Evening Star Newspaper, June 30, 1935, Page 32

THE EVENING STAR With Sunday Morning Editien. WASHINGTON, D. C. SUNDAY ..................June 30, 1935 THEODORE W. «....Editor NOYES.. The Evening Star Newspaper Company. Business Office* nia Ave. 42nd 8t. an Building. London. England Rate by Carrier Within the City. Regular Edition. The Evening Star : 45¢ per month The Evening and Sunday Star (when 4 Sundays) 60c per month The Evening and Sunday Star (when 5 Sundavs).. 65c per munth The Sunday Star. .. ... B¢ per copy Nizht Final Fdition, Night Final and Sunday Star. .. 70c per month Night Final Star 5 55c per month Collection made at the end of each month. Orders may be sent by mall or telephone Na- tional 5000, Rate by Mail—Payable in Advanos. Maryland and Virginia. DPailv ard Sunday..l yr. $10.00: Daily onlv . 1 yri. $8.00% Bunday only 1yr, $1.00 All Other States and Cana; Daily and Sunday.l yr. § Daily onls LAy Tl ¥ d 00; 1 mo. Sunday only. . $5.00; 1 mo! Member of the Associated Press. The Associated Press is exclusively entitled to the use for republication of all news dispatches eredited to it or not otherwise credited in this Daper and also the local news published herein. All rights of publication of special alspatches herein are also reserved e = The Objectives. In his now-celebrated message to Congress on taxation of wealth, the President outlined five distinct under- takings in legislative consideration of “the broad question of tax methods and policies.” Three of these related to imposition of inheritance and gift taxes designed to encourage a “wider distribution of wealth” and to reduce the public debt; a “definite” increase in the taxes now levied “upon very great individual net incomes” in pursuance of what the President considers is “the duty” of “the Government to restrict such incomes by very high taxes” and the substitution of graduated taxes on corporations in place of the present flat rate of thirteen | and a half per cent. Another proposal was to eliminate unnecessary holding companies and the discouragement of “unnecessary cor- porate surplusses,” questions which the President declared “cannot adequately be debated in the time remaining in the present session of Congress.” The fifth proposal was the submission of a con- stitutional amendment for future taxa- tion of State and Federal securities. According to the program now, Con- gres is to undertake immediately the | study of the first three proposals. The fourth is definitely out for the present gession, The fifth—submission of a constitutional amendment —while it might not take long, has received little discussion. But chief interest centers in the ulti- mate objective of the three classes of taxation now to be studied. The Presi- dent suggested that the yield frem inheritance and gift taxes be specifically “segregated” and applied to reduction of the public debt, lightening the “bur- den of the individual taxpayer, and, incidentally, assist in our approach to a balanced budget.” But Senator Har- rison’s tentative soundings in this field indicated, on the basis of proposed rates, a yield of about $100,000,000 a year. | That is just twice the amount set aside by the President only last week for an experiment in aiding the youth of the land to find work and get through school, one of the minor offshoots of work-relief. In view of a prospective deficit for the next fiscal year of about $4,500,000,000, raising one or two hun- dred millions a year through inheritance taxes does not offer much hope in re- ducing the public debt or lightening the individual taxpayer's burden. Estimated yields from restricting high Incomes “by very high taxes” and from a graduated tax on corporation incomes are indefinite, But the total yield from Senator Harrison's tentative schedule, inheritance taxes and all, was placed in the neighborhood of $340,000,000—and there are many who will question that estimate, believing it is too high. In the light of Government spending today, $340,000,000 is a drop in the bucket. The impressiog grows and is strength- ened by such preliminary estimates, that the President’s proposed tax program was based more on the hope of “en- couraging a wider distribution of wealth”—whatever the phrase may mean—and on restricting high incomes by “very high taxes” than upon levying taxes for revenue purposes only. And if that is so, the question imme- diately transcends the importance always attached to a revenue measure and enters a field of social economics wide enough for Congress to explore all Summer without recrossing its path. If the purpose of the tax plan is to produce greatly needed revenue, along with more equitably distributing the burden of taxation, Congress will find strong support for its unpleasant labors. If it is undertaken with the main objective of “distributing wealth” or in performance of what is conceived as a governmental duty to restrict great in- comes, another question presents itself, which, reduced to fundamentals, is whether to kill the goose that lays the golden egg, or how hard the goose may be hit without fatal results. The question of objectives is one of the first that the House Ways and Means Committee will be called on to answer. Frontier Fire Fighting. America’s frontiers have not all disap- peared with the spread of population. Bome of them remain, quite close to the great centers. One.of these is on the south