RUMOURS OF TAX REVISION

Southland Times, Issue 23345, 1 November 1937, Page 7

RUMOURS OF TAX REVISION

Roosevelt Denies Intention EFFORT TO CURB FALL IN MARKETS (United Press Assn.—Telegraph Copyright) (Received October 31, 6.30 p.m.) WASHINGTON, October 30. The President (Mr Franklin D. Roosevelt) indirectly denied reports that the Administration was contemplating a downward revision of the taxes on profits and the capital levy. In a statement to the Press he said revision of taxation was impossible when one-third of the country’s population was “ill-clothed, under-nourished and badly housed.” He insisted that the Government’s prime social and economic objective was to increase the purchasing power of those in need. It is stated that officials, including Mr L. W. Douglas (Director of the Budget in 1933-34), have begun a series of informal' conferences with a group of leading stockbrokers at Washington, it is believed in an effort to secure Wall Street’s support of the Government’s plans to prevent further declines. Mr E. F. Gay, president of the New York Stock Exchange, in a statement said that taxes and regulations impaired the efficiency of the securities market and accordingly restricted the flow of new capital to business and industry. He issued a warning that private capital must have an opportunity to supplement Government spending if the country was to continue towards recovery. The financial editor of The New York Times states that banking circles are interested in European rumours that further devaluation of the dollar is impending, and it is believed that such has arisen from conjectures about the method Mr Roosevelt will adopt to combat business and stock slumps. The prevailing view is that the President is rather disillusioned about the efficacy of further devaluation, and while he may be receiving such counsel from some quarters it is very unlikely that it can be adopted.

The Washington correspondent of The New York Times said on Thursday that the Administration was planning further steps to set private capital in motion, including: (1) Revision of high tax on undistributed profits of corporations. (2) Modification of the capital gains levy. (3) A changed industrial policy designed to hold down production costs and prevent runaway prices.