New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-04-19
4 BROKERS VIEW or WEBSTER AND
WALL-ST
TO N. Editor Of The TriDun.

series OF articles has appeared In TIE TRIBUNE from
time to time which unfair in their statements, and
calculated TO prejudice rather than inform the public
with reference Was transactions, that 1t seems due
10 the public and TO brokers that something should be
said from which the issues aud facts may be deter
mined
1t arises out Of the construction OF the 10th section OF the
act OF June 1864 which provides that there shall be
levied and collected monthly Of twenty fourth OF
percentum upon the capital used in business by any
bank bankers section OF the law which has already re-
ceived an adjudication by the Supreme Court OF the
United States In far as banks concerned In SUIT
between OF webster predecessors and the NewYork
City banks In that where bank had accumulated
n surplus. having, say, paid-up capital OF
million dollars. aud surplus from profits
Of half q million more, the Assessor sought 10
levy the tax on the mlonanda half OF dollars as all
being capital used in business" This resisted by
the banks and upon the matter being brought before Mr.
Justice Nelson Of theSupreme Court Of the United States
he held that capital something fixed and certain,
distinguished from profits which variable. and de-
pending upon in business and that tax upon such
surplus not legal nasmuch part OF the
capital" but undivided profits I'm business This de-
cison duly affirmed appeal TO the Supreme Court
OF the United States and, acting under It, the Assessors
and brokers worked in harmony until the transeendent
genius .Of Webster" discovered theory OF tax
alton
Assessor Webster held that banker should return as
capital used in business, not only tho money actually
put in and owned by him. with all profits or surplus
thereon II there any but also AL moneys borrowed
temporarily by him OF Others for use in his business To
illustrate: Suppose a young man with $4,000 capital
receives margin Of $4,000 moro from customer ana
order to buy 1000 shares of NewYork Central STOCK
costing 100000 He buys it, and In order TO pay for and
carry he takes the thousand shares Of stock and bor0ws
$4,000 it. which, with his own capital and Margin
makes up the 100000 which 1t costs Now the position OF
Asses Wei ia ne
1900 capital used in his business but 100000.
And 1t is opposition TO this claim OF Assessor Webster
that has called forth so much righteous indignation
against Wast frauds In the Treasury. Assessor Web
ster has been in power four five months ana he
only to make this assessment for the time no
been in Office but to practically repeal the action OF
his predecessor and TO back ana mako this assessment
for IS months past and the readers OF THE TRIBUNE were
informed few mornings since that he had ordered 10
different suits brought against one firm for the 10 months
pasta thiDg which the DisrictAttOrney. In common
with every lawyer knew could not be DONE or II done
the Court would order the suits consolidated at the plain
rs cost and hence but one suit was brought. This 10
the issue that is now before the courts the decision OF
which the brokers law.abdng citizens will promptly
acduiesce whether the same for against them, and
until such decision made both the press and the public
afford wait without prejudice on The one hand or
an immature judgment on the other. We come now TO
consider the immediate Of this communication, an
Stamp DutiesIow the Brokers swinGle the Government
the burden Of which seems TO be wall that brokers
dare to trust each other book account large amounts
aud that there is 10 law compelling them 20 give
promssory for moneys which they prefer to charge
on open account In far that article is eulogy on
Assessor Webster and In far rs IL Is homiy on the
Of banks and the risks OF stock specua-
ton. have nothing TO suggest in reply. But on the
wholesale charge OF fraud against brokers. IN not
bringing themselves under law which n extended over
their business would amount to actual prohibition OF
buslnc The article Is unjust, and TO this address
ourselvc4. And In the outset affirm that there Is
no business which, proportion TO the capital invested,
aud the nrnber engaged in H. us GENEROUSLY burdenod
10y taxation the brokerage business and yet there
is no complaint made, and tho taxes promptly paid.
In addition to the license aud the tax on capital,
10 begin with there Is stamp tax Of one.huudredh OF
one per cents the gross amount OF al sales made
tax which amounted. In the individual business OF the
writer IN his transactions In the last year. 10 moro
than $4,000 Does broker bny thousand shares Of New.
York Central aud make necghthicr cent upon IT, out 81
his profit OF S2j the Government takes s6 for stamps
Does he sell II loss Of per cent To his loss OF
81 900 the Government adds loss for stamp Of ts
And thus happens that broker with capital OF from
$4,000 to $500 actively engaged pays money for
ltanps III year than dozen farmers Of equal cap
ital would pay in lifeline. With this law the brokers
fnd no fault They pay 81, and willing 10 pay 1t. as
loyal men, support Of the Government which protects
them aud their property. But there IS another
law recurring n stamp Of onotwontieth Of ono
per cent ION all promlssory notes. or memoranda
for the payment OF money which, IL they compelled
TO pay Il call loans siftug from day to day. wouid
amount g. the rate Of IS per cent per ahnu
which would to be paid 10 the Government III addl'
on 10 the the loan Now, there no attempt
at evasion Of this law the brokers simply do not bring
bousclyes within the provisions OF H. Their loans are
made from day day strictly on call There is no heeu
OF any note or memorandum in writing. The lender
charges the borrower with the money on account ana
lves him a check the Endorsement Of which Is evidence
OF its receipt The borrower leaves ample security In the
hands of the lender with tho numbers and full descrip
tion of the securities entered hs own books, which
would lead TO the speedy detection Of the lender did he
GEEK TO convert them Above all they Know each oter
and arc governed by commercial Integrity ana hohor'
which 10 better than promissory notes. aud more binding
than memoranda IN writing and they no more defrand
the Government IN doing than man does who keeps
out "a debt and hence does not need TO make promis-
sorry note.
what would the merchants OF New-York think OF an
article charging them with defauding the Government
because they sold each other goods on bills rendered
monthly, without giving promissory notes therefori
Then why this hue aud cry about Wall-st. Let her
Notwithstanding 10 sOOOO0OOO daily, met without
the loss through fraudof onehundredh part Of one per
ceDum In "A year-bcar witness TO the integrity OF her
business men, 1t is Waist energy and enterprise that
has bound this country together by gaures OF steel
Which, I'm the OF this nations need, she asked for
money the country responded by thousands, but Walst
responded by milions-aud that. too when millions
alone could save her 1t is mistaken political economy
which snal attempt TO paralyze her energy by unjust
and oppressive taIatou 1t is mistaken journalism
that shall pander popular prejudice by charges OF
fraud against wallst, not for eyading, but simply
avoiding, oppressive taxation. Respectfully,
BROKER.
CARD.
To me EdttOr Of The Tribune.