Evening Star Newspaper, December 5, 1928, Page 2

MELLON'S REPORT MILDLY- OPTINISTIC Secretary of Treasury Sees Bright Indications Ahead for Business. A carefully drawn picture of bus(nes# for the year ending last June 30, show- | ing a decline in volume of 3 per cent | but several brighter indications for this ! year, was presented to Congress today by Secretary of the Treasury Mellon. | The man who for nearly ecight years | has directed the Nation’s finances and | who now appears about to continue with | the same portfolio under incoming President Hoover disclosed in his an- nual report not only the gains made, but the losses suffered. He described a period which he had informally char- acterized previously as “spotty.” It was not an enthusiastically opti- mistic review. Many eclements of strength in the general situation were outlined. The weaknesses were told. But few conclusions as to the prospect for the future were indulged in. Mast of these conclusions, however, were op- timistic. % Much water has passed under the, bridge since the year described, ending June 30, five months agé. The graywf: haired Secretary himself since that date has made several ‘campaign speeches concerning -the present” “‘prosperity” of. the country. And the -annual address of President Coolidge to the Congress | vesterday, of vigorously optimistic tone, | even warning against overconfidence, | has been interpreted as being based, in | part at least, on later reports from the Secretary of the Treasury. Activities Reviewed. But this annial feport, which will be carefully perused and given much | weight by students of the economic | situation, comprehensively covers the business and financial field in the United States, touching as well on con- ditions abroad. ~The.activities of the Treasury Department are reviewed with satisfaction by its head. “The physical volume of industrial production for the year,” Secretary Mel- lon said, “was nearly on a par with a year warlier, but soon fell off, reaching 2 low'point in November and December, 127, ficovory took place in January, and the monthly volume thereafter was sustained about equal to the same months of the preceding year.” The total for the year was 3 per POPULAR PRIZE equipment also incréased, but land val- ues declined slightly, so that the net inventory increase was estimated at $132,000,000. - “A suryey of all the products indi- cates that the:improvement was con- fined primarily to cotton and grain, particularly corn. While the gross -in- come from these crops increased, the total gross income from meat products (primarily pork), dairy and poultry products, and fruits and vegetables de- greased. Since the close of the fiscal | year, however, the position of producers cent below the prior year. Measured car loudmgsdo(u ImgbhtL 5 per cent decline, but fifi.‘)’\s of the loss was in“the’tombined, loadings of coal and OT@a s - & s “Automobile productiof.” Secres. tary said, “experienced & .major; turk: for the better during the yetr. Mont figures, after ‘;id]u;m&rgtmr Sseason! tendencies, indicate X decline which began-in«Nevember, 102% reached its lowest poffit in November and December, 19827:- Fhe year ’endg\; with June-July prodtigtion nearly per cent above Jume-july, 1927, al- though the total for the 12 months Was 12 per cent below the year. Steet ingots - production _foll much the same course: as -autom producti but the tofal for the year was only 3 i per cenit below the preceding year. 4 Building Contracts Gain.. “Building contracts awarded tof 2.4 per cent more in value than during the prior year, increases being shown for the contracts classified as residen- tial, public works and u% and edu- cational. New high reco! or s months were established for October, ary, April, May ang June. Since months showing. the grt t gaing. largely "in ‘the’ jast of u fiscal year, the resulting stimulus to business actlvity was to some extent ed to the following year.” . Discussing business profits, the secrga tary of the Treasury said that during the fiscal year 1928 the earnings of ‘manufactul and mining companies, according to the net income shown in the reports of 150 identical corpora- tions (exclusive of General Motors and TUnited States Steel), “declined about 7 per cent, as compared- with the prior year. ‘There were substantial differ- ences” he went on, “in the trend of earnings of the various companies in- cluded in the tabulation. The reduc- tion in earnings of manufacturing and mining companies was due primarily to the production and e situation,in two important industries—steel and oil. Profits of the steel companies declined t one-fourth, the decline for the TUnited States Steel Corporation being zimilar to Hlln rm;"the“ . steel com- ies, while profits for ?:I.;Ies were reduced by nearly one-half. “Companies in other industrial groups hadl in the aggregate an increase of 4 per cent over the preceding year. Por‘L this group of companies each quarter, except the opening quarter of the year, showed some gain over the correspond- ing period in the preceding year. The groups of companies showing increases for the year .were -those. engaged in manufacturing of automobiles and ac- cessories, food and food products, to- bacco. chemicals. and .miscel- laneous other products, - A decline was| shown by the group of companies pro- ducing railway equipment. various types of machinery and miscellapeous metal products,” B Prices at wholesale for all commodi- ties, the Secretary said, were over 4 per cent higher u;ethe end of the fiscal year than at the beginning. was used by the Sectetars. for‘explana-. tion of a curious factor in the situation for the year. : Check Payments_Increase, “Although prices rose over 4 per cent,” he said, “between the beginning and the end of the “and the phys- ical volume of produ clined 3 per cent_for. the money value of business transac