The Western news. [volume] (Libby, Mont.) 1933-current, 1937-11-18

cites these figures to prove that
President Roosevelt's anti-utility /
policy, his policy of putting the gov
eminent into competition with the
privately owned utilities, is actually
holding back prosperity, is retard-
ing employment, is oepriving both
local and federal governments OF an
increase in the tax base. But the
President sees it very differently.
Accuse Higher-Ups
He not only believes, but has been
assured by S. E. c. officials and 9TH
ers, that it is not the operating util-
ity men who are responsible for the
log jam, but the higher-ups in the
holding companies. So his anger at
the holding companies is merely
augmented. In fact, names have
been quoted to the President Of Off
Gals operating privately owned
electric companies who would be
delighted to expand. Names of hold
ing company officials who have We
toed the expansion have also been
supplied him.
All OF which Is rather interesting
to the bystander because it seems
to him that the holding company
executives are sacrificing their all
to defend city which has already
been doomed by a flank attack.
There may be some senator or rep
resentative in Washington who be-
lieves that the holding companies,
whether they be of the public utility
| or investment trust or whatever ma
ture, will be able to survive the
present trend in taxation, but this
writer has not encountered one.
| The answer is simple. Up to last
year dividends were exempt from
the normal income tax-on the the
DRY that the corporation paying
them had already given the federal
government Is per cent of its net
earnings. Moreover, corporations
did not have to pay the full corpora
ton income tax on dividends re-
ceived from other corporations, for
the same reason.
But now there is no such exemp-
ton. Moreover. the probability is
that the corporation income tax will
be increased. So there does not
seem to be much future for the
holding company as 1t moves down
this tax chiseling line. 1t seems
| headed for extinction.
Hidden Short Sales
| Worried as they have been abou,
the recent stock market nose-dive
there is no disposition on the par
OF officials of the federal reserve
board or OF the securities and ex
change commission to put out any
propaganda about bear raids"
As matter of fact, the exchange
commission has been studying shor+
sales for q good many months
Those OF record have not been o
any great significance. But it know.
also that there are many bidder
short sales, and that there is nt
way, at present, for any govern
mental body. or stock exchang,
committee for that matter, to dis
cover the extent and importance o
these.
Normally, of course, a speculate
wishing to sell short does so through
broker. The broker, ON receiving
the order, borrows the stock from
some holder, paying certain
charge for the privilege. II tn
holder wants it back before tn
brokers' customer is willing to ''cov
err" or buy the stock SO that tn
same number OF shares may b
returned to the lender, the broke
simply borrows the stock fror
somebody else.
. Figures on this sort of trading ar
: closely followed, and this type {
short position in the market is a
J ways known both to stock exchang
( authorities and the government.
But the secret system is causin
| some concern. In such a case tn
, speculator desiring to sell loo
shares of steel short borrows til
I certificate for these shares fror
t some friend, and tells no one excer
the lender what his plans are. The
he sells that thousand shares.
looks like legitimate sale. No on
. but he and the lender knows thu
actually the Spectator. sooner {
> later, must buy 1000 shares I
! steel to replace the loan and con
! plete the transaction.
: A Helpful Cushion
: This lack OF knowledge is impo
tant. Obviously If 1t were known
! all the brokers that great man
hundred thousand shares of stoc
t had, been sold short, they woul
r know that sooner or later thes
It hundreds of thousands OF shar.
: must be bought SO that the DO
n rowed stocks could be returne,
0 That reserve buying power, so
: sreak, would have tremendous
v steadying effect on the market.
+ fact, that is one of the chief arg
r ments against the abolition of sho
/ sales. This type Of transaction is
"a ...xx Ixo1,,f,.l 1,,cb,rr xxyhnp fha ~, "a