Evening Star Newspaper, September 25, 1921, Page 43

EDITORIAL SECTION S unday Star. 1921. EDITORIAL PAGE NATIONAL PROBLEMS i SPECIAL ARTICLES" WASHINGTON, D." C., SUNDAY MORNING, SEPTEMBER 25, Authority to Fund Allied Debts F rom Coming Conference on Arms g BY N. 0. MESSENGER. RESIDENT HARDING came back to the capital from hie altogether too short vacation to be received &vith acclaim by an eagerly waiting throng of officials, statesmen and rank and ‘file gen- erally. It would have seemed by the way they pounced upon him that in- deed, as the poet said, “absence makes the heart grow fonder.” From the en- thusiasm of his welcome he might well have wondered how the govern- ment and the country managed to get along without him those ten days or so. His desk piled high with official papers awziting his consideration; a veritable bread line of folk seeking personal appointments with him and statesmen with furrowed brows anx- jous to talk about deep affairs of public policy soon must have driven from his mind the last lingering mem- ories of calm nights on.the quarter- deck of the Mayflower and peaceful « afternoons on the golf links of the va- rious ports of call. From the zest with which he re- sumed his official duties it might have exuberance of spirit over the confer- ence. . They realize that the resuits In limitation of armaments must nec- essarily be limited and doubtless fall short of overzealous expectation. They know also that one feature of the meeting will be very practical dealings with great questions of ter- ritory and ‘commercial advantage; that international flance will enter largely and that diplomatic finesse and stratesy will be employed in a game where the stakes are heavy. L N A Some of the higher officials of the sovernment do not wish that the impression should -get abroad that upon this conference hangs the fate of the world and that failure to score 100 per cent of the expectations of the public will spell disaster.to the TUnited States. Such is not ‘the case by any means. in their estimate. Good will be accomplished beyond peradventure, but not the révolution of mankind or the ways of the world. i s0 call it. do not lend themselves to |ments of senators upon their countries and policies. * ¥ x The Senate will have to be in the limelight until October 4, as ‘the House, by a gentlemen's asremen!‘l will take recesses of three days' dura- tion at a time until that date. This means that the attention of the coun- try will be focused upon the upper chamber and its speed or delay in handling 'the ‘important legislation awaiting action subject to constant notice by the people. This prospect does not dismay the Senate, however, whose tradition might be paraphrased 2s “Don’t hurry me.” In fact, experi- ence has shown that the more mel Senate is nagged the slower it moves. That sense of security in office arising from a six-year term is a powerful sedative. * ko The political leaders in the admin- istration "take note of the fact that politically things seem to be break- ing favorably for the republicans. The election of Senator Bursum in To the United States will accrue its! proportion of whatever benefit re- | . suits, and in case of short measure— New Mexico was hailed as a dem- onstration of genuine support of the And the European Crisis By FRANCESCO NITTI, Former Premier of Italy. The economic conditions of Europe have grown steadily worse dnr- ing the last two years, after the armistice and the proclamation of peace, and it cannot be said that the moral conditions have improved. The most characteristic facts of this peace, which in reality is a continuation of the war, may be summed up as follows: 1. Europe has now, on the whole, more men under arms than before the war. The vanquished states have been forced to- disarm, but the victors have increased their armaments. This is especially the case with the small states and countries which have come to life as a result of the war. Some of these upstarts, as, for instance Poland, have, by their at- titude, become a permanent source of danger. > 2. Production, on the whole, is scarce and progresses slowly, because everywhere, although in difterent proportion, the working masses are less inclined to work while demanding higher wages. 3. The difficulties of trade and exchange, instead of decreasing, are actually augmenting, and international commerce rallies but slowly. No trade relations even distantly comparable to those existing before the war have as yet been established among the states of Europe. Com- paring the values of today with pre-war values, we find that products now constituting the foundation of trade'between the varlous European states are not even 50 per cent of what they were before the war. * K % K As only the wish to consume, if not the capacity for consuming. has greatly increased, while production has greatly diminished, and all the states have enormously increased their functions. the discredit of paper cufrency and government securities is in all Europcan countries, although in varying measure, tremendous. Some absurd situations have arisen in Europe. The victors, having succeeded in forcing the vanquished to ad- mit in the peace treaties that they were exclusively responsible for the war, now think themselves justified not only In stripping them of all they possess—colonies, shipping, credits, property and organization abroad— but also expect them to pay for all the damages caused by the war. The BY SHELDON 8. CLINE. 