THE INCIDENCE OF TAXATION 203

principle of equal sacrifice, the reasons for procuring them in
that way would be stronger than they usually are. Loans
are, in fact, commonly resorted to to avoid making taxation so
heavy as to become oppressive or unpopular, and to avoid
the adoption of forms of taxation which are markedly not in
accord with the principles of equity as applied to taxation.
If the expenditure for which the funds are needed is one of
general benefit to all, the burden which it imposes should be
distributed according to these principles of equity. If, for
example, the funds are required for war expenditure, they
may exceed what can be raised by the use of equitably
distributed taxation, while it may be claimed that the burden
ought not to be entirely borne by those who actually carry
out the warlike operations. The assumption, that future
generations will benefit so largely by wars of the present, as
to justify requiring them to pay their capital cost, is one
which must be made with the greatest reserve. We are
concerned here, however, with the comparison of the incidence
of the burdens of such expenditure when the funds are raised
by taxes or loans respectively.
If raised by loan, the funds are presumably procured
from sources where the least sacrifice is involved in procuring
them. The less productive of industrial opportunities will
be left undeveloped, while the funds are employed by the
government. At the same time, when industrial or commercial
 enterprise promises a greater net return than
subscribing to the loan, the capital will not be kept from
those enterprises and handed over to the government. So
long as the loan remains unpaid, the interest must be provided
from tax funds, if the loan be expended for purposes not
yielding a direct revenue, as in the case of war expenditure.
These taxes can be so distributed as to bear equitably on all
classes, and the same is true of the taxes whose proceeds
provide the means for the gradual repayment of the loan,
This repayment, moreover, will generally be postponed till
the national revenues suffice for the purpose without resort
to excessive amounts, or inequitable distribution, of taxation.
If the funds were raised by immediate taxes, the
distribution of the burden might not be able to be made