Evening Star Newspaper, June 2, 1929, Page 33

Editorial Page 1 EDITORIAL SECTION h ¢ Sunday Star Part 2—8 Pages WASH INGTON, D. SUND. AY MORNING, JUNE 2, 1929. WAR DEBT ISSUE RESTS WITH GERMAN WORKMEN Years of Self-Denial and Overwork Would Be Necessary to Pay Obligations in Goods. must depend on the outside world for its foodstuffs and most of its raw ma- terials. It has a magnificent industrial | plant and its people have a genius for organization and production. But it faces severe competition from Britain, the United States and, to a lesser de- gree, France and Belgium. Great Britain in similar circumstances is able to meet the vast surplus of im- ports over exports by the proceeds of its foreign investments and services, which leave it a favorable balance of upward of $1,000,000,000 annually. France, which exports almost as much as it im- ports, has a net surplus annually of over $250,000,000, drawn chiefly from the vast tourist’ expenditures within French frontiers. But Germany has no foreign investments and small tourist trade. If you look at Germany as a business, it has been “in the red” every year since the war, not merely because of reparations payments, but even more because it has had to buy more than it could sell. All of this was foreseen in the Dawes plan, which provided that all repara tions payments should be suspended au- tomatically whenever they threatened to bring German exchange below par. This famous transfer clause Dr. Schacht has preserved for all future payments, | save about one quarter. Actually Ger- many undertakes to pay uncondition- ally, judging by preliminary figures, no more than $120,000,000 annually. But this represents the capital value o lit- tle more than $2,000,000,000. For the rest, she agrees to pay only as she can; that is, only as payments can be made without bringing her money below pai Must Pay in Kind. But this $120,000,000 which with cer- tain additions may reach almost $150,- 000,000, is actually no more than w! Germany can safely calculate to pay in | kind, largely in coal, potash and dye- stuffs. Thus, in fact, the new settle- ment of reparations amounts to no more than a fixation of the total German ob- ligation at $8,000,000,000—instead of $33,000,000,000—one-quarter guaranteed unconditionally, three-quarters no more than a pure gamble, If Germany “comes back” strong and promptly, her pay- ments are assured, but if it takes a gen- eration for her to get back to a point where her income largely exceeds her expenditure, it is clear that she will not pay, because she cannot. Moreover, for the people of the United States it is at least worth noting that precisely the amount that repre- sents the great gamble in the German case is the amount that Germany's creditors have marked down to meet their own debts to the United States. ‘The Paris meeting of experts has pro. vided the machinery and the method by which Germany shall pay the allied debts to the United States, but no one knows or can know for a long time whether Germany can pay or not. If she can, all the old bitterness between the United States and our wartime as- sociates will tend to disappear. But if she cannot pay, her failure will inevit- ably lead to pressure by all these war- taln‘;:slssochus for a new adjustment of iebts. The experts have fixed the method by which Germany will pay if she can pay, the politicians are naturally at- tempting to give this settlement the ap- pearance of a general liquidation, but, in fact, while the reparations problem has been solved again, the latest politi- cal solution waits upon the disclosure of the economic realities. Germany's creditors have agreed that she shall not pay three-quarters of what they once set the bill at, but as to the re- maining quarter the old riddle remains. (Copyright, 1#29.) s Explorers Differ On Ship or Plane ‘Which is the best way to reach the North Pole—by ship or by airplane? Fridtjof Nansen, who is about to start on an international polar flight, has decided on the plane, while Comdr. Hansen, who accompanied Nansen on the Fram expedition of 1894-1896, says that only a boat can be absolutely ef- fective. Hansen argues that with the technical resources available there are no serious difficulties to bar the way to the Pole by sea, while airplanes are de- pendent on atmospheric conditions and exposed to many dangers, “the more so since it has become a fixed idea that such attempts can be undertaken only in early Spring.” He goes on: “I know from personal experience that in Sum- mer the ice cover is not strong, and that the Polar Sea from Spitzbergen to the North Pole is navigable. In 1896 the Fram passed through pack ice be- tween 80 and 84 degrees north. As for the airplane, the late Roald Amundsen, after his forced landing at 88 degrees north, says that his plane was in con- stant danger because the ice was drift- ing and leaving big open places of sea.’ BY FRANK H. SIMONDS. HREE weary months during which the experts have wres- tled with the eternal problem of reparation have served to con- | fuse still more completely that main issue—whether Germany can pay any considerable part of the bill her enemies hold against her. Ten | years ago these enemies hopefully out- lined their claims, which were pres- ently translated into a liability of | $33,000,000,000. Today the claim has | Dbeen cut to about $8,000,000,000. As | Germany has, in the meantime, paid | upwards of $4,000,000,000, this means | that nearly two-thirds of the original claim has already been abandoned. Nevertheless, it remains a matter of profoundest doubt whether any consid- erable part of the reduced claim can | be paid. All the Paris debates over | technical details and respective quotas | represent in the strictest sense of the | word excursions into pure speculation. | It is true, of course, that the ability of | Germany to pay, within her own fron- tiers, the principal and interest on a debt of $8,000,000,000 is beyond ques- tion. Britain is paying on a national debt of $38,000,000,000, France on a debt of upward of $15,000,000,000. To | raise the money within the national boundaries is only a question of taxa- tion But how is the money raised by | domestic taxation to be transferred to the creditors beyond the frontiers with- out bringing about the swift and com- | plete collapse of German exchange? A | nation can only pay its foreign debts | by its exports, by its services and by iis gold, if, as in the case of Germany, it has no foreign investments. To pay | this foreign debt, then, Germany must bave an annual surplus of exports over imports of some $500,000,000, the an- | nual charge of the revised debt, less | whatever sums it may borrow abroad. ‘We Have Been Paying. So far, under the Dawes plan, Ger- ‘many has had not a surplus of exports but of imports, generally in excess of $500,000,000 annuallv. In this situa- tion she has been obliged to meet her reparations payments and her excess of imports by foreign borrowings. And she has chiefly borrowed in the United States. We have actually lent Ger- many most of the money with which she has paid her enemy creditors, who have in turn paid us on account of their war debts. It is true that substantial payments have been made by Germany in kind. Coal, dyestuffs and other manufactured articles have been sent abroad, and this process can be continued, although it is plain that these payments in kind ac- | tually reduce the sum of German ex- |ports and increase the unfavorable trade balance. If Germany exports 120,000,000 tons of coal a year to meet part of the reparations claims of France, Belgium and Italy her coal exports will |not furnish money to balance her neces- sary tpv.!:!n:huea of raw materials and uffs. ‘When the experts have finished their work and gone home, therefore, while they will have at last fixed a definite sum for reparations and set up an intri- cate machinery for regulating payments, they will have done nothing to solve the larger problem—the problem of ‘Whether Germany can actually pay any considerable portion of her obligations. Moreover, along with the question of the capacity to pay goes that of the will to pay. It is manifest that this question of the will to pay is of utmost importance, for in the main it will hereafter rest with Germany whether she pays or evades. But if Germany is to pay, the first prerequisite is that she shall so order her national budget that her im- ports will be rigidly reduced and her exports feverishly increased. If Ger- many is to meet her obligations she must_submit to a long period of self- denial, she must consent to a very con- siderable reduction in the standard of living. Her workingmen must work | longer hours, accept lower wages. The Whole people must live as does an in- dividual who has a huge debt to pay ©off—wholly out of his earnings. Means Wartime Hardships. But how can Germany be compelled | to subject itself to such a regimen? How can any government, dependent upon the votes of the masses for exist- ence, be expected to impose real and long-continued hardships upon its con- stituents? If Germany is to pay her foreign debt it is almost inevitable that the whole population subject it- self to the same sort of discipline all belligerent countries endured voluntari- ly during the war. But what a people will do as a detail in national self de- fense it is hardly likely to do merely to insure the payment of a debt that 1t regards as unjust. Again, the allied countries o future means of coercion. The German government will raise the necessary sums in German money to meet reparations by domestic taxation. ‘This money will be paid into the bank established for the purpose of handling the reparations payments. But for in- ternational usage this money will be without value save as Germany is able to pile up balance of foreign | credits and currencies, either by a; surplus of exports or by more foreign borrowing. { And obviously in the matter of | foreign