Evening Star Newspaper, November 24, 1936, Page 11

THE EVENING STAR., WASHINGTON, D. C, TUESDAY, NOVEMBER 24, 1936. . St A= TR 'HE opinions of the writers on this page are their own, not Taxing Power May Solve Relief Exemptions to Business for Raising Total Em- ployment Possible. BY DAVID LAWRENCE. O MUCH enthusiasm prevails among New Dealers over what they believe has been accom- plished by using the taxing power as a means of economic reform that serious consideration will soon be given to the use of the taxing power as an in- centive toward absorbing the ‘unemployed. It is obvious that the tax on surpluses was in- tended to force dividends into distribution and Increase pur- chasing power irrespective of whether the law brought in addi- tional revenues. Now, if the tax- ing power can be used as a stimulant—that is, if ways of avoiding tax payments by conforming to the Federal Govern- ment’s desires are related to unem- ployment, the plan may have more far-reaching effects than even the authors of the tax on surpluses ever dreamed. Thus one plan calls for a tax ex- emption or credit for any corporation which increases its total pay rolls by & certain per cent, the increase to be In number of persons employed as well as total pay roll. If a company learned that instead of paying huge taxes to the Federal Government it can be exempted or credited with a certain proportion and thus increase its production at the same time the Impetus to re-employment might be- come as natural as the recent trend toward dividend distribution. Would Aid Budget. Also, if re-employment were begun by industry on a wide scale, there would be less relief expenditure needed from the Federal Treasury and this in turn would cut down the requirements of the Federal budget. At any rate, so the theory goes, and while the idea has been discussed from time to time, no real attention was paid to it until the dividends and wage increases began coming from the large and small corporations in the last few weeks as a method of legitimate tax avoidance. In fact, the whole idea of using the taxing power to achieve indirect ob- jectives is coming back into legisla- tive vogue after 20 years of enforced neglect due to an 8-to-1 Supreme Court decision in the second child labor case in which an attempt had been made to penalize by a tax the distribution in interstate commerce of goods made by child labor. Reverse of A. A. A. Case. It is true the Supreme Court held by 6 to 3 in the A. A. A. case that a processing tax even for a beneficial purpose, such as improvement of farm income, was not within accepted con- stitutional principle as laid down be- fore by the court’s decisions, but would the court say the same thing about a reverse of this process, namely, the exemption from taxation of groups which performed in a certain man- ner? ‘Thus for many years tax exemptions have been granted more or less arbi- trarily not only to individuals of dif- ferent sized incomes, but to different kinds of corporations, extending all the way from personal service com- panies in which more or less capital is used down to co-operatives. If the Congress has the power to make tax exempt a certain class it probably has the power to define what are the char- acteristics or qualifications of that particular class. Thus all corpora- tions which increase pay rolls and em-~ Pployes by 10 per cent in a given year would occupy a particular status, and eorporations which increased 20 per eent might occupy another. Two-Edged Sword. Congress might justify the proposal on the broad ground also of trying to get sufficient tax money to balance its budget. For, if expenses for un- employment relief are cut down by the use of the exemption privilege to cer- tain corporations, then it is but an- other way of improving the revenues ©of the Treasury as a whole. It will promptly be asked how any eompany can increase its pay roll and produce more goods than it sees ahead a market wherein such goods ‘would find buyers. The answer is that some businesses with non-perishable articles might actually find that the money saving on taxes enabled them to produce and store goods for future markets. Also, not all companies are distributing dividends, but the sum David Lawrence. Lewis & Thos. Saltz, Inc. French, Shriner & Urner CusToM GRADE MODELS FOR FALL & WINTER These are the Finest Men's Shoes French, Shriner & Urner have made in 55 years of Custom Shoemaking. Their choice leathers, Custom Workmenship and Smart Styling set @ New Standard in Fine Shoe Values. 