The City and the Tax

The City has given itself away rather badly over Mr. Chamberlain's N.D.C. proposals. City journals and City editors are now admitting that the magnitude of the Stock Exchange slump which followed the Budget speech was due to the fact that a speculative position had been built up, particularly in mining shares. In other words, it was not the effect of the tax on legitimate industrial profits that caused the greater part of the panic but the fact that it caught out share pushers and gamblers. (The political use afterwards made of the panic is, of course, another matter. That was the work of big business men of all kinds.) The episode is another reminder of the extent to which the real production and consumption is liable to be thrown out of its natural course by those whose interest in industry is not the profits of production but the profits of speculation in production. The recent rise in the price of wheat, attributed at first to a world shortage and then admitted to be the work of gamblers, is another recent instance.