shore of Long Island, within forty miles of the metropolis. It is a frontier, that is to say, in respect to certain facil- ities of social life, especially in the mat- ter of protection against fire. It is known in the official records as North Great Shore, a big title for a small community. Back in 1931, early days in respect to civic development, the residents of this local center of social life, comprising some 350 families, decided that some- LY thing must be done to safeguard their homes from the fire demon. Seven of them organized a volunteer fire depart- ment. These coteries of semi-urban dwellers used to be called “vamps,” a word that is supposed to have been de- rived from the name of the forepiece of a fireman’s hat, Soon their numbers were quintupled. The members paid twenty-five cents a month for expenses and benefit parties served the dual pur- pose of raising funds and giving the people entertainment., Apparatus of & sort was acquired. A railroad company contributed the great iron rim of an obsolete locomotive for use as a fire alarm. Then came a slick city sales- man and persuaded the Fire Department that the town should have a regular fire siren, a real hooter that could be heard for miles and would arouse every vamp and all the auxiliary helpers re- quired for any emergency. He installed the siren before it was really ordered. He appeared after a month and took a $25 down payment and disappeared. After a time the manufacturing con- cern pressed for payment of the balance. It could not be raised. Parties and benefits and socials were held, but the money seemed to dribble out in expenses and perhaps into other channels, and the debt remained. Now the company has seized the siren and also all of the equipment of the Fire Department, and North Great Shore is without its pro- tection and back to the frontier status of the early days prior to 1931. And all of this is happening within twoscore of miles of the big city. The people are now wondering whether it really pays to be on the fringes of Ameri- can civilization, e Regulate or Destroy? Democrats in the House have come to the parting of the ways with Presi- dent Roosevelt over the public utility holding company bill. Representative Huddleston of Alabama described the position of himself and other Demo- cratic members of the House in a speech Friday, opposing the President’s demand for the “death sentence” clause of the administration bill. He said that he stood squarely on the Democratic plat- form of 1932, which declared: “We advocate regulation to the full extent of Federal power of holding companies | which sell securities in interstate com- | | merce.” There is nothing in the plat- form plank, as Mr. Huddleston pointed out, which calls for the destruction of holding companies. President Roosevelt, facing defeat in the House over this “death sentence” clause, lashed out against the public | utility lobby soon after Mr. Huddleston had completed his speech in the House. | The President, according to the pub- lished reports, is ready to veto any bill | which is sent to him by Congress which does not contain the “death sentence.” He is exerting all his political power to control the House Democrats in this | matter. Never before has he failed to whip them into line for New Deal legis- lation. The only successful revolts in the House have been over veterans' legisiation to which the President was opposed. No one believes that the Congress would pass a holding company bill over the President’s veto. President vetoes the bill and it is not passed later by the necessary two-thirds vote, the measure fails and there will be no new law on this subject. It may be that the President will prefer to lose this fight in the belief that he may win another day. Government regulation of holding companies is one thing, as Mr. Huddles- ton so emphatically pointed out. Their destruction is another. tration, Mr. Huddleston said, is intent upon taking vengeance for past errors and ill-doing by utility holding com- panies, deeds done during the era of great speculation. Other kinds of com- panies engaged in business, spurred on by speculators, were#guilty of similar wrongs. The vengeance which the President now seeks will fall, as Mr. Huddleston said, upon the millions of stockholders, “whose only crime was that they were too trustful.” The charge has been made against the administration’s holding company bill that it discourages enterprise; that it does not lead in any measure to re- covery. It discourages enterprise and puts no single man or woman to work. In that respect it resembles other New Deal measures. Gradually it is sinking into the American consciousness that many of the New Dealers are intent, | not upon recovery of business and em- ployment, but upon “reform.” The re- forms are so far reaching as to touch the very fundamentals of the American system of Government and of business. They grant vast new powers to Federal bureaus. They destroy in part the liberties of the people. The President’s charges against the public utility lobby would bear more weight if he had not welcomed so effusively the lobby which came to Washington recently to demand a con- tinuance of Government checks to farmers. The checks to the farmers are part of the New Deal plan to reduce production. Militarism’s Burdens. Outside of Japan the impression pre- vails that the aggressive campaign which the