borrowing the limits are fairly | fixed. We have lent Germany up-| have Vote for Women Wins Adherents in Japan A group of younger members of the Minseito or opposition party are plan- ning to introduce a bill into the diet providing for woman suffrage in Japan. If they do there is the possibility of a lively discussion of interest to every one in _the country. So many_innova- E ward of $2,000,000,000, but our loans; are drying up. The condition of our, own market has been such that there | has been no temptatfon to send money | abroad. And the direct consequence of this cessation of loans at the moment when the Dawes plan payments have | reached the normal maximum has been to drain down the gold reserve in the Reichsbank to the danger point. | Gold has flowed out to meet repara- | tions dues and excess imports costs | end none has flowed in to replace the | osses. Question Remains Gamble. Frankly, then, the reparations que: tion, after Paris as before, remains supreme gamble. Certain experts are accustomed to point to the fashion in ‘which the United States following the Civil War borrowed huge sums abroad and by reason of the vast development of the West was able to repay prin- cipal and interest. For years Europe Jent us money and invested the inter- est we paid within our frontiers. Ob- vivusly it is conceivable that in the next four decades Germany will un- dergo the same sort of economic de- ~elopment. Actually she did enjoy | such a boom between the Franco- Prussian War and the World War. tions have been made in Japanese government in late years that backers of the bill think the present opportune as the country is used to far-reaching changes. The first general election to be held under the universal manhood suffrage laws took place a year ago and only last October the first jury trial was held in Japan. These are the two big- gest changes which have been made and there are many who belleve that | the authorities should go all the way and give the women of Japan the right to vote. However, while favoring the adopting of modern customs as much as possible, government leaders do not feel that the time has come for women to have the franchise. |Spaniards Are Vexed By American Grape Ban Spaniards think it is high time that the Mediterranean fly question is set- tled. It not only is hurting the busi- ness of grape growers, but California grapes are beginning to find their way in—at least a fruit dealer advertised them recently, though the announced origin of his product was denied by an official note. During recent years noth- ing has made Spaniards more vexed with Americans than the ban against importation of Almeria grapes into the United States ongaccount of the ravages of the Mediterranean fly. Serious news- papers have even denied the existence is [of this fly, which they declare is a lonly now beginning to become con- siderable ‘fl‘m; they took away colonies ight have been susceptible of eat development. Today Germany is ted couptry, whish creation of Yankee imagination and malice. The Spanish vineyard oper- ators are hoping for a thorough inves- tigation of what they & non- mmm‘. BY JAMES J. DAVIS, United States Secretary of Labor. IGHT YEARS is a short period in a nation’s history, but in sucn a brief term the destinies of the world may be changed. It is seldom, during times of peace, that the policies of a nation subjects of other countries are radically altered and the future of that nation vitally affected in so short a time. Yet that has occurred in the United States since 1921. The spring of 1921, as we well re- member, wage-earners out of employment. Im- migrants were pouring into this coun- try at an increasing rate which threatened to equal or exceed the high- est in our history. With shipping fa- cilities still unadjusted after the war, they were coming in at the rate of more than 800,000 a year. The emergency demanded stoppage of the flow to enable the country to meet BY HOWARD MINGOS. E turned down the biggest job he could ever hope to get. He chucked up a good salary. He went out on his own. His des- tiny led him straight into the most romantic adventure of modern business. An afternoon in 1911; Walter Hines Page, brilliant editor in chief of “The World's Work” magazine and later to become our Ambassador to London, was speaking to his young financial editor, “I'm leaving the magazine, Clement, amd I have named you as my Successor. ‘You shall be editor.” Clement Keys went back to his desk and thought it over. He returned to his boss. “It's a great job, I'll admit,” he said. “I would be at the top, as far as I could . But it isn’t far enough. thirty-four. I've been studying finance for years. It's my specialty. Guess I'll stick to it. I'm resigning.” ‘That was 18 years ago. Today C. M. Keys is the E, H. Harri- man of aviation. Harriman had a vision of railroad ex- pansion. He had the confidence of the money powers. They gave him credit without limit. He took their money and built up vast