Evening Star Newspaper, September 8, 1935, Page 33

HENRY FORD PIONEERS IN DECENTRALIZATION Fourteen Plants Make Auto Parts in Rural Sections Near Detroit. Men Enjoy Work. Ito thread holes daily. | ploys 776 men. steam power must be used, an over- shot waterwheel is being inStalled, simply for effect. ‘While the Nankin Mills plant oc- cupies an old grist-mill, it also fur- nishes the best example of the wed- ding of farm and factory. It em- ploys 11 men and they all live on nearby farms, which are lighted from the mill plant. An Air-Conditioned Plant. At Newburg, a short distance up the river, Ford has completed his most modern unit. It is an air- conditioned plant occupying the site of an old mill. The air-condition- ing is something new, but the plant itself, with its simple, rectangular lines and large windows, nestling against the side of the hill, the gen- erator whirling in front, and the blue mill-pond behind, is typical of all these country Ford units. The construction work at Newburg was done by 38 local men who had been on the dole. Now that the factory is finished, most of them will g0_to work making drills. From Newburg to Plymouth, the next of the units, the visitor jour- neys through a natural park. The Plymouth plant, employing 36 men, started operations in 1923. It pro- duces approximately 1,500 steel taps A few miles up the Rouge, and the visitor is at the Phoenix unit, one of the most interesting because most of its 100 employes are women. They produce parts for automobile generators. > Another stretch of park and river, and the Waterford plant appears nestled against the hillside. This plant, employing 62 men, makes pre- cision gauges and similar tools, all used in Ford plants. The factory is said to work to closer dimensions than any other standard production plant in the world—to four-millionths of an inch. At Ypsilanti, on the Huron, is a generator and starter factory. The plant employs 1,031 men and women and occupies a rural setting on the rim of an artificial lake four miles long. Farther down the Huron, at Flat Rock, is a lamp plant, similarly located on the edge of its own lake. It em- Not Dependent on Railroads. BY RUSSELL BARNES. ETROIT.—IF AMERICA de- centralizes, becomes a land with homes, farms and fac- tories spread more or less evenly over the countryside, as many students believe it should, future his- torians may credit Henry Ford with having pioneered the movement. While theorists both within and without the Government have been discussing industrial decentralization, Henry Ford actually has been moving important units of his automobile pro- duction into the country. The tremendous Rouge plant, one of the greatest industrial concentra- tions of all time, still sprawls its enormous Bulk along the western out- skirts of Detroit. But all Ford’s start- ers, generators, lamps, gauges, drills and certain other parts are now pro- duced in 14 little plants with 50 miles of Detroit, scattered along the Rouge and Huron Valleys. Last year these little plants pro-, duced $8,000,000 worth of parts and tools, employed 2,500 persons and dis- bursed $1,500,000 in wages to farmers | and small-town workers. This year | the totals will be larger, Henry Ford | says, because the plants have been ! busier and wages have been increased 20 per cent. More Than an Experiment. The totals of production and wages | are mentioned to show that Ford's 14 country plants represent serious ventures, actually in operation, not| experimentation or indulgence in an | expensive hobby. There is nothing in common be- tween Ford's little plants, which are among the most efficient and modern units known to industry, despite their location in the Michigan countryside, and the semi-medieval, hand-working shops John Ruskin and William Mor- ris, for example, tried to set up against nineteenth-century English industri- alism. For beauty, working conditions and convenience the Ford country plants could hold their own against any ever built. Nestling beneath green trees beside blue water, set in beautiful | lawns among flowers and shrubbery, gay awnings spread against the sun, the little factories look more like mod- | ern sanitariums than efficient auto- mobile plants. The carrying of manufacturing back into the countryside—breaking down the barrier between factory and farm which has featured the last century of Western civilization—has become Ford's most serious interest outside | keeping his automobile enterprise | prospering. He built his first little | plant in 1919 at Northville. Then he | added 13 others. More are to be built, | he says, as fast as suitable locations | for efficient production can be found. | Particularly is the Detroit manu- | facturer interested in developing proc- | esses for the production of industrial | materials from farm products. He recently opened at Tecumseh, Mich., | on the site of a century-old flour mill, | & new little plant to convert soy beans into automobile materials. Farm Ally of Factory. | “The farm and the factory are | natural allies,” Ford said. “One is incomplete without the other. They never should be separated, for each | has the power to heal the other of any economic ills that may befall.” | Before considering advantages of country manufacturing, as they have | shown themselves in Ford's rural | units, it might be instructive to look | at some of the plants. One can get | & good idea of their