Evening Star Newspaper, February 5, 1933, Page 1

WEATHER. (U. 5. Weather Bureau Forecast.) Cloudy and colder, possibly light snow today; tomorrow party cloudy; fresh west and northwest winds. Temperatures—Highest, 35, at 9:00 a.m. yesterday: lowest, 30, at 10:00 p.m. yesterday. Full report on page 9. “From Press to Home Within the Hour” ‘The Star is delfvered every evening and Sunday morning to eity and suburban homes by The Star's exclusive carrier serv- ice. Phone National 5000 to start delivery. WITH DAILY EVENING EDITION No. 1,455—No. 32,422 Entered as second class matter vost office, Washington, D. C. HULL DRAFTS BILL T0 END EXEMPTION OF BONDS FROMTAX Federal, State and Municipal " Securities Would Be Af- fected. TOTAL OF SUCH ISSUES PUT AT $26,000,000,000 Government Obligations Are Found to Be Refuge of Wealth to Es- cape L:vy Burden. BY G. GOULD LINCOLN. Senator Cordell Hull of Tennessee, ‘widely mentioned as a probable member of the Roosevelt cabinet and recently called to Warm Springs to consult with the President-elect on tax and tariff matters, is preparing and will soon in- troduce in the Senate a measure de- signed to do away with the issuance of tax-exempt securities in this country. Tax-exempt securities, Federal, State and municipal, it is estimated today, reach the stupendous total of more than | $26,000,000,000. Other partially tax- exempt securities bring the whole up to approximately $35,000,000,000. | It has been generally contended that | it would require an amendment to the Constitution to reach the end desired by the Tennessee Senator. He plans to make his resolution wide enough, how- ever, to cover all kinds of tax-exempt securities, particularly to make re- financed Government loans subject to taxation. Within a comparatively brief time, seven or eight billions of dollars of Government securities must be re- financed, and it is the purpose of Sen- ator Hull to reach these new issues of securities to take the place of the old. Furthermore, there are hundreds of { thousands of salaried employes in the various States today whose salaries are free from taxation, and these, too, Sen- ator Hull believes should be taxable. Not Policy of Roosevelt. ‘While Senator Hull has made no claim that his proposal to do away with the tax-exempt securities is to be a Roosevelt policy, .it is considered at least significant that an advisor of the President-elect on tax matters should take this matter up on the eve of the incoming of the new administration. Either Senator Hull, as it is now gen- | erally expected, will enter the Roose- velt Cabinet as Secretary of State or Treasury, or he will remain a member of the Senate, influential in revenue and tariff legislation. He has lcng been regarded as an authority on such mat- ters of legislation. In either case he! will b2 in & position to press for favor- able consideration of his proposal to amend the laws so one part, and a very | large part, of the country’s wealth shall be tax free and the other part shall bear very heavy tax burdens. Senator Hull believes that such a condition is no longer tolerable, especially when great wealth today is seeking the refuge of Government tax free securities in order to avoid taxation. With low re- turns, or none, from many of the in- dustrial and other private securities, wealth is receiving a comparatively large income from these Government securities and also has the benefit of security in the Government bonds, with the whole credit of the Nation back cf them. If the Federal income taxes applied today to the vast total of tax exempt securities in this country, it would be possible to balance the Gov- ernment’s budget with comparatively little, if any, additional taxation upon the wealth of the country now taxed. Probably through strict Government eccnomy no increased taxes would be needed at all to balance the budget. This may be one of the reasons which will lead the Roosevelt administration to sponsor the taxation of all securities, __Various estimates of the total amount (Continued on Page 3, Column 4) TAX RULING UPHOLDS INDIVIDUAL RIGHTS Judge Kenyon Holds Evasions Are Preferable to Compromise of Constitution. By the Associated Press. _ST. LOUIS, February 4—Jhdge Wil- liam F. Kenyon of the United States Circuit Court of Appeals said today it was preferable to permit some evasions of the income tax laws rather than to sct aside constitutional rights, in an