Evening Star Newspaper, June 1, 1931, Page 2

A2 ¥% RAILROADS WOULD -END COMPETITION Must Decide Whether to Seek : Co-operation or Engage in Rate War. Note—This is the fourth and lost of Y Satbicles on the conastion of e ahroads and possivle methods of Telef! . BY G. GOULD LINCOLN. Underlying the railroad problem is gomething more than a temporary or even a permanent increase in rates, mgre than wage scales or Federal legis- lation. The railroads are faced with a deeision whether to seek a m!nsu\‘e‘nf co-operation with each other and with competing agencies of transportation, rticularly highway and inland water- 4y transportation, or whether they tend to engage, through rate wars through the establishment of rail- d owned or controlled highway nsportation agencies, in an eflort to out all major competition and ve the whole fleld to themselves. here has been no indicated decision the part of the railroads that they or npawar to the limit. If they uld undertake such a struggle, they t consider not only whetner they survive such a struggle, but also ether the American public and the erican Congress Wil view with animity that contest. It Is one thing the roads to demand that their petitors be regulated by the State Federal Governments as they them- sdves are regulated. It is another for th roads to undertake to prevent the ddelopment to the full of new avenues ofitransportation. Co-operation Seems Likely. The alternative, which is co-opera- tion, seems much more likely to be the final course adopted w‘l\'nrd the solu- of the railroad problem. e un’;“he suggestion that the railroads can well undertake to aid in bringing about a co-ordinated system of transportation in this country, with the roads continu- ing to carry the great load, but with the bus, the motor truck, the pipe line and the water carrier also assigned im- portant parts. has been put forward by Joseph B. Eastman, interstate com- merce commissioner, in a recent ad- dress. The transportation agencies themselves can carry on in the develop- ment of such a co-ordinated system, or the Government itself assign this task to a Federal agency, patterned after the English Transport Ministry. The railroads in this present time of need are seeking aid of the Govern- ment. This is natural, since it is the Government_ which regulates them. id it were not for this governmental regu- Jation the railroads would feel free to adopt those policies which they deemed best to meet their needs and com- petition. But regulation has come to stay. It seems quite obvious that it there is to be any further step by the Government, it will not be in the way of eliminating regulation, but toward Government ownership and operation of the common carriers. It is assumed that eventually there will be legisla- tion by Congress for the regulation of highway tr: tion. There may also be legislation to aid the con- soldations of the rairoad systems. Litéle Chance of Legisiation. In the session of Congress which ns mext December there seems little chanee of railroad legislation, or legis- lation which the roads are seeking, largely due to the political situation This does not mean that various bills relaf to the railroads and to the reguiation of motor busses, motor tracks, pipe lines, etc., will not be of- fered, but that there is little likelihood of final , If this be true, then the roads are looking in vain for emer- gency remedial legislation. But the rcads are looking not only to cong'::, but to the Interstate Commerce - mission to aid them, especially in the matter of rates. If the roads apply for increases in rates the commission is-expected to give their applications prompt _consideration. However, the commission is likely to take into econ- sideration the Nation-wide condition, with other industries struggling back frbm depression, before it grants in- creases in freight rates. TThere are & number of things, stiadents of the railroad situation point out, which the railroads may do for thiemselves. One of them has already been referred fo. It is the ]tnrma:i:a n organization acting in unis o epresentatives of the ratlroads’ competitors to work for a better bal- anced transportation system. It obvious that the railroads will get no- where with such a project, however, if they go into it with the idea in the back of their heads that in the end they must eat up the competitors. Electrification Would Help. As has been pointed out in previous articles, the pmenger traffic of the radlroads has fallen off, or failed to ad- vance, in an alarming degree from the rajlroads’ point of view. ~The rail- roads can undoubtedly aid themselves in- this matter of passenger transpor- talion by the electrification of their roads, particularly in thickly-populated gzeétions of the country. Some of them are already doing this. But there is much room for greater improvement. 