operations by in- | specting the six that lie along the Rouge. It is also fitting that one go to the Rouge to see the little plants, because they mark a return to origins. Ford, as & boy, built a crude waterwheel along the river. At that time grist mills doted its length. Ford is now replacing those long-dead mills with | automobile parts plants, restoring to the region its old industrial balance and prosperity. At Nankin Mills the visitor finds | the most “old American” of Ford's country units. The shell of an old, clapboarded, white grist mill, framed in massive, hand-hewn beams, houses & battery of semi-automatic screw and4 rivet machines. They are driven by electricity developed by a generator set in a glass-inclosed powerhouse at- tached to the front of the mill. WAll Ford's little plants are water- powered. Some of them have stand- by electric power service from outside, but the main reliance is on turbines driven by the Rouge and Huron Rivers. In the new plant at Northville, where the Rouge does not develop suf- ficient power for the machines and | | talking to both men and Ford officials, | cross-sections of the man power of Railroads touch the plants at | Ypsilanti and Flat Rock, but all the | little factories depend upon trucks almost exclusively for transportation. They exemplify the freedom industry now has from the railroad and the op- portunities possessed by towns and re- gions removed from the rails. Superintendents in all the plants insist the men work better in the country than in the city. Virtually all are farmers and small-town men who live nearby. If they don't have their own farms or garden plots, Ford furnishes ground, charging only for | the plowing. When the plants are not | in operation the men work their | ground. The minimum wage is $6 a day, the same as in other Ford enterprises. As nearly as could be determined from the annual wage will run from $1,000 | to $1,500 a year. That is higher than | the average for the automobile indus- | try, which the Government last year estimated at approximately $800. Men Enjoy Country. The superintendents say they are | instructed %o see that the working forces represent as nearly as possible | the communities. Asked about production costs, super- intendents replied invariably: “We can produce cheaper because we are out in the country. The men work better. Most of the men have farms or houses with large gardens within a few miles. They live more normal lives than they would in De- troit. Even through the boom years we had virtually no labor turnover. “We can deal with our men more satisfactorily because we know them personally, where they live and what are their personal problems. “Bigness can often mean less rather than more efficiency. We know what every man and machine is doing all the time. We can route work through the plant with a minimum of ma- chine changes, material movement and time waste.” % Henry Ford is so satisfied with the success of locating factories in the countryside and near small towns he is expanding his rural production. He believes decentralization is coming in American industry. (Copyright. 1035. by the North American Newspaper Alliance. Inc.) Extraordinary Venom of Italian Attacks Perplexing to British LONDON.—No aspect of the| Ethioplan crisis has caused more perplexity, even bewilderment, in England than the extraordinary venom of the attacks in Italy upon the attitude of this country in the matter. ‘There is no power, certainly no military power, in Europe with which the relations of Britain have been so ® uninterruptedly cordial and har- monious as they have been with Italy ever since her political resurrection in the middle of last century. taly Appeals to Intellectuals. The fact is due to causes both epiritual and political. Italy has slways made a peculiarly strong appeal to the emotions of the in- , tellectual class in England, and poets like Browning and statesmen like Gladstone have felt for it a passion both personal and intense. It was in the liberal movement of England that the cause of Italian freedom found its most powerful external ally when that cause was in the balance. Here it was that Mazzini found refuge and encouragement, and the older generation of Englishmen can recall the astonishing popular en- thusiasm with which Garibaldi was welcomed by all classes of soclety. Nor since then has there been a single circumstance that has impaired the cordial feeling that has existed between the two countries. All this makes the unmeasured bit- terness of the Italian comments on British policy at the present time the more surprising. It was natural, of course, that Mus-olini, having decided on his adventure, should be annoyed at that policy, but it is inconceivable that he supposed England could permit him to ride roughshod over * the covenant of the League of Nations and the Kellogg pact without & pro- test. If she had done that, the Leggue of Nations would have become a thing of derision and the cause of public law in Europe would have been dead. British Avoid Provocation. Throughout the crisis the tone and temper of the British representations have been studiously respectful to Italian feeling and every effort has been made to keep the atmosphere cool and to avoid anything in the nature of provocation. In spite of all this Britain has been subjected to a tempest of ungoverned vituperation quite unprecedented in the relations of two