s of Doctoral Dissertations 419 ings. In 1951-54 between 438 and 562 companies with total assets of $10 million and over retained 51.9 per cent of total corporate undistributed profits. This accounted for $2,918 million out of $5,626 million retained by some 50,000 corporations. The net profits of the companies in the asset classes of $10 million and over were such a large part of total corporate net profits that they were able to pay out a substantial part of their earnings and yet retain large amounts of money for reinvestment. A positive step toward easing the effects of taxation on small enterprises would be to create a special tax category, similar to that for investment companies or non-resident-owned investment corporations, for financial institutions which supply long-term capital to small but growing businesses. A policy comparable to that which has existed toward mining companies for many years would also seem valid for small industrial companies. The present system of determining capital cost allowances has the disadvantage of being too uniform within the main categories. In order to introduce a greater degree of flexibility in the system of capital cost allowances, a certain amount of ministerial discretion would seem justified. The adaptation of the plan undertaken by the Australian federal government of tax concessions for underdeveloped areas could aid and encourage enterprise and might also be extended to depressed areas or industries. The flow of funds within the capital market could be stimulated appreciably by tax changes directly relating to the capital market. The remarkable responsiveness of parts of the capital market to given taxes, or tax changes, reflects the tax consciousness of financial organizations and investors. However, existing and future possible tax incenitives should be more direct and specific in their effects instead of being left too general, with their consequences diffused over the capital market and not affecting particular parts of the market as they could. Furthermore, general tax policies, such as that toward capital gains, should be re-examined in order to ascertain their specific effects on the capital market. This content downloaded from 207.46.13.128 on Tue, 06 Sep 2016 06:01:44 UTC All use subject to http://about.jstor.org/terms