5 Readjustment of Rates. Bo far as the freight traffic is con- eerned, the situation may be improved for the ralroads by a readjustment of the rate structure, So as to bring about the most economical handling of va- rious kinds and classes of freight. The radlroads, running single trains that can handle as much freight as a whole fleet or even hundreds of motor trucks, < certainly should be able to continue to dd the great bulk of the freight busi- ness, especially for long hauls. In ad- dition to the money tled up in the trucks, the wear and tear on the trucks, which would appear to be greater for 8 given time than on the freight cars | of the roads and the locomotives, a | train crew can do the handling of & huge amount of freight which it would veguire scores if not hundreds of men to handle by truck. It has been sug- gegted that the railroads could well beefir their freight service by the use of¢detachable truck bodies, which can b, piaced on flat cars of the railroads at the point of departure and upon ck wheels at the point of arrival. e of the railroads, either through tholding corporations or subsidiaries, are | golng into the highway transportation business in an effort to meet the com- jon afforded them on the highways. may, however, merely result in eventual waste and lack of economical thandling of the transportation problem. One thing seems to be fairly certain. is not going to permit the raflroads to take over the business of highway transportation exclusively or inevery large part. The transportation plcture puzzle will have to be fitted to- el in some other way than that. ‘The railroads have suffered in the past from overcapitalization and watered steck. There seems to be danger now that overcapitalization may result from the development of the so-called hold- ing companies which have been devel- oped to buy and to hold stock of rail- road companies upon the earning pow- er of which new securities are put out. There is that danger, too, in the pro- consolidations of the railroads In & comparatively few great systems. ‘The advantages from such consolida. tions might easily be wiped out if the finaneing of the consolidations be not soundly accomplished. The railroads complain today that the Federal Government is actually subsidizing their competitors on the highway and the inland waterways. e i Anesthetic Keep sl |Invalid Unaware of Return Home by Air Injured Woman Dislikes | Airplanes, but Family Finds W; By the Associated Press. | DETROIT, June 1.—She'd have raised an awful fuss had she known bef hand, but=—well, it was the quickest | safest way, her family believes. I While Summering near Traverse City, | ‘Mrs. Barbara Welse, 80, was taken to a hospital with a fractured hip. But, her family wanted her at home here. | Knowing of her dislike for airplanes, | they dared not tell her of special ar-! l'mnzement.s. And yesterday seats were | | taken from a plane to make room for the hospital cot, while a physician pre- \pared the woman by 'administerin enough anesthetic to last over the | 10g-mtle hop. | Neither Mrs. Weise nor two sons who accompanied her on the unusual ! journey had ever before been in a plane. | They arrived safely in two hours. For example, they say that the Govern- l | ment is spending something like $125,- 1 000,000 a year to help build the high- i ways which the motor bus and the | motor truck use. They point, too, to | the large sums expended every year on the development of the inland waterways out of the revenues of the Government. The roads insist that the motor trucks and busses and the water carriers do not pay taxes commensurate with the facilities provided for them by the Government, while the raflroads not only are heavily taxed, but also are compelled to pay the entire amount necessary for the construction and up- keep of their tracks and rights of way. | Their contention is that if the motor bus and the motor truck are to use the highways they must be made to pay & far greater share of the costs of con- struction and upkeep than they now pay. If the busses and trucks were taxed to such an extent, however, there is considerable likelihood they would be unable to continue in busi- ness. Certainly thelr rates would have to be higher, and naturally that is an end which the railroads in the main desire, though not some of those now operating busses and trucks. The railroads complain that they are under a real disadvantage, when con- sidered with their competitors and with other industries generally because their earnings are limited by the operation of the regulatory body, the Interstate Commerce Commission, which fixes rates for them. The transportation act, they say, contemplates a return of 5% per cent on the investment of the rail- Toads. Because of regulation they see no prospect of their ever being able to make more than such a return, al- though their competitors may make 50 per cent, if they are able. On the other hand, eritics of the roads complain be- cause, they say, the Government has undertaken through the Interstate Com- merce Commission, to see that these common carriers are permitted to earn 5% per cent. The roads point out that taken as a whole, they were able to more nearly approximate 5.75 per cent earnings in the first eight months of 1929, the high peak, than at any other ;Lr:e,t""l;hen_r;,fl! rate of return was 548 s rate has dro) year to 2.07 per cent. e Oppose Increase in Rates. The owners and manufacturers of trucks and busses are violently opposed to the demand of the railroads that their taxes be increased in order to equalize competition. Some of the rail- road men take the position that in the end the highways will be so cluttered up with trucks and busses that the public will enforce a demand that they be eliminated. The suggestion has been made that specially built highways for the use of trucks and busses exclusive- ly be constructed. It is held, however, that if the busses and trucks were called upon to pay for the construction and upkeep of such highways they could not possibly meet the costs and live. The railroad men insist that if such is the case, it is obvious that the bus and truck are not now paying their fair share of the