Evening Star Newspaper, May 9, 1935, Page 2

POLITICAL CONTROL OF 1 BANSSEEN Administration Measure fiives President Full Power 7 Over Board. * BY DAVID LAWRENCE. Just 100 years ago the United States had a central bank, which, because of titical domination, helped to bring the panic of 1837. The second experiment in a polit- faally controlled central bank is about te- be undertaken, but with greater powers to the Federal Government in its control of banks and banking than ever before in American history. “The questions at issue in the bill which is expected to pass the House of Representatives this week is whether business and banking shall have any real voice at all hereafter in the man- agement and volume of credit, and whether the Federal Reserve System set up by President Woodrow Wilson in 1913 shall be completely over- thrown. The administration measure, spon- sored by Gov. Eccles of the Federal Reserve Board and approved in the main by President Roosevelt himself, would vest ir a board, appointed by | the President and really removable at bis pleasure, the power to bring on inflation or to institute deflation, de- | pending upon the judgment of the small board in Washington. Suggestions Rejected. In effect, the proposed measure | makes it possible for as large or as &mall an amount of the deposits of the American people to be used by Federal Reserve banks for the purchase of Government securities whenever the Federal Reserve Board shall raise or Jower the so-called reserve limits, which hitherto have been fixed by law and now become & matter of govern- mental whim. The American Bankers' Association began last October, after its “truce” with the White House, a series of con- ferences with the idea of collaborating with the administration in the work- ing out of a sound measure. Con- structive criticism was given without | public controversy. The bankers were advised that the administration would | ‘welcome constructive advice. Now, after several months of such eonversations, it is apparent that the administration has rejected the funda- mental principles of the main sugges- tions made, and the bankers are just where they were six months ago, only } now they knew that most of the so- | ealled pleas for constructive criticism and suggestions are mere lip service because the administration has pre-j conceived notions about what it wants to do, anyhow. Plan to Produce Conflict. | What’s What Behind News In Capital Pension Ruling Sad- dens Donald Richberg, Author of Rai! Law. BY PAUL MALLON. NE man was saddened more than others when the Supreme Court scratched out the rail workers' retirement law—the misunderstood co-ordinator of the New Deal, Mr. Donald Richberg. ‘You may not believe it, but Mr. Rich- berg wrote that law which was torn wsunder unmercifully by a 5-to-4 majority of the court. The law bore the names of ex- Senator Dill and Representative Crosser, but they got it out of the old unpassed Wagner bill of 1932. The Wagner bill was conceived and executed for Semator Wagmer by Mr. Richberg, in association with two other labor attorneys, working for the standard railroad unions. The secret is of more than passing importance because of Mr. Richberg's prominence in the coming N. R. A. test case before the court and his activity in the redraft of N. R. A, legislation now pending in the Senate Indeed, there are many who believe that Mr. Richberg has just begun to play Quixote to the Supreme Court windmill. Whistling in Dark. The New Dealers are whistling in the dark in their optimistic statements about coming court decisions on . R. A, T. V. A, social security, etc. a Political bookies dropped the odds heavily on the N R. A. test case im- mediately after the rail labor decision. Few good lawyers here believe the | court can uphold the N. R. A. if it follows the reasoning adopted in the rail labor case. One hidden line in the labor decision hints at the probable attitude of the court majority on N. R. A. “The contention (of the Govern- ment) comes very near to this—that whatever some (railroad) carriers choose to do voluntarily in the man- agement of their business at once in- vests Congress with the power to com- pel all carriers to do. The fallacy is obvious. The meaning of the com- merce and due process clauses of the THE EVENING FREE PH“.IPP'NES Mellon Tax Hearing Resumes SEEN AS MENACE Gibson Report Says Island Liberty Will Bring Japan- British Clash. By the Associated Press. Fear that American abandonment of the Philippine Islands might “bring Britain and Japan face to face” there and disturb the whole Far Eastern situation was expressed today by Sen- ator Gibson, Republican, of Vermont, in recommending that the Filipinos ask Congress to withdraw its grant of sovereignty to them. Submitting to the Senate the sec- ond report made by individual mem- bers of the Tydings Investigating Committee that visited the islands last Winter, the Vermont Senator, who