Evening Star Newspaper, April 22, 1929, Page 5

MAY STIRUPSENATE Westerners, if Defeated on ! Debenture Plan, Might : Seek Slash. BY MARK SULLIVAN. The controversy about farm relief Need not obscure the situation. Hard- ly any legislative situation ever was more clear. The Lower House will pass its farm relief bill, which is the ortho- dox and accepted one. Everybody in the Lower House who is for farm relief at all is for this bill Congressman Dickinson of Iowa was close enough to literal accuracy when he said this bill has “practically unani- mous consent all along the line.” Some who favor the bill may have mental Teservations, but this bill conforms to the program for farm relief that won out in the presidential campaign last year. This bill will be passed by the House probably by Thursday, and prob- ably by an overwhelming ‘majority. Meantime, there is in the Senate an- other bill, the one with the debenture plan. It cannot yet be called the Sen- ate bill because it is by no means cer- tain a majority of the Senate will vote for it. On the contrary, it decidedly cannot be called the bill of the Repub- lican majority in the Senate, because fully four-fifths of the Republican Sen- ators oppose it. v Minority Initiated Bill. ‘This debenture plan is initiated by a #mall minority of about eight Western Republican Senators and is supported by many Southern Democratic Senators use the bill gives to exported cot- ton a bounty of 2 cents a pound. It is R'S LETTER TO McNARY Executive Expresses Opposition to Export Debenm!‘l’lm, Citing 10 Reasons for His Stand. By the Associated Press. President Hoover’s letter to itor McNary disapproving the e: de- benture plan as a measure of farm re- lief is as follows: ‘The White House. ‘Washington, April 20, 1929, ‘The - Honorable Charles L. McNary, United States Senate, My Dear Senator: On April 12 I received a call from yourself and Senators Capper, Heflin, Norbeck and Ransdell, acting as a sub- committee of the Senate committee on agriculture, requesting my opinion on the “export de lan” for - tural relief, since it is a complete de- les already de- bated during the campaign. I informed the committee that I would request an analysis of the plan by the Departments and would transmit them to the com- mittee, together with my conclusions after investigation. The departments have given {t earnest consideration and I have just received and studied these reports, which I transmit to you here- with, ‘The principle of this plan as set out in the draft bill of your comimttee, which is before me, is to issue a Gov- ernment debenture to merchants export- ing agricultural products in amount of >ne-half of the tariff on such products— such debentures to be redeemed by pres- entation for payment of import duties. ‘The assumption is that by creating a scarcity through stimulating exports the domestic price will rise above world prices to the amount of the debenture— that is, if the debenture on wheat ex- ports is 21 cents a bushel, the price of wheat will be 21 cents higher in the domestic market than in the world market. . “Means Disaster for Farmer.” I am aware of the arguments put for- ward in favor of the plan by some of our agricultural organizations, and the opposed by some Eastern and Northern Democrats. In this cleavage running across party lines the Senate bill, with its debenture plan, may or may not command a majority of the Senate. If the debenture plan should pass the Senate there will then be a tug-of-war between Senate and House. That tug- of-war will be won by the House, because the House has more confidence in the good faith and practicability of its bill and because the House, in a broad sense, kas a stiffer morale than the Senate. " In short., the senatorial iniators and supporters of the debenture plan are certain to be beaten. The ques- tion then will be where will they go from there? After their defeat will they “take it out” on the protective tarrif on manufactures? The tarrif Just now is in the background and will remain there until after the fight on farm relief comes to a determination. But even though the tariff sleeps, there is potential dynamite in it Western Leaders May Ask Cut. ‘The present program about the tariff Is to make a few changes, mainly up- ward, “the fewer the better,” as Spe: er Longsworth put it, and then stop. ‘The program on the tariff contem- glntzs no changes downward, or very ew. ‘The question that invites speculation s whether the Western Senators, after being defeated on their debenture plan of farm rellef, will initiate a broad movement for tariff revision downward. In the past they have said they would. ‘They have always threatened that un- less the East would concede what they demanded on farm relief, they would then attack the East on the protec- tive tariff on manufactures. Whether that treat was a strategic bluff, or was something more substanciadl, soon will be known, A little over 15 months ago, when the Western Senators were making a drive for their then plan of farm re- Hef, the equalization fee, they put their tarift threat into concrete form. One of them, McMaster of South Dakota, !ntrdoduced a Senate resolution which Tead: - “Resolved. That many of the rates in the existing tariff are excessive, and that the Senate favors an immediate revision downward of such rates.