Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-07-01

sell makes no exceptions, save on saw
ings accounts under $500 and not sub
)ect to check, except under the usual
savings bank precautions Money in
the pocket counts in the intangible law
just the same as money in bank, vault
or safety deposit box-in Washington
or elsewhere.
Our correspondents remark anent the
stiffness Of the tax has also impressed
itself on others. but it is too late to
change it. Very many bank depositors
thousands Of them. receive no interest
on checking accounts. but they will
pay the tax just the same as those re-
ceiving interest.
Some Mortgage Sections.
The Washington Railway and Elec-
trio Company may. II IT will, on the
approval Of its shareholders. pay the
Tax Tax on us oonds. but the company. on
the reading OF its mortgage. would not
seem obligated to make the payment.
nor is there any proba bility that it
will
The clause in the mortgage follows:
Both principal and interest on this
bond are payable without any deduc-
ton for any tax or taxes which the
washington Railway Company, its as
signs or successors. may be required to
pay or retain therefrom under any ex-
listing law or future law of the United
States"
Under this section the company paws
the normal income tax for its bond
holders.
The Potomac Electric company's first
5s and consolidated IS mortgages con-
tain clauses similar but broader than
the one referred to above
hon me e., principal and interest Of this
ton for any taxes which may be pay
able on account thereof under any
present or future laws of the United
States or the District of Columbia for
Tt,
poses"
prominent lawyer asserts that
there is nothing in this broad clause to
suggest that the corporation will pay
the intangible tax
Under this clause the normal income
tax is paid. And this leads to another
important matter.
II the income IA. law is changed. as
Congress. 50 that information be fur
nished as to dividends and interest at
the source, instead of being, as now,
retained at the source: very many cor
porations would be released from pay
ing income taxes for their bondholders.
Will Mean Heavy Losses.
The opinion was expressed that tho
Potomac Electric Company by reason
of the broadness of the clause referred
to above. would have to pay the normal
income tax, now 2 per cent, even though
the tax was based on information al The
source: while the Washington Railway
Company and scores of other corpora-
tions. local and American, would be re-
leased, by reason of mortgage clauses
providing for payment only in the
event of deduction or retention at the
source. This would mean the annual
loss of millions of dollars to bond
holders who are now relieved Of the Oh
legation.
Wall Street Market.
Henry Clews has this to say OF the
New York stock market:
at is natural that there should he aon,.
reactionary hating In the stock market
at half yearly period SO full Of nor
tentious influences as now prevail
Heavy aggregate payments accompany
the liberty bond installment date. which
Is so near that of July /, when large
disbursements are seasonal Price
questions are largely unsolved, and this
adds widespread uncertainty concern
ing profits. The requirements Of the
great domestic business are crowded
upon by the governments needs. which
are constantly becoming more diverse
Under these overpowering pressures
Notwithstanding uncertainty. produc-
tion is forced to greater activity
"All considered, the financial machine
has worked wonderfully we'll and In
both the business and security markets
there is evidence of great confidence.
I'm the stock market in normal times
the coming months dullness with lower
prices, awaiting the later monthe for
activity and upturn. but the rapid race
of events permits no comparisons Of
this stupendous era, bursting with ac-
ton, with tho peaceful past"