army has been pursuing on the Asfatic mainland ever since the occu- pation of Manchuria evokes little oppo- sition in Japan on the ground of cost. The people are represented as enthusi- astic supporters of the plan to make Nippon supreme in the Far East, espe- cially as the overlord of China. Hitherto, army leaders have experienced little difficulty in “selling” their imperialist program. The nation has absorbed un- questicningly repeated issues of bonds to meet mounting military and naval budgets. Finance Minister Takahashi has ven- tured to call a halt on the practice of heavy domestic borrowing for these purposes. He demands an end to “deficit bonds.” Last week he issued & If, however, the | The adminis- | THE SUNDAY STAR, warning that grave consequences will follow further excessive issues. Japan's national debt since 1925 has increased by 2,900,000,000 yen. The upward trend, due to military and naval expenditure, must be checked, Mr. Takahashi de- clares, if public credit is to be main- tained and inflation averted. The finance minister is a shrewd poli- tician, as well as a seasoned economist. He is believed to have assured himself that public opinion supports his re- trenchment policy before daring to court the disfavor of the militarists. ‘The latter boldly advocate an increase in tax revenue. They insist that army and navy budgets cannot be- curtailed beyond what national security demands —national security, in their eyes, de- noting such adventures as the army is now carrying out in North China. Since 1932 Japanese Army appropria- tions have risen from 227,000,000 to 492,000,000 yen and are expected to reach 500,000,000 by 1936. The navy budget has been more than doubled and is expected to total 700,000,000 yen next year. As & considerable portion of the army'’s cost is devoted to defense against the Soviet Union, Mr. Takahashi favors & peace pact which would permit the two powers to demobilize about 2,000,000 troops. The next Tokio Diet is likely to see a revival of pressure for a treaty with Moscow. If Mr., Takahashi pre- vails, the cause of peace and the docile Japanese taxpayer will be Jjoint beneficiaries. ————— A well-balanced sense of humor is an intellectual necessity. The sport fans who enjoy Mark Twain's “Punch, brothers, punch with ecare,” should be required also to read his more serious writings on matters of sociological sig- nificance. —aors. Inheritances protect the old pay roll on which many loyal workers are de- pendent. Inheritance taxes may dis- tribute wealth in a manner which jeop= ardizes the smaller interests they as- sume to protect. oo Differences of opinion are manifest in the affairs of the University of Mary= land, which will no doubt make the most of its opportunity to assert an intellec- tual leadership in the highest art of diplomacy—the science of conciliation. S s Pugilism reveals a curious variety of social possibilities. Even so huge an identity as Primo Carnera may figure as a forgotten man. ——— e France regards England as under obli- gation, after acting as umpire in a naval race with Germany, to act as referee in a land armament competition. ———————— College degrees would be more im- pressive if student publications mani- | fested more respect for the college professors. ——— Shooting Stars. BY PHILANDER JOHNSON. Initialative, A little bit of foolish rhyme Comes rippling in the Summertime, The Blue Bird sings its song anew, But all it says is “I. O. U.” | The record of our time is made Of listed debts that are not paid, Some of them large and overdue, Each a collosal “1. 0. U.” | Although these letters may enlarge What looks like a usurious charge, Each economic change we view Uplifts the signal “I. O. U.” Though we protest from day to day “The devil there may be to pay.” We meet each tax and carry through And hand him out an “I. O. U.” After the Rocket the Stick. “Are you going to shoot off any fire- works on the Fourth of July?” “Yes,” answered Senator Sorghum, “I'm going to send up a skyrocket as a reminder that in patriotic demonstra- tion you must always look out for where the big stick is going to light.” Jud Tunkins says big business suffers some from the fact that it is expressed in popular attention by the busy bill collector. First Principles. To Europe I traveled one day, Where art has been put on display. The glories which there we behold A sentiment common unfold. Men have fought for a name in the annals of fame And the language in which childhood prayers they'd frame. We find the great motive of life as we roam, Is expressed in our own simple song, “Home, Sweet Home.” Harmonies Overwhelmed, “Have women made a difference in public life?” “A great difference,” answered Miss Cayenne. “Men used to woo with a guitar, which holds no further influence since we women have taken possession of the political brass band.” “My ancestors gave me an honorable name,” said Hi Ho, the sage of China- town, “which I regret to find com- mercialized by those who hitch-hike to nocturnal gayeties and organize what they call & Hikum Hokum Club.” Clacque, We hear the clacque that leads us In theater applause, It warns us that it needs us In propagandish cause. Bad acting oft annoys us For just a little while; ‘Who cares if it employs us Simply to holler “Heil!” “I likes to shoot craps,” said Uncle Eben, “but I objects to de winner dat puts on airs because he has skinned me wif loaded