Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-01-06
BY I. A. FLEMING.

Under the terms of the federal re
serve law the twelve regional bank.
are expected to split their excesi
profits. after the payment OF the regu
lar cumulative per cent dividend
"1fty-fifty" with the government unit
such time as they have accumulated 6
surplus of 40 per cent, when the gov
eminent will take all excess.
Five of the twelve banks have paid
their dividends to date and have made
their contribution to the government
as a franchise tax, at the same time
devoting like amount to their surplus
account.
Fridays payment to the government
totaled $1.134.234.4S. which proves con-
clusively that the banks that made this
turnover have the ability to maintain
the per cent dividend.
The regional bank of Boston paid in
$3.50 New York sent in the largest
contribution. ss4s.a7a.57. Chicago con-
tributed $215.7sS.1s: Atlanta, $4,000;
Richmond, $116.471.73, and Minneapolis
turned over as franchise tax. SAT. 500.
Many Of the member banks at the
start of the system considered that the
stock of the regional banks was toe
large, and that they would not be able
to earn dividends. Their satisfaction
at receiving full per cent annual pay
ment is a matter of course.
Must Withhold Alien Interest.
The Treasury Department has ruled
that interest paid on deposits to the
credit of nonresident aliens and cor
porations are subject to the withhold
ing provisions of the act of October g.
1917; per cent for the former and 4
per cent on interest to corporations
nonresident and not engaged in bust
ness or trade within the United States
and not having any place of business
therein.
The Treasury Department has also
issued an order that bonds given by
officials of state, county, township or
village for the faithful performance of
duty are not subject, to stamp taxes.
This ruling does not apply to bonds
otherwise taxable for government pur-
poses.
Treasury Certificates.
A large sale is reported of the Treas
ury certificates of is sue January 2. ma
turing June rs. and, payment by SUBJ
scribers on or before January Is.
Secretary McAdoo will not make an
nouncement of the amount of the sale
until after the date of payment. The
federal reserve banks are making al
lotments to subscribers as fast as pos
ssible.
Both the Secretary of the Treasury
and the regional reserve bank of Rich
mond continue to put forward the adj
vantages of these certificates as in
vestments for funds reserved for
taxes" paying as they do per cent.
and being a measure adopted by the
Secretary as preventive to seri-
Gus disturbance in the money market
on the maturing of income tax pay
ments, final date. June 15. These Treas
ury certificates are receivable In full
payment o. income taxes.
A circular Of even date from the
regional bank of Richmond urges the
purchase of certificates, 'by individuals.
firms and corporations in preparation
for payment Of income and excess
profits taxes To postpone preparation
for such payments until June would
inevitably produce disturbance of credit
conditions. Moreover. other financing
by the government must. to degree.
be affected by the response of the pub
lie to these offerings of Treasury GER
tificates."
Business Less Active.
Business at the banks and around
town has let up materially since the