Evening Star Newspaper, April 16, 1937, Page 11

THE EVENING STAR, WASHINGTON, D. C, FRIDAY, APRIL 16, 1937. Interest Rate Reflected in Budget Electric Light and Other Costs Depend on Fis- cal Balance. BY DAVID LAWRENCE. HE average person who thinks that an unbalanced budget in the Federal Government is a thing apart and at best of remote interest to him probably would be surprised to learn that electric light rates and other costs may be dependent upon whether the Fed- eral finances grow Dbetter or I ‘worse in the next few months. Likewise the & ecost of mortgage money, the cost of borrowing . money for all & purposes, busi- ness and indi- & vidual, are today i related to the .n general level of interest rates. And interest rates, broadly speaking, are in the direct and indirect control of the Federal Government. For all practical purposes the recent break in bond market prices indicated that for some time to come the refinancing process by means of the so-called cheap money which has been 80 plentiful for refunding of existing David Lawrence. or maturing issues of bonds will be |/ at a standstill. The refinancing of the last 18 months was fortunate for those companies which were able to do it. Now the refinancing will be done at higher interest rates or not at all. Refinancing Suspended. In many parts of the United States electric light and power companies | have been able to effect substantial | economies in their interest payments | by paying off their security issues and borrowing new money at lower rates of interest. Where the Government | has been in competition or threaten- | Ing competition with the electric light companies, as in the T. V. A. area, | refinancing has been more or less| suspended anyway, but in other parts | of the Nation where no direct threat of competition has been prevalent, the tendency has been to refinance and effect economies for the consumer. ‘The situation in the South would not be alleviated even if interest rates | stayed low. Some sort of joint plan| whereby the R. F. C. or some Govern- ment agency arranges to guarantee the refinancing is about the only way | that particular dilemma will be met | and it may be the way by which a compromise set-up of a Government | partnership with the utilities or joint Government control of certain areas may be worked out. But apart from the effects on utility companies, there are other businesses which had looked forward to refinancing in the next year or so. Of the $4,500,000,000 of securities issued in 1936, about three fourths was in the nature of refunding of existing debt. The saving in interest payments was, therefore, very sub- stantial and aided producers in keep- ing prices down. The cost of the money borrowed is a material item in many a manufacturing enterprise. Cheap Money Rates Urged. Cheap money rates have, of course, been urged by the administration be- cause its own borrowings have been 50 extensive. As money rates go up, the interest on the public debt rises and thus the expense side of the Fed- eral budget goes up, too. | What is causing the interest rate | level to rise? Partly the demand for commercial loans, but very largely the ‘uncertainty that prevails about the | future of the Federal budget. The President is well aware of the diffi- eulties because he has sent out word | to all departments to economize as much as possible. He has indicated HE THE THIN MAN® DOSENT LOOK VERY HEALTHY TOME__p~ News Behind the News Senate Line-up on Court Plan Close—Roosevelt Majority Declared Slim. BY PAUL MALLON. RESIDENT ROOSEVELT has been telling friends privately he has an absolute minimum majority of five votes for his court-packing bill in the Senate. Postmaster General Farley has been telling the world almost daily that the President will win in a walk. Judiciary Chairman Ashurst says that, of course, the bill will not be with- drawn, because no one quits when he is winning, Ordinarily, in such circumstances, officials do not find it necessary or advisable to advertise their confidence so strenuously. The constant reiteration of these claims has, in fact, aroused some vague suspicion that something must be wrong somewhere on the inside. There is. A fair, careful, impartial check and double-check of the Senate in- dicates the inside situation to be as follows: ‘The President seems to have a good chance to get 51 votes, of which 10 are by no means certain. The opposition has 39 votes sure and will get at least four more for a probable total of 43. Only two Senators are still really doubtful, and they will prob- ably vote against. ‘This