Evening Star Newspaper, April 20, 1937, Page 11

THE EVENING Can Business Keep Laying Tax Eggs? Golden Goose Must Be Assured Health to Balance Budget. BY DAVID LAWRENCE. RESIDENT ROOSEVELT begins this week the hardest task of his career—cutting Federal ex- penses. Alang with this seemingly simple problem of making ends meet in the Government—something that has not happened in the last seven years —is a greater problem. It is how to keep from kill- ing the goose that lays the golden egg. For while the Roosevelt admin- istration has at last begun to listen to the so- called. conserva- tive groups who believe that it is dangerous to spend more than you have, the mere slashing of ex- penditures, especially the relief items, affords no way out of the dilemma. There will be a howl, and there ought to be, when relief expenses are cut. It is easy enough for “well-fed persons in their comfortable clubs” to talk about cutting relief expenses, but where are the people going to go who are deprived of jobs? When the | Government stops feeding them and furnishing relief work, will they find | immediately jobs somewhere else? Numerous Hardships Ahead. The coming economy wave is going | to produce innumerable hardships, | and, oddly enough, it will conceal the | true nature of the mistakes that have been made in governmental policy for the last four years or more Mr. Roosevelt's difficulties today are | due to one thing: The receipts are not | what they were estimated to be. It is like a business which has fixed its expenses and projected its anticipated | revenue and then finds, to its embar- | rassment, that sales aren’t what they were supposed to be To the Federal Government, tax money is the same as sales. Sales are down. Tax receipts aren't com- ing,in for the simple reason that | businesses aren’t as profitable as they must be if the Government is to get & big enough share so as to be able | to balance a budget. And why, are business profits not | big enough to furnish the needed tax | money? Because the administration, | unwittingly perhaps, has gradually been killing the goose that lays the golden eggs. Business and industry furnish the | golden eggs that bring in the tax| money. When business doesn't make | large profits, the Government doesn't | take in enough to meet its budgets. Some of Business’ Troubles. ‘Why is business unable to pile up the tax money? The reasons are numerous, but some of them may be cited here. First, because the Government has @& lopsided tax method which keeps on piling taxes on the costs to the consumers. As costs go up and prices rise, people curtail their buying. Re- sult, less taxes, more unemployment. Second, because Government car- ries on relief projects that actually compete with private business or force & shortage in certain classes of labor. David Lawrence. STAR, WASHINGTON, D. C., TUESDAY, APRIL 20, 1937. Behind the News Liquor Exempted From Advertising Restrictions THE 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. [ Trade Commission bill. As it predicament. the middle of the sizteenth page sion. bill. metics or other “devices.” Then “This section shall not apply to Administration act.” This safeguarding of the distill- ers’ interests is said authoritative= ly on the inside not to have orig- inated with Mr. Morgan or any of the other half dozen or so high new ordainers who lately have joined the same business group The job is being attributed to one of two Congressmen. Nevertheless, off-the-record dis- cussion at the Capitol has become hot enough to draw from the vision. industry. James M. Doran, long associated the institute. For these and other reasons, the will tration already has this authority. as extensive as is proposed ror other contents be stated truthfully. * % durables. such as food and clothing.) nomics Research in New York City. (1929 equals 100) February. average of the years 1935 and 1936 * % San Antonio, is being advertised as the court plan, Durable goods. This indicates the President is right in his assertion prices are ahead of non-durables, but they are not as far ahead as the in New Trade Commission Bill Joker. BY PAUL MALLON, F DEMOCRATIC TREASURER W. FORBES MORGAN had not recent- ly jumped to the distillers for a reputed $100,000 per year, there would be no commotion over a hidden liquor joker in the naw Federal is, there is plenty, Even President Roosevelt is said to have interested himself to avold an embarrassing Sharp legislative eyes spotted an obscure sentence tucked into of the new Federal Trade Commis- The measure, as a whole, lays down strong restrictions against false or misleading advertising practices for food, drugs, cos- comes this unexpected restriction: distilled spirits, wine or malt bev- erages, as such commodities are defined in the Federal Alcohol Treasury an unpublished official protest to Oongress against the pro- This is the first unhappy moment caused Mr. Roosevelt by the recent desertions of his political friends to the new and rapidly growing liquor It can hardly be the