railroad systems. speeded up business and industry. He quickened the country’s growth and he paid dividends. He was the dominant figure in an age of steel and steam. Keys has his dominion in the air. His vision is one of winged machines carrying people and things through space faster than any bird in its mad- dest flight. He is building up a net- work of air transport lines and aerial service systems. He plans to have try. Has Money’s Confidence, Like Harriman he has the confidence of money. Wall Street supports any project he launches. Shareholders show faith in anything he manages. More than a hundred leading bankers, capi- talists, industrialists and business men are assoclated with him in his enter- prises. Keys has financed more than $80,- 000,000 worth of airlines, airplane plants, flying services, holding com- panies and investment trusts. Yet he is just beginning. “It's a new era,” he says. ‘“People have more money, more courage. They are willing to pay for speed.” His private office is on the thirty-fifth floor at 39 Broadway, New York. From his windows he can gaze across the North River, into New Jersey and see the trunk line railroads coming in from zhe‘soulh and West. But he doesn't lo_it. His back is turned to that scene. It represents the past. A ten-foot map of the United States confronts him. It is & permanent fixture set in a panel on the wall opposite his desk. He walks over to it as he discusses his plans. He paces back and forth be- tween the Atlantic and Pacific. A finger traces new air routes up and down and across. “Every community will have its air service. The trunkline systems will have hundreds of feeder lines. There's no limit. “Only one letter out of every thou- sand, in some places two thousand, now takes the air mail. We shall develop that service until one letter out of every five is flown. “Perhaps 4,000,000 pounds of light freight and express were taken over the thirty-eight air transport lines in the United States during 1928. Soon hundreds of millions of pounds will be flown annually. “Possibly 30,000 passengers paid their fares and traveled from one destination to another in airplanes in this country last year. Our own lines are just be- ginning to seek that kind of patronage. We have spent many months organiz- ing. We shall soon be flying thousands of persans who now travel by motor bus and train. “Instead of one or two planes over a route during the day we shall have them loavios (e terminals particularly affecting the citizens and | found millions of American | T'm only | He | them soon spravling ll over the coun Control of Incoming Tides of Foreigners Has Had Vi its problems of unemployment and to put back to work the millions of young | men who had served in the military | forces. There were other factors lead- |ing to this demand for limited immi- | gration. including the necessity for as- | similation of the groups of foreign born already in the country, but the vitally influential factor which brought about limitation was that of employment. When the first quota act, using the quota basis of 3 per cent of the census iof 1910, was approved by President of the twenty-four. We will have more speed, too. At present the average is only 100 miles an hour. That is not fast encugh. We are planning to do 150, eventually more. “Yes, 1 think people will fly at two hundred miles an hour as a matter of course. Keys should know. He has been con- nected with every branch of aviation since the war. He now controls a fair share of every phase of commer- cial aviation in this country. Not only is he a leader in financing aeronautical projects, but he is the dominating fig- ure in the industry itself. Still he is not of the domineering type. Some years ago I saw him driven away from the planes on one of his own flying fields, back to the edge reserved for spectators. “You'll have to get back, out of the wucy. you!” ordered a guard. And Keys ge! “Hey, there, boob!” a fellow work- man whispered. “Do you know that little fellow with the blinkers, the one you just sassed? That's C. M. himself.” “Gosh!"” exclaimed the other. “Why don’t he come around oftener and get acquainted? He looks like a school teacher.” He was, once. Born in Chatsworth, Canada, fifty-three years ago, he be came addicted to classical literature and sports. After graduating from Toronto University he spent three years teach- ing history and foot ball to the boys of Ridley College at St. Catherin . One of them later on to be the indirect cause of his getting into aviation, Keys Goes to New York Keys and the Wright brothers were seized with epochal ideas at the same time—in 1900. The Wrights decided to invent the flying machine. Keys de- cided to invade New York and elevate that benighted community by writing in the class‘cal manner. Some months after his arrival in New York he had read of Tom Law- son's panic in Wall Street. Never hav- ing seen a panic, nor Wall Street, he went down town to ook them both - CLEMENT