means the situation is so tight as to be really dangerous from the President’s standpoint. Mr. R.s minimum is really his maxi- mum. Mr. Farley is bluffing. The President stands to win today by only a margin of six votes, and he cannot be certain even of that. * % ok X These deductions are not based on a simple poll. On this issue, polling is useless because so many Senators are playing a cat-and-mouse game. For instance, an inside poll made by the opposition leaders last Tuesday showed: For, 37; leaning for, 5—Total, 42. Against, 44; leaning against, 10—Total, 54, The trouble with these figures is that five or more Senators counted as against, or leaning against, will probadbly jump into the President’s bag, if and when it becomes necessary. Several of these jumps will be surprising. In other words, you cannot poll the present convictions of Senators and reach any worthwhile conclusion. Too many Senators will not vote their convictions this time. For one reason and another, they are being re- quired to support the President against their own personal inclinations. A poll based on the honest personal convictions of the legislators would show two-thirds of both Houses of Congress against the President's plan. There is no question about that. * Kk On the basis, therefore, not of how they stand, but how they may be expected to vote, the following classification is authoritative: In Mr. Roosevelt’s bag—Ashurst, Barkley, Bilbo, Black, Bone, Bulkley, Brynes, Caraway, Dieterich, Ellender, Green, Guffey, Harrison, Hayden, Hitchcock, Hughes, La Follette, Lee, Logan, Lundeen, McAdoo, McGill, McKellar, Minton, Neely, Norris, Overton, Pepper, Pittman, Pope, Reynolds, Robinson, Schwartz, Schwellenbach, Sheppard, Smathers, Thomas (Elbert D.), Thomas (Elmer), Truman—39. Likely to jump to Mr. Roosevelt—Bankhead, Brown (Fred H.). Brown (Prentiss M.), Chavez, Gillette, Hatch, Herring, Maloney, Murray, O'Mahoney, Radcliffe, Wagner- 12. Surely against—Adams, Austin, Bachman, Bailey, Borah, Bridges, Bulow, Burke, Byrd, Capper, Clark, Connally, Copeland, Davis, Donahey, Frazier, George, Gerry, Gibson, Glass, Hale, Holt, Johnson (Hiram), King, Lodge, Lonergan, McNary, Moore, Nye, Shipstead, Smith, Steiwer, Town- send, Tydings, Vandenberg, Van Nuys, Walsh, Wheeler, White——39. Likely to be against—Andrews, Duffy, Lewis, Russell—4 Doubtful, but probably against—Johnson (Edwin C.) and McCarran—2. ‘While all of these deductions naturally cannot be guaranteed, they are likely to prove no less than 96 per cent correct. Reasonable doubts, et vy in several instances, have been re- SEE JIM 7 solved in favor of Mr. Roosevelt, so the percentage of error will very likely fall against him, and make the result even closer than the figures indicate. * ox ok % The word among the wise about Farley's predictions is that he has never mentioned how many votes he has, but has only said he - has enough. Thus, it appears he is seeking to preserve his reputation as a prognosticator, while, at the same time, trying to keep his eyelash majority from defeatist dandruff. Mr. Farley also knows what is not generally known, namely that the House Judiciary Committee, which is supposed to handle the legislation after the Senate gets through with. it, contains a majority against the President’s program, and this majority probably cannot be broken down or lured away by any or all of the tactics used successfully on Senators. The House line-up is as yet uncertain, but the leaders have always been able to make the Representatives jump through the hoops with more celerity than Senators. * ok Kk % If you want the secret of how legislators sometimes alter their initial convictions, you may find part of the answer in the lists of relief allot- ments and patronage appointments to be made within the next 90 days. At any rate, these will be closely watched, not only while the fight is going on, but immediately after it is over. There is a rather general belief, for instance, that certain States will fare better than others, as will certain Senators. (Copyright, 1937.) that the deficit for the fiscal year ending June 30, 1937, may be much | greater than anticipated. This is| because tax receipts are not what they | were estimated to be. The gravity of | the situation, however, is not alone in the showing to be made on June 30, 1937, but in the clear indication that 1938 will show a substantial deficit, too, and that was the year in which the President really promised a bal- | anced budget except for debt retire- ment. Mr. Roosevelt has been forgiven by | his friends cause his repeated | promises of a balanced budget have | ot panned out, but his opponents ave consistently declared that the | rising level of expenses will never | permit a balanced budget. Now, how- ever, friends and opponents alike, are faced with the fact that tax receipts are not coming in as expected and yet no substantial cuts in expenses have been made. Relying on Recovery Curve. The administration has been relying on & rising very curve to enable it to spend almost as much as before“ but now it is apparent that expenses | have to be cut because taxes have | reached a danger point. Tax rates | can go up but they do not result in | increasing revenues just because some- | body writes the rates into higher figures. Business cannot absorb taxes as fast as the administration has been increasing them nor do consumer: ab- sorb goods which have taxes tacked on to the sales prices. Real wages are going down. This is but another way of saying that money wages even though on the | increase cannot possibly buy the commodities and articles of living that were bought a year ago. In the face of such conditions, the fiscal crisis of the Government is slowly coming to a climax and definite action may be anticipated from the White House. This will take the form of drastic curtailments of expenses which may produce a psychological effect for the time being that may keep interest rates from rising unduly. But the cost of money is in Mr. Roosevelt’s hands and the costs of a thousand and one things is dependent on whether the budgetary trend is toward a meeting of income and ex- penses or toward the same happy-go- lucky way the budget has been handled in the last few years when deficits of unparalleled size have been piled up and the political administration here The Bottimore ¥ Ollis Ridioned a% *( ;@ém » A new-typs Streamlined Train to be operated hatween New York, Phihhlphia, n, Baltimore and Washingten. Wilmingt MONDAY, ON EXHIBITION (Union Station, Track #30) WASHINGTON, D. C 1:30 P. M. to 9:00 P. M. — APRIL 19 has seemingly feared to make the necessary economies. Unless the expense slashes are made the budget will become in the eyes of the financial world a helpless affair nd this will tend to force interest rates and prices generally upward in an inflationary cycle. (Copyright, 1937.) Jailer's Wife on Job. LORDSBURG, N. Mex. (#).—S. E. Allen, chief of the New Mexico State port of entry, told about a man plead- ing guilty to robbery in Bisbee, Ariz. With a party of seven, he was searched in vain. Then the jailor's wife noted a member of the party carried a baby. She found the $1,100 in evidence, Al- len said—in the baby’s diapers. HE opinions of the writers on this page are their own, not 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. Putzi’s Cautious Adieu Hitler’s Former Confidant Loses Favor, But Not His Life—Yet. BY DOROTHY THOMPSON. RNST HANFSTAENGEL, pop- ularly—or at least gener- ally—known as “Putzi,” is no longer, we are told, musician extraordinary to his harassed fuehrer, no longer liaison officer between the great Hitler and the English-speak- ing world via the, press. The long and melancholy fig- ure has arrived in London, ac- companied— say the reports — by his son. It seems it was suggested that he go to Spain. But Mr. H a nfstaengel thought better of it. Spain and the whole mis- sion appeared rather fishy. Why the mission, anyhow, and why Spain? Also, his 50th birthday anniversary had come and gone with no telegram of congratulation to “dear Putzi” from the Reichspresident and fuehrer. The omission was ominous. By such small indications do yesterday's idols know that the royal thumb has been turned down. In Germany turned down thumbs sometimes mean more than coventry. Mr. Hanfstaengel, perhaps, thought of other gentlemen who, at one time or another, had been the intimates of his chief. Of the blustering Roehm, the scholarly Strasser, the feminine and pretty Ernst, all very much dead today, with bullets, lots of bullets, in their bodies. “Tsk, tsk, tsk,” one can hear Putz saying, wag- ging his heavy head gravely. “Tsk, tsk.” So he didn't go to Spain. Instead, he stepped across the border there, | near Munich. where several borders | are handily about, and went to Eng- | land. Dorothy Thompson, Putzi Disiliusroned. Mr. Hanfstaengel has long been one of my favorite characters, My Berlin friends tell me that I have enjoyed a peculiarly vivid place in Mr. Hanfstaengel's emotions ever since the day back in 1931 when he introduced me to the fuehrer, who was then just Mr. Hitler. I had written to Putzi for the interview, for