Evening star., 1938-04-06
Wall Street
Topics
BY FREDERICK GARDNER,
SNclated PreSS FlManClal Writer


growing steadily louder since 1882,
have resounded as central theme
through many corporate reports and
management statements the last few
months. Hardly any of the compre-
hensive reports put out by major cor
porations fail to harp on taxes and to
cite figures to emphasize how large
the Governments take has become
Business. 1t appears from annual
reports and comments in stockhold-
ers' meetings, has become acutely tax
conscious, the more so because i'm
provement in earning power and the
surplus profits tax in 1886 and 1887
revealed the scope of changes made
by tax bills the last few years
Typical of the detail some COM
panleS have gone into in laying the
tax picture before stockholders is the
analysis presented by American Water
Works & Electric Co, a big utility
combine, in its 1897 report.
American Water Works and its SUBJ
sidiaries, the report says. had a tax
bill Of $500 600. equal to So "a share
on the outstanding common stock. or
nearly three times consolidated earn
lngs available to shareholders after
payment of taxes
1T represents" the report continues,
1880 for each permanent employe of
the company and its subsidiaries. It
represents IA cents Of every dollar of
revenues Of the system 1t is 40 per
cent of the systems general operating
expenses.
1T is not much less than the So
100000 Of interest paid to owners OF
bonds and other indebtedness of the
system during the year, representing
a principal amount of Sl85,0OO.O 900.
1t is more than the S69OO,OOO of divi-
dends paid on preferred stock of the
system outstanding in the hands of
the public, representing par value
of over slo7,o00.0Oo.
Nor do some corporation managers
seem hopeful of an early change in
the trend, although the tax revision
bill now before the Senate has drawn
favorable comment in financial circles
as possible hint Of turn.
The trend of taxes is still upward"
adds the American Water Works re-
port. Total taxes of the system
charged to expense in the year 1882,
while on somewhat smaller taxable
net income. amounted to approxi-
mately s3,50o,Oo0. There has been
steady increase in each year since
1892 to the present figure of s7,2O0,-
000.' Not including 100000 charged
20 other than the consolidated income
account)
Social Security levies, it reminds,
are due for further boosts in the next
few years.
David Sarnoff, president of the
Radio Corp. Of America. tWanged on
the same tax theme in the annual
stockholders meeting yesterday, point
ing out R. c. AS 1887 taxes, including
$l,531 .461 collected for the Govern
ment in excise levies. equaled 42 cents
share on the corporations 1881 900
shares of common stock. That was
about what R. c. A. earned last year
for the common, he noted.
Thus tax complaints from business
are making the rounds of the hun
dreds of thousands of stockholders in
leading American corporations.
Biggest of the tax figures presented
to shareholders lately was the $467,-
100000 Myron c. Taylor, retiring
chairman Of the United States Steel
Corp, reported "big STEEL paid to
Government from January /, 1928, to
December, 81, 1887. BY way of
emphasis, the tax figure stacked up
against S472, 100000 in dividends dis
bursed in the same period, as Taylor
recorded steels income and outgo.
Another familiar note of the times
to financial observers, considering the
worldwide trend toward economic ma
tionalism, was Sarnoff's disclosure R.
G. A. has disposed of its holdings in
the British-controlled Canadian Mar
conf Co. to the British Gables & Wire
less, Ltd. as part of program of con-
centrating investments within the
United States.
R. c. A. has been selling its foreign
investments for several years. Ap-
parently this has been due partly to
opposition abroad to foreign participa-
ton in communications companies,
vital in war and trade In the post
war decade British concern over en-
croachment of American capital in
English companies increased until the
1929 collapse in Wall Street choked
off the flow of capital abroad.
Meanwhile, adventures of Japan on
the Asiatic mainland. European war
scares, the Spanish war, political up
heavals in South America, Mexican
appropriation of foreign investments
and efforts to build home industry all