1 ASSAGE of the bill giving the Secretary of the Treasury au- thority to fund the debt owed this government by the govern- ments of Europe is rapidly coming to be recognized as one of the things most necessary to the return of pros- perity. Uncertainty as to the SuK\I!! of eleven billlons of dollars, most of it in the form of demand or overdue jpaper, hangs like a black cloud over every financial center in the world. Financiers are almosy a unit in agree- ing that until something like a settle- ment of this problem is in sight there can be no stability in the foreign ex- change situation, and until foreign ¢x- change is made more stable the rest| of the world is not going to buy any American goods it can get along with- out. After exhaustive hearings before the Senate finance committee, the funding bill now Is before the Senate with a majority committee report favorable to Its passage and an adverse minor- ity report signed by Senator La Fol- lette and five democratic members of the committee. The majority report fa- P a Necessary to Prosperity of U. S. is liberty loans; $8,168,- 687.29 on relief administration sales; $10,929,130.39 on sales of surplus war materials, and $1.886,795.09 on sales by the grain corporation. * ¥ % % Under existing law the Treasury has no authority to fund any part of this debt except the loans made from the proceeds of liberty bonds. For loans made under the first liberty bond act it may accept bonds of the borrowing nations, maturing not later than June 15, 1947, and for loans made from subsequent liberty issues the maturity date shall not be later than October 15, 1938. There is no authority in law for deferring pay- ment of any interest charges nor for | deferring payment of the principal | of {pdebtedness due for the purchase of surplus war materials, relief ad- ministration supplies or grain cor- poration flour. The Treasury has no | authority to do anything but insist upon prompt payment, and when the debtor nations are unable to make payment, this government has no al- ternative but to hold them in default, bond problem if the best interests of the government and of the American peo- ple are to be conserved. No man is wise enough to foresee what conditions may have to be met, and to tie the hands of the representatives of the Treasury by restrictions or advence instructions would be to place them at a disadvantage when it came to negotiations with the representativ of other goyernments who had wide latitude of action. If there were no interested parties in each case except this government and the government which owed it i money, the problem would not be o difficult, but unfortunately this is not the case. Take Italy, for example. The United States loancd Italy §1,648 034,050.90 out of the proceeds of erty loans. It loaned Great Britain more than four biilions and Fran nearly three billions. But Great Brit- ain and France turned around and re- loaned to Italy a considerable part of the sums they borrowed from the United Sfates. So, not only are the on well, the government at Washington will still live and the United States will pursue the even tenor of its way. President Harding feels very com- fortable over the personnel of the been inferred that work was his mid- dle name, and, after sli, the king. of £ports. * % % * The President is in for a strenuous &cason in the coming weeks of the ali, and by the time that is over and the last of the Thanksgiving turkey has turned to hash he will be en- countering the regular session of Congress with a rush of public busi- ness that will last well into the ap- proach of the next congressiona! elec- tions. It may be that “there is mno rest for the wicked.” but that class can at least comfort itself by the thought that neither is there relief for a good President. * In high official quarters considera- tion is being en the state of pub- feellng over the coming confer- ence on the limitation of armament. The query is arising whether the peo- * nle are not keying themselves to a * ter and pray for the success of dis-| v LR } ; * member of the finance committee, and feverish pitch of tension over this approaching cvent. Reports are read of the proposal ih many sections to mizke the assembling, day aimost a, religious occasion: churches are to be open and the public