voted for the bill granting free- dom to the Philippines in 10 years, said his trip there changed his mind as to the advisability of independence for the islands at this time. Backs McKellar View. Senator McKellar, Democrat, of Tennessee, another member of the committee, expressed a similar con- viction In a report last week. “Japan is moving in as we are moving out,” said Senator Gibson. “England, in the event of our final withdrawal, will not suffer any other nation to block her lanes of trade or endanger her free passage to Aus- tralia and to her many bases in the East. “The situation created by our with- drawal may bring Japan and Great Britain face to face in the Philippines with a common problem. English diplomacy is not wholly altruistic as to objectives. A solution may force & secret treaty to delimit the spheres of influence and control the trade of the Philippines. Would Limjs Freedom. “I cannot divest myself of the firm be far better off if they had some form of independence under Ameri- can sovereignty.” Senator Tydings, Democrat, Maryland, chairman of the Investi- gating Committee and author of the | independence law, has not yet sub- mitted a report. It was suggested authoritatively today that a majority | report might not be submitted at all, | since the committee members differ so widely on their conclusions. | NAVY AIDS OFFICIALS. | Co-operates in Bringing Revolt Lead- ers to Justice. | MANILA, P. I, May 9 (#).—Dis- | closure that American naval authori- | ties are co-operating to bring justice | to Sakdalista extremists who par- The plan of the administration iS| Constitution is not so easily enlarged | ticipated in last week’s uprising in going to produce a conflict which probably will bring repercussions throughout the United States, in every city and town where the people who understand the difference between politics and business management are likely to have the question pre ated to them. Congress is particularly responsive | to pressure nowadays, and it is prob- able that Father Coughlin will get behind the administration tanking bill and tend further to crystallize the points at issue. It will be interest- ing to learn whether the depositors in the banks of this counuy who are anxious to have their funds safe- guarded are more numerous than the disciples of political banking. The administration plan, of course, bas no purpose except nationaliza tion of banking, although any such objective is denied. The officlals of the administration insist also that, under their plan, the people’s money will be safer than it has been hereto- fore. The trouble, of course, is that po- 1itical pressure exerted upon a govern- ment board tends to encourage infla- tlon and never to arrest a boom by deflation, whereas private banking, as & whole, however overcautious or un- wise it may have been in particular instances, will never hesitate to call a halt when unsound conditions are on the horizon. Points at Issue. ‘Thus, the history of the Federal Reserve Board shows that Congress has passed resolutions and exerted pressure upon that institution when- ever deflationary measures were un- der consideration. - The points of difference between the American Bankers' Association and the administration go to the heart of the matter of political or business management. Here are the points: ‘1. The administration wants a Pederal Reserve Board of eight, all the members of which would be ap- pointed by the President and really removable at will, for such is the power claimed by Mr. Roosevelt with réspect to all executive appointments. < 2. The bankers suggested a board of five members, with the term of office fixed at 12 years and with pen- sions provided for retirement, so that members would be independent of any inducements to return to private banking. : 3. The administration insists that the power to fix rediscount rates, to Taise or lower reserves and the power to initiate open market purchases of Government bonds shall be left en- tirely to the board, as at present con- stituted, and that the Secretary of ae Treasury be retained as a mem- 2. Government Would Control. 4. The bankers want a committee of four governors, selected from the governors of the 12 Federal Reserve banks, to sit with the Federal Reserve Board of five, making a total of nine members, and they ask that this group shall decide on open market pur- chases of Government securities and rediscount rates. Under this plan, the Government would have five votes and the Federal Reserve banks four votes, but the bankers feel that, if the Presi- dent appoints five capable men for a tenure ot 12 years, as nearly disinter- ested judgment as possible would be obtained. The Federal reserve banks are pri- vately owned and managed. If the administration plan goes through, there would be a small committee of governors of reserve banks to act in an advisory capacity, but without vote. Thus will the Government, through political appointees, entirely control the volume of credit and the power to inflate or deflate at will. The issues are fundamental and constitute an system—a change pat politically managed Central Bank of France and departing entirely from the principles of sound management of the Central Bank of England. (Capyright 1935.) Prison Tipping Banned. READING, Pa. (#).