The Birmingham age-herald., 1922-10-15
MORE WALL STREET FIRMS ID DECLARE
 STOCK DIVIDENDS
Other Corporations WllI Fol- low Lead of Standard Oil in Order to Escape Rev.
 enue Law
Ny HARDEN coLFAx

Ny HARDEN CoLFAx
 sOcS gsRs St ab. Tn.
 Washington, October 14.-Stand- ard oil's great stock dividend de- elared this week is appraised as the first of many fine melons ripening in the Wall street patch, all of which must be plucked within the next four and one-haf months to escape the heaviest outstanding penalty the rev. snue law imposes-a 25 per cent tax on undisturbs dearnings.
 Treasury officials expect many more extra dividends. whether they will be in stock or money will be for each individual corporation to de- eide As stock dividends arc not taxable. however, the opinion Is that most of the distributions will be hy this method Officials here have received definite. although wholly in- formal tntfmstionB that scores of ether corporations. many of large capitalization. will begin st once to declare extra dividends. The melon cutting is expected to reach its height soon after the first of the year and to cease altoEe ether by March 1. the time limit fixed by law for the distribution of 1922 profits.
 Failure to distribute lsa2 earnings in full. officials point out, within two months after the first of the year will bring corporations under the provision of Section 22o of the reve- nue law. which provides
 Terms of Law
 That if any corporation is avatlsd of for the purpose of preventing the imposition of Q surtax on it's mem- bers or stockholders through the medium of permitting its gains. and profits to accumulate instead of be- ing divided or distributed, there shall ba levied, collected and paid for each taxable year upon tho next income of such corporation, . tax equal to 2B per centum of the amount thereof which shall be in addition to the 10 per cent corporation tax provided elsewhere in the law.
 The law further provides that "ths fact that gains or profits are in any case permitted to accumulate beyond the reasonable needs of business, shalt bs prima facio evidence of the purpose 70 escape the surtax-" The com mi ssioner of internal revenue is empowered to determine whether an accumulation Is reasonable or not.
 That provision in tho law is inter preted here as meaning all corpora tions with large earnings shall. II they so desire, submit their cases 10 tho comm issi oner of internal revenue wherever there is doubt in the d. rectors' mind as to the reasonableness of the accumulation of profits and am1f kA whether such earnings are to Dc dis- tributed or held intact.
 U. s. steel Prosperous No corporations as yet have sup rnitted their cases to the commits sioner, so far as known, but many have made public financial statements indicating that they come within the class of taxpayers iiapie to the penalty. Among tho concerns large profits this year are numerous corporations in the non-union coai, the iron and steel, lumber. building construction and materials industries. The most conspicuous of those, per hans. is the United States Steel cor poratlon, which Is known to have en- joyed an extremely prosperous year thus far.
 The last financial annual statement
  cumulated profit and loss surplus oI nearly $500, ,o0o, ,ooo. the outgrowth or the policy of building reserves fol- lowed consistently since tho corpora tion was organized. The tansipie of the common stock, on account or this policy followed for more than twenty years. amounted 10 more than s259 a share. the statement discioses. In other words. II tno ta ana dispose of its assets at . fair rr,ca there would be s259 with which to redeem every outstanding share or common stock, worth at par sloo.
 Cars stu Short
 =- scutstanding developments or tnc week also included an approcahins climax to the rail situation, con tined increase in tho volume or pusi ness being done throughout tne country, and a measurable growth In tbe amount of money lent by the hanrs to business organizations with which to extend their enterprises
 chortare Of railroad cars, now more th.r 1ao.oo0 has become acute ana threaten5 to retard the expansion or ,,n.,nass for the time being. Car loading continues higher, almost touching the 100000 car marx.
 The federal reserve boards week. ly statement shows that 1resn ioans totaIing about s64,ooo.ooo were ,iau' d,,rinr the week by banks to busi- ness interests. .en ooo ooo In the amount of money on oe- nosit. subject to check. at the cniel h.nL. also was noted. There are still ample funds for business neeos, hut interest rates are showing tendency to harden under the pres
 rzed dADaa nd.