Evening star., 1938-01-11
NEW j. s. POLICY.
ASKED BY ALDR|CH
"Modification" Best Way to
Business Revival, New,
Yorker Says.
By the Associated Press.

6y inc ASSOClAteo tIeS8.
NEW YORK, Jan. ll.-Winthrop
w. Aldrich, chairman Of the board Of
the Chase National Bank, declared
today "a prompt and adequate mod
if1cation Of Government policy regard
ing the capital market would make a
major contribution to business re-
vival"
The banker made the suggestion in
the course Of an address at the an
nual meeting Of the banks stock
holders.
He directed sharp criticism at the
Federal capital gains tax, the un-
distributed profits tax and the struc-
ture Of Federal regulation affecting
securities.
Referring to statements he made
last October charging excessive thin
! ress Of the stock market was due
partly to Securities and Exchange
Commission rules, he declared 1.-The
adequate rectiflcation of this condi-
ton of the stock market remains one
| Of the most urgent needs of the cap
ital market of the United States"
"Helpful Interchange"
Aldrich said his discussion was Of
fered with "the hope of contributing
to the helpful interchange of opinion, -
now going on between Washington
| and the business and financial COM
munity.
Taxation for debt retirement" )"
said Aldrich, 'is source Of capital
as 1t returns capital to investors in
Government securities, who. in gen.
eral. reinvest in productive enter
prises. But for the past few years,
and even currently, this source Of
capital has ceased on balance, and
governmental bodies instead, have
been absorbing the capital Of the
country through increasing the public
debt instead Of retiring It,"
The capital gains tax "at anything
like the high rates Of the upper brack-
cts" he charged, similarly causes
the dissipation Of capital" Urging re-
peal Of the undistributed profits tax,
Aldrich asserted it has dealt a devas-
| tating blow" to one Of the most i'm
portant Of all our sources of capital
reinvestment of corporate profits in
corporate enterprise.
| The banks net earnings for 1887
were reported at sl5,0l6,494, equal to
$2.03 share of capital stock.
Perkins Sees Improvement.
Complete recovery depends on So
luton of number of problems but
already Improvement is in sight, James
H. Perkins, chairman of the National
City Bank of New York and City
Bank Farmers Trust Co.. asserted in
his report to stockholders.
| He listed as causes of the slump
stocking-up of inventories last Spring,
increased cost of production through
taxation and added wage burdens, the
ending Of inflationary support pre-
viously given by the Governments 5
deficit financing and "the effect of
existing uncertainties in retarding the
flow of savings into new industries
and private enterprise" He added:
! Wv INV AlSoAI W AAPAy, IA PIC.
senting these difficult problems, that
resumption Of the business recovery
will await their complete solution. On
the contrary, the correction of inven-
tories is proceeding rapidly in many
quarters, and 1t appears that within
short time this cause of recession
will be largely removed.
The pressure of declining volume
and profit is inducing other changes
in the direction Of greater efficiency
and lowered costs which are laying
the basis for improvement. But !
hold that these are key problems. As
progress is made toward solving them
the business situation will be propor-
tionately improved"