highway cost. The railroads in these days of de- pression have been forced into greater and greater economies, some of which may well be retained and thereby be- come a real aid to the roads when busi- ness comes back. While the reductions in business and in net revenue of the railroads have been very great since 1929, it is not the situation to date which is worrying the railroad men so much as what the future may have in store. The roads have stood the strain far better than they have in other periods of depression, and the number of receiverships for the railroads today is markedly low. They have hung on and on under the existing depression, h;l)::n[ that business would snap out of Shippers Make Special Demands. Government ownership and operation of the railroads have their advocates throughout the country and on Capitol Hill. But there is no general disposi- tion to turn to Government ownership and operation as a solution of the rail- road problem. It may come some day, but if it does. it will be after it has been demonstrated that the Government | regulated, privately owned and operated roads cannot continue to earn in com- aemmn with other forms of transporta- on. There is one danger to the railroads which comes from a different source than their direct competitors. That is the demand of shippers of huge amounts of commodities for special service and for lowered rates. These shippers have their ways of shaking down the railroads which in effect amount to the rebating in the old days of railroading before Government reg- ulation on its present scale. The roads themselves would like to combat these moves on the part of shippers, but if they do it may mean loss of business which the roads fear. RATE BRIEF IS FILED. | RN |Would Permit Motor Lines to File Schedules With Railroads, | Extension of raiiroad operations to ‘hlghwny transportation, with partial iregulation of common carrier trucks, | was recommended today to the Inter- state Commerce Commission by the |New York Merchants' Association and |the Shippers Conference of Greater New York. In a brief filed in the commission’s investigation of co-ordination of motor transportation, the New York organi- zations suggested that highway motor lines be allowed to file joint through rates with raliroads end that they be regulated in this respect. Where they do not act in conjunction with rail- roads, however, they argued, there should be no 1egulation. ‘The commission also was urged to consider seriously store-door pick-up and delivery systems for the railroads, adding that “this would undodbtedly result in many shippers giving rail car- riers their business if the terminal serv- ice is of a character to commend its use and if the time in transit between | terminals is comparable with the serv- ice offered by the highways.” e National Automobile Chamber of Commerce, in a brief filed at the same time, argued truck regulations was not in the interest of the public service and would be disadvant: s to the rail- roads. Regulation, it asserted, could not be effective unless contract carriers Found not gullty of conspiring to extort blackmail from Capt. and Mrs. Clarence C. Calhoun, the principal figures in the trial posed with their attorneys on the Court House steps. From left to right: Richard L. Merrick, attorney; Mrs. W. Clark Noble, defendant; L. R. Maddux, attorney; Mrs. Anna Hillenbrand, defendant; Mrs. L. R. Maddux, attorney, and James F. Bird, defendant. —Star Staff Photo. ISTICES HONORED BY SUPRENE COURT Taft and Sanford Receive Homage of Nine Bench Members. By the Assoclated Press. The laws of man were laid aside briefly today in the dignified Supreme Court room as the nine justices joined in simple ceremonies remindful of the inexorable law of death. Members of the bar aiso participated in memorial services for the late Wil- liam Howard Taft, genial Chief Justice and former President, and Edward Terry Sanford. associate justice, noted Southern jurist. Both died on March 8, 1930, Taft after a lingering illness and Sanford suddenly. “Kindliness” Praised. Attorney General Mitchell presented resolutions of regret adopted at the December meeting of the bar of the court—attorneys admitted to practice before it. He said that Taft's dominant traits of character were “kindliness and affection for his fellowmen.” He recalled Taft's service to the Nation began as solicitor general “41 years ago in this very spot.” He sald Justice McReynolds, while an Assistant At- torney General, suggested that San- ford, a fellow Tenneiseean, be retained by the Government in 1906, thus being responsible for Sanford's entry into public service. Hughes Responds. Chief Justice Hughes, who succeeded Taft, responded with praises of his pre- decessor's character and his life as a public servant, Sanford. The resolutions of regret were en- tered upon the record and copies were ordered sent to the respective families, members of which were presnt at the ceremony. After a few moments of silence that ended the service, the court turned to the routine business of disposing of cases on the last day of the term before adjourning for Summer recess. NOBLE COLLAPSES AS JUDGE ORDERS ACQUITTAL VERDICT ) graphs of the defendants and attorneys. Richard L. Merrick, counsel for the Nobles, declared Department of Justice agents assigned to the case will find “no solace in the action of the trial for submission to the jury. That should be_a sufficient rebuke.” Bird was felicitated by numerous fel- low members of the bar. “Naturally,” said