ABSTRACT
Gross investment in fixed capital (i.e. inclusive of capital goods required to meet maintenance and depreciation) can be determined from the Census of Production. In 1930 this amounted to £607 millions, of which £340 millions consisted of building. The preponderance of building in net investment is even more marked. The proportion of the national income invested has shown a strong downward trend since the War, partly accounted for by the cessation of foreign investment, and considerable disinvestment of working capital. In 1934 net investment was £225 millions and in 1935 £305 millions. Nearly three-quarters of these amounts are represented by the undistributed profits of companies. These, together with the savings of the State and local authorities, and working- and middle-class savings through insurance, building society repayments and the like, now add up to a total considerably greater than the recorded net total of investment (even after allowing for considerable sums which are spent on brokers' fees and other expenses incidental to the transfer of property). It follows that the net private saving has ceased or become negative. Institutional savings of the type specified above more than provide for the community's whole capital outlay, and the remainder is required to offset the net spending of capital by the well-to-do (either for consumption or to pay death duties).
Housing and public utilities now represent the entire demand for new fixed capital. Prior to 1929 about £70 millions per annum was absorbed in industrial and commercial investment, but since then the figure has been small or negative. Obsolescence and maintenance costs have been met, but no net additions to capital have been made.
