New Braunfels Herald Zeitung (Newspaper) - September 11, 1983, New Braunfels, Texas
Sunday, Septembar 11,1983 SALegislature must tackle $1 OO million problem
AUSTIN (AP) — A HOO million problem in collecting Uses from Texas banks is an almost sure subject for the next legislative session, special or regular.
Whether Texas needs new laws or just different methods of collecting the taxes will be the big argument.
On July 5 the U.S. Supreme Court ruled that federal securities, such as Treasury bills and U.S. bonds owned by Texas banks, are exempt from property taxation.
That decision shook not only Texas banks but practically every Texas city, county, school district and other taxing unit.
Taxing banks’ federal securities is the major source of revenue from banks for local governments which live mostly on property taxes.
The legal controversy began in 1960 when the American Bank and Trust Co. and 51 other Dallas banks sued Dallas County, alleging the county was unlawfully taxing federal securities held by the banks. According to the bankers, such taxation was prohibited by federal law that said federal obligations are exempt from state or local taxes.
The Dallas district court originally held for the
county, but the Supreme Court, after three years, finally sided with the bankers.
“Statewide, the decision will reduce the annual tax collections of cities, counties, schools and other taxing entities by an estimated $100 million/’ said a statement prepared by the Texas Municipal League. “Of this amount, cities will lose about one-third.”
Some authorities said the decision might void existing state laws authorizing local governments to tax any or all bank-held securities.
Additionally, the judgment was retroactive to 1960.
After the suit was filed, some cities, counties and school districts put aside taxes collected from bank securities in escrow accounts, to await the final court decision. Others did not.
Localities that have already spent the bank tax revenue are faced now with two options, said the TML — either increase taxes or cut bade spending to pay back the banks.
The impact mainly will be felt in major urban areas, where most banks are concentrated.
The ruling does not directly affect savings and loan associations, because they pay a state franchise tax on their operations, which banks do not.
“I think that something will have to be done at the next session, whether its a special session or the 1965 regular session,” said Rep. Stan Schlueter, D-Killeen, chairman of tile House Ways and Means Committee, which would have first vote on any tax Mil considered in a special session.
“It probably will be some sort of a franchise tax for banks, collected by the state then returned on a pro rata basis to local governments,” Schlueter said. “There are some problems with that, but I think we can do it.”
While the bank tax case was going through the courts, the Texas Bankers Association backed unsuccessfully in 1961 and 1963 a proposal to remove the bank securities from taxation and substitute a state franchise tax for banks that would not apply to federal securities.
“We have not altered our position,” said Leonard Passmore, general counsel of the Texas Bankers Association. “There is no reason why Texas banks should be taxed differently from other Texas businesses.”
Passmore said if the law is not changed, some banks with extensive holdings of federal securities would have “zero renditions.”Dollar contributes to unemployment
NEW YORK (AP) - If you take great pride in the strength of the UJS. dollar, which is to say it’s superior buying power in relation to other currencies, you might not have thought the issue through.
This is especially true if you are jobless, because the dollar’s strength, so often portrayed as a symbol of economic well-being, is a direct contributor to the high rate of domestic unemployment.
This strength-is-weakness scenario is accomplished by making it difficult for American companies to price their exports competitively, and making it easier for foreigners to undercut U.S. producers in their home markets.
How many jobs? Hundreds of thousands. The Commerce Department says at least 20 percent of all U.S. jobs are tied to
exporting, and since the trough of the recession late last year net exports have fallen by $12.6 billion.
Which do you want: A dollar that continues to rise in value or one that begins to lose some of its international buying power?
lf you choose a stronger dollar you will, in effect, express support for housing and other credit-sensitive industries, because a stronger dollar might mean a continuation of low inflation and, perhaps, moderate interest rates.
If you choose a weaker dollar you will be siding with those who seek to make U.S. manufacturers more competitive in international markets, simply because a weaker dollar would mean lower price tags on U.S. exports.
GNP important as an economic indicator
By Stan Cunningham, Edward D. Jonas Cr Co
Economic indicators, as we have pointed out, are signposts which tell us the overall movement of our economy at a glance.
One of the major signposts — or indicators — is the Gross National Product generally referred to as the GNP. This is reported quarterly on an annual basis by the Department of Commerce. The GNP shows the total current dollar value of new goods
and services produced (or purchased) annually. It’s a good overall measure of our economic growth.
GNP is important because it shows the amount of direction of consumer, business and government spending and therefore helps estimate future business results. For example, if the GNP rises this would tend to indicate expanding corporate sales and hopefully increased profits. A rising GNP would be a positive investing sign, all things being equal.
There is also the Federal Reserve Board Index (rf Industrial Production. This shows the combined physical output in manufacturing, mining and utility industries. The FRB Index measures activity in the most important basic industries like steel, automobiles, industrial machinery, chemical paper products and electrical and gas utilities.
It shows us production and sales trends in the industries which produce over one-third of the nation’s income, and thus is a
There are other indicators of production trends in specific industries such as steel production, auto production, electrical power output and petroleum production. These are reported weekly. We could go on indefinitely but I feel the picture is clear. It is possible to get a clear indication of trends in almost every sector of our economy.
These, of course, are just facts and figures. They must be utilized to conclusions and investment decisions made.