opinion which reversed the action of the Commissioner of Internal Revenue and Board of Tax Appeals in the case; of deficiency assessments against Frederick B. Wells, Minneapolis invest- ment broker. Wells created five trust funds, with combined assets of $300,000 in }922-23, the income from the trusts to pay premiums on insurance policies taken out by Wells and with his children, other relatives and designated charities named as beneficiaries. The Commissioner of Internal Revenue ruled, and was upheld by the Board of ‘Tax Appeals, that the trusts created by Wells were a device for evasion of surtaxes on his income and set up a deficiency assessment against him. . Judge Kenyon ruled that the com- missioner had no right to make an essessment against that part of the trust income, which was to pay Wells' 1if~ insurance premiums. “Wells had divorced himself from | Braun, Socialist member of the Prussian | bonefits aceruing from the policles nd retained no control over the in-! come,” the court ruled, “and to tax the same violates the Constitution.” PLUNGE KILLS ENSIGN Patient at Mare Island Hospital Drops Through Staircase Well. VALLEJO, Calif., Pebruary 4 (#).— “Ensign N. B. Rhoads, jr, U. S. N, 24, of New Orleans, dived three stories down a staircase well at the Mare Island Naval Hospital to his death to- day. Capt. John Neilson, hospital com- mandant, called an inquiry. Rhodes, hospital patient several weeks, was removed to the psychopatic ward several days ago after he slashed his wrists with a razor. The wounds were superficial. Guards said he jumped today after ‘breaking away from them as they were escorting him to a hospital zoom. The ensign went to the hospital . gxom the U. S. S. West Virginia. v WASHINGTON, D. C, SUNDAY MORNING, FEBRUARY .5, 1933 —EIGHTY-EIGHT PAGES. MRS. ROOSEVELT AS FIRST LADY TO CURTAIL FORMER ACTIVITIES AnSWers Re cent Criticisms and Says She Will Give Up Commercial Radio Talks and Certain Writing Contracts. By the Associated Press. HYDE PARK, N. Y, February 4— Mrs. Franklin D. Roosevelt will curtail somewhat her activities when she moves into the White House next month. But not, she said tonight, because of any criticism there may have been aimed at her because of them. “I have realized all along,” Mrs. Roosevelt said, “that I shall have to give up a good many things on March 4. Some of them co not matter. Some | of them mean a good deal to me. Not New Activities. at som> pcople do not seem to | | undersiand is that I am really not do- | inz anything that I haven't done for a long time. It's only Franklin’s position | that has brought them to the attention of people. “I shall drop a good many things when we go to Washington. .But, you see, we aren’t in Washington yet, and— until March 4 my husband will still be a private citizen. Until March 4 I hope I shall be permitted to enjoy P jand much of her public speaking. the privileges accorded the wife of a private citizen” . Recent editorial discussion of Mrs. Roosevelt’s activities in the New- York newspapers has brought a flood of let- ters, both to her and to the newspaper offices. Like the editorial comments themselves, the letters have shown a marked difference of opinion over the course she had followed in recent months. Contracts to Be Dropped. Among the activities Mrs. Roosevelt expects to give up, in addition to her position at the Tod Hunter 8chool for Girls, are her radio talks on a com- mercial hour, several writing contrn!‘::! s f21 2s snhe krows ncw, she caid, she will continue as editor of Babies—Just | Babies, “Those other contracts run out any- way before March 1,” she said. “An I have never had any intention of re- newing them. And, of course, I realize that I shan't have so much freedom in the matter of speaking in public, I shall make very few speeches. hall not, of course, lend my name (Continued on Page 4, Column 1.) EMERGENCY DECREE FOR PRUSSIAN DIET DISSOLUTION SEEN {Berlin Press Is E'xpecting Move Tomorrow to Oust Legislature. By the Associated Press. BERLIN, February 5 (Sunday).