Evening Star Newspaper, February 19, 1935, Page 1

WEATHER. (U. 8. Weather Bureau Forecast.) Fair, colder tonight, minimum temper- ature about 33 degrees; tomorrow fair; moderate to fresh west winds. Temperatures—Highest, 49, at 4 p.m. yesterday; lowest, 40, at 11 p.m. yester- day. Closing N.Y.Markets, Pages Full report on page B- 6. 15,16 &17 ch No. 33,166. post office, NEW GOLD LEGISLATION]MELLON WILL GIVE TO BAR U. S. BOND SUITS|$50,000,000 ART BELIEVED UNNECESSARY!GALLERYTONATION Entered as second class matter Washington, G D, WASHINGTON, D C, Congress Move Profit Taking Turns Stocks Not Finally Ruled Out. COURT FINDING | IS SCRUTINIZED Stabilization Held Determining | Damages. By the Associated Press. NEW YORK, February 19.—Enthu- siasm over the gold decision faded quickly in securities markets today. By early afternoon, stocks had | e | turned extremely dull and prices were inclined to sag. The reaction of today, By the Associated Press Early administration studies of the Bupreme Court gold decision today re- affirmed first. impressions that any immediate legislative action was un- necessary. This word was given at the White House and repeated in other official quarters as Government experts made themselves more familiar with the practical application of the voluminous legal rulings Future congressional steps were not finally ruled out, however, as Justice Department lawyers pondered the ex- act meaning of the Court's finding that while abrogation of the gold clause in Government bonds was un- eonstitutional, damages must be shown to prove a breach of contract. Damage Proof Limited. For the most part it was believed | that only if the dollar was stabilized | and gold returned to circulation at | below the former level of 25.8 grains to the dollar would it be possible o | prove damages. Treasury officials held that foreign holders of United States gold clause bonds were in the same position as domestic owners. Should a loss be suffered through foreign exchange transactions on the devalued dollar, they contended the loss was charge- able to the individual himself and not this Government Legislative possibilities were dis- cussed informally at a meeting of the | Senate Banking Committee, and mem- bers said it was concluded tentatively that for the present none was neces- sary. Senator Bulkley. Democrat, of Ohio raised the point that the decision on | Government bonds was based on con- ditions resulting from present gold re- strictions, and that a change in the status of gold domestically might pro- vide the basis for new legal action. Prevention May be Desirable. He suggested to the committee, without urging the point, that it might be advisable to prevent such a change. Later Bulkley told the Associated Press he had not made up his mind about the question. He said it prob- ably would require several days of study for him or for the Government's legal experts to decide whether action was required. There was much discussion in sena- | torial circles today of the status of foreign holders of Government bonds, but the opinion was generally ex- pressed that they could show no more legal ground for action than Amer- ican citizens because the bonds are payable in the United States. Foreigners May Show Damage. ‘The argument was made that though the Supreme Court held resi- dents of the United States could not show actula damage, foreigners might be able to show that depreciation of the dollar resulted in actual losses to them. Senator Glass, Democrat, of Vir- ginia was the most caustic commenter among Senators on the Supreme Court’s decision. He said it marked “the depth of moral insensibility to which the Nation has fallen,” and forecast its effect would be felt for “a century.” “What good is a contract if it can be violated?” he asked. “It’s nothing but a scrap of paper.” Stone Indicates Course. ‘What course legislation might take it decided upon, was marked out in a special opinion on the Government bond issue by Justice Stone. He said any question of such dam- age suits “may be transferred wholly to the realm of speculation by the | exercise of the undoubted power of the Government to withdraw the privilege of suit upon its gold-clause obliga- tions.” Responsible officials, however, were not ready to say what may be recom- mended to Congress after further study, if anything. In any event, the Court's decision does not become effective for 25 days —the period within which an appeal for rehearing may be filed. Other Developments. Other developments in the gold situation today were: 1. Senate inflationists, led by Sen- ator Thomas, Democrat, of Oklahoma, started a new movement to drive the value of the dollar still further down. ‘Thomas praised the court decision, de- claring it shows Congress has “unre- strictable power in handling money.’ 