Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1919-10-13
UPWARD MOVE IN STOCKS
EXPECTED TO CONTINUE
Will Hold Dividends Not
a. Taxable.
ISIS UING TEN FOR ONE
Many Reorganizations Are Looked
for just rs Soon as Decision on
VI. Incomes Is Handed Down by High
Tribunal.
III BRoADAN WALL.

~ NEW YORK. Oct. 12.-,In the last
week stocks have given such 4 sur
prising demonstration OF their funda-
mental vitality as 10 encourage = be-
\ lief that the upward swing may be
continued for an extended period. An
old factor in the stock market has
become rejuvcnatcd and for the mo-
ment, is almost as important as the
fact that rich men cannot sell on ac-
count OF the taxes. This new-old fac
tor is the popular belief that the
Supreme Court will declare stock
dividends not taxable as income.
The court has already made such
declaration under the previous IN
come tax Law, but the present law
that stock dividends be taxed. There
fore, a new decision Is necessary.
stock dividend is nothing but another
piece Of paper. II does no; add
holder already has
But Wall Street believes that stock
dividend is something valuable. Alb
entertained by many persons OF in
telliEence. The stock market value
of stock dividend lies in the fact
that when prices OF securities get TOO
high to be dealt in by the ordinary
trader. the paying OF stock dividend
reduces the value of the whole body
puts the price down TO n level where
it will be bought again. This new
price may be higher than the one from
soon forget the actual price that they
are paying and advance i Sill fur
were quoted At $3.50 share, which
is about it's actual price If stock divi-
dends are ignored, that would stop
trading in it.
Issuing Ten for One.
Even at $500 a share it is getting
too high, so that there is PROPOSE
ton to issue ten shares for one. write
IT down 10 's9 and io, start further ; adj
be put TO $4,000 share without at
attracting popular attention.
II te stock dividend is declared S,,, no,
will he food. that will mark down
the figures on such issues as Mexican
Petroleum. general Meters ITO Chandler
will make them as popular with the
people as some OF the good for moth
inE oil and mining shares are on curb
sold to the people for no other reason
than that they are sold AT small
price share. The ordinary American
likes to say he has 1000 shares of
stock
1t sounds big even il it is some
buy ten shares of a real stock for
tha- same money and make profit.
Reorganization Planned.
Should the stock dividend be de-
clared taxable there VIII be scores
of congratulations, for the Treasury
Department has ruled that where n
stock having par value is exchanged
for stock of no par value, the new
stock is not taxable as income or
profit. even though there may be more
shares.
The tobacco people are acting under
this Treasury ruling in their great
reorganization plans which arc to re-
suit In the issue OF some 10000 O0O
shares of no par stock. Par value is
nuisance anyhow and deception.
IT means nothing. All stocks sell on
the basis OF value, regardless OF par
value.
Entering New Ern.
The market is entering into new
era Of huge noatations. 1t will he
something like the great market eigh-
teen months ago 1t will be n much
bigger market than the former one
because of the absence of bond issues
In SO many OF the corporations. The
war has enriched American business
TO such AN extent that bonded in
debtedness is rapidly disappearing
Petroleum stocks. motors. tobaccos.
steel shares and electrical stocks
seem to be the leading features OF the
market. Here and there a railroad
becomes active. but in every case the
activity is due TO the fact that il is
something more than n railroad