Bird, “I am glad that the long trial has ended and particularly gratified that the court, after hearing and considering all the evi- dence, found no case to submit to the jury. Since the moment of my arrest, nearly two years ago. I have had no doubt about the outcome of the case. “The most astounding development is the fact that a private citizen was able to gn to a powerful Government department, and there, through ‘a friend’ enlist the services of subordinates in the perpetration of rank and irrepar- able injustice.” ' Mrs. Hillenbrand Relieved. “It certainly is a relief to be definitely free of all this,” Mrs. Hillenbrand said. “You know, I spent six months scrub- bing floors at the District Jail, all be- { cause T was unjustly accuse “Justice may be slow, but it is in- varibly right,” Armstrong told reporters. L. R. Maddux, associated with his wife in the defense of Mrs. Hillenbrand, said the trial reminded him of the Spanish Inquisition, The Government's case, prosecuted by Irvin Goldstein assistant United Btates attorney, was built around the contention that the defendants had en- deavored to extort $30,000 in exchange for promises not to publish charges defamatory to the character of the Cal- houns. The defendants had insisted their ar- rest resulted from the efforts of Noble to collect approximately $50,000 for his services as sculptor of the memorial. BAND CONCERT. By the United States Marine Band thi; evening at the Marine Barracks at 8 o'clock. Taylor Branson, leader; Arthur Whitcomb, second leader. Overture, “Leonore,” No. 3..Beethoven Andante and Rondo Capriccioso, Mendelssohn Trombone solo, “Thoughts of Love,” Musician Robert E. Clark. “Marche au Supplice,” fi phonie Fantastique”. “Nocturpe” and “Isolde’s from “Tristan and Isolde”. “Cripple Creek,” from “Southern also were included, and this has been 1 held unconstitutional by the courts. It is suggested the desirable recourse of the railroads was to abandon local freight trains in favor of trucks, add- ing, “It is impracticable to devise a single formula for this adaption which can be applied universally.” Mountains” ...Lamar Stringfield “Pini della ViasAppia,” from “Pini di Roma" .Respighi March from third movement “Sym- phony Pathetique”. . ... Tschaikowsky Marines’ Hymn, Halls of Montezum “The Star Spangled Banner.” along with tribute to | Katherine Milstead. obtained the auto- | court in finding there was no case| COMMON-LAW MARRIAGE IS VALID IN DISTRICT, APPEALS COURT HOLDS (Continued From Pirst Page.) sumed unless clearly expressed.” the decisicn of the lower court that com- mon law marriages in this District are invalid is “not supported by law and 1s | wrong.” Question Up to Congress. It the doctrine of common law mar- riage is contrary to public policy and public morals as was said by the Court of Appeals of Virginia, Justice Groner said “it is for Congress and not the | comts to do what is needful by appro- | prisge legislation to declare such unions | null and void.” The court pointed out that the local marriage laws make void ab initio marriages contracted between persons | of certain degrees of relationship | and persons who have been previous- | ly married and not divorced or | | the marriage state otherwise term- | inated, and volds marriages between idiots, parties below the age of con- | sent or parties incapable from physical | causes. They also provided for au- thorizing ministers to perform mar- | riage and give that right to any judge | of a court of record and arrange for | | marriages of members of a church which does not require a minister to| be performed according to the rites of that scciety and the like. Law Seeks Evidence Only. “There is nothing in the euluh‘} which declares that a marriage shall | ot be valid unless solemnized in the | prescribed _manner,” Justice Groner | said, “nor does it declare any particular | thing requisite to the validity of the marriage. “The sct confines ltself wholly with | | providing the mode of solemnizing the | marriage and to the persons author- ized to perform the ceremony. Indeed, the statute itself declares the purpose underlying the requirements to be to | secure registration and evidence of the | marriage rather than to deny validity | to marriages not performed according to_its terms.” The Court of Appeals has had the question of common-law marriage bafore it on at least two other occa- ons in divorce proceedings and has | “side.stopped” the proposition, being | able to decide the cases without | Tendering an opinion of that question and the lower court has frequently | held thet a common law marriage was not legal. |FRANCE’S BACHELOR PRESIDENT MARRIES Doumergue Weds Mme. J. Graves on Eve of Retirement as Nation's Leader. By the Associated Press. PARIS, June 1.—Gaston Doumergue, 68-year-old “bachelor President” of France, was married today in a civil ceremony at the Elysee Palace to | Mme, J. Graves, a widow whom he has known for many years. Announcement of the wedding. which | came as a surprise, was made by the | official news agency in a brief com- | munique. The President, who has served a full | seven-year term, retires on June 13, to be succeeded by Paul Doumer, who was elected President at Versailles last month. CONTEST OF DEPEW WILL IS WITHDRAWN Yale University and Four Cousins | to Divide $10,000,000 Estate. | | By the Associated Press. NEW YORK, June 1.