Evening Star Newspaper, January 20, 1932, Page 1

WEATHER. (U. 8. Weather Bureau Porecast.) Mostly cloudy toni warmer tonight; about 40 degrees southwest or west win Highest, 47, at noon today; lowest, 33, at Full report on page . 5:30 a.m. today. lowest gentle to moderate, ight and tomorrow; temperature ds. Temperatures— Closing N.Y. Markets, Pages13,14 & 15 ch ¢ Fpening WITH SUNDAY MORNING EDITION “From Press to Home With The Star’s every city block a tion is delivered to carri in the Hour” system covers nd the regular edi« ‘Washington homes ier as fast as the papers are printed. Yesterday’s Circulation, 121,858 — No. Entered as seco; 32,040, nd class matter WASHINGTON, DG WEDNESDAY, JANUARY 20, 1932—THIRTY-SIX PAGES. F¥P (P) Means Associated Pr TWO CENTS. post office, Wa. shington, D. ( - STIMSON REFUSES 10 GIVE SENATE FULL LOAN FACTS Says Message on Barco Oil Concession ~Would Be Against U. S. Interests. DECLARE;WHITE’S : TESTIMONY CORRECT Reply Follows New Demand of Securities Probers for Undeleted Colombian Message. By the Associated Press. Secretary of State Stimson stood firm- 1y today in his refusal to submit pub- licly to the Senate Finance Committee @ telegram from the American legation &t Bogota dealing with Colombia loans | @and the Barco oil concession. The Secretary reiterated his stand on the matter after the committee earlier in the day had requested him to furnish the correspondence in full. Previously Stimson had submitted telegrams with the ofl matters eliminated. In his letter of reply to Chairman Smoot, the Secretary reaffirmed his willingness to submit the telegram to the committee in executive session. He gaid “it would not be in the interests of the United States in its foreign rela- tions to publish the telegram itself.” Upholds White Testimony. Stimson also said that Assistant Sec- getary White in his testimony had stated correctly the substance of the telegram as to the Barco concession. The request for the telegram was made on the motion of Senator Couzens, Republican, of Michigan. It asked for the message of June 19, 1931, which White had testified mentioned to oil concession in Colombia. Among those who voted for the resolution were such administration stalwarts as Smoot and Senator Reed, Republican, of Pennsyl- vania. The committee’s action was at an executive session, In wulch a letter from the Secretary of State, transmit- ting some of the correspondence re- garding loans to Colombia, had been considered. Submits Parts of Messages. Stimson submitted portions of four nmunications between the State De- paitment &nd the American legation in Colombia regarding loans made to thet country by the National City Co. Testimony before the committee has ghown that e National City Co. forwarded the last $4,000,000 quota of a loan, contracted for by Colombia the year before, 10 days after that govern- ment restored the Barco oil concession to the Mellon-owned Gulf Oil Co. and other American interests. White testified that among the rea- sons mentioned by President Olaya of Colombia for the loan to be made was that he had restored the oil concession. He insisted, however, there was no con- nection between the concession and the Joan The following had been forwarded by Secretary Stimson An extract of a telegram of March 12, 1931, from the American legation at Bogota to the State Department: } “President Olaya informed me this morning that, although budget had been reduced and balanced as American bankers had demanded, they told him this morning that they were unable to send $4,000,000 as they had clearly | promised. * * *" | Second Is Paraphrase. A second document, & paraphrase of and extract from & telegram of May 12 from the American legation, follows: The bankers, President Olaya states, say that having discovered that the Sevenues for the first quarter of the present fiscal year are below their estimates, they cannot pay over the $4.000,000; they again want him to re- Guce the budget. “President Olaya says ‘this is an im- possible situation. The _President irther says 'mo government can Sunction if its budget is subject to re- vision month by month. “The bankers themselves accepted Kemmerer's figures for the budget, and in any event, in my opinion, the in- Creased revenues later in the year will fnake up for whatever they are short during this quarter.’” The third document, a paraphrase of on extract from a telegram May 16, from the American legation, follows: One of the first conditions laid Gown in