Evening Star Newspaper, November 30, 1936, Page 11

’ C, MONDAY, NOVEMBER 80, 1936. This Changing World THE EVENING STAR, WASHINGTON, D. ‘News Behind the News trHl opinions of the writers on this page are their own, not necessarily The Star’s. Such opinions are presented in The Star's efort to give all sides of questions of interest to its readers, although such opinions may be contradictory among *1U. S. Deficit Headline Folk and What Paralleling Last Year Prudent Course Calls for Expenditures That Keep Taxes in Reason. BY DAVID LAWRENCE. ITH exactly five months of the present fiscal year now passed, the Federal Gov- ernment is running a deficit in operating expenses at the same rate as a year ago. Apply the average of the past five months to the full fiscal year, which ends on June 30 next, the excess of expenditures over receipts will be about $3,600,000,000. f This means, | notwithstandin g the growing be- lef about re- oovery having arrived in full bloom, that the Federal Govern- ment will have had an unbal- anced budget running into the billions for the sive year. If there is to be any substantial curtailment in expenses for the pres- ent fiscal year, no sign of it has ap- peared from any quarter. This is oc- ceasioning much surprise in view of the fzct that tax receipts for the current fiscal year are to be the largest in the history of the United States. Obscure Figures. Unfortunately, the true situation on Federal finances is not to be gleaned readily from the complicated way the Treasury has 6! making its figures public. The facts are all there, but the words ‘deficit” and *“expenditures” do not embrace all the items that should be and would be so included in any private corpo- ration which tried to float securities nowadays through the sanction of the Securities and Exchange Com- mission, Using accepted methods of private accounting, therefore, rather than governmental bookkeeping, the ex- penses and receipts for the current fiscal year up to November 24, as compared with a year ago, would be tabulated as follows for No- vember 24: David Lawrence. seventh succes- Last Year. Expenses _: $3.096.514.181 ceipts 06! 1.4 el 22 1515.004.10% 1662004008 This compares with the Treasury's €laim that the deficit was $1,212,520,- 119 and that a year ago it was $1.618,886,164. But the Treasury, in ts tabulation of November 24, did not include under “Expenses” about $303,084,073 of cash derived from re- paid loans. This item last year amounted to only $43,208,763, so last November it did not alter the picture very much. Now, as R. F. C. loans, commodity credits and farm credits are being reimbursed to the Treasury and re-expanded by Government agencies, it is true less cash is needed than heretofore, but the expediture eide in private business usually re- flects all actual moneys paid out by check or cash for operations of all departments. The problem that 1. s the Roose- velt administration is how to cut actual expenditures and bring the budget into a real balance, Day Must Come, Some day, there will have to be & beginning of real debt retirement. Then only will holders of bonds really feel sure that the credit of the United Emtfis Government is on the same basis' as it was from 1919 to 1929, when the war-peak debt of $29,000,- 000,000 was cut down to about $17,- 000,000,000. (Copyrisht, 1936, e YOUR GIFTS © BEAUTIFULLY o GIFT-BOXED o IF YOU WISH 14.419.253 | Failure of Building Boom to Materialize Held Major Defect in Business Picture—Construction Needed. BY PAUL MALLON. AJOR defect in the business picture now is in building, The over- due boom in the construction industry has failed to materialive, The Governinent h&s been spending & iot of money on it for three years, but has cnly succeeded in keeping it from cemplete breakdown. Private expenditures have not heen stimulated to any extent comparable witn the pre-depression era. With general industrial production clicking along at 109 per cent of mormal, building for November lags at about 55 per cent. It is the lowest of all the major trade barometers. This is of tremendous importance because the bulk of unemployment now is in that industry. At least, in the absence of any real statistics concerning unemployment, most economists say it is in that industry. It means the current unemployment condition is not likely to be cured until the construction industry gets back into stride, * ok K X What has happened to the ab- sent building boom is not a very deep mystery. For one thing, prices are high. That is, they are high in relation to wages and in- come. And there is not much chance that they will get any lower. But that is not all. Other in- dustries have not yet reached the point where plant expansions are necessary. Factory building for the last 10 months amounted to $161,000,000, which was good only by com- parison with the $90,000,000 of the same period in 1935. Commercial building for the same 10-month period amounted only to $203,000,000, and it was $140,000,000 for the same period last year. Office and store rents are not high enough and business prospects are not yet good enough to stimulate a general movement in commercial building. Residential construction has dome somewhat better. In the 10-month period it amounted