last. Shortly after Mr. Morgan had left the Democratic National Committee to go into the big money, one of the able Michelson pub- licists there, Norman Bazter, also shifted to the Distilled Spirits Institute. About the same time, Mr. Roosevelt’s minister plenipoten- tiary to the Costa Rican government, the capable Leo R. Sack, folded his high hat and joined Schenley Products Co. ployes also have entered this same productive field. Of course, Dr. Two Treasury em- with the old Treasury prohibition unit, is drawing $50,000 annually as head Washington man for House Interstate Commerce Committee probably snip the joker from the bill some time this week. Note—The official explanation for exempting liquor advertising from Federal Trade Commission supervision is that the Federal Alcohol Adminis- However, that F. A. A. authority is not products under F. T. C. The present Government regulations do not go much beyond requiring that the age and Negotiations have been under way for some days which may be another New Deal left-winger into a large, or semi-large, private business. The negotiators are not the molasses group, which lured Dr. Tuguwell, but some one fust as sweet, * % Recently the President has been saying that durable goods prices are going too high and that his policies would be switched to help the non- (The durables are steel, copper and the heavy goods, while the non-durables are things more closely associated with the average citizen, It is hard to believe, but the Government has no figures on the rela- tive prices of durables and non-durables, as a whole. ment economists know the prices on all the various products, but have not computed an average for either group. The best available figures are those of the National Bureau of Eco- That is, Govern- Its latest price computations show: Non-durable goods. 81.2 81.7 88.7 88.8 that durable 87.0 885 93.1 945 * x | The Treasury has not yet ex- | pressed itself, but it has no ob- | Jection to the Cochran provosal to | levy income taxes on Federal and | State employes under a constitu- | tional amendment. From the | standpoint of a more equal dis- tribution of taxes, the proposition is appealing, but, from a revenue- raising standpoint, it is unattrac- | tive. Federal and State salaries are low. The victory of Lyndon Johnson, newly elected House member from a triumph for the President’s court proposal. On the surface it was; but many astute Texas authorities sus- pect Johnson's popularity as head of the National Youth Movement there would have afforded him a victory regardless of the position he took on (Copyright, 1937.) New Phase of Old Question Representative Smith’s Course Where Roads Divide. BY MARK SULLIVAN. HIS week, beginning Tuesday, there emerges, before the House Committee on Judiciary, a new phase of the question that tow- ers over all others. It emerges, to state it broadly, in the form of de- ciding what step Congres, in its turn, shall now take in the light of the | steps the Supreme Court has already taken. The Supreme Court has opened two wide doors. Both doors lead to the same humanitarian and economic ob- Jectives. By one group of decisions, mainly the Wag- . ner act one, the court has said we can go forward through legisla- tion passed by Congress to cover the whole coun- try uniformly, with power cen- tralized at Wash- ington. By another group of de- cisions, mainly the one upholding the minimum wage statute of the State of Washington, the court has said we can achieve precisely the same objectives by means of State laws (supplemented by Federal laws to make the State ones effective). The two roads lie open and broad before the country, before Congress and before the Democratic leaders of Congress. Let no one imagine that Congress, because it is a national body, necessarily prefers the national road Never does Congress have any strong predilection for national power as against State powers. And at this moment much of Congress, especially the Democrats who lead the body, are Mark Sullivan. becoming aware of the undesirability | of too much power centralized at Washington, too little in the States. It is quite possible for Congress to prefer the road of State legislation supplemented by Federal Smith Proposal Up. The mood of many of the most thoughtful Democrats is expressed in a suggestion put forward by Repre- sentative at Large From Virginia Howard W. Smith, who shares the elevation which the country has come to associate with Virginia's repre- sentation in Congress. It is on his proposal that the House Judiciary Committee holds hearings this week In advance of the hearings. Mr. Smith has addressed letters to all members of the House, asking them to give thought to his suggestion. The Smith proposal is not novel indeed, he puts it in the form of broading legislation already existing. The way he recommends, like many sound courses, is a compromise, a workable combination of both Federal and State legislation. The plan, in its working, would be something like this: Let each State pass its own mini- mum