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Show MONEY & MARKETS By James McMullin Die Teleoasts Eiclwtlve Observer Aleut Well Street MEW YORK-Financial leaders rate it a certainty that new taxes will be enacted before congress goes home in 1938, even though It is an election year. The stock market break -will make an iw-ful iw-ful dent in treasury estimates of next year's revenues and Uncle Barn's losses must be recouped somehow. The undistributed profits tax is due to be modified, not because of the flood of protests from,busi-nejis from,busi-nejis and financial sources, but because it is a colossal flop as a revenue producer. The degree of modification, however, will probably prob-ably cause a lively battle In congress. con-gress. F. D. Ft Is understood to be willing to make concessions to young and growing corporations, also to those that are debt-ridden or in process of reorganisation. Chairman Pat Harrison of the senate finance committee wants to go much further than that in permitting accumulation of untaxed un-taxed corporate surpluses and encouraging en-couraging capital expenditures, and he will have strong support from conservatives of both parties. par-ties. A political mess is brewing In the bituminous coal commission similar to the one in the federal communications commission which impelled President Roosevelt Roose-velt to send in Frank McNInch to clean house. Senator Joe Guffy of Pennsylvania Pennsyl-vania is In the thick of the coal scrimmage. The minority members mem-bers of the commission have complained com-plained bitterly to him about the ateamroller tactics of the majority, ma-jority, but Joe is stringing with the ruling faction. John Lewis, whose representatives representa-tives are in the minority, is getting get-ting het up about it and the situation sit-uation la shaping for a head-on collision between him and the aenator. Guffey has hia eye on the Pennsylvania Penn-sylvania governorship next year. He has worked closely with Jim Farley and figures he has built up a strong enough organisation to put him across. But he may find the going altogether too rough. He will have to buck John Lewis' powerful Pennsylvania organization, or-ganization, which will be out to elect Thomas Kennedy of the United Mine Workers. He is not on good terms with Governor Eerie and Earle is a real power in the Keystone state. Most serious of all, he has lost caste at the White House. It waa noteworthy that not a single administration ad-ministration leader ralked to his support when he got embroiled with Senators Wheeler and O'Ma-honey O'Ma-honey at the close of the last session ses-sion of congress. Comment runs that, if ha can win against these handicaps, he's a genius. The Bonneville power development, develop-ment, with ex-S. E. C.-er J. D. Ross In charge, doesn't worry utility util-ity and financial leaders nearly as much aa the Tennessee Valley Authority. For one thing, municipal ownership own-ership of electric power plants is already well established in the Pacific northwest,, so there will be no eudden intrusion of a brand new threat to private utility enterprise. en-terprise. Then there is Mr. Ross' own record. He has been an ardent public ownership man for years BUT he has many times declared himself opposed to the idea of squeexing private power companies compa-nies into submission by direct government gov-ernment competition. He considers consid-ers this method of promoting public pub-lic ownership, as practiced by T. V. A., wasteful and Indefen-aible. Indefen-aible. He prefers to extend the realm of public power by reasonable reason-able negotiation. have contracts with the transport workers. And every one of those contracts is dated to expire December De-cember 31, 1938. The union has thus achieved a strategic position whereby, If its demands are not met when the contracts have to be renewed, it could paralyze practically all transportation in the nation'a metropolis at one time. This doesn't mean that there will be such a strike but the possibility given the transport workers' tremendous tre-mendous leverage in future negotiations. nego-tiations. A stock exchange analysis of trading for the 20 montha ending last August shows that (4 per oent of tha total ahare volume was in stocks selling below $30. Ths range from til to fl was the most popular. There are not many dividend payers in that price group. The evidence is that the trading public pub-lic remains more interested in gambling on price appreciation than investing for Income. No amount of regulation can change human nature. . (Copyright, 1937, for The Telegram.) Experienced observers can frequently fre-quently spot the cause of selling in a declining stock market by tha time of day when heavy liquidation liqui-dation appeara on the tape. Selling in volume between 11 o'clock and noon usually signifies signi-fies the closing out of margin ac-counta ac-counta by brokers. Undermar-gined Undermar-gined customers are given until 11 a. m. to meet calls for additional addi-tional cash coverage. If they don't come through by then their securities are aold. Substantial liquidation between 2:30 and 3 p. m. often traces to the calling of collateral loans by banks. The latter give their clients a little more leeway than brokers do. but if they want mora margin it has to be produced by 2:30 or else. Strong market pressure when tha market opens at 10 o'clock Ia likely to represent accumulated selHng orders from Europe. Heavy baying at the opening indicates foreign orders also, unless Important Impor-tant overnight news haa stimulated stimu-lated bullish domestic sentiment Now that Brooklyn-Manhattan Transit has signed with the CIO Transport Workers' union, the latter lat-ter haa aewed up every important system of transportation in New York except for the city-owned independent aubway. The two privately owned subways sub-ways Interborough and B. M. T. the elevateds, the buses, even tha leading taxicab companies, all |