countries, which are at peace, but which are in dis- agreement on a question of the gravest moment. The attacks in the official press have been frankly and deliber- ately brutal, and Signor Mussolini's own speeches have been largely di- rected against England in terms of extreme violence and resentment. There has been no reply in kind in the English press to these attacks, but their virulence is much commented !ties and the silver wolves now T HE SUNDAY STAR, WASHINGTO D. ¢, SEPTEMBER 8, 1935—PART TWO. Small Change for Nation Sounds Unimportant Until & Country Tries to Get Along Without It—Then Chaos Results. BY NEIL CAROTHERS, * ton D. Baker and Mr. Brand gress urging the coinage of a 3-cent Professor of Economics, Lehigh University. LMOST 25 years ago Mr. New- ‘Whitlock, two very smart men, sent a joint memorial to Con- plece. Mr. Baker was mayor of Cleve- land and Mr. Whitlock mayor of To- able men, with fine minds, so that you can see just how mixed on money questions talented men can become. They thought that the movement for municipal ownership of street car lines would give everybody in this country a+3-cent ride. The coins would be needed for change. This forgotten incident illustrates one of the most important facts in| the world. That fact is that no man has ever lived who could accurately | predict economic developments. That | | is what makes economic planning so | risky and economic planners so ridicu- | lous. The two best “predicters” the world has had, Adam Smith and Karl Marx, have batted about 50 per cent so far. When you consider that eco- nomic life is about 100 times as com- | plicated now as in Adam Smith's time and that our modern planners have about one one-hundredth of the mental powers of the absent-minded old Scotch school teacher, you can see that when our planners are in action the mathematical chances that they will scatter broken pieces over the economic landscape are pretty high. Nowadays the forces governing our | economic life are so inextricably inter- related that the moet innocent eco- | nomic measures will, without fail, | cause unexpected reactions in wholly unforeseen ways. The invention of tin cans and preserved meats in | America s slowly wiping out cannibal- |ism in far places. The great clothing | industry of our time traces back '.o‘ |a king who did not want to expose | his legs in stockings. A scientist played around with coal tar, and later on a Central American republic defaulted on its bonds. Economic Interdependence. In no area of economic life is this interdependence of economic activities more marked than in the field of currency. It is literally true that the history of currency from Hammurabi to this day is a long story of monetary measures that had entirely unex- pected results. In 1853 Congress made a petty blunder in a coinage law, and the entire history of this nation was changed. Out of that| little minor error there came the | greenback movement of the seventies, William Jennings Bryan in the nine- run- ning ravenously over our Government. The history of any nation’s money is a fascinating and dramatic story. And the most dramatic and in- structive monetary annals of a coun- try, and the most neglected, are those of its small change. Tell the trained economist what kind of small change a country uses and he can tell you what kind of people live in it, what degree of civilization the country has. Do you recall Mark Twain's story of his trip to Portugal, where he had friends to dinner and the restaurant bill came to 7,000 reis and Mark jumped out of the window, only to be pursued, overtaken and told that it was about $1.15 in Mark's money? Did you know that’ Aristophanes ob- served, 400 years before Christ, the | strange fact that bad money drives out good, and that S8ir Thomas Gresham gained immortality by ex- plaining exactly the same thing to Queen Elizabeth about 2,000 years later, and that Congress about 300 years still later passed a statute in deflance of Gresham's law and brought on the fearful depression of 1893? Did you know that in the face of the most powerful pressure to change its clumsy and uneconomic shillings, pence and farthings Great Britain has kept its system, appar- ently on the sole grounds that a child taught to think in the barbarous British money will never be willing to use a sensible currency. Small Cllmncy' History. Our American small currency his- tory is a veritable panorama of color, drama and tragedy, full of strange incidents and curious facts and extra- ordinary developments. Everybody knows that way back in the seven- teenth century Massacliusetts colony set up her own silver coinage mint and that the mint master gave his daugh- ter a dowry of her weight in silver coins. But few people realize that one of the causes of the Revolution was the stupid refusal of England to allow the colonies to coin their own change and her failure to provide other small coins. For 200 years practically the only money of the colonists was the Spanish peso, divided into halves, quarters, eighths and sixteenths, and for this long time the = colonists stubbornly translated this money into British terms of & pound divided into twentieths, again into twelfths, and again into fourths. Not only that but the different colonies valued the Span- ish pieces as they pleased, so that & traveling New Yorker, valuing his Spanish money in New York shillings on and the cause is the subject of ‘widespread speculation. (Copyright, 1935.) 