— Althcugh the Diet and its triumvirate ceclined to dissolve the Prussian Diet, some morning papers today said the | dissolution would be accomplished Monday under an emergency decree. } The Tageblatt, an independent Berlin | newspaper, in an editorial inveighed | against the idea, citing that such a move Wwould be illegal and alleging that the German constitution fails to em- | power President Von Hindenburg | through an emergency decree to set aside Prussia’s legisiature or overthrow the Diet’s elected officers. The Deutsche Allgemeine Zeitung | said the triumvirate would be summoned | Monday, with Vice Chancellor Franz Von Papen taking the place of Otto Diet and former premier of Prussia. Another Dissolution Attempt. This move, the paper said, would indicate that another attempt at dis- | solution would be made through the triumvirate, which includes the Diet president, the premier of Prussia and the president of the State Council Only by a vote of the Diet or of the triumvirate can the body be dissolved. | EAGUE TO REECT JAPANESE DEMAND FOR CONCILIATION Committee of 19 Moves to Settlement on Basis of Lytton Report. By the Associated Press, GENEVA, February 4—The Commit- tee of Nineteen of the League of Na- tions Assembly today rejected Japan's proposals for treating the Sino-Japa- nese dispute on a basis of conciliation, and proceeded to the discussion of drafting recommendations for a settle- ment on the basis of the Lytton report. Yosuke Matsuoka, Japanese delegate, called on Sir Eric Drummond, League secretary general, and later officially re- | ceived notification of the decision of the League leaders, which is generally regarded here as further straining the relations between Tokio and Geneva. A carefully worded official com- munique dealing with the committee's attitude toward Japan's proposals said: “After careful consideration of these suggestions the committee, while ap- preciating the spirit which prompted | them, regretfully came to the conclu- sion that they differed so fundamentally from its own proposals, even as already modified to meet the desires of the Japanese government, that they did not afford a satisfactory basis for a pro- cedure of conciliation.” Matsuoka’s Proposals. The two proposals advanced by Mr. Matsuoka were: The government, meanwhile, re- mained silent. | Chancellor Adolf Hitler plans to go to Munich soon for a visit. | The new Hitler government lost no time yesterday accepting the challenge | frcm the recalcitrant Prussian State Diet. ‘Through the Prussian commissioners, headed by Von Paden, the government issued a decree dissolving all city and village councils throughout Prussia, | thereby forcing tens of thousands of Aldermen to defend their places at the polls March 12. In this way the gov- | ernment _hopes by constitutional means, | (Centinued on Page 2, Column 5.) e BRITAIN WILL ORDER THREE NEW CRUISERS | Lord Stanley Tells Trade Unionists Centracts Also to Be Let for 23 Other Vessels. By the Associated Press. LONDON, February 4.—Lord Stan- ley, parliamentary secretary to the ad- miralty, told a deputation of engineer- ing and shipbuilding trade unionists yesterday that orders for three new British cruisers will be placed within the next few days. The contracts, under original plans, were not to have been awarded until late in March. The projected vessels were planned in the 1932 British building program and are allowed under treaty provisions. Lord Stanley also told the deputa- tion that contracts for 23 other naval craft will be awarded within a fort- night. He estimated the new work will entail contracts aggregating £7,000,000 (currently about $23,730,000) for the thipyards. | 1. Suppression in the exposition of motives which accompanies the reso- lution of a passage relative to non- recognition of the State of Manchukuo, which was set up with the assistance | of the Japanese to administer Man- churia. 2. That the proposed conciliation body should not have supervisory au- thority in Sino-Japanese negotations for a settlement. In reporting rejection of these pro- posals, Sir Erfc informed Mr. Matsuoka in behalf of the committee that con- ciliation remained open on the basis of the committee’s previous suggestions. The committee resumes on Monday its discussion of recommendations wHich will take chapter nine of the Lytton report as their basis. This chapter deals with the conditions necessary for a satisfactory solution of the conflict between China and. Japan. Among these conditions are: Recognition that Japan has rights and interests in Man- churia which cannot be ignored; an assertion that the government in Man- churia should be modified to secure, consistently with the sovereignty and emlaBteativeli ntegelv ROERChine s, (Continued on Page Col NEW GOLLEGE HEAD Dr. Theodore Henley