PRINCIPLE OF GENERAL AVERAGE

Dominion, Volume 10, Issue 3147, 27 July 1917, Page 6

PRINCIPLE OF GENERAL AVERAGE

Sir—General average is laid down as a loss arising from a necessary sacrifice* made ior the preservation of a ship,, cargo, and everything on board. The: sacrifice being for the preservation of alithe assets (capital or wealth) on and' including the ship, then such sacrifice must be made good by a levy on or contribution from all the assets (or wealth) jeopardised. One party might have a pleasure car on board valued at iltOO. Another individual might be importing a car for sale, also valued at X-100, the. profit on the disposal of which might add, say. JJIOO to bis income. On a general average levy of 10 per cent, being6truck the owners of both cars would l;e> called upon for even contributions o£ JMO. This notwithstanding that only one of the cars would, in the ordimiry enurse, furnish a margin of profit (or taxable income). To many business men the term general average suggests a levy on assets (capital) irrespective of the power ot such assets to earn income or to be handled at a profit. The association li the term general average in my mind with various misadventures to ships that, led to general average contributions, and. the fact ftnt Mr. von Haast made use of the words led me to imagine that a capital tax was suggested. I note that vlint Mr. von } toast sought to convey to his readers was that the revenue that will l>e required for maldng fair allowances to soldiers and their dependants should be obtained by increasing the graduated income tax in !i certain. way.-I am, etc., July 26.