[Illustration: PROSPECTING FOR GOLD: PANNING A SAMPLE]
The inference that an immediate and heavy increase of taxation is to be made to meet the war debt obligations may possibly be gratuitous, and probabilities confirm this supposition, for it is at issue with the Government expert's special recommendations. From this point of view, Sir David Barbour's observations are worth reciting for their direct bearing. He says: "The sound policy for the Transvaal is to so frame its system of taxation as not to increase unnecessarily the initial capital expenditure, or enhance the cost of working. I shall take it for granted that it is not intended to impose excessive or crushing taxation on either of the Colonies, or to exact such a share of their revenue as would cripple or starve the Administration. Subject to these considerations, I shall assume that any surplus of revenue over expenditure, or any special assets that the Colonies may possess, can fairly be taken towards meeting a portion of the cost of the war." Further: "If the additional taxation which I recommend ... be imposed ... it may be anticipated that after two years from the conclusion of peace that Colony will be in a position to set aside a portion of its ordinary revenue towards meeting the cost of the war. I am unable at present to form an estimate of the amount which it may be possible to set aside in this way.... On the assumption that the contribution of the Orange River Colony and the Transvaal towards the cost of the war is to be limited to the amount which they can pay without imposing excessive taxation or starving the Administration, it will be obvious from what is said in the preceding portion of this report, and especially in paragraph 62, that it is impossible at the present time to specify any definite sum as that which ought to be paid. I suggest that the Imperial Government should fix the maximum sum which, under any circumstances, they would require to be paid. Such portions of the total amount of contribution, so fixed as it may be found from time to time that the Colonies can bear, should be made a charge against them. If, in the course of time, it is found that the Colonies are unable to pay the whole sum, under the conditions as to taxation and cost of administration which I have already specified, the balance should be written off." So far as the immediate incidence of war taxation is concerned, it is therefore highly probable that the Government, who have adopted their financial expert's views almost _in toto_ with regard to fiscal reform, will do the same with regard to the levy of the war contribution.