Evening Star Newspaper, October 23, 1927, Page 45

¥ EDITORIAL NATIONAL P A GE PROBLEMS SPECIAL FEATURES DISTRICT GROUP TO JOIN TOUR OF NEW ENGLAND Capital Delegates May Air Park Struggle Here as Civic Body Inspects Develop- ment of Boston Area. BY BEN McKELWAY. OMORROW in Boston some half a hundred experts and others interested in the vital- ly important subjects of city and regional planning will ®ather for their first “traveling an- nual meeting” under the auspices of the American Civic Association. Dur- ing the five full days of the meeting they will be taken on tours of the Boston metropolitan district, the Providence metropolitan district and the Connecticut Valley from Spring- field to Greenfield, obtaining on these tours a visual explanation of what - these areas, centers as they are of a dense industrial population, have done to preserve their natural surround- ings and to co-ordinate their develop- ment. At stopping places between the tours there experts will exchange opinions concerning the newly awakened en- deavor on the part of rapidly expand- ing communities to plan their growth in advance instead of spreading out hodge-podge, cultivating rather than destroying their beauty. Much of what is seen and said is expected to be discussed in_reference to the Na- tional Capital. For today Washington is the focal point of a belated national interest which centers in steps now in progress to make it an ideal Capital in the matter of parks, parkways and playsrounds. Meeting of Interest Here. This meeting will be of interest to ‘Washington, not only because of what it may develop with reference to the gh.nl for Washington's future, but use it will constitute another step in the many which recently have been taken toward establishing a Nation- wide pressure exerted toward the proper treatment of the American Capital. This movement has been gaining steadily in momentum, and much of it is due directly to the ef- forts of the American Civic Associa- tion and its Committee of One Hun- dred on the Federal City and the 75 other active committees on the Fed- eral City in as many cities through- out the United States. These organizations have been in. sistently preaching the gospel of the necessity for regional planning and proper park development for Wash- ington amd its metropolitan district, and largely through their efforts leg- islation was enacted in 1924 which brought into being what is now the National Capital Park and Planning Commission. This step was an indi- cation of the increasing enthusiasm %gg&m& t:::m ;o\:try over the m the growthof the Capital an ideal growth. But at a time when this- enthusiasm, which took so long to kindle, is burning brightly. a rather strange paradox presents itseif. Washingtonians, who worked faithfully and valiantly to fan into flame the national interest in the Capital, are beginning to show some alarm lest they be severly scorched by the heat. They are becoming only too plainly aware of the fact that ‘while ths millions of their fellow citi- ‘zens throughout the Nation are sym- m.unwuheflmtohnudlxreat ral City, these citizens have no understanding 58y E ‘:fi , appropriated for on the same basis that the city refuse department is appropriated for and discussed in ' the hallowed halls of Congress as if it were a selfish enterprise on the of . Washingtonians to boom their city and their real estate; some- thing, therefore, to be regarded with grave suspicion and distrust. . ‘Want Local Burden Lifted. ‘Washingtonians are beginning to feel that the laudable efforts of those ‘who are responsible for building up a sentiment throughout the Nation in favor of a proper development of the National Capitol should pause just Jong enough to bring the assurance that this sentiment will not assume the characteristics of a boomerang and return to smite Washingtonians. There may be broached for discus- gion at the Boston meeting, for in- stance, the fact that the National Cap- #tal Park and Planning Commission, which is doing such good work now toward regional development of the Capital, favors a bond issue, or a $10,000,000 advance from the Treas- . ury Department, which would enable it to accomplish within a few years what it will require perhaps 25 years to accomplish at the present rate of ,000 & year so far made available Congress. And it would be help- 1ul to the residents of the Capital if it ‘were explained, at the same time, why s0o many Washington citizens’ asso- clations during the last month, all of them highly in favor of parks and ‘k development, are opposing this d issue or Treasury advance when to secure it would seem, on the sur- face, to be a most desirable thing. It might be well to acquaint this Boston gathering of national city plan- mers and advocates of a finer Capital that such opposition is founded, not on the large amount of money involv- ed, nor upon any doubt that it would be well spent, but is based on well ,grounded suspicion that such an ad- wvance will be repaid almost wholly out of District funds to complete a project which is universally regarded as na- tional and country-wide in its impor. tance and appeal. Plan Founded on Economy. ‘The National Capital Park and Plan- | $ing Commission is not a body given .o seeking huge sums of money from the citizens in order to indulge in an orgy of spending on parks and play- grounds. While: the proposal for the $10,000,000 advance, to become avail- able at the rate of $2,000,000 a year for 5 years, originated in the Park and Planning Commission, it has not yet been carefully studied by Congress. But when this plan is ready for study, it will be founded on good economy and not on pleasant dreams. The Park and Planning