300th Anniversary - Of Fort Celebrated DIGBY, Nova Scotia—The 30Gth anniversary of the building of the first French fort on the shores of the An- napolis Basin in Nova Scotia was commemorated this month during the ;wmmmfim and pence, had to translate it into an- other valuation entirely when he got to Trenton, and made still another count when he got to Philadelphia. ‘When you smile at a Southerner for saying “two bits” you probably do not know that this word “bit,” which the colonists used as the name for the used universally to describe the Span- ish peso. This the English ‘got from the German word “thaler,” corrupted it into “dollar,” and applied it to & Spanish coin which came from the ledo. It is noted that thesq two were |- lar or from the monogram of the ini- tials of “Uncle Sam.” Nearly all our discussions of money are concerned with standards and price levels and international ex- changes and inflation. These are fundamental, certainly, but there is a deep importance attached to the small change of a nation. One of the world’s tallest buildings was built on 5 and 10 cent sales. The world’s largest corporation rests on a 5-cent telephone charge, and the world’s largest passenger transport enterprise still operates on a 5-cent fare. Prob- ably five billion 1-cent pieces go into slot machines in this country in a year. Small change is not only eco- nomically important. It has a deep social significance. It goes down to the very roots of daily life, and the people show a stubbornness of habit and prejudice about their small money that has defeated kings and congresses for at least 4,000 years, Curious Case in England. There was a curious instance in England in the post-war years. Silver coins in a gold standard country are merely “tokens,” containing less bullion value than their currency value. They could be made of any material, silver, nickel, copper or znc. Our silver dollar is of this type, a useless, unwieldly, dishonored coin, for 50 years an instrument of fraud end trickery by the silver interests in Congress. As the British pound went down in value after the war and the price of silver went up, the Eng- lish shillings finally reached a point where they were worth more melted as bullion than they were as money. England faced a national calamity. They hastily passed a law cutting the silver in all their coins from eleven- twelfths to just one-half, adding copper in its place. But the 50 per cent of copper turned the color of the coin yellowish. And the sturdy Britishers simply would not have them. Speaking practically, the auvthorities merely got themselves a large kettle of boiling silver, dipped the silver-copper coins into the kettle, and gave them a nice but very thin coat of silver-plated. British trade was saved. The history of our own silver, nickel and bronze coins is a melan- choly story. PFrom the first coinage 1aw in 1793 to the silver subsidies of 1934 it is one long, depressing story of error, neglect and corrupt interest. In the handling of this delicate economic instrument Congress has made every blunder known to history and a few that are unique. Con- gress passed at least half the meas- ures without the least understanding of their meaning. Contrary to popu- lar belief, silver has not been the only agency of corruption. The funda- mental law of 1834 was passed to give a profit to Georgia gold miners, and in Civil War times interests un- der the leadership of Joseph Whar- ton, whose name is now borne by & great school of commerce, made nickel the instrument of shameful loot and corruption. Shortage of Small Coins. Twice in our history our Govern- ment passed laws that were auto- matically certain to drive out all small change and then calmly stood by while it disappeared. In the middle of 1853 the country found itself with prac- tically no coins below the dollar. This sounds like dull and ancient history. Actually such a situation means social chaos. When a man with a $5 gold plece is thrown off a bus by the driver and cannot get to work, when barber shops and restaurants close up, when retail business collapses, when railroads offer 50 per cent reductions to those who bring exact change, when saloonists give due-bills in change until the volume of outstand- ing bills represents a small fortune and then skip out, the significance of small change becomes very real. The country was saved in this instance by an accident. The had created earlier a tiny little S-cent “token” of silver and copper, to enable people to buy the new 3-cent postage stamps. These were available, and in 1853 the small change of the country was a little sllver piece about one- third the weight of our copper cent. When a purchaser presented a $5 gold piece, the store-keeper scooped up a ladleful and counted out about 150 of them. This was a small affair compared with the debacle of 1862. Congress issued greenbacks which promptly went down in value, and the silver coins went steadily toward the dis- appearance point, the Government doing. nothing whatever. In July, 1862, all the silver in the country in rolls of 10 or 25 and taking them to restaurants and theaters and stores. Lord and Taylor's received so many that the floor of their storage room collapsed. And then the cents dis- appeared. Ordinary life went to pieces. As Horace Greeley expressed it in the New York Tribune, “tens of