This is by no means the first occasion during the last few weeks that we have been asked to consider a tax on bonus shares. I have sat, I think, through most of the Debates on this subject, but I have not heard a more illogical argument than that to which we have just listened. I must confess that I usually admire the hon. Member for Chesterfield (Mr. Benson) for the tidiness of his mind. But on this occasion, I think his remarks are very untidy indeed. As I understood him, his argument was that in the case of a company which, for instance, started with a nominal capital of a million pounds and assets equal to that amount, if half the capital were lost and the company wrote down its nominal capital by £500,000, then, to use his own expression, the company would have reverted to the original position. I do not see that that can be claimed in any sort of fairness or justice or tidiness. By writing down your capital you acknowledge that you have lost half of it. What would, I think, be a reversion to the original position would be if the company, having acquired new strength and ploughed back funds into the industry, was once again able to increase its nominal capital to a million pounds. Then, indeed, you would revert to the original position. It is that transaction which we seek, by this new Clause, to exempt from taxation.

I hope that hon. Members on either side of the Committee will not feel aggrieved if I say that during these Debates on bonus shares there has been a tendency to overstate the case. I think, for example, that there may have been isolated instances where the nominal capital of a company has been increased for the purpose, to some extent, of making the dividend payments apparently at a lower level than they really were. There have been cases where the value of holdings in companies have been increased to some extent by the issue of bonus shares. On the other hand, I thought that the hon. Member for Chippenham (Mr. Eccles) hit the nail completely on the head when he remarked, a day or two ago, that in his view the Chancellor of the exchequer was entirely wrong in fixing his attention, and asking the Committee to fix its attention, on the actual operation of issuing the bonus shares; the actual moment of the financial operation. Of course, it certainly is that event which will attract taxation if the Chancellor's proposals become law; but there has probably been, prior to any issue of bonus shares, many years of excellent, orthodox, sound and prudent finance when profits—and this should please the Chancellor of the Exchequer—have been ploughed back into the industry. Also, if, on occasions, increasing the nominal value of a company has led to a false impression with regard to the rate of dividend which that company is paying, the reverse is at least equally true, and I think would probably be much more frequent, for unless the nominal capital of a company can be freely increased and made roughly to correspond to any increase of actual capital—