The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1913-11-01
WALL STREET IN
QuANDARY OVER
INCOME TAXLA
Effective Today and Lawyers,
Bankers and Corporation
Officials at Sea Regard
ing Its Meaning.
COLLECTION AT THE
SOURCE CONFUSEs
More Than $SO,OOO,OOO Due
in November Interest Pay
ments May Be Withheld
Pending Solution. r

NEW YORK, Oct. 31.-That part OF
New York which is referred to vague
ly as "Wan street" was in a state Of
confusion today. For once in its ca,
reer, Wall street did not know which
way to turn. The new income tax law
becomes effective tomorrow and some
Of the highest-priced lawyers, bankers
and corporation officials in the world
confessed that they were at sea as to:
it's meaning,
At O'Clock tonight one Of group
of financiers which had just concluded
the last Of series Of lengthy confer
ences on the income tax law said:
"We're swimming in mud. For
day or two I thought I myself was
| coming TO know what was meant by
the income tax law and the treasury
regulations concerning it, but now l IN
convinced that hardly know anything
| about them
Source of Trouble.
The chief source of trouble is that
portion Of the law which provides for
the collection cat the source" Of the
| tax on incomes derived from interest
on bonds, mortgages and certain other
| obligations. Banks and corporations
are required to withhold this tax, in
making payments of interests due to
holders Of securities. More than $780,
5000 is due tomorrow in November
interest payments in New York.
The ruling in question has given
| rise to endless confusion. In cases in
which bonds are not registered, the
| names of their owners often are not
known to the banks or fiscal agents to
whom coupons are presented for pay
ment. The identity Of the owners must
be established to determine whether
| the tax is to be deducted. Certain ex-
| emptions are allowed under the law.
Six classes of exemptions have been
| defined.
No Precedent to Apply.
Every lawyer and bank officer in
New York has life made burden by
clients who wish to know which of the
six forms Of exemption apply to their
particular cases. There are no prece-
| dents to apply. No system has yet been
| evolved whereby banks and other agen-
cies which are called upon to make
bond interest payments Will be able
| to determine in what cases to deduct
| the income tax.
1t is practically foregone conclu-
sion that payment OF large part of
the Ss0,0o0,000 interest due tomorrow
will be deferred pending solution of
the riddle.
Whatever the decision, it is expect
ed many suits will be instituted against
| the government to determine the law
Result Is Confusion.
For the last two weeks Wall street
| has been flooded with booklets, dia-
grams, charts and pamphlets purporting
to summarize and clarity the law.
umns of interviews with bankers and
| lawyers. Some banks have sent out
printed instructions to all their clients
regarding the procedure for claiming
| exemption. The result of this deluge
has been to leave the average investor
| more confused than ever, Appeals to
lawyers avail naught, as the lawyers
themselves are in doubt as to the in
terpretation Of the law.
The wires to Washington have been
kept busy for the last fortnight with
appeals to the internal revenue depart
mont for help. Last Saturday set of
instructions was issued. On Monday it
was snid the regulations would be
changed, On Tuesday it was said there
would be no changes. Since then there
has been no further light.
Officials May Not Know.
Tonight there was a deep-seated sus
picion in the quarters affected that
Washington was nearly as much in the
dnrk regarding the new law as WINS
Wall street itself. Some of the lead
ing insurance companies, led by the
New York Life, have questioned that
| feature OF the law which imposes n tax
on corporation holders of state or mu-
nicipal bonds. of which they hold large
amounts, while exempting the individ.
ual
The provisions of tho law requiring
employers to withhold the tax on sal
aried employees receiving moro than
the exempt amount and in respect to
| the tax on rents to be withheld by