Commission +has put in some good work seeking a general program for the creation of re- ereational centers within the District; @ program_ which, when realized, will assure each community of the Capi- tal an adequate area of that sort. It has also been devoting time and thought to the manner in which it may complete the park system, not only of the Capital, but of the met- park development scheme where year- ly action toward the acquisition of large sections of land will be highly desirable. For the last two years the annual appropriation for the Park and Planning Commission’s work has been $600,000 and for the current fis- cal year the appropriation is $900,000, of which $300,000 was carried over from the preceding appropriation. The commission believes that with yearly appropriations of the future, approximating in size those of the past, it might complete, say within 25 years, the program now forming. But with $10,000,000 available within five vears this program could be completed almost as rapidly as the money could be spent. Therefore, says the commission, instead of slowly completing our work as the money be- comes available in driblets of $600,000 a year, let us have all the money now, finish the work, and then repay the loan at the rate of $600,000 a year or whatever amount Congress may de- cide. In addition to expediting the completiin of the program, there would be simple economy in taking advantage of present-day prices in- stead of prices to be met 10 or 15 years hence. And this argument, pro- vided the Park and Planning Commis- sion could wisely spend its money, is perfectly sound and its logic is hard to refute, Project Considered Federal. But there is a large fly in the oint- ment, detected most easily by looking back to the months antedating the for- mation of the National Capital Park Commission, established by an act of Congress dated June 6, 1924, the pur- pose of which was to acquire “such lands as in its judgment (the judg- ment of the park commission) shall be necessary and desirable in the Dis- trict of Columbia and adjacent areas in Maryland and Virginia * * * for the development of the National Capi- tal park, parkway and playground system.” Those who were behind this legis- lation, and they included the Amer- ican Civic Association and men and women throughout the- Nation who realized the importance of the sub- ject, looked upon the measure as a distinctly Federal project. They did not consider it to be local in any sense of the word. They did not confine the land to be bought for parks to that lying within what was once the 10 Square miles of the District, but look- ed into the future, when the terri- tory lying without the geographical limits of the District would be, to all intents and purposes, a part of the Federal City. With this in mind there ‘was written into the bill, and it still |- remains, the following language: “That there is authorized to' be appropri- ated each year hereafter * * * asum not exceeding 1 cent for each inhabit- ant of the continental United States as determined by the last preceding decennial census, said sum to be used 2{ “I:I:x;:mmmkénl lormthn payment nses and for of the land. * ¢ e+~ R oaiition The thought was an appealing one, and the idea that every man, v,:)mln and child would in effect be taxed one penny every year to beautify the American Capital was not only pic. turesque but altogteher practical. It did not seem probable that even those astute members of Congress, who pride themselves upon being referred 1o by the feature writers as the watch- dof' of the Treasury would see any- o a2t thel? Senmncs S thern atéh: EWC'; leashes or to howl u ngress the bill was emas- culated and the provision was ln;nfi that expenses for the National Park and Planning Commission would be made available in the annual District appropriation bill, and, furthermore, that “the funds so appropriated shall be paid from the revenues of the Dis- trict of Columbia and the general fund of the Treasury in the same propor- tl'on as other expenses of the District of Columbia.” 1In other words, if Con. gress appropriated for the District on the half-and-halt principle, the 500,000 residents of the District would pay halt the money appropriated, the 118, 000,000 other residents of the United States paying the other half. If ap- propriated for under the “sixty-forty” principle, the 500,000 residents of the District would pay 60 per cent. As it is, the District is paying about 76 per cent, while the 118,000,000 other resi- dents of the United States are co; tributing 24 per cent toward the com- pletion of this great “national” proj- ect. Instead of an annual appropria- tion of over $1,000,000, the annual ap- propriation is $600,000. Contributions Greatly Cut. ‘This idealistic program of develop- ing Washington as a great National Capital, therefore, already shows rigns which certain members of the House may chew in acstasy as they bark their determinatjon to save a fraction of a penny for each of their beloved constituents, to whom they mail, at a greater cost to the Government, cop- ies of the Congressional Record fairly teeming with their brilllantly intel- lectual remarks. Instead of a Capital whose wooded parks will express the idealism of a great Nation, these mem- bers of the House prefer that it be a Capital whose wooded parks express their own clever ability to shift the burden of cost to the unrepresented citizens of the District. And as for the citizen of Ocotollo, Ariz., who reads the National Capital Park and Plan- ning Commission bill, taking pride in the fact that his penny is going into the development of the Capital, his Capital—let that stand! He does not know that