Evening Star Newspaper, July 27, 1924, Page 31

EDITORIAL - SECTION EDITORIAL PAGE NATIONAL PROBLEMS SPECIAL ARTICLES Part 2—12 Pages AMERICA’S MEAL TICKET IS ITS INCOME TAX UNIT Since States Ratified Amendment Wealth of Nation Has Contributed Many Billions to Government. BY EDWARD NELSON DINGLEY. NE of the newest and finest buildings in Washington, acposs the strdet from the Treasury Department, is a magnificent structure over the portals of which are inscribed these words: “Income Tax Unit” Here are the headquarters of the officials having in charge the personal income tax. Several blocks away, in one of the temporary war - period _ bulldings known as “Annex No. 2,” with 2,000 rooms, hot in summer and cold in winter, are the thousands of clerks, accountants and auditors, whose duty it Is to examine all the personal in- come tax returns, many of the cases two or three yvears behind. Over on 20th and C streets, a quarter of a mile from “Annex No. 2" and a long distance from the Treasury and the “Income Tax Unit" headquarters, is the “Income Tax School of Instruc- tion.” In another building on 15th street, near the “Unit Building,” in “Annex No. 1," is the manager of the Income Tax School and personnel of the income tax unit. The chief of this Widely scattered division of the fed- eral government, the commissioner of internal revenue, sits in the northeast corner of the Treasury Building. The internal revenue bureau is ropularly known as the “meal ticket” ©of the Federal Government—that s, it supplies the bulk of the revenue of the Federal Government, out of which all salaries and expenses are paid. This important branch of the Govern- ment, with its priceless documents and records, is scattered in at least 8ix or seven buildings, some of them firetraps. The palatial building hous- ing the Veterans' Bureau, constructed during the World War, is one of the biggest money outlets of the Govern- ment establishment, and is housed in & magnificent building. The Internal Revenue Department, the biggest in- come-getting branch of the Govern- ment, is scattered all over the city,| and poorly housed, in the main. This is one argument for a new Federal building devoted entirely to the In- ternal Revenue Department, When President Taft in his mes- sage to Congress, June 16, 1909, rec- ommended that Congress offer an amendment to the Constitution for ratification by the States providing for an income tax that would stand the test of the Constitution neither he nor the country realized to what vast proportions this source of Gov- ernment revenue would grow and how accurately it would reflect the growing wealth and prosperity of the nation. . Income Tax Not New. An income tax was not a new thing in 1909. It was suggested by Secre- tary of the Treasury Dallas way back in 1815 as a means of assisting in defraying the expenses of the War of 1812, Lut little attention was paid to it until the outbreak of the Civil War in 1861. It was a matter of sur- prise that, in view of the hostility to any tax savoring of inquisitorialness, it should have passed Congress. This tax of 1861 was a direct or appor- tional tax, in accordance with the provisions of the Federal Constitu- tion, “No capitation or other direct tax shall be laid unless in proportion to the census or enumeration,” etc. The income tax of 1861 was tempo- rary and imposed with a view of raising money quickly and not inter- fering with industry. All personal incomes below $800 were exempt; all above that taxable at the uniform rate of 3 per cent, irrespective of the source. The income tax of 1862 re- duced the exemption to $600 and made the rates slightly progressive. The income tax of 1964 was still more progressive, from 5 per cent ($600 to 00) to a uniform rate of 10 per cent above $10,000 income. Later incomes over $5.000 were rendered dutiable at the uniform rate of 10 per cent. Income tax receipts from 1863 to 1866 climbed to $73,434,000, then gradually declined until 1877 when the amount raised was only $37.79. The total revenue from this source of taxation from 1863 to 1877 was more than $360,000,000—a sum sorely needed by the Federal Government to conduct the Civil War and take care of post-war conditions. This in- come tax was an experiment, unpop- ular, yet effective. Kconomists point- ed out that under the same law the returns in 1867 were $7,000,000 less than in 1866, and $6,500,000 less in 1869 than in 1868; the argument being that an income tax is “evaded al- ways, and promotive of fraud. Rejeeted by Court. President Taft's suggestion was the result of the failure of the income tax of 1894. The income tax provision of the tariff act of 1594 marked a new era in American finance. How- ever, the Supreme Court declared it unconstitutional because it violated the apportionment rule of the Consti- tution. The court assisted Congress by pointing out a way to remedy the @ifficulty, and the result was the six- teenth amendment to the Constitu- tion, ratified