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Rh necessary surplus, under pre-war conditions, was found by experience to be about 15 per cent.

The need for appropriating annually a proportion of the national work for capital savings is apt to be obscure. A prosperous country has normally a surplus of houses and of transportation and manufacturing facilities, wherefore it may suspend adding thereto for a time, as during warfare, without experiencing inconvenience. We may visualize the need, however, by imagining a nation that had exhausted its native supply of timber and had only what it grew. Annually, then, there would have to be done a certain amount of tree planting, which would not yield timber for, say, 30 years. If this were neglected the time would come when the country would have no timber.

There are several great modifying factors in the welfare of a people. Among the favorable are mechanicalization, whereby men multiply their work by machines, and so increase their production; and economy in use, whereby they decrease their consumption. Among the unfavorable are the impoverishment of natural resources and the tendency of workers to diminish their intensity. A people can improve its scale of living only by causing the favorable factors to exceed the unfavorable.

Irrespective of these basic, determinative conditions a people may wilfully, or ignorantly, depart from the conditions of sound living. It may say, figuratively of course: What is the use of saving? Anyhow, savings appear in the form of railways, houses, factories, which are owned by capitalists. Such accumulations are a part of the capitalistic system. Let us capture the portion of the produce of industry that used to be