in time of war for the equipment of the Army. It may be that the
benefit conferred by those who save, in increasing the output of
mankind, will be more generally recognised, and that the supply of
capital may, when the war is over, be increased on patriotic grounds,
or on grounds even wider than mere patriotism--a desire to help a
great stride forward in the material welfare of mankind.

Capital is a very tender plant, and it will be very easy, if mistakes
are made, to frighten those who see the benefits of accumulation for
themselves and others. Labour troubles and industrial unrest are
extremely likely to have the effect of destroying capital by
preventing it coming into existence. If we remember that capital can
only be created by being saved, it becomes evident that if those who
save are threatened with too deep an inroad into their reward for so
doing, on the part of labour, they will hesitate to save; and if the
action of labour has this effect, labour will be sawing off the bough
on which it sits. For it is new capital that sets new industry going,
and it is only by a continual supply of new industry that a continual
demand for fresh labour can be maintained.

There is also at present much mischievous talk about a great tax on
capital for the purpose of redeeming, or hastening the redemption of,
war debt. It is clear at once that it is not possible to tax capital
if we remember that capital consists of the tools and equipment of
industry, or even, in the wider sense of the word, of accumulated
assets which have not been consumed. Unless the Government is prepared
to take payment in factory chimneys, railway sleepers, houses and
fields, or the securities and mortgages that are claims on their
product, it is not possible to tax capital. The only thing that the
Government can tax is the output, that is to say, the annual income