Evening star., 1922-12-07
MELLON REPORT Bic
BOOM TO BUSINESS
Annual Statement to Con.
gress Cheers Leaders in
Trade All Over Country.
BY J. c. ROYLE.
Special Dispatch to The Star

specal dispatch to The Star
NEW YORK, December IA feel
ing OF greater confidence In the pres.
ent situation and in the future ha.
spread through business circles in thi.
country as a result of the report OF
secretary OF the Treasury Mellon.
Business men in various sections and
In many different lines voiced this
opinion today. making 1t clear thei,
attitude was based solely on the bust.
ness significance of the report and not
on any possible political aspect
Ffnanciers and business executive,
indicated that Secretary MELONS re
port was effective as business stimu-
liant, not because of any extreme Opt.
lnism, but because, while encourag gius
Factors Were fully enumerated, diff
cultieS in the way of business alsa
were fully recognized This recogr:-
tlon by spokesman Of the admins
tratlon was taken in some quarters az
1orecastlng measures for the removal
OF those difficulties
Steady Advances Seen.
Secretary MELONS outline OF the
condition of business portrayed CON
ditIons identical with those the de-
tails OF which have been set forth
three months. His statements that
the volume Of business was mounting
steaQliy, that prices OF commodities
mad risen and that inventories were
low We're regarded by business meu
today as particularly reassurine for
continued business activity during
the next six months.
Although he said farm products
were selling too low at the farm and
; TOO nigh at distributing centers. he
tempered TINS by the declaration that
crops We're bountiful and that the Sc
we're depression in agriculture had
been relieved. He laid strong empha-
sis on the fact that railroads are suf-
fering from undermaintenance and in
adequate equipment. but stressed
fully as strongly the heavy purchases
Of cars and locomotives.
Labor Shortage Taken In,
Large employers took the Secre.
tary's comments on the shortage ot
labor. which he said was due to bus.
ness expansion and restriction of i'm
migration, to forecast an attitude OIL
the part of the administration favor
able to the letting down of immigra-
ton bars to some extent.
The fact that no general revision
OF the revenue laws was suggested or
additional taxes recommended. while
at the same time a cut in the surtaxes
was advocated. proved grateful news
" many BUSINESS IHeu Inc SeCfe-
tary's report, however, probably will
not serve to check the tendency Of
corporations to increase capitalization
and declare stock dividends.
His comments on necessity 10.
closing all existing avenues of es-
cape from federal taxation were re-
garded as significant.
Stock Dividends EXPLAINED.
The attitude of many of the cor
porations which have declared stock
dividends was clearly outlined by 4
c. Bedford chairman of the board oi
the Standard Oil of New jersey
ford. in part. "a proposal for govern
ment Intervention in a certain phase
of industry.
ut is based upon the allegation
that earnings over dividends of
number of corporations OF varied
character have been sequestered 70,
number Of years for the sole pur-
pose of evading the super income
taxes of the shareholders OF these
corporations.
LAS the merest novice in business
will understand. the earnings over
dividends of these corporations could
not remain in fluid form. but. as ere
ated, the growth of the enterprises
requires that they be translated into
equipment and business facilities OF
these corporations. In the process
they were taxed as earnings, and the
remainder. thus invested in tangible
property, becomes fertile field of tax
alton by the state. These assets,
which thus comes into existence with
an earning power distinct from the
earnings of original capital invest.
ment. are the properties of the share
holders of any company