—Four first cousins of Chauncey M. Depew, ir., who objected to the probating of his will, which left his $10,000,000 estate to four other cousins and Yale University, with- drew their objections today before Sur- rogate John P. O'Brien. ‘The objectors were the Vicomtesse Anna Hegeman de Bresson and the Marquise Charlotte Hegeman de Pontoi, both living in France; Adelaide Hege- man Rogers, New York, and Elizabeth Hegeman Bailey, Jamestown, N. Y. Attorneys for the objectors anounced that their clienis had deeided to with- draw, but ga¥e no reason for the ge. Yale gets one-third of the estate and the remainder is to be divided among the four cousins. A Injuries Kill Ball }llyer. | GREENVILLE, 8. C, June 1 (&) Arthur Garrison, 25, died today from a fractured skull, suffered when a batter | on an amateur base ball team with| which he played accidentally struck' | recently sold to the United States Gov- TEAGUE, RETIRING, LAUDS FARM BOARD Characterizes Development | of Co-operatives as Most ‘ Important Work. ‘ | The Federal Farm Board, without sectionalism or politics, has rendered | valuable aid to Americen farmers un- | der “most difficult and trying condi- tions,” according to Charles C. Teague, | vice chairman of the board, who retired today. | Teague will return to California to | resume management of his citrus fruit business. In a letter to President Hoo- ver he declared that more progress has been made in co-cperative marketing during the past two years than in the previous decade. He characterized development of co- operatives as the most important work of the Farm Board. Teague, whose resignation becomes effective after serving a year beyond his regular appointment, ~ said that during his service “I e never ob- served any action influenced by section or politics,” and added: | “It was indeed fortunate. during the present serious _economic condition through which the country has been passing, that the farmers of the coun- try have had this important legisia- | tion (agricultural marketing act) with | adequat> finances and administrated by a group of men of your selection, who have such a deep and sympathetic at- titude toward the problems of agricul- ture.” Speaking of cotton and wheat price | stabilization endeavors, Teague said, “It has, of course, been impossible to be helpful under these most difficult and trying conditions without at times tak- | | ing some chances of loss to the revolv- ing_fund. “Had it been administered as a bank- ing trust or fund.” he continued, “it would have been of little help to agri- culture under existing conditions.” | He termed price stabilization efforts | entirely justified and predicted bene- | fits to agriculture and business “fa outweighing any cost to the Treasury.” | Expressing the bellef co-operatives will have an important influence in the | stabilization of markets, Teague added that a large number of existing asso- | clations would have perished under de- clining prices had it not been for the revolving fund of $500,000,000 set aside by Congress. MACHINE GUN PLANS SOLD TO U. S. STOLEN FROM COMPANY’S SAFE (Continued From First Page.) combination. After the plans were | removed the doors and the combination | dial were wiped clean. Pingerprint experts called in on the | case said they were unable to obtain | a clue. Mr. Hudscn said the plans were only ernment. Outside of saying they were for the development of machine guns, he refused to divulge their contents, A huge machine gun, a model of a plan which the corporation had at- tempted to sell to the Government some | time ago, was on a stand in the drafting room of the office, the muzzle of which ‘was pointing directly at the safe as the cracksman worked. It is about 5 feet in length and is mounted on a heavy steel tripod. The plans for this machine , which were laying near the other plans in the safe, were left behind by the robbers. The Automatic Guns Corporation is well known in military circles here. The Ordnance Bureau of the Navy De- partment admitted it had recently awarded a contract for the manufacture of “a certain type” machine gun to the corporation. he Ordnance Bureau of the War Department said it had never done business with the firm. FLORISTS’ SAFE ATTEMPT FAILS. An attempt to open the safe at A. Gude Sons Co., wholesale florists, 1318 I street, falled early yesterday when the strongbox withstood efforts to bat- ter in its door. James Paul, manager of the estab- lishment, reported to police that en- trance to the place was gained by a second-story window. Nothing was taken. Three other stores were broken into over the week end, police reports showed. These included Joseph M. Gasperon's place of business, 1221 New Jersey avenue; the beauty shop of Eva Housexan, 1716 H street, and the store of Harry Cohen, 2310 Fourth street northeest. Nine dozen pairs of women's hose, valued at $50; five boxes of cigars and other merchandise totaling $76, were reported stolen from Gasperon by burglars who broke a front window and entered the store. Thieves forced open the cash register of the beauty shop and stole §75 after | battering in, a side window. Lingerie and 66 pairs ‘of silk stockings were taken from Cohen’s shop. Cohen told police the merchnrrflu was worth $86, | L] i BERNARD J. FOX. Woman Fires Gun Into Cheek of Boy, Believing It “Toy” Condition Is Held Critical. Police Begin Search as She Leaves. Shot in the face by what was believed to be “a toy pistol,” Bernard James Fox, 3 years old, of 521 Eighth street south- west, was in a critical condition today at Emergency Hospital. The bullet which struck the child was fired. according to members of the Fox family, by Mrs. Maude Humphrey