Jagk Presi- dent of Randolph-Macon. LYNCHBURG, Va., February 4 (P). —Acceptance by Dr. Theodore Henley Jack, vice president of Emory Univer- sity, Atlanta, Ga., of the presidency of Randolph-Macon Woman'’s College was announced this afternoon by Robert C. Watts, chairman of the committee ap- pointed by the board of trustees of the Randolph-Macon System to select a president to succeed Dr. Dice R. An- derson, resigned. REPRESENTATIVE FISH ACCUSED IBARRY'S DISMISSAL FOR BRIBE CHARGE 1S DEEMED CERTAIN Most of Senate Judiciary Bqdy Consider Qusting Fore- gone Conclusion. CRIMINAL LIBEL ACTION DISCUSSION TO FOLLOW Smith Adopts Policy of Hands-off. ! Senate to Vote on Committee's | Recommendations Tuesdey. | | By the Assoclated Press. The Senate last night prepared to mete swift punishment to David S. Barry, its suspended sergeant-at-arms, for saying. in a magazine article that some Members of Congress are known to be bribe-takers. With the Judiciary Committee meet- ing tomorrow to consider what action will be taken, most of its members re- garded an immediate recommendation for summary dismissal as a foregone conclusion. After that, they said, will come a dis- cussicn of whether the case shall be certified to the civil authorities of New | York and the District of Columbia for | criminal libel action. A vote on lhel committee’s recommendation will be | taken in the Senate Tuesday. i Smith Keeps Hands Off. From the New Ycrk office of the New | Outlock, of which Alfred E. Smith is; the editor, and in which the Barry article appeared came word today that Smith himself plans a hands-off policy. But Francis Walton, managing editor, asserted: “Barry is a well known newspaper man and we have every confidence that ;l'hul he has written is the absolute act.” Late Friday, Senatcr Watson the Re. publican leader, called the Senate’s a tention to the Barry article. The Sel ate immediately resolved itself into a court of trial, hailed Barry before its | bar, questioned him, voted against sum- | mary dismissal and for suspensjon, pending an investigation by the Judi- ciary Committee. In the course of the tumultuous and dramatic hearing, Barry said his pur- pose was to defend the Senate against what he termed a popular belief that bribery is widespread in Congress by saying there were only a few bribe- takers. | He admitted he could not name them and had no evidence to support his charges, but stuck doggedly to an asser- | tion he believgd what he had written | to be the truth nevertheless. ‘Walsh Asks Libel Action. Senator Walsh, Democrat®of Montana, | before whose fierce eyebrows and relent- less questicning many a witness in a Senate investigation has quailed, in- troduced the resolution to ask for criminal libel action, against the pub- uslil,er& of the magazine and Barry as well. He backed up his measure today with an assertion that the publishers are “little less represensible than the au- thor.” The publisher is Frank Tichenor. ! “If they have got any evidence that any member of Congress has been tak- | ing money every means should be taken to bring it out,” Walsh said. “But I| can't believe such a condition exists.” | ‘Walton said the magazine has accept- | ed seven or eight more articles by Barry, some of which deal with the Senate. He outlined one in which he said Barry would discuss “smelling out com- mittees” which Walton described as “committees that go off on junkets at the end of Congress sessions to deter- mine whether our fish hatcheries in Alaska are operating well or whether our Porto Rican policy is right.” “We Laven't talked to him about ex- pancding ideas expressed in the first ar- ticle,” he added. “We plan to see him in Washington Monday night.” Norris said he had directed Barry ' to be on hand Monday in case the com- mittee wanted to hear from him further . The committee chairman expressed his own view, however, “that it would be foolish to take more evidence.” “All (Continued on Page 2, Column 8.) — TODAY’S STAR PART ONE—18 PAGES. General News—Local, National and Forelgn. PART TWO—8 PAGES. Editorials and Editorial Features. Schools and Colleges—Page 4. News of the Clubs—Page 5. I Stamps—Page 5. Organized Reserves—Page 5. Fraternities—Page 6. Parent-Teacher Activities—Page 6. Spanish War Veterans—Page 6. PART THREE—10 PAGES. BY HECHT OF STARTING BANK RUN Chairman of R. F. C. Advisory Committee Declares Attacks in House Brought Serious Result. By