as measured by the volume of check yments outside New York City was m per cent greater in June and. July, 1928, than in June and July, 1927, and 7.7 per cent greater for the whole year. This contrast is accounted for By a greater velocity of deposits and an ex- pansion of transactions purely financial in nature.” Domestic trade statistics, the Secre- tary said, revealed no evidence of a general decline in consumers’ buying power, but a trend toward “more direct marketing.” _The growth of chain stores was commented on by Secretary Mellon, who said that, with one excep- tion, they showed “larger sales every month than a year ago and each month making a new high record.” Export, trade, he pointed out, had an aggregate value in the year of 1927-28 of $4,877,000,000, which was 1.8 per cent less than in the preceding year, but was larger than in any other year since 1920-21. Imports were shown to have reached a total value of $4.146- 000,000, a decrease of 2.5 per .cent.as compared with 1926-27. Agriculture Made Gains. “Agriculture as a whole made sub- stantial gains,” flatly declared the Sec- retary. “There. was an increase both in prices and in total cash retutns for the crops and products of the year 1927-28 as compared with those of the year 1926-27, this increase representing ihe net result of gains in some products and losses in others. The average prices received by farmers during the fiscal year increased about 7 per cent, while there was » slight decrease in the prices paid by farmers for their pur- chases, according to price data com- piled by the United States Department of Agriculture. The advantage of this increase in average prices per unit pro- duced was partly offset by a decrease in volume. “As the net effect of these two forces, there: was - 3 P, * | yorable»owing to the abundance of .lgly fours: EREAD" the generalj WHITAHid: however; that with new meth- This_indicator |, of an! “products has been more fa- %ééd_ crops and advancing prices ‘animak products.” Tor. .« Enfortethend dmproved. -~ JipFovement In ifkohibition enforce- is.reportet] by Secretary Mellon, od¥ of-tontrol, diversion of legal liquor, including industrial alcohol, was no Ionger the major problem of domestic law- enforcement. ~*Hlicit manufacture of spirits from ‘Eugars and grain,” he said, “is the principal source. of supply of thg.domestic market.” He saw signs of *the: king-up of “the large and pro} DALY ahaniTattdring “opera- tionse’ =~ ~ Sml i thé sea Had been so -"e_bfir\&wd_mhey then “iedd . Coas 'd, the report” said, that~this. fllicit trafic has Feen ‘tre- mendously regticed and ‘rum row’ has been eliminated.” Narcotic drug control was said to have improved; the Secretary declaring that “an even smaller percentage of narcotic drugs lawfully brought into and smanufactured within the, United 1 ;to>illicit ehannels i e yedr' thah during the fiscal year 1927.” The ral building program for both chm.e country and the Distriet f@oluntbia was described briefly by the ecrefary, who mentioned the 251 proj- eccts authorized to date, of which 244 are for the country at large, and seven for the District of Columbia. New Money Described. The new small size paper money ex- pected to be put into the hands of the public next July was described at some length, but no new announcement was made, in addition to previous state- ments from the Treasury, In reviewing thé financial situation Secrétary Mellon called attention that the gold stock of the United States de- creased nearly $500,000,000 from the $4,600,000,000 on hand at the beginning of the year. The outward movement of gold, he says,-had had a far reaching ed to theflr!:wl;sll\ron d,foftification of the gold basis for t.:e;!\arrencles of various countries. It as.influenced our credit situation and the poliey of the Federal Reserve Board. “Between June 30, 1927, and June 30, 1928, there was an increase of more than $300,000,000 in the total amount of credit the Federal Reserve Banks were called upon to provide, due lnrge- ly to the unprecedented gold exports. The increase in Federal Reserve credit ook the form of an increase in bor- Towing by member banks. Owing to the traditional reluctance of American panks-to remain in debt.and the policy of the Federal Reserve Banks to dis- urage continuogs indebtedness, the ks found Themselves at the close of the yedr in'a positfon to lend ‘much less freely than a year previous.’ * Discount: Rate Raised. Theé Secrefary'reviewed the, action of the Federal Reserve Board in eesing money rates in 1927 by .purchasing se- urities in the open market, which was ollowed by the outward movement.of old and & new low rate for mbney in August of that year. \glhen it became apparent last March that repeated incréases in credit were faking place for speculative purposes the Federal Reserve Bank, he said, re- sumed its sale of securities and dis- count rates were advanced to 5 per cent in all the districts except those of Kansas City, Dallas, Minncapolis and San Francisco, where they remain at 41, per cent. In the banking situation loans and investments of all bavks in the country increased $3,500,000.000.. or about G!3 per cent, he neinted out. TLis was the largest growth since the year ending June 30,.1925. Four Billion in Receipts. The total ordinary receipts of the Government for the last fiscal year, Secretary Mellon placed at $4,042,348,- 156, a decline of $87,000,000 as com- pared with the previous fiscal year.| Customs receipts declined $36.500,000 to $569,000,000, while income taxes dropped $51,100,000 to $2,173,900,000. Miscellaneous internal revenue taxcs declined $23,400,000 to $621,000,000, but payments from foreign governments increased $2.800,000 to $208,900,000. The total against ordinary teceipts for the fiscal year the Secretary fixed at $J.643- 519,875, ot $149,935,356 more than in the preceding year. For ‘the year the surplus of receipls over expenditures ar cunted to $398.