invited fo en- Some ele- intend to armament the world cver. ments of the population Thold paradcs by way of solemn pro-' 1est agalist ‘the means of making war. ‘From'1iese foreeasts it might be assumed. that the country is ex- pecting a millennium of peace to suc- ceed the chaotic conditions of the present and the sinister forebodings of the future of world affairs. In contrast with this feverish tem- peramental display of the public is the attitude of the State Department and the diplomatists of this and other countries at Washington. These dis- passionate and cold-blooded gentry accustomed to recognize a spade and United States delegation to the con- country has as ‘'many high cards in ness of its delegates as any other. Senator Oscar Underwood, the demo- crat, has made a great hit by his jeordial expression of sympathy with |the aims of the conference and his intention to be all American and no |partican in dealing with the interna- {tional questions which are to arise. ERE President Harding, the day Congress reassembles from its month's recess, plumped the peace treaties into the Senate. Senator Lodge, the répub- lican leader in that body. strolled into nounced and had audience with the President in advance of the appoint- The Presi- i i ments made for the day. action on the ‘treaties should be ex- pedited. and he stated his determina- tion to push them as rapidly as pos- sible. Statesmen:and politicians recognize the embarrhassment which might arise if there should be partisan or factional debate over the peace trea- ties, bringing in collateral questions of relations with foreign countries, the {While tiie delegates to the conference {are on the scene. Whether the trea- ties are considered in open executive foregone conclusion that the public will be daily informed of the trend of the debate, especialty should it be ac- rimonious. and the visitors will read the public prints outspoken co; ference and is standing pat on his jté® had built great hopes upon re- hand in the game. confident that this jducing the normal republican major- the way of personal ability and fit- | ceeded, although they had net hoped the White House that morning unan-} ! dent apprised him of his destre thet | attitude of exercising overlordship of seéssion or behind closed doors, it s a|p; administration by the voters. Prior to that, an election in Iowa for the House of Representatives to fill the vacancy. caused by the retirement of Representative Good had given the republicans great joy from the fact that the democratic national commit- ity in that district, but had not suc- to carry the district. * x % % The republican effort from now on will be to hold the support of the electorate a year from next Novem- ber, when nation-wide opportunity will be given to indorse or rebuke the party in power, in the congres- sional elections. The . republican leaders feel that the tide is running with them now in practically the same volume which swept them into power and that their chief responsi- bility is to see .that no unwise leg- islation shall check it. * Kk k¥ President Harding resents sugges- tions which would place him in the Congress or driving the “leglslative body. He scrupulously avolds giving ground for any such intimation. But as titular head of the party he is interested in the succéss of the party. At_present his concern over legisla- tion is based upon Migher'thdd’ polfti- cal considetations,” Howevér. As President of all the people, he is in- terested in the passage of the bills proposed for the public good, the rail- road bill, the foreign debt funding Bill, the new tax bill and the tariff The President, it is sald. can ex-) press his solicitude for these meas- ures to the statesmen on the hill without being open to the charge of interfering with a co-ordinate branch of the government. war must be pald for by the losers, since they have recognized (if even against their will and under pressure) that they alone were responsible for the bursting of the world conflict. | This point of view is now regarded as a fundamental canon of for- eign policy. The less it appears founded on truth the more it is repeated as an undisputed fact in all lectures on the war. The morale of the vic- vors passage of the bill as drafted by the Treasury with a single anfendment, the amendment providing that the au- thority granted by the measure shall terminate at the end of five years. a situation which Is intolerable from the standpoint of international amity and not less unfortunate in its ef- fects on exchange and foreign trade. * % ¥ Ok It was to place it within the power of the government to correct this unfortunate situation that the fund- ing bill now pending in the Secnate was drafted by the Treasury and sub- United States, Great Britain and France joint creditors of Italy, but the United States has a direct interest in the sums Italy owes her