The Washington herald., 1909-06-21

slightly suspicious OF the foundation OF
the advance in values that has taken
place
There were last week 8 number Of spe-
cial circumstances that undoubtedly had
much 10 do with the less buoyant spirit
shown IN The financial district A sharp
decline early In the week IN American
Sugar Refining common stock was logi-
cGlly referred 10 the legal troubles which
have recently beset the sugar. company.
which must entail fairly heavy financial
loss.
Break I'm Sugar Stock.
In a technical sense the market eject
% the break IN Sugar stock was unfavor-
able. in that It illustrated that ali quar-
ters OF the market we're not equally
strong and that IL was not Impossible for
prices 20 90 down. Similarly, too. the
temporary check given 20 the effort 70
obtain for the United States Steel Com
pany shares a listing on the Paris bourse
injured the market position Of the Steel
stocks and that Of securities IN general,
for reasons that are obvious.
Another matter that operated as q dis
tinctly adverse market factor was cues
uons rather generally raised as 70 the
stability OF the recent violent upward
movement IN the various Wabash stocks
and bonds. The surface theory was that
control OF the Wabash property was pass
ms 70 some other railway. the names OF
the LackaWann2 and Canadian Paeifc
companies being those most frequently
mentioned IN this relation. But there
we're semi-OfiCiai denials that any such
transaction was contemplated. and atten-
ton was az last attracted 20 the exact
status OF the Wabssh's financial affairs.
The Wabash company exhibited a surplus
or only S2ll, 300 available for dividends "a
the last fiscal year. and q surplus OF only
a little more than $4,000 IN the boom
year OF 1905 Talk therefore that was
lghtly banded around Wall street oi
the extension OF q guarantee 0y some
other corporation OF a ( per cent divi-
dend upon the Wabash preferred stock
did not exactly ring true.
While the market was becoming some
what nervous as a result OF these mat
ters. q senl-collapse occurred IN the
speculation for the rise that has lately
been going on in mining stocks and Tari-
Gus metals in both the French and
London markets. This led inevitably "a
"a 1EAAA--E VI AAAC A-lE-A-- eA14Nc mere -lL
foreign account, ard the general market
weakened IN consequence. The recession
IN copper pr vas the first serious
countermove -ent in commodity values
that has q -urred IN several months, and
Of cOurs Il excited apprehension as tc
the e ent tofwhich the previous general
rise n prices had been Of speculative
nature
Discuss Corporation Tax.
President Taft's recommendation re
garding the imposition OF a per cent
tax on corporation net earnings was no;
an advance factor. but it certainly wa
not In any sense helpful TO values. What
occurs at first 20 every one is that dis
cussion OF the subject may have the eneci
OF delaying the progress OF the tariff bin
II the lawyers IN the United States Sen
ate are 20 turn over this new matter IN
all its sidelights and corners. political
and otherwise. there viii be no telling
when the present extra session OF Con-
greSs viii adjourn. and while the tariff
debate has really exercised much less IN
fuence upon business affairs than Il was
feared II would. yet an adjournment Of
Congress with the tariff matter at rest
would undoubtedly exercise a favor bic
influence upon business, II only Of Sc. IL
mental sort.
On the other hand. many important
considerations present themselves regard
ing the Presidents proposition that ought
to be thrashed out If the measure is Ia
be pressed 20 an enactment The oues-
ton instantly arises, What are the net
earnings" OF a corporation subject 70 the
tax? What deduction should properly be
made from gross earnings 70 make a fair
net surplus? This Is in inquiry whose
variety and complexity increase the more
II is studied. and Il Is obvious that its
determination for the purpose referred 20
must involve dispute and litigation and
a constant and a harassing governmental
inQuisition into corporate affairs.
Outcome Is Feared.
Beyond this IS the thought OF dupllca-
ton OF taxation that may be entailed
once this first step Is taken. II the differ
ent States are 70 90 on levying taxes as
they now DO and have q right TO DO on
corporation earnings, stock transfers,
collateral Inheritance, and the Ike. and
the general government is 10 do the same
thing, an unpleasant state OF affairs win
result from the point Of view Of people
VINO have any financial means at all
There are constitutional points here that
must be settled. II appears on the face
Of things quite open 70 controversy
whether the general government, whose
power 10 tax Is strictly limited in the or
ganic charter OF the land, has the right
10 lay many Of the taxes 20 which ref
erence has been made The strong prob