—No more shall a tip to the jail barber bring an extra spray of hair tonic or sweet smelling lilac to Berks County Prison inmates. All tipping was ordered abolished yesterday by the Board of Inspectors after a report denounced the practice, | Park to attend the cows. | by the voluntary acts of individuals or corporations.” If that does not strike at the theory | of the N. R. A, some very good law- yers here are in error. Court’s Narrow Margin. ‘The only ray which keeps New Deal legal lights shining is the fact that the 5-to-4 line-up of the court is so narrow that one man can change it. Also, lawyers seem to agree the labor decision does not fundamentally injure the chances of the social se- curity program. This program is not based on the Federal jurisdiction over interstate commerce, but on the power of Congress to tax. It is frankly in- trastate, just as income taxes are. This is an entirely different principle, which usually has been upheld by the court. “Life Begins” Later. Those who believe life begins at 40 will be encouraged still further by the labor pension decision. It held life does not end at 65. The prize line of the majority decision was: “It does not follow, as contended, that a man of 65 is ineflicient or incompetent. The Jacts indicate a contrary conclu- sion.” This view was subscribed to by four Jjustices over 65 (Sutherland, McRey- nolds, Butler and Van Devanter) and one who is the baby of the court at 60, Mr. Roberts. Guessing About James. A free guessing contest is on among insiders about the reason why son James Roosevelt is going back to Hyde The official explanation seems to be true as far as it goes. James has not been in good health and the estate needs managing. The favored supplemental guess, however, is that his business activ- ities were embarrassing to the White House. No relative of a President can be in business with- out causing embarrassment. No matter how independently a presi- dential son may conduct his business aflairs, competitors, ene- mies and even friends are bound to assume that he has power and pull beyond their reach. The mere existence of such a sit- uation usually causes a flood of sneaky stories which cannot be ef- fectively answered or denied. | Withdrawal of James also is an- other indication that the adminis- tration is caulking the seams for the President Roosevelt known his attitude on the bonus in April, 1932. In an interview with James J. Montague, of the North American Newspaper Alliance, the President then said: “I don't see how, as a matter of practical sense, a Government run- ning behind $2,000,000,000 annually can consider the anticipation of bonus payments until it has a balanced budget, not only on paper, but with a surplus of cash in the g But in that same interview, Mr. Roosevelt also said budget deficits should not be permitted to continue for more than one year. ‘To Renounce Pensions. The final bonus law will contain a clause renouncing pensions for ‘World War veterans, but no veteran needs to take that too seriously. Ten years ago the Legion was against a bonus. Ten years from now there will be a pension system. Railroads are going chead on all time. Most large railroads have mmwnmalflwm,aw- The liberals have been secretly afraid all along that Justice Roberts would desert them. They regarded the labor decision as the first con- firmation of their fears. N. R. A. officials now privately confess their organization is in a state of “progressive paralysis,” but it continues to take on new workers. which, it was said, extended even to the laundry. L 4 Six were hired in the last two weeks. (Copyright. 1935.) s, | which 60 were killed was made today | when Rear Admiral Wiliiam H. Allen | agreed to turn a Filipino coxswain | over to civil authorities. Simultaneously Allen, who is com- mander of the 16th Naval District, issued orders that all employes of | Cavite Navy Yard who are connected | with the Sakdalista movement be | dismissed. Most of the yard’s em- ployes are Filipinos. About 40 alleged Sakdalistas al- ready have been reported blacklisted by the navy yard. The coxswain, Julian Saria, was charged with sedition and actual par- | ticipation in the rioting. Civil officials pushed their clean- up of extremists who actually par- ticipated in the uprising and at the same time made peace with Sakda- lista leaders in Tayabas Province, where there was no violence. The | the plebiscite.” Elaborate precautions have been taken to guard against violent dem- onstrations during the plebiscite next Tuesday on the proposed Philippines Commonwealth constitution. 