the agreement of June 30, President Olaya admits, was a balanced ‘budget, and the bankers and he agreed on balanced budget of 51,000,000 pesos Yor the present year, which was after- ward reduced to 49,000,000 he banke now insist that as reve- nues for the first quarter are below their estimates, he reduce the budget egain. President Olaya maintains that Pe cannot monthly reduce his budget according to month-by-month re- ceipt of revenu Wanted Higher Interest. The fourth document, an from a telegram of June 19, American ation, follows minute and after every- as agreed on for the ad- vance of last $4,000,000, bankers tod: have made a new condition: They d sire o jump interest rate_on whole loan of June 30 from 7 to 8 per cent “An ease of this interest rate would now have absolutely disastrous consequences for whole “current of friendly feeling mow existing here for the United States. The bankers ap- parently still have absolutely no un- derstanding of situation here or their own best interests.” Tt was the remainder of this tele- gram which the committee requested Assistant Secretary White testified that Olaya, had said his people could not understand why the interest rate was jumped the day after tHe Colombian Congress had approved the Barco con- cession. CASHIER'S FAMILY HELD AS BANDITS ROB BANK By the Associated Press. MUNDELEIN, IIL, January 20.—After holding the cashier and his family captives in their home for six hours, four men looted the vault of the State Bank of Mundelein early today and escaped with $3,200. The robbers forced their way into the extract from the Peru Seeks Loan Data Uncovered By Senate Probe National Assembly Asks Facts From U.S. on Names of Those Who Profited. By the Associated Press. LIMA, Peru, January 20.—The Na- tional Assembly has called on the Reruvian government to request further ate Banking Committee loans to Peru. Under its resolution the committee would be asked to find out if any Peruvians, other than Juan Leguia, son of Izmqer Dresident Augusto B. Leguia, had received commissions as promoters of Peruvian loans. ‘The Peruvian Congress also was urged in the resolution to speed up its im- peachment of former President Leguia for alleged speculations and other of- | fenses. The resolution was adopted after publication here of a transcript of tes- timony in the American Senate Com- mittee's foreign securities investigation. Members of the firm of J. & W. Selig- before the committee that Juan Leguia had received a $415,000 commission for promoting $100,000,000 of loans, which now are in defauit. Impeachment of his father, who was overthrown in a revolution in 1930, was ordered by the Peruvian Congress last month on charges of high treason, mis- management of government funds and “illegal enrichment.” CHINA FIGHTS FREE MANCHURIA MOVE Arrest Confronts Supporters, List Including Pu-Yi, For- mer Boy Emperor. By the Associated Press. NANKING, China, January 20.—The Chinese government indicated today it is planning to issue an order for the | arrest of all persons alleged to be re- | sponsible for the new movement to set up an independent state in Manchuria. It was not suggested that the gov- ernment would be able actually to make the arrests, but it was under- stood it planned to notify the powers that China cannot recognize any treaty or agreement made between foreign countries and those persons against whom warrants are outstanding. The list of those for whose arrest warrants are being prepared was under- stood to include Hsuan Tung, otherwise known as Henry Pu-Yi, former Chinese boy Emperor, and a g™wup of other Chinese Manchurian officials who, the government charges, are following the dictates of Japan. Hsuan Tung, who is 26 years old, re- cently was spirited away from Tientsin, where he had been living for years, vir- tually as a Japanese prisoner. He went to Southern Manchuria and it was re- ported an attempt was to be made to place him on the throne of the province with the assistance of Japan. In 1908 Hsuan Tung was proclaimed Emperor of China. Four years later, on the day after his sixth birthday, he was forced to abdicate. GROUPS CLASH AT SHANGHAL | Chinese and Japanese Fight Over Man- churian Dispute. SHANGHAI, China, January 20 (#).