*** establishing a closer parity between agriculture .and industry.” Senate Then Fell in Line. ‘That resolution, in those words, passed the Senate on January 16 last year by a vote of 54 to 34. Nothing further was done because the Senate, whether on account of the threat or not, fell in line and passed the equalization fee, which ‘was the form of farm relief the Western Senators were demanding. In the fight on the resolution, Senator Shortridge of California, defending the tariff, asked McMaster of South Dakota to name the tariff rates that were excessive. Mc- Master recited an alphabetical list be- ginning with aluminum, which is an in- dustry frequently mentioned by hostile Senate debaters in connection with Sec- retary Mellon. Of the 54 Senators who ‘voted for that resolution, 10 were West- ern Republicans and 44 were Demo- crats. Of the 54, all except 8 still are in the Benate. The entire 8 could be de- ducted, and leave 46, which is within 3 of a majority of the Senate.’ Also some, and possibly all, the successors of the 8, feel the same about the tariff as_their predecessors did. In those figures and in this situation lies the real possibility of a tense and interesting fight in the present Con- gress. In these figures lies the real trump card of the Western Senators. They ,may or may not command a majorit; for their debenture plan of farm relief. "The likelihood is they do not. Appar- ently, however, they do command a ma- Jority, or close to one, for “immediate re- vision downward of excessive rates in existing tariff schedules.” At least, they command close to a majority unless some of them have changed their minds since January 16 last year. TWO YOUTHS ARE HELD « ON CHARGE OF ROBBERY Special Dispatch to The Star. RIVERDALE, Md, April 22—Two ‘outns are being held at the Bladens- urg Jail awaiting trial on charges of housebreaking. Robert Pickrel, 18, of Burlington, N. C., and Willlam Dalton, 17, of Hopedale, N, C., were captured at the point of a rifle by D. S. Herzog after he had seen them enter the home of & neighbor, Mrs. Grace Crawford. _ Herzog said when he saw four youths enter the house he went to investigate, but two unidentified men escaped e vouths will be called bef Judge ¥ 'you wi cal fore Bherift Wednesday. LUMBER = MILLWORK PAINT HARDWARE BUILDING SUPPLIES COAL You'll find us ready to supply it! "b-fn Oftir, Sims Cortes Attt 3, Frank Kelly, Inc. 1343 2101 Georgia Av. arguments of other farm organizations in opposition to it. The proposers ad- vance it in the utmost good faith and earnest desire to assist in solution of a great problem and I regret deeply that I cannot agree that this provision would bring the results expected. On the contrary, I am convinced that it would bring disaster to the American farmer. ‘The weaknesses of the plan as set forth in the Serate bill may be summarized as_follows: 1. The issue of debentires to export merchants and their redemption in pay- ment of import duties amounts to a direct subsidy from the United States ‘Treasury. If the plan proposed be gen- erally applied it would cost in excess of $200,000,000 a year, as it would de- crease the Treasury receipts by such an amount. 2. The first result of the plan, if put into operation, would be a gigantic gift from the Government and the public to the dealers and manufacturers and speculators in these commodities. For instance, in the principal export com- modities the value of the present vol- ume of stocks in possession of these trades would, if the plan worked, rise by from $200,000,000 to $400,000,000, ac- cording to different calculations, with- out a cent return to the farmer or con- sumer. Evey speculator for & rise in our public markets would receive enor- mous profits. Conversely. if after this elevation of prices the plan were at any time for any reason withdrawn the trades would suffer a like loss'and a long line of bankruptcies must ensue. But in the meantime, the trades, out of fear of withdrawal or of reduction in the subsidy. will not engage in normal purchase and distribution. Either ex- orbitant margins would be required or alternatively the farmer would be com- pelled to himself hold the Nation's stocks until there was a demand for actual consumption. Overproduction Is Possibility. 