48-PL;NE ARMADA HOPS FROM HAWAII ON 1,323-MILE TRIP (Continued From First Page.) that when the papers come out with the news. The dispatch of a flight of naval planes from Hawaii to Midway today was supposed to be a aeep, dark se- cret. « But somehow the news leaked out and was broadcast on commercial programs. The Black and Blue fleets, steam- ing to their “secret” rendezvous, re- ceived this information by a simple twist of radio dials. Further, according to a story in cir- culation here, a news service supply- ing matter for the Navy Department to broadcast to the fleet figured out the positions of the rivals in the Pacific. They also figured this might inter- est the Navy. It did. The news was broadcast by the Navy to the fleets and rival admirals were enabled to read each others’ positions over their morning coffee from the radio news sheet. The Navy high command wrathfully took the press association to task and was informed that the watch officer on duty in the office of naval com- munications could easily have censored the news. Meanwhile, the attack and defense of the West Coast and Alaska went on under a mutual, if somewhat un- ethical, advantage. “But it just isn’t cricket!” as one Debates motion to take up Norris T. V. A, amendments. PFinance Committee studies social security bill. House. Considers amendments to omnibus banking bill. Labor Committee considers, Wag- ner-Connery labor disputes bill. TOMORBOW. Senate: On the floor: Motion to take up Tennessee Valley Authority amend- ments, or possibie reconsideration bonus vote. Finance Committee, executive, con- tinuing work on social security bill. Military affairs, regular weekly meeting. Commerce Committee, 10 o'clock, hearing on bill relating to maritime liability rules. House. Considers farm credit bill. Subcommittee on Fiscal Affairs of the District Committee begins hear- ings at 9:30 am. on the Ellenbogen rent-control bilk conviction that the Filipinos would | of | leaders in Tayabas promised there | would be no disorders “at least until | | N.R. A STAR, WASHINGTON Lord Duveen (left), noted art dealer and critic, and Andrew Mellon, photographed as they discussed the Government suit to collect more than $3,000,000 in additional tax and penalties on the financier’s 1931 income Mellon has filed counter suit, contending he claimed exemption on more than $3,000,000—the claimed value of an art collection hc has turned tax. over to the A. W. Mellon educationa. was to testify on the value of the paintings. —_— % | ART CRITICS LAUD MELLON PAINTINGS AT TAX HEARING (Continued From First Page.) Lord Duveen asserted these pictures are among the finest of their kind in the world. The white-haired former Treasury Secretary, sat inside the counsel rail as his attorney, Frank J. Hogan, drew from Lord Duveen and Dr. Valentiner their expert opinions as to the great value of the collection. The five paintings to which special reference was made were Raphael’s Alba and Cowper Madonnas, Van Eyck’s “Annunciation,” Botticelli’s “Adoration®ot the Magi” and Titian's | “Toilet of Venus.” Both experts agreed that these pictures are among ' D. C, 1 and charitable trust. Lord Duveen —A. P. Photo, |the finest examples of old world art | to be found anywhere. | Lord Duveen sold the Cowper | Madonna to Mr. Mellon for $836,000, representing a profit of $75,000 over the price he paid the Soviet govern- ment for it, it was testified. “The Alba Madonna,” he said, "lsi finer than the Sistine Madonna at| Dresden. The Cowper Madonna is as | fine as the Alba, I think, but the Alba is more important and larger | and more valuable.” | He expressed the opinion the Alba | Madonna alone is worth $1,000,000 and he said he is ready “right now” to | pay Mr. Mellon $750,000 for it. He | said it is “one of the greatest master- | pieces.” “I refreshed my recollection of the | Alba Madonna at the Corcoran Gal- | lery yesterday,” Lord Duveen said, | ‘and I found it in marvelous condi- | tion. All the pictures there were in excellent condition.” FARM MEASURE TOBETAKEN 1P House Leadership Arranges for Bill to Follow That on Banking. BY WILL P. KENNEDY. The House leadership has arranged for calling up the Farm Credit Ad- ministration measure late today im-| | mediately following the banking bill. This will undoubtedly be passed promptly. It is an administration measure, but program. The bill is one of a half dozen which Speaker Byrns expects to have passed, sandwiched in between the most im- portant bills on the Roosevelt program, | while the House is waiting for com- mittee action to be completed on such | measures as the public utilities and Amendments Proposed. The bill proposes to amend the em- ergency farm mortgage act of 1833, the Federal farm loan act, the agricul- | tural marketing act and the farm credit act. ‘This legislation will make additional funds available for land bank com- missioners’ loans, will extend the pe- riod