dice.” [4 ) 1 bilization of world currencies. WASHINGTO New Deal Chess BY OWEN L. SCOTT. President Roosevelt is shifting the style of New Deal play. This shift is being screened and partly effected by the Presldent's “share-the-wealth tax plan.” It is forced by the breakdown in midterm of one after another of the original experiments. President Roosevelt has been on the defensive most of the time in recent months., Absence of recovery, high food prices, Supreme Court manhandling of New Deal laws, work-relief delay, and the Leviathan deal combined to create the appearance of a near col- lapse of the New Deal. Stories began to spread through the country that Mr. Roosevelt had lost his grip, that he was irritable, that he took the Supreme Court destruction of N. R. A. with poor grace, and that a delib- erate effort was under way to sabotage recovery by creating confusion. Congress felt this reaction and began to kick over the traces. Now it is evident there is another side to the story, and one that prominent New Dealers believe to be the correct one. ‘They picture the President as an astute chess player. His every important move since the tide turned against the New Deal is seen to fit into a pattern of strategy that leads up to November, 1936. In a reform regime, or any other for that matter, the first essential is to hold power. Otherwise, changes ef- fected become meaningless. D ‘The Supreme Court, in its N. R. A. de- cision, caught the President off balance and upset important plans. One after another of the Roosevelt experiments faced possible court trouble. To allow these experiments to drift into destruc- tion during the next year hardly would impress the country with the skill or wisdom of the present administration. In the face of that situation, the President’s recent moves have a clear meaning to his advisers. They are not the moves of a leader who 1s floundering. Instead, some of the recent moves have been so subtle and daring that they led to trouble. One of these was the move that would have rushed through Con- gress the President’s wealth-sharing tax plan, without giving opponents & chance. That play may cost heavily. The now famous May 31 conference with newspaper men f n with that picture. Mr. Roosevelt y pointed out that in his opinion the people of the country would need to decide whether this was to be a centralized Nation with power to deal with modern national problems, or a federation of 48 sovereign States with only limited power to deal with economic problems common to all. Statements have been made that this was a hasty, ill-considered performance, The fact is that it was carefully planned and well thought out in ad- | vance. * ok x % Presidential moves since that time fit Into the pattern of changed policy. With one avenue of Federal power cut off by the Supreme Court. President Roosevelt urged Congress to press ahead to test other Federal powers. He has refused to remain on the defensive. On his insistence. Congressmen voted to establish a national system of oid- age insurance and unemployment insur- ance. They voted to set up a national labor law. They prepared to bulwark the New Deal farm experiment, its Ten- nessee Valley experiment and other experiments. White House instructions urged enactment of a new plan to use national credit to help tenant farmers | ome farm owners and to use Federal | i | the line of the Metropolitan road has | always presented great attractions for taxing power to force a code on the sof(-voa‘ industry. The Roosevelt strategy called for en- actment of a program that presumably would be popular with vast segments of | the population. Then, if the Supreme Court told those people that they could not have their programs, the responsibil- ity would be the court's. Instead of accepting the constitutional issue on the basis of N. R. A. alone, the | | instead of discriminating against it. as President decided to let it develop, if it must, on a wide front. P Mr. Roosevelt also is taking another tack, designed to hold popular interest | while the New Deal is going through the courts. ¢ The first two years of the present administration were based on the theory that the Federal Government could engineer recoverv. N. R. A, was a corner stone in that program. It was offered by business itself and was ac- cepted by the brain trust group as a means of smoothing out supposed bar- | riers to recovery through co-operation with industry. Encouragement was given to bigness. But now N. R. A. has been torpedoed. Big business seldom has been popular with the mass of the country's voters. Codes had threatened to create a po- litical problem of no mean proportions. The Supreme Court removed them. So the President, with a swift about- face, has wheeled up a tax plan which is the antithesis of N. R. A. ‘Where bigness was encouraged for two years, it now Is to be penalized. Where concentrated wealth was accepted and encouraged to co-operate with the Gov- ernment, it now faces new tax barriers. Where anti-trust laws were forgotten, they now are to be enforced. As Mr. Roosevelt’s friends see it, he is turning back to a type of program that appeals to the voters. They believe the people never did trust N. R. A, with its emphasis on bigness, or P. W. A. with its emphasis on large-scale spending as a means of priming the pump of economic recovery. Both are out the window. In their stead are plans that