Evening Star Newspaper, April 16, 1935, Page 9

HEDGING CHARGED TOBARUCH-BY NYE Munitions Prober Would Take Profit Out of War to Remove Danger. (Continued From Eighth Page.) — e legislative means of taking profit out of war, and it is that to which T wish to devote my remaining minutes to- night. Does America want to take the profit out of war? If we really want to accomplish that prevention, I be- lieve it possible, and if we do that I am sure that we will at once accom- plish large prevention against our be- ing drawn into more war. The World War witnessed the crea- tion of 22,000 new millionaires in America alone. Individuals and cor- porations reaped lavishly of profit, while our boys were giving their all in trenches for cause of flag and coun- try. Eugene Grace of the Bethlehem Steel Corp., for example, awarded himself a bonus of $2,800,000 in addi- tion to his salary during the two years we were engaged in the World War. It is not easy to forget who is having to pay the bill of the Bethlehem com- pany for war supplies, a bill that in- cluded this private bonus for its pres- ident. Nor can we forget that it was this same corporation that helped meet the cost of sending a man to the Geneva disarmament conference to wreck the chance of accomplishing any measure of disarmament. Defenseless Against Greed. To keep the record straight, let us review a few of the gains which cor- porations enjoved as a result of four years of war. showing the average annual profit during the four years preceding the World War, compared with average annual profit during four years of war for a list of American corpora- tions. The Republic Iron & Steel Co. saw its profits grow, as a result of war, from $4,000,000 to $17,000,000 a year, while General Motors climbed from £6.000.000 to more than $21,000,000; United States Steel profits jumped from a peace-time average of $105,000,000 to $239,000,000 during the war, while Bethlehem Steel was moving its profit | | the war Before me are figures | cess of $10,000 per year after all taxes are paid. As for corporations, our committee proposal fixes a very heavy war-time tax. No effort is made to limit the profits of a corporation, but after the profit is made it is subject under the pending bill to severe taxation. That tax would be 50 per cent of the first 6 per cent of the profit and 100 per cent of all profit over 8 per cent. Plugging Escape Holes. One cannot study taxation without knowing that corporations and indi- viduals with their highly paid lawyers and accountants have learned many ways to escape tax laws. Consequent- 1y, we have found it necessary to write into the bill provisions to stop every conceivable d.vice which the experts might r2sort to get around the law. Had the provisions of this bill been in effect during our two years’ participation in the World War, income of the Government would have exceeded the expenditures without the necessity of borrowing a penny through the sale of Liberty bonds. The next device in the bill is the industrial management draft. It does not provide, as some would have you believe, for conscription of man power or labor. It reaches only those cap- tains of industry vho so often in the last war engaged in schemes to hold up, defraud and cheat their Govern- ment. Critics Answered. As to the commodity control fea- tures of the bill, these provide for the closing of commodity and stock ex- changes and the abandonment of all price speculation during war. Critics say that if you do away with the profit motive or reduce it, you will not be able to get money to finance | industries. We need not worry about that. In the last war| the Government had to finance these industries, and will have to do it again. Therefore, we have set up in our bill a finance control commission to meet these needs. Finally, recognizing that there were strikes of capital during the last war, our bill provides strong powers for the Government which will enable it to commandeer plants and operate them during the war. Criticism Offered. Roughly I have summarized the provisions of the Senate committee's pending bill to take the profit out of war. The objectives, I believe, will be strongly indorsed by every American. Yet some, while seeming to indorse them, are unknowingly or deliberately misrepresenting the purpose of the committee and its bill. Opposition is THE EVENING STAR, WASHINGTON, D. C, TUESDAY, APRIL 16, 193 commandeer such business as won't do its part, just as it commandeers the men 'who must make the iight with blood and life in the front lines. It is high time, in light of Mr. Baruch's statement of today, that the people took their pens in hand and let their representatives know that they really wanted to see profit taken out of war, not just talk ebout. it. Here is a challenge if ever there was one. We see how business is going to attack, try to trim and make