The Richmond Virginian. (Richmond, Va.) 1910-1920, 1920-04-28
HEAVIER SURPLUS
TAX BRINGS RUSH
FOR LIQUIDATION
~ RRoADAN WALL


New York, April 2s.--stocks had a
seycrc break in Wall street this otter
Aocn bat IL was not surprising in view
" the cenfiscatory tax measure intro
1 euced in congress and the disappont-
Sent over a stock dividend on United
u states steel. The market was IN tech
meal shape for q reaction snyho"
saving advanced sharply in several
spcciaities and in Reading and Wollen
particularly, Gold was Withdraw Tor
export to South America. call money
4 vent to 10 per cent. and sterling 10 &
new low for the movement. touching
B1s ga Nearly 100 American citizens
seft Mexico In fear OK their lives.
Early in the day the market was
stronE under the leadership OF Read
ing Baldwin and General Motors The
oil stocks and American WOODEN am
the Ryan Spectalt}cs moved upwa
lrapressiveiy. But ia vas Observed
from the very opening ci The market
that stocks wee being offered as tree
iy as they could be ualoadea without
break in prices This selling move
naent increased IN volume as the dag
advanced and sn the afternoon husl.
mess was heavy and excited The close
was at about tho low prices in most
issues with very material uet losses
In the leade e.
Reading very naturally attracted
most sftertiou. j vas Slow IN getting
Y atsrtad but fnaiiy d q advance about :
B points, Liquidation IN that and In f3s
4 Reading bonds wss heaN. Beror. tda
L Say ended Reading had broken more
than 3 points from its high figure OF
the morning Careful reading OF the
decision aiscloses the fact that there
reed not be a complete dissolution Il
Il the company. All Il need do Is dis
pose OF its coal properties. Jersey Cen
trail must DO the same. This limits the
size OF the melon expected but APP
= narentiy confirms the Reading COM
pany in its possession Of the Jersey
4 Central New York Central and Bal
tirnore and Ohio as owners Of Reading
E stock gained in the morning but sold
cn in the afternoon with the rest Of
& the market
I The credit situation probably had
more TO do with the break in the
market than any other one thing
The bank situation for the country
Il as a whole j. not so good as 1t was
N las. week even though the local
banks are stronger Merchants arc
com PEELED by the strike and by labor
q situation to carry larger stocks OF
goods and at higher prices. thus y
b ing up greater amounts Of money
than normal The Introduction Ct
the bill in congress taxing surplus
profits SO per cert would mean re-
Ownership for thousands of concerns
and individuals now considered sol
vent. They could not raise the
4 money for this tax because they have
tied IL up IN extensions Of business
In machinery. spent II for advertising
/ cr have consumed Il in some other
way There is no question, however.
that such law would be constitu
tionai and such strange ideas pre-
vail In congress that the business
h world is really afraid that the meas
ure may be passed. II passed there
is no question that it would precip-
itate a violent commercial panic and
II cause a loss Of billions Of dollars
M To the country For this reason a
Il large percentage Of today's selling
was genuine liquidation.
The steel report Of earnings was
4 eminentfv satisfactory showing a ne
for the FIRST quarter ~ s42A8e.ois
and A surplus Of sI3,57S.6s5 com
nared with S33,5l33s4 net and sur
AEs Of s4S82.5l6 In. the first quar-
Ter last year. Some very important
men have been talking recently OF q
stock dividend 'on steel common. The
failure TO declare one made the meet
ing Of the directors a disappointment
/ There was goOd IQu4Ga IoH 81 Stef
in the. last hour
The American Wooden report wat
20 made up as to show only S3a.sa .
share earned on the common stocE
compared with si3ss tAe previou
vcar This is after reserve for taxes
HI tho amount OF which is not given
IL Tt Is understood however. that befor'
taxes. the net profit amounted T.
over sac 900 .00o or more than Isl
per cent. The company restored +
surplus sI4.5t0,o0o which had beel
set aside IN previous years and re
NAMED unexpended. II also sets u
i new reserve OF t7,25o,0oo for pos
sible diminutiou OF inventory values
As a result Of these transactions n
profit and loss surplus of the com
pany for the year is increased Sl1-
e2a SOL or 20 per cent of the common
stock outstanding. These larg
profits led Wall street 70 fear tina
Congress might notice the report an
be goaded by IT into Some freak leg
Station So Il hurt the market
About the time announcement wa
made Of the withdrawal of S14 600.
600 gold for shipment 10 Sout
America n rumor gained currenc
MAT imports from London would b
resumed and that $50 600 600 woul
some. This had not been conhrne
NHeU i4fS maj asft C4p~FG SSNil AN
Gas weak all day, At it's loves
point it represented a decline ~ i
points from the high level estahIisho.
IN April 3.
Official denial was issued ny n
British government that II was geek
inE control of the Shell Ira LIS rita
ri ion company.
There is ro-donbt t+f4t iiquifatio
S-S of al kinds Of stocks Is progressin
n rs.r .fAt,r