3. If the increased price did reflect to the farmer, the plan would stimulate overproduction and thereby increase world supply. which would in turn de- preciate world prices and consequently decrease the price which the Iarmer would receive, and thereby defeat the lan. Stimulation of production has been the outstanding experience abroad where export subsidy has been applied. Overproduction will defeat the plan, and then, upon its withdrawal, agriculture would be plunged into a catastrophe of deflation from overexpanded produc- tion. The farmers’ difficulties today are in some part due to this process after the war. 4. The stimulation of production of certain commodities would disturb the whole basis of diversification in Ameri- can agriculture, particularly in the cot- ton and wheat sections, where great progress is now being made toward a more stable basis of agriculture. 5. Although it is: proposed that the plan should only be installed at the "MARSHAL it discretion of the farm board, yet the tendency of all boards is to use the whole o{ their authority, and more cer- tainly in this case. in view of the pres- sure from those u:vho MW&}I‘IH not, \andez- stand its possibility arm, and em- mufiun,v from the interested dealers the commodity. Loss to Farmer Is Seen. 6. It is not proposed to pay the de- bentures of subsidies to the farmers, but to the export merchants, and it seems certain that a large part of it would not_be reflected to . the farmer. It offers opportunity for manipulation in the export market, none of which would be of advantage to the farmer. The condi of com- petitive marketing at home and abroad and the increased risks would absorb a considerable part of its effect into the distribution and manufacturing trades. Moreover, the theoretical benefits would be further diminished by the fact that debentures would sell constantly at a discount, for the reason that persons paying duties upon imports would not take the trouble to accumulate the de- bentures and lose interest upon them unless obtainable at a discount. 1. The provision of such an export subsidy would necessitate a revision of the import tariffs. For instance, an ex- port subsidy of 2 cents a pound on raw cotton would mean the foreign manu- facturers would be receiving cotton at 2 cents a pound less than the American manufacturer, and the foreigner could ship his manufactured goods back into the American market with this advan- tage. As the subsidy in many cases is larger than the freight to foreign ports and back, it raises large opportunities of fraud in return shipment activities. 8. Export bounties are recognized by many nations as one form of dumping. T am advised that a similar action by another nation would be construed as a violation of our own laws. Such laws are in force in the principal countries of our export markets and to protect their own agriculture would probably lead to action which would nullify the subsidy given by us. ‘Would Require Tax Increase. 9. A further serious question arises again (if the plan did have the effect intended), where the foreign producer of animals would be enabled to purchase feed for less than the American farmer producing the same animals. For in- stance, the swine growers in Ontario would be able to: purchase American corn for less than the American farmers across the border, and it would tend to transfer the production of pork products for export to Europe from the United States to Canada. It would have the same and probably even more disastrot effect in dairy products. » 10. ‘The plan would require a sub- stantial increase in taxes as no such ex- penditure or depletion of revenues as this plan implies could be paid from marginal income of the Government, more particularly in view of the very large increased expenditures imposed by the naval program, flood control and other branches of farm relief. Altogether, from the above reasons, it is my belief that the theoretical bene- fits would not be reflected to the Ameri- can farmer; that it would create prof- iteering; that it contains elements which would bring American agricul- ture to disaster. The introduction of such a plan would also inevitably confuse and minimize the much more far-reaching plan of farm relief, upon the fundamental prin- ciples of which there has been general agreement. Yours_faithfully, HERBERT HOOVER. SPANISH STUDENTS CRY OPPOSITION TO DICTATOR Professor Who Favors Government Is Hooted at Valencia by Youths ‘Who Demand Republic. PARIS, April 22 (#).