Evening Star Newspaper, December 30, 1928, Page 21

| - Editorial Page EDITORIAL SECTION he Sunday St Reviews of Books Part 2—10 Pages WASHINGT! OGN, D. ¢, SUNDAY MORNING, DECEMBER 30, 1928. 1928 HELD DISAPPOINTING IN DIPLOMATIC PROGRESS Anglo-American Naval Discord Regarded Outstanding Blot of Year—Decisive Action Declared Needed. BY FRANK H. SIMONDS. HE 12 months which end tomor- row must be reckoned the most sappointing since 1923, the vear of the occupation of the Ruhr. Although no single event has rivaled that disaster in evil con- sequences, there has been a series of incidents tending to arrest and even turn back the movement toward general readjustment and reconciliation not only in Europe, but in the relations be- tween Europe and the United States and in those between at least two South American countries. Most conspicuous of all the unpleasant apisodes of 1928 has been the develop- nent and accentuation of the Anglo- American naval dispute, which had its rflgin in the fiasco of the Coolidge con- Jerence at Geneva in 1927. The Anglo- French agreement of last Summer, which at one time aroused indignation and suspicion on this side of the At- lantic and literally set Europe by the | ears because of its continental implica- tions, must be reckoned one of the most unfortunate and stupid diplomatic un- dertakings of the whole post-war period. Regarded Acute Problem. Anglo-American: tension, while it has no present menace to world peace, has now become one of the real and even acute problems of world statesmanship. A paval rivalry, having not a few superficial similarities to the Anglo- German competition which preceded and contributed to the World War, remains, if not a fact, at least a disturbing pos- sibility.And behind the incidental ques- tion of naval strength lies the real is- sue between the two Anglo-Saxon coun= tries—the question of the blockade. While this Anglo-American difference persists, involving as it does an inevi- table and extensive naval construction program on the part of the United States, the whole work of limiting armaments in the world in general, and in Europe in particular, is patiently postponed. And this postponement has already had evil effects in reviving anxieties and apprehensions among both the armed and forcibly disarmed countries of the European continent. Confidence Believed Undermined. For the League of Nations this post- ponement has been costly in prestige and public confidence. Although com- missions continue to meet at Geneva and a considerable amount of tech- nical detail is considered there, the broad and impressive fact is that it has so far been impossible for the League to make any considerable contribution té the task of limiting armaments, ‘which must be the first step in the long series of efforts to bring about pro- gressive disarmament. In Europe there has been a notable cooling of feeling between Germany and | to Czechoslovakia, which would become | an enclave, almost surrounded by Ger- | man territory. Nor would it be less { menacinig to Italy, not merely as a con- | sequence of the presence of a German | population south of the Alps in the Adige region, but because it would fatally revive the push of German as- piration toward Trieste, the old Austrian port, on the Adriatic. Meantime, while political questions remain disturbing, there has been a clear disclosure that the old economic issues of the post-war period, repara- tions and evacuation, must now be faced promptly. Decisive Action Urged. Before the new year is over something clear and decisive will have to be done in the matter of fixing the sum of | German indebtedness and the term of | allied occupation of the Rhineland. And | consideration will have to be directed | again to the issue of allied debts. For 10 years, ever since the making of the treaty of peace, all these vital ques- tions have been dealt with only by day-to-day compromises. Rightly, the effort to solve financial questions has been postponed until political and eco- nomlic conditions”could be disposed of. But now it is necessary to decide how much Germany can and will pay on account of the war and on what terms allied troops will be withdrawn, allied financial commissions recalled and Germany at last permitted to enjoy her national freedom again. On the financial side we have al- ready been brought face to face with an Anglo-French-Italian purpose to get from Germany enough to meet American obligations, and in the French case to get the costs of restoring the devastated area as well. This program requires, first of all, German assent to pay annually sums which are still believed by experts to be not beyond her capacity to raise by do- mestic taxation, but beyond her ca- pacity to transfer beyond her frontiers. In the second place, this scheme re- quires the flotation, chiefly upon the American money market, of vast bond issues, aggregating