2. Some other Democratic legis- lators thought the decision might be viewed as a brake on any inflationary tendencies. In their opinion, the Gov- ernment might be called upon to pay huge damages to holders of its gold bonds if the value of the dollar should be sliced drastically. 3. A firm opinion that a bondholder would find it impossible to prove damages unless Congress later orders the bonds redeemed in gold and per- mits & free market in that metal was expressed by an administration spokes- man. He did not give his reasons, but some other financial observers thought there would be difficulty in proving how much of any change in the pur- chasing power of the dollar was due to the abrogation of the gold clause and how much to other causes. 4. Wall Street and commodity markets, after experiencing something of a frenzy of buying yesterday, hoped that the end to uncertainty over the .gold cases would prove a tonic for the struggle back to prosperity. 5. There was no official comment on reports from flplomuuc quarters (Continued on Page 5, Column 5., DRIVE ON DOLLAR |along with that of yesterday after- { noon, canceled more than half the extreme rise which greeted the Su- preme Court’s ruling. Stock market circles said this was |to have been anticipated, since the decigion merely lifted a heavy weight {of uncertainty by preserving the status quo. Underlying economic con- ditions, it was felt, were left un- changed. Toward the end of the third hour of trading. United States Steel was off nearly 1, to close at 37; Case more than 1.50, to close at 59; Bethlehem Steel nearly 1. to around 31; General Downward After Sharp Rise Basic Economic Conditions Unchanged, Wall Street Decides—Dullness Again Rules Markets. under 25. and 50 cents, to metal stocks, | Electric, 50 cents, to American _Telephone, 10450 Non-ferrous however, held up well. | Bonds acted somewhat better than stocks, with the high-priced gold is- | sues which were sold yesterday, either steadying or improving slightly. Some | of the more speculative bonds which skyrocketed yesterday encountered profit-taking. United States Government bonds continued to push higher, with the | non-gold issues showing widest gains | The Treasury 3 per cents of 1951-55 jumped % of a point to 1031:. The commodity markets turned rather sluggish. The third hour of trading saw cotton futures off 25 to 35 cents a bale. In Chicago, wheat | was about unchanged from the prices | prevailing when trading was sus- pended vesterday, and corn was a little lower. BEGUN IN SENATE Inflationist Forces Rally to Clip 26 Cents Off Pur- chase Value. | By the Associated Press. Heartened by the Supreme Court's | decision in the gold cases, the Sen-'Iloss in the critical struggle over the| | ate “money bloc” started a new move | s4,880,000,000 work-relief bill today | [today to drive down the value of the when Senator Wagner of New York, | dollar. an amendment to the pending $4,880,- 1000,000 work and relief bill. Intro- | duced by Senator Thomas. Democrat, of Oklahoma, the amendment seeks | to decrease the value of the dollar | through the issuance of silver money. | Thomas introduced it after the gold case decision, in which he held | the Government's authority to fix the value of money was completely sus- tained. If further complicated the | legislative situation surrounding the | administration’s appropriation bill. | An amendment to cash the $2,100,- 000,000 soldiers’ bonus also must be | faced by the Democratic leaders, in addition to the many issues in the | bill itself. Congress’ Powers Upheld. | decision “holds Congress has unre- stricted and unrestrictable power in handling mo: z “The dollar.” he said. “is now worth $1.26 based on the 1926 price level. | We are going right ahead and try to get that extra 26 cents out of it.” His amendment is designed to raise the market price of silver to the statutory price of $1.29, at which time the Treasury would be opened to the free and unlimited coinage of the white metal. | The methods proposed to reach this | objective include: | 1. Issuing silver certificates on the ! basis of the $1.29 value against the 400,000,000 ounces of silver in the Treasury. This cost about 50 cents an ounce and currency has been issued against it only to the total of the cost price. 