Evening star., 1920-12-26
/ ntCL
by I. ArSLEMING.


is the revenue coming from
''iH 1921? Legislation affecting the in
come taxes of 1920 is not at all likely,
1e 90 that the old revenue law will prob
Is yHbly be in force.
But there will be an awful drop in
the revenues of 1920 compared with
I q ner, years in excess profits, big gains
in stock market trading and in trade
and commerce. with eXorbitant prices
9nIcurrent for all staple products and
" Manufactured goods and raw ma
IN teeials.
's 1.-THE result is that the income taxes
tasd excess profits exceeded expecta-
o1tions and were paid with eaSe-that
81 IS. athe first and second installme nts.
with more trouble paying the third
and many failures on the fourth.
might come within sew
hundred millions of dollars of the
&a6Skes that have been sustained dur
ftH the last nine months on Wall
ESFS&fet, but they will never be able to
ke31ure the losses that the great indus
644Ai corporations of the nation have
6f4RAtained. nor yet the added billions
&ZNlosses of the agriculturists, hard
hSh0fby the smashing of the markets
their products. to say nothing of
ssseAH enforced defiation of stocks of
e&ery kind of merchandise.
= SsRAnd the revenue law distinctly and
pioiuiy says NNat aCtual losses re-
sulting from transactions entered into
for gain may be taken from income
and return made accordingly.
What this will mean on Wall street
alone will amount to a large total. for
the losses have mounted to the bill
lions. One has but to turn to the
large table in an adjoining column to
compare the high and the low prices
of the year, and he will see for
himself. when losses are deducted
rrof fyrc hoN h~N - M
thing like the big tax returns of 1919.
Another Source of Loss.
There is another source of loss that
will be deducted from profits. Many
great corporations have found it
necessary this year to throw their
investments in liberty bonds and vic
tory notes overheard. regardless of
price.
1t will be recalled that in the sell
ing campaigns of the various issues
the great corporations responded with
purchases of millions. some as high
as S25.000, ,00o. and some even of larger
amounts.
These investments, aside from the
fact that corporate managers con-
sidered their purchase a patriotic
serve for just such conditions as have
developed. unfortunately much sooner
than expected.
Unable to borrow, unable to reduce
inventories through the cessation Oh
normal buying, these corporations
sold their government bonds, and they
sold them right and left-taking un-
usually heavy losses thereon. which
will further reduce the excess profits
taxes and the surtaxes as well.
A deficit of $500, 100000 for next
year. as estimated by Secretary
Houston. is very modest estimate.
and the chances are that it will be
far under the actual shortage.
H. Nf b. hA
Federal Reserve Board and the wisest
bankers in the nation are opposed at
this time to any further imitation, to
any generosity with public moneys.
with the government resources as
strained as they are.
Bankers believe that the time is
ripe for the floating of a longtime
bonr issue for tlA relief Of the Treas
ury through the retirement of the
100000. 900 Treasury certificates and
the funding of the liberty and victory
issues far into the future
The banking element of the country
want the cleanup to be final and
permanent now, with no aftermath.
They point to the efforts of pools
formed in Japan to stop the decline
in silks and the engulfing of the pool
and its resources, to efforts made
elsewhere with the same results. and
now. and learn a valuable lesson from
the dose.
Observation-Disclosures:
If the New York stock market has
a trace of its old recuperative powers
left, then there are many bargains In
splendid dividend-paying.~s stocks II
it is going to keep ON making new
history by petering out completely, !
after days, weeks and months of non- !
resistance to pressure. then the ap-
parent bargains are not real at all.
but a lure to further losses.
t. ho fx.f6a nd
to date have been serious and the fact
is the street doubts the ability OF
many more corporations to make their
shareholders happy with regular divi-
dends. 1t is an open question, too,
whether or not the dividend cuts have
not been more than discounted in the
price reductions
Union Bag and Paper. one of the
old. substantial corporations, is selling
. on nearly 13 per cent basis-and
the dividend prospects are good. Beet !
Sugar is on "a per cent basis; Chi
cago Pneumatic Tool. 1873 per cent:
Sloss-Sheffield, 1873 per cent; Bosch /!
Magnetic. 2o.4 per cent; Goodrich (B.
F). 22.2 per cent; Studebaker, 1874 |
per cent, and scores of other indus |
trials from IS to "a per cent.
Readjustment is the thing for the
corporations.
Cutting down inventories to the
bone, cauteriZing the bone. conserving
resources, avoiding wherever possible
the habit of going to market with
notes and starting the new year with
intent to build up conservatively.
1t is needed now. il ever-this con.
servatiye pay-your-debt spirit.
An Announcement.
January l N. L. Carpenter & Co.. a
New York stock exchange house,
prominently represented in Washing
ton, will be merged with A A. House
man & Co., N. L. Carpenter becoming
a partner in the Houseman firm. 1t Is
understood that the present officers
and employees of the first-named firm
will be retained.
The Bache Review, citing the vari-
Gus difficulties under which the farm
er suffers. has this to say:
I'm considering the farmers pres
ent condition, however. We must take
into consideration that the farmers
comparative loss on this years crop
on the present price level is material
ly lower than the government esti
mate of $4,000, 100000.
This reduction in estimated loss
would seem to leave still considerable
buying power with the farmers, and
the outside 40 per cent to which our
correspondent refers must, on the
whole have still large accretions left
from the benefits realized during the
war years.
1T may be said, however. that OFF,
setting the lower price the farmer is
to receive for his crops would be
the lower prices he might have to
pay for the things he himself will
buy.
1T is true that these things Of
fered by retailers cannot. most of
them, be bought anywhere nearly-a
low as even the present lowered