in which loans can be made from 1936 to 1940 and will extend the ma- turity date on loans secured by first and second liens on real property from 13 to 43 years. It is composed largely of amend- ments which the Farm Credit Admin- istration found necessary for more efficient work. It includes all of the banking facilities for agricultural re- lief: The Federal Land Banks, the In- termeidate Credit Banks, the Produc- tion Credit Corp. and the co-operative banks. Commissioners’ Loans. Under the original set-up, out of the $2,200,000,000 revolving d, only $600,000,000 was available for com- missioners’ loans. This takes off the limit and makes all the funds avail- able either for Land Bank loans or commissioners’ loans. The Land Bank loans could be made up to 50 per cent of the value of the property, and com- missioners’ loans could be made up to 75 per cent of the value so that when the funds for commissioners’ loans were all out at work there was a 50 per cent limit. This makes the entire fund available for both kinds of loans. This revolving fund is also increased by the sale of securities. At present, there are a number of outstanding loans being refinanced. - PROCESSING TAX PLAN IS UPHELD BY PORTER A. A. A. Executive Forecasts Equalizer Between Industry and Agriculture. By the Associated Press. NEW YORK, May 9.—Retention of the processing tax or adoption of some other equalizer between indus- try and agriculture was predicted last night by Paul A. Porter, executive as- sistant to the administrator of the A.A A Speaking before the Economic Club of New York, Porter said, “The tariff equivalent of the processing tax or some better device yet to be developed is, in my opinion, & permanent mechanism for agriculture.” He declared that prior to adop- not on the “must”| NEW ANITY PACTS SOUGHTBY FRANCE Friendship Mission Leaves for Rome—Laval to Head East Sdon. By the Associated Press. PARIS, May 9.—France, ceaselessly seeking security against war, moved today to strengthen friendships abroad nd bolster defenses at home. Gen. Victor Denain, minister of alr, left for Rome to work out the broad lines of an Italo-French air assistance “ treaty, while Foreign Minister Pierre Laval made ready to leave for War- saw and Moscow on his long-planned political fence-mending expedition. | Simultaneously the government put | into effect plans to mobilize reserve units and private organizations as part of its eampaign to tighten national de- fenses in the face of German rearma- ment. A “home defense” battalion, nom- inally composed of men, at Lille, was given an official standing by | presidential decree and placed under the direct orders of the war m.inister to aid aerial defense of the frontiers. Creation of this organization, con- stituting a sort of local militia, was part of the government’s plan to en- courage voluntary assistance of the nation’s air defense. President Lebrun's decree said the Lille units would “reorganize with a | view to participating in aerial defense | in the triangular district ot Lille, | Roubaix and Tourcoing, with the min- istry of air determining the means of recruiting and instructing and the methods whereby the battalion will be called for the air defense of the territory.” A squadron of three airplanes con- veyed Gen. Densin and his staff to FLOOR SPACE ALLOTTED IN INTERIOR BUILDING Interior Department officials yes- terday made public the names of units scheduled to occupy the newly-con- structed seventh floor, built on top of the Interior Building. Already in new offices there are the Division of Government Space Control of the Buildings Branch, National Parks Service; the Press Section of the department, and of the Public | Works Administration and the Division of Territories, as well as some P. W. A. units. The Division of Purchase and the Division of Grazing will move into the new quarters soon, along with some P, W. A. employes. Workmen today. were finishing up the painting of the offices and corridors and the laying of tile on the roof. ‘The Branch of Plans and Design of the National Parks Service last night be- gan moving into the new seventh floor quarters of the Interior Depart- ment, from the Architects’ Building across the street. Only a Few Price § 1 at_The Evening Star Business Office. or by ‘mail, postpaid THURSDAY, | old age and unemployment insurance. | demanded by the Board of National The Euvening Star ',_-__...o,. [ A | Name ... ] Street LM................. MAY 9, 1935. ILLINOIS WORKERS MARCH ON GAPITOL Leaders Say They Will Camp Until All Relief Stations Are Opened. By the Associated Press. SPRINGFIELD, Ill, May 9.