Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-23
TAX PLANS PROVE.
TEMPORARY CHECK
ON STOCK MARKET
Chance for Passage Fades.
Program Regarded as
Strategic Move. .
MODIFICATION OF BANK
AND UTILITY BILLS DUE
Social Reform Measures Regard
ed as Inevitable, but Opera
ton Expected to Be Slow.
BY CHARLES F. SPEARE.

BY CHARLES F. SPEARE. y
Special Dispatch to The Star.
NEW YORK, June 22.-The Presi-
dents tax message, asking such a
comprehensive array OF taxes to be
levied on big fortunes and big bust
ness as to suggest a purpose to bring
about some measure of redistribution
of wealth." took the financial and
business community by surprise.
The move came as surprise for
two reasons: First, because the budget
message of last January foreshadowed
no such purpose; second, because it
had been assumed that the admin
istration would now be content to give
business a breathing spell, save for
the measures lined up for congress
Sional action prior to this week.
The suggested tax program is
drastic, particularly as 1t is aimed to
take 8 sliding scale Of levies from
corporations according to their in
comes, and therefore put a penalty on
size. The financial community also
found cause for alarm in the pro-
posal to tax holding companies out
of existence by imposing stiff levies
on dividends received from operating
companies.
The inheritance and gift taxes pro-
posed follow a trend that has been
noted in Great Britain and are not
such a threat to business. save where
they may so far exceed the cash
estate as to force drastic liquidation
to meet the cash demands OF tax
collectors.
But the Presidents program is prob
ably the maximum that may be feared
by business. A great deal will depend
upon the attitude of Congress, and
there is room for doubt as to the tax
plans passage at this session. Per-
haps back of 1t there is a bit of
Strategy-a hope that Congress will
bend more readily to the work it al
ready has at hand If it may be per-
mitted to kick over the traces on the
newly task.
Shares Trend Reversed.
The irregular advance in stocks was
checked and turned into temporary
recession by the tax message. One
of the reasons for the previous upturn
was the prospect Of an adjournment
Of Congress within the next month.
Another was the disclosure of the
assistance furnished by the United
States Treasury to France in her re-
cent financial crisis and the implica-
ton that this was move in the
direction of sterilization in which the
United States had taken the leader
ship. 1t Is more than ever obvious
from this incident that nothing will
be done by Great Britain until her
own position is threatened by what
may happen in the money centers
of the continent.
Before Congress finishes its work
for the session-even If it balks on
taxation-it must pass the admins
tration's social reform measures; also
the public utility and banking bills.
The first group is generally accepted
as inevitable, but as it does not, as a
whole, come into action for a con-
siderable period of time, it is not re-
garded as so menacing to business as
when it was originally proposed.
1t Is probable that some modifica-
lions of the utility and banking bills
will be made, though insufficient to
satisfy the group that has been OPP
posing them. The greatest relief
from an adjournment by Congress
would be derived from its postpone
ment of any further infiationary leg
islation of the type that was pretty
well squelched in President Roose-
velt's veto of the bonus bill.
A six-month period of rest from de-
bate on measures of reform and re-
covery at Washington would give bus
mess an opportunity to regain its con-
fldence and give the administration
the time and the mood to bend all its
efforts on the execution of its $4,000
000,00 relief program. The delay in
getting this to function and the
changes of plan that have followed
its conception naturally arouse dis
trust of it and of its ability to do for
unemployment what it was advertised
to do. The administration is, how
ever, entitled to the public's support
of this program, which includes re-
spect for it as an effort in behalf of
those who sorely need assistance and
not as one primarily set up to aid in
political organization.
The most satisfactory element in
the business situation is the fact that
progress is being made in spite of the
ineffectiveness, to date, of the various
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