3 
the sacrifices we had made and had got to make and of our 
capacity to bear. I said we were going to have hardships, but we 
were in a position to. meet all our obligations, and to carry our 
Loan, provided we could exercise a wise economy and face up to 
the necessary sacrifices; but the sacrifices are there. ‘There is 
not the slightest idea. of the Government being able to dispense 
with the sums which are received from the Excess Profits Duty. 
It must either be the Excess Profits Duty, or it must be another 
tax in replacement of it. I am bound to say that I think trade and 
industry have borne the Excess Profits Duty during the present 
year, or will be able to bear it with greater ease than I had 
anticipated when I framed my Budget. Had [I foreseen what 
prices were going to be and the conditions of trade, I do not think 
I should have come down to 40 per cent.; and had the House of 
Commons foreseen what the prices were going to be and the ° 
conditions of trade, I am quite certain that there would have been 
a great deal more than there was of criticism on my coming down 
so low. Accepting that as a possibility you suggest an alternative.” 
I do not think you can say that there was anything in that to lead 
you to suppose that the Excess Profits Duty would disappear 
without an alternative which gave me an equivalent revenue. 
Mr. MANVILLE : No. : 
The CuANCELLOR oF THE ExcueqQuer: Then you suggested 
your alternative, and I went on to discuss that with yon. There 
was a great deal of interruption of my observations, and I do not 
see where my first criticism was but my second criticism on your 
alternative was ‘expressed in these terms: ‘My second criticism 
is, and it is a criticism which you would hear at once, I am certain, 
if your proposal was made in public, that it deals too hardly with 
small businesses, and it lets off too lightly the businesses which 
make big profits.” .I did not make a bad forecast of the kind of 
criticism which you might hear. That has been applied even to 
the present Excess Profits Duty; but it would have been much 
more strongly ‘applicable to the proposal which you made to me 
for a flat rate on all businesses. 
Mr, Hosson : That is the business we have come to discuss 
this afternoon. 
The CHANCELLOR OF THE ExcHEQUER: I wanted to remind 
you of what Mr. Manville had said, and of your letter to me. You, 
Mr. Hobson, have a foot in both camps—the Associated Chambers 
and the Federation—but I wanted to remind the members of the 
Federation of what had passed between us. 
Mr. Hossox: Yes. Well, Mr. Chamberlain, in the first place I 
suppose I have to take up the story from now forward. We have 
sent you a copy of the resolution passed at our Annual Meeting, I 
do not know that I need read it again, but that resolution affirms 
the belief that the Excess Profits Tax should be abolished altogether, 
and that an alternative such as a flat rate Profits Tax be levied on 
Schedule D returns. I am here in support of that resolution, but 
before 1 deal with the Excess Profits Tax I want to deal very 
briefly with the alternative that seems to be before the commercial 
world of a War Levy, which may be applied to reduce the amount 
of the Excess Profits Tax. At a recent date we thought that the 
Committee had come to the conclusion that that was so impossible 
that the scheme was practically dropped. But as I gave evidence