New Dealers de- scribe as more orthodox. A principal complaint of thoughtful New Deal critics has been that the President insisted that he sought re- covery through the machinery of private capitalism, yet at the same time engaged in experiments that made the operation of that machinery difficult, if not im- possible. But now, with N. R. A. out of the way, the chief agency of Government re- straint is removed. So far as the Gov- ernment is concerned, competition is free to get in its work, if industry gives it a chance. * kK X The President’s new tax program fis supposed to help equalize the competitive position of big and little units in in- dustry. Mr. Roosevelt has ditched pump-prim- ing under Secretary Ickes, The com- plaint that the New Deal was holding up recovery by bolstering prices of building trade labor and building mate- rials, is met by an executive order that withdraws the new $4,000,000,000 work program from a position of support for either. One other chief complaint against the New Deal has been that its plans called for a dollar of uncertain value. But now the President is seeking sta- He re- cently permitted the use of this coun- try’s $2,000,000,000 stabilization fund to help out France when her currency was threatened with collapse. He is direct- ing moves that New Dealers hope will lead to an end to world currency battles. * ok K X Opponents of the President also have charged that his insistence upon laws ( | throughout the year. NE 30, 1935—~PART TWO. HINDRANCES BY THE RIGHT REV. JAMES E. FREEMAN, D. D, LL. D, D. C. L, BISHOP OF WASHINGTON. Writing a letter to & people who at times had shown stability and staying power, a writer of old penned the words: “Ye did run well; who did hinder you?” Something had happened; their course, begun with promise, had suddenly been slowed down and halted. It was a nat- ural inquiry and a searching one. There is no answer given to the query, but it comes to us repeatedly as we survey our own record and the record of those in whom we reposed confidence and high expectations. There is an old maxim that valedictorians rarely fulfill the promises of their early distinction. They made an enviable record in the closing days of their academic life, but, too sat- isfied with their honors, they subse- quently failed to follow up their position of gained advantage. Again, we have noted in those whose early careers In the professions and other occupations were begun with acclaim and promise of real distinction that the later tests found them unready to meet crises and emergencies that tested their stability and powers of en- durance, They were surpassed in the race by other and less promising com- petitors. The old adage comes to memory and it is one that we need to heed throughout the whole race of life: “Be- ware when all men speak well of thee.” In too many éases applause and undue expectations prove disastrous to the one to whom they are given. Many & prom- ising genlus has suffered defeat and tragic disappointment through too much adulation. We do not have to cultivate an inferiority complex to keep ourselves within bounds, but the grace of humility is a valuable asset under any and all conditions. Possibly what we all need in the early days, ves, and all along the way, is measurable self-restraint and constant self-discipline to fit us to meet each emergency as it comes. Training does not belong to any specific period, it belongs to all periods. To abandon study and the replenishing of spent energies means to be defeated when the time of testing is at hand. What is true of our physical and intellectual ca- pacities and reserves is true of our moral and spiritual resources. The early years find us most impressionable and recep- tive. It is then that we acquire our habits and adopt our ideals. Some one said that “sixteen decides sixty,” by which he meant to imply that what we “fix in the way of ideals or standards of conduct in our youth largely determines our attitude when we are mature. We believe this to be largely truz. On the other hand, how often do we discover in ourselves lapses from early ideals and professions when the hard and sometimes bitter experiences of life have disillusioned us. In our religious con- victions and practices we show great variability. Indeed in our acceptance and practice of certain definite, and what we once regarded as fundamental prin- ciples, we show indecision and apathy. This may be and frequently is due to a lack of early training and a careless acceptance of definite moral and re- ligious obligations. I constantly meet reflective and high- minded men and women who frankly speak of the loss of their religious faith and trust, tracing it wholly to a lack of proper understanding of its meaning through the neglect of those who in their youth trained them. Such men and women are to be pitied and treated with Christian charity. Under later and better tutelage many such recover. The large and insistent question for those of us who have lost religious feel- ing and the zest and refreshment that come from unbroken religious practices is: “Ye did run well; who did hinder you?” All too frequently the hindering has resulted from our own selfish wills and moral instability. We gave up, perhaps gradually, our devotional habits and our deep religious convictions, be- cause they cut across our convenience and interfered with our ease end indul- gences. To