harm- less any legislative program that really seeks to take the profit out of ‘war. Profiteers will make themselves heard by Congress, be sure of that. Will the people try to make Congress hear them as well? If they don't they may expect auother war to wit- ness the du Ponts repeating their demand in the last war for larger profits and refusing for three months to respond to the request of their Government to build the additional powder factory the Government wanted built with Government money until larger margins of profit were assured. Drastic Action Needed. We ought to want to learn from history and common sense to pro- tect ourselves against being easily drawn into more war, to protect our society from the terrible maladjust- ments caused by war, the inflation and then the deflation which follows, the rising prices, the outrageous profits, the crushing burdens of debt to be passed on to our children and theirs It is these causes which have entered into our Senate committee’s consideration which is leading to the legislation we shall at once recom- mend. And none who know its pro- visions are going to consider it com- munism simply because it deals drastically with men and institutions whose patriotism is measured by the profit they can gain from war. . U. S. Trade to Be Sought. New Zealand will appoint a trade and tourist commissioner to the United States. to be expected. Fantastic, yet laud- able reasoning, will be resorted to, in an effort to preserve for greed the from $6.000,000 to $49.000,000 a year as a result of war. This same com- parison shows the du Ponts, with an average peace-time profit of $6,000,- 000 and an annual average war-time privilege and opportunity which war | has given. | One writer calls the program which T have here outlined “syndicalism, s0- LEADERS DISCUSS System of Magistrate "Courts to Aid in Enforce- ment Is Explained. A study of proposed changes in traffic law regulation an enforcement has been started by the District offi- cials and civic workers appointed by Commissioner Melvin C. Hazen to plan a new attack on traffic problems. A meeting was held last night under leadership of George W. Offutt, head of the Alcoholic Beverage Control Board. Corporation Counsel E. Bar- rett Prettyman outlined ideas on cre- ation of a limited system of magistrate courts, designed to relieve Police Court of much of its congestion of minor cases. Compulsory semi-annual mechan- fcal inspection of all automobiles is another proposal to be provided for intentative legislative draft. A uni- form system for modifying or drop- ping minor charges of traffic law vio- lation, to restrict “fixing” of tickets also is to be outlined. Among those attending the first session were H. Winship Wheatley, James G. Yaden, Richmond B. Keech, Edward W. Thomas, George W. Beas- ley, Wallace B. Robinson, Maj. Ernest W. Brown, Edward A. Dent and M. O. Eldridge. Prettyman and Offutt gave their | views of needed reforms at a lunch- eon meeting of the Advisory Board of the American Automobile Association yesterday. The A. A. A. plans to name & special subcommittee to co-operate | with the Hazen committee. Commis- sioner Hazen was a guest at the lunch- | eon. TRAFFIC CHANGES| PLAN' DISCUSSED VOTE FOR DISTRICT Sixteenth Street Citizens Refer Reorganization Pro- posal to Committee. Discussion of a special committee's report on reorganization of the Dis- trict government occupled the major portion of the meeting of the Six- teenth Street Heights Citizens’ Asso- ciation last night at the A. R. 8hep- herd School, Fourteenth street and Kalmia roed. The motion, which was referred | back to the committee for further study, resulted in a two-hour debate on the proposed plan introduced by Irwin Boletin, chairman of the spe- cial committee. National representation in the House, Senate and electoral college, a city council and a mayor are pro- vided for in the plan. The Board of Education would be elected by the people, while library trustees would be appointed by the city council. Judges Would Be Elected. Judges of the Police, Municipal and Juvenile Courts aiso would be elected by the people, as would the corporation counsel. All assistants to the corporation counsel would be ap- pointed by that office. The Public Utilities Commission, Alcohol Beverage Control Board, Pa- role Board. police and fire chiefs, in- | surance commissioner, heaith officer, | director of public welfare and all pres- | ent municipal department heads would | be appointed by the mayor, subject to the approval of the city council. District. appropriation bills uld ! be prepared by the council, after hearings, and submitted to the Bu- reau of the Budget and the commit- tees of Congress. Present legislative powers of the Commissioners would be taken over by the city council, while the ex- ecutive authority of the Commission- ers would be designated to the