The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-01-18
Plan
HITS MONEY
STRIKE
Possibility Of Tax Reduction
Has Been Steadying lnflu-
ence IN Bond Market
BY MERRYLE STANLEY
RUKEYSER.
Copyrighted 1s24, by star Co., Inc.
and distributed BY Cosmopolitan
News Sefvicel

4 J +
ecopyrighted, 1924. by star Co.. Inc.
News Service.l
NEW YORK, Jan. 1S.-If Con.
gress adopts Secretary Melons
tax reduction program. it will
break d stubborn strilxe-the strike
of capital against taxable securities..
Otto III. Kahn once described the
tendency of the ultra.wealthy 10
discriminate against taxable bonds
In favor of tax free municipal and
State issues az strike Of capital.
An expectation that ordinary
bonds Of railroad, Industrial and
public utility enterprises would be
more attractive to large tax pay
ers If the Mellon scheme goes
through has been q contributing
Influence to the remarkably firm
bond market since the beginning
of 1924.
Current Market Trend.
II Is interesting to observe that
the substantial gains were reg
istered mainly In domestic issues.
During the general upturn, French
bonds, and English issues to q
lesser extent have been in the
reverse direction. In fact, the
flow of funds westward across the
Atlantic from frightened investors
overseas, has helped to raise the
price OF American issues.
The primary cause of the active
buying, however, has been the fact
that the profits of business enter
prise during 1928 had become
share of the years gains are held
within the treasures OF business
enterprises, but portion was with.
drawn and placed in securities.
The very caution OF business
men, with their policy Of keeping
Inventories low and buying from
hand to mouth, helps TO release
funds for investments.
Year Of Cross Currents.
Nineteen.twenty three was q year
Of cross currents, and ups and
downs and unevenness, bu-, when
all is said, 1t was a profitable year
for most efficient business men.
Moreover. high wages swelled the
savings accounts and hence the de-
l1land of savings banks Tor bonds.
Technical conditions OF the bond
market similarly facilitated the
rise of quotations. The market has
been in a state OF excellent diges-
tion. Unlike conditions a year ago,
when corporations were crowded by
investment bankers with offerings
Of new issues, the older issues had
less competition.
Time Of Activity.
January is additionally d time
of activity In the bond market,
and like July, Ii known as q re-
investment period. More COM
panieS pay out interest and
dividends In January and July than
In any other months. This
seasonal influence was specially
great this year, because dividend
disbursements were larger, reflect
ing the fact that more than 400
prosperous corporations increased
their dividends last year.
Thus far the turnover in bonds
listed on the New York stock ex.
change has been about 80 Per
cent more than last year.
To the small investor who still
has funds available, the recent rise
should cause no encouragement
The buyer of high grade bonds
should be concerned more with at
tanning safety of principal and
regularity Of income than with
catching the minor price swings.
AS a matter of fact, some COM
petent judges of the bond market
expect higher quotations for the
Acad nP fhA war