ASPECTS OF CONSCRIPTION
[To the Editor of THE SPECTATOR] SIR,—Conscription appears to be accepted by the vast majority of the population; and this is so much to the good. But there is a rift in the lute which must make many anxious— not, perhaps, lest the country should be disrupted, but lest the external effect of the gesture may be diminished. That rift is the failure to conscript wealth at the same time ; a failure which is too readily interpreted as a ho:d by vested interests over the present Government sufficient to make it National only in name and not in spirit. Many who support the present measure must feel a twinge of conscience which would be allayed if a like conscription of wealth had been simultaneously put forward.
This silent acceptance of the present measure arises from a realisation of the difficulties attendant on conscription of wealth ; for it is true that the methods advocated appear worse than the disease. Capital levies and so on, if they do not destroy real wealth, render it unrealisable, for the realisation of wealth depends on confidence, and such measures destroy confidence. It is the misfortune of Labour that, while it has diagnosed the disease, it has advocated impractical remedies.
The difficulties are great, but not insuperable. The road has been mile-posted by Capt. H. Macmillan in his book The Middle Way, and the same idea has been developed in my book Unity, National and Imperial. It is the principle of controlled dividend as now applied to public utility companies. The gradual extension of this principle to companies pro- ducing and handling the essentials of modern civilisation has been pleaded by Capt. Macmillan in the realm of industry and by myself in the realm of agriculture. There is there envisaged a gradual extension such as would have been possible in normal times. But times are not normal, and the question arises whether, in the present exigences, a uniform application of the principle to all companies would not be possible. If it be possible, the internal rift would be healed and the external effect of such action would be far greater than that of the present measure of conscription of man power.
The details, no doubt, require working out, but the broad principles are clear. They include: (1) The limitation of dividends of all companies, public and private, to, say, a maximum of 5 per cent. or the average of the previous three years. Clearly, this latter is necessary ; for where companies, such as the banks, have stabilised their dividends at a higher figure, much of the capital has already changed hands at a figure which gives only a small return on the price paid, and a reduction of dividend would cause harm to large numbers of small investors.
(2) A limitation to the accumulation of reserves and to the payment for capital extensions out of earnings.
(3) The increase of capital to be limited to the issue of shares for cash received.
(4) The establishment of courts of appeal. In any such measure hard cases must arise, and these courts would corre- spond to the provisions for medical inspection and conscien- tious objection in the case of conscription of man power. With the information available from Income Tax returns there should be little difficulty in arriving at decisions where appeals were made.
With such limitations, trade would continue to be conducted on its present basis, and, where profits in excess of those defined were realised, they would be appropriated by the State. The incentive to getting rich quick through the in- flation of capital values, which is the real grievance behind the opposition to the present measure, would be removed. It may even be possible that the end, now being somewhat blindly sought by gradual extension of the field of public utilities, may be more quickly attained by the immediate enforcement of such a measure and the gradual release of business devoted to non-essentials as times become more normal.—Yours faith-
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