Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-19
BILL PROVIDES TAX
ON MARGIN SALES
Mcleod Measure Would Make
Levies From | to so
Per Cent.
By EDWARD C. STONE.

Representative Clarence j. Mcleod
yesterday introduced a bill in Congress
to provide tax on the sale on margin
Of corporate securities, in an effort to
slow UP or discourage this class OF
trading on the New York Stock Ex-
change. The bill would levy tax
ranging from so per cent down to !
per cent depending upon the amount
Of margin involved in the transactions
According to the terms of the bill, for
each dollar or fraction thereof OF the
purchase price, an addition tax would
be levied as follows:
where the margin furnished by the
purchaser does not exceed 10 per cent
OF the purchase price, cent on the
dollar.
purchaser does not exceed 90 per cent
of the purchase price, cents.
where the margin furnished by the
purchaser does not exceed 60 per cent
Of the purchase price, cents
Where the margin furnished oy the
purchaser does not exceed 90 per cent
of the purchase price, z cents.
Where the margin furnished by the
purchaser does not exceed 90 per cent
of the purchase price, 10 cents.
Where the margin furnished by the
purchaser does not exceed As per cent
Of the purchase price, Is cents.
Where the margin furnished by the
purchaser does not exceed 40 per cent
of the purchase price, 20 cents.
Where the margin furnished by the
purchaser does not exceed 35 per cent
of the purchase price, 80 cents:
Where the margin furnished by the
purchaser does not exceed 80 per cent
of the purchase price, 40 cents.
Where the margin furnished by the
purchaser does not exceed 25 per cent
Of the purchase price, so cents.
Explains Purposes of Bill.
REPRESENTATIVE Mcleod explained the
ralrpose of the bill today, declaring that
il would not interfere with the real
function of the stock market He De.
lieves the tax would do away with wild
speculation in stocks, as 1t would make
trading on small margins Improbable:
1.-The ease with which stocks can be
purchased on small margins encourages
imitation of the stock market. Innatlon
of the stock market encourages furtner
sueculation. Large speculation creates
an abnormal demand for call money,
which money is drawn away from
normal business pursuits and top-heavy
financial situation Is built up, Wnlcn
results in panic when dehation begins.
My bill discourages margins OF less IMAM
so rer cent. Any one can appreciate,
An, sure. that If all the buyers OF
stocks either own their stocks outright
or have them on margins in excess OF
so per cent q temporary drop In the
market viii not cause panic In SELF
ing. The rule of conduct which BenJa-
min Franklin laid down for himself
before this country became an indie
pendent Nation is still true guioe.
He said:
ind,,striollslv to whatever business
take in hand and not to divert my
mind from my business by any foolish
project Of growing suddenly rich, Tor
Industry and patience are the Surest
means Of plenty
lone of the important functions Of
Government is 70 encourage sound busi-
ness and that is what my bill does"
he said. =
Local Dividends Declared.
The directors of the Security Savings
q Commercial today declared the reg
ular quarterly dividend of 4 per cent,
payable March 81, to stockholders OF
record March as.
The directors Of the United States
Savings Bank have just declared a
regular quarterly dividend OF 71s per
cent, which is payable on March 80.
Directors Of the American Security
& Trust Co. voted the regular quarterly
dividend of 3 per cent at meeting
late yesterday. The disbursement is
payable April 10, to stockholders OF
record March 81.
At meeting yesterday afternoon the
board of directors of the Merchants
a ~ he
regular quarterly dividend of SITS per
share on the company's preferred stock,
payable April to shareholders Of rec
ord March 81. The books will be closed
from March II TO 81 inclusive.
virginian Bond Issue Out.
The National City Co.: Lee, Higgin-
son & Co., and KisSel, Kinnicutt g. Co.,
are offering today at 81 and interest,
to yield about 468 per cent, $5,000,000,
the Virgfnian Railway Co. first mort
gage 50-year AZ per cent gold bonds,
series b." due May /, 1862. Proceeds
from the sale of the bonds will be used
to reimburse the company's treasury for
capital expenditures already made.
The bonds are secured by direct first
mortgage on 504 miles of road extend
ing from Deepwater on the Kanawha
River w. Va, through the Pocohontas
and New River coal fields, east to
Sewall's Point, on Hampton Roads, at
Norfolk, Va.
Upon completion Of present financing
$50, 344 900 bonds Of total authorized
amount of SIS 100000, will be outstand-
ing, represented by $55,344.000, series
"A" S per cent bonds, and the present
issue
Bond Men Here Are Rejoicing.
Local bond statesmen and all others
dealing in senior securities are rejoicing
over the present bond trend. The Feb
ruary bond index showed a substantial
advance and recent bond markets have
displayed much flrmness and good adj
vances. The February improvement
represents the recovery OF more than
half the loss suffered during January,
which was due in large part to the
wave Of new financing.
The dominant movements of the bond
market for the past Is years may be
realized by comparison of the February,
1880, index numbers with those of jan
uary; the 1929 high in January; the
1929 high In April; high In December.
1927; high in December, 1926; high In
June, 1925; high in November, 1924;
low In October, 1923; high in Septem-
Der, 1922; years low in June, 1921:
record low Of May, 1920: low of 1919
in December; low in 1918 in September;
hlgn OF 1917 In January; low Tor 1916
In August; low figures recorded In Feb
ruary, 1915. and December, 1914.
Local Market Active Today.
The Washington Stock Exchange
= %howed fairly active trading today, the
Carpet Corporation stock taking the
lead in volume.
The stock opened at 1914 and closed
UP to 23%, the days turnover being 240
shares Four 50-share blocks changed
hands and 40-share lot after call. The