Lenton, 23 years old, of Elkwood, Va. a friend of Mrs. Harvey T. Fox, Ber- nard’s mother. Mrs. Lenton is said to have disappeared shortly after the shooting. which occurred about 10 a.m. Although members of the boy's family said the shooting was accidental, police were searching for the woman, who is believed to have gone to Alexandria. “Toy” Gun Proves Real. Bernard was wounded in the left cheek by the bullet, fired from a .22 caliber revolver. was mounting the stairs to the second floor of his home, the family said. The bullet passed through the cheek and lodged in the right side of his neck, just below the jawbone. James T. Fox, the boy's grandfather, who lives next door, took Bernard, who was bleeding profusely, to the hospits | He said he told Mrs. Lenton to remain until he returned. The grandfather told police Mrs. Lenton said she thought the gun was “a toy pistol.” She got it off a bureau in the room of the boy's father and pointed the gun at Bernard as he mounted the stairs, Fox said Mrs. Len- ton had told him. “She pulled the trigger twice,” Fox s3id. “The first time the gun snapped without going off, but the second time it exploded. Father Asks Police Search. “If my grandson hadn't been coming up stairs at the time he would have been killed. As it was, he narrowly escaped.” ‘When the boy's father, Harvey Fox, arrived home from the Chevy Chase Dairy, where he is employed, he asked lice to hasten their efforts to find rs. Lenton. He said she had planned to go to Frederick, Md., this afternoon llx}(tl he wanted her found before she eft. ‘The grandfather said the woman had gone to Alexandria to visit friends at 635 North Washington street. Alexan- dria police said there was no such address. At the hospital attaches said Ber- nard’s condition could not be deter- mined until after X-ray pictures taken of his cheeck had been developed. An operation to remove the bullet was ex- pected to be performed. $50,000 FEES AWARDED ATTORNEYS FOR INDIAN Supreme Court Grants Payment for Recovering Part of $1,000,000 Estate. By the Associated Press. Attorneys who recovered a part of the $1,000,000 signed away by Jackson Barnett, wealthy Creek Indian, were allowed fees of $50,000 by the Supreme Court today. At the same time the court dismissed the appeal of Marshall L. Mott, Musko- gee, Okla., from a lower court decision ordering him to return $15,000 to Bar- nett. Barnett signed away $1,000,000 that had accumulated to him from oil royal- ties, half of the money going te his wife, Anna Laura Barnett. She turned over $15,000 to Mott. Suit was brought to recover the money, the claim being that Barnett was an_fmbecile and incapable of real- Inumwudotnl. He was shot as he| DOLE’ IS RESULT ~ |EXPERT DISCUSSES OF UNION SCHEME] BUILDING FINANGE British Benefit System Adopt- |Enormous Increase of State ed After Labor’s Efforts Made Impression. This is the second of a series of mine articles on the dole which was woritten after several weeks of in- vestigation in England. Disadvan- tages and benefits are given in an unprejudiced discussion. BY CYRIL ARTHUR PLAYER. LONDON, June 1 (N. A. N. A These are the ingredients of the nomic problem in Great Britain: After 10 years of persistent unem- ployment there is from week to week approximately 20 &er cent of the entire industrial population without work. For unemployment benefit little short of three bil dollars_has been dis tributed during the last 10 years. ‘The annual cost of all the social serv- ices, including unemployment, health, widows’ and orphans’ and old age pen- sions, education, housing, poor law, etc., is around two billion dollars. ‘Taxation today absorbs approximately one-fourth of the total income of the whole nation. Compared with the fiscal year 1913- 1914 there has been an increase of 25 per cent on public expenditure, while the volume of export trade shows a de- crease of 20 per cent. Living Costs Compared. ‘While the rates of unemployment benefit have been raised and the quali- fications for benefit widely liberalized, the cost of living today is only 55 per cent above prewar, while in 1920 it was 176 per cent above the prewar figure. It is a problem that dominates every class of people and every variety of citizen, every industrialist, every em- ployer of labor, every worker —man, woman or child—every politician, states- man and economist and every taxpayer. In ubiquity of discussion it is to Great Britain what prohibition is to the United tates. It is probable the benefit payments have reached not fewer than 20,000,000 persons and their dependents. Every individual recciving benefit earns less than $1,250 a year when steadily em- ployed. The medium through which this changing army is sustained in “good physical condition” is known as “the dole.” Officially there is no such thing as a dole. Actually, in the early years of the scl e, there was no dole. U employment benefit was an insuran contract on an actuarial basis. Today, due to emergency and crisis, there is a dole, even though it is still not offi- clally recognized as that. The idea of unemployment insurance first attracted the practical attention of the friendly societies and trade unions. The former, devoted more particularly to sick benefit and funeral costs, made some relatively small efforts to solve the intermittent employment problem jof thelr members, and also. in a few cases, issued money relief during slack times. By 1905 a total of 122 societies was interested in this phase of relief, | with a total membership of 75,000. | Obviously, this