to $668,000,000, as compared with $394,000,000 for the first v0 months of 1935, * k Xk X But the demand for residential construction still exists, if the Govern= ment surveys on the extent of the residential shortage are correct. Ample credit facilities exist. The present wave of wage increases and bonuses should, if coatinued, stimulate buying. Increases of the general price level during November tend to put the general price level more in con- formity to building costs. All these factors suggest a continued steady improvement in the residential line. g Some slight sign of an increase in factory and commercial de- ‘mand is discernible. The rayon industry, for one, has been running at capacity and is expected to increase its plant facilities. Increased earnings have also caused exrpectations of plant expansions in steel. In the main, what is expected is a slow, smooth upward curve line, which may not reach pre-depression levels very soon. It is a problem which the Government could probably help more by encouraging a national belief in the certainty of business expansion, high wages and prices, than by the artificial methods which have been attempted. * x %k x Recognized national aushorities have circulated information that the upward movement of building stopped in July and has not recovered since. This is not correct. The amount of contracts awarded each month since Spring follows, in millions of dollars: - 130 - 122 116 141 Every building material line was up from September to October. Employment in the industry was up 213 per cent; pay rolls 5 per cent. * X ¥ x The extent to which building has lagged may be gauged properly from the following Government chart of major business activities, which, the leading national economist has said, “gives us our best information about business conditions.” All figures are based on 1923-1925 as 100, except prices, which are based on 1926. The figures are adjusted for seasonal variations, so each figure represents roughly the percentage of normal existing at the times designated. 122 119 125 ‘Wholesale | Prices Bldg. (1926 Con- Equals tracts 100) 117 95.3 28 648 37 80.0 62 81.6 59 81.6 58 81.5 55 821 Indus- trial Pro- duction - 119 Fac tory Employ- ment 104.8 642 82.1 88.9 88.9 90.4 90.0 Dept. Prt. Store Loadings Sales 106 111 56 69 63 kil 70 86 72 88 73 90 * 93 % x Autos are figuring on a 10 per cent increase in sales next year. Some noted economists cannot see how it will develop, although there was great enthusiasm manifest at the shows. A 10 per cent improvement in rail earnings next year is being more confidently predicted. * ¥ * x October production of autos was less than a year ago, but only because they got & slow start, due to model changes. Pay Rolls 109.1 453 70.2 81.1 81.1 86.5 87.0 Year 1929 Aver. . 1932 Aver. .. 1935 Aver. . 1936 Aug. Oct. * ok ok ok Practically all the lines of industrial production have continued strong, except lumber. It was tied up by the Pacific Coast strike. * ok % X The Cleveland Trust Co. has made an interesting survey, showing Canada has regained 97 per cent of her depression losses while this country has regained only 70 per cent, although we tried a lot of fancy remedies ada did not. (Copyright, 1936.) MEN!? themselves and directly opposed to The Stur’s. We, the People Hint of War or Peace Expected in Looming Trade Agreement With Great Britain. BY JAY FRANKLIN. E so:t of trade agreement that Secretary Hull gets from Great Britain will provide a map for the next decade of world his- tory and will be a tip-off on whether there is going to be another big Euro- pean war in the predictable future, Since 1914 England has been living alongside of a continent which comes close to being a political maelstrom and an economic vacuum. For a hun- dred years before 1914 British diplo- macy had maintained European peace through the balance of power and had found in Europe its greatest market. Then the British blockade of 1014~ 1919 taught every European nation that high tariffs and economic self- containment provided the only course of safety. The American doctrine of self-determination split the continent into a large number of desperately nationalistic little countries. The French military victory attempted to make this economic and political chaos perpetual. For the danger of a European war today, therefore, England, France and America are politically responsible. Trade Alternative to Homicide. Their policies have combined to con- vince such “have-not” nations as Italy and Germany that the only path to prosperity for their peoples les through colonial expansion and mili- tary conquest of wider economic bases for their industries. The rise of the Fascists and the Nazis suggests that the only alternative to big-time homi- cide is far freer trade on a far wider le—a scale which will give the ‘have-nots” fair access to sources of raw material, to industrial capital and to world markets, without forcing them to use bombs or bayonets. Since 1919 America—like the British Empire and the rest of the overseas world—has been in the position of subsidizing England (and to a lesser extent, France) as & sort of buffer- state against the rest of Europe.: So long as Europe’s energies go into arma- ment and European