105 to 1255 News Behind the News Eccles Apparently Has Taken Early Steps to Nip Boom in the Bud. BY PAUL MALLON. HE Roosevelt reorganizers here have been loath to say it, but they all expect they will have to battle a boom movement within the next I year or so. . ‘The President, for example, was asked before he lef. whether he expected sharp price increases. He wi:2ly ducked the question, with the facetious advice that the questioner should “ask some stock exchange house.” But no firmer offiicial announcement of the erpectations could have been conceived than the negative one made a few days later by Gov. Eccles of Federal Reserve. He said his board was con- sidering a further increase of reserve reduirements. Well-inspired news accounts simultaneously announced the increase would prob- ably be made right after the Christmas Nolidays. As there would be no reason for increasing reserve requirements unjess Gov. Eccles is anticipating a boomlike demand for bank credit, he seemed to say backward what President Roosevelt and his other reorganizers have declined to state frontward. The simple truth is every one scents what is coming, and Eccles is hoping to be able to handle it by taking a few wise credit stitches in time. The State Department move to get the embassy out of Madrid was officially ascribed to lack of faith in the aim of rebel aviators. ‘The rebels have repeatedly prom- ised they would not bomb the dip- lomatic zone in Madrid, but it is an old Spanish custom to shoot at one thing and hit another. Of course, evacuation of the em- bassy will also make the switch of recognition from the loyalists to the 12bels very smooth, pleasant and socially correct. By moving our diplo- mats out of .gun range, the State Department is also moving them out of the loyalist camp. After the rebels take the capital, our boys can be moved back in again, without seeming to be fallihg on Gen. Franco's neck. Of course, the department nevah, nfvah thought of that. * X * & Squads of new freshman members of Congress who matriculated in the last election have been wandering through Capitol corridors the last few days. They have hastened to iook over their new jobs before the official count of the ballots is completed. Other freshmen who have not yet arrived are said to have gone off on vacations away from home. | * An owlish Senator explained the migration. “The fellows who won the primaries this year were the ones who made the most promises,” he said. “Now they are elected, they are just trying to get away from those they promised™ Treasury Secretary Morgenthau has announced he will not object to Congress continuing the R. F. C.—for another year. The announcement was made a few days after the mews was told in this spot that Mr. Morgenthau had a hankering to abolish the R. F. C. as well as its chairman, Jesse Jones, and absorb the former, but not the latter, in his own well-run Treasury Depart- ‘ment. What it means is that fworwenlhnu has surpressed his hankering by request from higher up. The halchets unsheathed by Messrs. Morgenthau and Jones are now to be buried, but not sc deeply that they cannot be dug Up next year, when Mor- genthau will make another, and probably s more successful, effort to handle the liquidation of the R.F.C. Morgenthau speaks only ex cathedra, or, at any rate, only after hearing from cathedra across the street in the White House. Consequently, you may look for- ward to the following two develop- ments, just as surely as if Mr. Roosevelt himself had made the announcement instead of Mr. Morgenthau: (A). The R. F. C. will be continued another year. (B). The president’s monetary poyers will be renewed for two or three years, * % x % Don’t go too strong on the assumption that Joe Davies will be Ambassador to Russia for any great length of time. Davies was slated for & bigger diplomatic post, and still is. However, Moscow was the only one open at the moment. There has been some talk of making him Undersecretary of State, but Mr. Rooseveit is said to believ/ a career man should have that job. He was also candidate for the Paris Ambassadorship at * the time Bill Bullitt got it. A reorganization in the diplomatic corps after inauguration may yet bring him to Paris. Several things are said to have caused the recent soaring of Davies' stock on the White House exchange. ' He is supposed to have worked the old Republican squeeze play upon we!l-to-do Democratic officeholders for campaign contributions. Some say he turned over a neat $100,000 to Farley by merely inviting officeholders who could afford it to contribute one year's salary to the campaign fund. Also, he is said to have originated one of those $1 campaign clubs, thus demonstrating his versatility in collecting from rich and poor alike. This makes his appointment to Moscow wholly appropriate, as there is the matter of the Crarist debt still pending there. a (Copyright, 1936.) Air-Conditioning Begun. total of those which do has given the New Dealers much joy. From a strictly orthodox point of view, the idea of stimulating the em- ployment of employes who are not needed is all wrong, just as the dis- tribution of surpluses that ought to be saved for a possible depression is also all wrong. But the New Deal theory of accelerating recovery through increasing purchasing power at the moment rather than to look ahead to future depressions is a vital part of controlled economy, and that's the perspective through which the use of the taxing power to stimulate re-employment is being viewed in offi- cial quarters here. (Copyright, 1936,) districts of Malaya. Will Address Dentists. Dr. John Oppie McCall, director of Murry and Leonie Guggenheim Me- morial Dental Clinic, New York, will address the District Dental Society at a meeting at 8 o'clock tonight in the Public Health Auditorium, Twen- tieth street and Constitution avenue. | Plan “Get-Acquainted” Dance. A “get-acquainted” dance will be held at Wardman Park Hotel on De- cember 5 by the Social Security Board Union. Miss Marguerite Goffett is chairman on arrangements. 