Shareholders and workers SIR,-Miss Cundy is perfectly right in pointing out that many small savers invest in ordinary shares; but surely it remains true that the great majority of people with limited means put their savings in Co-operative or building societies or Government or other securities carrying a limited return. If they do invest in ordinary shares they are liable to have to pay an artificially high price for them and then suffer capital loss when anticipated dividends do not materialise, as in the New York Stock Market crash in 1929.
The right way to relieve the burden on small savings is surely to make adjustments in taxation. For instance, Mr. Butler could have done more to increase incentive and to help the small saver if he had reduced the reduced rates of income tax and introduced several new reduced rates, but left the standard rate alone. Or the exemption limit could have been raised or allowances adjusted. Or earned and property incomes could be taxed at two rates which were carefully graduated without any standard rate at all.
I fully agree with Mr. Travers that the only way to save the country from ruin is for the workers to abandon the attitude of "less work, more pay." But a spirit of partnership is only likely to be created if we modify the wage contract somewhat by a contract of partnership wherever that may be possible-as it is in the case of limited liability companies. That is the way to banish what Mr. Butler calls "that hopeless feeling that extra effort is not worth while."
I agree, too, that the shareholder should receive a reasonable return proportionate to risk. and suggest that this should be determined by the market. Thus a no par value share with a maximum dividend of one shilling of which sixpence was cumulative for ten years might fetch a pound; but it might fetch very much less. It would depend upon risks involved and market conditions prevailing.
I repeat that the return paid at present to ordinary shareholders is unlimited while their liability is limited in spite of the losses with which Mr. Travers seems to be familiar. Dividends may sometimes be as high as the 187+ per cent. paid recently by Binns, or the 4,000 per cent. paid by a company mentioned by the Sunday Express a year ago. If Mr. Travers would like to learn more about the rights of shareholders I suggest that he consult Mgr. Ryan's three pamphlets on The Christian Doctrine of Property obtainable at twopence each from the Catholic Truth Society of Ireland, 7 and 8 Lower Abbey Street, Dublin; or Fr. George F. Bardes's book on The Distribution of Profits in the Modern Corporation: Catholic Moral Teaching." published by the Catholic University of America Press, Washing
ton, D.C. Paul Derrick.
Cold Ash, Newbury.