—Mem- bers of the Illinois Workers’ Alliance, called to Springfield for a Statewide protest against the closing of relief stations, today started congregating near the State house. Gerry Allard of Springfield, Cen- tral Illinois chairman of the alliance, announced members from all parts of the State would march here to picket the State house, 500 at State House. Allard led 500 members of the workers' alliance to the State house grounds Tuesday. He presented & list of 10 demands to Gov. Horner, ask- ing that relief stations be reopened and the sales tax bill defeated. As his followers disbanded he promised “starvation march” if the relief crisis were not ended. The Legislature continued dead- locked. The House, for the third time, refused last night to give a two-thirds emergency majority to the tax in- crease-relief financing bills. Mean- while, 91 of the 102 counties have spent their last money from the Illinois Emergency Relief Commission. Against Emergency Clause. Whether another effort to pass the bill would be made has not been de- termined. Some legislators advocate acceptance of the measure without an emergency clause which would delay its effective date until July 1. Nearly 200 men were at the site of the old arsenal, across from the State House, and truckloads of reinforce- ments were reported en route. Edward C. Morgan of Staunton, State president of the Illinols Workers Alliance, and Allard were in clm-ge‘ of the marchers. Leaders said the men would camp | in Springfield until all relief stations ‘were reopened. | Acting Supt. L. M. Taylor of the State highway police said the men would not be permitted to enter the | State House grounds. | PRESBYTERIAN BODY TO DEMAND REFORM Will Ask Profit-Motive Curb,‘ 0ld-Age Pensions and | Child-Labor Ban. By the Associated Press. | PHILADELPHIA, May 9.—Subordi- | aation of the profit motive in business, and joint Federal, State and local abolition of child labor are to be Missions of the Presbyterian Church in its report to the annual Presby- terial General Assembly. A statement given out today at the offices of the Presbyterian Church in the U. 8. A, said the board’s report on social questions will be presented to the assembly after it convenes in | Cincinnati, May 23. The report was formulated by the | board’s Committee On Social and | Industrial Relations, of which the | Rev. Dr. T. Guthrie Speers, of Balti- more, is chairman. | The report states that during '.he{ past 15 years democracy has almost | entirely disappeared, and that - | ica is in greater need of “intelligeht thinking in terms of Christian ideals” than ever before. The report em- phasizes “an insistent demand that the church must stand for a social order on which there shall be no locked doors between groups.” STUDEBAKER TO SPEAK Will Address Washington Round Table Luncheon Tomorrow. Dr. John W Studebaker, commis- sioner of education, will be the guest | speaker at tomorrow’s luncheon meet- ing of the Washington Round Table at the University Club, it was an- nounced today. The group is s} a special Mother’s day service Sunday at 8 p.m. at the Chevy Chase Baptist Church, Chevy Chase circle. Rev. H. W. Bur- gan will be the speaker. FIREMAN WOUNDED CHICAGO, May 9 (#)—Fire Lieut. John Walsh, 37, was shot and criti- cally injured early today while seek- ing a blaze in answer to an alarm. Walsh was struck in the abdomen by a bullet fired through the door of & Chinese laundry a moment after he knocked. The police satd that Goon Sing, 42, owner of the laundry, told them that he fired the shots because several at- tempts to rob his place had been made recently and he believed that the knock on the door was the re- turn of robbers. Sing, his father, Sam Goon, 70, and an uncle, Sam Sing, 65, were arrested. Physiclans said Walsh, father of five children, had little chance to re- cover. —_ Match Causes Gas Explosion. CHICAGO (#).—There was a loud explosion. Residents of the neighbor- hood directed firemen to a house, and there investigators learned that John Zurek had turned on the gas in a water heater. Later it occurred to him to light it. The gas exploded, but nobody was hurt. Days Morge Offers Its Readers A complete description of the permanent de- partments of the Fed- eral Government and the Alphabet Bureaus of the New Deal. “There could be no better text lmokl for thedlAmeri; can ople, re; less O age, 5:-? this ogn.el.l”—Allen T. Treadway, member of Congress from Massa- chusetts. Y T TP T State..... e e e e e e e e e o e | lette, Progressive, Map shows location in Africa of the former German colony, South- west Africa, mandated to the Union of South Africa after the war and now involved in German demands for return of her former colonies. The Union of South Africa is re- ported willing to yleld the mandate. (Story on Page A-1.) PEASON NEASURE SAF, SAYS BORA Doubts High Court Ruling Will Block Action on Security Bill. By the Associated Press. Senator Borah, Republican, of Idaho | joined today with those holding that the Supreme Court’s recent declsion wiping the rallroad pension law off the books would not block action on the “I don’t see that it is going to put | up any bars for the social security | legislation,” Borah said. Administra- | tion lawyers previously