upward of $4,000,- 000,000, In a word, it envisages raising in the United States most of the money to liquidate reparations, this money to be turned back to us on account of al- lied debts. New Guarantees Demanded. Again, on the political side, France, Poland, Czechoslovakia and to a lesser extent Italy and Belgium, are all re- solved that before the problem of the occupation of the Rhineland is solved there shall be new guarantees of the security of all the states which have reasons for dreading the restoration of German liberty and strengti. If 1928 has been disappointing, it is not less evident that 1929 must be de- France, despite the more or less fic- ffcisive. In some fashion or other both titious show of co-operation at the recent Lugano Conference, where Chamberlain, Briand and Stresemann strove to give the outward impression of a renewal of the old spirit of Locar- no. The German people are becoming daily more restive under the continued presence of allied troops in the Rhine- Jand. And the Anglo-French naval un- derstanding, which aroused’ American anger, was just as fruitful in German suspicion and protest, for it ‘had the appearance of restoring the old Anglo- French Entente of the pre-war days. Between France and Italy, too, the bad feeling which has been a striking circumstance in the Fascist era was once more intensified by the failure of a French jury to deal severely with the assassin of an Italian consul on l"‘l“enchl soil. 'This Franco-Italian tension con- stitutes one of the gravest of all the problems of present-day Europe, and is, in fact, the graver because it has its origin not in any specific issue, which might find adjustment, but in a deep- seated and increasing rivalry in North Africa, on the Mediterranean and in the Balkans. Lugano Conference Flurry. Equally disturbing was the recent flurry which marked the close of the Lugano conference and was precipitated by M. Zaleskie, the foreign minister of Poland. Nominally this protest re- sulted from the eternal clash of Ger- man and Polish populations within the frontiers of the Polish republic in Up- per Silesia. But actually the circum- stance was far more significant and constituted a clear warning by Poland 10 her French ally that any settlement with Germany must include sqme defi- nite commitment by the Germans to recognize thelr eastern frontiers as permanent. Along with this Polish gesfure goes the renewed agitation both in Germany and in Austria in favor of the Ansch- luss—that is, the union of the German and Austrian republics. Such a union which would create a new German state greater in area and population than the old Hohenzollern empire, would constitute an immediate threat the political and the financial issues must have settlement. The financial problems necessarily involve agreements which may run for two generations; the political issues require arrange- ments which amount to the recognition of the present map of Europe as per- manent. The alternative is the revival of all the pre-war system of rival co- alitions, based upon conflicting policies and surviving ambitions. Problems for New Year. In sum, the next year is likely to dis- close whether the arrest in the move- ment toward European co-operation on the economic side and toward appease- ment and reconciliation on the politi- cal which has characterized 1928 is temporary or is the disclosure of the fact that European tradition has proved more powerful than all the experience of the war and post-war period. Nor is it less clear that a change in Anglo-American relations is a condition antecedent to any real progress in Eu- rope. Not even the occupation of the Ruhr. has been a greater world dis- aster than the Anglo-American naval dispute. If it continues, it will inevita- bly result in permanently abolishing all hope of disarmament in Europe and in the division of the Continent into Brit- ish and American groups. Already the European mind, used to such rivalries, is foreshadowing the grouping of Ger- many and Russia with the United States and France and her allies with Great Britain. And already the same experts are suggesting the revival of the Anglo-Japanese alliance, with a definitely anti-American implication. On the threshold of a new year, therefore, Europe is very clearly hesi- tating between two possibilities—the liquidation of the last war as a prelude to re-establishing peace on an enduring basis, and the preparation for a new war. No people of all the European races desires a new war, but not a few in every nation are beginning to fear that it is, after all, inescapable. And upon the events of the coming year may well depend the character of the w?lrl'v?lin which the next two generations will live. (Copyright. 