wage law, its own child labor law, its own maximum hours law, its ‘This results in higher costs, curtailed buying and unemployment. Third, because Government restricts | the opportunities for new capital to made available for new enter- This is done through the ies and exchange act, which, while commendable in its prosecu- tion of fraud and dishonesty, is, on the other hand, not bringing about the necessary encouragement for the | flotation of new capital issues. Re- | sult, opportunities diminished for new businesses to be started so as to add to profits and hence to increase tax | receipts Fourth, because Government inmsts‘r on burying or sterilizing all the gold | it has instead of using it to support | world trade so commerce with other nations may be increased, production at home stimulated and more tax| receipts brought into the Treasury. Fifth, because business, even when well financed, doesn’'t know where it is going. On the one hand, private property is menaced by laws that | amount virtually to confiscation, and, | on the other hand, strikes are en- | couraged by the administration in | an effort to bring about a redistribu- tion of wealth. Result, a redxsmbu-‘ tion of poverty as Government itself | starts to economize and cut down subsidies, and consumer goods indus- tries begin to feel the pinch because unsound economy has never been replaced by sound economy. States Fear Curtailment. Much of the Government money has been pouring into States which cannot, when the flow of Federal aid is cut off, find new employment or new enterprises to absorb the idle or those made idle. The governors and mayors who have been clamor- ing for a continuance of relief ap- propriations are absolutely logical. They know nothing has been pro- vided to take the place of Govern- ment relief spending. Mr. Roosevelt will struggle with those who will insist on keeping ex- penses up. He will point to the need for a balanced budget. The con- servatives will cheer the President. The liberals will look askance, and the real blunders of the last four years of deficit financing will be obscured and ooncealed. The change now going on is from @eficit spending to old-fashioned rules of making income and outgo match. This is all right if the curve of tax yeceipts doesn’t go down still further as the deflation is begun. To balance & budget requires something more than cutting expenses. It involves a removal of the empediments to the growth of profits and tax receipts. ‘These impediments are to be found J y CUSTOM_ TAILORED PLEATED AND ZIPPERS 2-Piece Set, $33.50 3 -Piece Set, $42.00 Choice Chevron Cloth, figured: dust- tight, “striped Homespun. rinted Crash. & 3rd FL. American Bldg. S el in a combination of policies of con-[ trolled economy on which the New Deal embarked, thinking that it could ultimately make the tax column rise by merely commanding the rates to go up. But higher and higher prices do not mean larger business volume They mean less volume and hence less tax money for Uncle Sam. Un- less the budget balancing program about to be begun is accompanied by several other shifts in administra- employed and more deficits instead of more employed and more tax money. Budget balancing is never an over- night job. But since it now is prom- ised for 1939, having been moved from 1938 to 1939, public confidence in the eventual maintenance of a sound fiscal position will grow in ac- cordance as the New Deal makes it possible for the goose—industry and business—to lay more golden eggs— pi32n-1317 F tion policy, there will be more un-| tax money—in 1937 than in 1936 and | more in 1938 than in 1937, | (Copyright, 1937.) " BAR DANCE TONIGHT Will Climax Annual Spring Out- | ing of Association. | | A dinner and dance at 8 pm. to- | | night will climax the annual Spring | | outing of the Federal Bar Association | at the Congresslonal Country Club. A | sports program, including tennis, golf, swimming and bowling, was to be held this afternoon. Morrison Schafroth, chief counsel of the Internal Revenue Bureau, will be guest of honor and the only speaker at the dinner, which is expected to be attended by 200 federation members, including a number of high Govern- ment officials. ESTABLISHED 1903 OIL HEAT Is Modern Heat CLEAN—SAFE— CONVENIENT For satisfaction and economy, let responsible Heating Engi- neers of long experience handle your job. Easy Payments . . . Let Us Estimate You Incur No Obligation MAURICE J. OLBERT 2 Heating—Plumbing—Tinning 1908 M St.