- 828,281, but most of it. or $367,258,710, had beén expended by the end of the year in public-debt retirements. It was 3‘237.000.000 less than the year pre- vious. At the -close of ‘the fiscal year the gross public debt of the United States Government amounted to $17,604,29¢,- 563 ‘and the net cash balance in the general fund of thé Treasury was $260,- 190,331. The figures represent a de- and .an increase of $27,592,210 in the net bhalance for the year. In closing his report Secretary Mellon reiterated his suggesilon made the estimated gross cash income from farm products increased in the fiscal or crop year 1927-28 by $279,000.000, or 2.9 per cent, as compared with the pre- ceding crop year. During the year in- ventory values of live stock ln*l_ln'n a year ago that Congress remove the surtax from Government securities as well as the normal tax. This, he said, would remove the disadvantage of the F expenditures chargeable ! crease of $905.883,793 in the public debt | THE EVENING : STAR, WASHINGTON, D. €, WEDNESDAY, DECEMBER PERUVIAN NATION NNING PICTURE ' “A NATIVE OF VIRGINIA.” MELCHERS PCTURE VNS AT CORCORAN $200 Special Prize in Pop- ular Rgferendum. PATGE TS “A Native of Virginia,” appealing portrait of an elderly: countrywoman of the Old Dominion, painted by Gari Meichers, has won the special prize of $200 given by the gallery by reason of its selection as the popular choice in the public referendum on all the pictures -in the Eleventh Biennial Ex- hibition of Contemporary American Oil Paintings, which opened at the Corcoran Gallery of Art late in Oc- tober. The prize was determined by the votes of visitors during the weel which ended last Sunday. The picture, which- 1s No. 146 in the exhibit, has commanded widespread attention and the ‘award will undoubtedly be as popular among those unable to go and cast their ballots as it proved among those who were. Mr. Melchers has won second prize in a previous Corcoran biennial. He is considered among the very best of lving American artists. Seyffert Painting: Second: 1 highest number of votes was the self- gzrtrmt, ‘engitled “Myself,” by Leopold yflert.. - t recelving the rd, highest number was “Chioriodoxa,” by Sergt. Kendall. The votes were widely scattered, according to Corcoran Gal- hibition as a whole offered a wide op- portunity for selection. Hung in a place of honor, the Melchers picture shows an old woman in a sunbpphet leaning on a grubbing:'| hoe. It commanded instant favorable | public attention from the very opening ! of the exhibition. It has also been highly and constantly praised by pro- fessional artists. Its inclusion among those paintings likely to recelve the popular award could be forecast from | the beginning. “This picture was produced by & man who is undoubtedly one of the greatest of American artists and aiso it is one of his finest works,” said C. Powell Minnigerqde, director of the gallery, in commenting on the award. “It is un- questionably’ one of the most noted pictures’in’the exhibitioh. There could scarcely be a more convincing evidence of real discrimination on the part of the gallery's visitors.” Gari Melchers, who makes his home in New York, was born in Detroit in 1860. He was a pupil of the Dussel- dorf Academy at the age of 17 and later studied under’ Boulanger and Lefebvreé in Paris. He became an associate member: of the Natfonal Academy of Design in 1904 and was de a national academician two years later. He is a member of the Paris Sogiety of American Painters, the Paris Societe National des Beaux Arts, the London International Society of Artists,” the Munich Secession, the Royal Academy of Berlin, the National Institute of Arts and Letters, the New Soclety of Artists and the National Arts Club, New York. " Prizes Are Numerous. His previous -prizes .and awards are. numerous, many of them gained years since and coming from all over the world. They ' include ‘an honorable mention at the Paris Salon of 1886, a first-class medal at Amsterdam, 1887, | third class medal, ParisSalon, 1888; first- class medal, Munich, 1888; grand prize, Paris Exposition, 1889; first prize, Art Institute of Chicago, 1891; medal of ! honor, Berlin, 1891; gold medal, Phila- delphia Arts Club, 1892; medal of honor, Antwerp, 189¢; ‘Temple gold medal, Pennsylvania Academy of Fine Arts, 1896; first-class medal, Vienna, 1898; gold medal, Buffalo Pan-American Ex- position, 1901; gold medal, St. ‘Louis Exposition, 1904; second W. A. Clark prize, Corcoran Gallery of Art, 1910, and gold ‘medal. Sesquicentennial, Philadel- phia, 1926. Mr. Melchers is also a knight of the Order of St. Michael of Bavaria, a chevolier and an officer of the Legion of Honor of France and an officer of the Prussian Order of the Red Eagle. He is already represented in the pers manent collection of the Corcoran Gt ley by two well known paintings, en- titled, respectively, “Penelope” = and “Maternity.” The popular referenda held by the Jocal institution were started in 1916, have been repeated with each biennial and imitated widely elsewhere. In the six,conducted thus far the public has always picked a worthy . picture and always a painting containing one or more figures. ‘The present exhibition will continu to and including next Sunday after- noon, thus giving the public an ep- portunity of viewing it further before its close. Hours of opening are. Week days, from 9 am. to 4:30 pm.; Sun- day afternoon, from 2 until 5 o'clock. P AT R Telephone Manager Appointed. Speclal Dispatch to The Star., WINCHESTER, Va, December 5.