The Washington herald., 1917-07-10
HOLLAND LETTER
The Biggest Daily
Financial News Feature of
the Country's Best Newspapers

Many have been the surmises or the
predictions that before the end OF 1917
the common stock of the United States
Steel Corporation would very likely
command as much as $50 a share.
But since the Senate has perfected
the war revenue tax bill, no longer
are there any forecasts of as high a
market price of steel common as $50
share. Yet it is presumed that the
corporation is now earning and may
continue to earn for months net profits
equivalent to 800 a share. So also
other corporations which are known to
have earned unprecedented profits and
whose shares were presumably steadily
to increase in market value, will 5e
more lis-ly to discover that there has
been SOMA depreciation in the market
value. although the net profits. which
reach high in the millions. will con-
tinue
This is one of the features associated
with the pending war revenue bill
which causes a great deal OF comment
in financial circles and among business
men. II is one of many comments
that are now made indicating tha,
business and finance are still some
what in doubt respecting the opera
tion and effect of that part of the new
revenue tax law which fixes the tax
to be paid to the government upon So
called excess profits.
1t is commonly said that the imme-
date effect of this bill, as soon as it
shall become a law, will put an end
to any speculative transaction in the
stocks of the corporations of the
United States. For IL the government
limits to a certain relatively small
figure the percentage of net profits
which any corporation may keep and
disburse in dividends or put into sur
plus account. then all temptation to
make speculative ventures in the stock
of industrial companies will be elm
mated from present-day conditions
Therefore, no imitation in the security
markets of the kind which reflects
speculation is likely to take place as
long as this section of the war revenue
bill Is enforced.
Another comment which is frequent
ly made refers to the attitude of the
government with respect to price fix
ing. The government presumably will
buy within the next twelve or eight
eeE months commodities produced by
| American manufacturers and furnish
ed by American harvests involving an
expenditure of perhaps $4,000, 900, 600.
! The Secretary of the Treasury, Mr..
McAdoo, is quoted as having said that
| the government must spend $1000 600
go within the next twelve months,
| eight-tenths of which will be secured
by marketing loans of the American
people and two-tenths by war revenue
| taxation.
VIII the government so fix prices As
to allow a larger percentage of profit
( than the minimum upon which is to
be based the computations which will
nix excess profits? Should the gov
eminent allow prices to be fixed in
excess of this minimum then it would
Immediately, through its revenue col
lection department. take back a por-
ton OF these profits. An operation of
this kind would seem like paying
money out of one pocket by trans
| ferring 1t to another pocket.
Some of those in this city who have
recently been in Washington and have
in that way come in close touch with
administration circles are persuaded