FINANCE AND IMESTMENT
By NICHOLAS DA1INPORT Ti 1!. Stock Exchange has been one of the worst sufferers from the temporary disap- pearance of the national newspapers. It provides a market in some £35,000 millions' worth of securities (taking market values at the end of last year) and its daily turnover of business must have dropped to about a third of its recent peak. If it may be said to feed off rumours, it is .off rumours circu- lated by the printed word, not by word of mouth. A rumour, for example, spread like wildfire on Tuesday• that the date for the General Election had been fixed for May 2i',, but because it was not printed in the favoured gossip column it cast not the faint- est ripple round the markets. The ticker tape and teleprinters have, of course, been tapping out their business news as usual, but it is that quiet digestion—during the daily ride to Work—of the beloved morning paper's tendentious presentation of events that gives professional investors their avid appetite for business. How very different it was when the Stock Exchange started as a private business club to deal in the Govern- ment loans raised by William III in the last years of the seventeenth century! The first jobbers of that time did not hesitate to spread adverse rumours by word of mouth if they wanted to buy or invent favourable news if they wanted to sell what they called the 'Funds.' They talked the Government down so thoroughly in 1716 that when the Treasury issued a loan of £600,000 at 4 per cent. only £45,000 was subscribed. This was the occasion which prompted Sir Robert Walpole to declare in the House of Com- mons : 'I know that members of the Stock Exchange have combined not to advance money on this loan. Everyone is aware how the administration of this country has been distressed by stockjobbers?
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British aid foreign loan capital and on share alital of all public companies regis- tered tnl managed in the UK with the except)! of trust companies. The total in- come is year was £1,122 million, of which £443 zillion represented equity dividends —a 6: of 20 per cent. on 1953. Over the five yus the increase in equity dividends was 142 million or 47 per cent. If any Labot politician makes use of these figures in thelection campaign he should add that the ri, in wages and salaries over the same periomas around £2,300 million or 150 per cet.
The statistics are by no means perfect, as Siilohn Braithwaite points out in his foreword. The total income contains an element of duplication. That is why invest- ment trusts are excluded, but insurance companies are included although their divi- dends are also paid mainly out of their interest income (I suggest that the insurance companies should give the Stock Exchange the amount of their interest income each year, so that this deduction can be made from future publications). The student of the national income statistic should also remember that a large amount of the total interest and dividends shown goes to Gov- ernment Departments, public authorities, boards and pension funds and residents overseas. But the Council is to he congratu- lated on having made a start in providing figures which give us a much better know- ledge of our capital market. I would only omit the percentage returns on the nominal capital which is really useless except to the malicious critic.
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