A CONSERVATIVE’S EXAMPLE

Hokitika Guardian, 4 July 1928, Page 3

A CONSERVATIVE’S EXAMPLE

(Auckland Star)

The example set by the shareholders in the iron and steel firm of Baldwin’s, Limited, in reducing the capital of the company from £(>,000,000 to £4,213,563, has a very special interest. During the war there was much inflation of capital in some industries. Profits were large, but prudent financiers would have reflected that these profits could not he expected to last, and they would have built tip a substantial reserve to meet the contingency of future losses. I’ll is was especially ti lie of the cotton trade, Large issues of capital were made, on which it was possible to pay substantial dividends while trade was good and prices maintained a high level. But I a tell the cotton trade has been through a period of depression, and some of the employers have attempted to reduce wages in order to meet thoii difficulties.

Speaking at Munchestei' in ATay, Mr Baldwin appealed to the parties to make sacrifices, and he made pointed reference to over-capitalisation. Additional point was added to this remark by the record of himself and of bis firm. The present plight of the firm of Baldwin’s.is largely due to the generous response the company made to luc Government’s urgent requests during the war. The firm has now written ofT losses incurred as a consequence, and Mr Baldwin said in his speech at Manchester .that for every shilling he bad when be took office ne lin'd something under a penny to-day. The cotton manufacturers increased their capital because ol the large profits they were making out of the nation’s needs. They might well he called upon now to sacrifice some of the grossly inflated capital values which were due to the war. The Prime Minister has not only pointed to the just course;, he has himself set an example. »