Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-03-16
INCOME TAX SHOWS
BUYING POWER
Payment of Several Hundred
Millions Will Affect Vol
/ ume of Business.
IN l. G. ROYLE.

III u. L. hOhlAL.
NEW YORK, March 16.--Payment
of several hundred million dollars 10
the Government for income taxes up
to midnight undoubtedly has anected
the volume of business throughout the
country This effect. however, is mere
h. temporary, and the huge volume OF
receipts, running in some districts ~
per cent ahead of the sums received
year ago, gives glowing testimony as
to the high buying power of the nation
as a whole.
The year 1926 is shown undoubtedly
to have been one of the most prosper
GUS periods ever known. There is
small doubt that income tax receipts
for the year will equal or approach the
$500, 900 900 mark. The huge amount
of profits from business and invest
ments which this represents. has not
been dissipated. The public is IN a
strong financial position, and, so far
as ability to pay is concerned, the pro-
ducers and distributors have little to
fear.
Strong Buyer Resistance.
They have considerable to fear, how
ever, as to their ability to present to
buyers what the latter want. Price
advances are meeting with strong
buyer resistance. In the same general
lines some concerns are doing record
volume of business while others are
finding the going extremely hard.
This Is especially evident in the auto
mobile field.
For example, the sales of General
Motors for the last month. just made
public today, show the tremendous to-
tai Of 102 ,025 cars sold by dealers to
users, a gain of 37,054 as compared
with the corresponding period Of 1926.
the best year the concern ever has
had. In the same time 124, 426 cars
were sold by the factories to dealers.
Even the sums paid in to the collec-
tors of internal revenue in the last few
weeks are not sufficient to show the
relative size of 1926 profits to indi-
viduals. This is because such a large
proportion of the big fortunes have
been invested in tax-exempt Federal.
State or municipal issues. 1t Is no.
ticeable that the holders of the older
fortunes never have grown accustom'
ed or reconciled to paying income
taxes and consistently seek out invest
ments which are tax free. Those
whose prosperity is of more recent
years are not worried with this inhibi-
ton, and it is from these that the
larger part of the $4,000 900. 900 in new
securities, which f1nanciers say will be
offered this year, will be bought.
The business end of the country as
a whole, as. measured by bank debts,
shows that retail trade Is as strong as,
or stronger than, 1t was a year ago. In
the industrial sections employment
has increased and retail sales have
been speeded UP In consequence. In
Illinois, for example, after some
months of decline, pay rolls are in
creasing, according to the State de-
partment of labor. This Improvement
is specially apparent in the iron and
steel industries.
-Four Centers Poor.
There are only four centers listed
in the entire United States where
sales prospects for the next three
months are regarded as poor In
some of the agricultural communities
the mail order houses have reported
some check to buying, but 1t seems
this is due not SO much to lack of
buying power, but reflects uncertainty
as to the extent to which cotton and
corn paintings can be restricted and
the desire to hold some crops for a
further possible price advance.
The strong position OF live stock is
helping the agriculturists to no
small degree. In the mountain States
buying has been cut down somewhat
in some centers, but there exists no
apparent cause for pessimism. The
Pacific Coast is undoubtedly in "a
strong position, even though the lum-
her industry appears for the time
slightly unbalanced. Further gains
are in sight In the manufacturing
centers. The textile industries are
doing better, IL not well, and the i'm
provement seems likely to continue.
Manufacturers in all lines report
forward buying slow, but purchases
for current needs are on an active
basis, with further gains in sight in
many fields.