“ONLY TEMPORARY”

Gisborne Herald, Volume LXXV, Issue 22585, 13 March 1948, Page 5

“ONLY TEMPORARY”

ANTI-INFLATION BRITISH MEASURES BUSINESSMEN'S COMMENT LONDON, March 11

The Federation of British Industries, the Association of British Chambers of Commerce and the National Union of Manufacturers, in reply to the Government’s proposal to freeze profits and prices, recommend an increase in productivity, the reduction and stabilisation of prices and the limitation of dividends.

The report recognises that the country’s economic crisis is the worst for a century. It says every section of the community must play its part swiftly. “We are convinced that the system of restricing prices and profits and of centrally controlling wages is, in principle, thoroughly unsatisfactory,” the report states. “Nevertheless, the measures the Government proposes can play their part in preventing the aggravation of inflation. But they are only a temporary contribution towards a solution unless other measures are taken.”

The report urges the encouragement of voluntary savings, opposes further direct taxation, recommends additional Government restriction of capital expenditure and reduction in Government expenditure. The report recommends that all concerned in industry should do everything possible to reduce prices, announce reductions as quickly ns possible and accept the consequent reduced profits. Manufacturers should peg selling prices on today’s levels, subject to discretion in exceptional cases, and a company's gross distribution in dividends should not exceed the gross amount distributed on the same capital in its previous financial year. The report urges immediate adoption of its recommendations, which should operate for 12 months.