SHIPPING AND WAR PROFITS.

Lyttelton Times, Volume CXVII, Issue 17281, 23 September 1916, Page 8

SHIPPING AND WAR PROFITS.

Vkry few people like to be taxed, and it is therefore not surprising that soino complaints are heard in the Mother Country at tho toll of 60 por cent which the Government is taking out of war profits—or, as tho statute prefers it, " excess " profits. On tho whole it must bo acknowledged that tho claim is gcnorally recognised as being just and necessary, and those who grumWo arq few in proportion to thopo who pay without protest. Some of the larger illustrations of war profits aro, of course, to be found in tho balancesheets of shipping concerns. Thirty companies whose reports were available up to August for annual periods ended in 1916 showed an aggregate of profits amounting to £6,400,000, compared with a little over £2,000,000 a couple of years back. These huge profits unquestionably aro due to tho war, and it soems almost beyond tho possibility of debate that, a large part of tho additional money earned may properly bo taken by the State to help gain a victory over the Germans. Yet some prominent shipping men arguo that this policy is wrong m«¥i'<%' > ahd y unsound economically., I Ono shipping journal, indeed, regards tfio oicess promts tax—on shipping ..earningft.-at

all events—as not only wicked but even "insane." The latter contention is based on tho argument that it would bo far more profitable to the country to allow the additional earnings to be converted into new ships, it being urged that increased tonnage is not only required immediately but will be still moro urgently needed after tho war, when Britain will have to rapidly set about recovoring her position in tho markets of tho world. Wo aro not prepared to wholly disqualify this argument nor to challenge tho motives of all tho men who uso it, but however sound the contention may be, tho companies putting it forward are not consistent in their policies. After paying cho " excess profits " tax most of them have distributed abnormal sums in dividends. Wo need uot burden this article with statistics, but many a shipping eompnny has increased its dividends many times over, thus putting into tho pockets of individual shareholders millions of pounds, which many directors say should have been expended m shipbuilding. It is surely unfair to blame the State for taking by taxation profits that otherwise might form a useful building fund and at tho same time neglect opportunities that remain to carry out the policy advocated as so desirable. The mercantile fleet has unquestionably performed a work of enormous value to the Empire and the Allies by maintaining tho huge sea-carrying service in spite of added dangers, but shipowners have been handsomely rewarded. The high freightage rates that havo ruled have burdened the community by raising the cost of living and tho largely increased profits are tho result. If there is anything wrong with the war profit tax as applied to shipping it is that the State has been too modest in its demands. The moral senso of tho community must Ire shocked, as it is, by the-distribution of shipping profits that is constantly being made—after payment of taxation on excess profits.