248 The Stock Market Crash—And After 
prevent the purchase of speculative values on 
credit.” 
Such a policy, Mr. Cahill asserts, would stabilize 
security values on a basis where their purchase price 
bears a direct relation to earnings. He believes it 
would regulate credit to a point where a 25 per cent 
margin would be sufficient, ‘because based on actual 
and not on fictitious values.” Mr. Cahill declares 
that he is not sure whether this would do away with 
speculation entirely, but that it would quite definitely 
“prevent rash speculation with borrowed funds.” 
Proposed Basis of Value on Margins 
Yet another suggestion for stabilizing the market, 
is that of Mr. Fred I. Kent, Director of the Bankers’ 
Trust Company of New York. Mr. Kent recom- 
mends: 
Create a joint committee of the New York Clear- 
ing House and Stock Exchange, whose duty it should 
be to develop a basis of value upon which margins 
for stocks should be figured from time to time on the 
principle of net earnings to price, which would repre- 
sent interest returns, and having due regard to cur- 
rent and near-future money values, and in the case 
of new issues, on clearly defined prospects.” 
Proposed Repeal of Capital Gains Tax 
Mr. Kent makes four other suggestions, the first 
of which is “Legislation removing the Federal Tax 
on capital gains, also that in New York State and 
any other state where such a tax may be in force.”