-214 POST-WAR FINANCE

he represents, has given us the plant and equipment
(in the widest sense of the phrase) with which we are
now working. If, therefore, we penalise the Rentier
too severely we shall discourage his future creation |
the present race of earners, if they see that those who
are living on past savings are shorn too close will be
deterred from saving, will put their surplus earnings
into extravagant spending instead of into plant and
equipment, and the economic future of the nation,
and of the world, will be pro tanto less hopeful. If
once our fiscal system is going to propagate the view
—already so rampant among the happy-go-lucky
citizens of this unthrifty people—that the worst
thing to do with money is to save it there will be bad
times ahead for our industry and commerce, which
can only get the capital that it needs if somebody
saves it. Mr Hoare's elaborate calculations led him
to conclusions involving a tax of us. 6d. in the pound
on unearned income. This figure is, I hope, need-
lessly high. To arrive at it he assumed that peace
might be concluded towards the end of 1919, and
that when peace conditions are fully re-established—
which will take, he thinks, three years, the National
Debt will amount to £10,000 millions, involving
annual interest of ^500 millions, which, added to the
total Rente of the country in 1913 (which he made
out to be £520 millions), will make a total Rente in
1923 of £1020 millions. His view is that the burden
of the National Debt should be thrown by means of
the income tax upon the national Rente, not taxing
it out of existence, but by such a scale of taxation
as would reduce the net Rente of the country to