— Relations between Chinese and Japa- nese here were further strained today after a clash between a number of Japanese and a group of Chinese police in the International Settlement, in which cne Chinese and one Japanese were killed and a number of both na- tionalities injured. The cause of the clash was not defi- nitely determined today, although re- ports said it grew out of the Man- " (Continued on Page 2, Column 6.) RADICAL RULE SEEN investigation by the United States Sen- | on foreign | man Co, New York bankers, testified | FRENGH POLITICS - MAYHALT PARLEY N REPARATIONS London Expects Lapse of Week in Going to Lausanne, Paris Sees Longer Delay. |MAY BE POSTPONED UNTIL LATE SPRING Coming Elections Threaten Agree- ment—U. S. Attitude Makes Settlement Necessary. January 20.—Postpone- ment Lausanne Reparations | Conference was regarded in British | official circles today as inevitable be- | cause of the French political situation. With the debate in the French Chamber of Deputies carried over until Thursday, Downing Street considered it impossible for the arrangements for the conference to be completed and give time for delegates to arrive at Lausanne by January 25, the date set for the meeting. British opinion is that the confer- ence will be held perhaps a week later. Discussions of preparations con- tinued today among the British, Ger- man and French governments regard- ing the conference. So far the British government has made no formal move to postpone the meeting although it was England which took the initiative in fixing the date at January 25. It is understood that a mutual understanding regarding the postponed date may be reached during the exchange of views now proceeding among the European capitals. PARIS SEES LONG DELAY. the Question May be Held Up Until After Spring Elections. PARIS, January 20 (#).—Prospects for any broad settlement of the repara- tions problem until after the French elections in April or May appear remote today. The Government is awaiting the de- cision of the British cabinet regarding a date for the proposed international conference at Lausanne, but there was some uncertainty here as to whether that conference will be held at all. In view of the American attitude that an extension of the Hoover moratorium cannot be granted and that Europe must reach an agreement before the United States can participate further in the debt negotiations, it is believed the Prench_government is inclined to ad- journ the whole question until after the elections. P Confidence Vote Delayed. In some quarters it is belleved that if the Lausanne Conference is held it will be primarily for the purpose of telling Germany that France cannot act while the United States refuses. In this case the conference would be hrief. At any rate, it seemed unlikely that the meet- ing would open on January 25, because of the postponement until tomorrow of a vote of confidence in Premier Laval's new government. It appeared today that Joseph Paul- Boncour would head the Prench dele- gation to the League of Nations Council meeting on January 25, replacing Aris- tide Briand who usually has functioned in that capacity. The delegation to the Disarmament Conference, to be held on February 2, met this afternoon with Andre Tardieu, the chairman, to discuss matters of policy. DEBT PROBLEM DELAY SEEN. Year's Postponement Eypected as Re- sult of Diplomatic Exchanges. BY PAUL SCOTT MOWRER Special Dispatch to The Star. PARIS, France, January 20.—The die is cast. The decision is taken. The | whole " burdensome problem of ~war | debts and reparations is apparently go- ing to be postponed for one year. Such is the outcome of the diplo- matic exchanges of the last few days between Paris, Washington and Lon- don. The Lausanne conference is rec- ognized as unnecessary, but if it is held Spanish Republicans Assail Dodg- ing of Disorder Issue. MADRID, January 20 (£).—A group of Radical Republican leaders declared today that the National Congress “failed to fulfill its duty” because it did not discuss at Tuesday's session the disturbances at Bilbao, Valencia and other places throughout Spain. They predicted the next government would be based on the Radical Republi- can party, whose program is scheduled to be outlined by Alejandro Lerroux February 11. Many Marooned by Snow. TEHERAN, Persia, January 20 (A).