other credi- tors, It is only reasonable to suppose in such circumstances that there would be joint negotiations with Italy for the purpose of arriving at a plan of tors appears to have sunk to a lower level than that of the ideas attri- buted to the aggressors. * % % * Austria, Hungary, Bulgaria, Turkey cannot pay a farthing and are rather in need of help and assistance. The quarrel rages around Germany alone. Unarmed and helpless before France, the ally of Belgium, now no longer neutral, and of Poland, imperialistic and provoking in spite of her poverty, Germany should be made to settle the whole bill of the war. A country which has already given up her colonies, her shipping and all her foreign credits can only pay an indemnity. abroad if her ex- ports exceed her imports, unless, indeed, she be expected to confiscate the property of private citizens to hand it over to the victorious states. Germany must maintain an army of occupation on the Rhine and support the expense of numercus military commissions and controls, which means that she must defray every year the expense of a large army though no longer having an army of her own. Before the war imports and exports were about equal, with the ex- ception of the trade in precious metals and bulllon. In 1913 imports were in excess of exports, and in 1914 exports. were 673,000,000 below imports. Making every allowance for all the causes of error in customs house sta- tistics and for other. motives well known to economists, by which export trade generally appears to be inferior to import trade, the fact always on the part of a country, unless it be obliged to reduce its capacity for remains that it would be absolutely absurd to imagine permanent tributes on the part of a country, unless it be obliged to reduce its capacity for consumption -beyond all tolerable limits. Thus it is that the payments which Germany has commenced to make and the goods which she is forced to send out, excepting coal and certain raw materials, constitute rather a source of anxiety. * % k % France, Italy, ‘Germany and Belgium comprise altogether abou 150,000,000 inhabjtants spread' Gver a surface less than double that o? the state of Texas. They have but a small territorial extension, while their interrelations’of production.are extremely intense and social life has a century-long organization which permits the. utilization of the smallest fraction of texritory. In this comparatively tiny spot of the world, rendered so illustrious by its history, men are divided among themselves by profound hatred and bitter rancor, production and ex- changes are stopped by almost insurmountable barriers. As a result of the war the bonds of economic solidarity have snapped. The losers must not only make good their own losses, but, according to the principles on which the treaties are based, they must pay for all the damages caused by the war. At the same time all the countries of Eu- (Continued on Third Page.) * ok K % That it is necessary that the Sec- retary of the Treasury should be giv- en broad powers in the operation of funding this debt is apparent from its complicated and unsatisfactory pres- ent form. The cebt owed this country by Europe comes under five distinct headings. First, there are the ad- vances made under the various liber- ty loan acts, amounting in the aggre- gate to $9,435,225,329.24. This indebt- | edness is evidenced by demand notes | or notes which now are past due, all bearing interest at the rate of 5 per cent. The second class consists of notes given the War and Navy departments I on account of the sale of surplus war materials and amount to $565,048,- | 413.80. These also bear a uniform in- terest rate of 5 per cent and have ma- i turity dates ranging from April 10, 1922, to August 1, 1929, Next come the obligations which | I Herbert Hoover turned into the Treas- | jury representing sales of supplies to! the European governments by thej American Relief Administration. They total §84,093,963.55 and bear 5 per cent interest. Their maturity dates are from June 20,1921, to June 30, 1923 Class four comsists of obligations taken from Enropean governments by the United States Grain Corpora- tion in_exchange for flour. They! total $56,899,879.09, mostly at 5 per; tent, though' a fe# carry 6 per cent | interest. Most of these obligations | are past due, but Czechoslovakia owes | $2,873,238.25, due January 1. 