248 ECONOMIC PRINCIPLES

imposes an inequitable burden on the rest of the community.
It would appear as if the method of guaranteeing interest on
the investment of capital saves the community from sacrifice,
whenever the conditions turn out to be sufficiently favourable
to permit the earning of the guaranteed amount by the
industry on its own account. The community, in that case,
has merely to be ready to take the risk of that point not
being attained. If there were a sufficient assurance of equally
capable, vigorous, and interested management, equally enterprising
 and not more rash, the guarantee would present
greater advantages than the bonus. Human nature being
what it is, political influence may lead to the granting of
bonuses of amounts disproportionate to the real difficulties
which they are to assist in surmounting. It is to be noted,
too, that rivalry between different localities may lead to the
establishment of an industry, by means of a bonus, in places
other than those best suited to it within the same national
boundary-line. Where the practice of offering bonuses is
followed by the minor divisions, such as the cities and towns,
of a country, an uneconomic distribution of industries in the
country may easily be the result.
A third method is the granting of a bonus or bounty
proportioned to the quantity of the production of an industry
whose establishment or development it is sought to encourage.
Such a bounty is sometimes granted for a term of years, and
decreases with the lapse of time according to an arranged
scale, Thus the presumably greater difficulties, of the early
years of the first establishments which engage in the industry
to be favoured, are met by greater assistance, and, as the difficulties
 diminish, the amount of aid also diminishes, and the
bounty may entirely cease after a definite date. If the need
for assistance do not diminish with the lapse of time, it may
reasonably be presumed that the circumstances of the industry
 are not such as would justify its support at the public
expense. Should a permanent bounty be necessary, justification
 will need to be found in the indispensable nature of the
product to the national progress, and the danger of dependence
 on any but domestic sources of supply, or in incidental
advantages which may be expected from the establishment