mayor. Provide for Councilmen. The President, under the plan, would be authorized to appoint a special commission to divide the Dis- trict into not less than 10, nor more than 15 precincts, each precinct to elect one member of the city council, who shall have resided in the pre- cinct which he represents for at least one year. Copies of the proposed plan will be sent to each member of the as- soclation for study, with a view to further discussion in the future. S = Power Output Climbs. Electric power production in Sweden broke all records last year. For the pérfec* DRY MARTINI MARTINI & ROSSI DRY VERMOUTH Imported by BEITZELL & CO. Distributors | |W.A. TAYLOR & CO,,N. Y. | Rescue Dog From Shaft. For rescuing a dog from an old coal mine shaft, Police Sergt. Weaver and Constable Fennihough of Bake- well, England, have been awarded Humane Society certificates. SPECIAL $50.00 For Your Old Furnace 0ld Well Discovered. ‘While laying gas mains in Dungan- non, Northern Ireland, workmen re- cently discovered a 36-foot well, be- lieved to be 100 years old, yet containing 11 feet of clear water. QUIET MAY OIL FURNACE bowest fuek cost. COLUMBIA SPECIALTY COMPAN INC. | cialism and communism.” The crack- profit of $58,000,000. | down artist of business says that this The profit of the du Pont Corp. for the four war years shows a return upon invested capital of more than 400 per cent Other corporations made even larger showings. Individ- uals enriched themselves while the world was afire and without defense against those who were reaping profit. To prevent repetition of that ex- | perience is no small task, vet I be- lieve the Senate Committee has on | its way a legislative program that will largely turn the trick. Starting on ‘Wednesday the committee will write up its program in legislative order, and it hopes by early next week to have its bill before the Senate for consideration. Fixing and Freezing Prices. In light of the disclosures which the investigation has developed, there | 15 in Congress much proposed leg- | islation to take the profit out of war. This is a splendid sign, and | Indicates a large will to meet the chal- | lenge. A week ago the House of Rep- resentatives passed and sent to the Senate the McSwain bill as a proposal to take profit out of war. This bill provides for licensing industries and would fix and freeze prices with the declaration of war, using as a base the average prices prevailing during the years immediately preceding the war. this program would have worked had it been in effect when the United States entered the World War. The war had been on for two years, and our American price structure had reached high. American industry | could have wanted nothing finer than | a guarantee of the prices that pre- vailed during those years just before | our entry into war. | The Senate Munitions Committee | believes that the House bill is quite inadequate, and that it will fail to protect us against repetition of the | frightful practices and costs that pre- vailed during the last war. The bill | which our committee is proposing en- | tertains an entirely different ap- | proach. The devices of our proposal | are: First, taxation; second, a draft | of industrial management; third, | commodity control; fourth, control of | finances and credit during war; fifth, | power to commandeer necessary pro-f duction. | . Let us consider these various devices in their order. The first, that of tax- | ation, is aimed at the cause of ex- | cessive profit. Excessive profits are | really the effect of a more profound | cause, namely the inflation which always accompanies war. In other words, high prices do not produce inflation; rather inflation produces | high prices. Therefore, it is upon us| to stop inflation. | Paid Three—Borrowed Seven. If high prices is not the cause, what is the cause of inflation? Inflation proceeds from the method of financing | war, War is a great business, and as soon as it begins, a tremendous new | industry is called into being. There is at orce call for vast munition pro- | duction, costing billions. In the last war we did not even try to pay for these things, instead we borrowed the money to meet the cost. In the war we spent $33,000,000,000. Of this we borrowed $22,000,000,000. Out of every $10 spent to fight we paid $3 and bor- rowed $7. Most of that we borrowed is left for our children to pay. That $33,000,000,000 poured into our economic machine produced inflation. Out of this flood, workers were paid. ‘They in turn spent their larger re- turns in peace-time avenues for lux- uries, as well as necessaries. This stimulation brought new competition to the war-time industry, labor be- came scarce, prices and earnings rose, executives and managers boosted their own salaries. Then workers demand- ed higher wages and there followed higher prices, larger profits and more wage demands. And