FREE TRADE AND PROTECTION 247

and of amount sufficient to outweigh the sacrifice likely to be
imposed ‘on the present generation in order to secure it.
Further, the capacity of the present generation to bear
additional burdens requires to be taken into account.
Finally, the comparison, of the benefit ensured by the
suaranteed enterprise, with what might have been assured
through the investment of capital and labour in other ways,
had not the guarantee attracted it to the railway, must not be
omitted. If the adoption of the method of guarantee draws
from other countries capital and enterprise which could not
have been secured without it, this consideration may be
‘gnored, for the gain through other investments of the capital
would have accrued where the community, whose interests we
are discussing, would have been unaffected by it.
Differing substantially, both in form and in its results,
from the method of guaranteeing a minimum return on the
outlay necessary to establish an enterprise, or class of enterprises,
 is the method of granting a bonus to the entrepreneurs
engaged in establishing such enterprises. The bonus may
sake the form of a grant of money or of land or both, or an
annual subsidy for a term of years, or an exemption from, or
reduction, of taxation or special forms of taxation, for a term
of years. The amount of the burden placed on the community
 at large, for the benefit of special industries, is in this
way more exactly defined than when a guarantee of interest
on the capital invested is offered. If the benefit secured is
more or less problematical, the price paid is known with
greater accuracy. Moreover, the stimulus to effort on the
part of the responsible managers of the enterprises thus aided
is greater, since all the gain of success, or loss from failure, is
gain, or loss, to them. The method previously considered
may save the owners from the losses due to incompetent or
unfortunate management, at least in part. In other respects,
the same features call for consideration as in the preceding
case, in estimating the desirability of making the sacrifice,
imposed by the payment of the bonus, for the sake of the
gain anticipated. It is obvious that, in the case of industries
capable of affording a sufficient profit without public assistance,
 the granting of such assistance is unnecessary, and