if one spoke English one approached the chief through the musician. “Madam,” he replied “Mr. Hitler will see you. a very nice handwriting.” Perhaps Mr. Hanfstaengel was given | to the study of graphology, a science highly considered in Germany, and thought that he discerned in my script both tenderness and sympathy. How great was his disillusionment how false was I to my revealed na- | ture! How perverse of me and how unwomanly! I did not like the fueh- rer. And the fuehrer did not like the interview. “The Thompson,” Putzi would say, his eves blazing with wrath, his mane of lank, dark hair | falling into his eyes. “That woman! | She nearly cost me my job!” I suspect that Putzi's hatred of “the woman' operated to benefit some of my colleagues. One of them recalls how Putzi loomed upon him in the Unter den Linden, spying him from a distance, and shaking at him a long agitated finger. “What do you write | about my country?” he wailed. “Why do you see things with so jaundiced an eye?” But suddenly his ire melted “Still,” he concluded, “you are better than the Thompson!" Fate Does Somersault. | gallantly, | You have | impertinent woman had returned. And through the direct intervention of Putzi the Gestapo—the dreaded secret state police—laid upon my | desk in the Hotel Adlon the order, | stamped within 24 hours. Putzi had had the last word. Or had he? Well, Mr. Hanfstaengel, I left Germany, openly, by train. How about you? Kurt Wilhelm Georg Ludecke, who first represented the Nazi movement in Italy, later in the United States as Washington correspondent of | Our band of heroes! | “I will take great pleasure in calling | | in an office and lines of men with their Dawn broke for Putzi in 1934. The | | reports say—he is writing his memoirs. the | I should drop a tear. Voelkische Beobachter, and eventu- ally was rewarded for his efforts by a session in the German concentra- tion camp—an adventurous gentleman of the earlier vintage of Nazis, when most of them were adventurers— makes two claims to fame. Opened Society’s Door. Eventually, however, Putzi performed greater services. For it was he who introduced Hitler into society. The Hanfstaengels belong to the upper crust of the Munich bourgeoisie, rich, civilized, patrons of art and music, living in the aroma of good food, handsome furniture and general culture. Mr. Hitler's followers were a handful of impoverished workmen, down-at- the-heels journalists, dreamy cafe philosophers and the backwash of the recent war. But Putzi knew the re- spectable people. Through him the messiah of German nationalism sat at the tables of the substantial, and en- tranced the wealthy Frau Beckstein (pianos) and the {nfluential Frau Winifred Wagner of Bayreuth. The ex-house painter, ex-soldier and Ger- man regenerator began to rise in the world. Putzi’s dollar primed the pump for many more, Of the original Nazis few could speak another language than their own, and Hitler himself still speaks, not German, but that other winsome, somewhat more slushy tongue, Austrian. But Putzi’s mother had been a Sedgwick of Boston, and he was a graduate of Har- vard, who had leaned his vast length across the counter of the family's branch shop in Manhattan, where prints of classic pictures once were sold. What more natural than that Putzi should become official trans- lator and liaison officer, first to the pretender, and later to the ruler? Air Castles on Piano. Evenings he sat at the piano, bang- ing out in his florid and not untalented style the music that Hitler loves; tunes, above all, from the Wagner operas, while the susceptible Muencher lolled in his chair with half-closed eyes, and dreamed, no doubt, of the dwarf who | cursed love to win the ring with which | he might rule the world; of Wotan in his giant’s palace of Walhalla; of Siegfried denying death. All these great dramas whose eternal theme is power enchant der Fuehrer, and Mr. Hanfstaengel must have felt as he beat the piano onward and upward to ever dizzier heights with his chief, that the whole of Germ:ny was being trans- formed into a Wagner opera with him- self very important in the orchestra. And now, alas! alas! The struggle was romantic, dramatic, sometimes even lyric. Our little group of men! With victory the heroes became bureaucrats. Putzi| sat at a desk, a hateful desk, piled | high with reports, statements, letters | to be answered, decisions to be made. | the attention of Der Fuehrer to ® * *” | I regret that I am compelled | to* * One made mistakes. Sometimes | one's coup cut the wrong way. Bureau- | cracy! Officialdom! And even