IS GREAT BRITAIN LIVING ON HER CAPITAL?
(To THE EDITOR OP THE "SPEC IATOR.".] Sin,—In the strange eagerness which.Mr. Ellis Barker shares with Fiscal Reformers of his type tetpublish to the world the supposed decadence of this country, be brushes aside very lightly what most serious statisticians consider the irrefutable evidence of the Income-tax Returns ; but it would tie interesting to bear his explanation of the figures of
increase of "income from abroad " revealed in Table CCM
of the last Report of the Inland Revenue Department.- " From 1904-5 (to go no further back than that year), when that income was declared at £66,062,109, it had risen by 1906-7 to £79,560,116, an increase of £13,498,007. If it be assumed that this income stands for interest at the outside 'figure of 5 per cent., it represents a capital sum of £269,960,150. Some of the increase of income may be due to capital (like that invested in South African mines) having recently resumed payment of dividends ; but, allowing for this, the major part of this great capital sum must apparently have been freshly invested in foreign countries and the Colonies during the period in question. It may be added that, as an able article in the Quarterly Review for July, 1907, pointed out, the table alluded to does not profess to include nearly the whole of the profits derived from such investment, much of which cannot be dis- tinguished from that which appears under the head of " businesses, professions, &c., not otherwise detailed" ; and that therefore the great increase of income assessed under this latter head is doubtless largely due to further fresh investment of capital abroad, as well to fresh home invest- ment. No official indication unfortunately exists which would enable an estimate to he formed of the amount of the national savings which must be annually invested in industrial concerns in the United Kingdom, and the amount of the total annual savings of the nation must therefore be a matter of conjecture. But a study of the nominal amount of the securities quoted on the London and provincial Stock Exchanges over a series of years would establish, to the satis- faction of any impartial mind, the certainty of an immense annual fresh investment of British savings, which competent inquirers have put at from £250,000,000 to £300,000,000 on an average, and which some would put at an even higher figure than this. The subject is one which pre-eminently demands authoritative investigation ; but sufficient evidence surely exists to disprove such assertions as those of your correspon- dent. A country which annually invests all over the world such sums as those suggested above (to say nothing of home investment) cannot be "living on its capital," or " selling off," except for the purpose of reinvesting that capital more
securely or more profitably.—I am, Sir, &c., A. B.
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