The work of the Stock Exchange

Bibliographic data

Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

614 APPENDIX as before. The real burden here falls, not on the parties to the trans- actions, but on certain outsiders. “Who are these outsiders? In the first place, they are apt to be the smaller capitalists who have borrowed on securities and who are less able to endure the losses resulting from excessive declines in value than are their larger brethren. In the second place, since the tax increases pro tanto the expense of transferring securities and thus diminishes the mobility of capital, it is likely to increase, even though slightly, the rate of interest. If, however, the rate of interest rises the capital value of the securities will decline. We would thus have a kind of capitalization of taxation somewhat comparable, although not in degree, to the capitalization brought about by a tax on the securities themselves. If, however, instead of dealing with a new or suddenly increased tax on stock-exchange transfers we have to do with a long and well established tax, the net results will obviously be that when the securities are initially listed on the exchange they will fetch a price somewhat lower than would be the case were there no tax on the stock-exchange transaction. The real losers, therefore, will be the bankers who float the securities; or, still more likely, the corpora- tion or enterprise which has arranged with the promoters to under- write the issue. The ultimate result will be a slight falling off in the profits of the stockholders in the industrial and other enterprises whose securities are listed on the exchanges; and to the extent that the issues consist of government bonds, a slight increase in the public expenditures, which is, of course, far more than compensated by the proceeds of the tax, when the same government that issues the securities also imposes the tax. Thus here again we see that the consequences of a tax are frequently quite different from those that are expected or intended.” Again, in “The Effect of Taxation,” in the Political Science Quarterly for March, 1923 (p. 23), Professor Seligman stated: “The indirect consequence of a tax may be far greater than the direct effects. An excessive tax on business enterprises may not only cut down business profits but lead to such a reduction of employment and wages that it will be borne by classes of the community far removed from the direct taxpayers. A tax on stock exchange securi- ties by hindering the free speculative movement may cause a widening of the upper and lower limits of stock quotations so that when the new securities are initially listed they will fetch a smaller price. This will obviously cause the bankers who underwrite and float the securities to make a bargain more unfavorable to the corporation or enterprise in question. When we are dealing with private issues

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