Evening star. [volume] (Washington, D.C.) 1854-1972, 1901-03-09
TAXING THE"BUCKET SHOPS"
NEW REQUIREMENTS GO INTO Eff
Feet APRIL 4.
Inquiries Made of the Internal Rev
enue Observation-Disclosures by
Commissioner Yerkes.

Inquiries are beginning to pour into the
internal revenue bureau in regard TO the
operation of the new law taxing bucket
shop" transactions in produce and other
merchandise. The question of levying such
taxes is so far involved with the tax upon
legitimate transactions on the produce ex-
changes that some differences of opinion
are expected to arise after the new law is
in full operation. For the present Commits
sioner Yerkes is contendng himself with
sending notifications to all the local col
lectors of internal revenue that the law
has been enacted and that they should pro-
coed on and after April 1 to enforce its pro-
visions.
Most of the provisions of the revenue re-
duction bill take effect only with the begin
ming of the fiscal year, July l next, but
the bucket shop provision takes effect at
the beginning of next month. There seemed
to be some misapprehension in the Senate
deba ties in regard to the operation of the
existing law regarding certain classes of
transactions This law has been interpreted
by the internal revenue bureau as requiring
bucket shops to pay the tax of two cents
for each 800 in the par value OF the stocks
transferred. The only transactions which
have partially escaped tax have been those
purporting to concern produce and merchan-
disc, which have not taken place lat any
exchange. or board of trade, or other SINH
lar place"
Claim of the 'Bucket Shops"
The bucket shops have claimed under this
limitation that the bets accepted by them
upon the market prices of wheat, corn, cot
ton and other products were not consum-
mated on any exchange or board of trade.
They have paid, more or less cheerfully, the
actual license tax of $50 imposed upon
brokers, but have escaped the payment of
the stamp tax on transactions when pur-
porting to deal with produce, The stamp
tax upon bets purpor1ng to deal with
stocks has been paid in some cases, and
earnest efforts have been made by the in
ternal revenue bureau to enforce 1t in all
cases. Now that no distinction is made be-
tween the purported transactions in stocks
and those in produce, more careful scrutiny
Is likely to be made of the books of the
bucket shops in order to compel the pay
fnent of the tax of two cents on each 500
levied by the new law.
Relieved of Stamp Tax.
The bucket shop managers have been pay
ing, under compulsion, another stamp tax
from which they will probably be relieved
When they contended that they did not
conduct business through exchanges and
were therefore exempt from the tax Of l
cent per 500 levied upon such transac-
tons they were notified by the commits
sioner Of internal revenue that their con-
tracts would be taxed under the blanket
clause of the stamp law. providing for
Brokers note or memorandum of sale of
any goods or merchandise, stocks, bonds
exchange, notes of hand. real estate or
property of any kind or description issued
by brokers or persons acting as such for
each note or memorandum Of sale not 9TH
erwise provided for in this act, 10 cents
Having set up the contention that they
were mot otherwise provided for" they
fell into the trap of the special clause COW
ering such cases. They will not be re-
quired to pay this trifling tax of 10 cents
for each memorandum, now that they are
specifically provided for by the new law
The new provision does something more
than put the bucket shops upon the level
of regular brokers by making the tax upon
their deals 2 cents per 500 in the case of
produce and merchandise, while in legiti-
mate transactions it is only 1 cent per
800