his penny is not a penny, but o small a fraction of a cent that neither he norany oneelse will ever recognize it. It is not surprising. therefore, that Washingtonians who are giving thought to the matter have already rebelled at the $10.000,000 Treasury advance plan. If the advance were made and paid back according to the principle so finely advocated in the be- ginning, the people of the District sharing their part of the cost proudly and eaually with other citizens of the United States, they would only praise and commend the plan. As it is, Wash- ingtonians are constantly finding new greund for fear and distrust of Con- gress. They have been led by the nose with fine promises before, to find themselves afterward in deep water and gasping for breath. They want Congress to put it down on paper and sign on the dotted line before they are willing to do any more bargaining. City Well Represented. ‘Whiile the meeting of the American Civic Association, beginning in Boston tomorrow, is to be devoted primarily to-considering the things that Massa- ropolitan area surrounding it. By next January the Park and Plan- ning Commission will have progressed to the point in its recreational area ‘program where "l Wil:l know :lx.c"i{ what is needed. In the meantime the polat in ity chusetts, a pioneer nearly 40 years ago in planning a metropolitan dis- trict around its capital, has done and is doing, Washington’s municipal gov- ernment, its trade organizations and 7 (Continued on Third Page) EDITORIAL SECTION he Sunday Star WASHINGTO! D. O, e e SUNDAY MORNING, OCTOBER 23, 1927. The Significance of Navy Day BY G. GOULD LINCOLN. AVY DAY, 1927, takes on unusual sig- nificané®. The people of America are called upon to consider on that day the needs of the Nation on the sea. Thurs- day, October 27, the birthday of President Theodore Roosevelt, firm friend of the Navy always, is set aside particularly for this ob- servance. The' Navy League is sponsoring the celebration in every part and every city of the countr; Navy day this year takes on added signifi- cance for several reasons. First, it is appar- ent through the failure of the tri-power naval conference at Geneva last Summer that there is to be no immediate limitation of naval construction. That is, no immediate limitation except that provided in the treaty of Wash- ington, governing capital ships and air car- riers. Second, it is just a decade since the United States Navy was called upon to play its impor- tant part in the World War. It is just a decade since the American people were called upon to pour out 3,000 million dollars to pro- vide a “bridge of ships” across the Atlantic Ocean, a bridge over which passed men, muni- tions and supplies for the armies of the allies and associated nations and for the peoples of Great Britain, France, Italy and Belgium. ey Within a few weeks the new Congress meets. With the advice of the President, the Congress must determine what is to be done for the Navy. It must decide, too, what is to be done for the merchant marine of the United States. The second problem bears carcely less upon the well-being and safety of the Nation than does the first. For *“sea power” divides itself into two phases. First, the armored and armed ships of the naval service, and the aircraft attached thereto. Second, the overseas merchant ma- rine, capable of acting in time of emergency as the right arm of the Navy, and in time of peace as the carrier of American goods to all parts of the world. Without adequate ‘“sea power” the United States cannot maintain its position of world leadership. Without “sea power” the United States becomes impotent in world affairs, is forced to become self-contained and finally becomes vulnerable to the attack of other more farseeing martime nations. The United States, since the Washington conference on naval limitation and problems of the Pacific, has been content to allow other sea powers to outstrip it in the construction of new naval craft, particularly speedy and powerful modern cruisers, destroyer leaders and submarines with a wide cruising radius. This situation came prominently to the atten- tion of the country during the Geneva naval limitation conference this year. It was found that in craft other than capital ships and air- craft carriers the 5—5—3 ratio had gone into the discard. Great Britain, under the ratio supposedly the equal of the United States, and Japan, supposedly on a 3-to-5 basis with this country, both have laid down and constructed powerful modern cruisers in excess of the United States. What are Congress and the President going to do about it? * k ok ok Ever since the close of the World War the problem of the overseas merchant marine has pressed for consideration, By the enactment of the La Follette seamen's law, intended, and justly so, to benefit seamen on American flag vessels, the Congress made it difficult for American vessels to compete on equal terms with the vessels of other nations in the over- seas carrying trade. But while this law solved problems for the seamen, it merely adds to the problems of the American ship owner. The late President Harding, impressed with the vital need of upbuilding a permanent overseas American merchant marine, undertook to put through Congress the so-called subsidy bill, glving Government aid to private American shipping. Immediately there rose a howl against subsidizing “special interests.” It was in vain that supporters of the Government aid bill pointed out that other maritime powers, in- cluding Great Britain, France and Germany, glve such aid to their ship owners and opera- tors. The cry of “subsidy” killed the Harding bill dead as a doornail. Under the direction