was not anything of a national scheme. Distribution Spreads. It was the trade unions which really broke ground and proved, by trial and error, the fundamentals of unemploy- ment insurance; in fact, when the State entered the field it was more than glad to profit by the experience of the trade unions; moreover, had it held fast to the principles thus established, the financial problem (as distinct from the social problem) would not exist here today. By 1904 84 of the 100 principal | unions, with a membership of 950,000, !were distributing benefit to unemployed | members. This benefit varied in form; sometimes it was travel money for a member to seek work some distance away; sometimes it was a straight al- lowance, which usually was from $2.50 to $3 a week, although in some few cases it went as high as $5. It is im- portant to note certain principles on which this relief was based. ‘There was a fixed maximum number of weeks for which benefit might be alowed, either continuously or within a given year. enefit could begin only after a “waiting period,” during which the un- employed was expected to live on his own resqurees. The contributors were limited to the number of members in the trade union; the contributions came from men of relatively small income, and the condi- tions of benefit were fixed accordingly. Fat Years Care for Lean. On the whole unemployment in those years, say from 1896 to 1905, followed normal cycles, and the fat vears took care of the lean. Dunring the period {named these 81 unions paid out for | unemployment benefit 22 per cent of their total expenditure, or approxi- mately $18,750,000. ‘That was in 1905. So impressed was the country with the working of the scheme and with its solvency in opera- tion that between 1905 and 1910 the number of workers insured through trade unions mounted to 1.500,000, and | the whole plan attracted the lively in- terest of poor law authorities. In fact, the Poor Law Commission recommend- ed, in 1910, that either State or muni- pality should contribute to the benefit with a view to extending the system. It was realized that the trade unions could provide for only a fraction of the wage-earning population, which then totalled something like 8,000,000 adult males between 20 and 50 years old, and an unregistered number of women and young persons. From 1904 to 1008 there were bad years which demonstrated the need of some centralized State-directed effort to meet general depression. The successful operation of unemployment benefit by the trade unions not only offered a basis for the erection of a state plan, but suggested that unemployment was mea- surable and could be insured against at a moderate premium which could be diminished in proportion as the fleld of insurance was extended. Compulsory insurance, as a State en- terprise, first made its appearance in England when Lloyd George was chan- cellor of the exchequer, in the liberal ministry of Prime Minister Asquith. Under part 11 of the national insurance act of 1911, the extent of benefit al- lowed was proportionate to contribu- tions paid. The plan was limited to selected trades. he trades selected were, broadly, building, engineering and shipbuilding, on the basis that work- men in these trades were subject to heavy risk of unemployment. Union Schemes Made Basis. Admittedly, the act of 1911 was ex- ,}erlmental, The selected trades af- fected 2,250,000 manual workers in trades which were peculiarly susceptible to_periodic fluctuations of prolperity. Notably, the act adopted the funda- mentals of voluntary schemes, so to speak—and emphasized the underlying { Bonded Debt Meets Disfavor. Asserting that the net funded debt of State governments has increased 240 X.!r cent during the past 10 years, L. Carruthers, chairman of the Committee on Fiscal Relations of the Federations of Citizens' Associations, declared in a radio talk Priday that the increase in public indebtedness in re- cent years on the part of States, coun- ties and municipalities has been at such an abnormal rate as to excite a great deal of unfavorable comment all over the country. Mr. Carruthers, who is chief of the division of the Census Bureau in charge of com] g annual reports of financial statistics of States and cities, and a member of the Oitizens’ Advisory Council, spoke over Station WMAL. “It is the common practice of States, counties and cities to meet capital out- lays from revenues derived from bond issues,” Mr. Carruthers declared. “At the present time the net funded debt of State governments is $1,600,000.- 00, or a per capita State indebtednes” of $13.50. Ten years previously the 3 875,000, and a per capita debt, $4.44. P & City Debts Grow. “The indebtedness of cities has in- creased at an equally rapid rate. Of the 24 cities with a population of over 300,000, we find the net debt # be ap- proximately $4,000.000.000, which is & per_capita net debt of $164. “It is the practice of most States and cities to meet maintenance and operation charges from current reve- nues, but it is found desirable to finance betterments from borrowed money. “The proponents of this system of financing public improvements are of the opinion that tax rates and assessed valuations of taxable property should not be subjected to radical changes. Persons acquiring property for invest- ment must be able to forecast the approximate amounnt of taxes to which such property will be subject in order to_determinne the purchase or rental value of such properties. This can not be done with a