had dechred{ their opinion that the decision was not a blanket injunction against all social legislation. Borah's expression came as the Senate Finance Committee, acting on administration advice, started ex- ecutive consideration of the social program with a view to reporting it | to the Senate by the end of the week, | if possible. { Many proposed changes in the ad- | ministration bill were before the com- | mittee. One of the liberalizing pro- | posals, advanced by Senator La Fol- | of Wisconsin, would | raise the old-age benefits. The present | bill says the Federal Government would advance $15 a month if the| States matched it. La Follette had | not decided whether he would ask for | a special increase, say to a $20 limit, | or seek to remove the limit altogether. Would Give States Powers. La Follette also planned to ask for a change in the unemployment | insurance program to permit States| to enact laws for company reserve plans if they chose. A Wisconsin law, now in effect, permits companies to set up unem- ployment reserves individually, and | many millions of dollars have been collected under it. If the present| proposal for State-wide pools should | go through La Follette said it might | require refunding all the money col- lected in his State. Chairman Wheeler of the Senate Interstate Commerce Committee pre- | dicted today that the Supreme Court’s rail pension decision would increase agitation for public ownership of rail- roads. He said the court’s majority opinion “limits the rights of Congress over interstate commerce,” and assailed the reasoning behind it as “unsound.” “This decision will make a mil- lon railroad employes realize that the only way they can get a pension is through Government ownership,” Wheeler said. Both the White House and Capitol yesterday received legal opinions meas- uring the security bill—with its old- age pension and unemployment in- surance taxes—by standards set in the Supreme Court’s invalidation of the railway retirement act. President Roosevelt held confidential for study the views given him by Attorney Gen- eral Cummings. Distinction Is Seen. But Angus D. MacLean, assistant solicitor general, told the Senate Fi- nance Committee the rail decision ‘would not upset the security program because the bill was framed on dif- ferent constitutional grounds than was the railroad law. After this testimony Chairman Har- rison said the committee would bring consideration of the measure, section by section, today with the hope of reporting it to the Senate by the week end. The Justice Department view, how- ever, was challenged sharply in some quarters. Senator King, Democrat, of Utah, said he still felt sections of the security bill were flatly unconstitu- tional and strong factions within the committee, including other Democrats, ‘were preparing to fight for important modifications. LETTER EXCHANGES HANDLE MUCH CASH Springfield Residents Join Mad Scramble to Get Rich by Mail. By the Associated Press. SPRINGFIELD, Mo, May 9.—The spirit of old King Midas remained unbroken here today. Unlike the king with the fabled touch, money-mad chain letter fans showed no signs of tiring of bargains they snatched up in the “cheater- proof” chain letter exchanges. So- clety women, maids, grocery clerks and staid business men joined in the rush to cash in on chains with an initial investment ‘ranging from $2 wr‘:&e were reports that three of the so-calied letter “factories” had had a turnover of $18,000 in fiye The “Get-Rich-Quick Walling- fords” forced the exchanges to remain open until an hour after midnight. Many were open at dawn today. As more and more chains were started, salesmen were added to the retinue of notaries, stenographers and clerks. unable to sell their chains turred them over to the sales- men for disposal at ® 50 per cent commission Fans ciaim that a $3 continued unbroken, would $3,072. No fortunes are but no one appears to about who will foot not yet. % chain, bring 1t in guaranteed, be worrying the bill—at least CHARACTER WORK EXTENSION URGED Ballou Tells Board Consult- ants Will Discuss Flans Soon. Extension of the character educa- tion experiment to the first, second and third grades was suggested by Dr. Frank W. Ballou, superintendent of schools, in a report to the Board of Education yesterday, reviewing the w of the character program to He said such an extension, tsgether with the advisability of installng the character program in additional schools during the next school year, will be discussed at a meeting of character education consultants later this month. Details and final aecision in the matter hinge, however, on whether Congress decides to appro- priate money for continuance of the experiment. The appropriation was stricken out by the House, but rein- statea by the Senate District Com- mittee. “As a result of our experience in the past seven months of the char- acter education program, we have come to the conclusion