the desk was threatened by that greedy, | gossiping, intriguing, ambitious, grin- ning Goebbels! Oh, it is tiring, and often boring, to be one of the ruling! The Trials of Power. Sometimes, they say, Putzi swept all the papers off his desk in a snarl of rage and frustration. The revolu- tion had been vibrant with brasses, rhythmic with marching feet, and one marched, too, composing odes to heroes. But victory was dusty papers hats in their hands. Hanfstaengel! But Mr. Hanfstaengel is no fool. He is a man from the inside. So—the Poor Mr. To file away in & safe, with the key in the hands of a publisher, and if anything “happens” to him, as things do happen, even in foreign lands, his posthumous words will tell all. A genteel blackmail to disarm assassins. I hope nothing “happens” to Mr. Hanfstaengel. In the Nibelungen gloom of Germany, he furnished a quixotic and fantastic note. In any- thing “happened” to Putz, I believe (Copyright, 1937.) “She won’t do that stunt with any coffee but Wilkins” This Changing World Great Britain to Answer Japan’s Naval Building With a Program of Her Own. BY CONSTANTINE BEOWN. BOU'L this time six years ago Washington and London were re- sounding with speeches about the blessings of the London Naval Conference. The most momentous decision reached by the three principal naval powers, the United States, Great Britain and Japan, the makers of that treaty used to say. All rivalries had come to an end. Recent confidential reports from Japan indicate that the Japanese government, having denounced the London agreement, has started build- ing a 45,000-ton battleship; 16 other sea monsters of 47,000 tons are planned now. Great Britain is erpected to retaliate in the course of this Summer. Two new 35,000 tonners have been put on the slips and cannot be changed. The 1937 naval program calls for three more such ships. If the admiralty receives confirmation about the new Japanese battle- sRips, it intends, according to reliable sources, to make the three new ships of 48,000 tons each, armed with 12 guns of 16 inches each. ‘The speed of these ships will exceed 31 knots. The British yards now have experience in building large and fast ships because they have been constructing large ships of the Queen Mary type. * x ox % The United States Navy De- partment has not made any com- ments yet regarding these new developments. Two new battle- ships will be started this Summer. The plans call for 35,000-ton ves- sels. But it would not be surpris- ing if, instead, 45,000-ton super- dreadnaughts were to be built. It is not easy to change plans on the eleventh hour. Considering, however, that we had planned such ships before the Washington Naval Conference of 1920, the construction of these ships would not suffer much delay if the Navy Department decided to adopt this large type. * koo One of our main handicaps is that while basing the Navy now in the Pacific, we must always keep in mind the fact that we might have to transfer it to the Atlantic, should circumstances require, The width of the Panama Canal permits ships of not more than 36,000 tons to go through. If much larger men-of-war are built, they Will not be able to get through. Hence the need of another canal. There has been a good deal of talk in past years about the construction of the Nicaraguan Canal. It may be that, under the threat of Japan to make these new super-battleships, we shall start building that canal. * o ok x The victory of the Belgian Premier Van Zeeland at the polls may have important international consequences, Before the election, Jaspar, the Belgian minister of communications, visited London and Paris and arranged with the Briths and the French government to get his chief Van Zeeland to prepare an international economic conference in Brussels at the earliest possible time after his re-election. Belgium is an important communication knot in Europe and as such is specially qualified to arrange for such a conference. Furthermore, since the last few weeks, the Belgium government has thrown off the shackles of all political and military alliances and has signified her intention to be once more an absolutely neutral state. The calling of an international economic conference to take up the work of the {ll-fated conference of 1933 would meet with an enthusiastic reception in almost every important capital in Europe and is looked upon with great favor by Mr. Hull. There is a growing belief that from such a gathering the nations might derive important advantages, since a number of thorny political questions could be approached under the cloak