thousands during the past week have been compelled to walk to and from their places of business. here, but there is a lesson in the final results. Secretary Chase, an able man but hopelessly unversed in economic matters, proposed to Congress that the crisis be met by a Jaw making postage stamps a legal currency, and Congress actually passed this mon- strosity. Before this incredible meas- ure took effect the post office simply refused to go on, and in his bewilder- ment Chase violated the Constitution and issued Federal notes in fractional sums. As a consequence this country had to endure for the next 14 years a small change currency of 3, 5, 10, 15, 25 and 50 cent paper “shin plasters,” a cause of constant loss, inconvenience and frritation to the people. It would be a marvelous thing for this country to have, just once, a Secretary of the Treasury who has an elementary un- derstanding of the facts about money. A word more about this Civil War affair. In the late 80s, a quarter- century after all the silver coins had | completely disappeared, when every- | body thought they had gone to the | melting pot, the whole lot reappeared and literally choked the chafnels of trade. They had been to South America and the West Indles and served as currency for a generation, and a change in silver relations to gold made them more valuable back in their old home. All this seems a long introduction to the subject of small change de- velopments in our time. But it has served to show how important and delicate a matter control of small change is. It illustrates the impor- tant truth that when a government runs counter to the customs of the people in the fleld of currency or fails in its responsibilities the people simply take matters into their own hands, regardless of law. All the private issues of the Civil War period were flagrantly illegal, by the Con- stitution, by Prederal law, and usual- 1y, by State law. Warning for Future, There is in these dry bones of monetary history a warning for the future. At the present moment the silver in our current coins is worth less than 50 cents for each dollar’s worth. But our Government has em- barked on a policy of inflation and also on a policy of artificial increase of silver prices. There is a definite possibility that some day these two policles will cause another calamity like that of 1862, We just barely banks of Scranton, Pa. actually is- | sued 1 cent paper notes to provide small change. In no previous crisis of the kind has the Treasury had any understanding of the problem or known what to do about it. There is & simple, workable way to provide for this emergency in advance. The writer recommended it to Congress years ago without result. But about those midget coins. Re- cently the entire country was in- terested as well as puzzled by a bill that the Treasury drew up and sent to Congress. The Treasury-drawn measure pro- vided for the coinage by the Treasury of coins below 1 cent in value, the types and materials and value to be determined by the Treasury. It was | a proposal to permit the Treasury to most confused and various in all the world. The papers explained the purpose of the measure. It seems that 24 States have passed general retail sales-tax laws. Some of them are flat 1 per cent or 2 per cent or 3 per cent taxes on all sales, which means that & man buying s 10 cent cigar owes a tax of 3/10 or 1/5 or 1/10 of a cent. In some cases the tax is 2 per cent, but on all sales there is & minimum tax of 1 cent. The gigantic intellects that passed these taxes did not stop to find out how & man is to pay a tax of 1 or 2 mills. They did not stop to con- sider that a 1 cent tax on a 5 cent purchase is a tax of 20 per cent. When the tax geniuses of these States discovered what the laws meant they went into the minting business. Some of them appealed to the Treasury, but others started coining pieces of such dimensions as 2 mills and 5 mills. Illinois has been coining 14 mill pieces, while Missouri, Washing- ton, and Colorado have been proceed- ing with plans to coin one-fifth of & cent tokens and what not. The Treasury, it was reported, was very hostile to these state coinages. It planned to coin under the pro- posed law two pieces, & 1 mill piece and s one-half cent plece, to enable these States to work out their tax problems. The papers reported that the President was interested in the coins and proposed that the half-cent have a hole in it, like a doughnut, and that the one mill piece be made square. The suggestion makes it clear that there is a marked dif- that gi the Treasury power to denominations of coins less escaped it in 1919. In that year the | | add at its discretion tiny little coins | to a currenecy that is already the | and pay taxes himself. That commit- tee did not want to “put the thought” on‘the Treasury by authorizing coins adapted to a sales tax, Secretary Morganthau refterated his request for the passage of this bill, and the House Coinage Committee re- | sponded by voting to table the legis- | lation, pointing out that the sales taxes were a State matter and should be solved by the States. Held Unconstitutional. But in the meanwhile, the experts of Treasury and Justice have made some discoveries. They have discov- ered that under the Constitution no State can issue “tokens” to pass as money. They also have discovered that square coins and doughnut coins had best be dropped because