Evening star., 1932-05-19
PLAN TO TAX BANK
CHECKS DISCUSSED
Printing of Special Stamps by
Government Urged in
Some Quarters.
BY EDWARD c. STONE.

Bankers in Washington and all over
the country are worried over the pro-
posed method of collection of the 2
cent tax on bank checks which is now
before Congress. The average bank de-
positor supposes that if the bill is
passed he will get 2-cent revenue
stamps at his bank and place cne on
each check when he draws it. Such is
not the plan.
The Government does not propose to
print stamps for the checks, but the bill
would place the burden on the banks
of keeping the great amount of extra
bookkeeping in collecting the tax. 1t is
estimated by local bankers that keeping
records of the 2 cents due the Govern
ment on every check will add to the
bookkeeping departments operating
costs by at least 5 per cent.
The plan as now before Congress calls
for the 2-cent tax on every check, draft
or order for the payment of money.
drawn upon any bank, banker or trust
company. The tax would be paid by
the maker or drawer and collected and
returned to the Government by the
bank or trust company upon which the
check is drawn, the amount of the tax
being charged to the account of the
drawer or maker of the draft or check
by the bank"
Heavy Bookkeeping Costs Seen.
Right here is where the trouble
comes. Either every : cents must be
recorded on the cay each check comes
in or each depositor's checks must be
locked over at the end of every month,
the total tax on the account figured
and recorded and, Of course. placed on
each depoSitor'S account and deducted,
so his account will balance.
The total for all the accounts must
then be summed up and the tax sent
to the Government. The banks feel
that the large amount of extra work
In keeping each individual account, as
we'll as making the collections, VIII
mean an unfair burden and one that
should be avoided.
The way out, bankers said today, is
for the Government to print the reve-
nue. stamps Each bank will then have
a supply of the stamps, which they Will
sell patrons The person drawing
check will then place a revenue stamp
on it and all the bank will have to
do is to see that every check has the
stamp.
It is claimed by sponsors of the check
tax proposal that it will bring in $685.
100000 a year to the Treasury. Bank
ers think the estimate is a bit high, but
are not arguing that point. They real
ize that the budget must be balanced,
that every one must share in the extra
burdens of added taxes, and are not
strongly opposing the levy on checks as
method of boosting revenue totals
Method Employed in 1898.
The mere mechanics involved in the
collection of the tax are what has
caused the present stir. If the Govern
ment will use fractional part of the
expected sos 100000 in printing revenue
stamps for the checks the banks will
not have to worry so much about addl-
tionaI overhead costs.
Some extra trouble cannot be avoided.
People will often be out Of stamps when
they draw checks. In such cases the
checks must be returned, at a cost much
larger than the cost of the stamps or
entered on the books and the cents
charged to the depositor's account.
Where corporations have large &C
counts, the banks can have the stamps
printed on the blank checks and charge
the tax up against the customer. But
in cases where a customer wants book
with perhaps 800 blank checks, he will
be surprised when told it will cost him
S6 for stamps. AS most people have no
idea how many checks they are likely
to use in a given time, the individual
stamp idea works best. At least, it did
in 1898, when the tax was last in oper-
alton.
Railroad Earnings Still Down.
March net loss of Southern Railway
Co. was S675,860 after taxes and
charges, comparing with net less of
$248 098 in March, 1881.
For quarter ended March 81, 1882,
net loss was S2,787, ,473, after taxes and
charges, against net loss of S1,53e,187
in first quarter of previous year.
March net income of Atlantic Coast
Line was s170,570, after taxes and
charges, comparing with 81, l,422, ,709 in
March, 1881.
Net loss for three months ended
March 81, last, was $119,54 after taxes
and charges, against net income OF
S2,861. .463 in first three months Of 1881.
March net loss of Seaboard Air Line
Railway was s562,069 after taxes and
charges. comparing with net loss of
$l81.116 in March, 1881
Net loss for quarter ended March 81,
last, was S1,976,452, after taxes and
charges, against net loss of S1,16l, ,735
in first quarter of 1881.
Short Sellers Being Classified.
With a view to obtaining information
relsting to the geographical distribution
Of the short interest, the Committee on
Business Conduct of the New York
Stock Exchange has requested members
Of the exchange to report as of the close
OF business tomorrow the number of
their accounts in which there is a short
position, and also the number in each
State in the Union and in each foreign
country. The report must be submitted
not later than the succeeding Monday
The purpose of this move is to sup
pert the claim made by President Whit
neT of the Stock Exchange that the
short interest is scattered throughout
the country and not concentrated in
New York
Exchange members are still compil-
ing daily reports on fluctuations in the
short interest as has been dcne since
September.
Cleaned in Financial District.
Washington Gas SIS figured in a 81 900
sale at 1902 on the Washington Stock
Exchange today and two 81 900 sales in
Washington Gas 6s, series A, were re-
corded at 89&
The Treasury will sell another S6G,-
900 in 81 day bills on Monday next
The bills will be dated May 25 and ma
ture on August "a. the income 10 be
used in retiring a similar Issue due in
few days.
President Hoover has signed the pill
requiring all locally incorporated insur-
ance companies to maintain their
principal Offices in Washington. The
bill was sponsored by the District super
intendent Of insurance in order TO give
him access to insurance company rec
ores.
Roger B. Hull. who addresses the Dis
trict Under writer's Association tomOr-
row, was an active figure in the National
Underwriters Convention held here in
1928 He was formerly assistant at
torney of Porto Rico and special as
sistant to the Attorney General of the
United States
The American Stores Co. has declared
the regular quarterly dividend Of so
cents per share, payable July l to stock