that we ought to find a way of extending tne pro- gram to the first, second and third grades, even if we have to let up somewhat in the junior and senior high schools,” Dr. Ballou asserted. Earlier Beginning Favored. He explained school officials feel the character training would be more effective if begun earlier. Dr. Ballou discussed with the board members whether the name “char- acter education experiment” was mis- leading, and concluded by suggesting the term “congressional demonstra- tion” as more suitable. The character work is based on the principle of individual treatment ot | administration social security program. | each child and affording the child th greatest opportunity to develop his own capabilities, Dr. Ballou said. The report filled 18 pages and re- cited numerous case histories anc methods used to correct particula: conditions. At the conclusion of the report, Mrs Philip Sidney Smith, board member who first requested that it be rendered asked Dr. Ballou to keep the board in close touch with his plans for the future. In response to a question by George Whitwell, another member of the board, Dr. Ballou said it is too early to notice improvement in the juvenile delinquency situation. On February 6 there were 452 pupils on probation under Juvenile Court order, and of this total, 99 were pupils in the eight day schools in which the character education experiment is being carried on, Dr. Ballou revealed. As a further development of the program, Dr. J. Hayden Johnson recommended assignment of adjust- ment teachers to train mal-adjusted children in the colored junior high schools. Child Labor Issue. Consideration will be given at the board’s next meeting to the bill re- cently introduced in the House by Representative Mary Norton aimed at liberalizing the present District child labor law to permit theatrical per- formances here by children. Dr. Ballou spoke in opposition to the bill, saying it would make the Board of Education a censor of the moral fitness of each play in which a child has any part. The bl would require the boaid to pass on the morality of the production before the child could perform, thereby present- ing a great administrative difficulty, Dr. Ballou declared. Aroused by notification from the ‘War Department that it would be im- possible this Summer to establish a C. M. T. camp for colored high school boys in this region, Charles H. Hous- ton, dean of the Howard University Law School, served notice he would “fight to the enc for participation of Negroes in all phases of the armed defense of this country.” The board previously had voted to investigate the possibility of camps for Washington high school boys. It was informed that students of the white Washington high schools already are being cared for in C. M. T. camps and that it is financially impracticable to establish a colored camp here. On recommer.dation of Mr. Houston the board accepted an offer of the American Legion of sabers for the captains of winning companies in white and colored high school cadet competitive drills. EX-CONVICTS CONFESS $12,000 BANK HOLD-UP Nabbed at Cleveland En Route to Airport—=Satchels Hold Money and Pistols. CLEVELAND, May 9 (®.—Two paroled convicts who admitted after their capture by Cleveland detectives early yesterday that they participated in a $12,000 bank hold-up at Eden, N. Y., Tuesday waived extradition. ‘The men gave their names as Milton Rutherford, 25, Brooklyn, N. Y., and Albert Cassidy, 29, Portland, Oreg. Inspector Cornelius Cody said the men pleaded with the four detectives to “let us take it on the run while you shoot at us.” He said they explained they were paroled convicts and pre- ferred that to capture. Detectives arrested the men as they waited in front of a hotel for a taxi- cab to take them to the airport. The detectives said three satchels which the men were carrying contained $5,000, some of which still was wrapped as it had been when taken from the Bank of Eden yesterday three pistols and 500 rounds of ammunition. LERROUX GOVERN;AENT WINS ARMS SUPPORT Spanish Congress Hears Plan to Boost Budgets for Mili- tary Power. By the Assoctated Press. MADRID, May 9.—The new govern- ment of Premier Alejandro Lerroux won a vote of confidence last night, 189 to 22. shortly after it had formally entered Spain, traditionally neutral, in the European armaments race. A tense Congress, meeting for the first time since Lerroux's former mi- nority government resigned to be suc- ceeded another including five members of the powerful Rightist coalition, heard the premier declare the government planned to modernize and increase the nation’s military power. Plans already prepared, it ‘was learned, call for expenditure of 500,- 000,000 pesetas (about $68,000,000) in five years to fortify the Balearic Is- lands and another 200,000,000 (abuut $27,000,000) for aviation and otrer improvements. Lerroux was expected to announce further plans soon. ‘. o §