— Most of the population of the town of Hamadan have been imprisoned in their nomes by heavy snows, which nave blocked the streets and drifted about the houses. Many of the shops and offices were closed today and 1t Was still snowing at $1,000 a Month, bu By the Associated Press. SHANGHAI, China, January 20— Five Americans and five Canadian avia- ors who came to China expecting to be given jobs at $1,000 a month pilot- ing Chinese military airplanes found themselves stranded here today. The aviators said they were promised by Chinese organizations in Canada and the United States that the Aviation Bureau of the Chinese ministry of war was seeking pilots and would pay the salary mentioned for competent men. The aviators landed here with practi- cally no money, only to be told the Government Bureau is not looking for pilots at all. home of the cashier, M. C. Mott, at 2 am. and held Mr. and Mrs. Mott and their two sons with pistols until 8:15 am., when all were driven to the bank. Radio Programs on Page A-12 The five pilots from the United States said posters appeared at numerous Pa- cific Coast airports, including those at San Jose. Stockton and Oakland, Calif., advertising China’s need for flyers. The Canadians sald they came as a result of direct promises from the anti-Jap- A | ~ (Continued on Page 5, Column 4.) CHINA NAMES DR. KOO | Former Foreign Minister to Serve | in Manch PEIPING China, January 20 (P).— | Dr.” Wellington Koo, former Chinese foreign minister, will be his country’s Tepresentative on the Manchuria com- mission of the League of Nation's Coun- cil, it was announced today. Dr. Koo, who is a close associate of Marshal Chang Hsiao-Liang, went to Nanking today to discuss the situation with the central government rian Probe. Havana Building B(;mhed. HAVANA, January #).—A bomb exploded last night department of public instruction windows, door: stimated 20 AMERICAN AND CANADIAN FLY SEEKING WAR, STRANDED IN CHINA 10 Say Anti-Japanese Groups Promised Them Army Jobs t Nanking Denies Need. | anese National Salvation & | Vancouver {.’haL‘ they would 13}3&&}'@\“‘5 | ernment jobs immediately | arrival in China. Tialmiter Dr. Philip Chu, a Chinese i1 at Vancouver, the Canadians o " president of the Chinese Society there and was directing listment of Ca- nadian fiyers for service in China The fifers appealed to the American and Canadian trade commissioners here, who referred the matter to the government at Nanking, and received the reply that the National government - war ministry has no knowledge of Chi- | nese enlisting aviators abroad and that no foreign flyers are being sought | 'The aviators said they understood | more American and Canadian pilots | are coming to China as a result of the promises. 'The trade commissioners remmunicated today with their respec- “-nments, hoping to forestall w i3 of others, LIEUT. VAN WINK LE ORDERED BEFORE RETIREMENT BOARD | Inspector Acts on Advice of| Board of Police and Fire & Surgeons. Was Organizer and First and| Only Director of Wom- an’s Bureau. Lieut. Mina C. Van Winkle, director of the Woman's Bureau of the Metro- politan Police Department, was ordered today by Inspector E. W. Brown, act- ing superintendent, to appear tomor- row morning before the police retiring and relief board—a step which may mark the close of her long and suc- cessful career on the police force. Inspector Brown’s action was based | (Continued on Page 2, Column 4.) ' i LIEUT MINA C. VAN WINKLE. SRADY BOMB CASE HAY B REDPEHED Action Predicted After Dyna- | mite Is Found in Wash- ington Garage. Reopening of the Seat Pleasant bomb | case appeared likely today following the discovery last night of 17 stieks of | dynamite in the garage at which Loy | Brady, now serving a 10-year term for manslaughter, formerly worked as an automobile mechanic. The dynamite, wrapped in & news- paper dated November - 27, 1929, was found in an abandoned flue in the basement of the Barry-Pate Motor Co., 2525 Sherman avenue. The djscovery was made by William Spencer, colored porter, who was working in the cellar. Company officials turned the dyna- mite over to Detective Sergt. Thomas Sullivan, who took it to the second pre- cinct police station for examination. Date Held Vital Clue. The date of the paper in which the dynamite was wrapped, it was pointed out, corresponds with the time at which witnesses at Brady’s two trials festi- led the mechanic was working on a trigger taken from a St. Louis “fur gun.” A trigger of the same type was used in the bomb which Brady was accused of making and delivering to the home of Mrs. Annie Buckley, Seat Pleasant. The bomb, wrapped to resemble a Christmas gift and addressed to Mrs. Naomi Hall Brady, 18-year-old secret bride of Leroy's brother Herman, was found on Mrs. Buckley's front porch the morning of December 29, 1929, Three days later Mrs. Buckley sent the package to Naomi, who thought it a belated present. When she opened the parcel it exploded and she and her little sister and brother, Dorothy, 4, and Samuel, 19 months, were killed, while her mother, Mrs. Nora Hall, 45; her grandmother, Mrs. Margaret Brom- ley, 86, and another brother, Thomas, 8, were seriously injured. Naomi’s mother lost an eye and sev- eral teeth in the bl be: being " (Continued on Page 5, Column 6.) POISONED CABBAGE IS DESTROYED BY U. S.