Day 247 - 10 May 96 - Page 44


     
     1        American Corporation now because that holds all the shares,
     2        if they no longer find that the Company is giving them a
     3        sufficient return on the money they have invested in its
     4        shares, some of them will start to sell their shares.  The
     5        share price will begin to drop, the more they start to sell
     6        their shares, the share price will begin to drop further
     7        until you go into a kind of spiral and the Company does not
     8        exist, so in order to continue existing and employing
     9        people, it must give those who hold its shares what they
    10        consider to be a reasonable return on their money or they
    11        may be attempted to place it elsewhere.  That is your
    12        reasoning, is it?
    13        A.  That is exactly correct, sir.  We are a
    14        publicly-owned company.  We are responsible to those
    15        shareholders for everything that we do.  They want a return
    16        on their money and if they do not think they are getting it
    17        with McDonald's, they will, and do, go elsewhere.
    18
    19   Q.   So your point of view is that one cannot just say: "Right,
    20        we will spend half that profit on paying people more, or we
    21        will end up with no company"?
    22        A.  Quite possible.
    23
    24   Q.   That is your point of view?
    25        A.  Yes, and, as a result, I employ no-one.
    26
    27   Q.   Sorry?
    28        A.  I said and then, as a result, we employ nobody.
    29
    30   MR. MORRIS:  There would be another point of view.  It is the
    31        workers who are employing the shareholders because the
    32        workers are doing the work and the shareholders are getting
    33        the benefit.
    34
    35   MR. JUSTICE BELL:  But in a capitalist economy, which is what we
    36        are living in, and what we are living in in the States, you
    37        say that is the way it works?
    38        A.  The shareholders are those who dictate ultimately what
    39        the Company does, if they are happy or unhappy with its
    40        returns, and we have to march to the beat of their drum.
    41
    42   MS. STEEL:  You would accept, would you not, Mr. Preston, that
    43        what you have just put forward is one set of political
    44        beliefs?
    45        A.  It is my belief.
    46
    47   MR. JUSTICE BELL: I want you to understand it in case you want
    48        to ask some questions about it.
    49
    50   MS. STEEL:  I understand it; I do not agree with it. 
    51 
    52   MR. JUSTICE BELL:  It is not a question of capitalist beliefs, 
    53        it is a question of saying whether you like it or not we
    54        live in a capitalist country and, therefore, this is the
    55        way companies work.  You might want to change that but----
    56
    57   MS. STEEL:  That is the point.
    58
    59   MR. JUSTICE BELL: -- As I understand it, because I have to get
    60        to grips with the opposing point of view -- and it is a

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