M. KEYS. SECRETARY DAVIS. Harding in 1921, a new chapter in American history was written. This law permitted a certain number of per- sons of each nationality to enter an- nually, the count being made at United States ports. It was necessary, there- fore, for a prospective immigrant to break up his home abroad and make a journey of from 3,000 to 5,000 miles or more before he could know whether or not he could enter the country, even though he were satisfied that mentally, moraily and physically he was qualified over. Everything was ~uiet, no nci->, no disturbance. Keys wrote a stury, and tried to sell it, to the effect that | thera was no panic. That experience fascinated him with the mysteries of the Street. He got a job as reporter on the Wall Street Journal and began to study finance. He ran down tne news by day and digested it at night. Rallroads then formed the main topic in financial cir- cles. All Wall Street was watching the operations of Harriman. But Har- riman did not talk about his plans. Everything was very secret. One day Keys heard that he had is- sued a confidential and importan: re- port to directors. He went to Harri- man and asked him for it. “Go to hell,” replied Harriman. Instead, Keys went to cne of his friends on that board and procured a copy, which he published. Harriman sent for him. “Where did you get that report?” “I'll tell you what you told me,” Keys retorted, and departed with speed. | _Several weeks later he fell in with | Harriman on the street. | _“Hello, there,” the magnate greeted. | “By the way, how would you like to | have an interview with me?” “It would make me," gasped Keys. “All right, tomorrow at 11 o'clock.” Peers Behind Scenes, For two years after that Keys was railroad editor. Harriman was only one of many big men whom he could term his friends. Hz was able to peer behind the scenes. He soon learned | why transportation is of vital impor- tance to national progress. He also! found that nothing big can be done without proper financing. He became | an_expert on the subject. But he studied too hard. His eyes gave out and so did his nerves. He had to lay off. | He was on the World's Work in 1908 when the newspapers carried the first flashes from Hammondsport, N. Curtiss, al Bearing on America’ New Era in Immigration s Employment Problem for admission. On the first day of cer- tain months a portion of the quota be- came available, and those who ap- plied at that time might be admitted. They might arrive a minute or an hour late, and have to be turned back. And 50 it was that the most important races of history were staged on the ocean in those days. Law Created Hardships. Technically, the law was so framed that when the gate swung closed it even tore babes from their mothers’ breasts. Actually, as the administrator of the law, I took the responsibility of refusing to let that occur, but there were thousands of instances where no stretch of administrative construction could serve to relieve the hardships which the law created. ‘The inequities of this situation could not be permitted to continue, so grad- ually we have been working to smooth out_the difficulties and provide more (Continued on Fourth Page.) Harriman of Aviation As One Man Dominated Expansion of Railroads So C. M. Keys Guides Air Highway Development Since the Wrights had made their fl‘.:sl hflllh;. ml.n 1903, he lfl‘m’l;lc ;’;:d thought of e part flying migl y in transportation. So when he read of the Hammondsport flights' he realized their importance. He knew Baldwin. He had_taught him how to play foot ball at Ridley College. He addressed a letter to his former student, gave it to a writer and sent him to Hammonds- port for a story. Later Baldwin and McCurdy visited New York. They telephoned Keys. It was just a friendly party. Aftfer ‘that they kept in touch with one another. When the World's Work lost its financial editor in 1811 Wall Street acquired a new firm, C. M. Keys & Co. At first it was an in- vestor’s service. ‘Three years in his own business; he was selling millions of dollars’ worth of bonds and waxing rich, when Europe went to war. Glenn Curtiss began building air- planes for the allies on a quantity pro- duction scale that made quick ex- pansion imperative. He reorganized his company in 1916. Wall Street interests bought control. Curtiss found himself with much money. He told his friend, McCurdy, that he wanted expert a vice about investing it. “Go down to New York and talk to C. M. Keys,” said McCurdy. Curtiss and Keys have been close friends and business partners ever since. Keys became a vice president of the Curtiss company without a salary. He was simply financlal adviser. He cut | no ice at all in aviation, When the United States joined the allles, Curtiss had to expand again. One of the Keys clients was John N. Willys, the motor car manufacturer. Through Keys he became interested in aviation, and in September, 1917, bought control of the Curtiss company. Keys was chairman of the