politics hinge on threats of war, Europe is a bad market for goods and a bad risk for capital investments. This system of secret subsidy was pretty expensive and we abandoned it after 1929. So England turned to the empire and to “sterling countries” such as the Scandinavian and the Argentine, for preferential tariff arrangements which amounted to subsidies. That is the situation which exists today. If Mr. Hull's arrangements with London do not include the “most- favored-nation” clause and do not sup- plant empire and other tariff prefer- ences, the coming agreement will sim- ply mean that we, too, are prepared to pay England with tariff concessions to stand guard for us over the gates of the European continent. This, in turn, will mean that, if war comes, we shall have to stand by England, Just as we did in 1917-8. May Be Opening Wedge. There is another possibility: That our agreement with England may be the opening wedge for the economic appeasement of the hungry “have- not” nations of Central and Southern Europe. England would open her cap- ital markets to Germany at any time when the British were sure that this financing would not simply be turned into fresh armaments with which Hit- ler could blackmail the French and overawe the jumpy Russians. This, in turn, would mean that France had become resigned to the economic rebirth of Germany and to German control of all Central Europe —in other words, that France should surrender the fruits of victory. France, torn by civil strife and with Spain aflame, is far closer to making this hard decision than seemed possible even a year ago. If France resigns herself gracefully to the inevitable stronger Germany, the way will be clear for & real pacification of Europe through freer interpational trade. Foolish to Bind Selves. Under these conditions the British would be fools to tie themselves by quotas and tariff preferences to any special sources of supply. They would instead try to resume their old role of bank and warehouse for Western Europe. This would mean a return to British free trade, with all the raw materials of all the world freely ad- mitted to England, for processing and/ or redistribution to the European markets. Mr. Hull's coming British trade agreement, under these circumstances, would be broad and simple and would take the form of England's abandon- ing her post-war protectionism while we modified our traditional tariff pol- icy 50 as to permit a wider circulation of goods and a general redistribution of welfare throughout the countries bordering on the North Atlantic. That is why, if we really want to understgnd what is going to happen in Europe, an Anglo-American recip- rocal trade agreement is the thing to watch. Unless it is calculated to do much more than increase trade between America and England, it will mean that the forces making for an- other world war have not yet been mastered. (Copyright, the Register and Tribune Byndicate.) NAMED BELL OFFICIAL Buckley Is Promoted by Bell Laboratories. NEW YORK, November 30 (#).— TheBell Telephone Laboratories an- nounced yesterday the election of Oliver E. Buckley as executive vice president to succeed E. H. 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BY CONSTANTINE BROWN, Spanish loyalist government is very inconsiderate. After sll the moral assistance it received from France and Great Britain, it de- cided to presant & claim, “danger of war,” before the League of Nailons. To lay such & baby st the doorsteps of the League is bad taste, indeed. It looks as if the loyalist government either is not aware of realities or that it wants to embarrass be- yond words the poor, decrepit Ge- neva organization. Prance and Great Britain were quick in trying to persuade the Spaniards to withdraw their pro- test. Eden and Delbos have be- come, by necessity, realists. They know that the League can do noth- ing and will do nothing, especially after the bitter pill it had to swale low in the Ethiopia-Italian conflict. This time any action of the League might precipitate world war with greater ease than a year ago. Germany and Japan are completely outside the League. Italy is mominally still in the Geneva organization, but Muassolini has not minced his words every time he had an opportunily to talk about the prematurely senile League. Should the gentlemen who used to have such a good time on the shores of Lake Genmeva try and stop the Italian and German support to Gen, Francesco Framco they would be very sorry, indeed. Power politics and shock diplomacy, international vituperation through the air and through the press, death of the League of Nations, widespread social unrest, feverish expansion of armaments throughout the world, war in Ethiopia and prolonged tension in the Mediterranean, trou- ble in Palestine and finally war in Spain, waged with a barbarity unpar- alleled in modern times. This is the unfinished record of the year now drawing to an ominous close. What the next 31 days have in store nobody knows, but it won't be very good. * % % % ‘What puzzles the average American is where the hard-pressed Eu- ropean and Asiatic nations get their money to continue relentlessly to arm themselves. Italy is on & war footing. To the 1,200 ammunition factories Musso- lini has added