FINANCE AND INVESTMENT
By CUSTOS
THOSE of us who had been prepared for a further modest dose direct taxation have been relieved by Sir Kingsley Wood's Budg While I do not share the Chancellor's implied view that the of direct taxation have been even temporarily reached, I feel he done the wise thing in concentrating the financial contribution the task of curtailing consumption of non-essentials on the field indirect taxation. The actual increases, spread over tobacco, spirits, wines, entertainments and luxury goods, are stiffer than been generally expected, but no more so than the situation w I doubt whether demand for tobacco, beer and entertainments be affected very much by the gher level of selling prices.
STOCK MARKET REACTIONS This view is reflected in the stock markets in the steadiness tobacco, brewery and cinema shares. Such falls as have recorded are quite trifling. At today's quotations these shares valued on the assumption that profits and dividends will be m tained at the level suggested by the _pre-Budget trend of even Stores shares, on the other hand, have been lowered on the strtn of the swingeing luxury taxes. Gilt-edged have naturally respon to the Chancellor of the Exchequer's reiterated determination to h the inflation danger at arm's length and must benefit from the absen of competition from the speculative groups. So we have the 31 cent. War Loan at a new five-year peak of io6f's.
One wishes, of course, that Sir Kingsley Wood had seen fit leaven his austerity Budget a little more generously with meas designed to increase war output. It is disappointing to find all representations made to him on the subject of Excess Profits T practically ignored. As things stand, E.P.T. is not merely taking profit out of war, which everyone agrees is both necessary and i but curbing the enthusiasm of a large number of industrial main ments. It is no use arguing that in these critical days patriot' should be enough. It is unfair and unwise to expect firms win are placed in a wholly anomalous position by too per cent. E.P. to "go to it" with too per cent. efficiency.
POST-WAR HOUSING
I see that Sir Edward Whitley, president of the Halifax Build Society, estimates that each year the war goes on will call i,000,000 new houses to make good arrears of tuilding and repl houses destroyed by enemy action. He points out that in the twe years to 1929 not more than 4,000,000 houses were built. It is p however, on the basis of Mr. Keynes's recent suggestion that 5 £800,000,000 of building construction can be financed- without flation, that a much higher rate of construction is probable after war. Meantime, growing shortage is reflected in rising prices.
War conditions, imposing severe limitations on new advances, h "resulted in the building societies becoming more and more bq Current balance-sheets are a striking demonstration of fin' strength from this standpoint. From the point of view of inc however, this liquidity is an expensive juxury. In the _case of Halifax, the repayment of mortgages and the re-investment of proceeds in safe, but low-yielding securities resulted last year in loss of £28o,000 in income from borrowers and a gain of Lioo,000 in income from investments. What with reduced rev" heavy taxation and liability for war damage contribution, it is surprising that the rate of interest on deposits and shares have to be cut down.
RESULTS
Preliminary results announced by Imperial Chemical Indus conform closely to a now familiar pattern. Net income for I after charging taxation and £2,000,000, as in 1940, for obsoles and depreciation, was down from £6,418,533 to £6,162,212. £6,400,000 was provided by the company and its operating s sidiaries for N.D.C. and E.P.T., against £5,600,000 in 1940, it op that gross trading earnings were well maintained. For the f successive year I.C.I. holds its ordinary dividend rate at 8 per
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