FINANCE AND INVESTMENT
By CUSTOS IN finance as in art there is strength in simplicity, and frankly I feel that Sir John Simon's Budget has much to commend it from this standpoint. Here was a gap of L30,000,000 : the Chancellor fills it by levying an extra 6d on the Income Tax, another id. on petrol, and 2d. on tea The thing is so simple that there are many in the City who argue that it has achieved simplicity at the cost of being unimaginative. Why not have estimated revenue rather more optimistically, cut down the National Debt service provision or—to quote the extremists—" borrowed the lot " ? Well, I am afraid one cannot judge this Budget entirely from a financial angle ; it is obviously an integral part of the Government's policy. Is it better to try to stimu- late the business community and the City into a more hopeful view of the future, or to bring home to the whole nation the gravity of the European position ? I pose the question as one which every investor should ponder before passing judgement on the Budget proposals.
Those who take shortish views in the City are naturally growling, but there is little to support the contention that, except very temporarily, the level of security values is affected by the rate of Income Tax. Personally, I like the Chancellor's decision to avoid a sharp increase in borrowing, and the larger allowances in the matter of wear and tear of industrial plant and machiney must mean that many big companies will gain in this direction as much as they lose through the higher tax. As usual, the City's second thoughts have proved less dismaying than its first, and I shall be surprised if, even psychologically, this Budget does much harm to markets. * * * *
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