finance committee. Airplane Industry Hit. The armistice knocked the airplane industry for a complete loop. It landed flat on its back. It was a war baby | nourished solely by war contracts. The Government had canceled $100,000,- 000 worth of aircraft orders within 24 hours. Curtiss was the biggest concern in the industry. It had produced 5,000 airplanes and as many engines. It had the only complete research laboratory and engineering organization in the United States. The Willys interests thought they could develop commercial aviation and keep their plants running. ‘They spent $1,500,000 finding out that flying then was not popular. On a Friday afternoon in August, 1920, they went to Keys. “We're through. These are hard times in the motor car industry. We cannot afford to carry the Curtiss com- pany any longer. It has $650,000 in debts payable next Wednesday. We plan to ask for a receiver.” “What a pit; exclaimed Keys. “That will mean the finish. If Curtiss goes, the others will go. Most of them are out of business now. Let me see what I can do.” He went home and remained in the house over the week end, thinking. On Monday night he met the Willys people and the Curtiss board of directors. “This company is not worth a good dime,” he told them. “But as an or- ganization it is worth saving. If you want to sell your holdings to me, for cash, I'll take control. Tomorrow I shall pay the debts, and I'll keep the company going until I find some way to save it and protect the thousands of small stockholders,” Credited With Foresight. ‘They sold out to Keys for less than $4 a share and thought themselves lucky. Perhaps they were. He himself time that of all the gs he had ever done this deal took the prize. But others think Y., that Glenn H. , F. W. Bald- m J.fi?‘.nD. l:lmm‘ others were oing &S . This ex- clied the imagination of Keys, that he knew what he was doing. Th credit him with foresight sglch g i Tariff Revision, and Others Are BY MARK SULLIVAN. O one who reads the day's news in the light of history, a fre- quently recurring state of mind is irony. Irony is not a good thing to put into print very freely. Each generation is entitled to have faith in its own lawmakers. Any generation tends to resent having its lawmakers pointed out as futilely re- | pealing past experience, or going coun- ter to it. Nevertheless, history does show that much of what seems new is actually ancient. It shows that much | of what now seems expedient has been tried before. Persons called “intellectuals” know this. Knowing it, they tend to say so more often than our patience can tol- erate. That is one reason why the in- tellectuals have, on the whole, less weight with us than it is desirable they should. One man who must experience a good deal of irony in watching current events is the venerable Senator Burton of Ohlo. He is a scholar and knows history. _Not only written history. Senator Burton has been in public life so long that he has seen fully a quar- ter of our entire national history in | the making. Within his own lifetime | he has seen the wheel make the com- plete turn more than once. Has Seen Tariff Cycle. Senator Burton has seen the tariff revised downward—in the early '90s, by the Democrats—and a few years later he has scen the predicted all-good fail to arrive. Then he has seen the tariff revised upward, in 1897, by the Repub- licans, and again he has seen the all- good fail to eventuate. Again, and yet again, Senator Burton has seen the wheel make a complete round—tarift revision upward by the Republicans, in 1909; revision downward by the Democrats, in 1913; revision upward by the Republicans, in 1922, and so on. ‘These complete revolutions have been seen by many men still alive, not only as to the tariff, but as to currency, taxation and many other subjects of legislation and of judicial decision. (It is unfortunate, perhaps, to couple Sena- tor Burton with any generalization about irony, for as it happens he is a man with a well poised mind and a hopeful heart, who retains the convic- tion that the spiral, on the whole, winds upward.) Need Exists Half Century. President Hoover has just appointed a Commission on Law Enforcement, for the purpose, with others, as expressed in his inaugural address, that justice shall be more swift, that the procedure in Federal courts shall be simplified and expedited. In connection with President Hoover's commission, read the following passage, the earnest words of a President of the United States: “Abuse in the administration of our eriminal law should be remedied. . . . The nullification of small and technical offenses, especially under the provisions of our internal revenue laws ([liquor laws], render some change in our pres- ent system very desirable, in the inter- est of humanity as well as of economy. The district courts are now crowded with pretty prosecutions. ..” President Grover Cleveland, in the year 1885, in a message to Congress ex- anded on “the growth through Federal