the Assoclated Press. NEW ORLEANS, February 4—Rep- resentative Hamilton Fish, Republican, of ‘New York, was charged today with starting a run on the Hibernia Bank & Trust Co. here by Rudolph S. Hecht, president, by his recent criticism of Hecht before the House Banking Com- mittee in connection with Reconstruc- tion Finance Corporation loans to the defunct Union Indemnity Co. of New Orleans. In an exchange of telegrams Mr. Fish expressed confidence in the Hibernia Bank & Trust Co. He added that nothing he had said reflected on the bank, that he was willing to review the information and did not wish to do Mr. Hecht an injustice. All the banks in New Orleans and in many other parts of Louisiana were sary of the severance of diplomatic re- lations with Germany: There has been no visible sign of a run on the Hibernia Bgnk, but Mr. Hecht said that news of Mr. Fish’s oticism of him had caused millions of_dollars to be withdrawn. In New York today Mr. PFish said he had the “utmost confidence in the Hibernia Bank and nothing I said re- flected on its stability.” “It is sheer nonsense for the le in New Orleans to take my criticism of Mr. Hecht as a reflection on_the cmmuoé hud b-nk.hm""m New York Rep- resentative dec] - Before the House Banking Committee Thursday Mr. Pish said he would de- mand the resignation of Mr. Hecht from the chairmanship of the Advisory Committee of the Reconstruction Finance Corporation and demanded an investigation into all Reconstruction Finance Corporation loans to concerns that later failed. In a telegram to Mr. Pish yesterday, closed today in response to a proclama- | joans from tion issued by Gov. O. K. Allen in com- memoration of the smeex:(-h anniver- Society. PART FOUR—6 PAGES. Amusement Section—Stage, Screen and Music. In the Motor Worldi—Page 4. Aviation News—Page 4. American Legion—Page 4. Radio News—Page 5. PART FIVE— PAGES. Sports Section. PART SIX—12 PAGES. PFinancial and Classifled Advertising. Serial Story, “Night Club Daughter’— Page 11. jon Auxiliary—Page 11. Public Library News—Page 11. Veterans of Foreign Wars—Page 11. District National Guard—Page 11. Army and Navy News—Page 11. D. A. R. News—Page 11. D. C. Naval Reserve—Page 11. Disabled Veterans—Page 11. Y. W. C. A. News—Page 11. PART SEVEN—16 PAGES. mfim Section. ws of New Books—Page 11. Notes of Art and Artists—Page 12. Crossword Puzzle—Page 13. Boys' and Girls’ Page—Page 14. High Lights of History—Page 15. Those Were the Happy Days—Page 16. GRAPHIC SECTION—6 PAGES. ‘World Events in Pictures. COLOR SECTION—8 PAGES. Sundy Star, NOW JUST AS | HAD EVERYTHING FIXED YOU HAD To BLOW ypP! HOUSE WON'T CUT 75 OWN SALARIES Capitol Restaurants Continue on U. S. Funds—Supply " Bill Passed. By the Associated Press. The House yesterday refused to re- duce its members’ salaries and insisted that the Capitol restaurants continue to function through Federal appropri- size, and consequently the cost, of Congressional funeral delegations. The price of haircuts and shaves, the taste of pigs’ knuckles and bean soup and expenditures for funerals the legislative branch, which was passed late in the day by the House and sent to the Senate with practically the same provisions as were reported by the committee that prepared it. Representatives Whittington of Mis- sissippi and Mitchell of Tennessee, Democrats, led a vigorous fight for the reduction of salaries, but were soundly trounced. Pay Cut Bid Badly Beaten. Twice Whittington unsuccessfully tried to reduce them from $9,000 to $7,500, but was overwhelmingly de- feated by a non-record vote. Mitchell wanted the salaries cut to $5,000 a year. Only one vote, in addition to his own was cast for the prcposal. Then he withdrew his proposed amendment A.|to prevent members of Congress from hiring kinfolk as secretaries and other employes at the Capitol. It was Representative Schafer, Re- publican, of Wisconsin, who tried to “get the Government cut of business under the dome of the Capitol” by eliminating appropriations for the gating approximately $60,000 a year. He was told by Representative Boylan, Democrat, of New York, that “if you knew the good taste of pigs' knuckles and bean soup served there you wouldn't want to close down those eating places.” In denouncing Whittington’s proposal to cut Congressmen’s salaries, which normally are $10,000 but which were reduced to $9,000 through the economy act, Representative Cochran of M souri, chairman