The following letter appeared in the Financial Times of 6th October. "Re rewards for industry and the letters appearing in your issue of October 4, I am a shareholder in quite a large number of companies, and although my holding in each tends to be on the small side it does mean I receive each of their annual reports of the directors, I therefore cannot help noticing that in most reports the directors! fees, emoluments, etc., adding up to their total remuneration increases year by year, irrespective of whether the profits are up or down, Fov instance, only this morning I received a report, where the profit is down 20 per cent, but the directors' remuneration of seven is up over £5,000 from the year ending 1965. I wrote a few companies earlier this year asking for more detail, only to be told (and they were within their rights) that they gave all the information in their reports according to the law of the Landacccrocceces
G. A. HARTLEY," The real causes of inflation (2) The Bank of England Quarterly Bulletin had this to say in its September issue (pages 222 & 223).
"In the first quarter of 1966 the saving of companies, including financial institutions, was negative (in other words, after paying dividends, interest and taxes and deducting profits due abroad, they had a deficit) for the first time since the severe winter of 1963. Gross trading profits were lower than a year earlier, while tax payments were greater, because of the higher rate of income tax, which was mainly paid on the large profits earned in 1964. But the chief cause of the deterioration in company saving was the exceptionally high level of dividends: payments were some £200 million more than a year ago because companies brought them forward to take advantage of the transitional arrangements in the Finance Act 1965.....e0- The exceptionally large dividend payments by companies were the main cause of a sharp rise in personal income in the first quarter: although tax payments were heavy, disposable incomes were 43%, higher seasonally adjusted, than in the fourth quarter of 1965. Consumers' expenditure, after seasonal adjustment, rose by rather less than this (3%), and personal saving increased by some £110 million. Capital expenditure and eanital transfers also increased, but the seasonally adjusted financial surplus was still some £90 million larger than in the previous quarter."