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A RELAPSE
Stocks Fall from
High Level
EFFECT OF WARNING
LONDON, Nov. 24.
The upward march of British funds
received a slight check this week,
which wea only natural, considering
the high level to which all these
stocks had been pushed. Appar
ently the big banks and other insti
tutions have filled their requirements
fpr the time being, and there have
also been a large number of profit
taking sales.
Another factor was a speech by the
Chancellor of the Exchequer (Mr.
Neville Chamberlain), who, referring
to the optimists who were hoping for
reductions in taxation, said it was
necessary to remind them that there
were two sides to the account-re
venue and expenditure - and it was
only the difference between the two
that could be available for the re
lief of taxation.
"You can't eat your cake and have
it," he added. "We have been eat
ing our cake in the way of new ex
penditure so rapidly of late that I
must warn you that very large in
creases in revenue are still necessary
to meet this increased expenditure
before there will be anything over for
the relief of the taxpayer in the next
budget."
Little Hope of Relief
This speech was generally infer
preted as a warning that there is
little hope of a reduction of income
tax, and this caused some selling of
gilt-edged. But the market became
more hopeful later, and closed last
night with a better tone. Dominion
stocks reacted a little in sympathy
with British, the premium on the
new loan declining to a quarter, but
their position all round is still
strong, with Commonwealth, Victorian
and South Australian 1945-75 5 per
cents, all standing at £116. Indus.
trials, which had followed the up
ward movement of gilt-edgeds, again
followed them in the relapse, though
not perhaps to the same extent.
Profit-taking was apparent in those
sections In which the recent rise was
most pronounced, but here again a
better tone was apparent at the close.
Much interest attaches to the an
nouncement that a Birmingham loan
of £5,000,000, 2% per cent., 1955-57,
at £96 10s, is being underwritten.
This is the first long-dated issue by
a home corporation at an interest
rate below 3 per cent.
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