egislation of new kinds of minor crim- inal offenses ™ Incidentally, the legislation asked by President Cleveland was never passed; the changes urged by him were never made. The need that he pointed out in 1885 remains today, together with the additional needs accumulating through 44 years, as the imperative ne- cessity for the work President Hoover's Commission on Law Enforcement has undertaken. Had Young “Hippers” in 1886. In this field of history repeating itseif the illustrations are many. For exam- ple, read the following passage: “The Fairport (N. Y.) Woman's Christian Temperance Union is now much grieved over the fact that boys in public schools are carrying flasks of liquor in their pockets, tempting the younger boys to drink. All efforts to ascertain where the liquor has been obtained have been unavailing. Does not every mother's heart in the lancd cry out?” Of course that is, you say, a com- ment on the evils of our present-day prohibition. It is, you say (at least you say so if you are a “wet”), a proof of the troubles that have come upon us since and because the eighteenth amendment was adopted in 1919. But, indeed, you are quite wrong. That passage is copied from a periodi- cal published on February 18, 1886, 'The Union Signal,” then the official organ of the W. C. T. U, and recently resurrected by the present organ, “The W. C. T. U. Bulletin.” Here is another passage which reads like today’s newspaper talking about present-day prohibition. Actually, it is a summary of a news article in the New York Tribune for May 22, 1909, the summary being printed in the Herald Tribune’s “Twenty Years Ago Today” column: “Mason Trowbridge, one of District Attorney Jerome's young assistants, spoke last night to a youthful audience at Calvary Baptist Chapel. He asserted that the City of New York spent $25,- 000,000 a year fighting the evils caused by rum and declared that if the saloons | were voted out of existence in this State there would be a reduction of at least a third in the number of crim- inals, paupers and lunatics.” Rail Valuation Is Old Issue. ‘We had, just the other day, a deci- sion of the Supreme Court about rail- road valuation which ultimately will determine railroad rates. By many who | read the commotion in the daily news- papers doubtless the situation was re- garded as new. But it was not new. Railroad valuation happens to be one thing that has gone round the full circle once, and is just now midway of another revolution.” Understanding of this subject will lead to understanding t;: ;severa.\ other aspects of current af- Most of the railroads were built in the '60s and '70s. They were built with little dollars, for in that period follow- i) PREVIOUS GENERATIONS FACED TODAY’S ISSUES Law Enforcement, Liquor Menace, Railroad Valuation Old Problems. nent of radical doctrines, “horned in” to the law suit—as a friend, of course, of the State of Nebraska and of the “cost of reproduction” theory of valu- ation. The railroads lost. Nebraska and Bryan won. The decision to Smythe vs. Ames said, in effect, that the valuation of a railroad is, speaking roughly, what it would cost to reproduce it. Dollars Again Grow Small. Time passed, as the oldtime melo- dramas used to say. The Great War came in 1914. Thereupon the wheel of the dollar began another revolution. Big dollars once more became little dollars—as they had after the Civil ‘War, as they do after all wars. Again arose the question of railroad valuation. Again it came to the Su- preme Court. But this time the roles of plaintiff and defendant are exactly reversed. Now, in a period of little dollars, the railroads want their valuation to be “cost of reproduetion.” Now the rail- roads are contending valiantly for ex- actly the theory which in 1897 they denounced as an atrocious radicalism invented by Willlam Jennings Bryan. Tha railroads today, in short, are in the shoes that Bryan occupied 30 years ago. Similarly now the agencies of gov- ernment, as well as the progressives and radicals, have likewise reversed their position. They are today thevugummt.s the raflroads made in 1897. And back of it all and beneath it all is the changing value of the dollar. from fifty-cent dollars in 1870 to one- hundred-cent dollars in 1897, and now back to fifty-cent dollars. To complete this particular bit of irony, to make it twice perfect—just one more half-circle of the wheel is required. One can envisage the most exquisite of ironies. Suppose the rail- roads should win their present conten- tion (as they partially won it in the O'Fallon case). And suppose, then, the dollar should make another half-circle. Suppose the present fifty-cent dollar should become by, say, 1940, a one- hundred-cent dollar. Permanent Dollar Value Urged. In this disquisition, it should be said, many statements are made and phrases used, with the looseness that brevity sometimes causes. A strictly legalistic history of railroad valuation would be more exactly phrased and would be very much