The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-10-05
TAX ON SALES
OF ALL STOCK
WILL HELP SEC
Brokers Charge One Cent
for Each $500 of
Gross Amount.
BY CHARLES II. HUFF
Times Special Writer

NEW YORK, Oct. 5.-New York
Stock Exchange brokerage houses,
as well as the Exchange itself, have
taken on new bookkeeping worries.
For the first time in its history the
Exchange has begun computing the
dollar volume of stock transactions.
Brokers are now charging sellers
of securities l cent for each $500 OF
the gross amount of such sales.
Such charges were debited in the
ledger accounts, TO appear later on
the customers monthly statements
alongside such other items as inter-
est, commission, federal tax and
state tax. The new charge is the
registration fee which henceforth
accrues to the new securities and
exchange commission.
Exchange to Pay SEC
Accordingly. the trader will pay
the broker Through deduction from
his credit BALANCED. the broker will
pay the Exchange and, eventually,
the Exchange will pay the SEC.
The brokerage office will &C
cunulate such deductions from
customers accounts until such
times as the Exchange calls for
payment. The Exchange will &C
cumulate the accretion until pay
ment becomes due to the SEC on
next March Is, covering transac-
tons to the end of 1884, and on
each succeeding March Is for the
business Of the preceding calendar
year.
The same process, Of course, ap-
plies to the New York Curb EX-
change and to all other security ex-
changes throughout the country
which have registered under the
terms of the Securities Exchange
Act Of 1884.
Discrepancy Indicated
Only in the case of odd-lot bro
kerage houses, among member
houses operating on the New York
Stock Exchange, will the fee be paid
by the brokers themselves. All other
brokers are required. by rule of the
exchange, to pass the charge on to
the customer.
This process is expected to lead to
considerable discrepancy in collec-
lions. For instance, a customer will
pay 2 cents if the gross of his sale
exceeds $500, even by only dollar
and even if his net proceeds above
commission is less than $500. But
the exchange is required to pay the
SEC, in its annual accountingS, only
one ve-hundredths of l per cent
"of the aggregate dollar amount Of
the sales of securities transacted
on such national securities ex-
change" during the preceding calen-
dar year.
Computations Unavailable
There are no available computa-
tons of dollar volume Of Stock EX-
change transactions in the past.
Only rough approximation is pos
sible.
In 1888 transactions of stocks
alone totaled 654 ,016,042 shares.
Taking the average between the
average value of S1735 per listed
share at the beginning of the year
and $25.59 at the end of the year,
which would be $21.47, the total
dollar volume would be $14,058,909,-
324, on which the SEC fee would
have totaled S281,17S. That does
not include bond transactions or
the business of other exchanges.
On a similar basis last months
business on the New York Stock
Exchange, in stocks, with trading
down to only 1883, $40 shares, and
the average value per listed share
on Sept. l at S2490, would have
taken a mere S6,292 from the pock-
cts of the traders.
Operation under SEC control was
further Signalized today by issuance
of rules by the New York Stock Ex-
change to members. One instruc-
ton was that members should not
transmit to specialists any orders
except market or limited price or
ders. The committee on bonds no.
titled members that, effective tomor-
row, all cards placed in bond cab
inets bear definite prices and that,
If a card represents a market order,
that fact may be indicated, but
other members will not be obligat-
ed 70 regard il as other Than a linn