of the United States Shipping Board, and through the Fleet Cor- poration, American flag ships owned by the Government have been kept in the overseas trade. Some of the Government-owned ships have been sold to private American ship men and shipping companies. The capital invest- ment for these ships has been low enough for their private owners to maintain them in op- eration with no‘inconsiderable degree of suc- cess in certain instances. Others have been hard put to it, owing to the intensified com- petition immediately leveled at them by for- eign shipping concerns, as soon as the back- ing of the Government of the United States was withdrawn, * k k Xk The greatert difficulty which faces the Amer- fcan mercharnt marine today, or will soon face it, is the matter of replacement. Ships wear out. They have a certain life of usefulness, like automobiles, locomotives and railroad cars, and that life eventually expires. Private own- ers do not find themselves in a position to in- vest heavily in new ships, at costs far in ex- cess of the prices paid the Government for their purchased ships. The Government's own ships are growing old. Some of them are threatened with obsolescence already. It is time, high time, that the Government, through Congress and the Chief Executive, determine upon a permanent and constructive merchant marine policy, a policy which will look to the operation of American flag ships in the carrying trade on the seven seas, a policy which will permit of and provide for replacement of merchant vessels now in the service and the augmentation of the merchant fleet. This is a major problem for the next Congress to tackle. There has been criticism both here and abroad of the principle advanced that the United States requires or should undertake to possess a Navy equal in strength to that of Great Britain. There was no criticism of that 1dea, however, in 1921-22, during the Washing- ton conference. It was accepted then by Britain's foremost representatives. At that time the United States was building the great. est Navy the world had seen. The United States was financially in a position to go ahead with this naval construction on a scale which would have placed a terrible strain on Britain, Japan or any other foreign nation, * ok k Xk A glance at the facts should convince any * American that the needs of the United States for an adequate Navy, a Navy comparable with that of Great Britain, are not to be dis- regarded. America has a huge coast line to defend. It has a tremendous coastwise ship- ping trade which must be protected. This ocean-going coastwise trade is equal in size and value to the entire ocean-borne commerce of the country in ordinary years. Much of this coastwise trade travels long distances. Over 11,000,000 tons last year passed through the Panama Canal, which means a minimum distance for this tonnage of 4,009 miles. Lum- ber from Alaska and Washington travels 8,000 or 9,000 miles in ships to Eastern centers. Oil goes from California and the Gulf States to the Atlantic Seaboard cities. Texas and California cotton is sent to New England mills and West Virginia coal to California and New England ports. An adequate Navy for the protection of this ocean-going coastwise trade, which the railroads could not handle, or if they did would increase costs greatly to the consumers, is *cheap insurance.” The United States, moreover, in 1926, was the greatest exporting Nation in the world. It bids fair also to become the greatest im- porting Nation. America's foreign trade in value last year was $9,200,000,000, almost equal to the huge debts owed this country by the nations which borrowed from America during the World War. Britain’s total trade, the trade of the empire, was only $600,000,000 in excess of this total. This American trade goes to all parts of the world, some of it in American hottoms, though not as large a share as should be carried so. The importance of this trade leads naturally to a demand that the United States have a Navy as strong as that of any other country. * ok ko ok important this foreign trade is to the Americ people is told in reports of the De- partmerft of Commerce. Approximately one- sixth off the total value of American agricul- tural products have been shipped overseas in recent years. The American oil industry ex- ports 35 per cent of its kerosene, 29 per cent of its lubricating oils, 14 per cent of its gaso- line and: naphtha. Forty-one per cent'of the American copper production is sold abroad, and sa is 30 per cent of the locomotive produc- tion, 23 per cent of the sewing machines pro- duced, 39 per cent of the typewriters produced, 8 per cent of the automobile production and 60 per cent of the motor cycle production. In- deed, the average of all manufactures and me- chanical production of the United States sold abroad is 8 per cent of the total. 