Evening star., 1925-10-10
BY STUART r. WEST.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, October 1O.-Since the
first Of the year the price appreciation
on the Stock Exchange has reached
the stupendous figure of $1,000 ,000, 900.
The average advance in stocks has
amounted to nearly SIS share. This
gives some idea of what has been go
ing on under the two-fold impulse of
investment values increasing under
low money rates, and speculative
values increasing greatly, not so much
because of the assurance of an abun.
dant credit supply. but because of
other factors. OF these the chief are
big company earnings. capital read.
justments involving either immediate
ly or, eventually larger distribution
to, stockholders, and the promise of
further tax reductions.
Interests Want Tax Cuts.
Probably the most interesting point
about the present situation, the one
which does more than any other to
throw light upon the recent Stock Eek
change advance, Is the tax outlook
The big interests in Wall street are
hoping for a tax decrea se-that is, a
decrease In surtaxes on high incomes
such as will allow them to take the
profits which have accumulated or
their security holdings during recen,
years. Heretofore they have not beer
able to do SO on account of the large
percentage demanded by the Govern
ment.
Stock Distribution Forecast.
But II the maximum surtax is cut
| say to % per cent, things will be very
different. People of a practical turn
of mind think that this will he the
signal for the biggest distribution o1
stocks Wall Street has ever known
| First. of course, shares which have
gone up in late years 100 and 20t
! points, and in some Instances a grea,
deal more. will have to be split into
| smaller units, where they will be more
readily marketable.
Then those who recall in 1916 wher
these multiplications were common
| will perhaps recollect how few were
| the instances where purcha ses of th
| new stocks turned out prof1tably ant
| how many were disastrous.
Public Little Factor i'm Market.
| The present speculation appears t.
be preparing the way for some even
| tuality like this. Unlike other bul
markets, such as 1919 and 1923, tht
public il not the big factor. This i:
| not to say that there is not a large
outside participation. But the huge
totals which are run up from day tc
| day in the favored stocks like the
| motors undoubtedly originate witt
what are known as insiders-that is
wealthy spectators who are in posi-
ton to realize what is going or
| within.
The speculative movement. OF
course, has this advantage over thai
of six years ago. In that the credi
market is opera ting on a Federal re
| serve ratio Of not quite y per cent
as against a ratio some 80 per cen1
! lower. Also there is the renewal o.
gold imports. promising to add con
siderably TO the credit base.
Gold Imports UnwelcOme.
| These gold imports. from a conserv
| ative banking viewpoint. are not a
| all welcome. since they are swellin
and already abundant reserve. bu
| they are unavoidable in consequenc
| Of the fact that the net balance. tai
Ing visible and invisible credits t,
| Eether. is against Great Britain an
that we are not buying enough Bri
| ish securities to even the account.
The talk OF possible gold imitation
however, Is not well founded. Thi
sort Of talk was one of the basis 70
| the excited rise in the Spring of 1928
a nd 1t was indorsed by men of i'm