Evening star., 1914-10-25
FINANCIAL-LOCAL AND OTHERWISE.

Beginning with the first Of November
the banks of the country. state national
and private, will find the new war tax
measure operative. imposing upon them
81 for every $1,000 of capitalization. and
reducing annual profits by just tnat
amount Moreover it will not be tax
on capital alone, but the law specifcal-
ly says that in estimating capital. sur
plus and undivided profits shall be con-
sidered- The tax is payable on the
capital. etc, at the beginning of the
year.
This new burden on bankers will cost
Washington national and state insti-
tutions $33.2S2 a year, based on the
capital. surplus and undivided profits,
less taxes. as shown by the statements
in response to the call OF the controller
Of the currency of September IL. There
are a number of private banking insti-
tutions that will add a few thousands
to the tax
Brokers. understood in the sense of
being represented in financial and Sc
curlty transactions. must pay a tax
or $50, but the law releases from this
taxation brokers who may have paid
taxes as bankers. Mutual savings
banks. not capitalized. and operated for
mutual benefit are not taxable under
this act
After December /. bonds. debentures
or certificates of Indebtedness issued
oy any association, corporation or
company shall pay cents each on
$IOO face value in stamp tax. All sales
OF STOCK, agreements to sell or men,
oranda of sales or deliveries or trans
fers of shares or certificates of stock,
shall be subject to a tax of 2 cents on
each 800 face value. No tax Is con-
templated on stocks put up as COL
lateral loans where no transfer has
taken place.
One cent on each 500 of face value
is assessed against sales of merchan-
disc or products on any exchange. un-
less actual transfer of goods or bills
Of lading for the same shall be made.
This will tax both cotton and grain
transactions for future delivery.
Further taxation is provided on all
pfomissory notes, except bank notes for
which are heavily taxed
now On promissory notes of 500 or
less. 2 cents: for each additional 500
or fraction thereof, cents.
Municipal and state bonds, etc. are
not taxable under this law. Telephone
and telegraph messages costing Is
cents or more, carries with them an
extra charge of 1 cent for tax pay
ment-
Fiduciary bonds carry a stamp tax
of 80 cents each.
Insurance policies pay y to 1 per
cent tax on each dollar thereof.
It is going to cost just a little bit
more to do business.
Carrying Reserves.
It is not to be expected that MEM
Der banks of the federal reserve insti-
tutions will carry any larger percen-
tage of their reserves with the federal
bank than the law necessitates. The
reserves carried with the latter yield
no interest returns. Reserves carried
with other national banks pay interest
at per cent, sometimes more. The
reserve requirements Of the federal
panies from joining the system, as at
present they are compelled to keep but
very modest reserves. Their checks
will be collected through a national
bank affiliation by the federal reserve
bank without additional cost When
the new law is effective member banks
In reserve cities will reduce reserves
TO IS per cent.
Emergency Currency Law.
1t was fortunate. indeed, for the well
fare of the country that the Aldrich-
Vreeland currency measure was enact
ed and enrolled on the statutes before
the emergency in which the country
now finds itself. Under its provisions
the Treasury Department has been able
to meet all demands, to scatter $780,
100000 emergency money where II was
most needed. and to prevent anything
ike financial stress in the general
business world.
That it was enacted right after al
panic and that it has prevented. in AMI
even greater emergency than that in
1907, still more serious panic. is to the
credit of its sponsors, the republican
and Representative Vreeland in par
ticular. Its enforcement by the party
that made it a law consisted simply
In the preparation Of $500,000.000 emer-
Eency currency
That it was a vehicle at the hands
when it's own financial measure was
ret in embryo and by these forces put
20 the best possible use In relieving
, strained situation has been plainly
evidenced. That the new currency
aw will do even more has been the
claim of its sponsors. in that there is
40 limit to its ability to rediscount.
may be a demonstrated fact as the
lays pass on. but one of the most po-
tent reasons for giving thanks No
rember &c by American bankers is that
he Aldrich- -Vreeland law was there
when Il saving influence was sadly
needed.
Income Tax.
There was no possible way by which
The internal revenue department could
-each even an approximate conclusion
as to the incomes subject to taxation
in the various classes before the re-
turns were all in. A mans income. like
his wealth, is subject to revision. and
while the latter is a. matter of public
in a general way. where the
party is of sufficient financial i'm
portance to be well known. still the
after death revisions have told some
startling tales. Incomes are even
more impossible to estimate.
When the returns are next received
there will be probably be more sus-
picion of tax lodging, for very many
Of the sources OF income have been
stopped or seriously interfered with
during the last few months, and more
will be In the next sixty days. Passing
of dividends has become a very COM
mon thing, decreases in gross earnings
much more serious. and the revenue
from corporations and in
dividuals will fall OF heavily. Like
wise, the revenue from dry" states
paying internal revenue taxes will also
be largely reduced.
Then. too, there are many who drew
incomes as salary last year who are
not on pay rolls this year. and salaries
of over $4,000 have in many cases
been sharply reduced 1t is perhaps a
fact that there are not Il hundred thou
sand men in the $4,000 class today.
The Money Market.