—Le Journal to- day prints a dispatch from Madrid say- ing that fresh troubles at Spanish uni- versities have been started. At Barcelona the students staged a manifestation on Saturday. At Valencia the students were said to have hooted & professor who was a partisan of the dictatorship and to have cheered an- other notorious for his advanced opin- jons. The rector cleared the university buildings, but the students then marched through the streets shouting for a re- public. ‘The dean of the faculty at Valencla sent a protest to the government against the terms of the last official note. It was signed by & number of professors, and it was expected that the university ‘would be closed. G STAR,” WASHINGTON, 'D. "0, MONDAY, APRIL 22 ° DEBENTURE PLAN STUDY OUTLINED Treasury, Agriculture and Commerce Departments Analyze Proposal. By the Assoclated Press. The declaration of President Hoover opposing the debenture plan of farm relief was based largely on studies made for him by the Agriculture, Commerce and Treasury Departments. Secretary Hyde of the Agriculture Department reported: “It appears from our study of the effect of export debentures in other countries that it has operated to in- crease production, * * * “As a consequence of the operation of the debenture plan, there would be a tendency in farming to shift from many lines of production toward the production of debenturable commodi- ties, especially those with a short pro- duction cycle—grain and cotton, for ex- ample—the acreage of which could be increased greatly from one year to the next in the expectation of realizing quickly the benefits of the 'debenture. This would at least temporarily disturb established production programs. Fur- thermore, should the support of prices provided through this plan be removed, the debenturable commodities would be left in an overstimulated condition and agriculture would stand to suffer ac- cordingly. * * * Increase Would Cut World Mart, “It should be noted also that an in- crease in our exports of a commodity would tend to depress world prices. This would tend to reduce the effective- ness of the debentures and necessitate further increases in deben rates in order to maintain prices. * “Should the world price level of a commodity rise materially, there still would be an enhancement of the domes- tic price above the world level by the amount of the effective debenture. This would tend to give an abnormal stimulus to production.” A memorandum prepared by the De- partment of Commorce estimated that it the export bonus were fully effective in raising prices the total cost to the public theoretically on the seven com- modities to be affected—pork, wheat, corn, rice, cotton, tobacco and cattle—— would be $518,000,000 annually, of which $369,000,000 would be increased cost on domestic consumption and $149,000,000 public revenues spent on paying the bounty. “The bill,” it continued, “provides that when increased acreage or pro- duction reaches 15 per cent, the de- benture plan then becomes inoperative and shall be withdrawn. The effect of this would be to leave the industry with an increased production and no protection.” Mellon’s Comment, A straight export bounty, it said, would have the same effect, would cost the public exactly the same, and would be simpler of operation, but “it should be pointed out that practically all coun- tries, with two or three exceptions, have anti-dumping laws.” Secretary Mellon could see no differ- ence in principle between the issuance of debenture and nayment of a cash bounty on exports in its effect on the Treasury, and held tnat the bounty would benefit the farmer more than the debenture, since “the debentures must inevitably sell at a discount.” ‘That, *he said, not only would de- prive the farmer of part of the benefit but would represent a bonus to exporters l{ld “seriously dislocate the tarlf sched- ules.” Furthermore, he thought it would be undesirable “to pay a cash bounty on the exports of a commodity which al- ready is produced in excess of domestic requirements.” He also outlined the effects which could be expected to reduce customs re- ceipts, and pointed to the likelihood of protective measures by foreign govern- mtnl': with important agricultural in- terests, Threaten to Outgrow Their Island. ‘The population of Java is increasing at the rate of 1000000 a year. It doubles in 25 years. In 1880 there were about 5,000,000 people in Java, In 1900 there were about 20,000,000—now doubled. Of course, the island is be- coming overparulnud. But it can sup- port a few millions more yet. About 50 per cent of the land is now being util- ized. It is belleved that 70 per cent of it can be made productive. And it is all for the Javanese. The Dutch gov- ernment will not allow a Dutchman, or any other foreigner, to buy any land in Java. It can only be rented from the natives. L & WENDELL \ “Which 'p'ian() shall v choose?” To aid you in selecting a piano which will exactly fit the personality of your home, we have secured Marshall & Wendell baby grands in six different period styles. Early American, for example, & patrician model, with the wholesome simplicity that is our inheritance from Pilgrim days. Venetian— a bit more romantic—graceful carvings re- call the Venetian Gothic arches of palaces that flank the Grand Canal. 