| More Than 1,000 Hampers at Bal- timore Found to Contain Arsenic. By the Associated Press. BALTIMORE, Md., January 20.— More than 1,000 hampers of cabbage contaminated Wwith arsenic poisoning, Have been confiscated and destroyed by the Federal Government during the 1ast two weeks, United States District Attorney Simon E. Sobeloff said today. The action, taken mostly against shipments from the Carolinas and Florida, was directed by the Depart- ment of Agriculture, whose officials discovered the contamination when the shipments reached Baltimore. Despite the confiscation, receipt of arsenic-laden cabbage has decreased materially over previous years, Daniel M. Walsh, chief of the food and drug inspection station here, said. Arsenic is used to destroy the cab- bage worm which infest the vegetable. Under -normal _conditions, rainfail WRIT THREATENED IN FORTESCUE CASE Defense Demands Grand Jury Action by Tomorrow—Leg- islators Press Reforms. By the Associated Press HONOLULU, January 20.—While Hawailan legislators pressed their pro- gram to reorganize Honolulu's law en- forcement system and check the city’s crime wave, defense attorneys threat- ened to seek release by habeas corpus of Mrs. Granville Fortescue and three Navy men unless the territory asks the grand jury by tomorrow to indict them for murder. City and County Attorney James F. Gillland immediately promised to present the case to the grand jury Thursday. The demand for speed in the prose- cution of Mrs, Fortescue and her co- defendants was coupled with a state- ment by Montgomery Winn, defense attorney, that the Washington and New York soclety matron is still so nervous she “cannot carry on a long conversation without breaking into tears.” Legislative conferees and territorial and city officials agreed at a confer- ence to make the pending bill for re- organization of the Honolulu police department effective February 1. Kentucky Plan Assailed. Kentucky legislators were excoriated and abruptly told to “mind their own business” by Hawallan Senators indig- nant at a resolution of the Southern lawmakers urging presidential interfer- ence in Honolulu’s crime situation. Hawailan Senators, resentful of criti- cism from the continental United States and jealous of the integrity of the islands, were quick to flail the Kentuckians as soon as they heard of the resolution yesterday. Sarcastically advising his colleagues not to be too hard on their critics, youthful Senator James K. Jarrett com- mented “some of the most ignorant people in the country come {rom Kentucky.” The attack upon the Southern law- makers was launched by the veteran Senator Charles A. Rice, who declared (Continued on Page 5, Column 2.) e ARCOTTIC RING SMASHED BY SIX ARRESTS IN OHIO Three Women Among Those Seized With $25,000 Drug Supplies in Cleveland. N By the Associated Press CLEVELAND, January 20.—Narcotics valued at $25,000 were seized by Federal agents today in two Cleveland raids. Three women and three men were arrested. Seizure of the contraband drugs, the officers said, will cripple one of the largest narcotic rings in this district. Investigation of the places raided had been going on secretely for several weeks, but was hurried to a conclusion today when Ralph H. Oyler, Federal narcotic agent for Ohio and Michigan, feared the suspects would take alarm from a raid made by police. One of the men arrested gave his name as Max Shapiro of Cleveiand. The officers sald he was the head of the ring, and charged him with violation of washes the heads free before they ripen, but during the past season near drought conditions have prevented such action. L] the Federal anti-narcotic act. Similar ;hnrges were placed against the other ve. BROWN ASKS RAISE INPOSTAL RATES Treasury Experts Also Urge Sales Tax at Hearing Before Committee. By the Associated Press. ‘Two methods of increasing the Gov- | ernment’s reyenue were outlined today to the House Ways and Means Com- | mittee. | Postmaster General Brown, telling of | the $150,000,000 deficit confronting the Postoffice Department, requested