1t is not only the export trade of the United States that requires the protection of the Navy and the assistance given by the American flag merchant marine. The import trade is vitally important to American life today. Fertilizers come from Chile, binder twine from Yucatan and cotton bags and grain sacks, needed by the farmer, from India, rubber from Malaya, shel- lac from China and India, silk from Japan, manganese from Brazil, tin from the East In- dies and Bolivia, hemp from the Philippines, and scores of other materials which America cannot produce in sufficient quantity to meet its needs. The United States has a population in ex- cess of 110,000,000. Of this number approxi- mately 42;000,000 are gainfully employed. Divided into great employment groups, they size up about as follows: Agriculture, forestry and animal industry, 10,950,000; mining, includ- (Continued on Third Page.) How, The New Plan for Cutting Taxes DISARMAMENT PROGRESS IS HELD BACK BY FEARS All Nations of Europe Want Peace and Smaller Forces, but Demand Security for Selves First. BY WILLIAM P. HELM. TAX reduction program that would fasten upon a small group of corporations the bulk of the income taxes paid throughout the United States has been worked out by Chairman Green of the ways and means com- mittee. Minority Leader Garner has indorsed the idea. It will be pre- sented to Congress and at the moment appears to be the outstanding tax revision proposal, with better chances of passage than any other, although it may possibly be upset in the Senate. Under the Green-Garner program there would be no cut in the present corporation rate of 13% per cent, for the reason that the prospective Treas- ury surplus for the coming fiscal year is not large onough to warrant adop- tion of Mr. Green’s idea and rate re- duction, too. For the same reason, the total elimination of the automobile excise and other so-called nuisance taxes could not be accomplished. Nor would the surplus permit the repeal of the Federal estate tax, urged by business interests generally and recommended by the Legislatyres of more than 30 States. The Green-Garner plan, briefly, pro- vides for raising the exemption now allowed corporations from $2,000 to $25,000. For some time past experts of the committee have been calculat- ing what such a move would cost. The latest figures indicate that the plan, if adopted, would decrease Fed- eral revenues by about $225,000,000. That figure is in excess of the entire estimated surplus for the coming fiscal year, put by the President at about §215,000,000. Thus it would ap- pear that adoption of the program would preclude the enactment of any other form of tax reduction. * ok Kk In its tentative form, the proposal provides for lifting entirely the Fed- eral tax on corporations whose net income is $25,000 or less. That means that 10 corporations out of every 11 in the country would go tax-free s0 far as the Federal income levy is concerned. There are approximately 450,000 corporations engaged in busi- ness in the United States and fewer than 40,000 have net incomes exceed- ing $25,000. Among those 40,000 prosperous cor- porations one finds_virtually every name listed on the New York Stock Exchange. This group, more than any other, has been active in work- ing for a lower corporation rate. Apparently they are doomed to dis- appointment at the next session of Congress, ‘What they would get, instead of a rate cut that would mean milions in lower taxes to some of the large con- cerns, is a tax reduction of about $3,- 100 aplece. That figure represeuts the amount by which their income taxes would be lessened by raising the exemption from $2,000 to $25,000, Under the surface the program has aroused vigorous opposition on the part of some of the larger cor- porations. A concern of the magni- tude of the American Telephone & Telegraph Co., for instance, would stand to get a tax reduction of about $1,000,000 if the present rate were cut only 1 per cent, or from 13%; to 12%. If the cut were to 10 per cent, as proposed by many organizations, such a’ corporation would get a re- duction of about $3,600,000 in its tax bill, Under the Green proposal its taxes would be reduced only $3,100, some- what less than one one-thousandth part of what it had hoped for. General Motors under the pro) 1 to owt #0 10 per cent would obtaln a tax cut amounting to about $7,500,000. Under the Green proposal it would receive $3,100. A corporation with net earnings of $1,000,000 a year would benefit to the extent of $35,000 a year by a cut in the rate to 10 per cent; one with $500,000 would pay $17,500 less taxes, and one with $100,- 000 would get a cut of $3,500. Under the Green program each would re- ceive but $3,100. Officials of large corporations are endeavoring to head off the Green proposal, but thus far have made no organized move to do so. Their chief argument to date is that the program discriminates greatly against the small stockholder in the big corporation and in favor of the large stockholder in the smaller corporation. The con- tention has not been placed formally before the committee, but it will be. Here is how the Green plan would work out as these officials see it: ,Take a closely held corporation with capital of $500,000 and net in- come of $25,000. The owner of this stock would receive the full $25,000, entirely free of corporation tax. Take the holder of stock in, say, the American Telephone & Telegraph Co., which incidentally, has more than 400,000 stockholders. The earn- ings of that company would be taxed 13% per cent and the stockholder would recelve not 100 per cent of the net income (less whatever portion is held as undivided profits), but 86% per cent. In other words, the big stockholder in the small corporation would re- ceive, in dividends, virtually the en- tire net income of the corporation, while the little stockholder in the big corporation would be called on to pay 13% per cent in taxes before net in- come were available for dividends. * k Xk *x Against this argument proponents of the plan assert that it would grant a boon to the thousands of strug- gling concerns throughout the country who can now least afford to pay a heavy tax, and that it would tax only the prosperous concerns which can best afford to pay the tax. There has appeared to date no answer to the charge of alleged = discrimination among stockholders. If the Green proposal is adopted, it would remit nearly $100,000,000 in taxes now being paid by corporations whose income does not exceed $25,000 a