1928.) Canada Is Spending Many Millions In Beautification of Capital City OTTAWA —Millions of dollars are being spent by the Canadian govern- ment in the beautification of Ottawa, which has been described as the “Washington of the North.” While a federal district commission carries out the federal program of im- provement, it has no official control over the Canadian capital as does the Federal District Commission over the District of Columbia. Thomas Ahearn, a member of His Majesty's privy council for Canada and one of Canada’s most noted electrical experts and financiers, is chairman of the federal district commission. Under his guidance, Ottawa has improved more in one year than for the last quarter of a century. Premier Supports Plan. Premier Mackenzie King supported measures last session which provided more than $3,000,000 for improvements. The Russell Hotel and Theater, stand- ing in the heart of Ottawa, were expro- priated and tazed to make way for a park which will fittingly commemorate the sixtieth birthday of Canada. Improvements are being carried on to a lesser degree in the vicinity of Ottawa. It is expected that the future will see the city made into a federal district including the city of Hull and part of the beautiful Gatincau district. This will entail an amendment to the British North America act, which has been described as Canada’s charter. More Millions Wanted. The commission hopes that some day many more millions will be provided for future development. It is proposed that the city hall, police headquarters, historic old Knox Presbyterian Church and other buildings will be razed and Confederation Park extended. To replace the city hall and police station it is hoped that the government will erect a huge hall of justice which would house civic services, police courts, county courts and the supreme court. A state theater may also be erected. . Philippine Tariff Set Automatically For many years specified American interests have been. complaining that I'the Fhilippine tarift on importea sugar land imported tobacco and tobacco products is lower than that of the United States, and alleging that possi- bly these products could be brought into the islands and shipped thence to the United States (entering free of duty, as coming from the Philippines) and cheat the American tariff. As a matter of record, no such thing has oc- curred. As another matter of record, the difference between the insular and American tariff rates has been insig- nificant. Nevertheless, the Legislature has passed, at Governor General Stimson’s suggestion, an act whereby the insular tariff automatically becomes the same as that of the United States on sugar | and tobacco whenever Congress changes Ithe American schedules. Maj. Gen. i Frank McIntyre, chief of the insular bureau, has wanted this done for a long time, just to silence the complaints made to him in Washington. It's done now, and Gov. Stimson takes it as a manifestation of co-operation on the Legislature's part. Otherwise,it has no material siguificance, BY SENATOR ARTHUR CAPPER. Member of the Forelgn Relations Commit- tee, United States Senate. OW stands our account with the world in general at the begin- ning of 1929? What are our liabilities? What are our assets? What are our risks? And what are our pos- sibilities for gain in intercourse with other nations? To state our international account in terms of dollars is simple—and decep- tive. In the first 10 months of 1928 we sold to other nations forty-one hun- dred million dollars’ worth of our prod- ucts. We bought from those nations commodities valued at thirty-four hun- dred million dollars. The year, as & whole., will show a handsome profit— in dollars—for the United States. But the account between nations BY IRVING FISHER, Professor of Economics, Yale Uuniversity. HE recent “crash” in the stock ‘market has not yet brought the stock price level down to the level of past years. On Decem- ber 8 the weighted daily index of Stock Exchange prices of 50 in- dustrial common stocks calculated by the Standard Statistics Co. showed & loss of 15 per cent from the “high” of the year on November 30. But the average price of these 50 stocks still was 25 per cent above their high point for 1927 and more than two-thirds higher than the “high” of 1926. Notwithstanding the “crash,” stock rices and shares traded are still gam- ling upon the mountain peaks which look down upon the high stock market plateaus of 1926 and 1927. The reasons for my conviction that common stocks will remain for some time at this higher #titude are set forth below. But this does not mean that there will be no more lulls and recessions. On the contrary, the present lull seems likely to continue and deepen for a month or so. The persent major bull market has persisted, with minor or moderately severe recessions, since 1923. The so-called “Spring rise” of stocks from February to May, 1928, shawed an advance of 13 per cent, as recorded by my Weekly Investors Index, weighted by shares' outstanding. The