Evening star., 1936-06-27
FLEMING REVIEWS
VITAL LEGISLATION
tearing on Bank Problems
Sketched at West Vir-
ginia ConCIaVe.
BY EDWARD T. STONE.

BY EDWARD i. STONE.
Robert v. Fleming, who plays the
buble role of president of the Amer
IAN Bankers Association and the
1iggs National Bank, reviewed legis-
ltion passed by the last Congress
thich has vital effect upon banking,
n the headline address made this
brenoon before the West Virginia
isnkers Association in session across
he State line at Hot Springs, Va.
1T has been my experience, he said"
hat in these questions of legislation
fecting banking, the proper atti-
hde for the American Bankers Asso-
Iation to take is a constructive rather
han a negative one of simply oppoS-
az all legislation introduced affecting
be interests of banks. We have had
tee and frank discussions with the
lpervisory authorities of Government
nd in many instances their support
as been invaluable. In number
[ instances. excellent Government
atistical information has been very
aiuahle in preventing the enacting
( banking legislation of an unsound
haracter.
Tax Law Most Vital.
The revenue act of 1886 furnished
he most difficult problem with which
he banks had to deal, Mr.. Fleming
sserted. Among the provisions of the
i'll was one which proposed tax
pom undistributed earnings which, if
pplied to banks, would have been
a direct conflict with the program
Undertaken by the Government to
ebuild and strengthen the capital
tructure of the banks of the country.
As far as banks and insurance COM
anies are concerned, the new law as
nally passed by. Congress eliminates
ny tax on undistributed net income.
While banks are not taxed st the
raduated scale levied against other
operations, they are taxed at fiat
ate of Is per cent of their net income.
Mr.. Fleming added that bank hold
ag companies. which are fequired by
lection 5l44 of the Revised Statutes
build up reserves m readily mar
etable securities Of either IL per cent
II 25 per cent, depending upon
fhether or not they hold bank. stock
ubiect to assessment, are allowed
redit in computing their taxes upon
lnoistributed net income for the
mounts which the Board of Gov
rnors of the Federal Reserve System
critics have been used in the acqui-
ition of such assets.
With respect to the so-called COM
non trust fund, a provision was
llaced in the law 50 that the common
rust fund is not taxed on its own
tccount or as a unit. but the partic-
pants are taxed upon their propor-
iozate share of the net income Of
he fund, thereby providing the op-
lortunity for corporate fiduciaries to
.ssist in the handling of small estates
nd legacies, the Washington banker
aid.
Other Provisions in Law.
Also, the rate of the capital stock
ak was reduced from s1.40 Per thou
W SA-OO pea bAAOOopAAAs
aspect to the tax upon dividends,
liyidends on bank shares were treated
he same as dividends of other corpo-
ations, which is at the normal rate
IA per cent. However, it will be seen
hat A. B. A. officials were able to
ecure relatively favorable treatment
n new revenue law.
Mr.. Fleming spoke of other legis-
alton of more or less Importance to
he banks, including bill that would
lave given another Government
igency new control over banks. This
cntrol was eliminated. He spoke of
he vast amount of time and thought
equired in presenting the bankers
Jews at hearings and before the Gov
rnment agencies and praised the ef-
orts of Tom K. Smith, Charles NJ.
Iylander, chairman of the A. B. A.
taxation Committee, and Robert M.
lanes. chairman Of the Committee
n Federal Legislation.
At other points in his address, he
elerred to the restoration Of conf
lerce in banks. INCREASED interest in
Iank stocks, steady paying of OF r.
>. c. stock and notes. greater latitude
egardinZ the payment Of dividends,
md the improved relations between
inanciers and the general public.
These statements coming from the
lead Of the A B. A. we're received
With great enthusiasm and he was
at
4 his address.
Transit Net OFF so Per Cent.
Net income of the Capital Transit
%. in May totaled s40,220.67 in COM
;srison with 500, ,463.37 in May, 1885,
decrease of s60,242.70, or so per
:ent. according TO the monthly state
rent just filed with the Public
Utilities Commission. Operating rev.
'nues totaled $3.50 ,S37 30. an increase
If s73 ,26996, or 81 per cent, but
Jpersting expenses required $685.
1887. an increase of S95,l3384, or
II per cent The item for deprecia-
ion was $4,000 higher than year
go, these various added costs bringing
rcome down 81 per cent from May,
.c35.
c. g. p. Phone Net Higher.
Net income Of the Chesapeake &
>ooomac Telephone Co. in May reached
he sum Of s1S6,2o4. against the lower
lgure of $l79,377 in May, 1885, the
'eport filed today with the Public
Utilities Commission shows. Operating
'evenues totaled $500, 1853, as compared
With sS59,263 year ago. Operating ex-
0enSeS were higher than year ago,
1927 487 comparing with 1888, ,095 IN
May, 1885. For the first five months
let income totaled $915 $50, far ahead
II the $Sl9,2 ,223 balance before dividends
r 1885.
Pepco Revenues Mount.
The Potomac Electric Power Co. re-
corts for May net income Of S349,-
332.S7, an increase Of 1915 per cent
oyer May, 1885. Operating revenues
for May Of 81 .055, ,6Ss 90 showed a gain
If 7.9 per cent. Total revenue deduc-
tiOnc uere heavier than In, NGay ~ tae