— Lawrence Roland, Alexandria, V: been appointed manager of the busi- | seaport of Callao gave President-elect | decorated and ' all ships both of the | beflagged and - decorated. in honor. of | | roaring ‘as Mr. Hoover in the Mary- | land’s launches with the Peruvian gov- | ernment’s The painting recelving the ‘sécond-teannon fired a presidential salute, lery officials, indicating that the ex=i[iroofs for AGCLAIMS HOOVER Arrival at Callao Marked by| Picturesque Welcome. Holiday Is Decreed. By the Associated Press. CALLAO, Peru; December 5—The Hoover a picturesque welcome today when the U. S. S. Maryland came into port bearing Mr. Hoover on his good will tour to Latin America. The Callao. waterfront was lavishly Peruvian Navy and- merchantmen were the occasion. The piers and ‘wharves all | along the waterfront were jammeéd with thousands of spectators as the Mary- land anchored at 7:15 am. Then the Maryland's launches be- gan carrying members of the Hoover party ashore, Mr. Hoover himself plan- ning to land with his immediate official party abaut 9 o'clock. Seaplanes in Harbor. Nine seaplanes of the Peruvian Navy soared over the harbor as President- clect Hoover started - for the - shore, Three Peruvian submarines, a half doz- en destroyers and cruisers and other smaller craft lined the route across the harbor from the Maryland to the | ier. P Pennants were flylng and salutes | official - welcoming. party, passed through the lane of ships. Previously the president of the cabi- net and forelgn minister Rdda y Gamio with a group'of prominent government officials, boarded the Maryland and warmly greeted Mr. Hoover. The for- eign minister expressed the utmost pleasure that the government and the people of Peru found in Mr. Hoover’s visit and the conviction that it was of great importance to international friendship. Dr. Carlos Roe, mayor of Callao, greeted the president-elect and extend- ed an official welcome in behalf of the municipality and the people of the port. Children Line Route. Alexander P. Moore, United Stetes Ambassador, arrived =t the pler and joined the official welcoming party shortly before Mr. Hoover's arrival. There were hundreds of school chilaren lining the route from the pier to a nearby plaza, where the President-elect was_ officially welcomed.. The eight-mile stretch of highway between the port of Callao and Lima, Peru's capital, was lined on each side by thousands of brilliantly uniformed gendarmes stationed about 20 yards apart the entire distance. Both Lima and Callao were beflagged and all the bulldings petween the two cities were decorated. Just as in the other republics visited, this “Hoover day” was a national holi- day in Peru by a ¥rcsidenllal proclama- tion and an act of Congress. ‘A committee of deputies called 1 pon the President-clect at Callao ¢nd pre- sented him with a’ formal scroll en- nouncing ‘the congressional action by which Mr. Hoover was voted a guest of the nation. Colorful Ceremony. Mr. Hoover and his party passed through lines of police and soldiers, who saluted with fixed bayonets. While the Peruvian naval band played the national ‘anthems-of the United and Peru The welcoming crowd was colotful, there being at least a dozen different uniforms of various branches of -the army and navy besides the brilliant- hued habiliments of the police, firemen and gendarmes. The populace lined the several blocks in every direction and many others climbed palm trees on Plaza Grau to catch a glimpse of the distinguished American. ‘The crowd on the streets pushed and shoved as though they were in a foot ball scrimmage, trying to see the visitors as the mayor of Callao extended his| official welcome. VISIT PIZARRO'S HOME. President-Elect Will Be Given Relics in Lima. LIMA, Peru, December 5 ()~—Flags fluttered today in ancient streets, through which famous Spanish con- querors, headed by Pizarro, once gus&ei in honor of the coming of Herbert Hoover. Among the historic places that he will be shown is the Government Palace. also called the Pizarro House, where that Spanish conqueror was fatally wounded during an assault on his resi- dence by adherents of Almagron the Lad. He will also be shown a fig tree that Pizarro is reputed to have planted 400 years ago, and which still produces fruft. President Leguia will give Mr. Hoover some ancient relics as souvenirs-of his visit. These include a golden Inca mask and a piece of woven material believed to have antedated the Incas. Mr. Hoover will also be given.a gold llama, carved by Indians, who, like their ancestors, still use this meek Andean camel.for transportation. After leaving Peru the Maryland will sall for Chile and is due to arrive at Valparaiso the morning of December 10. On the evening of December 11 he will: leave for Buenos Aires, The trath will stop ‘while crossing the Andes to psmm thé - President-elect to. see the famous ‘statue of Christ of ‘the Andes, which was erected to celebrate the peaceful adjustment of a boundary dispute between Argentina and_ Chile. Mr. Hoover hopeg to reach Buenas Aires late on the aftérnoon of Decem- ber 13 and will remain in that Capital for two and a half days. After Buends Aires his schedule calls for a visit to Montevideo ahd Rlo de Janeiro, with the route beyond the Brazillan capital not yet determined in detail. [ Theater Seats of Rubber. At a recent exposition of the rubber industry, held in London, there wefe shown some very attractive and very comfortable theater seats made of rub- ber. In response o the present craze for color, there were also displayed some very pretty designs of table tops, mats and similar articles with pretty designs blended into the rubber base. . 