‘Philanthropy’ An Asset to the Capitalist

The following report, taken from a trade paper, needs very little comment: —

“The effect of a judgment which Mr. Justice Macnaughten delivered on June 16th in a revenue case was that contentment and loyalty of employees have a monetary value which their employers may include in the computation of their capital for assessment of excess profits tax.
“The case before the court concerned payments of over £1,000,000 by Lever Bros, and Unilever, Ltd., into their employees’ pension fund in order to provide pensions for employees and their widows. The company contended that by the payment of these sums they had brought into existence an asset in a feeling of greater security and contentment among their employees, leading to increased efficiency, and that the value of the asset should therefore be included in the computation of the capital employed in the business.
“The Commissioners of Inland Revenue, holding that no asset had thereby been created, assessed the company accordingly. The Special Commissioner upheld the finding; from that decision the company appealed.
“Mr. Justice Macnaughten allowed the appeal, saying that it could not be suggested that the word ‘asset’ in the schedule to the Finance Act, 1929, was restricted to material things; the company had acquired an asset within the meaning of the Act, and its value was the amount paid for it.” (The Insurance Mail, 21/6/44.)

There it is—pensions for worn-out workers, an asset to be paid for at its market price.

R. AMBRIDGE.