that first-class postal rates be raised from two to three cents. He also asked a small increase in second-class rates. Two Treasury experts gave their opinions that a manufacturers' sales tax, such as the Canadian system, could be used in this country. Their views were hased upon a study of the Canadian plan. The tax brings $44,000,000 annually to Canada, but the experts declined to estimate what might be expected from it in this country. Sees $100,000,000 Increase. Brown in urging that first-class rates be increased from 2 to 3 cents an ounce, estimated this would bring in $100,000,- 000 additional revenue. “This increase, we feel, is justifiable,” | he said, “based on the value of serv- ice rendered as compared with rates that prevail in other countries.” Brown sald he favored a slight ad- vance in second-class rates. He also recommended increases in registered mail fees, insurance rates on parcel post, money order fees and fourth-class mail rates. Immediately after Brown testified, |~ (Continued on Page 2, Column 7.) FINANCING GROUP SOON TO FUNCTION Conferees Finishing Work as Re- construction Officers Get Under Way. | By the Associated Press. | With its highest officers already at | work, the Reconstruction Corporation faced but a few more hours of congres- sional consideration today before it will be brought into actuality by presiden- tial signature. Conferees adjusting points of dispute between the Senate and House as to just what it will do, by way of giving business a spurt forward, found their task easy. Meanwhile Charles G. Dawes and Eugene Meyer—to be president and chairman, respectively, of the $2,000,- | 000,000 corporation—studied ways of | getting it quickly into.working order. | = After 8 hours of conferences, which | began yesterday afternon, Senator Nor- beck, Republican of South Dakota, chairman of the Senate Banking Com- mittee and a leader of the conferees, said, there had been “no rows.” He explained that the task of “ironing out” the differences is one that takes time, but added “we are getting along fine and hope to report the bill tomorrow.” HOUSE COMMITTEE | TODENYWOODPAY (LT SPECIAL RULE ‘lndividually Opposed to Blan- ket Provision in Agricul- tural Measure. HOOVER IS AGAINST GENERAL REDUCTION Would Agree to Some Slashes, How- ever, in Interest of Economy. The Houe Rules Committee is pre- pared to turn down the request of Rep- resentative Will R. Wood, former chair- man of the House Appropriations Com- mittee, for a special rule making in order on the agricultural appropriation bill now before the House a blanket provision for reduction in salaries throughout the Government service ap- plicable on all other departmental ap- propriation bills as a limitation. Although Representative Wood has not yet furnished in writing to Chair- man Pou of the Rules Committee his statement, and although no disoussion on the subject has been had by the Rules Committee and no meeting of the Rules Committee has been called to consider this question, it is authorita- h: he Rules Commit- e i io.grant & special Tule along this line. Individually Approved. ‘Members of the House Rules Com- mittee individually, and as they have discussed the question among them- selves, informally, are pretty well agreed that they will decline to grant any such blanket rule especially applicable to an appropriation bill. p"l"her:r attitude will be that if a vote in the House is desired upon the ques- tion of salary reduction and if action by the rules committee is needed to give privileged status to such legisla- tion the matter must come before the Rules Committee as an independent measure and only after consideration and hearing before the proper com- mittee to which such legislation should be referred. In other words, the Rules Commit- tee members believe that the ques- tion of pay-cut legislation should be thrashed out on its merits. They think it should be dealt with in the House as a subject entirely by itself and not as a legislative rider on any appropri- ation bill. They belleve that the House would stultify itself in acting or in sending to the Senate any bill of so much Tmponmce and so highly con- & report from the proper legislative committee the House would be able to give reasons for its action and definite detalled information, which is not now available. Unaffected by Tabling. The fact that the House Committee on expenditures in the executive de- partments has tabled the four bills intro- duced providing for slashing into