1925;/ Hungary, $1.685835.61, due January 1, 1925, and Austria, $24,055,703.92, due January 21, 1925. ‘Class five totals $943,534,755.99 and represents interost duo’ and unpaid, ! Of the unpaid interest, $922,550, mitted to Congress. The bill gives the Secretary of the} Treasury, with the approval of the Pres- ident, broad authority to refund or con- vert and to extend the time of payment | of the principal or the interest, or both, of any obligation of any foreign govern- | ment now owing 1o the United States, or | Jq8, BETES, JOMGR oA any obligation of any foreign govern-|within _fourteen years. Naturall ment hereafter received by the United | England and France would be u the United States Grain Corporation) |\whole megotiation would be lmperiled. arising out of the European war, into P bonds cr other obligations of such, or of | Gpponents of the funding bill mads any foreign government, and to receite mych of a pretended fear that under bonds and obligations of any foreigh [ne authority granted by the me government In substution for ““ane the Treasury would accept Ger- now or hereafter held by the United iman bonds or the bonds of Turkey, or States. some other near-bankrupt power, in The bill provides that the obliga-}exchange for the obligations of the tions received under its provisions! countries which borrowed money from shall be in such form and of such!us. Secretary Melion was Cross-cx- terms, conditions, date or dates of ma- | amined up one side and down on the turity and rate or rates of interest.|other on this point, but he stated em- and with such security, if any, as shall | phaticaliy that there was no thought be deemed by the Sccretary of thelof accepting substitute bonds from Treasury, with the approval of the any of our principal debtors, and that President, for the best interests of the | Substitute bonds would be accepied United States. from debtors of questionable selvency The bill also.authorizes the Secre-{only where it was clearly to the ad- e e aqjuct 4 | vantage of ‘the Unitedl States to do & fettle any and all claims, not now rep-| The Secretary of the Treasury made resented by bonds or obligations,|it plain that the only object sought in the measure was to enable the which the United States now has or e a or- hereafter may have against any for-| ;. . qury to get the European debt in a more satisfactory and usable form, jeign government and to accept se- but that it was so impossible to for- curities therefor. see conditions which would have to payment. It might work out that iItaly could handic her total indebted- ness to the three powers on a basis of fifty-year bonds. Under existing law the United States could not ac- cept this, but would have to insist upon payment of loans from the fir: liberty bonds within iwent, * x ok ¥ It is the contention of the Treasury, ipe met and the negotiations would be which contention has the support of a | of such delicacy that they could not - | well be conducted by an advance for- majority of the Senate finance com- | Well be conducted by an SAvERce fo/0 mittee, that the Treasury must be giv- | Congress for authority to conclude en a free hand in dealing with this|each successive ste Big Fortunes Find Refuge From Taxation In Great Volume of Tax-Free Securities Proposed to Increase Federal Assistance To States in Vocational Training Work BY G. GOULD LINCOLN HILE the Congress is strug- gling with the revision of the internal revenue taxes, trying to determine what to tax and what mot to tax, there is a growing demand from all parts of the country that an end be put to the exemption of federal and state, county and municipal Members of the Senate. which is the body now considering the tax bill. are receiving communications from many citizens—not the least of them the Secretary of the Treasury—urging * that something be done to allow the taxes to fall upon the dollars of the man who has put his hundreds of thousands into these securities now sxempt, as well as upon the man who has invested in industrial se- curities. These demands are bringing about « serious agitation of the question in Congress. The bonds issued by the federal government and representing the public debt amount to some $24,- 000,000,000 They are, to a very large extent, exempt from taxation—the in- terest upon them goes into the in- comes of the holders and that por- tion of their incomes is not tax- able. It is estimated that the total of securities issued by states, coun- securities. | tee, have introduced in their respec- | tive houses resolutions proposing that an amendment to the Constitu- tion making it possible to tax these securities be submitted to the states. Proposed New Artiele. | The new article of the Constitution proposed is as follows “The Congress shall have the power to lay and collect taxes on incomes derived from obligations issued or created by a state or any political subdivision thereof after the ratifica- tion of this article, without appor- tionment among the several states and without regard to any census of enumeration."” The Smoot resolution has been re- ferred to the Senate judiciary com- mittee and Senator Smoot is only waiting an opportunity to appear be- fore that committee to urge favor- able action upon it. The Constitution does not mention the securities of states and munici- palities in so many words, but .the decisions of the Supreme Court of the United States in a number’ of cases have been to the effect that these se- curities are exempt from federal taxa- tion. For that reason Senator Smoot and other legislators have reached the conclusion that the Constitutfon must be amended before they can be taxed. ties and municipalities now exempt from taxation total between $10,000.