FINANCIAL NOTES.
I am glad to see that the Quarterly Review, in an able article dealing with "The Burden of Taxation," strongly supports Mr. Herbert Gibbs in his recent advocacy of a Commission to study the whole question of taxation, and to report on the best means of raising revenue from the point of view of the permanent commercial interests of the country. This is a movement which from its commencement has received the backing of the Spectator, and it is one which should be supported by all who have the commercial and financial interests of the country at heart. The article in the Quarterly Review is unsigned, but it betrays the hand of someone who has a perfect grasp of his subject, and I regret that space does not permit my dealing with it adequately. Without any- - (,ritinued on page 112.) thing approaching doginatigni the article suggests that under our present system of taxation—quite apart from all questions of equity—we may be living on capital to an extent which may threaten the very existence of the nation. It is too often overlooked that the greatest sufferers from an over-penalizing of capital may be the wage-earners themselves. The following extract is indica- tive of the general tone of this most important article. In pressing for a full inquiry into our system of taxation the writer says :— " This therefore is the point, not at all in the personal interest of wealthy individuals, but in the interests of the masses of the people, to which inquiry should principally be directed. If it should appear that the life-blood of industry were being drawn away in excessive taxation, the present rate of income-tax and death duties, or anything like them, would stand self-condemned. For if the country can no longer finance its home industries or its foreign trade, it is very certain that its industrial downfall is at hand, and that in twenty years or less the population will have been reduced by starvation or emigration to perhaps less than half its present numbers " Last week I referred to the way in which life insurance and endowment insurance policies had kept their hold on the popular imagination in spite of the increase in the activity of the investor in purchasing investment securities. I have now been favoured with a very interesting prospectus of "The Old" Equitable Life Assurance Society, designed to meet the requirements of those who are requiring loans for the purchase of houses. That, of course, has become an increasing need during recent .),ears owing to the manner in which many a householder has had to choose between the purchase of his house and something approaching to actual ejection. Accordingly, the Equitable Life Assurance Company formulates a scheme under which by taking out a life assurance policy for the amount of the loan required the borrower can make repayments over a period of sixteen years at a rate of interest of 4} per cent. (clear of tax), while should death occur earlier the loan becomes repaid automatically through the amount of the principal accruing to the policy holder, all balances in his favour going, of course, to his beneficiaries. The company is prepared to advance up to about two-thirds of the actual cost of the house required, and the loans can be repaid at any time. Cash benefits additional to the principal sum insured are guaranteed at the end of the period at varying amounts according to the age of the borrower at the date of the loan. The scheme seems simple and straightforward and deserves to be well known.
In another column I have dealt with some of the influences msponsible for the recent further appreciation in gilt-edged securities, and they are, it will be noted, influences connected more or less with the developments of the moment. Those, however, who arc fond of what may be termed the science of Stock Exchange fluctuations would, I think, be interested in an exhaustive article dealing with the prospect of investment securities which appears in the current number of the Bankers' Magazine. The writer is the well-known banker and statistician. Mr. A. II. Gibson's views command a good deal of attention now because nearly two years ago, when British Funds were at a very low level, he did not hesitate to prophesy an impending rise in all gilt-edged stocks, basing his predictions for the most part on the connecting link which usually exists between a heavy fall in com- modities—in other words, in the cost of living—and a rise in fixed interest yielding securities. At the time that Mr. Gibson's first article appeared, namely, in the early part of 1921, Consols stood at 481, and Mr. Gibson ventured to predict that they would touch 60 by the end of 1922. As a matter of fact, they went slightly above the figure named during last year, and in his present article Mr. Gibson deals with the prospects of a further rise during the next few years.
Not the least interesting feature in the latest balance- sheet of Messrs. Glyn, Mills, Currie and Co. is the remark- ably stable position which is revealed as regards the principal items. Latterly there has been a general (Continued on page 113.)
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