about 130 new ones. Hours of work have been increased from 40 to 60 hours per week, increasing the production by 30 per cent. Eight million doilars have been spent during the last few months for new sirdromes. And $8,000,000 are not $8,000,000 in Italy. They are 120,000,000 lire, which is & lot. Nobody knows how much money the dictators spend on ;;:umenu. ‘The guess is that Mussolini is spending this year over $400,~ ,000. ‘The rearmament plan of the French, approved September 7, calls for an expenditure of $864,000,000. More will be needed shortly to complete the fortifications on the Belgian and Swiss borders. And still more money will be needed for aviation. The armament erpenditure of the German government is known only to @& few insiders in Germany. But judging by the eflort they are making, it is safe to say that the Reich had to spend this year over $1,000,000,000. % ok w ‘The British have just embarked into s comprehensive rearmament program which embraces the air force, the navy and the mechanized army forces. The toial to be spent this year—without the supple- mentary estimates—is $1,500,000,- 000. Unless something happens in the course of the next few months to put an end to this armament race, it is probable that the Brit- ish treasury will have to produce next year something like $4,000,- 000,000 for the needs of the na- tional defense. The smaller nations, and even the so-called neutral nations, like the Scandinavian states and Switzerland, have to tax their citizens to the limit of their capacity to strengthen their war machinery. Their military experts say that should another European conflict break out, the rights of the neutrals will be by far more disregarded than in the past. This armament race of Europe provides an excellent subject for investigation to the world psychiatrists. i T Thief Shoots Trooper. CAZENOVIA, N. Y., November 30 (®).—A thief discovered at work yes- | { R n e oY= Cmvaal Brivc | apartment house here early yesterday. shot a State trooper in the thigh, after | Aroused by her screams, 14 families a hand-to-hand fight, and escaped. | escaped from the building. The cause The wounded trooper was John E.| of the fire, which started in Miss Woman Dies in Flames. MURRAY, Ky, Miss Effie Smith burned to death in & fire which destroyed a 21-room frame Smith's bedroom, was not determined. ' November 30 (#).— | They Do Angelus Temple Rivals Have Two of Three “Angelic”” Qualities. BY LEMUEL F. PARTON, HERE is an old saying that women are angelic because they are always up in the air, never have anything to wear and are always harping on something. The two boss seraphim of Angelus Temple, Aimee Semple McPherson and Rheba Crawford Splivalo, have plenty to wear, but they do seem to be a bit up in the air, and they are harping on each other's shortcomings. Mrs. Splivalo was Rheba Crawford, “the angel of Broadway.” She files a suit for $1,080,000 against Mrs. Me- Pherson, charging slander. Accord- ing to her com- plaint, sweet bells are out of tune at Angelus Temple. The charges are such as to excite the non-angelic populace tremen- dously. The brunette and comely Miss Crawford caused a Broadway riot when, at the age Rhebs Orawtora Of 18, she started a Salvation Army meeting in the theatrical district. She had been born in the Army, her father being Col. A. W. Crawford of Atlanta, who has been a Salvationist 44 years. The riot started when the police arrested her for obstructing trafic and people around the show shops went to her rescue. They liked her act, and she became Broadway's pet evangelist. 8he was a snappy dresser, altogether the most fetching evangilst that had ever hit the town. She had many offers for stage engagements, and the play, “My Gal Sal.” was written around her career. But she kept on with her street corner appearances until she married J. Harold Sommers, an | Atlanta business man, in 1922 and set- tled down in a Spanish mission home in Miami. Her second husband is Ray Splivalo, San Francisco broker and poio player. The late Gov. James Rolph, jr., of California appointed her State director of social welfare in 1931, with a salary of $600 a month. Her later assc~/ation with Mrs. Mc- Pherson came when it was supposed that the latter would withdraw from the temple, and Miss Crawford was | widely publicized as the successor to the glamorous Aimee Semple. Howe ever, she remained as assistant pastor, with resulting discord and now a fight to the finish. Miss Crawford is 38 and still -alluring. (Copyrizht. 1436,) o AR Planes Head for Chile. MIAMI, Fla. November 30 (#).— Two Sikorsky amphibian planes, en route to South America, where they will be placed in service by the Chilean National Air Lines, remained hers yesterday for routine inspection on their arrival from the factory at Strate ford, Conn. They will proceed to Santiago by easy stages. Our Silver Anniversary Year RALEIGH HABERDASHER Wflknybn'l st Mon's Whee Store-1310 F s78REET LAMGORA TOPCOATS ' 12th Exclusive Season at the Raleigh WANT a topcoat that has real style and the rare sub- stance to make that style last? Want a lightweight topcoat that's warm on cold days, dry on wet days and smart on all doys? Then you want a LAMGORA! 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