the Government pay roll will not affect the Rules Committee in its decision not to grant Mr. Wood’s application for a blanket permit, which would give him a short cut toward forcing a vote in the House on this question. It can be stated positively that the Republican members of the House and the Democratic members in a big ma- jority support the President’s position that there should be no blanket re- duction of salaries in the Government service. The leaders and parliamentary authorities both on the Republican and Democratic sides are prepared to oppose any effort to place on the appropriation till a rider for reduction of salaries. Hoover Against General Cut. President Hoover was represented to- day as welcoming any further reduc- tion in the Government's budget and will serlously study proposals with this object in view, but that he still main- tains his position of opposing Federal pay reductions if there is any likelihood of lowering the efficiency or morale of the Government. It was stated in the President’s be- half that his attitude is not a new one and that he has made it known for a long time. His first desire is for re- ducing the expenses of the Government as much as possible and to go as far as possible in order to meet the Treasury | deficit, but that he will not con- sent to slashing so liberally as to impair the functioning of the Govern- ment. | Opposes General Cut. Moreover, Mr. Hoover is known to be | opposed to any plan providing for a general cut in salaries of employes. To more than one person he has made his position in this connection perfectly ciear, but, in the interests of economy, it s thought that he might agree to wage reductions in individual cases. In this connection Mr. Hoover, who, (Continued on Page 2, Column 1.) troversial unless through hearings and PEPCO OFFERS RATE SAVING CONSUMERS 660000 ANNUALLY Compromise Proposal Makes Possible New Primary Charge of 3.6 Cents. HEARING TO DETERMINE DISTRIBUTION OF CUTS Utilities Board Agrees to Plan, Reduction Represents 70 Per Cent of Excess Profits. The Potomac Electric Power Co. and the Public Utilities Commission today reached an agreement that $860,000 will be used as a basis for rate redue. tion in 1932, effective February 2. This amount, $30,000 more than thiw used in 1931, will make possible the new primary rate of about 3.6 cents per kilowatt-hour in comparison with the present rate of 4.2 cents, The cut represents about 70 per cent of the company’s excess profits during 1930. It is greater than would be pos- sible under the consent decree scrapped by the commission last year. However, it is less than the cut possible under the new sliding scale established by the commission, which is now in litigation in District Supreme Court. Public hedrings will be held by the commission beginning Monday, largely to determine how the reductions shall be distributed between the various schedules. Court Battle to Continue. The court battle over the commis- sion’s new sliding scale will continue. The compromise is effective only until the appeal from the commission’s slid- ing scale order is finally settled by the courts. The company’s statement of net earnings for 1931 showed a profit of $5,260,000. Under the old consent decree, about $600,000 of this would have been used for rate reductions, and under the commission’s sliding scale the amount would have been approxi- mately $1,000,000. The compromise was arranged large- ly through the efforts of Dr. Cloyd Heck Marvin, president of George Washington University, and a mem- ber of the board ‘of directors of the power company. The Public Utilities Commission is- sued the following statement today in explanation of the compromise: “The Potomac Electric Power Co. ap- pealed to the. court to enjoin the ene forcement of the Public Utilities Com- on’s order No. 919, which modifies the sliding scale arrangement under which_electric rates have been fixed since 1925, Discussion Still Awaited. “The court has not yet rendered its decision, and the commission felt that in advance of the court action it would not be justified in putting this order into effect for the purpose of adjusting the new rates, which will go into effect February 1. “At the same time, the commission was not willing to fix such rates in ac- cordance with the unmodified sliding scale as embodied in the consent decree. “While the commission was endeav- oring to determine what action it should take, the power company voluntarily came to it with a