2. Forcing the Federal Reserve Banks to issue $100,000,000 in silver certificates now held in their vaults. 3. Speeding up the purchase of sil- ver by the Treasury, paying for it with silver certificates or gold and issuing silver certificates against it on the basis of $1.29 an ounce. Permitting the acceptance of silver in the settlement of international | balances. Thomas said his amendment would mean less than a billion dollars in new monev. But, he gontended, it would cheapen the dollar and raise the price of silver. Seeks Free. Coinage. ‘When the market price reached $1.29 and the Treasury was opened to free coinage, Thomas said, “we will then be ready to propose an interna- tional agreement for bi-metalism.” Senator Wheeler, Democrat, of Montana, expected to introduce today a proposal to pay the cost of the $4,880.000,000 program by issuing United States notes. The administration men gathered their forces to fight an amendment by Senater Adams, Democrat, of Colo- rado, to cut the bill to $2,880,000,000. Backed by a group of Democrats and Republicans, he planned to push this change today. VISCOUNT JULIAN BYNG, WAR HERO, RECOVERING Famous British Soldier Conva- lescing After Heart Attack in California. By the Associated Press. PASADENA, Talif,, February 19.— Viscount Julian Byng, former gov- ernor general of Canada and chief of Scotland Yard, was believed slowly improving from a serious illness in a Pasadena hotel today. The 72-year-old British war hero suffered a heart attack 10 days ago, and while his illness was not made known at the time, physicians express deep concern over his condition. The title of Viscount of Vimy was conferred upon him for his distin- guished command at Vimy Ridge dur- ing the World War. Viscount and Viscountess Byng came here several weeks ago to spend the Winter, WAGNER DEMANDS PREVAILING WAGE INew Dealer Inflicts Heavy Loss to Work-Relief Bill’s Progress. | By the Assoctated Press. The New Deal suffered & major n administration stalwart. demanded Lo dia Inflationist forces gathered behind payment of prevailing local wages on ' public works projects. He told the Senate that if the 3.500,000 employables intended to be given jobs were paid on a relief basis “the wage policy of the New Deal will be thrown into reverse.” “‘Every objective of public works will be defeated,” Wagner said. The prevailing wage amendment was | only one of many obstacles faced by | administration forces. They also sought strength to override a currency | expansion amendment of Senator | Thomas, Democrat, of Oklahoma. | P. W. A. Given $45,000,000. As Wagner spoke, President Roose- velt allotted the Relief Administra- tion enother $45.000,000 of public Thomas said the Supreme Court's | WOrks funds to help care for the needy | until a new appropriation is available. This made $145,000.000 available for February, which originally was esti- mated to require $150,000.000. | Secretary Ickes sald $15,000,000 re- | mained unexpended in the P. W. A. housing fund, from which Mr. Roose- velt took the money. Ickes said also that a partial re- port from 29 States had outlined another $1,000,000,000 of possible projects for which the $4,000.000,000 work fund could be used. Already on file were applications for $2,000,- 000,000 of non-Federal and $1,000,- 000,000 of Federal projects. Complete | reports on the survey must be filed by March 1. La Follette Asks $10,000,000,000. Another Senate development was an amendment by La Follette of Wis- consin to boost the relief appropria- tion to $10,000,000,000. He hoped to get substantial support from liberal elements on both sides of the chamber. La Follette’s proposal would add $5.200,000,000 to the public works fund of $4,000,000,000 carried in the bill. It would extend the life of the present public works act and make liberal changes in its form. ‘Wagner, who has been consulted fre- quently in the framing of important New Deal legislation, said unless pre- vailing wages are paid on the works projects, as demanded by the American Federation of Labor, “morale will be lowered, not restored; wages will go down, not up: purchasing power will shrivel, not expand; business will be demoralized, not stabilized.” “And the business machine will be driven back into the