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WENDELL DEBENTURE PLAN " KEPT IN FARM BILL ‘BY-SENATE GROUP (Continued From First Page.) floor of the Senate he would report the farm bill tomorrow and asked that it be made the unfinished business of th Senate. He sald, too, he would discuss the measure at the time he submitted his report. Democrats Question McNary. “Will the ‘Senator from Oregon tell the Senate whether the debenture plan was retained in the bill by the com- mittee?” asked Senator Robinson, the Democratic leader. “It was,” sald Senator McNary. “WIill the Senator from Oregon tell the Senate whether the vote in the committee for the debenture plan was unanimous?” asked Senator Harrison of Mississippi. Senator McNary replied that the vote had stood 8 to 6 and was taken after a discussion of President Hoover's letter opposing the debenture plan. SOUSA TO DIRECT BANDIN CONGERT - Program by Army Musicians Will Precede Tour to Seville, Spain. John Philip Sousa, internationally known composer and band leader, will come to Washington to direct the United States Army Band during a feature of its “Despedida” or farewell party con- cert here Saturday evening at the new McKinley High School auditorium, on the eve of the departure of the band for a tour to Sevelle, Spain, where 1t will participate in the Ibero-American exposition there, The farewell concert at the Mec- Kinley High School will be featured by the presentation of a regimental flag to the Army Band by the Washington Board of Trade and the Washington Chamber of Commerce, Sousa, it was announced today, has prepared & new march for the Army Band's program in Europe, entitled “La Flor de Sevilla,” dedicated to the Ibero- American exposition, and which he will direct in its first rendition at the con- cert here Saturday. Miss Hazel Arth, Washington con- tralto, winner of the Atwater Kent radio audition, will sing songs from the Ibero-American countries, and the Tchernikoff-Gardiner dancers will give dances of Spain and Latin American lands, accompanied by the Romano The program is to be broadcast over the Columbia chain of stations, from 8:30 to 9:30 p.m,, it is announced. “LAME DUCK” BILL 0. K.D. Senate Committee Today Favorably Reports Norris Measure. | The Norris amendment to abolish lame-duck sessions of Congress was I ordered favorably reported today by the Senate judiclary committee. ‘The measure has passed the Senate by the necessary two-thirds vote on sev- eral occasions, but never has been ap- proved by the House. It would prevent members from serving in Congress after they had been defeated at the polls. FREAINE Queen Souriya of Afghanistan be- no‘\lv goes about without the customary veil. lieves in modern dress for women, and | RODLCTION CURE S SUGEESTED Truck Growers Urged to Form Strong Co-opera- tive Associations. By the Associated Press. Unwise expansion of truck crop acre- ages, aggravated by "wxldnt"krhnuw of promotion agencies, is held respon- sible by A. W. McKay of the Depart- ment of Agriculture for the most serious overproduction blems of the fruit and vegetable lnpdr&try. Mr. McKay, who is co-operative mar- keting specialist of the Bureau of Agricultural Econgmics, urged in & statement issued by the department the organization of strong co-operative associations by growers. He also sug- gested interregional co-operation among these groups to prevent “‘unwise expan- sion and to discourage promotional schemes which in many sections have resulted in large plantings of fruit and ve?euble crops and long periods of low rices.” Citing the acreage increase in lettuce and strawberries as an example of un- wise expansion, he said the lettuce acre- age in the Imperial Valley of California was expanded from 20,000 acres in 1924 1o 34,000 acres in 1927, increasing pro- duction 41 Eer cent, The net result to growers, he sald, was that in 1927 they recelved $4,796,000, whereas for the smaller 1924 crop they had re- ceived $6,327,000. “Missouri in 1925,” he continued, “had | 11,960 acres of strawberries. The aver- | age yleld Was 2,100 quarts per acre, the | average price paid to growers 19 cents per quart and the total farm value of the crop was $4,772,000. In 1928 acre- age in Missourl was increased to 26,490 acres and yields were