longer. It would not, however, differ materially from the loose and abbreviated narrative given here. From all of which very many lessons might be drawn. One of the most im- portant is that the value of the dollar ought not to be permitted to change, to range from 100 cents down to 50 cents or less, and then back to 100 cents again. Among all the causes of human_discontent, of political commo- tion, of judicial difficulty and confi sion, even of moral and ethical insta- bility—among all the causes that pro- duce such results probably the most provocative one consists changes in the value of the dollar. A dollar should be the same dollar always. Prof. Irving Fisher has a plan which he thinks would make it so. If his plan is sound it ought to be adopted. : There is vet another analogy, omi- nous to those public utilities described by Senator Norris of Netbl'ukl as col- lectively “the power trust.” During the ’80s, '90s and early 1900s the railroads committed many ui~ ties. Their iniquities led to political commotion. In the end Congress took notice of them harshly. In 1906, during the administration of Theodore Roose- , the railroads were brough'z }nw in the 90's and things cha the public utilities today almost perfect parallel. In some re- spects the actions of the ral ‘were the more offensive; In other respects, the actions of the, public utilitles are the more contemptuous of public opinion. For example, the rallroads undertook to destroy some citizens and some cor- porations by giving secret rebates on freight rates, to competing citizens and corporations. That was one of the principal charges against the railroads, and it was abundantly proved. As re- spects the public utilities today, the writer has heard no charge that they glve secret rebates or practice unfair discrimination in rates. Conditions Changed Little. But as respects attempts to influence public opinion by secret approach to the press, it is the public utilities who are the greater offenders. The rail- roads used to give free passes to prace tically every editor and reporter; they occasionally bought a newspaper and concealed their ownership of it; they set up an elaborate “publicity bureau” (then something new), to collect infor- mation about all the newspapers in the country, little or big, and about their susceptibility to railroad propaganda. But the railroads did nothing com- parable to the purchases of newspapers by public utilities, recently revealed; nor to the introduction of public utility propaganda into school books, nor to the payments made by public utili- ties to newspaper writers and college teachers. With some variations, everything charged or proved, or both, against the public utilities today, was charged, or proved, or both, against the railroads 25 to 40 years ago. The speeches made in the Senate now by Senator Norris, Senator Walsh of Montana and others; the revelations brought out by the Federal Trade Commission—all these actions and utterances about public utilities today can be found dupli- cated, in effect, in the railroad de- bates in Congress in 1906 and earlier. ‘.'x'het ’:xd‘tunnu outcmdne of this analogy a g every reader can for himself. i Japanese Diet Hows Blamed to Bad Air Lack of ventilation in the Diet build- ings is given as the cause of much of the petty wrangling and fist fights ing the Civil War the dollar was worth about 50 cents. Presently, in the late '90s, the little dollar grew to a big dollar. Thereupon the rallroads took a valuation. They wan! ued at the number of dollars actually nt to build them. They wanted at it time the valuation of railroads to be what is called “actual investment”— that is, the number of dollars (little dollars) actually invested. The State of Nebraska (and other States) took a different view. They wanted valuation to be called “cost of r the number of llars (big dollars) RS power of the dollar. which occur almost daily in the legisla- tive chambers. Reports of the bad af mosphere, not only figuratively, but ac. ition _about | tually speaking, have been appearing in the railroads ; the vernacular press for some time. A leading Tokio newspaper, availl itself of the services olP lpemvemm:lx‘:{ official, had him give the question scien- tific study. He is Dr. Yutaka Kinugasa of the sanitation bureau of the home istry, who reported that the air in the Diet chambers, especialy that of the House of Representatives, is a dis- what they : grace to the coun an roduction”—that is, | alterations be .!hl’f:dryll oguugerw; this unfortunate state of affairs. Gen- which it would cost to bulld the roads | tlemen prominent - anew under the changed purchasing | tricts be?nve like c?}ld’;’he;kwlk:::eun%‘:! the influence of the foul air, he said. The case went up to the courts in a | They not only are unable to put their ‘Smythe business Fand. o sult known as | . best efforts then making his | make a bad life as an expo- |spectators’ g o the at hand, but ipression on those in the alleries,