1409 G Street N.W. Air-conditioning is being intro- duced into Singapore and up-country necessarily The Star’s. Such opinions are presented in The Star’s effort to give all sides of questions of interest to its readers, although such opinions may be contradictory among themselves and directly opposed to The Star’s. Wilson Illusions Rejected Collectivism Aqwng Nations Dies, and Individ- ualism Brings Chaos. BY MARK SULLIVAN. RESIDENT ROOSEVELT, in the address he is about to make at the Pan-American Conference at Buenos Aires, will deal with international peace. He may consider international peace as respects the American continent only, to be attained by some kind of Pan - American § under standing. Whether it would be practicable for % the Western con- tinent fo have a separate peace organization of its own is a ques. tion. It could hardly be water- tight, hardly be securely immune from war on the continent of Eu- rope. Whatever is done, it will be necessary to con- sider international peace with respect to the world as a whole. Mr. Roosevelt, or any one else who looks this problem ‘squarely in the face, must recognize one outstanding, inescapable fact: The attempt at in- ternational peace begun by Woodrow Wilson 20 years ago has not safe- guarded the world against war, It has not worked. This is a land mark in history. Can we draw any in- ference from it? Mussolini the other day said it was necessary to clear the table of all “Wilsonian illusions.” Among these, Mussolini, with some Latin latitude, named three—I paraphrase an epi- tome of Mussolini’s speech by Walter Lippmann: Disarmament; the doc- trine that all nations have equal legal rights; that collective security is a possible or even a desirable ideal. All these, Mussolini asserts, are out the | window. Lippmann agrees “that in Europe today all these hopes have been blasted and that no nation now places any real reliance upon them.” Two Other Illusions. 1 am not sure that Mussolini's defi- nitions of Wilson's ideals are historie cally accurate. But Wilson did have two ideals which overlapped those mentioned by Mussolini. These may now fairly be called “Wilsonian illu- sions.™ The two Wilsonian illusions were the slogans with which we entered the Great War, the slogans phrased by Wilson: The “war to make the world safe for democracy” and “the war to end war” Twenty years after we know that i war is not ended, on the contrary, a new war is threatened and may be imminent. And we know, too, that the world was not made “safe for democracy.” On the contrary, at the | very time Wilson was exalting us with | his slogan, the world was entering a | period in which democracy has for 20 years been on the defensive, on the decline. Mark Sullivan, Brings Weakness. From recognition that these slo- gans are illusions a fundamental les- son may be drawn. As Lippmann puts it: “The British and French peoples were lulled into a -false sense of security by the collective system and they permitied their armaments to become inadequate.” Because Britain relied on the collective sys- tem “it was unable to defend the in- terests of the empire during the Ethi- opian affair.” And “if France and FORMAL EVENING Clothes of Dependable Correctness Single or Dewble Breasted DRESS SHOES ......... $7.95 & $10.85 SHRINER SHOES #7795 LEWIS & THOS, SALTZ INCORPSRATED TAILORED BY THE BEST TAILORS IN AMERICA TUXEDOS . . « + « « %40 t0 $67.50 TAfn.co,u's & TROUSERS %45 10 375 DRESS OVERCOATS . . . %40 t0 365 COLLAPSIBLE OPERA HATS $10 0 15 FRENCH, SHRINER & URNER DRESS SHOES..___..........$795, $10 BLACK HOMBURG HATS .. -- $7.50 LEWIS & THOS. SALTZ INCORPORATED 1409 G STREET N. W. NOT CONNECTED WITH SALTZ BROTHERS INC. Britain had not trusted in the system of collective security they would not have been so weak that Hitler was able to tear up the Locarno treaty so | “Ifly." Lippmann says, with some justifi- cation, I think, that while the present condition exists “the only hope of peace lies in the superior military power of the peaceable nations.” That was said before by a former President ind a former Roosevelt, Theodore: “Speak softly—but carry a big stick.” That is clearly the path for America today. The wreck of Wilson's dream might, I think, be expressed in a larger gen- eralization: The collectivist system, a3 a form of internationa! organiza- tion, is not now practicable. Whether it may some day be