The Washington times., 1919-12-09
BOERSlANER,S
COMMENT ON !:
BUSINESS /
~ poERssANn.

sterling at S3.s4 at the top Of t.
foreign exchange roster and mar1b
at ~ the bottom OF ft was a haa1 Il
fiscal circumstance that nunined u
mild effect Of the political sugur}U3
represented by President wissss's :
letter to Senator Fail aRd by the st,{
lies concessions to Germany in the
treaty protocol-with the money
market unchanged the while PoSss-
sibly the money marts had been morr
demonstrative had there been an an
rtuncement during bourse hou6D =
that the new offering of Treasur1 u
certificates would be at AZ per cent.
or u per cent higher than the pro- -
vious emission ca,-
The view is spreading that IL there
Is TO be immediate relief in foreign
exchange IL must be in the form Of \
direct barter plan. ss proposed tV a.
Arthur Reynolds Some ultimate :.
sehcnses appear TO be workable
enough TO save in their inHi cIausfr
which. in the opinion OF ID. n. Toe-.iS
gan. negatives, by its impraciibIe-
ness. the Feasibility OF all other
clauses; that 10. the Issuance OF debcnsnc
tare bonds is inprsctiblc bccause u.
these cannot be marketed
Net Patriotic D.sy.
The Liberty and Victory bond or
SANITATION is now myth for the ree- 's
son that it's former constituents csn.i
aot be pressed into service IL was n ~
purely patriotic formation and Pa \
trioiisu is not concerned with deben
'ure bonds put out TO maintain our ex
port business. 'fDo
Assuming, however that an eR'n--t
Gent sales organization should ur.e1f
cortske the fotation tnind This Ns~
= matter of billions of dollars. ne-b4
millions) 10 whom would IL seIi I'M
security? Corporations would
course, take some Bsnsers wrfou-
tsve an eye to European conncctiops.
would also be buyers. but these are.
comparatively two small units in a.
proposition where the participation
of millions OF investors were neces-t
sary. Millions OF American investora
would mol invest billions in European -
debentures because they are insult = =
eiently posted on European affairs. ..f.~.|
IS see u. the only pernan<ssses >
solution of the problem By and garH,s:;.s
Is for the United states Governm-rt,s-
to guarantee the bonds -
Sbee Pinckes Creditor. 1iss.i
Unfortunately the Secretary Of thse'
Treasury and the Federal Reserve =
Board have gone on record IN opDosi .
ton TO Government Intervention N
foreign exchsnge-dircctly or i.di-
rectiy. The attitude OF foreign gov
nrnments toward the question is not
likely TO change the posifion 6r
American officially. though. paradox~1f :
caiiy. the shoe now pinches the credi1 =
tor, not the debtor. 1eeS
when the pressure and exi-crrefttr
were acute abroad governments acs-l
ed promptly In example. the Brfss1. {
ish government guaranteed all at- 6
ceptances-and lost not shilling IN -
SO doing q.
Relative to the adjudication ossss
stock dividend. the points are ncs -
especially fine. The Government
holds that the distribution OF sddf--ift
tionsl shares TO stockholders fs tzxas sc
BILE. II one has 100 shares I'm a CON-
pany which puts out 1ee more. tkeffc
addition is taxable at the ms rtStt g q
price or the new certificates. the Goyr~s*'
ernmcnt contends. though the snare-cAs
holders actual income be MOI
creased thereby.
Frea AaSsher Aasi~.
illustrated from another angle. II
Mr.. Drew has ono share which has
been yielding s per cent and the con-
psny gives him two share for his one Z.
and then pays 10 per cent on ths.,
emission, the Government Claims A.
tax not only on the per cent la-,1
creased dividend. bot on the market -,
value Of the new share. .-x
The lower courts decided a mere ~
stock dividend is an adjustment Of -
corporations capital--pothirs more
and, therefore, is not taxable. -
Should. however. a stockhoIder sell =.
the new stock declared as a dividend.
the proceeds were as a matter eI.
course taxable. There is no conte,-s.&
tion on that score