break dur- ing June brought a loss of more than half of this advance. The market did not fully recover until August, after which it continued to rise until the index for November was nearly 22 per cent, and for the week ending Novem- ber 30, 35 per cent, higher than the index for February. That was after the election of Mr. Hoover—celebrated by 5,000,000 and 6,000,000 share-days, with daily advances from 5 to 50 points in many stocks. November recorded the tremendous total of more than 100,- 000,000 shares traded on the New York Stock Exchange, and values of more than 200 representative stocks advanced by $3,750,000,000. During the year my index of the 50 stocks most actively bought and sold in each week rose from 2335 for the week ended December 8, 1927 (and on the base of 1926 as 100), to 656.2 for the week ended November 30, 1928. That represents a profit of 181 per cent in the buying and selling each week of the weekly shifting list of the 50 most active stocks during the year. December Recession. ‘The December recession, more pro- nounced than the fall in June, followed the announcement of more than $500,~ 000,000 increase in brokers’ borrowings during November, Secretary Mellon's pessimistic remark that the outside pub- lic “believed and acted as if the price lof securities would indefinitely ~ad- vance,” and the increase of the call money rate to 12 per cent on one of the days of heaviest trading. Ten per cent on call loans had been repeatedly ex- acted during half a year, and loans on time had several times risen to 7 and T2 per cent. At the governors’ conference in New Orleans during November, Gov. Bibb | Graves of Alabama denounced the | “evils of mad gambling in stocks and cotton.” Gambling, he said, had be- come the “most serious menace to | American civilization and progress.” | Weightier authorities had likened the | boom in Wall Street to the dizziest period of the boom in Florida real estate, when most of the exchanges were being made by indjviduals, who jcannot be stated alone In dollars, in marks, in pounds, or in any monetary unit. There is among nations’ accounts, as in the accounts of private business en- terprises, an asset that may transcend in value all the material or tangible pioperty—the simple _item of “good What do we possess of good will among the other nations of the world? What obligation do we owe other na- tions that cannot be stated in terms of dollars? What can we do, what should .we do, to better the condition of those with whom we deal that we may thereby also better our own con- dition? ‘We may compute the balance of our international account as many business men compute their own general balance sheet at the beginning of a new year, and thus obtain verypleasing results. We may ignore or “write down” our contingent liabilities, we may make no charges for depreciation, we may con- sider all our accounts receivable, good and collectible, and we may base our estimate of next year's profits upon the assumption that we have satisfied and pleased all those with whom. we have had dealings. Prudent and experienced business men, however, proceed upon a different basis. They realize that no matter how carefully and conscientiously they have conducted their operations, they have undoubtedly displeased and antagonized some customers. They have acquired some bad accounts; they have incurred some liabilities. Similarly, candor compels the admis- sion that, while the United States oc- cupies a most fortunate position among bought in the hope and expectation of selling at a large advance. In such warnings and denunciations there is, of caurse, much sound sense. Today it is more than ever perilous for the single individual to “play the mar- ket,” pitting his unaided judgment against the collective intelligence of the pools of professional traders. Cases will recur frequently of the last bettor at the game gambling ignorantly and in- dividually upon stock prices and being badly stung. But this is not the half of the story of the “boom” market of 1928. Con- servative investors realize that, despite downward reactions in the upward sweep of common stocks since 1926, they have attained an average level more than 75 per cent higher than the aver- age for 1926. During the most spec- tacular tradings the market never has approached the demoralization of the Nopthern Pacific “corner” of 1901, when tthe shares traded represented > per cent of the total of common and preferred stocks listed on the exchange. Frederick Hansen has pointed out that a 7,000,000~ share day would amount to less than 1 per cent of the 728,000,000 shares now listed and that computations of the relative market value of all stocks listed on the exchange tell much the same story. The aggregate value of common and preferred stock during 1901 was only a little more than $4,000,000,008, whereas that of listed stocks on Novem- ber 1, 