of secrecy. * * % % The House of Commons session of last Wednesday was amusing and instructive. The Baldwin cabinet obtained the inevitable vote of con- fidence despite of its blunder in the field of international affairs. As long as the government in office has its parliamentary majority it is practically impossible for the opposition to put through a vote of non-confidence. The discipline in the party camps is such that a member has not got the freedom of voting against the leaders even if he wants to. * % ok The House of Commons resounded with high-powered words such as “stern attitude of his majesty’s government” or “his majesty’s gov- ernment will not tolerate * * *” But every member in the House and, what is more important, Franco, Mussolini and Hitler, knew perfectly well that these were only words and empty expressions. The British government warn- ed Franco that he is not permitted to enforce a blockade, since his authority is not recognized by the British goverrment. To this. the leader of the Nationalists answers, “What are you going to do about it?” The best answer to the policy of the British government was given by Lloyd George, when he asked: “Are you going to sue Franco if he disregards your warnings?’ And that is the long and the short of it. The rebel leader will continue to blockade the Basque coast whether the other powers—Great Britain and France— like it or not. Juan March. Headline Folk Juan March, Financial Spanish War. BY LEMUEL F. PARTON. Juan March used to tie up his dally earnings in his shirt tail. thl? way, too, at the start of his war against the republic, which he bank ducts from Rome, where, according to todays dis- in residence. For- eign correspond- ger on Mr. March as the main plug of the war, both in its origin Blasco Ibanez is pretty tame a cursory look at Senor March's financial genius, one of the richest men of the world, house—that is, as a pupil. At the age of 40 he had a string of 12 banks, estates and Hispana cars, and he couldn’t read or write a word—always in the Island of Majorca, of desper- ately poor parents, he was a sack car- then an itinerant peddler. His par- ents were members of an obscure Jew= to Africa, as a laborer, and became a grower of tobacco. March was trailed, jailed, hounded and persecuted by national and interna- nean as a smuggler. The money rolled in, In the post- Spain, investing many millions in vast {areas of land which made him one | traveling with an entourage of gen- erals and flunkies in Hispana limou- de Rivera as dictator. Quite a few years before the overthrow of Alfonso holdings was gaining momentum, and Senor March, combating it, became | contender for fascism in Spain ‘ ‘The republic jailed him for 18 | scure, but when the jail swung loutward. the real troubles of the re- ‘or last August and September, Senor | March’s bank in Palma, on Majorca, | lution, and Palma was the entrepot | not only of planes, cannon and muni- landed on a coast which he ki from Gibraltar to Istanbul. A lot of blood he peddled onions, but, at 57, there | peddled around the Mediterranean | that he doesn’t know about, and What Spark Plug of 8 AN itinerant onion peddler, A He pretty nearly had Spain rolls and more or less personally con- patches, he is now ents put the fin- financial spark and continuance. reading after even career. He is a who never saw the inside of a school steamship lines, newspapers, beautiful signing his name with a big X. Born rier in a corn merchant's shop, and ish sect known as “Chuetas.” He went In the years that followed Juan tional police around the Mediterra- | war years Senor March was back in |of Spain's most imposing grandees, sines. His was the build-up of Primo | the drive for the break-up of big land the most powerful and resourceful months. Details of his re € are obe ]pubhc began. According te dispatches | was the financial mainspring of revo- | tions, but of the African Riffs, being | has flowed under the bridge since | probably isn't an onion or a cannon (Copyright, 1937.) - - = Free Coronation Seats. | Holders of the Victoria Cros | Albert Medal in gold and the Edward Medal in silver will be provided free coronation parade seats in London. ‘What was News in yesteryears is often a common occurrence today. Back in 1888 when Mrs. Wash- ington read in her evening paper that Mr. Charles Schwartz had that day received a shipment of Certified Perfect Diamonds berley mines in Africa... Now, almost weekly Chas. Schwartz & Son con- stantly receives new shipments of Perfect Dia- monds. 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