deepest trough of depression,” he added. Charges 30-50 Per Cent Handicap. Referring to testimony before con- gressional committees that the admin- istration planned to pay in work wages around $50 a month to the 3,500,000 now on relief, Wagner said. “No one denies that this would estab- lish a rate of compensation ranging from 33 to 50 per cent below that pre- vailing in private industry.” “If the public projects under this resolution “set rates of pay for full- time work below those prevailing else- where,” he continued, “private indus- try will find this lower level with the certinty that the river finds the sea.” Senator McCarran, Democrat, of Nevada has reoffered a modified amendment requiring the payment of prevailing wages, but permitting dif- ferent rates in various localities. His original proposal was defeated in com- mittee, but in its place was adopted an amendment by Senator Russell, Democrat, of Georgia permitting pay- ment of lower or ‘“security” wages until such time as it is shown they are bringing. down private wages. Then the President would be required to increase the rate to that being paid by private employers. 100 Drown as Ship Sinks. SHANGHAI, February 19 (#).— More than 100 persons were drowned, Chinese press reports said yesterday, when the Chinese steamship Fu- Lung sank off Wuhuko in the East China Sea, where not only sudden squalls, but pirates have long men- aced navigation, | ¢ Foenin ‘WITH SUNDAY MORNING EDITION TUESDAY, Gift Designed to Make Capi- tal Eclipse London and Paris. PAINTINGS BY RAPHAEL AND OTHERS ACQUIRED Some of World's Most Famous Pictures Already in Collection Destined for Washington. A monumental gallery of art, repre- senting a total investment of approxi- mately $50,000,000, is to be estab- lished in Washington. A gift to the Nation from Andrew W. Mellon, the gallery will be built around a nucleus of about $19,000,000 worth of pictures now owned or marked for purchase by the Pittsburgh millionaire. ~When completed, the institution is expected to make the Capital a cultural center outranking either London or Paris. Announcement of these plans was made yesterday by Frank J Hognn“ Washington attorney, during his | argument in court in Pittsburgh that Mr. Mellon should have been permitted | some deductions in his income tax | statement for the $3,241,250 which he paid in 1931 for five pictures bought from the famous Hermitage collec- tion in Leningrad. | Mr. Mellon, in a statement to The Star this morning, declared that he is not intending a memorial for him- (self. The gallery, he said, will not bear his riame nor will it be solely for his pictures. Other donors, he hopes, will present paintings worthy of the collection. Famous Paintings. Six pictures were designated yes- terday as destined for the Washington gallery, the Associated Press reports. They are: Raphael's “Madonna Alba,” costing $1.100,000; Titian's “Toilet of Venus”; Perugino’s “Crucifixion,” showing the | Virgin, St. John, the Magdalene and St. Jerome; Jan van Eyck's “An- nunciation”; Botticelli's “Adoration | of the Magi” and “Cowper Madon- na,” also by Raphael. Art experts said the six are among the best held in America and that no gallery in Europe holds a finer assembly of such masterpieces. Their value is esti- mated in excess of $10,000,000. Others are to be included in Mr. i Mellon’s gift to the Nation, it was said, but their identity may not be | known for several months. Mr. Mellon’s plan has been an | open secret in the Capital for several | vears, but publicity concerning it was withheld at his request. The donor still was buying pictures for his col- lection and believed that any dis- | closure of his name would have the effect of “booming the market” to his disadvantage and to the detriment of his purpose. Building to Be Erected. Even now the whole plan has not been disclosed. In brief outline it | is understood to include: Funds for the erection, decoration and equip- ment of a monumental building to | house the pictures already accumu- {lated and still to be acquired; funds | for the purchase of paintings “ear- marked” by Mr. Mellon for acquisi- tion, and funds for use in further buying in years to come and for | the enlargement of the building, if or when necessary. Some of the old masters specified by Mr. Mellon in his gift are stored in Washington and some are in Pitts- burgh. All will be assembled in a structure to be built under the .donor’s supervision