Evening star., 1938-10-30
INVESTMENT men
FORESEE NEW ERA
Predict Better Financing
Chances for Smaller
Corporations.
By CLAUDE A. JAEGER.


WHITE SULPHUR SPRINGS, w.
Va, Oct. 29.-The Nations leading
underwriters and distributors Of se-
curities took home ffom their annual
convention, concluded. today, . pic
ture Of:
l. Improved opportunity for the
financing of business, particularly
smaller corporations. 2
2. A prospective new and more ami.
cable phase OF relationship with the
Federal Government.
). Early Inauguration Of . self
regulatory Nationwide association,
under Federal supervision, proponents
Of which expect It to eliminate un-
healthy practices and improve prestige
for the business.
These were high points in the adj
dresses and discussions of the four
days Of sessions Of the Investment
Bankers Association Of America, at
tended by some 100 delegates from
principal cities from coast to coAst. !
Regulatory Powers.
Concern over the increased regula-
tory powers in Washington 3as again
expressed. however, - tn preceding
conventions, Roscoe Pound. former
dean Of the Harvat aw School, told
the final session: :
To-day zeal to regulate by rules IL
carried as far in one direction as zeal
to leave everything pnregulated was
carried half 4 century ago. - The
outcome Of excessive regulation must
be bureaucratic control Of business,
presupposing it incompetent to con-
duct itself. directed toward an ulti-
mate condemning of business not
merely to regulation, but to abolition" !"
Another speaker. DR.. Marcus Nader,
vell-known economist and professor
Of finance at New York University,
counseled the bankers not to listen to
sirens from the right or the left" and
said:
If this country is to live under q
democratic and capitalistie system
modified to be sure to meet the trends
OF the times and purified Of inequities
that may exist, as We all expect it will
then the economic future of this coun-
try is bright indeed. Economic and
social progress in the United States
has barely begun"
Witter Takes Once.
Jean c. Witter Of the San Francisco
investment Arm Of Dean Witter Il Co.,
taking once as new president of the
association. in the concluding address
pledged his administration's efforts to
the Job OF reviving the investment
banking business. q task 80 close to
the crux Of our biggest national
problem"
He said 1t was important to be Ger
tain we are not working at cross
purposes with others who are Just a4
eager Is we are to get the machinery
Of new financing started" particular
ly with the Securities and Exchange
Commission. which will supervise the
new self-regulatory body Of over-the.
counter investment Arms, numbering
some 5000. in contrast with only about
l.400 members Of organized stock ex-
changes. already under 8. z. c. su-
pervision. He continued:
Il should like to put down as the
first item on our secaedule for 1885,
work with the s. e. c. in carrying out
the objectives Of the securities legis-
lation it is obligated to administer"
Earlier, Securities Commissioner
George c. Mathews and Francis A.
Bonner, Chicago investment man act
ing temporarily as S. E. c. adviser,
had told the convention the legis-
lation at the last session of Congress
(Maloney AcU authorizing the Sell
Regulatory Association Of the over
the-counter Arms. represented an
example Of cooperation between busi-
ness and Government with few his
toric parallels. The association is
being formed out Of the Investment
Bankers Conference, Inc, outgrowth
Of the old N. r. A. Code Committee.
Only important resolutions adopted
by the convention were two dealing
with Federal taxation. The first ap-
plauded the action of the last session
Of Congress in all but doing away
with the undistributed profits tax.
Some Of the association leaders said
this had permitted corporations to
plan better for the future, and was
undoubtedly . factor in stream Of
embryonic financing plans now COM
ing before the investment men from
corporations. This resolution also
urged further revision Of the tax on
capital gains (profits from sale OF
investments or property as stimu-
lus to investment.
The second resolution favored
elimination Of tax-exempt provisions
Of Federal and municipal bonds. but
opposed any method OF accomplishing
this save by amendment to the
Federal Constitution, thus running
counter to the stand taken by the
Department Of Justice that the 18th
amendment already grants the FEDERAL
Government power to tax income from
the some $4,000. 600, 900 in State and
municipal bonds outstanding.
Some of the investment men
thought An attempt to. deal with the
problem by new constitutional
amendment would be likely to defer
action almost indefinitely, and that
early action was extremely desirable
from the standpoint Of diverttng
funds Of very wealthy investors out
Of tax-exempt securities into stocks
and bonds OF industrial corporations.
But fears were widely expressed
among them that the Interpretation
by the Department Of Justice would
result in dangerous concentration OF
Federal power over the States.
Optimism Shown.
The tenor Of the convention was dis
tinctively one Of optimism. based on
the pickup In financing since suhsid-