Lack of Business Capital Called a Casualty of War

The means for American businesses to raise capital, the money needed for expansion and new jobs, is a casualty of the Persian Gulf War, American Stock Exchange Chairman James R. Jones said Tuesday.

And even for the average American who doesn’t have money invested directly in the stock market, no capital formation means fewer job opportunities.

In uncertain times, both individual investors and large institutions move their money away from medium-sized firms that are likely to create new jobs as they expand, Jones told a news conference.

One way to encourage capital investment would be to reform the capital gains tax. But Jones conceded that cutting the tax investors must pay on their profits “has become a partisan issue” and doesn’t have good prospects in the immediate future.