Evening star., 1921-08-19
BANKERS PROTEST
ON CONTINUING TAX
Say Excess Profits Feature
Should Be Dropped Now.
Financial Notes.
BY ]. A. FLEMING.


tinuation of the excess profits taxes
until 1892 has been sent to Senator
Penrese and Representative Fordney
by the American Bankers Associa-
tion. through it's president, John $.
Drum.
The association urges these objec-
tions to further continuation OF the
excess profits feature in the new tax
tmeasure. charging it as the chief
cause for the high cost of produc-
tion and finished products, as against
farm products and raw material. and
further retarding the unemployment
of labor.
The message reads as follows:
"The American Bankers Associa-
tion. representing $4,000 banks and
more than 95 per cent of the coun-
try's banking strength. without at
this time going into other features
of the bill now before Congress, most
earnestly protests against the con-
tinuation of the excess profits tax
to January l, 1922. and urges these
objections:
"1. The excess profits tax never
could be justified except on the
ground that it was an emergency
lrtasure irquirtd under the Unusual
conditions of war.
"22. The restoration of peace has
destroyed both the reason and the
~
'3. Continuation of the tax is one
os the most important factors oper-
ating to keep up the cost of produc-
ton of manufactured goods, and the
: higher cost of finished products as
against that of farm products and
raw materials prevents the restora-
tion of an equitable and harmonious
price level.
~ The effect of these inequitable
prices is to reduce and restrict the
fsays
stock men, cotton growers, lumber
men, oil producers and miners, for the
treason that they are forced to sell at
prices relatively too low and with the
proceeds of their sales can buy finish
ed products only at prices relatively
too high.
- Reduced buying by farmers AS7h
producers of raw materials natura.>
means reduced selling by producers
of manufactured goods. and the buy
ing power of manufacturers and their
employees, therefore, is likewise re-
duced.
"6. The so-called excess profits tax
is actually not tax or profits, but a
diversion of working capital. and by
inhering the working capital of the
country it prevents that full develop
ment of productive enterprise without
ment of labor.
Considering all the foregoing facts,
1t is apparent that the excess prof1ts
tax. while it will produce relatively
small revenue, is a destructive inf1u-
ence that works against the farmer.
the cattlemen, the miner, the lumber
man. the oil producer, the cotton
grower and the workman. 1t is a tax
that impairs the prosperity of all
classes. Its economical fallacy has
been recognized by other nations that
imposed the tax, and England and
Canada have already repealed and
substituted other and sounder meth
DDS of raising revenues required.
The American Bankers Associa-
tion, therefore. is convinced that 1t
gress. before Congress assumes the
responsibility for continuing this tax
until 1922 and thereby adopts course
which. the American Bankers Asso-
ciatien firmly believes, interferes with
the natural movement toward restora-
tion Of a price level at which agricul-
tural products and raw materials can
be exchanged SO as to receive full
value in finished goods; that restricts
the purchasing power of the farmer,
the cattlemen and the miner; that
keeps workmen out of employment;
that delays, in short, with disastrous
effect, the operation of natural forces
which, If unwise legislation does not
interfere, will restore normal condt-
tions. JOHN 8. DRUM.
Name Committee to Investigate.
Directors Of the Merchants Bank
yesterday named committee to
make a thorough investigation of the
proposition for the purchase of the
banking quarters in the southwest
corner of the Southern Building. main
floor, going especially into the CO.
operative features and the measure
of success attending the sales of the
building to date.
officials of the bank. from Presi-
dent Drury down, are enthusiastic on
the proposition, believing the change
of location would result in decided
enlargement of the banks business,
but all desire to avoid any possible
knotty problems for future unravel-
ing.
Take Losses Now.
1t may be that the stock list Is
whether it is or not, this is the time
for traders to take their losses for
income tax offsets.
The new tax measure provides that
with it's adoption it shall be unlawful
to sell stocks to establish losses
time or in the Immediate future.
OF course. one may establish losses
at any time, but to take the loss and
hold on to the stock-and it has been
an expensive operation-will not be
countenanced under the new meas
ure if it becomes a law.
Local Securities.
Local securities were rather slow
on the final session of the week, there
being few pressing orders either way.
Values were generally firm, especially
on the bonds traded in. Capital Trac-
tion 5s selling at SIA and Potomac
general IS at So.
A few shares of Capital Traction
brought S5le, and Mergenthaler sold
at 11Sh.
Want Exchange Charges.
The state of Tennessee has passed
q law similar to that passed by North
Carolina relating to the collection
of exchange on checks.
A copy of the law is not available,
but the federal reserve bank of
Atlanta has returned to Richmond
and the latter returned a check Of
fered for collection stamped as fol-
lows:
although the name of the bank
on which this check Is drawn ap-
pears in our par list. the said bank
has notified us that, in view of a
1ature. authorizing them to charge
exchange. they will discontinue re-
uniting at par to the Atlanta bank
or it's branches. Therefore, as the
federal reserve act does not permit
us to pay exchange, we must for the
time being discontinue handling
items on the bank named in the
check"
And many of the banks in Ten
nessee will speedily follow.
Personal Mention.
Maurice Otterback of the Anacostia
Bank is at Poland Springs.
RAR SILVER QUOTATIONS.