of the House Expendi- | tures Committee, said: “There is a tendency upon the part | of the press of the country to discredit the Congress, claiming there are cer- tain abuses here. “We are accused of getting free shaves and free hair cuts. I can go across the street into an outside batber shop and get a haircut and a shave for 50 cents. “No Free Shaves.” “I can go to the barber shop in the House Office Building and get a hair cut and shave for 60 cents, but if I go into the barber shop of the Capitol downstairs a hair cut and shave will cost me 75 cents. I get no shaves or hair cuts free. Nevertheless, the people of the country have been led to believe (Continued on Page 5, Column 5) RICHMOND JOBLESS ‘MARCH’ ON CITY HALL! Two Leaders of Council Are Ar- rested, Third Is Held, but Later Released. By the Associated Press. patrolling the building. One was held under arrest. The other was released, and later a third was arrested when he came to arrange bail. - :‘be ‘Tomkin, the council mmmn' {Europe Combed ‘ Facts on Bullitt Cancellation of Passport i Seen Curb if Activities Are Wrong. By the Assoclated Press. ‘The American Government reached across the sea last night for informa- tion on whether William C. Bullitt has ' | been posing gs a semi-official envoy of this country in discussing war debts | with other nations, as charged in the ! ations, but it did place a limit on the Senate. | Embassies in Europe were asked to 'mnke an investigation of Bullitt's ac-/ | tivities after Senator Robinson, Repub- lican, of Indiana had asked the State Department to invoke the Logan act | formed the business of the day in con- | and have Bullitt punished if it is found | sidering the $16,588.000 supply bill for |that the charges against him are ac- curate. | “'“These represented Bullitt as suggest- ing debt settldments in London, Paris " (Continued on Page 2, Column 4. PRESIDENT SIGNS FARM RELIEF BILL [Measure Authorizes $90,- ‘ 000,000 to Aid Production of 1933 Crops. | By the Associated Press. A bill hailed by its congressional sponsors as the only credit rescurces for | Senate and House restaurants aggre- | many a hard-pressed farmer became |law yesterday by President Hoover's | signature. It authorizes $90,000,000 for | loans to farmers to help them produce | their 1933 crops. The measure. was approved by both | Houses despite the efforts of opponents, | including Representative Snell, Repub- | lican, New York, minority leader of the | House, who attacked it on the ground it would serve to increase agricultural surpluses already large and burdensome. The bill provides that the Secretary of Agriculture may lend the money to farmers in return fcr a lien' on the crop. Formulation of rules and regulations is placed in the hands of the Secretary. Live Stock Feed Loans. A cut in production of as much as 30 per cent may be required by the Secre- tary in return for a loan, but the law does not ccmpel him to make that | stipulation. The measure also provides $1,000,000 for loans for live stock feed in drought-ridden areas, the borrower to give a lien on the live stock. ‘While President Hoover was acting on the measure after corsidering it for a week, Senate committees were pushing ahead mwith hearings on other farm re- lief legislation. g Sharply conflicting views on the farm parity bill, passed more than three weeks ago by the House, were (Continued on Page 4, Column 4.) | By U.S. Agents for ) * FIVE CENTE IN WASHINGTON AND SUBURBS | Means Associated Press. CENTS ELSEWHERE | TEN COMMITTEE VOTES - MORE D.C. GASTAK :Cent Increase Reported to Senate Despite Estimates -of Cash Balance. | Despite the fact that the Budget Bu- reau estimates for the next fiscal year, | as submitted to Congress, together with the revenue prospects for that year in- dicate the District would have a cash balance in 1934 of $3,366,000, the Sen- ate District Committee yesterday re- ported to the Senate the proposed 1-cent increase in the local gasoline tax, which ‘would levy $1,000,000 more a year from District motorists. ‘The prediction as to the cash balance which the District would have at the end of the fiscal year 1934, on the basis of the estimates as approved by the Budget Bureau, was revealed in testi- mony before the House Subcommittee on District Appropriations. In reporting favorably the measure to raise the gas tax from 2 to 3 cents a gallon, the Senate Committee incorpo- rated the