1928, had reached above $61,000,- 000,000. To attain the relative activity of a single day during the Northern Pa- cific “corner” it would be necessary now to have a 35,000,000-share day. Factors in Rise Basic. No such wild speculation as that in 1901 has occurred during the upward surge of the present stock market to | what I have called a permanent plateau The factors in this rise are basic and contain within themselves the promise of continuous improvement in the con- dust of American business. The losses hitherto suffered by individuals invest- ing in stocks have been greatly dee creased through the insurance afforded by investment trusts and investment counsel. Moreover, there has been an increase in the intrinsic value of stocks since 1921 and in the prospect of future profits, together with a decrease in the rate of interest by which future values are discounted in the present. The basic interest rate, as reflected in the yleld of 60 high-grade bonds, computed by Standard Statistics, declined from an average of 5.79 per cent for 1921 to 4.47 per cent for 1927 and 4.57 per cent in October, 1928. These pronounced changes have come since the war and after participation by the general public in the “baby” war bonds had accustomed the whole Nation to the investment idea. Investment counselors have steered the general public from investment in “safe” bonds to investment in common stocks. Diver- sification of-investments is recommend: ed for safety and for increasing the in- come of the investor. How successfully the investment coun- selors have preached may be inferred from tne estimate made by J. F. Fow- ler in his recent book on “American In- | vestment Trusts” that, whereas the number of American investors number- ed only 500,000 in 1914, this pre-war total now has grown to between 15~ 000,000 and 20,000,000 investors . in stocks, bonds and preferred securities. That is, an average of more than two out of every three families in the United States are today supported, in part, from the income of investments. Investment Trusts. The business of organizing the pop- ulation into investment groups has de- veloped apace. A pamphlet entitled “New York and Boston Bank Stocks,” printed by the Investment Trust An- alyst Publishers, states that the total capital employed in American invest- ment trusts in 1924 was less than $5,- 000,000; but, by 1928, the total had grown to exceed $800,000,000—a real factor in the mighty increase of invest- ments in Wall Street during the last year. . The investment counsel have demon~ What U. S. Faces in 1929 In Balancing International Affairs With Other Nations, America Has Both Liabilities and Assets all the nations of the world, we are confronted in the year to come, as well as the years that follow, with dif- ficulties that menace both peace ana prosperity. As a matter of fact, the problems in- volved in our contacts with other na- tions are much more numerous, much more difficult, and much more fraught with the possibility of loss or harm to us than ever before. Our relationship to the remainder of the world before the great war was comparatively simple. It was the ordi- nary relation of buyer and seller. Now we have added to:that relaf hip— from necessity—the more df It and respansible one of banker. We are in- terested—vitally so—in the condition of many nations because our own peace, progress and prosperity are indissolubly (Continued on Fourth Page.) Will Stocks Remain Up? Famous Economist Discusses Business and Financial Conditions Justifying Optimism in U. S. strated, first, that common stocks are, on the average, much more profitable than bonds and may be safer as an in- vestment during the fluctuations in the purchasing power of the dollar; second, that stocks, well selected and diversi- fied, lose much of their speculative character and become true investments, oftentimes safer and -more ‘dependable than bonds During 1912 I was one of several economists who "contributed to a_book entitled “How to Invest When Prices Are Rising,” in which we contended that during rising prices—that is, while the dollar is falling in value—invest- ments in bonds or preferred stocks were less safe than investments in common stocks. More recently several other writers, notably Robert W. Pomeroy in his “Stock Investments” and A. Vere Shaw, then of Scudder, Stevens & Clark, reached the same conclusion. Since then much more extensive studies have been made by Edgar L. Smith in “Common Stocks as Long-Term Invest- ments” and by Kenneth Van Strum in “Investing in Purchasing Power.” These studies show that diversified common stocks are safer and more profitable than bonds, not only while the price level of commodities is rising, which is generally accepted, but also while the price level of commodities is lf;;lrltnl. which never had been shown ore. Nothing Absolutely Safe. ‘There is no way to get the