—Dlst. 3626 “I don’t want your old Royce Rolls— I want a cup of Wilkins Coffee!” Proposal Opens Middle own other laws regulating businesses. | To this condition, differing stand- | ards in different States, the objection | in the past has been that a State having its own law and its own stand- ard is at the mercy of a neighboring | State having a different law and | standard. That objection was sound | up to January 4, this year. On that date, the Supreme Court handed down a decision which says that when a State has a law against convict-made goods, such goods cannot be shipped into the State from other States. The decision, in effect, prohibits shipment into any State of goods made under conditions such that their production | would have been unlawful in the State to which they are shipped. Old Problem Changed. This decision of the Supreme Court changes fundamentally the whole old | problem of States’ rights versus | Federal rights. The decision makes | it possible for every State to protect itself fully against any good or prac- | tices which it disapproves. By its| own law it is protected against un- | desirable labor conditions within its | own borders. By Federal law it is protected against undesirable labor conditions in other States. It is a | satisfactory and adequate formula. | It is the formula which President Roosevelt put in words in his to Congress, January 7 last, laws supplementing State laws.” Objection will still be made by those | long accustomed to the old argument against separate State laws, and those | not aware of the recent events that have made that old argument ob- solete. Doubtless there will be heard | again the old scornful phrase, “Forty- | eight separate child labor standards, | 48 separate minimum wage stand- | ards” But there won't be 48. The | | whole gamut of all the standards of | age that any State will want will run from about 13 years to about 17. Similarly there will not be 48 different standards of minimum wage. To ight variation as there may be, | ess need have no difficu ing itself. Liquor manufactur find | no great trouble in selling in 48 States having different s ds and regu- lations. However, | against and for the new proposal w be made clear with time. Federal Menace Obviated. To Democrats, especially Southern ones, the middle way, eserving State rights and accommodating them | to Federal power, will come as a wel- come solution. They are just disturbed about Federal power. Wi in the past week they have seen the House pass an act giving the Federal Government power to reach into a State, into a county, and arrest and imprison a State or county 1 whose conduct of his office the Fed- eral Government does not like. And in that measure they have seen the menace of more, the Federal Govern- ment supervising elections in the | States. And they have seen the | Supreme Court, their old safeguard | against such intrusions, say, in effect, lman the court is tired of standing | We, the People Publishers Urged to Close Gap Between Voting Public and Newspaper Public. BY JAY FRANKLIN, HE American newspaper editors and publishers, who are now going through their annual convention, should pay some attention to the problem of closing the gap in public opinion as developed dur- ing the political campaign of 1936 and continued in this. fight to reform the Supreme Court. That Yankee Summer hotel, which hid a guide behind a rock at its “Echo Point” to answer the yoo-hoos of the awe-struck tourists, was the unconscious author of the present system of government by organized echo. I have made it my business during the Supreme Court fight to keep in close and friendly touch with both sides of the controversy, in order not to be mistaken as to the facts on which I base my opinfons. It seems, after all these weeks, that both sides are equally convinced that a big majority of the people is behind them. For every time a spokesman for either side makes a speech, he is greeted with loud applause. Both sides seem to be in danger of confusing these echoes with a Nation-wide cheering section. Both sides are confident of success. Both sides are keenly enjoying the fight for its own sake. Both sides are convinced that they are in the right and that the safety of the Nation depends on their success. Both sides are speaking in the name of American democracy and human rights and both sides use the same arguments and receive the same re- sponse. The disintegration of our public opinion is what makes this possible. The great majority of the newspapers are opposed to the Roosevelt reform bill. On the whole, it would be fair to say that in this the newspapers accurately reflect the opinion of a majority of their own readers. The newspaper public is—by and large—the conservative-minded buyin, public, to reach which the advertisers pay sums for newspaper space and thus make the publications commercially profitable. But the last election revealed that there is a mumerically larger section of public opinion—people whose buying power is small in terms of advertised products—which responds politically to the President's program. The mewspaper public and the voting public have ceased to be identical. Mr, Roosevelt reaches the voting public by word of mouth—over the radio, through mass ‘meetings such as the one recently organized in the Chicago Stadium, or through quiet word-passing along political “grape-vine” channels This is a very confusing state of affairs in a democracy ruled by public opinion. There does not seem to be any quick or easy solution. Even if the publisher of a paper was willing to take a