live by what in earlier years we had professed laid too costly a toll upon what we had come to believe was our personal liberty. The right kind of moral and religious profession is costly, and it ought to be. It neverthe- less has its compensations and satis- factions. Hindered lives, how many there are! Disappointed men and women, disillusioned and often embittered, who might, if they would, by consistent self- diagnosis, find the hindrance not out- side and beyond, but within and of themselves. “Ye did run well; who did hinder you?” FIFTY YEARS AGO IN THE STAR “An encouraging sign that the B. & O. Railroad Company.” says The Star of Suburban June 28, 1885, “proposes to . carry out its promises of es- Service. tablishing a more liberal policy in local accommodations than has heretofore prevailed with that eco- | nomically managed corporation is found in the report that midday trains are to be put on the Metropolitan branch, and also on the same road a night train, leav- ing the city at 11:30 pm. These trains will supply much-needed facilities for communication between town and coun- | try during the middle hours of the day and will afford an opportunity for people | residing on the line of the road to get | home after attending places of amuse- ment or looking after business matters | in the city during the evening. At pres- ent there is no train leaving the city after 5:30 p.m. “The elevated, breezy country along | health and pleasure seekers, but the ? scanty means of rail communication with the city has been a serious drawback to continuous residence in the country Despite these dis- advantages the region traversed by this road has filled up rapidly, and if the B. & O. corporation will now adopt a policy of encouragement to this growth, on a non-competing road, there will un- doubtedly spring up an almost coniinu- ous line of airy, attractive villages all the way from the city to the Point of Rocks. “Heretofore the great trunk lines of railroads have. in their ruinous cut- | throat competition, sacrificed the inter- ests of their local consumers in favor of through traffic and transportation against competing lin The disas- | trous results of these wars have shown, however, that there are too many trunk lines for the amount of business to be done. Evidently there can never be | a paying through business for all the great competing lines, and they had bet- ter change their policy and in future | cultivate and build up local business as a certain permanent and constantly in- creasing source of income.” * % Half a century ago a plan was pro- posed for a one-day closing of business Merchants’ establishments in Mid- . summer in Washington. Holiday. 7he Star of June 27, 1885, sS4, “‘Here is an idea for The Star to boom.' said a prominent Avenue mer- chant to a Star reporter. ‘Now what I want to do is to establish a general holi- day in this city, to be known as Mer- chants’ day. The holidays of the busi- ness men of this city are few and far between, not that the merchants want to overwork their employes, but in jus- tice to their customers it is seldom that they can close their establishments en- tirely during the regularly ordained holi- days. This is especially true of the gro- cery and provision business. So in view of this I have drawn up this paper for signature. It sets forth that, recognizing the faithful services of their employes, the signers agree to entirely close their business houses on Wednesday, August 18, in order to give them a well-earned holiday, and that they will also close on the third Wednesday in August in each succeeding year, the holiday to be known as Merchants’ day.’” The paper had then been signed by a large number of merchants, including Hume, Cleary & Company, Barbour & Hamilton, Trunnel & Clark, J. C. Ergood & Company, N. H. Shea, Frank Hume, G. C. Cornwell & Son, John Keyworth, Charles I. Kellogg, C. W. Thorn & Com- pany, Hill & Duvall. to regulate the sale of stocks and bonds has retarded recovery by making it more difficult for industry to obtain money with which to expand. In recent months changes have been worked out that appear to satisfy bor- rowers, with the result that industry is coming into the market for money and is finding it is available in large quan- tities at low cost. Mr. Roosevelt, according to his friends, now is in a position to tell critics of his policies that the restrictions about which private industry complgined for two years are removed or in process of re- moval. The dollar remains the strong- est currency in the world, the national credit is high, and the groundwork is laid for recovery. Mr. Roosevelt’s strategy on the polit- ical chess board, sc his advisers assert, leaves him with a strong vote appeal in 1938, regardless of how the original New Deal progrem fares in and out of court. (Coprright. 