LIMITATION OF DIVIDENDS

Press, Volume LXXXV, Issue 25739, 26 February 1949, Page 7

LIMITATION OF DIVIDENDS

BRITISH INDUSTRY RENEWS PROMISE

GOVERNMENT CRITICISED FOR EXPENDITURE LONDON, February 24. The Federation of British Industries, the British Chambers of Commerce, and the National Union of Manufacturers have assured the Chancellor of the Exchequer (Sir Stafford Cripps) of industry’s co-operation for one more year in avoiding any general increase in the level of dividends. This was announced by Sir Stafford Cripps in the House of Commons to-day. A letter from the three groups to Sir Stafford Cripps said that while giving an assurance on dividend limitation. industry felt strongly that the most powerful single factor’ in reducing inflationary pressure must be the reduction of public expenditure. The three bodies had based their recommendation for reduced dividends in 1948 on the assumption that Government expenditure would be reduced as an essential part of the disinflationary policy. This had not been achieved,' and it was vita! for the reduction of costs, the increasing of competitive power, and a healthy national economy, that it be achieved. The letter said that .the voluntary limitation of dividends had been accepted on the implicit understanding that wages would generally be stabilised, but although large and general increases had been restrained, higher wage rates had been granted or awarded during the period March to December, 1948. to the extent of £1,660,000 weekly, affecting nearly 7,000,000 work people, and extensive new claims were being advanced. “Effective observance of a policy of restraint by the trade unions must be one of the most important justifications for requesting a similar policy regarding dividends,” it said. The letter also urged the alleviation of corporate taxation. It said that the aggregate amount of distributed corporate profits, after taxing, was less than 4 per cent, of the national income. Therefore, any conceivable changes in the level could have only a very slight direct effect on inflation. Sir Stafford Cripps, in reply, said that the points raised would be given careful consideration.

Sydney Tram Collision.— ln heavy rain yesterday. 11 persons were injured when twe trams collided in the Sydney suburb of Forest Lodge. One tram skidded round a corner on the wet rails and crashed into the other head on. Both were derailed and heavily damaged.—Sydney, Feb. 25. Australian Swijnming Record.— John Marshall broke the Australian 1500 metres freestyle swimming record by U.lsec at the Australian championships carnival. His time was 19min 35.35ec. The previous record was made by Roy Lei vers at the British Empire ,Games ir. Sydney in 1938.—Brisbane. February 25.