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Show I INCOME TAX HITS THE RAILROADS That the railroads; are facing an added burden In the income tax is the view taken by Haden, Stone Co . in their weekly market letter In which they declare that in the provisions provi-sions of the Income tax lam- calling for collection of the tax at the source i the railroad companies, as well as other corporations, will be obltped to pa Into the federal treasury an amount equal fo 1 per cent of Hie interest pa mjnts on their bond and other indebtedness The total bonded debt of 'he riilroads at the present time is approximately. 10 -000,000(00 A an average Interest rale of 4 1? per cnt on the par value, the Interest payment? annually annual-ly amount to ?15r' 000,000 The nor-; H mal tax of 1 per cent on these In-j Iterest payment will he '4 500,000 Thlv. amount wl be payable by the j railroad companies without r.coerv, except where interest payments are made on bond? that do not Include exemption to the holder from pa -j ment of tsx cn the Income, and where Interest payments are made to corporations and to aliens. The corporation tax iav. of 1909, providing payment, by practically ( all corporations, cf 1 per cent of their net profits above fixed charges has been largely the equivalent of the na Income tax law and Is superseded super-seded by the new law. The new tax. however, will Increase the aggregate ;a merits bj tb railroad companies, nasmucli as the individual company j in computing net profits under the OCw law, may deduct for fixed j charges a sum that Is eo.uhalent only to Interest on bonds outstanding equal In amount to Its Issue of capital cap-ital stock Many of the railroads have a larger amount of bonded debt 1 than capital stock, the total amount of railroad bonds in eiews of railroad rail-road capital stock being about ?2.-f ?2.-f 0(1,000,000 Thus there will, in the workings of the new Income tax, be additional deductions from profits of the railroads, rail-roads, making a hurden not large in Itself hut adding to the accumulation of handicaps Imposed during the last five or six years. |