practicable is too much to say. At least we know that Wilson was too far ahead of his time. Britain Loses Power. If the collectivist system among nations is impossible at present, what is the alternative? The alternative that the world has had since time out of mind is individualism among nations. For more than two centuries there was a leading individual in the world of nations. It was Britain. She used her pre-eminence in the way that the right kind of leading indi- vidual man in any community does. From uer flowed out to the world standards in many fields. She con- ferred on the world such interna- tional law as there was; for funda- mentally international law is merely the concession which the strongest naval nation makes to the less strong. Britain had the leadership, Ger- many coveted it. Germany wanted “the place in the sun.” Germany tried to take it away from Britain. Germany failed—but she so weakened Britain (as well as. herself) that it | became doubtful whether Britain | could regain her dominance. Chaos Follows, As a result, for 20 years we have had chaos. We did not know whether the world was going to be organized on the collectivist system of Wilson's dream, or whether it was going to go back to national individualism. And| assuming that individualism was to| continue to be the world order we did | not known which nation would be But we rejected the leadership and | the leading citizen. our rejecting it added to the chaos. Meanwhile, there was serious doubt whether Britain could regain the po- sition. For a time Russia aimed to take it, aimed to impose her concep- tion of society on the world. At the present moment Italy and Germany entertain the ambition. Without try- ing to foresee in detail what is to come we know quite surely that col- lectivism as an order of nations has for the time being passed; that for | the near future individualism of na- | tions will be the world order. In the fate of collectivism as an order of nations is there any analogy to collectivism as an order of society within nations? l (Copyright, 1936.) We, the People People’s Demand for Results Creates Crisis for Supreme Court, Observer Says. BY JAY FRANKLIN. OLITICIANS may be content with jobs, but the people want results and do not particularly care how these results are achieved. It is this which creates the constitutional crisis now involving the Supreme Court. The old theory was that we Americans have a peculiar love and touching reverence for this judicial instrument, and much of Gov. Landon’s luckless campaign was baséd on the charge that the New Deal had “flaunted” the Constitution. Today the Supreme Court is considering cases arising under the ‘Wagner labor relations act and the T. V. A., and doubtless will be asked to review other New Deal statutes. Any one who believes that these measures are the careless whim of a few intellectual New Dealers is invited to consider carefully the following letters addressed to this column by two assuming mem- bers of the American electorate. The first one comes from Iowa: “I hold 17 years seniority on the Blank Railroad Co. as an engi- neer and freman. I have been cut off the working list since 1931 and had hopes of returning to work in 1935, when the railway retirement bill was to go into effect, but to my big disappointment nine old men, who should be retired on account of their age, decided the bill was not lawful and I am still not back to work. “Now & new bill has passed and is coming up before the Supreme Court again. Now, Mr. Franklin, honestly what are the chances of this bill becoming & law? Surely the working class are entitle. to some pro- tection when they get old. I am 36 years old and am one of the many who shall benefit by this law.” The second letter is from Ohio: “I realize as & working man and a student of economics that we can't get to first base unless we change the Constitution or the Supreme Court itself. I claim that I as a working man know just as much about the Constitution as the smartest constitutional lawyer in the country, for the simple reason they don’t know any more than I do how the court is going to interpret the particular law that comes before them; even the Supreme Court itself don’t know what s constitutional. If they did, they would render a unanimous opinion instead of a split opinion, 30 Jay, old boy, hammer away, for this issue must be decided one way or another before we can legislate for the common weal of the American people.” * % It is because of ¥s awareness of this sort of popular pressure, as well as because of the rigidity of some of the court'’s majority opinions, that the New Deal has been driven into increasingly hostile criticism of the Federal judiciary. People want jobs, they want incomes, they want security, and they want results from the actions ;:;‘hich they have taken, through their political agents, to secure these ings. ‘They are not particularly hostile to barriers—they simply seek to remove or get around them. They will