COMPANY MEETING

UNITED KINGDOM PROVIDENT INSTITUTION

Si V: ERNEST BENN ON THE NEWSPAPER MENACE THE 98th annual general meeting of the members of the United Kingdom Temperance and General Provident Institution was held on Wednesday, iviaish 8th, 1939, in the Incorporated Accountants' I la I, Victoria Embankment, W.C.

The Chairman (Sir Ernest J. P. Benn, Bt.) said:— My Lords, Ladies and Gentlemen,

In moving the adopt:on of the 98th report and accounts, and atte.opting a review, as is our custom, of the past year, I have a task which is peril:Ts more difficult, certainly more interesting, than ever before in my experience. From the general market I have to report a certain element of depression, a considerable ele- men of anxiety, a lack of confidence, and a failure to progress, out of which it would be easy to produce a superficial tale of woe. Env: in my judgement any such tale would be far removed from the real truth, however much it might accord with that deeply ,herished grumbl:ng instinct which is one of the qualities of our ace.

THE NEWSPAPER MENACE

Commerce and industry have always suffered the handicap of politics, but in these modern times a serious new barrier to peace and prosperity has arisen in the shape of an enormous expansion of he machinery for the distribution of news. Hour by hour, the rotary press and the wireless have to be fed with more and more news. There remains, however, among all this advance and improvement, the age-old difficulty that good news is no news, and bad news is good news. Thus in the realm of foreign affairs we only hear of the bad in other nations, and they, in their turn, are only informed of the bad which, strange as it may seem to us, is also to be found or invented here.

Every nation is amply supplied with skilful sensation sleuths, experts in the discovery or invention of scandal and rumour, and the provision of headlines and scares.

The business of news gathering and news distribution, on paper and on the air, must now be ranked with the greatest of our in- dustries. In this country alone it employs more than a hundred millions of capital; there is a daily newspaper circulation of thirty million copies, and there are nearly nine million wireless licences. To remember that the whole of this impressive structure is absolutely governed by the very human preference for bad news, is to realise one of the difficulties of a peacemaking Prime Minister, and the jeopardy in which quiet and confidence always stand_ The difference or difficulty about which men can disagree, argue, or even fight, is as old as history, but only in recent times has it become the essential raw material of a great and powerful industry. I fear that to preach goodwill to the news trade, the bad news trade as it must be called, is something like advocating teetotalism to brewers. But a more general understanding of this difficulty is one of the most urgent of present-day needs. In the absence of cheer, or comfort, or encouragement from the news services, we are only saved from disaster by the good faith, and sound common sense of ordinary people, who still find, if not "sermons in stones," at least some good in everything."

THE STOCK EXCHANGE rN 1938

Roughly three-fifths or your property is in Stock Exchange Securities, and the shrinkage in values during 1938 was a matter of some concern to us. For some years past, I have pleaded, in your name, for a better interest yield upon our money, and in each of the last four years I have noted with satisfaction a tendency in that direction. 1938 has given us all we hoped for, and has brought Stock Exchange prices into line with the Five per Cent. Mentality of which I spoke last year. You must remember that, like all serious investors, we buy for income, and seeing that we have never taken credit for inflated capital values, we are able to ranain undisturbed when the inflation disappears. Our economic Department has functioned so effectively that the round million of appreciation which we put into a published Reserve remained intact even at the low Stock Exchange levels of December 31st.

I fail to share the feelings of the pessimists and I think that t'.e story of the Stock Exchange in 1938 gives further proof of our s: rength and staying power as a nation. We have lost foreign funds chiefly because of returning confidence in France and America. I can find no cause for pessimism in that. I suspect that the withdrawal of foreign money was accelerated by official audriPts to stop it, and I regret that, notwithstanding all the lessons Of the post-War period, we still persist in the attempt to control and manage that which, more than anything else, derives its -weetness and perfume" from "Liberty alone." The with- drawal of "funk money because of the absence of reason for " funk " should be a matter for congratulation, and should be Owckly followed by the deposit of new money arising out of the rrosPerity of the foreigner.