on a site to be selected. No architect has been engaged to date, but Mr. Mellon is reported to have discussed designs informally with several different men whose names are associated with other works of archi- tectural art in Washington. ‘The Smithsonian Institution, prob- ably, will be official custodians of the entire gift. Mr. Mellon has indicated as much to Dr. Charles G. Abbot, secretary, and to others. But an ad- visory board or council may be or- ganized to aid the Smithsopian re- gents in the selection of further pic- tures for the collection. Mr. Mellon does not wish his presen- tation to affect the plan, first devel- oped by the late Dr. Willam H. Holmes, for a National Gallery of Art to be built and maintained by the Government. His gift, as he sees it, supplements but does not take the place of that project. Nothing should be permitted to interfere with the National Gallery proposal, he believes. C. Powell Minnigerode, director, Corcoran Gallery of Art, when asked for a statement, said: “A notable col- lection of great masterpieces assem- | piled over a long term of years by Mr. | -~ ‘Red Menace’ Exists in America,""A“AN TROOP Burrowing Into o Sftar FEBRUARY 19, 1935 —THIRTY-FOUR PAGES. GUESS 1D The only evening paper in Washington with the Associated Press News and Wirephoto Services. Yesterday’s Circulation, 137,539 Some Returns Not Yet Received FHF BETTER! LOOK INTO THIS! JUST ANOTHER. *‘MATTER_OF - RELATIVITY. Army and Navy Threat No Longer Is Regarded Lightly. Military Circles Are Concerned About Attempt to Overthrow Government. (This is the first of a series of articles based on official records and authentic documents, disclos- ing hitherto little known facts on eflorts of communistic agitators to spread unrest and incite rebellion in America’s military and naval forces. The House Committee on Un-American Activities has just recommended drastic legislation to curb seditious propaganda of .the type revealed in the articles.) BY REX COLLIER. Is there a “red menace” in America? Propound that question to many intelligent persons and the answer more than likely will be a laugh. Ask the same question in informed military circles and the reply will be | a serious one, marked by an expression of real concern. Army. Navy, Marine and National Guard officials once were inclined, like the average citizen, to laugh off sug- | ' MOVEMENTS HIT Ethiopia Guided by Pacific | Spirit in Negotiations, Says Spokesman. | gestions of a “Communist problem” in | | the good old U. S. A, but times have | changed. Today one finds no levity among naval and military officers familiar with the subversive activities being waged under direction of the Com- munist International among Amer- | ica’s “workers in uniform” and em- ployes of navy yards, arsenals and other strategic points in the system of national defense. A careful and comprehensive study of these communistic activities has convinced the War and Navy Depart- ments that unless immediate action is taken to curb efforts of radical agi- | tators to bore into the machinery of | naticnal defense, America will face a | genuine “red menace—possibly too late. | Communists themselves, in their of- ficial publications, point out that their success in Russia was due to inroads | (Continued on Page 3, Column 2 HAUPTIANN CASE INAPPEALS COURT Fisher and Pope Act With- out Reilly in Fight Against Conviction. By the Associated Press. TRENTON, N. J., February 19.— Bruno Richard Hauptmann's appeal from a conviction of murder of the Lindbergh baby today was thrown into | the State's highest tribunal, the Court of Errors and Appeals. Chancellor Luther A. Campbell denied the ap- plication of defense counsel for an ap- peal to the Supreme Court, which au- tomatically places the case before the higher court. The appeal will probably be heard at the next term of the court, which starts May 21. Act Without Reilly. Two of the three New Jersey attor- neys who represented Hauptmann in the six-weeks’ trial at Flemington took the action. The attorneys—C. Lloyd Fisher of Flemington and Frederick A. Pope of Somerville—moved rapidly despite the absence of Chief Defense Counsel Ed- ward J. Reilly of Brooklyn. Prior to the application before Chancellor Campbell, the two attor- neys went before Justice Thomas W. Trenchard, who presided at Haupt- mann’s trial, and obtained an order requiring Hunterdon County to pay the costs of printing the voluminous record and briefs. Today’s action means that Haupt- mann will have a respite from the (Continued on Page 2, Column 6.) Nazis Amazed by (Continued on Page 3, Column 1) Calm Bravery Of Two Women on Scaffold (Copyright, 1935, by the Associated Press) BERLIN, February 19.