U K. BALANCE OF PAYMENTS

Press, Volume XCIX, Issue 29336, 15 October 1960, Page 11

U K. BALANCE OF PAYMENTS

(N.Z. Press Association—Copyright) LONDON, October 13.

Britain’s external monetary position deteriorated in the first half of 1960 by £3Bm, according to provisional estimates issued by the Treasury today. ■Hie reason given was that the current account surplus was small and there was again a high level of capital investment abroad. Gold and convertible currency reserves rose by £s6m in spite of the transfer of the equivalent of £3om to the International Monetary Fund. This was in partial repayment of a drawing in 1956 to help offset effects of the Suez episode. At the same time, the sterling holdings of overseas countries rose by £lo7m. Sterling holdings in Britain by non-sterling countries rose £l37m and those of the rest of the sterling area fell £3om. TAX AMENDMENT CRITICISED Move Described As “Regrettable” As convertible notes were a promising and suitable means of attracting new capital for development, the income tax amendment treating interest on the notes as dividend, non-deduetible from the assessable income of a company, was regrettable, Mr S. Leatham, of Auckland, said in a paper presented •to the Manufacturers' Federation. > "Debenture interest remains a deductible expense of a company, therefore why not convertible note interest until the time conversion to shares is made?” he said. "One is forced to the conclusion that the motive is to. channel savings away from industry and toward Government loan issues.” Although the' maximum of- 7s in the £ in dividend tax would make convertible notes more attractive than ever to many investors. Mr Leatham said, the taxation benefit to the company bad gone. A reversion to issues of preference shares or debentures would take place. Beer Oatpat Down.—Production of beer in New Zealand fell in July to 2.6 m gallons. This is the lowest monthly total this year, and. compares with 3.lip gallons in June this year, and 3.6 m gallons in Joly last year.