Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-07-29
BY I. A. FLEMING.

Until the financial situation clarifies
In waehinRton as to what Is to be done
in the way Of financing the war; uneii
the Russian situation assumes some
danntte aspects for or against the allies
cause, business Is not expected to make
any definite Roadway. But, desplIe
these vital questions being in the pal
ance, throughout tho country there IL
widespread optimism, WIN hn,dir9 arm
The railroad situation. oenenteo Dy
the granting Of increased rates TO some
roads by the interstate commerce com
mission, Is improving. The actioh u
the war board in cutting of unneces-
sarv trains and unifying methods sucn
al releasing thousands OF freight cars
badly needed is also great ooon 70 70
the railroads. The steel trade 10 sniai
being held back, at least theoretlcAnS,
by the uncertainties OF
In commenting on the outlook In the
snancial world ]. s. Bache d co. IN
their weekly survey says: ..ocL
1.-THE current situation IN ths ,;.hiy
market. when it can be renaoas
anaiyzed liz of great assistance IN de.
t.rminine the conclusions or the pes
nancial thought Of the country oh tn'
efYect which the great ana SINAI It'll.
menta throughout the world are La
to have upon business anu ia no
prosperity. The present market 10 w nv
EXCEPTION. II prices are dlscounuins a..
worst that can happen in any direc.ion,
the conclusion. it seems 70 US, nus u;
that the best thought believes, nrst, ~
a sane solution-a solution ON NC nroh-
.tructiye side Of the price-hxlns PROV
lem and that of taxation-a soIutioi,
which allows prosperity to continue
md will not rob enterprise OF inouce
ments to put forth Its best enorts, anu
second. conclusion as .. 10 tne I
~ averv resource in men, money ahu
nroduction of a nation of ITO miliiohs OF
people possessing $24o.ooo.ooV.oVv ~
Wealth. people who have never no
beaten in war-added 70 tn ,;, az 70
sources of England. France ana the
other allies, with all this against nel,
Germany Is sure to be crushed. IN ~.
end and the war completely won LOT
liberty and civilization.
"Any other inference as TO what ma
oninion is would mean an OUTLOOK LOT
collapse IN prices of great proportions
and general disruption in the ous'hes1
world"
ants has prepared a memorandum Oh
certain features of the Senate revenue
hill which lays stress on what II tefms
the injustice of the Is per cent tax on
undistributed surplus. The instltute
points out that the proper remeay it %
the boarding of surplus in order 70
avoid the surta1 in the hands OF large
.tocEhoiders is contained in section 3
of the present income tax act. permit
ting the Secretary OF the Treasury 70
collect surfaces on gains or pronts
which have purposely been held back
in order to evade the law
The institutes objections to the pro-
posed tax are: -,
That the excess profits earned will
not in many eases, be in such form as
to he available for distribution.
That the Government will be reauir-
ing many corporations to provide addi-
tional facilities for war work and the
natural way to provide for such facili-
ties as far as possible, by the retention
Of profits in the business
That it is part Of the national policy
to encourage economy throughout the
Of extra dividends to small stockhold-
ers would undoubtedly lead to extrava-
gance on their part.
That II the clause results. as 1t is evil
IDENTIFY intended to result. In full dis
tribution of dividends, such distribu-
ton Of dividends will tend to create in
| fated values for stocks quoted on the
exchanges and those financial interests
which are able to see the whole situa-
ton In it's true perspective Will be af-
forded an opportunity to sell stocks at
high prices to the public, who will be
deceived by the large distributions.
Much attention has been drawn during
the past week to a statement promulgated
! by James s. Alexander. president Of the
National Rank Of Commerce Of New York
city, urging commercial borrowers to re-
Wise their methods Of making notes for
goods purchased from the customary four.
Ave and six months maturity to three
months paper.
The former paper is not rediscountable
at the regional banks Of the federal re-
serve system until after the expiration Of
three months, when 1t is entitled to be
discounted as commercial paper.
Mr.. Alexander declares that 1t Is the
duty Of merchants and business mon to
build up the new banking system by pro
full facilities Of the system may be
brought into play.
IF commercial borrowers would arrange
| to have their paper mature in three
months from date Of ISSUE" said Mr.. Alex
andsr. mot only would tbs banking eondi-