amendment recommended earlier in the day by the District Com- missioners which would make this ad- ditional money to be taken from the motorists available to meet a number of items of municipal expense now paid from general revenues. Other Items Added. Under existing law the gas tax may be used only for street and road im- provements. The committee had pre- viously voted to add park roads and, at the suggestion of the Commission- ers, these other items of expense were made chargeable to the gas tax: Con- struction and repair of bridges, installa- tion and upkeep of traffic lights, all other expenses of the department of motor |in the street and bridge divisions of the Highway Department, salaries of police- men assigned to the Traffic Bureau and the salafies of crossing policemen, who are now paid by the street railway com- panies. The recent merger legislation (Continued on Page 2, Column 6.) MEXICO IS PREPARING TO RECOGNIZE NICARAGUA Relations Broken Seven Years Ago Soon May Be Resumed Between Republics. By the Associated Press. MEXICO CITY, February 4.—Mex- ico today took what was accepted in some circles as the initial step toward the recognition of the Nicaraguan gov- ernment, with which relations were sev- ered seven years ago. Foreign Minister Puig Casauranc to- day dispatched a telegram to President Sacasa of Nicaragua cengratulating Nicaragua on the arrangement of its internal difficulties. It was considered the telegram would open the way for Nicaragua formally to ask Mexican recognition. The telegram said: “On the occasion of the happy regulation of the internal difficulties of Nicaragua I desire to ex- press the satisfaction of the Mexican government because of the disappear- ance of the former obstacles.” vehicles and traffic, salaries of employes ; ' SAVINGS PROPOSAL POSTPONES SENATE ACTION ON PAY CUT Bratton Measure to Have De- partments Reduce Expenses Proves Hitch. BINGHAM WITHDRAWS 1 2-3 PER CENT PLAN Treasury-Post Office Appropriation Items Disposed of—Economy Debate Continues. BY J. A. O’LEARY. The Senate late yesterday postponed action on the new pay cut of 12; per cent on Government salaries until after & decision has been reached within the next few days on the Bratton proposal to require all Government departments to reduce their expenditures next year by 5 per cent below whatever appro= priations Congress makes for each de- partment. Turning to the general economy pro- gram late in the afternoon, after hav- ing disposed of the Treasury-Post Office appropriation items, the Senate launched into debate over the new pay cut, which, added to the present 83 ver cent furlough, would impose a total reductidn of 10 per cent on Uncle Sam's workers, It soon developed, * however, that there was considerable opposition to passing immediate judgment on the 125 per cent cut, in view of the pos- sibility that salaries might be reduced still further if, later on, the Bratton 5 per cent saving plan should go through without exempting salaries, Bingham Withdraws Amendment, Senator Bingham, Republican, of Connecticut, in charge of the Economy Committee report,.then withdrew the 123 per cent salary cut amendment for the time being. He said when the Senate resumes work tomorrow 1t ‘will proceed to act on the various other phases of the economy measure and g0 back to the pay-cut section after the Senate has determined what it wants to do with the general saving of 5 per cent on the total of each bill proposed by Senatoy Bratton, Demo- crat, of New Mexico, mfg.m cgdstdif:n, Demoerag &f Col- ) , Republi o= vada, took the lead in owom her pay cuts as the debate got under way, mguit 'l!!;'i:cmxm,hhph“ m publican of wl the Senate should first defie nitely whether galaries sye to Te- duced Bratton plan before it votes on the centage cut of 135 per cent, Suggested by President, In presenting the committee recom- mendations, Senator Bingham said the President had suggested that an 11 cent pay cut be added to the exist] furlough plan, that the committee had gone into the matter thoroughly and came to the recommendation for an additional cut of 125 cent, “This will bring all salaries under $12,000 a year up to a total reduction of 10 cent.” “I opposed the 123 per cent addi- tional cut in committee,” said Senator Oddie. “It may not sound like a large amount, but when you consider the number of Federal employes receiving small salaries, it will mean the differ- ence