reasonable degree of accuracy if the tax rate is subject to abnormal and constant fluctuations. Advantages Cited. “Another argument advanced in fa- vor of financing such costs from bor- rowed money is that improvements Wwill be of benefit and service to future generations, and that it is unfair to ask the taxpayer of the present to bear all of the burden. A more con- vincing argument is that it permits a State or city to carry out needed f‘l;lel:d X‘l’rnxg‘ovemh:r&t that would be de- e to cuirrent revenues. oS QTnel o “This method of financing is not pe- culiar to States and mhw‘r civil ?;.l- visions of States, but is practiced by individuals and corporations. Compar- atively few people who own or have ac. gl:lmd an equity in their homes would ve been able to do so if they had been compelled to save from their an- nual earnings an amount sufficlent to acquire the home by a cash payment. f Washington has not fol- ion rule and has mo . _Possibly as a this practice it is found ne s to resort to the use - putids lor';fihml ke (2f portable buildings “The building program of W - ton contemplates a Municipal c::f’&‘r“ % cost from $25,000,000 to $30,000,000, In order to carry out this and other improvements one of thres things ape pears necessary: to increase the tax Tate sufficlently to complete the pro- gram; allow the tax rate to remain as it is and extend building program over a period of possibly 2 years; or to Tesort to the method followed by practi- cally all other cities, which would be to issue serial bonds to be retired within & period of years, making it possible for our present tax rate to take care of both principal and Interest These bonds could be issued with the credit of the Federal Government back of them, insuring a rate of interest to the v:;lnymu advantageous as the Federal ent secures wl vi for its own uses. e MR Indebtedness Fixed. “In most States cities are restri by State laws as to the amount of m debtedness they may incur, based on the assessed valuation of taxable real property of Washington, with an as- sessed valuation of real property of $1,200,000,000 and a population of 586.- 000, could normally borrow approxi- crln:telly ‘sl%o.goo.non and be no more deeply in debt than other cif ]lk‘ropopulgtlon. R ‘Our city is confronted with necessity ‘of increasing revenues or e tailing expenditures, and if this curtail- ment must be made at the expense of needed imj rovements it might be better low the example of oth bor;g}: u:”: money.p er cities and “This discussion of public indebted- ness is offered with thepxhoughl th::dll may point the way to a solution of a financial situation that must be met by those charged with the administration of the fiscal affairs of our city. “The Federation of Citizens' Associa- tions, as an organization, has not taken any action on this subject and it is not to be considered as having its indorse- ment.” e CHARLES W. HOLMES FETED BY G. W. STAFF Finance Controller Honored Thirty-Fifth Anniversary of His Appointment. Officials of George Washington Uni- versity today tendered a luncheon to Charles Wendell Holmes in celebration of the thirty-fifth anniversary of his appointment as a member of the staff. The affair was held at the Cosmos Club. Mr. Holmes has been an outstanding figure in the affairs of the university for many years. As finance controller he has directed countless business transactions. Among those attending were Dr. Cloyd Heck Marvin, president, and a gathering of men who were professors and trustees when Mr. Holmés first be- came affiliated with the university. TWO DIE IN CAR CRASH ST. PAUL, N. C, June 1 (#)—Her- bert Foswick of Miami, Fla. and Norton B. Davis of Florida were fatally injured in an automobile accident near here early today. Their sedan collided with a truck driven by a Negro. the trade union schemes— | ynjon practice. There was & “walting riod” before benefit could be sought, principle | gnd there was the “1 in 5” rule, which that the insured trades should help 10 | meant that for every 5 contributions maintain, through times of depression | pajq the claimant was entitled to one and under-employment, the reserves of | week's benefit and no more. Also, no labor they required in seasons of g00d | person might draw more than 15 weeks employment. rther, the state adopted the funda- mental that the emmyed person and his employer should tribute in equal | plan of the friendly on benefit during an insurance year ‘This was frankly a photograph of the societies and trade p proportions to the insurance fund, and | ynjons, which sought to aid thrift b) ihat the state, on public grounds and to | making available, when bad times umi make the scheme more attractive to the | o ‘sum to supplement the personal sav- compulsorily insured contributor, should | jngs or the private insurance it was as- make a somewhat similar contribution. med a workman of ordinary prudence u; ‘Thus the famous and successful triple | would have in reserve. contribution came into existence. The rates of contribution were low—em- Also, it 1s to be noted that the benefit 'was based not on need, but on contract; ployer and employed contributing 5| further, it was too small to offer a: | ents each and the state something like | inducement to idieness. i 3 cents. The benefits also were low, the top allowance for persons of 18 years ent story. and more being $1.75 weekly. main the cpnditions fol .3 3 3 In the trade But $hen came the war—and a differ- (Copyrisict. 1931, by Morth American News- "~aper Alliance, Ine.) ¢