Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-03-31
STOCK SPECULATION
Passage of New York Bill
Would Transfer Business
TO SOME OTHER CITIES
WASHINGTON MIGHT BECOME AN
ACTIVE CENTER.
Many Liberal Patrons of Market Here
Empire States Plan to Raise
Revenue.
TO SOME OTHER CITIES
Special From STAFF Correspondent

Special From STAFF Correspondent.
NEW YORK, March 31.-Washington
may become the center of an active busi-
ness in stock speculation if the pending
bill in the New York legislature should pass
placing tax of s. on every 100 shares of
stock transferred. The republican leaders
in the legislature have in caucus adopted
the bill and the prospect is good that 1t
will become law. The purpose of the meas
ure is to raise revenue for the state by in
direct taxation.
On Wall street it is said that the imme-
date effect of the enactment of this bill
would be the transfer to Jersey City, Bos-
ton and Philadelphia of the immense busi-
ness now transacted on the New York
stock exchange. Washington might get a
little of it, too. The local stock exchanges
in the cities mentioned would quote the
stocks and transfers would be made not
in New York, but in the ouside cities Bos-
ton is already preparing for this contin-
gency and seats the Boston stock eX
change have increased in value by leaps
and bounds
Liberal Patron of Stock Market.
Washington is a liberal patron of the
stock market. Most of the big Wall street
firms maintain branch offices at the capital
city, and hundreds of thousands of shares
are dealt in annually. If this law goes into
effect the purchaser of every hundred
shares of stock would have to pay a tax
of So if the transfer should be made in
New York
In order to avoid the tax the transfer
would have to be made outside of New
York, and it is within the range of poss-
bilities that transfer offices of some indus
trials might be opened in Washington to
facilitate dealing in some of the more prom
nent issues.
Under the rules of the New York Stock
Exchange, although stock may be pur-
chased by the speculator on a margin,
there must be an actual transfer of the
certificates within twenty-four hours and
record made. 1t is the broker who makes
the transfer and pays for the stock, al
though the customer only puts up the mar
gin. There is no question that If the law
passes the customer WIFI finally pay the
tax.
Plans to Dodge Tax.
Some inquiry is being made among Wall
street houses as to the rules governing the
local stock exchanges in other cities with
a view to ascertaining what arrange
n.ents can be made to dodge the tax. OF
course, the stock dealt in would have to
be listed on the local exchange and
transfer office would have to be establish
ell in the city, but in the cases of Bos-
ton and Philadelphia, the most active ma
tiopal stocks already are listed.
Wall street is very much exercised over
the prospect of having to move across the
river, and the Wall street view of 1t IS
given in the following interview with
man well posted upon the situation: Be
cause the state may need additional
revenue is reason why the principles of
just and reasonable taxation should be
violated.
"The bill is a short-sighted measure, be-
cause while temporarily it may increase
payments to the state treasury, it will
70 70 Irirr I,tci D,,t
of the state or effect such changes in
procedure as will prevent the raising of
the revenue contemplated by the pro-
posed new import. This view has been
urged upon the legislature by business
men of the highest standing and best
judgment, not only those in strictly Wall
street circles, but those engaged in other
ayocations dependent upon the general
prosperity of city and commonwealth.
Position of Republican Leaders.
"The republican party leaders, however,
appear to have as little regard for the
question of expedency as for the matter of
principle involved in this measure. On the
latter ground alone ii should be defeated.
'The bill proposes to tax, not property,
but evidences of ownership or methods of
transferring that ownership. In other
words, it taxes process of trade, thereby
making the conduct of such trade more
expensive and naturally discouraging enter
prise and activity in that line.
Imagine the effect that tax upon the
transa ctions of the buyers and sellers in our
great department stores, for instance, would
have with regard to the circulation of
money and the operations of industrials.
There is no real distinction between tax
of that sort and this tax aimed at the stock
exchange. Furthermore, the tax is unjust
for the reason that it is levied against face
values instead of against market values,
falling equally upon the transfer of stock
worth $40 as upon a stock worth $50 or $3.50
in the market"
It is said to be certain that the stock
transfer bill will be political issue and the
democrats will take it up. n. o. M
MANY MEN IDLE.