between their present condition and positive suffering. It is false economy.” Senator Walsh, Democrat of Massa- chusetts, wanted to know how much the additional cut would save the Gov- ernment, and Senator Bingham replied, $17,800,000. Senator Walsh then inquired if it embraced a cut in salaries of members of the House and Senate, and Senator Bingham said it did not, pointing out that they are now on a 10 per cent cut basis. Fears 1714 Per Cent Cut. Senator Costigan then took the floor 1n opposition to the new cut, contending that if the Bratton proposal for a gen- eral saving of 5 per cent goes through without a safeguard against taking this saving from salaries, some employes would face the possibility of an aggre- gate cut next year of 17!, per cent. ‘The Senate a few days ago adopted the Bratton amendment for the Treas- ury and Post Office Departments, and, while Costigan succeeded in having it worded so that none of this saving could be effected by further pay cuts or furloughs, Senator Bingham has filed a motion to reconsider the Costi- gan restriction. Calling attention to this possible re- consideration of his amendment, Costi- gan said if his amendment should be repealed and the 123 per cent cut ap- proved, employes in the postal service, for example, would face three pay cuts. He said that while the Bratton amend= ment calls for a total saving of 5 per cent in the Treasury and Post Office Departments, if irreducible fixed charges are eliminated, salaries might be cut 71, per cent if his amendment to the Bratton amendment is rescinded. In that event, he said, these Post Office SHIPPING Senator Copeland Accuses ¢ | By the Associated Press. Great Britain was accused in the Sen- ate yesterday of undertaking by “secret diplomacy” in advance of the World Economic Conference to reach interna- tional agreements detrimental to Amer- ican shipping. The charge was made by Senator Copelahd, Democrat, of New York, who lobbying ‘against Uncle Sam and the interests of the American merchant ‘marine.” 3 “It is the most dangerous and self- ish national policy I ever heard of,” he said. Copeland, a vigorous opponent of pmpo‘:d cuts in the subsidies paid ship- to | ping companies under ocean mail con- tracts, contended that the “British are “trying to asserted it constituted “a specles of [read “SECRET DIPLOMACY” AGAINST U.S. IS CHARGED TO BRITAIN! Her of Intriguing Before Meeting of World Economic Patley. itself” Great Britain should seek to secure the co-operation of as many na- tions as possible pledged to work for re-establishment of world trade through removal of trade barriers, including modification of tariffs ahd removal of Government ship subsidies. Quoting from the resolution he said had been transmitted to the British Government by the Chamber, Copeland “We further recommend that Great Britain, and those co-operating nations, should agree to confine mest-favored- nation treatment to each other’s trade and shipping.” “They are planning,” he then said, approach those delegates, not in open convention, but by private ar- rangement, beforehand, to work out some scheme by which they may take care of their favorite shipping, meaning the shipping of those European nations as against the shipping of the United States. speak of what they are going enforce their proposals. To me it is (Continued on Page 2, Column 3.) METROPOLITAN PLANS T0 EXTEND OPERA Directors Declared Planning o Or- ganize Company on a Na- tional Scale. By the Assoclated Press. NEW YORK, February 4—The Times says directors of the Metropolitan Opera. are giving “serious consideration to a proposal to reorganize the company on a national scale as a means 6f meeting the financial crisis in its affairs.” The plan, the newspaper says, con- templates a division of the operatic season, not only with Chicago, as has been proposed, but also with San Francisco. The season in the three cities could be arranged, it was pointed out in the Times, so that the “Golden Horseshoe” could open about January 1, avoiding the pre-Christmas slump along Broad- ‘way. Contracts could be so drawn that singers would agree to sing under Metropolitan management in New York, Chicago and San Francisco, as well as other cities that might be visited on tour. Whereas the entire company would appear in the Chicago engagement, 5] of the plan hold the view that the chorus and' orchestra mge\he San appearances could be engaged i