20 Days to Christmas SINCE PAPA cAme Home FRom THE SANATORIUM HE MAKES.uS AL sceep WITH THE WINQOWS WIDE OPEN ness of the Chesapeake & Potomac Tel- ephone Co. in this district, with head- quarters at Winchester, it was announe~ ed today. He was promoted from the Government as compared to State bonds, . TSRS T Nt position” of -assistant manager at_Alex- andria. He will succ . M, Petfit, transferred, : GASVALUATION HEARING HALTED ther Action While Appeal Is Pending. The Public Utilities Commission ruled at the outset of the hearings in the Washington Gas Light Co.’s valuation case today that no further proceedings would be allowed in the case until the company had settled its appeal in Dis- trict Supreme Court from the commis- sion’s valuation finding in 1917. The hearings were then adjourned until 10 a.m. December 13 to allow counsel for the gas company to confer with their clients and decide on their action. George P. Hoover, one of the counsel, stated he believed a meeting of the company's board of directors would be necessary to decide what to do and said he could not be sure of a decision by the date named. ‘The ruling of the commission upheld a motion _made at the last hearing day by People’s Counsel Ralph B. Fleharty. It grew out of am attempt on the part of the company lawyets to strike out’ the testimony of the-com- mission’s first witness, Byers . McK. Bachman, on the historical .¢dst of the company's property. Bachman had based his findings on a réport on -his- toric cost of the company to Dec¢m- ber 31, 1914, by Andrew. Sangster, which was adopted by the commission mn its formal order setting a valua- tion on the company for rate-making purposes in 1917 {+ ¢ Move to Drop Testimony. The company lawyers moyed to strike his testimony from' the ;record” on. Lhe ground that the Sangstér report.cbuld not- be considered as a basis for- cal- culation subsequent to 1914 unless. Mr. Sangster could be produced in person to subject himself to cross examination as to thé accuracy of his report, Mr. Hoover, in voicing this objection, cited the fact that the report itself was questioned in the appeal from the commission’s valuation decision in 1917, which has been dormant in the Dis- | trict Supreme Court for the past nine years, Mr. Fleharty countered with a motion to halt the proceedings until this ap- peal had been settled, and his motion was upheld today. At the outset of the hearing Chair- man John W. Childress of the com- mission read the following ruling: “It appears that there is now pend- ing in the Supreme Court of the Dis- trict of Columbia, a suit between the Gas company and the commission— Equity No. 25,380. . “The commission rules that it will not proceed further with formal case {No. 196 while the above suit is pend- ing.” € Swagar Sherley, another of counsel for the company, asked what action had been taken on the company's mo- tion to strike out Bachman’s testimony. Mr. Childress replied that the com- mission had considered this motion, but was not ready at this time to announce its_decision. Mr. Sherley sald that in fairness to the company the commission ought to announce what was the basis for its decision and what alternatives were open to them in order to secure a re- opening of the valuation case. Vice Chairman Harrison Brand, jr., of the commission, remarked that if the com- pany thought any alternatives were open, they might submit them to the commission in writing. “In other words,” asked Mr. Sher- ley, “can the company make condi- tions to dismissing its suit in the courts? Is that' what we are invited to do?” “This 15 not an invitation,” replied Brand, “but you are free, to submit any alternative schemes you care to.” Mr. Hoover-said the company would not be in a position to decide on alter- native schemes of action until it knew what was being done to its motion to strike. People’s Counsel Fleharty re- torted that since the case was suspend- ed, a ruling on the motion would be illogical. Mr. Hoover then stated that the com- pany might be ready to dismiss its ap- peal in court if it knew in advance what was going to be done with its motion. Conferences Are Suggested. “Mr. Fleharty then suggested informal conferences among the company repre- sentatives and the commission to dis- cuss any proposition the company might make for dismissing its suit in return for concéssions by the commission. The company lawyers did not appear to take at all kindly to this idea. “Why,” exclaimed Mr. Sherley, “any man can say at one of these confer- ences anything that may be in his mind, and yet it would be binding upon no one. It seems to me that the com- mmon has taken a most extreme posi- “Its position is, in my opinion, un- fair,” added Mr. Hoover. “Of course I realize that any action taken by this commission is presumptively correct. But we have attacked the correctness of one of these actions by a suit in court, and yet we seem called upon to withdraw that attack without any clear view of the results.” Mr. Childress, however, declined to reveal what action would be taken on the ‘motion, and the meeting accord- ingly adjourned. 1 The open hearing today was preceded by & lengthy executive session, at which Corporation Counsel Willlam W. Bride discussed ‘with the commission the wording of its ruling on Mr. Fleharty’s motion. When the meeting was declared open, Mr. Bachman, who was due for cross-examination by the company to- d.g, took the stand, but was not asked a single question. The entire time was taken up by discussion of the commis- sion’s ruling. DRUG VIOLATIONS LAID TO SYNDICATE Deputy Commissioner Says Smug- gling Rings Are Backed by Wealthy Men. By the Associated Press. Estimating that there are about 25 narcotic drug smuggling _ syndicates operating in this country, L. G. Nutt, deputy commissioner in charge of nar- cotic law enforcement, at hearings be- for a House appropriations subcom- mittee *on the Treasury appropriation bill said: “This, man recently killed in New York was financing some of them.” “He was financing them,” Nutt con- tinued, “and we know he had plenty of them.” In his testimony, made public today, when Nutt was questioned regarding a $100,000 increase in appropriations for the purchase of evidence in enforcing the Harrison narcotic act, the deputy commissioner .did not name the man “killed in New York. He declared that if one of the