Harold Lever's £1,000 million
1.1 has not needed the severity of present Interest rates and the resultant financial Pa?°n1 to indicate the yawning gap !•yeeri industry's short-term credit needs 7olch are reasonably well, though expenLtve,IY, served by the clearing banks for Fertods of up to two years, and the necessity for medium-term, preferably fixed-interest credit for terms of ten to fifteen years. The stock market, in the absence of a Capital Issues Committee, has been a ramshackle arrangement for the sale of existing securities and, though new ventures have been able to raise capital to a limited extent, the 'system' has, through the share-price mechanism, made the raising of permanent equity capital disadvantageous to existing shareholders of established companies which have had to rely on what little they have left after taxation and dividends to raise their base of permanent capital. There is little doubt that Mr Harold Lever and the Chancellor should reconsider certain postwar measures, such as the Capital Issues Committee which controls inflation and ensures that, during a period of crisis, capital is raised through the stock market according to the national interest instead of by the price mechanism alone, which has had the effect of bidding up the price of credit by fundamentally shaky financial institutions for short term financial operations at the expense of steady organic industrial build-up.
This subject deserves the critical and probing attention of the authorities, and they should not exclude from their inspection the often ill-judged and sometimes downright irresponsible investment decisions of some of the large insurance companies and pension funds — usually tax-free and answerable directly to no one — which have been avoiding industrial mortgages and loans and plunging from property to fringe banking financing with results that have been particularly painful for their policy-holders. Meanwhile Mr Harold Lever, whose indefatigable and lucid mind in the Cabinet must be worth 50 points to the confidence index, deserves wide support for his proposal to provide an Initial ELMO million revolving loan fund for firms unable to get mediumor long-term credit for capital projects and ancillary activity. Until an intellectually and almost literally bankrupt City recovers its senses, or has some sense banged into it, there is little that it can do for industry that industry cannot do for itself — without cost to the country — with Mr Lever's help.
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