The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-06-03
STOCK TAX MAKES
WALL STREET SORE
BIG POOL OPERATORS HARDEST
HIT BY THE LAW.
The Expense of Creating Public In
terest or Following in a Particular
Stock Will Now Be Doubled-The
Northwest Railroad Situation and Its
Bearing Upon Prices Money Rates
May Harden a Little About July l..
Special to The Journal.

Special to The Journal
New York, June 8.--Wall street Is experience
the enforcement of the stock transfer tax law
will have upon the local financial community.
That prices will be affected merely by the law
taking effect no one anticipates. Ample time
has been given for discounting the effect of
the law upon prices, SO far as that can be read
in advance. Whatever disturbances Of that sort
the law may cause, brokers are generally agreed
are most likely to be indirect and more
less delayed in making themselves apparent.
Brokers Of large experience place the classes
81 transactions which will be most affected in
the following order: Pool operations, whether
conducted simply for trading profits in existing
issues, or for the distribution of new issues;
the in-and-out trading of professionals on the
floor; orders of the permanent commission house
patronage; orders of the public" The pools
will be the hardest hit, it is declared, because
they frequently carry an enormous business
in one or two issues for days and weeks at
time without showing profit hoping ultimately
and then to unload at higher average selling
price than the average buying price. Many Of
them now carry on their operations at a charge
Of only So per 100 shares the regular commits
sion between members Of the exchange. This is
just the amount Of the new state tax, SO that
the expense of running pool will be doubled
by the enforcement Of the stock sales tax. The
recent experiences Of the pools have not been
altogether satisfactory. For unusually long
period the public has held aloof, with the
sequence that the recent break, or series of
with heavy lines Of long stock still on their
books. Having been themselves the chief fac
tors III the preceding extended advance, their
own attempts to shift to the other side of the
market left them almost no market at all. This
result followed what was in several cases d
course Of trading on both sides of the market
with an energy little short Of recklessness. That
pool managers will no longer throw their means
into the manipulation of the market with such
abandon Is reckoned one of the most probable
results Of the new tax law. Much the same
restraining influence will be exerted over the
activities of the professional operators. The
few very large individual operators are not ex-
pected to be deferred by this tax from attack
ing booming prices the customary scale
whenever the market Is 'ripe," but they will,
it is said, require to be a little better satisfied
of their probable success before they enter UPON
such undertakings. The rank and file of trad
ers, who follow the lead of their prophets as
best they may, and frequently do business In
thousands of shares in one day, with a merely
nominal profit even loss, will be far more
hampered. An impression has prevailed in some
quarters that commission houses were divided
on the question whether they might not bear
the tax themselves If they chose. 1t was even
said that some commission houses had deter
mined, for the sake Of preventing loss OF busl-
ness and attracting new business, to provide
the stamps as an item of office expense and
make no charge for them to their customers.
At the office Of the secretary OF the exchange
1t was said positively that such practice would
be regarded by the governing committee as
rebate of commits ON, thing strictly prohibited
by the rules Of the exchange. The customers
will, therefore, pay the tax. The governing
committee has provided blank forms of protest
against the payment Of the tax for the use OF
brokers who wish to protest. These blanks are
designed as technical foundation for demand.
ing refund of money paid the state for stamps
in case the courts pronounce the tax law I'M
constitutional. 1t is supposed that practically
every user Of the stamps will register "a pro.
test.
The Northwest Roads.
For number Of years the northwestern rail
road situation has been source OF constant
trouble as market factor, as well as menace
to the prosperity Of the railroad business In thai
part of the country, and the elimination there
| fore Of the unsettled conditions that have pre-.
vailed for SO long time, involving personal
and corporate relations Of the largest financial
interests in the United States, Is deep with
meaning as augury Of complete harmony
among the men who control such large pro-
portion Of the railroad business In this country
Doubtless later in the season the resumption
of cordial relations between the Hartman an6
Morgan-Hill interests will become a more I'M
| portant factor in the stock market, while 1t If
| also probable that before many weeks the trans
| fer Of stocks from weak to strong hands which
| has been going on for month or more, WI
| exert it's natural influence on speculation. Al
| the moment the greater number OF wall stree
traders believe that the market will be- wait
| ing one with good chances for quick turns OF
| both sides, but the same people hold that the
| high prices made earlier in the year ought K
| be recorded again before the close OF tue year
barring, Of course, widespread disturbance in thu
industrial world, crop failures and Legislation
| by congress unfavorable to the business inter
ests Of the country. Just now there is NJ
| indication Of the development Of any of thu
! factors named.
Money May Harden.
/ About the first Of July there may be brfe
period Of dearer money, owing to the shift1nl
| of loans that will take place at that time Incl
dent to the July interest and dividend dsburse
ments, but the outlook favors easy rates thru
out the summer, despite the possibility Of gol
| exports in the course Of the next two months
/ Europe, however, does not need our gold, an
an outward movement of the metal viii merel
abroad in a way most profitable to the bankin
! community. The United States could spare man
millions Of gold for foreign exchange transac
lions. The supply Of money In the country !
large national bank note circulation has In
creased in the last few months, the additio
to the amount Of money in the country thr
coinage Of domestic gold has been heavy, an
!, more money has become available for the pun
, poses of trade and speculation thru the exces
Of federal government expenditures over receipts
IS. s. Schron