drug- smuggling syndicates was put out of business another would start. “‘Somebody ‘will finance these fellow. “In New York -that old financier who was killed was one of them.” i Nutt, estimating there were 100,000 narcotic addicts in the United States, sald their source of supply was the smuggled drug. * “That is established largely,” he said, “by the fact that we are catching very tew .of the legitimate dealers violating the law.” - - - Reports that some dealers were selling their illicit wares to school children in some cities were unfounded, Nutt said. He added that such reports were recent- ly run down in the National Capital and in the West and were found to be baseless, ] 2, PHIPPS ON ___(Continued from Pirst Page) going to Princeton as a professor, for | two years, after which he also served | on the faculty of Yale for ten years. “Across South America,” “Inca Land" Bolivar's route across Venezyela and Colombia and a year later traversed the | Spanish trade route from Byenos Aires to Lima. He directed the Peruvian ex- pedition for Yale and the National Geographic Society in the period from 1911 to 1915. The Connecticut Senator | is the author of several books, including “Across South America,” “Inca Land” and “An Explorer in the Air Service.” He served in the Connecticut National Guard in 1916 and soon after began to take an interest in aviation, organ- izing the United States School of Military Aeronautics. He became a| lieutenant- colonel in the Alr Service during’ the World War in command of a, flying school in France. Following the World War he was chosen Heuteniant governor'of his State and served from, 1922 to 1924. In No- vember of 1924 he was elected yovernor, and a month later he was elected United States Senator, to take the seat of the late Senator Frank B. Brande- The resignation today of Senafor Coleman du Pont, Republican, of Del- aware, from the Senate, leaves another local committee vacancy to be filled, since Senator du Pont was a member of the Senate District committee. PAMPHLET SCORES SIR ESME HOWARD University Students Aid in Distribution of - Literature Attacking British Envoy. Literature attacking Sir Esme How- ared, British Ambassador, who made an address today opening the new Inter- national House at Howard University, was distributed to students gathered for the exercises before the arrival of Sir_Esme. The communication, a lengthy mimeographed document, bearing the name of George Padmore, described as secretary of the International Anti-Im- perialist Youths League, brought an immediate repudiation from Dr. Morde- cai W. Johnson, president of the uni- versity, who declared that Padmore was not enrolled as a student. Other members of the faculty admit- ted that some students whom they de- scribed as “soreheads, who wanted to | run things,” had aided in the distri- bution of the literature. Faculty mem< bers were not inclined to regard the incident seriously. “We protest against your present misleaders,” the communication de- clared, “who have, without your con- sultation and - approval, - invited the British Ambassador .and other im- perialists officiate at your function.” The communication then continued that Sir Esme’s influence played an impor- tant part in the deportation of Marcus Garvey from the United States and more recently from Canada. Interchange Is Lauded. Sir Esme paid. tribute to the inter- change of students by different nations and to foreign travel as means of dis- seminating a more perfect education. Expressing his pleasure in functions which tend: ‘to “promote let(qr under< standing among nations, Sir e de- clared~ 'hn-bx 'II dly increasing num- ber of ‘interfiational students’ move- ments soon “will come to have a very important influence on - international politics.” “We cannot expect that travel alone will necessarily turn young men im- mediately into broad-minded states- men,” Sir Esme said, “for, as Francis Bacon says in his essay on travel, they need have someone to tell them ‘what things are worthy to be seen in the country where they go, about acquaint- ances they are to seek, what exercise or discipline the place yieldeth,’” without which, as he continues, ‘young men shall go hooded and look abroad little.’ It is the great merit of this plan of exchanges of students that young men at forel colleges and universities do thus obtain these very advantages that Bacon spoke of.” %omlmung. the British Ambassador “It is hardly too much to say that a man who has not had the opportunity of rubbing shoulders with and exchang- ing ideas with men and women of | other nations, who has learned no other language but his own, and who knows no literature but his own, has foregone a most important part of his educa- tion, and, unless he has an extraordi- nary nature gift of intuition such as belongs to a few, must be hampered, as a driver of a motor car would be by blinkers, in dealing with men whose environment, traditions and modes of gpmlgn are totally incomprehensible Pays Tribute to Bryce. Sir Esme paid tribute to former Am- bassador James Bryce as a man of wide learning and insatiable thirst for edu- cation, and concluded with the observa- tion that “if all the international houses and colleges and the exchanges of stu- dents between nations could succeed in turning out men of his wide learn- ing, sympathy, charity and understand- ing, to which gifts I would also add that of a palky Scottish humor, the world would be a better place to live in for all of us. The Howard University International Hall is located at 2447 Georgia avenue, and it will provide a house of residence for domestic and foreign students- for the promotion of better international understanding. Addresses also were delivered by Al- lin Locke, who spoke on the “Signifi- cance of an International Mind.” The remainder of the program included the singing of a hymn by the