- 000,000 and $12,000,000,000. Find a Ready Market. ‘With the present high surtaxes upon incomes, the tax exempt securities are in the very heyday of their life. Many of them pay as high as 63 and even 7 per cent. They are gobbled up by the people of large incomes, with a result that tremendous sums of money are free from taxation that other- wise would be taxable. The result is that the tax burden falls heavier than ever upon the people whose money is invested in industrials, upon the peo- ple with moderate -incomes. So far as the federal securities are concerned, it is likely that Congress can do as it desires about repealing exemption clauses. But when it comes to the tax exempt. securities issued by the states and by the va- rious subdivisions of the states, it s another matter. An amendment to the Constitution of the United States, it is contended, is necessary to make it possible to compel income derived from these securities to pay the in- come taxes. 3 Senator Smoot of Utah, republican May Conduct Negotiations To Refund European Debts ELIOT WADSWORTH, Ah-fihlt secretary. of- tle Treasury, with Representative McFadden of Pennsyl- vanis, republican chairman of the House banking and currency commit- I+ Tax-exempt securities are held by men of great welath these days, and by large estates. It is of interest to note that in New York state in 1917 there were eighty-one persons paying incomg taxes on incomes amounting to a million dollars a year or more. But when 1919 had rolled around, only twenty-five persons were paying taxes on_incomes in that state of a million dollars or more. It is beyond reason to believe that there were less men with incomes of a million dollars in New York in 1919 than in 1517. In fact, the war gave opportunity for the development of many large fortunes. The answer is that when the” high surtaxes on-incomes were levied by Congress, these big moneyed men im- mediately sought to avoid these heavy taxes by the simple expedient of in- vesting their funds in tax-exempt ue- curities. Escape All Taxation. Under the existing law the:-income ax rate on large incomes runs as high as 65 per cent. By investing in tax-exempt securities the owners of these big fortunes avold paying these high taxes, and in fact, pay no taxes at all on that part of their money in- vested in tax-exempt securities. The pending tax revision bill, as passed by the House, rediiced the surtaxes on incomes so that the high- est surtax is 32 per cent. The Senate finance committes has followed suit and made 32 per cent the highest sur- tax on incomes. The reason given for this reduction Wwas that more money would be invested in indus: tries, and taken out -of tax-free se- curities, and that business and the efitire country would = necessarily benefit by the impetus given to com- merce. The action of the House and Senna committees in reducing the surtaxes upon big incomes has been criticised in a number of quarters on the ground that it was taking the tax burden off of wealth and letting ft fall more heavily upon the peopla of moderate means. Notwithstanding ‘the efforts of :he administration to curtail government expenditures, it seems inevitable that, for many years very large revenues will be required by the government to meet the interest and principal of the war debt and to run the govern- ment. This revenue must be obtained from the -taxpayers. Therefore, to take from the field of federal taxa- tion ten-or twelve billions of dollars now invested ‘in state, county and municipal securities and. many hll-' BY WILL P. KENNEDY. WO big developments and ex- tensions of the work of the federal board of vocational education are being consid- ered by Congress. The current fiscal year ending June 30, 1922, is the fifth year of operation under the vo- cational education act and the second year of operation under the act pro- viding for the vocational rehabilita- tion of persons disabled in industry or otherwise. Since the war the board has been obliged to give much of its attention to the work of retraining disabled soldiers, sailors and marines, It has been natural that great publicity should be given to this humanitarian work, with the result that the public bas lost sight to a considerable ex- tent. of the intent for which the board was originally instituted— namely, the promotion of vocational education. With the faking over of the work of soldier rehabilitation by the Veterans’ Bureau, the federal board is left free to carry out the original purpose. Leng Interested in Work. wealth of the