proposal to effect a reduction in rates, beginning the first of February, which would in 12 months decrease the company’s gross income, based on the business done in 1931, by the sum of $860,000. “The company stated that it was heartily desirous of granting this meas- ure of rellef to its customers, and that if this offer was accepted by the com- mission, the company would not appeal from the order of the commission, put- ting the new rates into effect. “This sum, $860,000, is $30,000 more than the reduction made at the end of 1930. It is also ore than $200,000 greater than the reduction which could have been made under the consent de- cree. Offers Accepted. “In view of the business uncertainty now existing, the considerable differ- ence made by the destruction of so many buildings in the triangle are, the probability of heavier taxes will ba imposed on the company during this year and the positive benefit which will promptly follow an undisputed order fixing the new rates, the commission has thought it best to accept this offer of the power company. “The public hearing scheduled for January 25 will be held, but its main purpose will be to determine how this sum of $860,000 will be distributed among the various rate schedules.” Peoples Counsel Richmond B. Keech was present at the meeting at which the compromise was arranged and said today he was perfectly satisfied with it. The commission was represented during the conference by Corporation Counsel Willlam W. Bride and Assist- ant Corporation Counsel Willlam A. Roberts, who also agreed that the com- promise was & good one. Paterson Alderman Says Plai By the Assoclated Press. PATERSON, N. J, January 20— Alderman Joseph King wants to license Paterson speakeasies. He said today that there are an estimated 700 “speaks” in town, and that an annual license for each of $150 would turn more than $100,000 into the city treasury. The idea, he told the Board of Aldermen, yesterday, is mnot original with him. Several New Jersey cities have been issuing licenses to speak- easles for as long as seven years. Even Pederal' authorities, he said, have ap- proved the idea. The board, after hearing Alderman King’s proposal, voted unanimously to have the legal department prepare such an ordinance. ‘There would be -no conflict, King said, with the prohibition law. The speakeasy operators would be licensed content. If they elected to sell beverages of greater potency, he pointed LICENSES FOR SPEAKEASIES URGED IN NEW JERSEY TOWN a Year From 700 Places. to sell beverages of only legal alcoholic | said. n Would Bring in $100,000 their coming to grief at the hands of Federal agents. ’ Besides being a source of revenue, the license ordinance would provide another advantage, King said. It would make it possible for the city to with- hold licenses from undesirable persons or known criminals. WOODCOCK HITS PLAN. Looks Like Approval of Law Violations, He Asserts. Prohibition Director Amos W. W. Woodcock said today the suggestion of Alderman Joseph King at Paterson, N. J, that speakeasies be licensed looked to him “like a virtual countenancing of law violations.” “If they intend to profit by violation of the law, or aid or countenance them, it’s my opinion they can be prosecuted for conspiracy to violate the law,” he “Of course, its not the bare form of the words of the contemplated ordi- out, that would be their business. The license wflm be no guarantee against nance that counts; its the intent and purpose behind them.” t GARY MAYOR INDICTED ON MISRULE CHARGE Accused of Using City Funds and Laborers to Build His Sum- mer Cottage. By the Associated Press. GARY, Ind, January 20.—Roswell Johnson, mayor of Gary, was indicted today by the Lake County grand jury on charges of misfeasance, oppression and maladministration of his office. It is alleged in the indictment that Mayor Johnson used city laborers and city funds for the building of his Sum- mer cottage on the Gary Lake front and for the improvements to his home in this city. Johnson is serving his third term as mayor of Gary. He was first elected in 1913. He was defeated for re-elec- tion, but was elected again in 1921. After serving three years of his second term he resigned when he was sen- tenced to serve 18 months in the Fed- eral Prison at Atlanta, Ga. on a liquor conspiracy dcharge. dHeed served 10 mont and was pardoned by former President Coolidge. i3 In 1929 he was again elected mayor after a campaign in which he sald he was seeking vindication,