Evening star., 1924-10-27
BOOM IS Predicted.
IN TAX-FREE ISSUES
Publishing Returns May
Cause New Move to OutWit
Business Rivals.
BY j. G. ROYLE.

Special Dispa tch to The Star.
NEW YORK, October 27-A dis
tinct change in the trend of invest
ment is anticipated by many bankers
and business men as a result of in
come tax publicity. This is expected
irrespective of the decision with re-
gard to newspaper publication of in
come taxes by Attorney General
stone. Consequently investment bank
ers all over the country spent Sun
day scurrying around for tax free
security issues which they might Of
fer their clients
One business man whose tax is in
hve figures expressed the trend in
dicated when he declared that pub
1icity given individual and corpora
ZION income taxes would result in
changing the game from draw poker
TO stud" He explained that while the
publication of the tax payments had
allowed rivals and competitors to see
all the cards held against them where
tax exempt income did not exist, the
placing of funds in tax free invest
lnentS would offer Il certain amount
of secrecy just does the buried
card in poker.
Change in Trend Likely.
There is ample money for invest
snent in the United States at present.
The problem, business men and bank
ers assert, has been to induce it to
Sow into channels where it would
@ spell industrial activity and expand
operations The tax reduction which
took place this year was counted on
TO aid in bringing that about. Many
Gear, however, that the publication
of the income taxes paid which has
already taken place may nullify the
effect of the reduction in this respect
The change in trend, however, seems
likely to promote extensive additions
to the already heavy programs of
municipal. county and state public
works. With money readily available,
many communities are expected to
put into effect projects which up to
this time had been regarded merely
as possibilities for the future. Sub
way system in the larger cities may
lie numbered among these. Philadel-
phia has just let the contract for the
second section of the Philadelphia
subway. Pittsburgh, Boston, Chicago
and other centerS are planning on sub
surface transit facilities. These pro-
jects will call for employment of a
large amount of abor.
Credit Men Very Busy.
Credit men have put in busy days
since tax publicity went into effect.
They have been revising their opinions
and their credit ratings in some in
stances. Such changes, however, are
not likely to be drastic as general
thing for the up-to-date credit man
usually has SO accurate a line on his
customers that his estimates are only
occasionally overturned by the tax
figures.
There have been both walls and
laughter from the theatrical and
movie world as a result of the opera
ton of the new law. Some stars have
heen diSgruntled because their tax
payments have not been published.
believing that such payments should
be regarded as good advertising.
Others whose proud boasts as to the
sizes of their salaries have rung
along Broadway are being joked be-
cause their returns have indicated
that a part at least of their asser-
tionS have been couched in terms of
stage money"
Advertising men are hopeful of
some additional business, believing
that the trend toward putting excess
profits into advertising instead of tax
payments maybe revived.
Poor Returns Deterring Factor.
Opposed to the trend toward tax
free securities is the fact that these
Investments pay relatively small
return. On the other hand, careful
statistics indicate that industrial
earnings in some 40 different lines in
the last year were at the rate of S7.75
on each 500 of capital, or slightly
above the yield of. the reasonably
safe bonds. Utility earnings were
about 81 d hundred lower than in
duStrial earnings. but showed greater
stability, while railroad earnings in
1928 ran ABOUT So.