year. Such is the result indicated by the latest available figures from the Treasury covering tax returns filed last year and covering 1925. To that $100,000,000 should be added a further remission of about $3,100 in taxes to each of about 40,000 corpora- tions with incomes of more than §$25,000. In the case of that group the total tax remission would be near- ly $125,000,000. For the two groups the total cut brought about by increas- ing the exemption would amount to nearly $225,000,000. That figure, as stated, exceeds the prospective Treasury surplus for next year by $10,000,000. There are indica- tions, however, that the estimate of the surplus will be revised to indicate a larger surplus than $215,000,000, and on that theory some of the adminis- tration leaders in Congress are advo- cating a tax cut of $300,000,000. Assuming that Congress should de- cide to cut taxes by $300,000,000, the He Prépared for Good Times BY BRUCE BARTON. ! T the dinner table we were dustry and contributed much to his city. “He had an cal for work,” long friend, “ ability to select and train men.” Another man, also a lifelong friend, nodded his head in agree- ment. “I give hi inexhaustible full credit both of those qualit “but | would add acteristic and put it al other two. in periods of depression. When other men were hopeless, he ways prepared for good time: O of th benefits that came to us war was a certain hardening of our nerves. Twenty years ago, when it was np:rt; '-‘n the newspapers that J. P. Morgan was ?Il,” the ck market sold off, Now the papers may carry reports of international compl cations and a dozen calamiti but we refuse to be stampeded. We have made considerable ress toward the realization pro _that the world is not going into (Copyright, 1927.) the hands of a receiver, that, howe: serious things may be for the moment, the common sense of mankind will finally sert If and good times will follow bad. ‘The wi investors and specu- lators have always recognized that truth. In one of the French revolutions. Baron Rothschild r od call from a young man who had recently inherited quite a sum of money and wanted to know how to invest it safely. “Buy French bonds,” Rothschild. “But, Baron, the gutters of Paris are running with blood.” | “That,” replied the Baron, “is why you can buy them for 50 per cent of their face value.” Caesar, launching out into the storm, read in his boatmen’s eyes the dread that they were in for a .bad time which would probably be their last. “Fear not,” said he, “you carry Caesar and his fortunes.” may call that faith, or ism, or confidence, as you . The name makes little dif- ference, if only one can get a little of it and hold on when everybody else lets go. said Greén plan, if adopted, would call for $225,000,000 of that total, leaving but $75,000,000 available for other forms of tax reduction. Such a sum would permit the elimi- nation of the automobile excise tax alone, but would not be sufficient to include the abolition of the admis- sions, club dues and other nuisance taxes. The $75,000,000 would be insufficient to cover the loss to the Treasury from repeal of the Federal estate tax, which last year produced about $100,000,000. Again, the $75,000,000 would be too little to permit of a real reduction in the corporation tax rate. A cut of only 1 per cent amounts to about $100,000,000. L From the estimate of the surplus it would appear, therefore, that enact- ment of the Green proposal would pre- clude any other form of tax reduction, with the possible exception of the au- tomobile excise tax. Secretary Mellon is represented as being opposed to the entire elimina- tion of the automobile excise and other nuisance taxes. His reported advice to advocates of repeal has been to work for a reduction of the tax—to take off a part of it, rather than all. Mr. Mellon also is in favor of a re- duction, if warranted by the state of the Treasury, in the corporation tax rate. He is likewise on record as fav- oring the repeal of the Federal estate tax. As those proposals clash with the Green plan for reducing by exemption, another encounter between the h of the Treasury and the chairman of the ways and means committee ap- pears in prospect. Mr. Mellon has not, as yet, outlined his ideas as to how taxes should be cut and Congress and the public are uninformed, at the present, as to what the newest ‘“Mel- lon plan” will embody. But whatever it is, it is certain of strong support by a host of business interests who are willing to take the Secretary’s ideas ahead of their own and support without question any tax plan he may propose. LR R R Some time - before Congress con- venes, Mr. Mellon probably will break his silence on this subject. In the past he embodied his views in letters addressed to the chairman of the ways and means committee and he is likely to do so again. While no one has authority to speak in advance for Mr. Mellon, there.is a fairly definite impression among business interests that he will advocate: First, a modest reduction in the corporation rate. Second, repeal of the Federal in- heritance tax. Third, a reduction in the so-called nuisance taxes, including 3 per cent tax on automobiles. There is likewise a definite and clear-cut impression that Mr. Mellon will not advocate an increase in th exemption allowed corporations apd will make no reference to Mr. Green's pet plan. It has been'the consistent policy of the Treasury to advocate small tax on a large number of indi- viduals. Behind that is the theory that such a tax quickens interest in national affairs on the part of the rank and file of American citizens. The same theory holds for the smaller corporations. Every one, in the Treasury’s view, should pay some lélnd of tax, M]lti Qv:il;:& l;m-]'l. The reen proposal is at vari- pr !