FINANCE AND INVESTMENT
By CUSTOS
WRAT with another Budget next week and sundry dark predic- tions of Hitler's invasion date, markets have done remarkably well to hold practically the whole of their recent recovery. Prices are, of course, rather unreal and they would not stand up to much selling, or, for that matter, to any heavy buying either. That in no way belittles the achievement of markets at a time when they might understandably have been uneasy and drifting down. Investors have no illusions about the Chancellor's financial problems, and everybody is quite pre- pared for fresh taxation, as well as another huge addition to borrowing.
Severe budgets always mean some casualties in the stock markets, and doubtless next Tuesday's blitzkrieg from West- minster will hit certain equities. I feel, however, that even a shilling or so on the Income Tax, fresh imposts on luxuries, and all the other unpleasant but very necessary burdens which the Chancellor will ask us to bear will not have any demoralis- ing effects on the investment front as a whole. Gilt-edged will draw fresh powers of resistance from really swingeing increases in taxation which give evidence of the Government's determination to fight the inflation danger. Equities, from the broad standpoint, are already so low that the effects on profits of a steady contraction of private spending are fairly adequately discounted.
TREASURY OBSCURANTISM
When investors and taxpayers are being called upon to make such heavy sacrifices and are not flinching, it is unfortu- nate that the Treasury should suddenly see fit to withdraw a good deal of information from the weekly Exchequer Return. For some reason best known to Whitehall, the inauguration of the new Treasury Deposit Certificates through which the banks will lend surplus cash balances to the Government has been made the occasion for withholding the weekly details of the floating debt. Apparently, the official view is that more lati- tude is now required, and that fluctuations in the floating debt items are apt to be misleading. This is an unsatisfactory explanation. Under the pressure of criticism, the Treasury has agreed to restore the floating debt figures once a month. This quarter-loaf is better than no bread, but I remain con- vinced that this attempt at a statistical black-out was ill- conceived.
TELEPHONE RENTALS
In a financial year vs hich has included nine months of war, Telephone Rentals, which owns a number of companies engaged in the installation and maintenance of " New System " private telephones, has achieved a fresh record of profits. After cover- ing taxation, the board has maintained the z o per cent. ordinary dividend out of available earnings of 151 per cent. At the annual meeting Mr. Fred T. Jackson reviewed the group's position in relation to the war effort. He stressed the national importance of the company's work but warned shareholders that the future depended on the maintenance of supplies of apparatus required by the company and its affiliates. It might be necessary, therefore, to look for some contraction in the group's activities. Fortunately, a considerable income is assured from existing arrangements and the group has built up an immensely strong finaicial position.
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