by all the States except Connecticut, Florida, Pennsylvania, Rhode Island, Utah and Virginia. This amendment gives Congress power “to lay and collect taxes on jncomes from whatever source de- rived, without apportionment among the several States, and without regard to any census or enumeration.” The words “from whatever ‘source derived” caused some confusion of thought and hesitancy of ratification, and much favorable public sentiment was withheld because It was feared that Congress was given the powel’ Yo tax incomes derived from the State, municipal and other civil divisions. The proposed amendment was gen- erally popular because it was believed that the decision of the Supreme Court had practically taken Away- from Congress a power of vital im- portance to the General Government and essential to the nation’s life. On the other hand, it was feared that the proposed amendment giving Congress unlimited taxing power would injure the States, but it was pointed out by constitutional lawyers that the courts had held repeatedly that the taxing power of Congress does not apply to the instrumental- ities of the States, and the sixteenth amendment, notwithstanding the words, ‘“from whatever source de- was forbidden to apply to States, municipalities and other civil subdivisions. Exemptidns Admitted. In this regard the words “from whatever source derived” are non- operative. This is why the Federal Government cannot collect taxes from incomes derived from State, municipal or other local instru- mentalities of local government. In- comes of State or municlpal officials of whatever nature, and incomes from State or municipal securities cannot be taxed by the Federal Government. Such securities are called “tax-ex- empt” securities, which have caused %0 much discussion in and out of Con- gress. The income tax law has changed the relative importance of the Fed- eral Government's revenues. From 1800 to 1860 customs receipts aver- aged between 90 and 95 per cent of the total receipts. From 1860 to 1890 customs receipts were about 60 per cent of the total receipts. From 1890 to 1912 customs receipts exceeded in- ternal revenu: receipts eight times and internal revenue receipts ex- ceeded customs receipts six times, in- ternal revenue climbing up steadily and customs receipts declining in comparison. In 1913 the tide turned rapidly, and from that year to 1923, internal reve- nue receipts outdistanced customs re- ceipts. This was due entirely to the income tax. From 1900 to 1914 the average annual internal revenue re- ceipts were about $275,000,000. There was a sensational increase for six years until in 1920 the Internal reve- nue department of the Government produced the stupendous sum of $5,407,000,000! Receipts from customs dwindled into comparative insignifi- cance. Five billion dollars in one year was a startling contribution of private wealth to the needs of the Federal Government. = Nothing like it had ever occurred in the history of this or any nation. These vast con- tributions demonstate the extent of the private wealth of the people of the United States and their patriotic response. This revenue marked the high tide of federal taxation. It re- ceded somewhat in 1921 and 1922, and in 1923 receipts from internal revenue were down to $2,621,000,000—still a vast sum compared with the pre-war period. Figures By Years. But the story of patriotic contribu- tioms and patient endurance of direct taxes is still more clearly shown in the record of personal income taxes paid into Uncle Sam's Treasury. In 1916 personal income taxes collected amounted to $173,386,000; in 1918 to $1,127,721,000; in 1919 to $1,269,630,000; in 1920 to $1,075,053,000, and in 1922 to $861,057,000, an increase of some $40,000,000 over 1921. The significance of these figures is that in seven years the income tax paying proportion -of America's citizenship has paid into the United States Treasury approximately $6,- 000,000,000. This is nearly 10 per cent of the total accamulated increase in national wealth during that period. This was taken out of the private in- comes and earnings of approximately six and one-half million people—less than 7 per cent of the entire popula- tion. The Bureau of Census estimates 6.2 per cent. More than one-half of the six and one-half million people were citizens having incomes from $2,000 to $4,000, showing how widely distributed are the taxable incomes The constantly iwcreasing number of appeals of income tax cases made it imperative for Congress to estab- lish a board of tax appeals, consist- ing of 12 members, recently appoint- ed and organized. The personal in- come tax has been in operation nearly 11 years, and has ylelded the United States Treasury more than seven bil- lion dollars. This sum contributed largely to the winning of the late war, to the payment of the enormous bills contracted in the war and un- pald after the war. It was taken from the pockets of less thas 7 per cent of the entire population, and