Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-07-03
TAX ON STOCK SALES,
1t Was the Suggestion of Senator
Lodge of Massachusetts

1t Was the Suggestion of Senator
Lodge of Massachusetts
The provision for tax on stock and
bond transactions in eonpecuqn with the
tariff bill which was agreed upon lat the
caucus of republican senators was sug-
gested by Senator Lodge of Massachusetts,
and grew oIt of statement that with tho
tea and beer provisions withdrawn the tar
iff bill was likely to fall short to the extent
of $15,OO0.0O0 in providing sufficient revenue
to meet the demands OF the government.
Senator Elkins seconded Senator Lodges
efforts in behalf of the tax. making a Wig
orous speech and working jealousy for the
proposition. 1t is now understood that the
amendment will also provide for stamp
tax on all issues of stock, whether when a
company is originally formed or it SUISSE
quently enlarges it's issue. The rate Sug
gested Is five cents per 800 of stock.
The suggestion was that a tax of cents
per share should be levied upon every share
of stock sold at a stock exchange. or at any
other place, and that similar tax Of two
cents should be collected upon all bonds
sold on the stock exchanges or elsewhere.
The caucus accepted the suggestion. but de-
cided to leave the formulation of the
amendment with possibly change of
rates, to the finance committee.
rough estimate places the amount of
revenue the provision will furnish at ST.
0OO. 600.
How the Tax VIII Operate.
The amendment provides that every is
sue of stocks or bonds shall be stamped
with a two-cent stamp, and that every SUBJ
sequent transfer Of each share Of stock shall
also be similarly stamped or the transaction
shall be null and void. There was some
discussion over the rate of the tax, and
this was left to be finally settled by the
finance committee.
The tax affects not only the investor but
the Spectator in stocks and bonds, and,
as Mr.. Lodge says, 'it is of interest to the
investor, for he being wealthy man
would not attempt to dodge the tax and in
validate his transaction, while as to the
Spectator, We do not care about him."
The tax applies to every transaction on
the stock exchanges, ard the tax has to
be paid on every share bought and sold.
The tax will amount to 81 on every block of
100 shares, and that will be about one
twelfth of the full commission of one
fourth on such transactions.
AS the caucus authorized Senator Lodge
to draw up the amendment, he has done
This he will submit to the finance COM
mittee, and in all probability it will be re-
ported to the Senate unchanged.
What Many Think.
1t is the opinion of many Of the senators
that the adoption Of this amendment solves
the question of bucket Shops" and that
1t will eventually drive them out of the
business of placing the stamp Of legiti-
macy on every transaction made by them.
When Senator Lodge was ASKED If this
stamp tax would not clog the machinery
of the exchanges, where CELEBRITY was one
of the requisites Of businessg he! replied
that he did not think SO, because II would
be only necessary to fix the stamp on
stocks and bonds as they passed from hand
to hand. sor' 4
AS to the collection of THE TAX, it is
thought that it will collect itself, as with
out the stamps the certificates and bonds
would be worthless, and so III self-defense
both parties would see that the tax was
paid, by the afftxiDg Of the stamps.
Adverse to DiscussiDnSl
The fact that the senatorS GENERALLY do
not understand the amendmenfmales them
shy in discussing 1t and itgp chances of
adoption. The fear that it will not catch
the speculative element, butaaoniy affect
legitimate transactions. seems to make
many OF the senators hesitate about Its
feasibility; but Senator Lodges own ex-
PLANTATION shows that it catches this very
class. and will operate for the good of real
investors, and when he has a chance to
demonstrate this. 1t is thought that the
amendment will grow in favor 1t is al
most impossible now to predict It's exact
fate in the Senate.