—Benita von Falkenhayn and Renate von Natzmer went to the executioner’s block in Pletzense Prison yesterday with more outward calm’and bravery than any men within the memory of prison au- thorities. An absolutely reliable description of their beheading, kept secret by the government, was given to the Asso- ciated Press today by a man who was there and witnessed every step of the procedure. First and foremost, he praised the upright bearing and composure of the two German women who paid with their lives for their revelations to a foreign government of Germany's mili- tary secrets. This is his story: The execution was performed be- fore dawn within the courtyard of the grim old prison. The night was pitch black, but the scene was illumi- nated brightly with floodlights. The execution of both women only took six minutes. “Prau von Falkenhayn" said the eye-witness, “was the first to be exe- cuted. When she was led into the of the prison, she walked first to the improvised stand for the jury which was witnessing the affair. “Her hands were chained on her back. She stood there and heard once more the verdict of death read aloud by the state prosecutor. “Bowing before a crucifix on a table, dimly lit by tall wax candles, the prosecutor surrendered Frau von Falkenhayn to the executioner with the words: “ ‘Executioner, do your duty. “PFrau-von Falkenhayn took the ver- dict calmly and she walked to the block rigidly erect.” The informant paused in his tale of what happened to comment: “This woman should be an example to male delinquents, whom we usually have to drag to the scaffold.” The executioner was August Grieb- ler of Magdeburg, 67: years old, who was aided by three assistants. As soon as her head was severed from her body, Frau von Falkenhayn's corpse was placed in a simple, blatk narrow Frau von Natzmer, one of Berlin's lights that illuminated the courtyard{ (Continued on Page 2, Column 5. LABORSEESN.R.A TREND TO FASCISM A. F. of L. Spokesman Hits at Williams—Roosevelt Message Awaited. By the Associated Press. | spokesman told the House Labor Com- | mittee today that “with N. R. A. now riders, labor can expect increasing doses of Fascism from its decisions and activities.” The statement, by I. M. Ornburn, | secretary of the Union Label Trades | Department and president of the | Cigar Makers’ International Union, was made as word came from the White House that President Roose- velt's message on the new N. R A. probably will go to Congress tomorro The Chief Executive gave special a: tention today to work on his recom- | mendations. Sees Trend to Fascism. Ornburn said the trend “is alarm- ingly similar to the early stages of Fascism in Europe, where labor was first baited with promises, such as the N. R. A, and then suppressed.” He added: “The continued stewardship of the |N. R. A. in the hands of a former president of one of the most uncon- scionable, callous and arrogant in- dustrial units in this country seems almost to be a studied and certainly is a standing insult to labor. “Labor’s only hope lies with Con- gress. The recent promulgation of & cigarette code by the President re- enforces this conclusion.” Ornburn referred apparently to S. Clay Williams, N. R. A. chairman and former president of the R. J. Reynolds Tobacco Co. ‘The rift between the administration officials and the American Federation of Labor widened, meanwhile, over a proposal by Representative Connery, Democrat, of Massachusetts, that Con- | gress require labor organizations and employers to have equal representa- tion on code authorities and other N. R. A. boards. Richberg Testifies. Donald Richberg, chairman of N. R. A’'s Policy-making Committee, testified before the House Labor Com- mittee yesterday that such an arbi- trary requirement would only tend to intensify conflict between employers and labor. “If the N. R. A. which we are set- ting up for the future is to be suc- cessful, it must be run by public officials with no partisan interests,” he told the committee, of which Con- nery is chairman. The equal representation bill has the support of the A. F. of L., whose leaders recently said Richberg had “betrayed” organized idbor. He an- swered that they wanted him to serve a group rather than the Government. Although the administrative board which now operates N. R. A. includes representatives of labor organizations. some of their spokesmen have com- plained of inadequate representation on code authorities, An American Federation of Labor | headed by one of industry’s chief night | By the Assoclated Press. ADDIS ABABA, Ethiopia, February 19.