is a glowing tribute to the wealth and prosperity of the country as a whole.. Pays Govermment's Way. The income tax bureau has been upon the shoulders of a small propor- tion of the people. It has been made lighter during the past year and will be still further lightened in the years to come; according to the Treasury official President Coolidge says the total annual expenses of government must be kept down to $3,000,000,000,000 this next fiscal year. If so, at least one- quarter of it must come from personal income taxes. In fact, the Federal Government could not raise that amount of money without a personal income tax = . Dean Andrew F. West of Prince- ton University says that classic learn- ing is !n demand again and that there is an apparent increase in the number of new students seeking learning in Latin and Greek. They are almost without exception superior students in other courses, Dean West The Sunday Staf WASHINGTON, D. C, SUNDAY MORNING, JULY 27, 1924. Birth of New National Party This Year May Result From Political Upheavals|,, BY G. GOULD LINCOLN. P to the present time, the interest in the Independent Progressive ticket, headed by Senator La Follette of Wis- consin and Senator Wheeler of Mon- tana, has commonly centered in what its ef- fect will be upon the chances of success of either the Republican or Democratic national tickets. Included in this speculative view of the new ticket has been also the possibility of Senator La Follette’s winning enough electoral votes to throw the choice of a President into the House of Representatives— and a choice failing there, to selection by the Senate of a vice presidential candidate to serve as President. Hope for New Party. But the Progressive group or groups which are backing the third ticket do not take this narrow view of the movement. It is true that Senator La Follette and his followers have disclaimed the formation at this time of a new political party with national organiza- tion. But it is equally true that the Progres- sives hope—and many of them helieve—that a new national party will be born of the struggle in the coming campaign. This new party, it is their hope, will be the liberal party of America, as distinct from the con- servatively minded voters. Whether the birth of such a liberal party is to follow quickly on the heels of the coming election depends largely upon two factors. 1. The interest shown in the movement as evidenced in the vote cast for La Follette and Wheeler. 2. The effective enunciation of principles sufficiently important and clear cut upon which a permanent political party may be based. No national political party in this country has ever been built up to any degree of per- manence that was not founded on principles rather than personalities. And few of the political parties whose organization has been attempted have had any degree of permanence. Ticket Is Experiment. So in a measure the Independent Progres- sive ticket is, like other political movements in the past, an experiment. Many of the men and women who are devoting themselves to its cause believe that the movement is to continue, that the day has dawned when a new national party is to be born. Others there are who, while believing just as strong- 1y ih the Progressive cause, are =till waiting to be “shown.” They are not yet convinced that the various progressively-minded indi- viduals and groups can be welded into a political organization which can challenge, year after year, the older parties—or one of the older parties—should either of them pass into history. 1 recently inquired of one of the men who has been an active leader in the Progressive Wwhether he saw in the movement the ultimate organization of a political party. He frankly said that it was too early to answer this question. He put it somewhat like. this: Test In Awaited. “If the La Follette-Wheeler ticket receives 5,000,000 votes in the coming election, I should ay that it would be evidence of a real desire on the part of the people to get away from the older parties to an extent that would war- rant the formation of a new national political organization. “I mention 5,000,000 votes arbitrarily. Some estimates place the strength of the La Fol- lette ticket much higher than this. It may be that 3,000,000 or 4,000,000 such votes would ‘warrant the organization of a new party. “But there is one thing that must be borne in mind. If a new party is to be established, it must be based on principlegand not on per- sonalities. In 1912 the Bull Moose party, headed, by Theodore Roosevelt—with Hiram Johnson of California as a running mate— was organized. It was a protest against the steam roller tactics adopted by the Republican national convention in that year, when Chief Justice Taft was nominated, and in a measure, a protest against the administration then drawing to a close. But in the main, the movement was one of personalities. It was dominated by Theodore Roosevelt. It did not last even four