be printed unless, nations and men maintain and enlarge good faith between one another. With disregard for the sanctity of contract selfrespect is abolished, prices become meaningless, commercial intercourse ceases, and the very structure of society is dissolved."

MENACE OF WAR "The youth of Britain," states Mr. J. L. Garvin in the Observer, "never will be asked again to embark by millions as foot soldiers for Continental conflict. That method for an island Power would be strategically imbecile; happily, it is both economically and politically impossible. Were we involved in another life-and-dcath struggle we should have to wage it in a very different way. The Air Force would have to be immensely and rapidly expanded. Any future Great War will be not mainly at first —or perhaps ever—between- pedestrian armies, but a war waged upon civilian populations, bombed regardless of age or sex with an unexampled mereilessness of promiscuous massacre. Every town, every street, every house, every occupant, will be exposed directly to fates worse than were risked on the last battlefields. An attitude leaning to the left at an angle of 45 degress will meet no appreciation. Bombs and poison-gas cannot distinguish between opinions. Without more powerful, foresighted ameliorative efforts to preserve the peace, vast catastrophes will return upon civilisation. This may come in the long run. Britain may bo involved through 110 culpability of her own and in spite of the utmost efforts for settlement. Most Socialists and Liberals and a good many Unionists seem to imagine that thjp cause of peace is safer than it ever was before. They never were ipore deluded in their lives. The whole of the real work is yet to do. We are approaching several very difficult and dangerous years in foreimi policy. Of that there seems no reasonable doubt. As a result of that ordeal peace may be saved and stabilised for a long period; but to achieve so much there will bo required something above all yet attempted—a supreme exertion of statesmanship, preventive, constructive and reconciling. There will have to be a new and simplified system of confer- ! ences, regularly including the I nitcd ! States, to examine frankly potential ' causes of war in all parts ol the world , and to apply means of remedy before | the outbreak of passion iu arms." i