‘lnt policy. b2l BY FRANK H. SIMONDS. NEVA.—What are the pres- ent prospects of disarma- ment in Europe? For the practical-minded American, keenly aware of the fact of two successive failures at Geneva, those of the preparatory conference and of the three-power meeting, the reports of the latest adventure of the League must be examined in the light of this question. Actual progress has been exactly nil. It is true that feats in verbal gymnastics almost unequaled in mod- ern times have been performed. Words have been discovered to reconcile prin- ciples and accommodate positions which were—and remain—irreconcil- able. But in the end every one re- mains exactly in the position taken befors the Assembly. Armies remain untouched. This failure in the Assembly was mightily forwarded by failure in the three-power naval conference. In the earlier gathering the British repre- sentatives stood uncompromisingly upoL their right to fix their naval strength. They openly adopted the principle that disarmament was con- ditional upon security, and security was something for the individual coun- try to decide. Greater Tonnage Needed. Although the war had at one time eliminated the single fleet in Europe dangerous to Britain and had made it impossible for France or Italy, the remaining great powers, to build fleets even remotely menacing to Britain, the British at the naval conference felt bound to ask for themselves cruiser tonnage in advance of that pos- sessed before the war. As far as Europe is concerned, this British decision carries no regret. Since both France and Germany feel themselves insecure, both welcome the existence of a great British navy and are inclined to praise rather than criti- cize the decision to increase it. On the other hand, those Conti- nental nations, like France, which rely mainly upon armies for security, see in the British stand with respect of their navy an ultimate acceptance of the Continental view that security must be based upon force. After the naval conference no British states- man can urge France to reduce her army beyond French conceptions of safety, and the same principle ap- plies to all other armed nations. The words spoken by Bridgeman and Cecil at Geneva supply the retort for any British urging for reduction of Con- tinental armies. Pooling of Strength Alternative. Now the Continental position with respect of disarmament is simple. For all countries the alternative to large individual armies is a pooling of the military strength of all nations be- longing to the League in a common alliance to defend any member wan- tonly attacked. With such an alliance the countries could afford to reduce their own armies. But a second British principle here intervenes. The British refuse to join any League combination which might give a collective guarantee to all mem- bers. They insist upon being strong enough at sea to defend themselves. They refuse on land to bind them- selves to help defend any country in a League alliance. The Briton says, in substance: b s will have the fleet I need. will agree to, use my naval and military strength "in Europe only where it is clear in advance my interests are at stake. Since war in the Rhineland must affect me, I will agree, through the Locarno pacts, to defend the fron- tiers of France, Germany, Belgium— and, by inference, Holland. But, since my interests are not necessarily in- volved in Poland, Rumania or Jugo- slavia, I will make no general con- tract.” He makes the further observation: “It is absurd to undertake to guan antee all the frontiers of Europt now, because some of these frontiert are impossible and must be remade To promise to defend the integrity of Poland would be to agree to joln in certain war, for Poland is bound t¢ be attacked sooner or later -by both Germany and Russia, because for both the present Polish frontiers are intolerable. These frontiers must be amended, not guaranteed.” Must Have Guarantees. On the other hand, the Poles, the Czechs, the Rumanians, who feel themselves exposed, are just as cer tain not to agree to reduce their very considerable armies while they have no guarantee. Nor is France, relying upon Poland and Czechoslovakia for protection against Germany in a new war she always fears, likely to urge her allies to reduce their armies or consent to reduce her own. The German position is different. The Germans are not only disarmed, but by the peace treaties condemned to_stay so. Thus Germany has every reason— and some legal right under the treaty of Versailles—to demand that the process of disarmament which be- gan with her shall be extended to others. She has a good case for pro- test as long as she remains substan- tially disarmed in the midst of an armed Europe. But she has no des sire to see the League transformed into a defensive alllance to defend all natons against attack and thus to guarantee the integrity of all coun- tries on the present territorial basis. Germany, like Hungary and Bule garia, refuses to accept treaty deci- sions on territory as permanent. She wants to have the treaties revised be- fore the League is made the guaran- tor of all nations against any attack. Thus her policy inclines to the British direction. Germans and Britons alike argue for disarmament on land, but are equally opposed to any League undertaking, like the famous protocol, which shall pledge all to aid any ate tacked country. ‘While Britain solidly refuses to undertake any contract to come to the ald of an attacked country, Ger- many with ever-growing insistence argues that there must be L ment. But the net effect of the com- bined British