years. Progrensives Long in Existence. ‘The truth of the matter is that for a long e there have been in both the Democratic and Republican parties, as organized, progres- sives ard conservatives. Just as there have been in this country since its birth, conserva- tives and progressives. Now we are gathering together progressives from both the old par- ties as well as many independent voters, and if there is to be a permanent party organiza- ion there must be a clear statement of principle that may be read by him who runs.” 1 asked for a sample of what might be set up as one of the principles of a progressive party. “Perhaps,” his reply was, “you might de- clare for public ownership of public business as one of the principles of the progressives. Do not mistake me,” he hastened to add, “I do not believe that private business should be owned by the Government. I should be as strongly opposed to that as many of the con- servatives. “But there are certain kinds of business which have become of such vast public in- terest that for the best interests of the mass of the people they should be owned by the Government and operated. But if 8o operated, they must get away from bureaucracy and from the kind of political influence that domi- nates the Post Office and the business of transporting the mails of the United States today. If the Government should own and operate the railroads, it would be a disaster to were elected merely because they were ex- pected to support bills for higher pay of the raillroad employes, it would be a disaster. It would be a mistake to have wages fixed by legislation.” Popular Vote Shown. The suggestion that three or four or five million votes for the La Follette-Wheeler ticket would be a sufficient manifestation of the desire and need of forming a new national political party makes an examination of the popular vote cast in earlier elections of not a little interest. In 1920, the first election after the national enfranchisement of women, the late President Harding polled 16,152,200 votes. James M. Cox, the Democratic candidate, poll- ed 9,147,359, and Eugene Debs, the Soclalist candidate, 919,799. The clectorial vote was divided between Harding and Cox as follows: Harding, 404, and Cox, 127. Going back 12 years to the days of the Bull Moose, we find that the vote polled by Woodrow Wilson, the Democratic standard bearer, was 6.286,214; by Roosevelt, the P'ro- gressive, 4,126,020, and by Taft, the Republi- can, 3,483,922. The electoral vote was divided as follows: Wilson, 435; Roosevelt, 88, and Taft, §. When the Republican party first raised its head as a national organization in opposition to the Democratic party, back in 1856, when the population of the country was about 40,- 000,000, and the women did not vote, Buchan- an, the successtul Democratic candidate, re- ceived 1,927,995 votes at the polls; Fremont, Republican, 1,391,555, and Fillmore, American, 934,816,.and the electorial vote was divided as follows: Buchanan, 174; Fremont, 114, and Fillmore, 8. Four years later the Republican party came into its own, Lincoln receiving 1,866,352; Douglas, Democrat, 1.375,157; Breckinridge, Democrat, 845,763, and Bell, Union, 589,5681. The electoral vote was divided as follows: Lincoln, 180; Breckinridge, 72; Bell, 39, and Douglas, 12. Formed With Great Insue. But the Republican party was formed with a great issue before the country—slavery. It was a moral issue that gave the party a vitality which has carried it forward success- fully as a national organization for 68 years, even though the question of slavery was set- tled long ago. The Democratic party originally called “Republican,” the party of Jefferson and Jackson, had been the “progressive” party of the country in the early days as opposed to the Federalists and the Whigs. The Republican party, newly born, became the progressive party because of its stand on the great issue of the day. But af- ter that issue was settled the Democrats, with their demands for free trade or for a tariff for revenue only and other issues, be- came again the progressive party in the minds of many. The Republicans were labeled, by the Democrats at least, as the friends of the movement and who is engaged in the cam- have such a bureaucracy dominate their oper- interests and business rather than the people. paign of the Independent Progressive ticket ation. For example, if members of Congress Coptinued. o0 _Third Fage) BRAZIL WAR THREATENS COFFEE FAMINE IN U. S. Only Month’s Supply Now, With Enough For Year Blocked at Source By Rebels. BY WILL P. KENNEDY. HERE 1s not enough coffee in this country to last for more than about a month or two months, at the most. How long the shortage, that may become a famine, will continue is largely contingent on how long the revolution in Brazil lasts, and then on how great damage the rebels have done to the railroads. It is pretty certain, however, that there will be a real shortage for the next six months—according to