I By RUSSELL STOLLEWERkB SCHRIEWER 6 ASSOCIATE!
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Water-drilling firm uses traditional means to find water
BOERNE (AP) — Hugo Schwope tips back his cap, hitches up his coveralls and directs his water “witcher” skyward, gripping it tightly in his work-worn hands.
He waits only a few seconds before, sure enough, there’s a steady inexorable pull that ends with the contraption pointing straight at the ground.
“Water,” he says confidently. “I’ve never been wrong.”
Schwope, 67, is one of about 25,000 known water “witchers” in the United States, but his “God-gifted talent” has a rather unusual twist. He drills water wells for a living, thousands of them.
“I always ‘witch’ a water well before I drill,” he declares, “and I've never, ever drilled a dry hole.”
He founded Schwope It Sons water drilling company 35 years ago in this Hill Country community, about 25 miles north of San Antonio, and it didn't take long for word to spread about his knack.
“I enjoy doing it,” he said. “You feel like if you get people water, you’re really being a big help.”
He discovered his gift, he said, during the 1962 drought that parched the local Hill Country terrain. He began with the most rudimentary equipment — a green forked wooden stick that folklorists say is directed to the water by the sap inside.
“Witching,” or dowsing, refers to the practice of
using a forked stick, rod, pendulum or similar device to locate underground water, minerals or other hidden or lost substances.
Schwope now uses a stick he bought in Florida many years ago for about $40 and then jazzed up with bits of a broom handle, plastic tubing and a “transistor,” which strengthens the rod's pull.
A six-inch vial on the stick’s tip holds whatever substance Schwope is ferreting out — water, oil, gold or silver.
“We had a guy come here out of Houston and say, ‘I’d just like to see that work once,”' Schwope said. “He put a Kruggerand under a Styrofoam cup and lined the entire road with cups.
“I put some gold in the tip of my ‘witcher,’ walked right to that one Krugerrand and made a believer out of him,” he said.
Schwope has four sons, but only one is “God-gifted” with dowsing ability, he said.
“Very few people can do it,” he said, “and a lot of people flat just don’t believe it.”
Skeptics insist that dowsers unconciously move the rods themselves, and that ifs unusual to drill a hole and not hit at least a trickle of water.
One of Schwope’s former employees, a Jehovah’s Witness, was deeply disturbed by his boss’ unorthodox method for seeking water, Schwope said.
No one knows when bull market will awaken
NEW YORK (AP) - Wall Street’s bull market is showing signs of stirring again after a summer-long snooze. But analysts aren’t certain just yet whether it is ready to wake up.
In the past few days, the Dow Jones industrial average has edged close to the record highs it reached in June.
But the latest rise in stock prices has been sluggish, for the most part, with trading volume running relatively light and only a few dozen of the more than 1,500 issues listed on the New York Stock Exchange reaching new 52-week highs.
“There has been some near-term improvement in the indicators,” Stan Weinstein, s specialist in technical analysis of market trends, told readers of Ida letter “Tbs Professional Tape Reader” early this month, “but not enough (by far) to give the ‘all deer’ for the intermediate term trend.”
the viewpoint of market-watchers who fundamentals such as the economic climate, ens important plus of late has been a slowing in the pawth of the money supply. Most agree that this has improved chances for lower in-[ rates in the months ahead.
“He said, ‘Boy, if that ain't voodoo, then I don’t know what is,’” Schwope said. “He said it was the work of the devil. He didn’t mind if I did it, but he didn’t want to be around when I did.”
Schwope said he even relied on his “witcher" when he was hired by the state of Texas to drill two water wells.
‘I told these two state engineers, ‘I know you’re engineers and you probably went to college and ;’ou probably won’t believe this — but watch,’” he said. “I ‘witched’ and one of the wells we drilled pumped 450 gallons a minute.”
References to “witching” date back to the Bible, in a passage where Moses strikes a rock with a rod and water gushes forth. It wasn’t until after 1675 that dowsing began to be mentioned in connection with witches and witchcraft.
There’s even an American Society of Dowsers, headquartered in Danville, Vermont, but Schwope doesn’t belong.
He doesn’t want to be scholarly about it. For him, it works. End of lesson.
“It’s certainly not something I think about,” be said. “I just do it. And I don’t charge for the ‘witching.’ I feel like if I charged for it. I’d lose it. If you’re gifted enough that you can do it, then you ought to do it for nothing. ”A&BHearing Aid Center
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A surprise decline in the money supply reported by dm Federal Raserva Jug! before the Labor Day
Weekly Wall Street
weekend was cited as the major force behind the advance in stock prices over the past week.
The New York Stock Exchange composite index gained 1.26 to 96.54, and the American Stock Exchange index was up 2.54 at 235.01. Big Board volume averaged 66.74 million shares a day, against 56.30 million tho week before.
Stock-market activity of lata has moderated in step with a slowdown in ilia pace of the economic recovery.
“Somewhat a ipint vehicle attempting to •uccearfuUy launch lido the proper orbit, the economy is endeavoring to slip into just the right trajectory without falling abort of the mark or overheating and burning up,” observed Las Idleman, research director at the brokerage firm of Dean Witter Reynolds Inc.
As the efforts by the Federal Reserve and other policymakers to guide it continue, be said, moat investors have “taken ta the sidelines to watch the
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