it would take a long time to make them. As for the first of these discoveries, the Consti- tution has specifically prohibited State coinage since 1789. In fact the pro- miscuous coinage of copper pennies by | New Jersey and many other States be- fore 1789 was one of the reasons for | the Constitution. As for the other dis- covery, no new coinage of any kind can be finstituted immediately. The only quick method of making tokens is to farm out the production to private | metal-working companies. As for square coins, both the white race and the Chinese discovered more than 2,000 years ago that the only practicable coin is round and flat. The Chinese have had coins with center holes for centuries, and the French have had them in our day. But they serve no special use. Congress way back in 1853 rejected a proposal to coin 3-cent pieces with holes, for “stringing on an | upright stake or file.” But the larger economic aspects of this midget tempest appear to have | been completely overlooked by all par- ties. A 1-mill or }>-cent coin is an economic affliction. It does injury to the people. Jefferson knew that a century and a half ago. He opposed a %-cent plece, but Hamilton insisted on it, on the grounds that very small coins enable the poor to buy cheaply and therefore to “labor for less.” Ig- nore the medieval social philosophy of that reference to wages and con- sider only Hamilton's economic error. In small sales the chief cost is han- | dling, boxing, transporting and general | “overhead.” When the poor buy tiny | values, they get chiefly overhead. The larger the amount bought the less the | cost for overhead. Very small coins raise the cost of living for the very | poor and create a very real social | waste in change-making, loss of time |and retail expenses. In the pauper | countries of South Europe the petty | coins in circulation are a real detri- ment to the poor. Half-Cent Recalled. 1792 to 1857 there was 8 l4-cent coin in this country. Throughout its history it was a nuisance to the mint officials and an object of scorn by the people. And this was when a half-cent would buy much more than now. The useless plece was withdrawn. At different times an unwise Treasury has forced on the people of this country a 3- cent coln,.a 2-cent coin, a 3-cent nickel piece, a 3-cent silver piece, a 5- cent silver coin, a 20-cent coin lm:lJ 3-cent, 5-cent, 10-cent, 15-cent, 25-| cent and 50-cent paper shin plasters. | And in every case the people refused | them and forced their discontinuance. In every generation some temporary condition leads to ill-considered proj- | ects for new and undesirable coins. During the World War the sales taxes led to a veritable bombardment of Congress. Bills were introduced to make 6-cent, 7-cent and 8-cent coins, as well as 2%;-cent pieces. Even so able a mint director as George E.| Roberts, now one of the most distin- guished banker-economists in the world, was persuaded in 1912 to rec- ommend the coinage of l2-cent and 3-cent nickel coins with “scalloped edges.” Fortunately none of these proposals achieved passage. ‘This is not the place to discuss the wisdom of a general sales tax. It is a very large question. But any sales tax that calls for payments of less than 1 cent is a self-evident atrocity, serving no good purpose and making | for loss and inconvenience. Any law that puts a tax on a little child’s 10-cent toy is & bad law. Any pro- posal to facilitate such taxes by intro- ducing into our disordered currency a 1-mill or 2-mill or 2%-cent coin is foolish. The currency of such trash is wholly undesirable. It would dis- organize bookkeeping and accounting, embarrass banks and antiquate mil- lons of cash registers. The proper solution lies in the amendment of the State tax laws. Prom New Navy Program Speeded by Germany BERLIN.—Full speed ahead for Germany’s naval building program has been ordered in the face of the threatened naval race. Work on 107,500 tons, one-fourth of the total strength permitted under the Anglo-German arrangement, is being rushed as fast as navy yards ean operate. The first U-boat of the new under- sea armads s already in service and others have been launched while sev- eral destroyers, the exact number is negotiated. This was officially re- vealed when the 1935 building program was announced. It comprises 2 battle- ships of 26,000 tons each, armed with . | 28-cm. guns; 2 cruisers of 10,000 tons each, armed with 20-cm. guns; 16 destroyers of 1,625 tons each, armed with 12.7-cm. guns; 20 submarines of 250 tons each, 6 submarines of 500 tons each, 2 submarines of 750 tons each. Germany's new fleet is character- { state when the terms of the canal con- | PANAMA EAGERLY AWAITS TERMS OF NEW U. S. PACT Popular Interest in Treaty Being Nego- tiated Here Reveals Resentments Over Past Treatment. BY GASTON NERVAL. ISITORS in Panama this Sum- mer were somewhat surprised at the lively interest and the excitement with which public opinion awaited news of the treaty being negotiated at Washington with the United States. Despite the secrecy surrounding the | meetings of the Panamanian repre- | sentatives with the officials of the | State Department, the newspapers at | Panama were full of conspicuous headlines, editorials and rumors about | . the probable outcome of the negotia- tions. At official functions the forth- | coming treaty was the subject of dis- creet inquiries and even more discreet | replies. At public discussions all | other matters were relegated to second piace—even the clectoral campaign al- ready in full swing, which ‘is saying a great deal, Nor was this popular interest the expression of mere curiosity; it was, rather, what may be termed a fight- ing interest. In their anxiety about the possible terms of the new treaty, | it was easy to detect the resentment | and the suspiciousness aroused in th Panamanians by the treatment here- | tofore accorded them. They were out- spoken in their denunciation of the | injustices they had suffered under the old treaty with the United States and they were extremely skeptical about the “new deal” which they had been told their representatives in Washing- | ton were endeavoring to secure for them. Attitude Understandable. To the person familiar with the his- tory of United States-Panama rela- | tions, however, that state of mind of | the Panamanian people should not | have been difficult to understand. It is cause enough for complaint, and for resentment, to have a treaty detri- mental of national sovereignty thrust upon a people, under peculiar circume stances, and practically imposed by a foreign power. But when to that is added a misinterpretation and misuse of the treaty by the officials of the very nation which was granted ad- vantages and privileges, that is, when to the original imposition is added an | abuse of the privileges given, the grounds for protest and for redress are indisputable. No one ignores that in order to secure the concessions necessary for the construction, maintenance, opera- tion, sanitation and protection of the Panama Canal, the United States did not stop short of lending indirect, buy very effective, assistance in the sepa- | ration of Panama from Colombia and | its constitution into an independent | republic. And nobody will deny, today, that the price for such an assistance | was ably exacted from the newly born | cessions were settled. Instead of the joint jurisdiction of the Canal Zone proposed to -Colombia, the United States obtained from Panama the ex- | clusive and absolute jurisdiction over it. Instead of the temporal grant sug- gested to Colombia, Panama gave the United States perpetual rights over the zone. Instead of the conditions and limitations specified in the com- pact rejected by the Colombian Sen- ate, the United States secured from Panama s series of additional privi- leges covering further expropriations | of land, control of the Panama Rail- way, commercial concessions for the | zone ‘“commissaries,” etc., and even | certain political rights in obvious det- riment of Panamanian sovereignty. The hastiness and the peculiar | circumstances under which the orig- inal Canal treaty was signed by the | States Government toward them. {ll-famed Bunau Varilla, financially | interested in the Panama Canal, and Secretary of State John Hay, in the private residence of the Ilatter, scarcely two hours before the duly accredited Panamanian plenipoten- tiaries arrived in Washington, testify to the one-sidedness of the deal. This one-sidedness, and this une usual manner in which the Hay- Bunau Varilla treaty came into being, were bad enough, but the way in which the treaty was applied and exploited in later years was even worse. Inexperienced and almost friendless at the beginning of their independent life, the Panamanians had accepted the sacrifices involved in the 1903 treaty, as stated in & previous. article, in the belief that they would be compensated in the future by the material benefits and the commercial prosperity to be de- rived from the interoceanic canal Boon it turned out, however, that such benefits and such prosperity were being diverted, by means of a capricious stretching of the 1903 treaty, to the United States authori- ties and residents of the Canal Zone, After three decades of misinter- retation of the Hay-Bunau Varilla pact, the United States was enjoying privileges, not only for the “mainte- | nance, operation, sanitation and pro- tection” of the Panama Canal, as | had been originally intended, but | for the carrying on of a merciless competition against local business and local commerce, which were being deprived of the profits they had been promised in exchange for the surren- der of Panamanian sovereignty over the Canal Zone. Last week we de- scribed some of the outstanding abuses which were committed under the veil of the original Canal treaty and which definitely turned the Pana- manians against it. Repeatedly Disappointed. It was these abuses and the re- peated disappointments they suffered at the hands of the Taft, the Wilson and the Harding administrations that made the Panamanians skeptical about the friendship of the United It was hard to convince them this Sum- mer that a change had taken place in the Latin American policies of the State Department, that the old impe- rialistic attitude had been supplanted by a more liberal and more humane tendency of gradual correction of yes- terday’s evils and mistakes. They somehow could not understand why the United States had suddenly given up the role of the “big brother” and decided to become the “good neigh- bor” of Panama. I will never forget the reaction of one of the more radi- cal leaders of the “Accion Comunal” party, when I was outlining to a group of them what I thought would be the main concessions given Panama in the new treaty, which was then being concluded at Washington. “What will the United States get in exchange?” he asked impatiently. *“What are they after now?" Perhaps it is'a good thing that the Panamanians be in that frame of mind when tley learn the terms of the new treaty. For then it will be easier for them, by mere comparison with the present conditions and the old abuses, to recognize the improve- ment, and to admit the disinterested- ness and the good neighborliness which inspired the new compact. It will be easier for them to realize that the new treaty complies with the requisites once demanded by the stanchest defender of Panama’s rights in Washington, Dr. Ricardo J. Alfaro: “Not to hinder the prosperity of Pan- ama, not to decrease its public reve- nue, not to impair its international prestige.” (Copyright. 