The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-10-01

New York Bankers
Threaten Move
to Jersey.
by VINCENT LYONS
Tines Financial Editor

TIRE ogre OF taxation again mas
reared its head in New York
CITY to shake the municipalities
security as the financial center of
the nation. A tentative ruling Of
the state Tax Commission that
Wall Street bond syndicate opera
tions fall within the scope Of the
new 4 per cent tax on unincorpor-
ated business revived the threat
that financial interests might pull
I'D stakes and move across the
river to New Jersey.
A few years ago, it will be re-
caud the New York Stock Ex-
change and its many hundreds Of
members we're on the verge Of TAX
ing up quarters in the adjoining
state as a result of taxation legis-
lstion drafted by the city admin
istration. At the very last moment
before the hegira was to begin a
settlement was reached and Wall
Street remained.
The banking houses confronted
with the new levy are fighting it
on the grounds that the State
Commissions ruling would bring
about double taxation upon cor
porations already taxed as such
and which are engaged in syndi-
cate operations. The case for the
bankers was aptly stated by Isl
nore Sack. controller of the pri-
yate banking firm Of Lehman Bros.
"THE banking groups engaged
Il in syndicate operations are
not selling their own property"
Mr.. Sack pointed out. They mere
" are acting as bOokkeeper for
participants in q syndicate and as
long as the participants are taxed
there is no reason to axe the banks"
A threatened move of the in
vestment banking fraternity from
Manhattan to New Jersey is not to
he taken too seriously at the pres
ent time. In the first place the rul-
ing laid down by the state depart
ment is but tentative one, which
would indicate that the agency IS
going to listen TO the arguments
OF the bankers before the levy IS
actually enforced In fact hear
ing was conducted on the question
so that the financial interests
could have chance TO present
their case.
Suggesting openly that a whole
branch Of industry might move to
another location apparently is
more a bludgeoning device than it
is a real intention. The group max
ing the suggestion realizes that
Cognizance will be taken of its
pOsitiCa in the community once the
Nthreat is made public. From that
point forward the burden of proof
falls upon the taxing authorities.
VXTHEN an important segment
w OF business, such as the
stock market or investment bank
ing fields, threatens to quit COM
munity because of impending tax
alton it can arouse a lot of public
sympathy. Both these branches of
commerce create huge chunks of
wealth in the community by their
presence there. In addition. they
supply large portion OF the
states tax revenues.
Thus, transferring their activi-
ties to other fields would remove
an instrument of wealth. Either
the ranks of the unemployed would
be increased as a consequence or
whole families would move out of
the community. While the migra-
ton OF population might not be
relatively large the mass purchaS-
ing power represented would be Of
much Importance.
Not all of the ammunition. how
ever, is held by the protesting
group. Moving entire organizations
to another field has it financial
and physical handicaps. In large
. number of instances Office space
has been contracted for under long
term leases; a situation which pro-
hibits a transfer EN- maSSe. I'm
doubtedly the state and the bank
ing groups will arrive at a salts
factory conclusion shortly that
will obviate the necessity of a move
10 New Jersey.