only approxi- mately half those in 1925, or 1,065 quarts per acre. However, total pro- duction increased, the average price paid to growers as a result declined to 11 cents per quart and the total farm value was $3,103,000.” Considering the national strawberry situation, he pointed out that -planting increased over 57,000 acres, or 40 per cent, in 1928 in this country as com- pared with 1925, while the total farm value of the berries increased only about $40,000,000, or about 9 per cent. ‘The need for interregional co-oper tion with regard to potatoes also was | stressed, Mr. McKay declaring that an effective program for marketing the total crop called for co-operation among associations in all important regions. PRISONER MEETS DEATH WHEN JAIL IS BURNED Flames Originating From L{ghted; Cigarette in One-Cell Structure Cause Its Destruction. By the Associated Press. . HELENA, Ga., April 22—Charlie Hulett, 38, was burned to death here yesterday when the city jail, in which he was incarcerated on a misdemeanor charge, was destroyed by fire. The fire, which was discovered about 3 o'clock yesterday morning, is presumed to have been started by a lighted cigarette, which ignited the mattress on Hulett's bunk. Hulett was arrested late Saturday on a charge of being drunk and disorderly. ‘The jail, a small, one-cell affair, is not guarded, nor was there any other inmate at the time of the fire. Hulett, who resided a short distance from here, is survived by his widow and several children. Ontario has invested $200,000,000 in its highways. Quebec has authorized new road improvements costing $17,- i ~ NEW REDUCED RATES to BALTIMORE by Motor 10 $138 Effective Coach Round Trip at Once ELIMINATE parking and driving worries on your next trip to Baltimore. Sit back comfortably. in a .lux- urious gas-electric Mitten Tours Motor Coach. 15 express motor coaches daily. 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Owned by Pennsylvania Railroad and Philadeiphia Rapid Transit Company POLICE KEPT BUSY INDRY LAW CASES Several Arrests Made After Pursuits—144 on Docket as Drunks.- Week end activities of liquor law violators who continue to maintain their trade despite the penalties im- posed by the Jones law, kept operated by Elmo J. Johnson, 26, 00 block of Champlain street, on Ontario road last night, in an at- tempt to warn the driver that the car bore no tail light, police of the eighth precinct say that when they overhauled the machine, the man jum out and ran. A search of the neighborhood by Officers W. F. Burke, W. R. Laflin and W. E. McEwen led to the arrest of Johnson, who, they allege, was found hiding in a house nearby. Four half- gallon jars of alleged liquor were found in the car, police say. Charge of Posession. A charge of possession was preferred against James Varnstein, arrested in the 700 block of Eighth street southeast. Sensitive olfactory nerves possessed by Policeman E. Fillmore of the fifth pre- cinct led to an examination being made of the man’'s person. Five bottles of alleged liquor were found, police say. Jumping from his car when police attempted to inspect it at Fairlawn ave- nue and Twenty-second street south- Police | Hitt, Lists i) the District branch of Police Court, bearing the names of 144 dmnka‘: | gave mute 2vidence that ardent spirit Wwere procurable in various sections of city. herself, the officer informed Judge Isaac R. Hitt today. 'Fines of $15 imposed by the court for intoxication and disorder- ly conduct were suspended by Judge NAVY TRANSFERS LISTED. Admiral Wiley Among Prominent Officers Under Orders. Naval orders released today show that Admiral Henry A. Wiley is to be detached as commander-in-chief of the United States Fleet about May 21 and is ordered home to await orders. Rear Admiral Joseph M. Reeves is detached from his command of the aircraft squadrons of the battle fleet and ordered &8s a member of the general board through the Navy Department. Lieut. Commander Robert P. Molten, Jr. is to be detached from the U. S. 8. Langley about May 12 and will come to Washington as aide to the Assistant Secretary of the Navy for Aeronautics, Lieut. Gerald D. Linke and Lieut. Clinton A. Misson are to be detached | from the Carneigie Institute of Tech- ! nology at Pittsburgh and will come to the navy yard here. under instructions. For All New Wall Board Purposes Compare These Low Prices on This First Quality! FOR PARTITIONS Wood Pulp Wallboard Per 1,000 LD A Rockl Per 1,000 WELL FOLKS— The Budget Boys and “me” will be FOR | FIREPROOFING | INSULATING and for partitions FOR Insulating Boar Per 1,000 S5 'M..... board Convenient 3 Branches MAIN OFFICE-6™ & C.Sts. S W. CAMP MEIGS-5™ & Fla. Ave.N.E. 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