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cent. The balance of about 15 per cent. consisted of a variety of other types oPinterestyofen, together with paymenPage1ba21In both 1948 and 1954 dividends took a little over 20 per cent. of total company income; taxes accounted for about 30 per cent.; nearly 40 per cent. was set aside to provide for depreciation and stock appreciation charges or put to reserve; and the balance of some 10 per cent. was absorbed by the other items.

16. Dividend payments by companies constitute about 5 per cent. of the total of incomes analysed in Table 1, and their relevance to the movement of prices lies much less in their direct effect on the level of incomes than in the pressure which they are liable to generate for what are felt to be corresponding adjustments of wages and salaries. Table 3 compares the movement of dividends over the period 1938–1948-1954 with the movement of wages and salaries. The figures for wages and salaries are the same as those in Table 1 and cover all incomes of this kind, in whatever industry: or occupation they are earned. Corresponding changes for dividend payments cannot, however, be calculated directly from Table 2 because the coverage of the figures in that table is affected by successive acts of nationalisation and denationalisation. To ensure the same coverage throughout, the estimates used in Table 3 are those of dividends paid on ordinary and preference shares by companies which have not been nationalised at any time during the period 1938 to 1954.

TABLE 3

COMPARATIVE CHANGES IN WAGES AND SALARIES

AND DIVIDENDS(1)

Wages and Salaries

£ million

Dividends(1)

Index: 1938-100

£ million

Index: 1938=100

1938

...

2,830

100

426

100

1948

6,140

217

470

110

1954

9,265

327

699

164

(1) Dividends paid on preference and ordinary shares by non-nationalised companies.

Source: National Income and Expenditure, 1955, Table 30.

17. These estimates, which take no account of direct taxation, show that between 1938 and 1948, while prices of consumers' goods and services* roughly doubled, wages and salaries rather more than doubled, and dividends of non-nationalised companies rose by about one-tenth. Over the period 1948 to 1954, while consumer prices rose by one-quarter, wages and salaries and dividends both increased by about 50 per cent. Taking the period 1938-1954 as a whole, wages and salaries have increased by very much more than dividends. But in the last few years dividends have increased rather faster than wages and salaries.

*The price index used for these calculations covers prices of consumers' goods and services of all kinds (Item 5 in the Appendix).