country. It is esti- mated that the government might realize a billion dollars more from the income tax if an end was put to these ‘tax-exempt securities and the income from all sources in this coun- try were taxed alike. An Orgy of Spending. In all parts of the country, the states and municipalities are putting out securities today. They find them easler to dispose of, it is said, than ever before, becanse people with money to invest prefer to buy them and have their incomes tax free than to invest their funds elsewhere. This is leading, according to Senator Smoot, to a veritable orgy of-spending by ‘the states and - miinicipalities, an orgy that s running these subdivisions of the.country into’ debt from which they cannot hope to emerge for many generations. . It is resulting in an.ex- penditure of funds at a time when the country should be curtailing . its ex- penditures for state as well as national government. Before the war the United States :ov- ernment had outstanding the old 4. per cent bonds and 2 per cent bonds, not to mention the Panama Canal bonds, which were to a large extent tax free. Now all of the 3% per cent liberty bonds and the 43 per cent liberty bonds are tax free also, and also all the other liberty The appointment of Lewis H. Car- ris to be administrative head of the federal board's co-operative work | with the states, has also focused pub- bonds are to a certain extent exempt from taxation of various kinds. It has been estimated that a man may pur- chase various issues of, the liberty bonds—not Including the 3% and 4% per cents—and so arrange his holdings that he may have a total of $150,000 worth of these liberty bonds upon which he does not have to pay any income tax. It 18 easy to see*therefore that billions upon billions of doHars’ worth of these liberty bonds—many . held by very wealthy persons, are paying no taxes Other Exempt Securitie In addition to these federal securities that are exempt from taxation, are the federal .farm loan bonds and the War Finance Corporation securities recently authorized to the tune of a billion dol- lars to ald the agriculturists of the country. As a matter of fact, the coun- try' seems to “have entered an era ‘of tax-exempt securities the like of which has never been dreamed of. ‘The argument has been made that the exemption of state. country and municipal bonds from taxation has made it easier to finance needed im- provements. Undoubtedly this is tnle. But ‘when ‘hue murfiz are payin good Tate’ of inte anyway, an Mvo the iddmonl unm.q. of ;m- l‘filfllfi’:}.d:tg not seem '.hn money “to lic attention on the extension pro- gram. Mr. Carris is sometimes call- ed the “father of vocational educa- tion,” having been from the first an active worker for establishment and development of such a new system in education, and having helped to write the new laws passed by the several states to allow them to share in the federal aid extended through the board. Members of Congress interested in the development of the federal board's activities: in co-operation with the states, leaders in industry, organized business men and associations of edu- cators and of social workers are urging new legislation to enable the federal board to develop and extend its operations. The two principal new efforts are: (1) The vocational education in- terests of the country are urging the passage of the Kenyon-Fess amend- ment to the vocational education act which would provide a separate fund for promotion of home economics edu- cation. (2) The merchants and commercial people, including chambers of com- merce and tradg associations in prac- tically all the states are agitating a similar fund for the promotion of emnmerclal oduuuon. the ¢nlnhs of young men and women for all sorts | of commercial jobs and to meet the need for intelligent and efficient workers in domestic and foreign trade, where the country is entering a mew commercial era. Co-Operation With States. In vocational education work the federal board is now co-operating with forty-eight states, and in indus- trial rehabllitation with thirty-three states. Demands for service are now coming in from all of these states greater than the federal board can supply. Those members of Congress, such as Dr. Simeon D. Fess, chairman of the House committee on education, who have given this phase of federal activity closest study and who are in sympathetic touch with the educa- ttional interests of the ‘ountry, point out that: As regards vocational education the need for an increase in the annual ap- propriation fixed at $200,000 for ad- ministration and for making studies, investigations and reports is urment and imperative on the assumption that Congress proposes to continue undiminished its provisions made in the act of 1917. They emphasize that in education, as in practically every- thing else, the purchasing power of the dollar has dwindled, 50 that the| fixed annual appropriation of $200,000, has shrunk more than one-half in the 1918 to 3,281 in 1920, and the num- ber of teacher training institutions applying for aid in the same years increased from $9 to 177. The num- ber of state directors and super- visors of vocational education in- creased from 139 to 217. Each year the amount of federal funds to be ad- ministered has increased from §1,655.