the best information gathered by Government officials and agents and by gommercial concerns. The situation has been growing worse for some time, and the revolu- tion has now been in progress for three weeks, with no indication of an early compromise. Felix Coste, secretary of the coffee roasters’ association, some days since put out a statement that there was about 60 days' supply of coffee in this country and about 30 days' supply afloat on its way here. He considered that just about the nor- mal supply, as those who handle cof- fee in the United States never care about getting much below a two months’ supply. =3 Foreseeing a shortage, the coffee people have been making a vigorous round-up to gather in all the coffee they can from any source. In re- sponse, some coffee is coming from Guatemala and from around the Carribean Sea. These are mostly what is called “mild” coffees, which are used to some extent in the cotton belt States, but very little north of the Mason and Dixon line. The North has grown accustomed to the stronger Brazilian coffee. Or- dinarily we import about 70 per cent of our coffee from Brazil to satisty this preference. Movement Is Limited. Heretofore practically all the coffee crop of Brazil was kept at the ports at this time of year, or else shipped abroad. But since the coffee control under the new government valoriza- tion scheme, the movement of coffee out of Brazil has been limited to 35,000 bags a week from the port of Santos, which ships the bulk of the best coffee, and 12,000 bags a week, mostly lower grades, from Rio de Janeiro. In order that stocks might not accumulate §t the ports the government built large interior ware- houses, most of which were com- Pleted last year or the year before. So that now for the first time in the history of Brasilian export coffee trade large stocks of coffee are at interior points at this season of the year. Santos is the main coffee port draining the province of San Paulo, which contains most of the coffee. the government. forces control San- tos, and if the coffee supplies were stored there as always heretofore instead of in the interior warehouses it could be shipped. But the rebels control San Paulo, which is the rail- road center where all the five or six coffee railroads converge, with a sin- gle line running into Santos, so that is the neck of the bottle. The coffee crop for the 1923-24 sea- son, ended Jume 30, to be shipped through Santos is variously esti- mated at 14,500,000 to 16,000,000 bags. Under the quota system, about 10,000,- 000 bags of coffee were shipped from Santos during the year just ended, and some 2,000,000 from the port of Rio. The new crop, for the 1924-25 season, in the Santos territory, is estimated at 6,000,000 to 7,000,000 bags for this port, and about half as much more from the rest of Brasil. So it is estimated that the carryover with the small crop will make the supply for shipment during the next year just about normal. . Supply Blocked by Rebels. Thus, the whole supply of coffee for the coming year is now blockaded ‘back of the rebel lines, and the rebels are reported to have torn up long stretches of the railroad. One of the main coffee roads is electrified and there have been reports that at least one of the big power stations has been destroyed. It this is so it will be necessary to send to Europe or the United States for repairs. The rebels will not let this coffee into Santos, and even if the rebels should capture Santos, as many be; lieve they can, it would be impossible for them to ship out the coffee be- cause the Brazilian government has a navy with which it could blockade the port. So the chances are that there will not be much coffee shipped trom Santos to the United States for some time. This’ condition is made still worse by the fact that just prior to the out- break of the revolution a very serious port congestion existed at Santos, an with the natural diverting of ship® ments to Rio de Janeiro and the add- ed effect upon both ports of the revolution, the exporters have had plenty to worry about, especially since there was a very heavy pre- mium put on frelght rates from the interior during the period of port congestion. The Latin American division of the Bureau of Foreign and Domestic Commerce warned American export- ers that it might be advisable to awalt the reopening of communica- tion with consignees and agents in Santes and Sso Paulo before forward- ing further shipments in order to avold the possible accumulation of warehouse charges. A moratorium has been decreed by the federal gov- ernment, Affecting the State of Sao Paulo. The termination of this has _mr on Third Page.) BY FRANK H. SIMONDS. HE long wrangle and dispute and even more the seeming inability of earnest and even eager men to reconcile conflicting national points of view in the latest London conference has served to emphasize once more the realities as contrasted with the imaginary obstacles to Euro- peans settlement