—A government spokesman assailed | Italy today for dispatching “boisterous™ troops to Somalilard and Eritrea. | Ethiopia, the spokesman said, is) guided entirely by a pacific spirit ml conducting negotiations with Italy for | settlement of the Italo-Ethiopian dxs-i | pute. The official source said Ethiopia will | not duplicate Italy’s procedure, udd~|‘ ing that the Italian troop movements ' indicate a desire on Italy’s part to, | bring pressure to bear on the negotia- | tions for cstablishment of a frontier neutral zone. Previously, it was announced that an | agreement for creation of a neutral | area between Ualual and Guerlogubi had been effected. Ethiopia Sends Delegation. The Ethiopian announcement said | it was decided to send a joint dele- | gation to the border area to delineate | the neutral district. The section is adjacent to Italian; Somaliland where hostilities took place in recent weeks, leading directly to the crisis in Italo-Fthiopian relations. Government officials also disciosed | that they hoped other outstanding is- sues between the two nations would | be settled by arbitration as pmndedi in an Italo-Ethiopian treaty signed in 1928. | A government spckesman said there had been no further frontier clashes since the fighting near Guerlogubi on January 29. It was not disclosed what military preparations Ethiopia may be making in view of ltaly's dispatch of an East African expeditionary force. Establishment neutralized fron- | tier zones, to obviate the danger of further clashes between Ethiopian tribesmen and Italian border garrisons, was one of the proposals advanced by Italy for settlement of the controversy between the two countries. Italy also requested an indemnity of slightly more than $49,000 and a public salute to the Italian flag in Addis Ababa. TERMS HELD IMPOSSIBLE. Italian Spokesman Accuses Ethiopia of Making Unacceptable Conditions. ROME, February 19 (#).—Ethiopia was accused by a government spokes- man today of putting unacceptable conditions in the way of concluding a preliminary agreement for establish- | ment of a frontier neutral zone in the region of recent Italo-Ethiopian hos- tilities. As a consequence, the spokesman said, Italy may find it necessary to take ‘precautionary measures of a stronger nature.” The official sources said it was not | true as had been previously reported | at Addis Ababa that an agreement had been reached on creation of a nettral zone. “We suggested to the Ethiopian gov- ernment,” he continued, “creation of a neutral zone and they have more or less agreed in principle, but with cer- tain conditions. Cannot Aceept Conditions. “These conditions, however, we can- not accept. So we have replied to that effect and hope to get a settle- ment without these conditions.” One condition advanced by Ethiopia, the spokesman said, may possibly be (Continued on Page 5, Column 4) AR S S NS Speedway Builder Is Killed. CAPETOWN, Union of South Africa, February 19 (#).—“Bushman- land” Nesbitt, who built the Verneuk Pan Speedway in the desert in 1929 on behalf of Sir Malcolm Campbell, British auto racer, was killed in an automobile accident today. (#) Means Associated Pr: TWO CENTS. BIGGEST MILITARY BUDGET SINCE 197 15 GIVEN CONGRESS Committee Report on Army Asks $48,000,000 More Than in 1935. OTHER FUNDS PLEDGED IF STRENGTH IS RAISED Navy Measure Yet to Come—More Than $7,000,000 Provided for Air Program. By the Associated Press. The largest military spending pro- gram in 15 years was started through Congress today. The House Appropriations Commit- tee wrote its approval on expenditure of $318,131,482 by the Army during the fiscal year ending June 30, 1936. It told the War Department it might pledge an additional $7,686,753 for airplanes. The total recommended was $48,815,548 more than the 1935 appro= priations. The committee said it stood 1eady to provide additional funds if Presie dent Roosevelt takes advantage of the authority the bill gives him to ine crease the Army's strength from 118,750 to 165,000 men. $100,000,000 Increase. Taking the Navy into accoun’, the committee's