gamble out of life altogether. Neither stocks nor bonds are absolutely “safe” as to putchasing power. But the individual investor is at a great advantage when he pools his earnings and savings of those of a multitude of others in an in-y vestment trust, which with the aid of expert counsel keeps it invested in well selected diversified stocks and preferred securities. A little reasoning permits of a star- tling corollary. It is this: If we can, by sufficient diversification in investments, get a greater certainty and thus run less risk from our speculation, then the more unsafe the investments are, taken individually, the safer they are taken collectively, to say nothing of profitable- ness, provide that the diversification is sufficiently increased. This paradox is derived directly from exploiting the old- fashioned fear of common stocks and the consequent refusal to ‘deal in them, except well below their “mathematical value.” kS Now, the mathematical value of a prize at stake is that prize multiplied by the chance of winning it. If a man stakes a dollar on heads coming up, the mathematical value of that chance is exactly 50 cents, because there is ex- actly one chance in two that heads will come up. If the prize at stake is to be won only in case two successive heads come up, there is one chance in four and the mathematical value.is 25 cents. This is so-called “fair” gambling. Any price above the mathematical value is unfair gambling, and none but a real gambler will pay more than the mathe- | matical value, or even so much. The { gamblers at Monte Carlo do pay about 3 per cent more than the mathematical value of their chances; but only con- scious gamblers, not investors, partici- pate in rouge et noir. In fact, a sound- minded investor will pay more than the mathematical value for a chance to gain money on a risk. That is, he will trim that price by,means of a “caution co- efficiel to a term which I em- ACont, on Fifth Page.) WILL HOOVER’S FRIENDS GAIN GREATEST FAVORS? Speculation Rife as dent-Elect Will to Just How Presi- Care for Those Longest Near Him. BY FREDERIC WILLIAM WILE. EW Presidents of the United States have taken office confronted by as many purely personal ties and friendships requiring considera- tion as those which beset Her- bert Hoover. It is a circumstance more than likely to lead to early and serious clashes before the Hoover administra- tion is fashioned. It will crop up in the building of the new cabinet. Hardly ever while Hoover is in the ‘White House will if not come to the surface in some form or other. The “regulars” of the Republican organiza- tion are already intrenching against what they believe to be an inevitable contest for preference in President Hoover's favor. They have promptly evolved a name for the competition. They say it will be a struggle between the “boys,” by which is meant the party stalwarts and organization leaders, and the “boy scouts,” by which is meant the non-political men and women who sur- round Hoover. The name of the latter is legion. They have been grooming and boosting the Californian for Presi- dent for eight years. The goal now reached, most of them feel, was at- tained primarily with their aid. Beset by Five Groups. In addition to Republican profes- sionals—the practical mechanics, na- tional committeemen, State leaders and others who organized victory for Hoo- ver at Kansas City and on November 6—there are five distinct and so-called “Hoover groups.” In chronological or- der they are: The war-time (food ad- ministration) group, the post-war (Eu- ropean relief) group, Hoover's group of California friends and associates, main- ly with a Stanford University back- ground; the group that has grown up around him at Washington in the con- duct of the Department of Commerce and the group of American engineers who look upon Hoover as one of their particular own and with whom he has intimately worked for years. As it was the foundation of his fame, the President-elect’s closest associates are probably to be discovered among the men identified with him during his food administration, first as the reliever of Belgium and later as United States food administrator. The names of some of these co-workers need to be remem- bered in any pre-inaugural speculations about Hoover’s plans. They include Ed- gar Rickard, mining engineer, formerly of California, now of New York, who was Hoover's right-hand man in Bel- glan relief at London from 1914 to 1916 and his assistant in the food admiris- tration at Washington from 1917 to 1919; Dr. Vernon L. Kellogg, Hoover's chief representative in Belgium in 1915 and 1916 and an assistant at Washing- ton during the succeeding three years; ‘Thomas T. C. Gregory of California, one of Hoover's original and principal coadjutors in post-war relief in Central Europe; Julius H. Barnes of Minnesota, who was president of the United States Food