assemblage, a spiritual by Lester Dorsey, and a de- scription of the objects and purpose of the International Club and house by Rewan O. Murray, president; music by the university glee club and the sing- ing of the university song. DISTRICT BODY Above: Below: SAYS PUPILS GIVEN RUMFILLED TOYS Patterson Tells Methodist Board Bootleggers Seek to Cultivate Taste in Young. SENATOR BINGHAM. SENATOR PHIPPS. Hollow toys filled with intoxicating school - children by bootleggers seeking to stimulate an appetite for whisky among the younger generation in order to” secure a future market for their wares, the board of managers of the Methodist Board of Temperance, Pro- hibition and Public Morals was told yesterday at its annual meeting, in the Methodist Building, by D. Stewart Pat- terson, secretary of young people’s work for the board. liquor are being given to American | e e S SENATOR BINGHAM SUCCEEDS | BYRD POLAR SHIPS MAKECOOD SPED City of New York and Eleanor Bolling Over 500 Miles South of Dunedin. BY RUSSELL OWEN. By Wireless 10 The Star and New York Times, ON BOARD THE BARK CITY OF NEW YORK, AT SEA, Wednesday, De~ cember 5.—The wind which threatened vesterday failed to materialize, but blew itself out in a quick squall which push- ed our ship along faster than ever. Today it seems incredible that we are more than 500 miles south of Dunedin and half way to the ice pack. The wind is gentle. It is the best weather any Antarctic expedition ever expes | rienced in this region of gales. At noon today the Eleanor Bolling and the City of New York were 499 miles south of Tarora Head, their posi- tion being latitude 54:16 south, longie tude 170:47 east. The plan to have the Eleanor Bolling tow the City of New York to the ice has worked out excellently, for in ad- ditfon to giving us fair speed during the period of head winds, it also insures for us a full supply of coal when the ice pack is reached and the Eleanor Bolling turns back. Solution of the Fuel Problem. The problem of carryiz enough cuat on these wooden boats has always been a serious one and it was Capt. Scott’s greatest worry during - his last trip through the ice pack. From the Eleanor Bolling, which éf course is not suitable to through the pack so early in the yeiu is possible for the City of New Yofk to get full bunkers and also a deckload before the Eleanor Bolling return to Dunedin. Then, after getting through the pack, the City of New York can sail to the barrier and arrive there with neary full coal bunkers. The Eleanor Bolling will bring the other planes, and fuel, houses and food, on her first trip through the ice, which will begin late this month. So far the City of New York and the Eleanor Bolling have been averaging 170 miles a day. which is even better than had been expected. Ice Birds With Albatross. A suggestion of the ice ahead was given by little ive birds which were seen for the first time today flying in company with albatross. This seems to B& one of the most rolling oceans in the world and the ship is constantly heaving uneasily on the long swells. She is carrying sail as well as steaming and both ships are making about 7 knots, which is very 8qod, considering the heavy load aboard. ‘The City of New York carries not only one airplane, but she has food supplies enough to k:ee'gI 20 men on the ice for a year, even if the Eleanor Bolling should not come down with more materials. (Copyright, 1026 by the New York Times Co. and the St. Louf BlSlication reserved 1 Totidhodt the worid) |SCHOOL BUILDINGS ITEM IS REDUCED ALMOST ONE-HALF (Continued from First Page.) made next year, the bullding program would be practically “cleaned up.” At the conference between citzens and _school authorities last April, the tol.sl :;:ulnlng school system needs under program were considered and it was decided that instead of attempt- Patterson called attention to one in- stance where a “toy” in the shape of a hollow ruler, marked “12 inches of good stuff,” was given to a boy attend- ing a primary school in Oregon. “The ruler was taken from the child by the teacher, whose suspicions were aroused by the ‘dopey’ actions of the boy," Mr. Patterson said. “It was found that the youngster had been made drunk by drinking only one-quarter of the liquor contained in the long glass bottle inside the ruler. Another of these toys was in the shape of a hand, and was given to a boy peddling papers by a saloon keeper. Still another was in the form of a child’s doll and was taken from a little girl. Queer-shaped bottles and hollow toys were given to school children in Oregon during the last Christmas holidays. These were ex- amined and found to contain sweetened wine and whisky.” ‘The extent of drinking among stu- dents, however, has been greatly ex- aggerated, Mr. Patterson believes. “A large per cent of the drinking among young people is done because it is considered smart,” he said. “These people do not necessarily care to drink. But this attitude long continued, will lc;;i hto 1‘1{lebe‘°m‘m; of a standard which w opposed to the of restriction.” Bl Bishop Willlam Fraser McDowell said he was of the opinion that the prohi- :l't.lzx 1:1 not 8 qtuuflmrt for the United s alone, but one for of the world. % Sudngrite ARCHIVES BUILDING COST IS INCREASED BY CHANGED PLANS (Continued from First Page.) ing, for which_excavations ha made between Fourteent and mg street.i:s, ? S;I;CQL 1:x:;lfl?enmylvnnh ave- nue, 0 eréc unde: cost of $17,500,000. i bl sn 00 for Revenue Building. For an addition to the Government Printing Office, the authorized $1,250,000. % o For the Internal Revenue Building the limit of cost is $10,000,000. Much of the foundation of this bullding al- ready has been laid between Tenth and Eleventh streets south of the Post Office De!l'mflltl;’entxfb\:ll?lng to the Mall. or the rty Loan Bulle additional normytnd other sfluh:x‘cl:;‘: BAND CONCERT. By the United