EFFECT OF DEATH DUTIES ON STOCK QUOTATIONS.
Sales of this magnitude could not fail to exert a de- pressing influence on quotations, reducing the total value Upon which death duties were payable and, consequently, the Produce of the death duties themselves. The serious illness of a large holder will immediately cause a fall in the price of the particular stock or share held, because of the fear that a large part will be forced on the market to secure funds for the death duties. That fall Would not occur were provision made for the Payment of the death duties by life 'assurance: Selling on account of deceased owners' estates is a continual source of market weakness What are the stocks likely to be chosen for realization ? Naturally those which can be most easily realized. The stocks most easily realized are British Government stocks. British Government stocks issued since 1914 represent about one-sixth of the total value of the estates valued for probate. It is the depression among these very issues that has been such a trouble to the Exchequer for years and has prevented. the raising of British credit. If life assurance policies had been available to meet the death duties, the constant stream of sales would have been averted, quotations would have stood consisteutly higher, and conversion operations would have been facilitated to the benefit of the whole nation.
An increase of 1 per cent, in the total value of estates passing -at death would bring in over three-quarters of a million pounds more in estate duty every year. A similar increase in the quotations of British Government stocks represents approximately an improvement of Is. per cent, in the national credit, which, When translated into interest service, would mean a saving of £4,000,000 per annum. When these facts are grasped it will be seen how great are the possibilities if life assurance could be harnessed to the discharge of death duties. The Treasury has much to gain and little to lose by excluding life policies up to the amount of the duties payable in calcu- lating the gross value of estates. passing at death.
F. M. ToovEv.
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