and German policies, if they prevailed, would be that exposed nations, like Poland, would disarm without any general pledge of aid if attacked. No Progress Since 1925. Not one inch of progress has been made beyond this point since 1925. Obviously all the pious resolutions will not change a situation in which all nations agree the national judgment must determine the needs for national defense. There, in a nutshell, is the present European situation. The nations which have large armies feel them- selves exposed to attack. The nations which have been disarmed make no disguise of the fact that they do not mean to accept permanently the frontiers created by the peace treaties. ~But the nations who profited by these treaties are - pre- cisely those which are now armed and feel themselves thus endangered. t, then, could or can the League of Nations do in the premises? It has no power of its own. It is no more than a meeting place. Just as long as the British will not accept the League as a common alliance of all to keep peace, by force it necessary; just as long as France and many other countries will not re- duce their own armies until they have League guarantees of aid in case of attack; just as long as certain countries will not accept the existing frontiers and certain others will not . consent to modify them, the situa- tion is hopeless and must remain hopeless. (Conyrixht. 1927.) WAR DEBTS AND REPARATIONS ARE STILL TROUBLING WORLD Final Disposition of Settlement Has Been Postponed for Future Consideration, But Allies Must Finally Face Problem. BY HAROLD G. MOULTON, Director, Institute of Economics. The reparation and debt issues, it is now conceded by all close students of the question, have not been solved. They have merely been laid upon the table by means of adjustments de- signed to postpone the coming to grips with the real issues until a more pro- pitious day. Settlements made have in their final ead | effect called for the delivery of stu- pendous sums from distressed conti- nental countries to the United States. The statesmen of the allied' world de- cided that Germany must pay for all damages done “by land, by sea and from the air,” then in 1921 submitted a bill aggregating $33,000,000,000, re- quiring Germany to begin paying at once at the rate of approximately $1,000,000,000 & year. The statesmen of the United States permitted a breathing spell of about four years before pressing American claims. They then laid down the principle in the World War debt funding act that all the war debts to this country should be paid in full, with interest at not less than 4% per cent. Great Britain would be merely a transfer agent between the Continent and the United States, y The attempt to restore the world to health and prosperity by starting a flow of wealth from central Europe and thence to the United States proved utterly disastrous. The German finan- clal and economic systems broke down and the nation went into. the | 8roup, hands of foreign receivers, so to speak. The lesson learned from the repara- tion calamity proved distinctly usefpl, however, in connection with World ‘War debt negotiations. The later set- tlements were ostensibly based upon the principle of capacity to pay, and called for merely normal payments in d | the first few years, thus providing for ceeded the payments made by Ger- many under the Dawes plan. And the loans of the United States to the rest of Europe—Great Britain aside—have been enormously in excess of the small sums that are currently payable under the terms of the debt settlements. In a word, the flow of wealth has of late been from rich to poor, and the latter have in consequence been looking up. Instead of liquidating indebtedness to the United States, Europe has been incurring an enormous volume of new indebtedness to this country. While this borrowing is in progress Euro- pean conditions are alleviated, but it is obvious that the real test for Eu- rope has yet to come. (Covyright. 1927.) Tokio Seen Reviving Old Policy in China: Japan's ‘“new policy in China” seems to be the most popular food both for news and editorials in the Japanese newspapers these days. As a matter of fact, there is no policy. The so-called new policy is the old one which was inaugurated after the Russo-Japanese war and which gave Japan a foothold on the continent. The policy then established by Ito, Yamagata, Inou and Matsukata loose,” but Saionji has instructed Tanaka, premier, to make “We'll never loose our hold on the continent” the slogan of the government party of Saionji and Ito. o Primitive Trade in Balkans. ' - Primitive methods of barter and trade were used in a recent interna- tional exchange of commodities be- a virtual moratorium, during which it|tween Czechoslovakia and Bulgaria, ‘was hoped the major difficulties with|in which 2,600,000 pounds of Bul. which European nations were con-|garian bacco were traded for aSri~ tol fronted might be satisfactorily ad-|cultural machinery manufactured. in justed. Since 1924 much improvement has occurred in Europe. the impoverished nations of col Czechoslovakia. After the preliminary B aimee. 1954 | axtion trory the B e e jut since gation from the nti- | department and the Bulgarian Agrisyl- et nental Europe have not been trans-|tural Bank visited Prague, where the ferring wealth to the prosperous| machinery was inspected and oréered. United States. On the contrary, the|The United States has, through vast mew loans, been helping Europe to get back on her feet. The loans of the outside uf the A s bacco Conyrisht, 1087.) _dudidie World to Germany bave greatly ex:' cultural machinery was supplied by man- facturers who had been notifled by implements. .