and to the primary es- sential of that settlement, Anglo-French co-operation. For at London, whatever else may be said, the conditions favorable to adjustment have been more impressive than at any other in- ternational meeting since the Paris conference itself. For the first time even the most suspicious of observers could not honestly interpret French action as revealing either imperialism or mil- itarism. To accuse Herriot of any hidden purpose to revive the policies or purposes of Richelieu, Louis XIV or Napoleon the Great was in itself to provoke not indignation but laughter. If it were possible to transform the legalistic figure of Poincare into the traditional man on horseback, no stage management, however ingenious, could cast Herriot as Caesar. Champion of Reconcill n No, the fact was unmistakable that the man who went to London to rep- resent France was the Frenchman least in sympathy with any of the real or imaginary French fondness for military display, least in sym- pathy with any militaristic ideas, by contrast frankly and openly the champion in the past and the present of reconciliation with Germany, with European pacification, a man who had already recently risked his rather tenuous parliamentary support by his sacrifices to British views. One might, indeed, T think, say with per- fect accuracy that it would be incon- celvable to imagine any other French premier who would bring to an. in- ternation’ conference a greater amount of reasonableness or ~a greater desire for agreement. Moreover, both in France and in Great Britain recent political events had removed the parties and the men whose insistence upor extreme na tional points of view were most un- yielding. A MacDonald and Herriot were new men freshly come to power, having recent mandates from their respective publics and commissioned beyond all else to get a settlement of European problems; they represented a spirit of concession in their respéctive na- tional constituencies. Favorable to Concession. In addition, there was the unmis. takable urge of financial and eco- nomic necessity. France after her experiences last spring with the per- ils of the falling franc, faced by her IN DIVERGENT INTERESTS France Interested in Reparations, Eng- land, in Restoring German Trade—Ulti- mate Settlement Lies in Compromise. ever-increasing fiscal difficulties, need- ing money she were to escape an ultimate crash measurably like to that which overtook Germany last year, was in a frame of mind which was certainly more favorable to con- cession tha never before. On the Brit- ish side MacDonald had rightly drawn the conclusion from recent events that there was no European adjust- ment conceivable save as it was pos- sible to restore Anglo-French co-op- eration. The idea of British isola- tion or of an independent British policy and a separate Anglo-German arrangement had gone by the board. In the face of all these favorable circumstances what was the actual fact of the first contacts between British and French statement, a con- tact established in the presence of American unofficial representatives eager to aid so far as possible in the solution of the pending problems? Precisely the same deadlock which had marked every other international conference since the closing days of the Paris peace assembly, more than five years ago. Divergence of Interests. And what was the cause of the deadlock? It was no longer to be attributed to the clash of personali- ties, for both Poincare and Lloyd George were gone. Indeed, it could be attributed to nothing save the fundamental divergence of the na- tional Interests of the two countries most vitally affected, a divergence which, at least at the outset, seemed 80 complete as to render impossible that compromise which was being earnestly and sincerely sought by the French and British prime min- isters alike. And this divergence turned on per- fectly obviotis facts. The French situation was patent. France was the principal creditor of Germany under the reparations agreement of Spa, holding 52 per cent of the repara- tions total. She had, moreover, the tacit support of Belgian representa- tives, since Belgium holding 10 per cent of the claims had the same in- terests as France. Thus the French position was founded upon the con- trol with Belglum of almost two- thirds of the reparations totals. ‘What the French and Belgians saw and said was unmistakably accurate. They were the only two countries exclusively or vitally interested in the collection of reparations. Italy had only a minor share, which she was less interested in getting than she was concerned in achieving a general cancellation of interallied debts, while Great Britain was con- cerned not with * reparations at all, but with the restoration of the Ger- man markets and thys the expansion of British trade and commerce and the reduction of British unemploy- ment, thoroughly legitimate con- (@Tund on Eleventh Page.) FRANCE’S STAND BLOCKS HIGH ROAD TO PROGRESS