chance, how could his editor count on anything but the loss of subscribers and the falling away of adver- tising revenue if he addressed himself to that public which must make every cent count and can't afford to buy many papers, let alone the products which they ad- vertise? It is simply an honest reflection of the mal-distribution of income and opportunity, that Wwe now have two public opinions One conservative, consisting of the “haves” (even if they haven't very much), and another, largely inarticulate, consisting of the “have-nots” (even if they have a little). Nevertheless, it would be worth while to work out something a bit less slow and cumbersome than the Gallup poll and other “sampling" methods of predicting public opinion. Our schools of Journalism could do far worse than undertake a special study of trends in order to antici- pate tomorrow’s public along with tomorrow's problems. There are certain rhythms or cycles in politics no less than in business, and in actions no less than in iceas. For example, the figures on unemployment among young men and celibacy among young women explain why any responsive political leader would be forced to lead an attack against old age in high office, judicial or otherwise. Y0o! Hoo! No one erpects an economic royalist to change his spots or a Tory to turn Technocrat, but even a highly conservative editor could start the reunion of public opinion by some objective forecasting along such lines. Journelism, as Carr Van Anda was fond of saying, is “the phase of things,” and prophets have never been popular with those who stand to suffer by the events foretold; but unless two public opinions are again merged into a single unit it is hard to feel any confidence that the freedom of the press will long survive or democracy itsel! be maintained under e system of government which substitutes organized echo for public discus- si and rival cheering sections for political consultation of the electorate. (Copyright, 1937.) alone in defense of the Constitution, | leadership of Congress must see they | that Congress has as much responsi- ‘ are where the roads divide, and that ' bility to support the Constitution as|the middle road is their practicable the court has. The Democratic | course. An American You Should Know South Trimble Has Had HISTORIC aura surrounds South Trimble, clerk of the association. His office heightens the illusion of marching on with the old Long Association House for 16 years and Rep- leaders. With Politics. BY DELIA PY HON. IA resents for six. He in= terprets history in the light of long Close your ey South Trimble's office is, as it was, the old office of 2 Speaker of the Ho 1t is die off Statu= ary Hall, which used to be the se! House of Repre= sentatives before wings were on. This office is, and al- ways has been, a ) stage where Rep- resentetives ase semble, play their parts and move on “The office clerk of th of South Trimble. is quite an one,” Trimble have a clerk (pro the House of Comm for life, receiv £3,000, is fu | coach-in-four, end wea he presides. His A “does not fare so we South T: Hazl G over many | He has the power of office without the | trappings of his “British cous From a farm near Frankfort, Ky, he entered the | member of | Representatives, serving | 1900. He was spea | election contest and assa: Nationally he served as Democratic Representative in Congress for three | terms. Intermitte: i | from public tion near | Trimble Congresse % { He is part and parcel of congression {life. His duties are “executive and | quasi judicial,” he says. Ten clarks, under the supervision of Trimble, col- laborate in duties that keep the con- gressional in play. This includes filing docum ng pay rolls, | recording bills nd engross- | ing | dar, keeping the m |ing the offices Trimble & clerk during two of the most exci times in our h: r honor of sig an He is elected inual salary of th a residence, a wig when dle says. 1864 near out | nicety eloquent and epi . “This is no provident: | he says, “it is man-made. He 1 1 depression,” We should not destroy capital, but we should not let capital destroy the people. Every one should earn what he gets and get | what he earns.” INFORMATION WANTED “YQILLING STATION ROBBED! Attendant shot! Send for F the cops, somebody”—and the manhunt is on. But the police must solve this crime—and thousands of others—not as the fiction detectives do, not with the help of an indifferent public, but with “stool pigeons,” known criminals allowed to remain at large in ex- change for information. Here’s a revealing article on modern police methods, paid informers, the truth about the third degree, with cases from actual crime files. by Leslie T. White AND IN THE SAME ISSUE...5Short stories...A murder mys- tery in South Afri ..Love in a flood-marooned apart- ment house...Stories of adventure...humor...romance: Feature articles...Social Security...Hollywood movie children...Crime detection...baseball...and more... Plus serials, humor, cartoons. 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