City and industry
Sir: Following your invitation of "the critical and probing attention of the authorities" to the current failure of our "ramshackle" stock market to meet industry's crying need for long-term finance (October 26), may I be allowed to commend the example of Austria? Besides being one of the first and most successful practitioners of what has come to be known as the social contract, and having a lower inflation rate, a harder currency and a higher growth rate than most, Austria has recently seen fit to treat investors in a. whole string of both private and public sector fixed-interest securities to increases in coupons and hence returns on their investments, evidently with the blessing of the Austrian authorities.
The cost of extending a similar measure of social and financial justice to fixed-interest investors in Britain would, of course, not be negligible to borrowers and taxpayers alike. With or without the aid of Mr Harold Lever's proposed revolving loan fund which such self-help would usefully supple. ment the price could be well worth paying none the less, if only because, by giving a much-needed tonic to the fixed-interest (and so, indirectly, the equity) market, it would make industry's task of raising long-term finance that much easier.
W. Grey 12 Arden Road, Finchley, London N3
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