- 588 in 1918 to $3.632,177 in 1921 and to $4,120,000 for the current fiscai year ending June 30, 1922, To carry out the program of voca- tional education it Is estimated by those supporting this phase of fed- eral co-operation that an increase in appropriations from $200,000 to $400.- 000 is reQuired. In industrial ruhflhilllilion it has developed during the past year th special classes of the vocationally disabled, such as the blind end the tubercular, present special neecds which cannot be adequately providcd for under the provisions and appro- priations of the industrial rehabili- tation act. In reply to questions asked by con- gressional leaders, Mr. Carris has stated that the federal board is not in position at this time to make recommendations or to formulate 4 federal policy for co-operating with i the states or for direct service in vocational rehabilitation of the blind or tubercular. Its investigations indi- the pressure of increasing costs and impaired and diminished national re- sources available for economic utili- zation. During the period of retrenchment the demands made upon tbe federal board have been increasing. The number of schools federally aided in- creased from 1,116 in 1917-18 to 3,155 in the year 1919-20. The number of pupils in these schools of all types— including evening and part-time schools for workers, and all-day schools, in the fields of agriculture, trade, industrial and home economics education—increased from 164,000 to 265,000 in the same period. Probably the number of worker8 and pupils en- rolled in vocational courses in schools federally aided during the year 1920- 21 will be found to be in excess of 300,000. This is approximately three times the number of disabled soldiers and sailors in training under the fed- eral board at the close of the fiscal year ended June 30, 1921. ‘Would Double Appropriation. In the period from 1918 to 1920 the number of vocational teacher train- ing institutions federally aided in- creased from 94 to 135, and the num- ber of pupils training for vocational teaching in these schools increased from 6,589 to 12,456. The number of schools applying to state boards for federal aid increased from 1810 in period during and since the war. The vocational education program must be in large measure abandoned, they say, unless current appropriation is adjusted to present needs rather than to the needs of 1917. As regards vocational rehabilita- tion of the civilian disabled, the: leaders in Congress are urging that additional provision must be made for undertaking work with reference to the blind and tuberculous, Need Greater Teday. There is more urgent need today than there was in 1914 for vacational training, those behind the program contend. One direct consequence of the war has been to throw nations! more keenly into competition with one another. Today, as never before, n.l and eommercial prosperity for any nation must be won in open- compe- tition with other nations, and in this competition no nation which avoids the responsibility of training its workers can hold its own. The cost of living has advanced sharply, and trained efficiency ‘for useful labor is the only means. of maintaining and improving standards of living under is true that industrial, agricultural| | Leads National Movement For Increased Efficiency cate, however, that a very real re- sponsibility rests upon the federal government to make some provision for vocational rehabilitation ~with reference to these classes. Problem for the Nation. As regards the blind, the stales cannot, except in the case of the larger states, separately make ade- quate provision for their rehabili- tation. It is estimated that there were 1,000,000 cases of arrested tuberculosis and 1,000,000 cases of tuberculosis in an active state. Vo- cational rehabilitation for arrested cases presents a tremendous prob- lem of national concern. The present program of the federal board embraces the promotion in our public schools of more adequate training of girls and women for the vocation of homemaking., based on a nanalysis of the vocational scrvices rendered by women in the home. To make this analysis and formulate courses in this fleld is in itself « great undertaking. In the opinicn of those working in the fleld of vo- cational] education training for home- making clearly involves the welfare of the home and of the community. and it is an anomaly of our public school system that -dequte train- (Cam.lnucd on Third P Pu;x—. ) '