The Topeka state journal., 1899-05-31
Who Uses Ten-Cent Stamp ON
"Puts and es Calls"
WHICH. Is TOO SMALL.
Revenue Department Has Three
of His Obligations.
Financier Says a "Put" is Pur-
chase Agreement Only.

New York, May 31.-The internal rev.
enue department is preparing case
against Russell Sage for alleged viola
ton of the law regarding the use of
stamps on''puts,'' calls and spreads"
1t is asserted by brokers through whose
hands certain of these pieces Of paper
have passed that Uncle Russell deems
ten cents quite enough to pay the gov
ernment for permitting him to do a
privilege trade.
Three forms of these obligations
bearing Russell Sage's signature were
recently presented to N. B. Scott, COM
missioner of internal revenue, atWash-
ington, designated respectively as
put a "call'' and a spread
The one marked a put" was an
agreement by Mr.. Sage to purchase a
specified number of shares of stock at
an agreed price at any time within
certain period. The "calP' was a SINH
lar agreement to sell to the bearer a
specified number of shares of stock at
an agreed price within certain per
iod The spread was Uncle RusselfS
promise to buy or sell stock, offered or
demanded within a certain range of
prices and period of time.
MR.. SAGE CALLS THEM "PRIVI-
LEGES.''
Mr.. Sage designates these papers as
ilege is not a transfer of stock, but on
ly conveys to the holder the right to
deliver or call for a certain quantity
of specified stock at a specified price
within a certain time.
An agreement to sell, Mr.. Sage con-
tends, must have two parties to it, and
his privileges are signed by only one
party He objects to paying stamp
tax on these agreements, because, when
the stock mentioned in the ''memOran-
dunn is transferred. the legal tax is
paid, and double tax would thus be
collected for the one transfer.
There appears to be confusion in re-
gard to the tax due on Mr.. Sage'S priv
ileges,' said F. B. Thompson, general
agent of the Second internal revenue
district of New York. 1.-The first para
graph of schedule A, act of June IS,
1898, is clear in requiring that on all
sales or agreements to sell, memoranda
of sales or deliveries, or transfers of
shares, or certificates Of stocks in any
association, company or corporation,
tax of two cents must be paid on each
800 of face value or fraction thereof.
DECLARES A STAMP IS REQUIRED
'It specifically directs that in case of
an agreement to sell, there shall be
made and delivered, by the seller TO the
buyer a bill or memorandum of such
sale, to which the stamp shall be af-
fixed. Every such bill or memorandum
must show the date thereof, the name
of the seller, the amount of the sale
and the thing to which it refers. A pen
atty is imposed upon any person, agent
or broker who shall make any such sale
without affiXing the proper stamps.
'The person so offending is deemed
guilty of a misdemeanor, said Mr..
Thompson, taking a copy of the act and
reading: 's Upon conviction thereof the
person so offending shall be punishable
by a fine not to exceed $500 in each case
and may be imprisoned for a period
not to exceed six months, or BOTH That
would seem to fix the punishment
clearly"
PUTS" ARE INCLUDED.
Does schedule A refer to puts as
well as calls % was asked.
1.-The commissioner has SO ruled" re-
piled Mr.. Thompson. Il argued the point
before him for two days this week, and
he now takes the same view. 1t was
the contention of Mr.. Sage that a put
was exempt from tax because it was an
agreement to purchase, not sell, prop
erty. This view was held by many, but
Commissioner Scott's ruling settles that
question for the present"
Now, how has Mr.. Sage been stamp
ing his privileges2" was the question of
the reporter.
ten-cent stamp on all his puts calls
and Spreads irrespective. of the
amount replied Mr.. Thompson. "He
cannot plead ignorance of the law, be-
cause as early as September "A Of last
year he took legal advice on the sub
ject. But all the trust companies and
savings banks have taken legal advice
and all are guilty of evasion or viola
tion of the internal revenue law.
1--WE are after them all. We are after
the bucketshops, also. Vernon H. Da-
Wis, counsel for the bucketshops, agrees
that the sole purpose in issuing privi-
leges' certificates is to evade the state
law against that class of traders.
Many large corporations are trying
to dodge the stamp tax
''Win Mr.. Sage be prosecuted?"
THAT rests with the commissioner.
He is clearly a violator of the law; I
don't think the law was made to tax
the poor man and let the rich man go
untaxed, just because his transactions
are larger
WATRC nETO uTnu DpTcEc