Administration Grain Corporation under Hoover; Millard Shaler, an American resident of Brussels, who for some years has been the adviser of the Belgian- government in_dvelopment of the Belgian Kongo, and Herbert L. Gut- terson of the New York bar, who was a co-ordinator of food administratin ac- tivities and during the recent campaign was executive secretary at Republican natinal headquarters. Another Hooverite of war-time days, who is certain to be in the administration’s high favor is Lewis L. Strauss, formerly of Virginia, and now a young New York banker. Strauss was Hoover’s private secretary at Washington from 1917 to 1919. George Barr Baker Mentioned. After the war, and when Hoover was assigned the unofficial task of relieving distress in various parts of Europe, there came into the picture a man of whom something is likely to be heard at Washington henceforward. He is George Barr Baker, writer by profession and once journalistic secretary to the late Joseph Pulitzer. He became di- rector of the American Relief Adminis- tration under Hoover in 1919, after having been a member of the Belgian Relief Commission and a naval cable censor during the war. At the peace conference Comdr. Baker saw a good deal of Hoover in the latter's capacity of director general of relief under the supreme economic council which funce tioned during the Paris peace confere ence. In 1920 Baker blossomed out as Hoovet’s chief publicity man during the Californian’s ill-starred campaign for the Republican presidential nomina< tion. Baker had charge of the foreign- language vote during the 1928 campaign on Hoover's behalf and was invited to, accompany the President-elect to South Americe.. Unless all previous indications are de ceptive, Mr. Hoover's California back< ground is going to be the one on which he will draw heavily for support during the next four years. He has no single loyalty to which he is more devoted than his Stanford University affiliation and his friends of young manhood in California. Probably Mark L. Requa mining engineer, of San Francisco, ranks near the top of Hoover's coast comrades. He was an assistant in the Food Administration at Washington and has been active for eight years in the promotion of Hoover's political ambi- tions. Ralph P. Merritt of San Fran- cisco, now president of a California fruit growers’ co-operative association, was State food adminjstrator under Hoover during the war. 'In 1920 Merritt con= ducted Hoover's unsuccessful pre-con= vention campaign in California against Senator Hiram Johnson. Ralph Arnold of San Marino, is another Californian belonging to the inner Hoover circle. He is a geological engineer, a Stanford alumnus, an oil magnate and stanch Hoover Republican leader in California. Other Golden State men prominent in Hoover’s “personal” organization include John G. Mott, Los Angeles lawyer, for- mer law partner of Secretary Wilbur, and a member of the President-elect’s South American entourage. These names do not - to exhaust the ros- ter of Hoover's comrades in California who are numerous throughout the whole Commonwealth. Department Ties Considered. The President-elect’s Department of Commerce ties are bound to become apparent in the make-up of his ad- ministration. ~Assistant secretaryships of the department have largely been filled with political appointees, some of whom later became Hoover's close friends and supporters. This list em- braces persons like C. H. Huston of Tennessee, J. Walter Drake of Michigan, ‘Walter F. Brown of Ohio, now Assistant Secretary of Commerce, and William P. MacCracken, Assistant Secretary for Aeronautics. “Commerce men” who have been particularly close to Herbert Hoover are three of his former private secretaries, Christian A. Herter, Clar- ence C. Stetson and Harold Phelps. Stokes. The “chief’s” two present per- sonal secretarial lieutenants—George Akerson, his principal assistant, and Lawrence Richey—will, of course, be with the new President at the White House. A Califol ) departmental helper, former Representative James H. MacLafferty, went from Congress to Hoover. ) With no other official in the Depart- ment of Commerce was Hoover more constantly and intimately identified than with Dr. Julius Klein, the chief of the Bureau of Foreign and Domestic Commerce. If Hoover had any particu- lar hobby in Wasl during his cabinet days, it was success with which he met in organizing American business for purposes of trade abroad. As a presidential candidate Hoover harped on this phase of his administra- tive carcer often and eloquently. Na- body, next to the Secretary of Com- merce himself, had so much to do with that activity as Dr. Klein. These and innumerable others of the same ilk—men and women by the hun- dreds in all parts of the country “who talk Herbert Hoover’s language"—com- prise the “Hoover old guard” which the G. O. P. old guard thinks it will sooner_or later have to face and foil. The Republican “regulars” are not downhearted. They retain faith in Hoover. They believe he has vastly more “political sense” than is com- monly attributed to him. They are con= fident that the last thing in the world he thinks bf doing is to leave the “boys” out in the patronage cold. They expect to find their full place in the Hoover sun, no matter how many “boy scouts” contrive to crowd into that fa- vored reservation. (Covyright. 