States Marine Band Orchestra, auditorium Marine Barracks, 8 o'clock tonight. .J!'Elrbert March, “The Gold Bug”. Overture, “Martha” Intermezzo, “Glittering Cry: ‘Trombone solo, “Macushla, McMurrough (Musician Hervey J. Clark.) Grand scenes from “Lohengrin,” Wagner “‘Adagio Elegiaque” . ‘Wieniawski Suite de ballet “La Source”.....Delibes Marines' hymn, “The Halls of Montezuma’ “The Star Spangled Banner.” changes were authori 53;56000. ized at a cost of r the supreme Court site the au- thorization is $1,500,000. and condem- nation groctedlnls now are in progress. For changes in water mains and other such work special in conneclon with the public building program a special appropriation of $225,000 was made. The Crime of “Paperhanging.” . In the criminal world those persons engaged in counterfeiting, check rais- ing and similar occupations are known as “paper hangers” and the operations of these persons cost the American public about 20 million dollars an- nually. Nation-wide Influcaze Warning Issued As 15,000 Cases By the Associated Press. ‘With 8,213 cases of influenza reported in California and 15,000 in the country as a whole, the United States Public Health Service today warned physicians and health officers to be especially vigilant to forestall another widespread epidemic. State health officers reported the fol- lowing numbers of cases in their States for the week ending December 1: Mon- tana, 3,372: Oregon, 296; Utah, 25 Arizona, 300; South Carolips, 2,718; - P Are Reported in All Georgia, 344; Alabama, 198, and In- diana, 261. Several other States had less 100 cases. In every State it re!}orud. there are at least a few cases. he first cases reported were in San Francisco, several weeks ago. Appar- ently, the health service explained, the disease spread to Hollywood, thence less extensively South and East. Dr. R. C. cautioned against mingling with crowds and advocated sleeping in open air, and the usual necessary precautions to prevent In contact with the discase, ing to secure a single appropriation for the last of the five years sufficient to complete the program, the needs would be divided into two parts. ' Hopes Are Blasted. ‘The estimates of $3.715,300 which the school officials submitted to the Com- missioners and the Bureau of the Bud- get this Fall represented approximately one half of the remaining needs. Any straggling needs ~ which the system might feel after the second appropria- tion had been made—the second half of the wind-up appropriations, the au- thorities hoped, would be made one year after the scheduled completion of the program—would be taken care of in regular annual appropriations. Hopes for this procedure, however, have been pretty thoroughly blasted h{eme Bud- get Bureau's estimates now before Con- gress, the authorities feel. A careful study of the appropriation and the xgednx: items will be considered by the school officers and the Board of Education and a formal statement will be forthcoming in the near future, it was indicated at the Franklin Admin- istration Building today. Program Meets Opposition. ‘The biggest surprise which the school authorities received in the budget was the proviso which the Bureau of the Budget tacked on the item of $300,000 for the beginning of the new Business High School. At the last meeting of the Board of Education, held two weeks ago, a fight on the old structure’s u: a colored elementary schoel was fore. cast when the three colored members of the board launched their opposition to such a program. Dr. J. Hayden Johnson, Mrs. Mary A. McNeill and Rev. F. I. A, Bennett united in citing reasons why the building was not suited to elemen- tary school use. On the contrary, other board members at that time, indicated that with a need for 21 elementary classrooms for colored children already present in the vicinity of the building, only the transfer of the structure to the colored divisions of the system would be wise. Mrs. Henry Grattan Doyle, member of the board, urged then that unless the board could agree on the use of the old building, the status before Congress of the $300,000 item for the new build- ing would be endangered. The board was expected to continue its considera- tion of the matter at this afternoon’s meeting. It is felt in some circles of the Dis- trict Government today, that the Bu- reau of the Budget had stepped com- pletely out of its jurisdiction and into administrative and legislative affairs when it made the specific recommenda- tion concerning the use of the old Business High School. Funds for Junior Schools. A shaft of light was found in the budget, however, inn the inclusion of sums for the construction of the Reno Junior High School and for an addi- tion to the Paul Junior High School. Considerable apprehension for the Business High School item was felt when the District Commissioners placed that structure’s construction funds in a supplemental estimate over the pro- test of the Board of Education. Th Bureau of the Budget had consisten contended that the idea that supple- mental estimates were not given due consideration was entirely wrong. Hence the bureau's inclusion of the new high school item in the et was not surprising to the officials at nk- lin School. It was pointed out today. however, that while this supplemental estimate item was allowed, other items which totaled more than the $300,000 allotted to the Business High School had been stricken from the regular estimates. The increase noted in the budget for operating expenses, it was explained by school authorities today, was caused by the normal increase of salary ratings and similar items provided for under existing legislation. The total operating expense item in the budget is $9.633,580. as compared with $9,538,530 in the cur- rent appropriation. ‘Traffic on the principal waterways of France is now nearly equal to that of —oww UG-WAT tmes,