FINANCE—PUBLIC AND PRIVATE
CHEERFUL MARKETS
By ARTHUR W. KIDDY WITHOUT very much increase in business, the past week has been- a good one on the Stock Exchange. How much of the firmness of British Funds and kindred securities must be attributed to special influences such as pur- chases by those in France who have taken flight from the franc, or to hesitancy here occasioned by uncer- tainties connected with the Labour outlook and the effect of a possible return to the Gold Standard, it would be difficult to say, but undoubtedly not only the firmness of existing investment securities but the ready response given to new issues of capital of an investment character continues to be an outstanding feature of the situation. Firmness, however, during the week has been by no means confined to the strictly investment group, for there has been a steady enquiry for some of the European " Reconstruction " Loans, such as the Hungarian issue, while in the Industrial group the outstanding feature has been the great rise in Courtaulds on an astonishingly good dividend and- profit statement. In fact, if one were summing up . the general situation of markets in a sentence, I would be inclined to say that in very many directions there are all the indications of a period of considerable activity if only some of the bigger uncertainties of the outlook were removed.
BUDGET PROSPECTS.
Among these uncertainties must be included the forthcoming Budget. So far as the current y.•,m. is concerned the position, as I explained last week, is sufficiently,. favourable, Revenue giving every sign of equalling, if not exceeding, the original Estimates, so that there is at least a reasonable prospect of the year closing with a small surplus. It is known, however, that in some directions Revenue during the coming year must suffer by reason of the big reductions in indirect. taxation made by Mr. Snowden a year ago. No exception need be taken to the much-needed expansion in Expenditure for our Air Defence, mud it is not con- sidered that there is much margin for reduction in either the Army or the Navy ; but if Mr. Winston Churchill fails drastically to reduce Civil Service outlays, he will have done much to prejudice in advance confidence- in the forthcoming Budget. Probably enough, the moment has been reached when to effect drastic- economies in the Civil Service certain departments will have to be abolished, but the general public, I fancy, has come to the conclusion that such departments as the Ministry of Labour and the Ministry of Health are distinctly expensive luxuries, and would be glad to see them, dispensed with. I know that this, of course, is an assertion which will be immediately challenged in many quarters, but it would really be very interesting. to see a carefully reasoned statement proving that the country will receive full value for the outlays of very nearly £40,000,000 on departments of the Ministry of Health and Insurance and the Ministry of Labour, especially when m last year's statement there still figures under the head of " Relief of Unemployment " an amount of over £3,000,000. One seems to recall that in the time before these huge outlays appeared in the National Accounts, the health of the community was not 'altogether unsatisfactory, while there were certainly fewer unem- ployed people.
THE RAILWAY POSITION.
The ,railway results for the past year are not of a very encouraging character, revenues having declined in most instances, while there has been no corresponding shrinkage in expenditure, which, indeed, in some directions has actually advanced. With the exception of the Great Western Railway, which slightly reduced its distribution, dividends on the Ordinary shares have been maintained, but only at considerable cost to the reserves: - In- the case of the Southern RaihVay; howeVer, rather better results have been shown, and the amount taken from reserve was rather less than a year ago, while there was a material reduction in the deficit after paying the dividend on the Preferred, Deferred and Ordinary " A " shares. It certainly cannot be said, however, that the railway shareholders are getting anything unduly high in the shape of return on the capital which has provided employment for so many hundred thousands of the population, and which by reason of the huge sums which are being disposed just now for improvements, extensions and new rolling stock and locomotives must be greatly relieving the uneniployment problem. And yet, as we know, many industries are being adversely affected by the high transport charges, while the poorer section of the travelling public must be hardly hit- by the great rise in tireS and the curtailment of the pre-War scale of cheap excursions and week-end arrangements. In fact, both in the railway and the coal industry we come up in specially direct fashion against the problem of the high costs of production benefiting certain sheltered employees at the expense of other sections of the com- munity. Indeed, it might, perhaps, be said at the expense of the national interests as a whole.
Previous page
