THE SUGAR BEET INDUSTRY
[To the Editor of Tim SrEcrAron..] SIR,—The recent report of the Royal Commission on this enterprise is providing the controversy that might have been expected. The economist rightly says that an industry 'which has to be subsidized by a sum which is . more than sixpence in the £. on our present Income Tax is uneconomical; the agriculturist pleads that a discontinuance of the enter-. . prise would rob him of a ready market for his products, while the politician contends that the creation of a new enterprise in this country is providing employment for labour which otherwise would be a charge on the State if unemployed.
It has not yet been suggested, however, that the industry can well afford to provide a fund for the reduction of taxation without penalizing anyone at present engaged in it. If a return on capital by way of dividend was limited to 5 per cent., the inactive shareholder would be . satisfied with his investment, for this is 2 per cent, more than money is generally earning at the present time, and any dividend beyond that sum is rightly owing to the community which has provided a sheltered industry. The shareholder who has purchased his shares at some considerable appreciation above par would, of course, suffer, but as he is purely a speculator he deserves no sympathy.
Why should not the State agree, if it decides to allow the enterprise to continue, to pay 5 per cent, on the original caPital invested in the industry, and appropriate the balance by way of rOduction of the annual subsidy ? There would, of course, have to be safeguards to prevent illegitimate writing back of profits to reserves, or the payment of unreasonable sums for managerial remuneration, but these could easily be provided for with competent accountants. This procedure would at least prevent foreign capital taking advantage of our own industrial distresses to feather its own nest.—Youna
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