1928.) New Philippine Legislation Is Hailed As Inaugurating Era of Economy BY WALTER ROBB. MANILA —“A new era inaugurated,” says Gov. Gen. Henry L. Stimson of the Philippines, respecting economic legis- lation just passed by the Legislature. When he says this, intelligent Ameri- cans and Filipinos in the islands reach for the salt. They realize that every governor is hopeful of his particular ad- ministration being the forerunner of a new era, and Filipinos realize that prog- ress and a new era to any American governor means material advancement —more work, higher wages, more con- sumption, greater sale of American products. Gov. Stimson’s phrase is nof new. Harrison said he inaugurated a new era. It largely went to smash, and then Gen. Weod came with the new Harding era. Stimson's new era suc- ceeds Wood's. Difficulties in the Way. ‘There will be difficulty in bringing the new era into being, because the United States refuses to settle the sta- tus of the islands in relation to the mother country, the United States her- self. The present legislators expect no great influx of capital until the future of the islands politically is as- sured. Upon what then is the Stimson statement based? Something has been done to the cor- poration law. Just what this is nobody as yet knows; all awalt the draft which will go from the Legislature to the gov- ernor’s office. It is supposed to be en- couraging to farm investments, some- thing to bring millions of dollars into the financing of new plantations. It is the foundation of the new era. Those who passed it say it won't allow the gobbling up of public lands by power- ful corporations, yet certain corpora- tions are supposed to be ready to take hold—some to grow rubber and others to grow pineapples. That which is more rationally bene- ficlal, though much may come of the corporation law changes, is the sev- eral steps taken for the improvement of communications throughout the islands and across the Pacific. The lar Co. Another franchise is granted for .the operation of a long-distance telephone service in the islands, the American Telephone Co. seemingly be- ing back of this project. Evidently the islands are going to talk more, especially with the United States. Evidently, too, there is to be considerable competition for their talk- ing patronage. This will benefit com- merce. There is a steady refinement of old facilities, putting the islands for- ward a little each year. Gen. McIntyre Optimistic. Going away, after an extended visit with Gov. St:mson, Maj. Gen. Frank Mcintyre says, as chief of the Insular Bureau: “I found the same lovable peo- ple that I have been associated with for 30 years, and I found a governor general of whom the American people expected muclh. I find that he has gained the cor fidence of the people of the islands—Filipinos, Americans and foreigners. I b:lieve he may reasonably expect an administration fruitful in ac- complishments for the people resident in the islands.” Unless the seasons fail, this is safely true. Nothing the islands now raise or may raise wants for a steady market. And they are a ‘arming country. Each year America’s business with the islands will inerease: America has about 70 per cent of it because of the free trade with her and the tariff applied to other countries. a (Copyright, un)_ Priest Finds Ruins Of Ten Sarcophagi Carthaginian ruins excavated by archeologists time on end make their contribution to pure seience as well as religion. Father Delattre, octogenarian churchman, who is serving his faith through the fleld of science, has added to his list of discoveries in his lifelong work in archeology. Amid the crumb- ling vestiges of this city’s ancient hey- Mackay interests, identified with the |day he has located 10 beautiful Chris- Commercial Pacific Cable Co. the American cable line across the Pacific, have now a radio franchise to maintain stations in the islands for the transmis- sion of messages abroad; they can, therefore, compete with Gen. Har- bord’s company, the Radio Corporation of the Philippine Islands. A similar franchise is granted to the Robert Dol- tian slrcorhl‘i, which have been de- posited with the Carthag> Museum. Several of the sarcophegi are made of marble and the rest are cumposed of limestcne. Six of the coffins, one bear- ing the inscription “Romanus in Pace,” still contained some humen bones in- tact. 4 lead seal on ones\anw( was broken.