1935.) ) Reciprocal Trade BY HARDEN COLFAX. ‘The negotiations begun this week for a reciprocal trade agreement with France and her colonies mark the eight- eenth effort of the administration to clear the channels of world trade of obstacles to the free movement of goods. The list includes nine countries in in North America—Canada. Five of these have been signed—those with Cuba, Belgium, Brazil, Haiti and Sweden—and all, except that with Brazil, are in operation, and that one is about to be ratified by the Parlia- ment at Rio. Others are in prospect. Evidence is now being reported by the Department of Commerce as to favor- able results with Cuba. The Bureau of Foreign and Domestic Commerce has made a survey of the concrete results of the agreement with Cuba to date. Some 95 per cent of the more than 4,000 | | testimonials were to the effect that | these results have been favorable. Offi- cial figures show that, during the five months following the conclusion of this agreement, American sales to Cuba reg- istered a gain of something like 140 per cent over the comparable period of the preceding year. *x X ok X “It would appear,” says the depart- ment, that “optimism has been engen- dered on both sides. Cuban purchasing power has been increased. Benefits are accruing to American producers even of articles not specifically mentioned in the agreement and commodities on which the tariff rates were not greatly changed.” The Cuban agreement is preferential, it is true, and in that respect departs from the general trade-agreement pro- gram. For that reason, one is not justi- fied in attempting to go too far in drawing conclusions from it. The agree- ments with Brazil, Belgium and Haiti are of more recent origin, and therefore do not as yet permit of definite ap- praisal as to their results on our trade. Besides the growing movement to con- clude reciprocal agreements, there are other encouraging developments. These are summarized in a memorandum of the factors affecting our foreign trade policies recently issued by the Commerce Department. x % * X In the first place, new markets are being constantly opened up. As condi- tions throughout the world improve, it is “not unreasonable to expect that we shall see new and previously unde- veloped markets presenting themselves as fertile fields for cultivation —regions in Africa, Asia, the Malay Archipelago, and the interior of South America, and elsewhere. From 1905 to 1931, for ex- ample, the imports of French Morocco jumped from $6,500,000 to $81,500.000. Three decades ago Algeria bought about $65,000,000 worth of products annually from abroad, but its imports now aver- age considerably more than $200,000,000 yearly. In these advances American exporters have participated. The universally acknowledged inven- tive genius of our people, says the de- partment’s statement, will continue to play a major role in the success of American export effort. “The history of our foreign trade in the twentieth century,” it says, “has demonstrated re- peatedly the high importance of this quality. Americans have shown them- selves peculiarly adept at devising countless useful machines, instruments, apparatus, household devices and simple gadgets.” * ok k% Time after time we have taken a posi- tion of undisputed primacy and sold enormous quantities of such products abroad before any really serious com- petition could appear. Choosing only two or three examples out of a multi- tude, one can mention the sewing ma- chine, the automobile, and office equip- ment. Moreover, as foreign trade com- petition catches up with us in any given line, there is nothing to prevent our forging ahead again with new and different products. At the moment, for example, we are ahead of the rest of the world in the development of fabri- cated dwellings and air-conditioning. Our technical productive efficiency is admitted to be unsurpassed, and this is responsible for two most advantageous characteristics of most American mer- chandise—superior serviceability and reasonableness of price in relation to quality. It is mainly the advantages in price, quality, style and service arising from mass production that have enabled American automobiles virtually to con- quer foreign markets, (Copyright, 1888.¥ A | fox. | long before the _ | Indced, the farmers never fully recov- Latin America, seven in Europe and one | o | good years since Big Farm Owners BY FREDERIC J. HASKIN, Every country in the world has gone through a period of concentration of productive land in the hands of a rela- tively small number of owners, with a resulting decline in the strength of the indigenous yeomanry. The years since the beginning of the great depression have revealed that the United States is not escaping this universal experience— but with a difference. In the days of ancient Greece, in the days of ancient Rome, when the agrarian problem was rife and created internal strife, the con- centration of farm land was the cause. The beginnings of the French Revolu- tion were rooted in the same problem, and England was not immune. The: the inclosing of commons led to all manner of strife between the common- alty and the yeomanry on the one hand, and the gentry, the nobility and the church on the other. In Mexico the same situation created a series of rev- olutions, ali based on the agrarian ques- tion. Finally came the greatest revolu- tion of all, the 10 days that shook the world, the Red revolution of Russia, and all because lan® ownership was being concentrated in the hands of a few. In the United States the difference is impressive. Whereas, in these other cases, the concentration was in the hands of individual powerful landlords, here the concentration is in the hands of corporations. There was to be said for many of the great landlords of all the countries named that they felt a keen sense of responsibility for their tenants, the men who worked the land while not owning it. The central idea of a feudal system is