New-York tribune., 1902-02-15
To CONFER WITH YERK ES.
COOKERS HOPEFUL THAT HE WILL. RE.
VERSE HIS RULING.
ATE ACTION FOR THE COLLECTION
OF THE TAX ON LOANS.


OF THE TAX ON LOANS
There was continued excitement in Wall
Street yesterday over the ruling Of the Commits
toner Of Internal Revenue that the tax on col
,.ersl loans should he collected. Many of the
h-ol,ers said that if Commissioner Yerkes stuck
- his ruling it would mean that they would
bsve to pay from to per cent more for call
money than heretofore. and some of them would
be driven out Of business. The effect Of the rul-
Ing il was said. was to make the market weak.
There was conference at ]. P Morgan's
oHce before noon. Among those present WAS
Charles II. Treat. the Collector of Internal Rev
enue for the Second District of New-YorI
Later Fl was announced that there would be no
immediate action for the collection of the fax
m collateral pledged for loans. and the result
ras an Improvement I'm the market. Some of
the brokers who attended the conference in Mr..
Norean's office got into communication with
commissioner Yerkes in Washington by wire
and an appointment was made for Consulta-
ton today in Washington between the Commits
sioner and 2 delegation of brokers representing
the stock Exchange, including President KEEP
rler II was said that when the facts were laid
before Commissioner Yerkes he probably would
change his ruling.
II rss learned that Collector Treat had sent
? letter the Commissioner. stating the rea-
sons why the ruling given in the letter to
Colonel Thompson. the internal revenue agent.
would cause hardship TO brokers. The letter
WIS mailed on Thursday evening. and probably
was in the hands of the Commissioner yester-
day.
ATTITUDE OF COLLECTOR TREAT
collector Treat said yesterday that. while ne
had seen the letter sent by Commissioner
Yerkes 70 Colonel Thompson. he did not regard
the letter as an official notice him collector
n collect the tax on collateral loans. Mr.. Treat
continued.
have sent brief 10 the Commissioner. and
snail await official notice from him before taking
fsenfs SIs ions viii be made to the Commssoner to-
morrow 10y a delegation from the stock EHcnansse
Commissioner is in possession Of all the facts he
may decide that the tax on collateral loans should
not be collected. Al present I have no intention
to collect the tax Of two cents on every 500 face
This would seem TO he double taxation stock
fers al stock 1t is the custom OF brokers to bor-
row money temporarily in buying stocks for their
Collateral certain other stocks 1t is not intended
~ eH those stocks which are pledged If such
pledged stocks are taxed. and then we tax the
stocks which were bought with the borrowed
r Re taxed collateral pledged for loans there
a Should be taxed I whether VI m Should ID tax h
81 the loan or the face value OF all the
., The face value OF 10000 to secure loan Of
No6p for day or two. He would have to do that
4 share and market value Of only $40 a share
stoes f6s has sce @ Taue Of s6e @ G5 because 3haf 9P
stock Is worth 500 share in the market. Now.
The sane tax for borrowing $1,000 that f' was im
posed on another broker for borrowing 100000. To
collect the tax on collateral loans at the face value
9. the stocks pledged would seem TO prevent loans
It was sscertained that in his letter TO Com
missioner Yerkes Mr.. Treat had presented the
arguments of the brokers against the ruling to
collect the tax on stocks that were pledged for
loans and not transferred. Among the argu-
ments were the following:
ARGUMENTS OF THE BROKERS.
The brokers' pay license tax to the government
r Transact business. and this gives the right do
The brokers have the fight TO negotiate loans for
TAX They pay the tax on all stocks actually trans
ferred. but the stocks pledged for loans not
Of the loans. In case of default the stocks
II a double tax be imposed the burden on the
brokers viii be so heavy as to defeat the object
Of the tax.
statement yesterday:
notify dealers through Mr. Treat the collector
shat the EoTernment demands and what paper
cancelled. Newspaper reports Of what Mr.. Thomp-
So 5@@ "a sEs the Commissioner is about to decide do
Before paper is stamped under the ruling when
hin that the money will be demanded and recov-
cred again from the government.
eo not feel IN contest.
Remember his Is the crowd who three years
ago ruled that put. offer to buy stock.
2 little later. Remember that ii is the Cffice
that u 11g to 1874 held that mans debts were his
capital IN business. and which taxed him all
that De owned and all that ne owed capital. But
No supreme Court in the suit OF Clark. Dodge &
60 "gf- Bailey. collector. y Wallace. page 24,
upset that decision II is fair remember that
me Internal Revenue claims have been overturned
oItener than upheld by the United States Supreme
The amount of loss, if it is all lost is trihing
suppose man bOrroWs substitutes 300
Shares Of stock day. il would only be 500 day.
OF one-elshth commission 500 shares, and in the
remaining l2e days he would only lose $1,000 And
every dollar OF that sum will be to refund when
The Supreme Court calls down the outra geous ruI-
Ing, 3S j. surely viii.
Collector Treat and Colonel Thompson said
Iaie yesterday afternoon that there was no fric-
non between them, their duties and responsible
uHs being different. As agent of the gov
eminent. Colonel Thompson said. il was his
NutN 10 ascertain if there any evasion of
payment OF tax, and his inquiry about the tax
duty.
President Kepper and other officers of the
Siock Exchange were in conference until late
n the afternoon. They were said 10 be hope
ill last evening that Mr.. Yerkes would reverse
MS ruling
SAY THEY PAID TO KEEP JOBS.