finally this vicious spiral reaches inflated propor- tions which naturally invite an eco- nomic wreck. Pay as We Fight. The only way. then, to stop inflation is to stop the borrowing and pay for the war as we fight it. If there must be another war, let us, when we send our men into battle, prepare to meet the bills as they come. That can be done only by taxation. And since we are select in choosing the best, young- est and heelthiest to do our fighting in time of war, we should be equally select in levying the taxes to meet its cost, and those most able to pay should bear the brunt of the taxes occasioned by war. The legislation which the Senate Committee proposes provides a tax | upon jncomes starting at $500. The bill steps up the rate of taxation so that those earnings more will contrib- ute proportionately more in paying for the war. The bill provides a tax of 100 ‘per cent upon all income in ex- ’. At once one is struck by how | | today are saying, to no one's good, plan is but a scheme to use a war | emergency to destroy the profit system and shift the country over to com- munism. Another writer of larger reputation and responsibility declares this program to take the profit out of war a scheme to make the greatest war machine the world has ever known, a program playing into the | hands of any war party. | Communism and Profit. | Criticism of the program is invited and expected, but I do wish critics would know what they are talking about before they undertake their dec- larations. It would be well if they would read the bill before undertak- ing to tell what is in it. Calling the bill communism will hardly register with people who know that Com- munists are not in the least interested in regulating the profit system. The real Communist wants nothing quite so much as & war with the same old unrestrained, mad, selfish, grasp- ing after profits that existed during and after the last war. He believes, | and I think he is right, that if such a thing were to happen again, this system would destroy itself without a bit of aid from the Communists. Another objection raised is that the proposed bill will not prevent war. No one ever said it would. I wish such a bill could be writtem, but I rec- ognize the causes of war to be many and progress against these causes to be slow. Yet I am firmly convinced that if we remove the profit from pre- paring for war and then destroy in every American mind the prospect of profit from more war, there will be far 1 danger of war. A first result will be far fewer the numbers who ‘Maybe what we need to get out of this depression is another little war.” Seemingly people forget that the last war gave us the depression, and tI another might easily destroy our civ- ilization, Baruch Backs Down. This very day has developed the 8,271 men most surprising of critics of the bill. For years Bernard Baruch has been talking about taking profit out of war. For days he appeared before our com- mittee urging drastic programs to ac- complish this. Some of us wondered why he withheld indorsement of the proposal to provide a constitutional amendment which would give Gov- ernment in time of war the same power over property that it had our life. He insisted that the Govern- ment already has this power, in spite of the fact that property dictated the terms when the Government asked its co-operation during the last war. | Today Mr. Baruch issues a state- | ment to the press hedging on the| position he took when he was be- fore our committee some days ago. According to his newest statement he has discovered that our commit- tee plan would take the profit out of war—not jnst a little of it but practically all of it. Now he says the bill is too drastic, that we would be | defeated in another war under such legislation because business wouldn't | do it's share of fighting and helping to win the war when it's profits were 30 restricted. May heaven preserve us! | T've expected some one to say that. | But Mr. Baruch, I never expected it | to come from you. Business Fights for Profit. So American business won't pro- | duce what is needed in war if it can't have its profits! So American busi- ness will not go into a war on the same basis that the boys go in when they are called! Well, if this be true it is high time America knew it. And double is my conviction tonight of the need of a constitutional amendment that will let the Government in time of war It’s a Wonderful Way to Soothe Ugly Eczema Soothing, cooling, healing Zemo re- lieves itching distress and helps you escape from the tortures of Eczema. For 25 years this wonderful remedy has produced such amazing results because of its rare ingredients. Get Zemo today—for Rashes, Pimples, Ringworm and Eczema. Worth the price because you get relief. Tested and approved by Good Housekeeping Bureau, No. 4874. 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