The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1917-10-19
AGENCIES PUZZLES
over WAR TAXES
Changes Make Study Necessary
Before Announcements of
Probable Effect Can Be Made

In the agencies of the various plan,
tation companies this week experts
were busy figuring on the effect upon
the earnings and the dividends of their
companies the new War Tax Law will
have. Especial interest attached to
the portion that relates TO War Profits
which was published in full in The Ad-
vertiser on Tuesday morning. Since
then most of the companies have Sc
cured copies of the law in later mails.
II has been changed so much from the
original measures in house and in SEN
ate that il requires new Interpretation
from the accountants although in some
respects it is much more clearly ex.
pressed than before.
Requires Some Study | e." ..1
Numerous complications come into
the fgnrng of the War Profits Tax in
the bill that finally became "A law.
What constitutes invested capital is
one of these. Another point is that
the earnings that are to be taxed under
this provision are rated with invested
capital and not alone in comparison
with pre-war profits. Yet another mat
ter il that the prewar profits which
may be deducted are now limited to
nine percent. For this reason few
agencies are ready to talk about the
probable tax that will be paid by the
! different companies. It is understood,
however, that Eva directors have learn
ed that that company will pay about
half o million dollars in such taxes, say
1927 900 it is unoficially reported.
Experts Differ
Local experts differ in some respects
with Godfrey N. Nelson, the expert ac-
rountant and author of works on the
income tax, whom the New York Times
secured to explain the workings of the
I new law and part of whose article on
/ the subject was published and credited
in The Advertiser Yesterday morning.
In the stock market the effect of the
publication of the provisions of the law
| has had the effect of stimulating trad
ing, apparently. Yesterday. sales of
listed securities ran over 1900 shares.
Olaa was weak from the cutting off of
| dividends that had been determined up
! on and sold down. Other stocks held
up pretty well.
Rich Companies Hit ~
NhS ihIliSbhiOh stShls W prov al thob
the companies which did not have pre-
war profits or only small ones are rather
benefited under the law as il was
| changed, or at least that the burden
will fall more heavily or as heavily up
! on the plantations which had big profits
/ at that time since deductions in any
event are limited to nine percent on the
invested capital,
ether Taxes Added ... a.. ..-s..,.s
1t is not only in the War Profits Tax
that Hawaiian Plantations will be hit,
according to one agency head who was
seen yesterday. "We shall get it com
ihg and going, as / interpret and read
the law,p he said. flake the matter
OF tax ON bills. of lading. 1t is three
percent. Let us assume that plantat
ton here brings supplies that come
from the Atlantic coast, Three percent
on the bill. of lading to San Franeiseo
must be paid, then another three per
cent to Honolulu. Suppose it is a plan
tation on one of the other islands, an
other three percent on the Intcr Island
bill Of lading. If on Hawaii and shipped
out of Hilo,by rail, add another three
percent. There are four three percent
payments that must be met as ] read
the law. ] am rs patriotic as any one
! but i should like to see the tax fall on
all alike. '.' 49,. ... p.
Sees smau Profts .....
"Thcn we hayG'a maximum price for
our product fixed, not a minimum or q