report said, the 1936 budget for national defense is ap- proximately $100,000,000 in excess of the larges' regular annual appropria=- tions mad® for national defense since | the enactinent of the budget law in 1921. Th+« committee’s action on the Navy supily bill has not yet been re- ported, hyt the budget approved by President{ Roosevelt called for £792,« 000,000 {4* the two military branches, The cof¥mittee boosted the War De partmeng: military allowance $67 205 ove§ budget recommendations. Memberq of Congress pointed out that, on} a money bill has weathered the ApQropriations Committee, its battle #'much more than half won. In addition to the contemplated outrigh! appropriations for the Army and Nuvy, they are slated to receive $20.000.000 each from public works funds o be brought in under a separ= ate pending estimate. The Army's slice of this money wil lbe for construction at military posts, erecting an wirdrome in Hawaii and for seacoast defenses. Other Funds Likely. “Unquestionably, additional amounts will be forthcoming from recovery funds for Army housing and river and harbor and flood control projects,” the committee said. Rivers and harbors and related non-military activities of the War Department were allowed $60,567,966, a $§134,878 cut under the previous year. The committee explained, though, that the public works pro- gram will continue into the 1936 fiscal year and that therefore all of the War Department appropriation is for maintenance except $740,000 to- ward completion of a dredging con- tract for the Livingstone Channel, Detroit River. In addition. it exe plained, there will be $2,209.095 availe able from prior appropriations. ‘The committee authorized the Army to contract for 547 additional planes at an estimated cost of $7,686,753. It was explained 450 planes for the Regular Army and 19 for the Organ- ized Reserves would be for replace- ments during 1935, at the end of which 1,367 will be on hdnd. The new machines would raise the total to 1,445. Air Corps Funds Jump. The Air Corps as a whole drew $45,600,444, compared with $26,376,490 this year. The committee explained the increase was “for expansion in various directions, but very largely for new airplanes.” Provision was made to increase pilots’ flying hours from 225 to 300 a year as recom= mended by the Aviation Investigating Board headed by Newton D. Baker. The committee said frankly it was proposing “to pinch off a little sooner than otherwise would happen the lighter-than-air activities in _the Army, apart from free balloons.” Maj. Gen. Benjamin D. Foulois, as chief of the Air Corps, told the committee “we have practically abandoned them in the Army,” and the committee ob- served ‘“the enlisted personnel and the funds, in the committee’s judg- ment, would be better employed in the heavier-than-air branch.” No men- tion was made of the recent crash of the Macon, giant Navy dirigible. Permit Increase in Guard, In addition to authorizing the President from time to time to ine crease the Army strength to 165,000 if he sees fit, the measure would per- mit him to provide a 5,000 increase in the National Guard from the present total of approximately 187,000. Among the steps taken in the bill to strengthen ‘“weak spots” described by Gen. MacArthur, chief of staff, were: An increase of $367,862 to $590,914 for field exercises, including another command post exercise in the 4th Army on the Pacific Coast, and for the first maneuver of large forces— the 10-day concentration of between 50,000 and 60,000 men, including Na- tional Guard troops, of the 1st Army from New England, New York, Penn- sylvania, Delaware, Maryland and Virginia around Pine Camp, N. Y, east of Watertown. Would Raise Food Allowance. An increase in the daily food ale Guide for Readers Page. ..B-16 ..B-13 vves B-12 .A-15-16-17 A-9 Amusements .Comics Features Finance .. Lost and Found.. Radio ....... Serial Svol Service Orders Short Story .. ety ceeeee SpOrts wwescmmene lowance of soldiers. Allowance of $1,000,000 for motore ization, mostly for trucks. An increase of $2,986,890 for the Signal Corps, chiefly for radio equip- ment for airplanes. Provision of $350,000 to permit re- sumption of the National Rifle Matches discontinued after 1932. An increase of $163,996 for the | Military Academy with the suggestion that the Army's request to raise from two to three the number of cadets each member of Congress may name to West Point might well be granted,