responsibility; the feudatory must take care of his people in a paternalistic manner, Grave abuses and neglect of this responsibility brought on the various revolutions. But it is a favorite saying of the American people that a corporation has no soul. Where- fore, it might seem that no sense of paternalistic responsibility could eonfi- dently be expected from a corporate landlord. One can still hear of how Ireland was ruined by the institution of absentee landlordism, but, after all, even the absentee landlords, many of them Eng- lish, did visit their Irish estates if for no other reason than to hunt the red But one cannot well imagine the board of directors of some large Ameri- can corporation showing even that much personal interest in their farms. To be sure, American farm lands have gravitated into the hands of corporate tenants, not because ‘the corporations wanted to become great land owners, but as a direct result of the depression. As a matter of fact, the corporations do not want to be landlords. That is the last thing they desire, short of out- right loss. More Mortgages Foreclosed. It must be remembered that the de- pression in the farming regions set in industrial depression. red from the effects of the depression of 1920-21. They have had a few spottily then, as to certain crops, but the general trend of farm prosperity has been downward. The inevitable result of this has been the foreclosure of more and more mortgages. ‘Thesg mortgages were held to the extent of billions by corporations, including banking corporations, finance compa- nies, insurance companies, farm imple- ment corporations who had taken farm mortgages as security, and various others. These corporations were in the busi- ness ¢f lending money, or of providing credit to farmers, and desired to con- tinue in pursuit of that business, But when the farmers could not pay their interest, much less curtail principal sums, there was no recourse on the part of the lenders but to take over the security, which was the land itself. The Bureau of Agricultural Economics, through its Division of Agricultural Finance, of which David L. Wickens is chief, has gathered some data and made some calculations of the first importance on the situation. It is shown that in 1930 the total value of the farm land owned by corporations was $294,000,000. By 1932 the amount had risen to $511,- 000,000. In 1933, the low year of the depression, it had mounted to $770,000.- 000. These figures, however, have been affected by the declining value of farm land. Through the depression period the pressure of hard times caused prices of farms to go progressively downward. The figures have been computed with these declining values in mind, but, even so, the value of holdings of corporations in 1933 was 263 per cent of what it was in 1930. Now had the straight per acre method of calculation been used with no offset for the declining market value of land, it would be found that the cor- porate holdings in 1933 had climbed to 412 per cent of what they were in 1930. Not even in the countries referred to above, save in cage of outright military conquest and subjugation, has the con- centration of farm land in the hands of absentee landlords proceeded so rapidly. To guadruple holdings in only three years is a record. Nor do these figures include land in process of foreclosure. In many cases foreclosure proceedings require a con- siderable period for consummation, espe- cially in hostile jurisdictions. It does | not require a very long memory to recall when Middle Western farmers were driving corporate agents away from premises they approached with shotguns and several lynchings were narrowly averted. In one case a judge was dragged from his bench in a foreclosure case. These circumstances suggest that the tale is far from complete, and that the gravitation of American farms into corporate hands is proceeding apace. Corporate Ownership Increases. For the entire country Mr. Wickens" studies do not go beyond 1933, but the Iowa State College has made a study of the situation in that jurisdiction, bring- ing the facts up to date. In 1933, as far as Mr. Wickens' figure go, corporations owned 7.2 per cent of the land. In 1935 corporate holdings had risen to 10.1 per cent in Iowa. The action of the Supreme Court of the United States in declaring invalid the Prazier-Lemke farm mortgage mora- torium law is expected to result in a new wave of foreclosures, which will further add to the holdings of corpo- rations. It is the Middle West that is most affected by this absentee landlordism. In the West North Central region, the corporate farm holdirigs amount to $424,~ 347,000, and in the East North Central region to $87,813,000. This group of States accounts for well over half of the entire corporate holdings in value. It is possible that more acres are held in some other region because lands have been taken over at a much lesser value per acre, but that is not shown in the fignres now in hand. It is interesting to note that during the very period when this rapid transfer of such vast spaces of farming land to corporate ownership was taking place, the population on farms reached its record heights. This means, necessarily, that absentee landlordism has been com- pounded—that while the number of owners has measurably decreased, the number of those dwelling on the farms and therefore tenants has increased. ¢