st Capitulate in London Conference Or Face Extremely Costly Na- tional BY OLIVER OWEN KUHN. N hour of decision faces the allied conference in London, where statesmen of the allied powers amd unotficial repre- sentatives of American interests are debating the Dawes plan with the view of reaching concrete plans ot carrying it forward and advancing general European welfare. The chief quesion involved is whether France will capitulate to the world’s common weal and sub- ordinate strictly nationalistic view- point or whether by Krance's in- sisteice upon her own pecullar tenets the conference will be shat- tered. The decision, whatever may be said by apologists for the Krench, pro- fessional or otherwise, rests square- ly with France. Premier Herriot, whatever his own private views, will be forced to capitulate or shatter all chances of reconstruction along lines entirely acceptable by other na- tions of the world. And if the con- ference breaks down and if the allies fail to reach an equitable agreement measured by the general good of all na- tions, it may be taken for granted that France will occupy an entirely politically isolated position, which will have far-reaching evil effects, economically and financially. Clash of Viewpoints. The French viewpoint is that the repa- rations commission under no circum- stances shall share or give way its right to decide what shall and shall not be done in case Germany should default on reparations. France insists upon re- tention of her right to enforce sanctions against Germany independently, if nec: essary. The Americans, British and others possibly, excepting Belgium, de- clare that no $200,000,000 loan, the amount provided for under the Dawes plan, can be floated if security is to be hazarded by the whims or caprices of any one government. International financiers who will have most to do with the loan back up other allfes. Her- riot sees overthrow in France if he con- cedes this point, which his political enemiés declare would be a surrender of France's rights under the treaty of Versailles. Herriot consequently hesi- tates about doing anything. The posi- tion of the other allies is opposed to the French theses, and it is deciared that France, to gain the eventual re- wards of settled order in Europe, should concede and make certain fulfillment of the Dawes plan. Want Absolute Guarantees. The position of the financiers in re. gard to abeolute guarantees that the whole future of Germany shall be safe- guarded against the unwarranted or prejudicial action on the part of any one government is a mere matter of precaution. The great bond issues nec- essarily must be subscribed by the aver- age small investor in the countries in which the loan is floated. No reputable financier would make such a loan with- out exercising every precaution as to the security of his client's funds. And with the reparations commission French controlled there could be little chance of insuring security to investors in Amer- ica or any other country, inasmuch as France recently has been governed by politicians who are making the German reparations question a political foot bali for their own peculiarly seifish ends. Poincare and his cohorts afe rest- ing in Paris, ever ready to oust Her- riot and his government on this issue. They still have power to do this in Parliament, een though the majority of the French people are eager and willing to bear a proportionate share of national sacrifices in order that the whole question, which in the final analysis Is an economic one, shall be Isolation. settled once and for all time. But unless outside pressure is brought to bear and French politicians are brought into alignment with inter- national weal, nothing may be ex- pected. French politicians will be forced to repudiate many of their theses if there is to be advance. Other ways of settlement have been tried and failed. All have been broken upon the rock of French political stubbornness, and the London con- ference will go the same way unless agreements are reached during the present week. Poincare Ideas Menace. The ever-readiness of Poincare and his regime to garrote any understand- ings with other nations which infringe on the force-without-stint school and the constant willingness to place the French government and peoples in position of staying the hand of prog- ress to gain individual ends, is the real menace to the allied conference in London. Ostensibly Herriot is the man to whom the world would look to pull France onto the highroad of general international progress. But even Herriot is very susceptible at the moment to the organized resistance of the Poincare clique in Paris. He knows that any good he may achieve by persistence in tenure of office is hazarded by any one move in London which may be interpreted as an aban+ donment by France of those idead which Poincare has so long preached as wholly necessary to the perpetuas tion of national interest. Poincar@® consequently will be