The bureaucratic grip upon our activities still tends to tighten. If Chambers of Commerce, farmers, shipowners, and others con- tinue to demand Government assistance in fields where govern- ment is out of place, that grip must get tighter still. There are those who hold that confidence and management can go together. To my mind the ZW3 things are wholly incompatible, and I believe that the rapid develepment of the new science of management as exemplified in the Exchange Equalisation Fund and recent legisla- tion, is in part responsible for the continued weakness of confidence.

The ordinary man, rightly, shrinks from a market where the largest and most powerful operator is a newcomer, full of theories, but devoid of experience, whose avowed object is not to secure income, or to make profit, but simply to defeat the law of supply and demand.

From the mass of dialectical generalities about the practice of control and management, two, and only two, small hut significant facts have emerged. The first is that the Issue Denartment has ceased to be a source of profit to the Treasury, and has made a loss of L9,000,000; secondly, 1,86,000.000 has been placed to a Reserve in the Equalisation Account, indicating that in the opinion of the managers, losses arc not to be ruled out even in the Holy of Holies of the New Economics. The situation was admirably summed up by an American correspondent, who wrote: "We don't know what we're doing, but we're getting there all right."

FOREIGN TRADE The continued shrinkage of trade between the nations of the world gives emphasis to this argument. At no previous time in history have governments lent so much of their aid to the business of exporting, and yet exports everywhere continue to decline to respond. The best hope for world trade lies in the re-establish- ment of the merchant, who, alone, understands that trade is very seldom hi-lateral. He also knows that trade consists in buying as well as selling, and that the buyer, both here and abroad, is seldom interested in trade agreements, in quotas, in balance of payments, or even in Empires.

The merchant also, from his long experience, is in that small minority who can understand the old hard and unpopular economic truth, that the buyer settles the price. There is now more talk of organising industries to sell by the Cartel method, thus intro- ducing still more red tape where the only need is freedom. Block sales and purchases such as we hear of from Germany may look good from the inside of a Government Department, but they ignore the taste and convenience of the real buyers. They also make no use of all the wisdom and experience of the merchant, the wholesale or the retail trader, who by their knowledge of the con- sumer and his ways have steadily raised the standard of living of all of us.

ANOTHER FIVE MILLIONS Coming to the details of our own business, which, of course, hang upon these wider considerations, I am happy to report that the total of the new policies written during 1938 exceeded for the second time the sum of £5,000,000, and improved a little upon the record figure established by us in 1937.

OUR FUND We can claim another record for the year just passed in that for the first time in our history the normal amnia! addition to our life assurance fund had reached the seven figure mark. We add to the fund the handsome sum of £1,030,020.

CLAIMS The institution paid out in 1938 £1,510,143 in claims arising by death, by maturity, and by surrender. This figure is three times the average of the previous 97 years, and provides striking evidence of growth, but it is even more interesting as evidence of the value of life assurance as a method of investment. If each of the claims paid during 1938 is considered as part of an estate, whether large or small, it is safe to assume that the life assurance item was, in most cases, the only one that realised the full value attached to it.

EXPENSES OF MANAGEMENT The directors are happy to report that not withstanding the con- tinued growth of the new business undertaken, the ratio of manage- ment expenses to premium income has been reduced by .2 per cent.

THE BONUS I have left until the last the important question of the valuation and distribution of bonus.

You will see from the printed report that the Actuary puts the present value of the liabilities under all contracts at £23,193,585. We can pride ourselves upon being able to maintain our reserves for both old and new contracts upon the same stringent basis as before. We then come to the life assurance annity and capital re- demption fund which is shown as £25,198,836, without taking into account in any way the £1,000,000 reserve fund. There is thus a surplus of assets over liabilities of i2,005,251, of which £400,377 was brought forward from the previous valuation.

It requires the sum of £1,633,201 to allot bonuses at the same record high rates as declared ever since 19272 and there remains the sum of £372,050 to be carried forward undivided.

Throughout the triennium, the inroads into the funds made by the death claims have been light and this has been a powerful factor in the production of the surplus available for distribution to mem- bers.

The institution has a fine history of large bonuses, and the declaration of a steady rate for the past twelve years, during which period the prices of gilt-edged stocks have jumped up and down like the shoddiest of industrial shares, is proof of the stability which you secure when your money is invested in this institution. The report and accounts were unanimously adopted.