Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-11-18
BY I. A. FLEMING.

Tha Investment Bankers Association
ha. furnished another installment OF
its explanation OF the excess pron's
features of the new revenue law.
Tho second chapter. like the nfsI
mention Of which was made recently
IL far short Of being real explana-
zion as the law is admittedly capable
of many interpretations.
rha moro local bankers study the
law tho more they are inclined to leave
To the internal revenue bureau ana
congress. either or both, the task OF
e.nlain,ns and notifying them OF the
exact meaning OF the law before un-
dertaking to complete schedules. Inc
committee appointed by the trust COM
mania. at a recent meeting Is up IN
~. a,r. on a solution OF the vexed
problems.
Invested capital is the stumbling
block of the whole matter, and re"
there are who know what the invested
"a nital In their business ts-unoef tho
wording Of the law.
The latest report from the Invest
ment Bankers Association contains
these paragraphs: ,,-
Az
oome' to invested capital eacn SUP
1ect TO arbitrary provisions; II 10 UNI
safe to assume that tax 10 on eceuai
capital or book capital; invested cap
ital under the act may be simply compana :.
tion of business accidents; net income.
NAV represent earnings due to factors
excluded from capital computations ana i
hayinr no relation to capital; wn1le TAX
will be nominal or conhscatory IN many
cases vet where invested capitai 1air-
ly reflects actua! capitai, taA * .ar
cent income, II per cent out OF ~ per
cent income. 81 per cent out OF 20 per
cent income and 25 per cent out OF %
per cent income. .,o,
.ers haais and in same manner az
under income tax, except that DIVIDENDS
received are deducted (Sec. 2Ob); TINS
excludes interest on state ana munici-
pal bonds; OBJ net income - income :
- F;nsiish law Tor allocating profits
over neriod Of actual earning; this Will
operate disastrously in some cases.
Invested capital as DENIED esec;
actual capital which makes result IN
many cases contradictory and acct
dental 1t means both Tor taxaole
II. In q corporation or partnership:
"la) Actual cash paid In: apparently
n1ns: falls under (c) and money bor-
rowed' is excluded under III (a); taken
alone, this gives full credit for origi-
nal cash Investment, one. ten or forty
years ago, regardless OF Its possible
loss or Of past or present character or
value Of assets, If any. representing 1t;
alb) Actual cash values Of tangible
pronerty paid in for stock OF
shares, valued on January !. 1914. not
exceeding par value df any) OF 'ortgt-
nal stock or shares specifically issued
1914, valued at time acquired: capital
Invested principle Of "a is reversed;
credit for paid in investment seems
dependent on continued existence and
value in 1914 of substantially same
property; no allowance is made for
property, which may have disappeared
or for other property taking its place.
Mergenthaler Annual Meeting.
The annual meeting Of the Mergenthaler
Linotype Corporation will be held during
tho coming week.
In . second call for proxies from the
oficeholders' committee there is a clause
which might be construed as an indica-
ton that some opposition might be ex-
pected to the management at the annual
election.
The committee urged the forwarding Of
prox1es Immediately, unless you intend
to be present In person or be represented
by some other proxy committee"
Minority shareholders arc beginning to
take more and more interest in the man
agsment Of corporations in which they are
financially interested and It may be that
something Of interest will develop.
Three times since the formation Of the
Izaarf