the man to de- cide whether or not France will walk with the allies. The situation is one of the most peculiar that has arisen in international negotiation in dec- ades, and it is one of the most dan- gerous for France, for with con- tinued clinging to Poincare policier and flouting of assured economif continental advance on the othet hand, the position of France will bt anything but enviable. How France Can Profit. Though France may have to cone cede her grip upon the Ruhr, lose the deciding voice in the infliction of fure ther sanctions on Germany and stand aside and witness a rejuvenated Ger- many, a thing which secretly she has never desired, France stands in th® way of gaining much through com» cessions to the viewpoint of the othep allies. Her financial position is to- day largely dependent upon the mod- eration of other nations in the ad- justment of debts. The very financiers who are now abused by France for insisting that France yield but a few months back saved the franc from a tremendous crash. They were hailed gleefully then. The very nations that saved France during the period of the war are but eagerly seeking to further co- operate with her sans the peculiarly noxious nationalistic nostrums of Poincare. But if France decides to block the conference, delay the inau- guration of economic settlements and cling to her peculiar ideas of perpet- uating self rather than working for common good, unquestionably lurope will see new alignments, an Anglo- German alliance being not the least of possible arrangements which eventually would subordinate French interest to that of the continent. France cannot afford at this time to be isolated morally, financially and economically. That is why some capitulation leading to inauguration of a new scheme of things from a reparations standpoint may be expected sooner or later. Common sense alone dictates some h actiol Indians Attacking Tribal Rule Would Have New Government Harnessed by the custom of cen- turies in the municipal control of corresponding to the white man's towrs, young men of the Taos Tribe of Pueblo Indians of New Mexico have initiated a move- ment to break away from the rule of the cacique, or tribal master, and substitute therefore government by a popularly elected official or mayor with a pueblo council. = The attempted breaking away of control of pueblo affairs by a group of progressive young men of the Taos Tribe marks the most serious attempt yet made to modernize their government, take the reins of gov ernment out of the hands of the ab- solute dictators and make it a demo- cratic form of rule. For centuries the pueblos of New Mexico have been governed by caciques, some- times nominally ruled by elected mayors, but always iith a power behind the throne—the cacique (pro- nounced kaseek), whose power is a matter of tribal custom and who cherishes by memory alone the tribal customs and achievements. For the Taos have no- written history. Their history has been handed down from the ages by word of mouth, con- veyed from cacique to cacique. Go to Secretary of Imterior. The progressive young Indians of the Taos have precipitated -the issue between the old and the new types of rule by raising the legal question with the Becretary of the Interior whether the cacique shall be per- mitted to sequester two Indian chil- dren every eighteen mogths, keep them out of school for a period of a year.and a half in defiance of the their pueblos, laws of compulsory school education and educate them to be future rulers of their tribe. Every eighteen months the cacique selects two ma¥ children, whom he causes to be put in a dungeon and initiated into the tribal rites and customs, at the same time learning the tribal secrets from the lips of the old cacique himself. When the old cacique dies, from the ranks of these children who know the tribal lore and customs a new cacique is chosen. The progressives among the Taos Tribe feel that if this custom is abolished there will soon be no material from which to choose new caciques when the time comes, and that within a short time a democratic election will result in popular selection of a tribal ruler. Commissioner of Indian Affairs Burke has been petitioned to issue an order and secure its enforcement compelling the attendance of the children in school in accordance with law, but he has declined to take this action, and the Indians have gone to the head of the Interior Depart- ment, who has yet given no decision. Definite Action Postponed. Secretary Work has postponed def- inite action until the Fall school term starts, and in the meantime is hope- ful of adjusting the whole matter through friendly negotiations. e For the second time in history arti- ficial moonlight for the lighting of a city at night is planned. Forty years ago Detroit had an idea about it, but more recently London has projected plans for building elusters of lights high towers for the purpose of shedding moonlight, artifically made, over the in