1935.) Schacht Qutburst Tames Attitude Of Nazi on Jews and Catholics Special Dispatch to The Star. = BERLIN.—Since Dr. Hjalmar Schacht, president of the Reichsbank and minister of national economy, made a courageous speech at the Koenigsberg Fair condemning Nazi violence, there has been a noticeable moderation in the government's atti- | tude toward Jews and Catholics. Dr. Schacht is faced with the reali- ties of the situation in Germany. ‘While Nazi storm troopers and black- shirted guards were bullying Jews and insulting Catholic clergymen as | enemies of the Reich, Dr. Schacht | was sitting quietly in the Reichsbank gazing at an astronomical budget deficit. The Nazi economic theories did not appeal to the practical banker, whose main concern is state revenue and not oratory. Takes Practical View. Despite the fulminations of the propaganda minister, Dr. Paul Joseph ‘Goebbels, and all his cohorts of super- heated Hitlerites, Dr. Schacht could look at the practical side of the race and religious question, and he could see the Nazi program slowly alienat- ing Germany from world markets. So Dr. Schacht himself let loose a little verbal violence and he called some of Hitler's followers “heroes of the night who break windows and plaster the country with bill posters.” He called them “anti-semitic and anti-clerical dilettantes.” \Dr. Goeb- bels sent a copy of the Schacht speech to the press, leaving out all the important parts. But the Reichs- bank president is an old-timer in politics, and he openly challenged | Dr. Goebbels’ authority by sending | out complete texts of his speech all over Germany. Dr. Schacht wanted to inform the Reich that the “pure Aryan German race” had nothing to do with world trade and he tried to put over the idea that revenue is international and gold is neither Jewish nor Cath- olic, nor even Nazi. Hitler must have been convinced. many’s great work projects and for her new navy—a deficit that is not financed from the regular budget, but on some elusive security described as “anticipation of the future.” Borrowing Necessary. The Reichsbank president must have informed the Fuehrer that Ger- many is broke and must begin one of the most intensive borrowing cam- | paigns in her history. The note was already sounded when Dr. Schacht | spoke at Koenigsberg for he told the | Germans then they would have to submit to great sacrifices and mobilize their savings for the Reich. ‘The proof of Dr. Schacht's theo- ries is mow apparent. In the new 500,000,000-mark consol- dation loan, the official newspapers name several Jewlsk banks, eertainly non-Aryan institutions, among the financial houses with which Germans may do business in negotiating the loan. And this loan is only the be- ginning. At last Hitler has realized some plain economic truths. The billion-mark subsidy fund, instituted by Dr. Schacht to stimulate foreign trade, reveals the urgency of the export situation. German goods are being underpriced in foreign countries as low as 50 per cent of their value in the effort to recapture mar- kets. German manufacturers at home will be paid the difference from the subsidy fund. There is no sense, says the minister of national economy, in deilberately affronting racial and religious inter- ests throughout the world. (Copyright. 1935.) {Old Citadel Restored As Relief Project HALIFAX —Restored by 300 men, whose reward has been shelter, food and 20 cents spending money a day, a grand old fortress, on the crown of a stately hill in the center of Halifax, stands today breathing new life after many years of decay. It was built in the middle of the eighteenth century, shortly after the founding of Halifax as a military and naval base when Great Britain started intensive military operations aimed at breaking French domination in Canada. ‘When employment became & major problem a few years ago the citadel was turned into a relief camp. Now 8 beaytiful drive for motor cars en- circles the fort at the top of the hill, Just inside the road runs a deep moat, over which an old drawbridge works at the entrance to the citadel, (Conyright. 1935.) \ . Today's Film Schedule FOX—“Dante’s Inferno,” at 3, 4:35,7:25 and 10:10 p.m. Stage shows at 3:35, 6:25 and 9:10 pm. EARLE—“Accent on Youth,” at 2:45, 5:05, 7:30 and 9:50 p.m. Stage shows at 2:05, 4:25, 6:45 and 9:05 pm. PALACE—“Anna Karenina,” at 2, 3:40; 5:40, 7:40 and 9:40 p.m. KEITH'S—“Top Hat,” at 1:45, 3:45, 5:45, 7:45 and 9:45 pm. METROPOLITAN — “Page Miss Glory,” at 2, 3:50, 5:45, 7:40 and 9:35 p.m. BELASCO—"“My Heart is Call- ing,” at 2:30, 4:16, 6:06, 7:54 and 9:50 p.m. COLUMBIA—"“China Seas,” at 3, 4, 6, 7:55 and 10 p.m,