yield to necessity with good spirit— witness the kindliness and humility of our people in the early days of what we were then told was an unavoidable depression—but they do not take Paper obstacles very seriously. Their very patience imposes & tremendous responsibility upon all of us who inhabit the many-celled superstructure of industrial society. We are living on the labor of oth- ers, no matter how impressive or constitutional the gestures we make with pens and paper. Unless we, by our activities, can help the mass of people make a living we have no right to exist ourselves and no au- thority to tell others how things should be done. Politicians, bank- ers, doctors, lawyers, writers, art- ists, clerks and even judges may lend luster to our history and edify our descendants, but unless they serve the humblé purposes of that work- ing creature—man—to get an honest living by his own exertions they are dishonest or oppressive imposters. * * % % In other words, the property-owning, professional and white- collar classes of America will be judged, not by the sort of living pilfer for themselves in a light-fingered economic system, but by the sort of living they enable the workers and farmers of this large country to enjoy. Thromes and courts and banks and empires have been tumbled in the dust for mo other reason than this: That the leaders cut the cord which iinked them to the womb of their own people and preferred individual advancement to the test of the gen- eral popular welfare. ‘This is the case of the New Deal vs. the Supreme Court; this is the ren- dezvous with destiny, of which Roosevelt spoke last June at Philadelphia. ‘This is the proof of the political pudding which the handful of conscience- stricken millionaires, politicians and intellectuals have placed before the American people. Will it give jobs, work, peace and food to the mass of their toiling fellow citizens? (Oopyrisht, 1936.) 505 PRIZES FOR THE 505 CLEVEREST LAST LINES TO THIS JINGLE You Must Use FREE Entry Blank You needn’t buy anything to enter. Just get a FREE entry blank and full details at any Richfield Gaso- line Dealer. Contest closes midnight, December 2nd. 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Headline Folk and What They Do U.S. Air Record Holder Flys for Spanish Loyalists. BY LEMUEL F. PARTON. LYING and fighting for the Spanish Loyalists, young Eddie Schneider of Jersey City gets $1,500 a month, $2,000 insur- ance and $1,000 for each enemy plane he drops. No pay for overtime, how- ever, and you may not be able to knock off when the whistle blows. Schneider, an amiable, blond, flop- haired giant of 24, is the holder of sev- eral flying records, including the junior transcontinental record, made when he was 18. When he finished high school his parents refused to back him in his chosen air career. He started putting in a full-day shift around the American Express Co. hangar, doing roustabout work without pay, cadging a ride once in a while, getting the hang of flying. He finally made the pay roll, became a second-class me- chanic, saved his money and bought & second-hand plane. He cobbled it up and flew it with such abandon that | he startled the groundlings — his Westphalian father and Norwegian mother among them. He’s a thorough master of his trade, but times have been hard for aviators. The Spanish | civil war offers a rare combination of base pay and piece work. There are a number of American | aviators fighting on both sides. The group which s.ipped last week in- cluded, in addition to Schneider, Bert Acosta, Maj. Fred A. Lord and Gordon Berry. Acosta is 41 years old and has been flying 26 years. I saw him take his first air ride at San Diego in 1910 with & little debonair Prench fiyer named Paulin in an extraordinarily shaky box-kite thing, which I also tried out, 80 scared that my teeth were clenched for a week after, Acosta has gone into many unhappy marital and financial tailspins and has become the Prancois Villon of aviation, ready for a tilt against the | Burgundians, and surely slated for the legendary chronicle of sky roisterers. He was Rear Admiral Byrd's pilot on the flight to PFrance in 1927, but grounded much of the time since then by various misfortunes. Maj. Lord is, I believe, several years older than Acosta. He is an English- man who brought down 20 German planes, flying for the Britith in.the World War. A London friend told me several | years ago that Charles B. Cochran, London theatrical producer, was go- ing to make a second Maude Adams out of Elisabeth Bergner. He cited Miss Bergner's cloistered life, her re- fusal to give interviews, her ascetic aloofness. “That's a build-up,” said my friend. “You'll see, when she starts doing Barrie, it will be the Maude Adams story all over again.” From Edinburgh, Scotland, the ca- bles bring long laudatory accounts of | the success of the elfin Miss Bergner |In Sir James M. Barrie’s new play, | “The Boy David." 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