Evening Star Newspaper, June 9, 1937, Page 4

A—4 x» EXEMPT TAX DRIVE URGED IN STATES Reciprocal Program Would Net Millions for Treas- ury. BACKGROUND— March returns from tazes, par- ticularly income levies, were dis- appointingly low. President first asked that econ- omy be practiced in departmental erpenditures. Later he blamed rev- enue shortages on wilful evasions by wealthy few, asked inquiry by Treasury Department and legisla- tion by Congress to plug loopholes, By the Associated Press. Treasury officlals said today States would have to join the Federal Gov- ernment in & reciprocal tax program if millions in revenue now lost through exemptions are to be channeled into public treasuries President conference he always had favored re- moving income tax exemptions which Roosevelt told his press | are granted Federal and State em- | ployes. He sald he believed income from securities now exempt should be taxed. Two other developments helped make taxation a major topic of Cap- {tal discussion 1. The House approved a resolution for an inquiry into tax dodging, but voted to restrict publicity. The Sen- ate must agree to the limitations or | &eek a compromise, 2. United States Chamber of Com- merce officlals predicted business spokesmen would seek modification of the new undistributed profits tax. White House officials said the House proposal to restrict tax-dodging pub- licity dent Roosevelt. It was said that while the President would take no sides in the Senate- House controve over publicity, the resolution would meet no objection from him. The President, discussing the re- moval of exemptions, said a constitu- tional amendment probably would be necessary The States might ratify it and they might not, he added. Co-operation Held Necessary. Treasury officials reported the Gov- ernment could make future security issues taxable simply by enactment of a law They added, however, that unless all States and political sub- divisions took similar action interest would be acceptable to Presi- | plants had a widespread effect mail for the plants. Refusal of Harry M. Dixon (left), Warren, Ohio, postmaster, and Harry A. Marceau (right), acting postmaster at Niles, Ohio, to accept packages of food for mailing to strike.bound steel demands for an investigation and Republic Steel Corp. appeal- ing to Postmaster General Farley and threatening to sue. postmasters said they had instructions to refuse any “irreqular” | THE EVENING STAR, 'WASHINGTON, D. C, WEDNESDAY, JUNE 9, 1937, today, with the Senate hearing The —Copyright, A. P. Wirephotos. | immoral to invest in tax-exempt se- curities?” | Leading off the discussion on the resolution, Chairman O'Connor of the | Rules Committee referred to Morgan, but not by name. | “In a statement to the press on yes- | terday,” he remarked, “a great finan- | cier defended the use of such (tax | evasion) loopholes and passed the blame to Congress for being so ‘stupid’ as to leave the holes open | “That, of course, is no answer in morals. Some taxpayers, in crawling through these loopholes, so stretch the holes that the world no longer recog- nizes them as holes.” | United States Chamber of Com- merce officials said the inquiry may | permit business representatives to | make suggestions for revision of the | | tax laws. | Fred H. Clausen, chairman of the | | moral to incorporate a yacht, why is it breakers by the steel companies. | The 38-year-old Senator, one of | two “freshman” Republicand in the chamber, replied in a telegram: | “While I feel that the committee will confine its investigation to specific | violations of postal laws and regula- tions, my personal feeling is that any | repeated violation of Federal laws might well be subject to senatorial | investigation.” | | Chairman McKellar of the Post | Office Committee indicated, meanwhile, | | mitted to enter school last September. | LUDKE WILL TAKE FLAG CASE HIGHER Circuit Court Upholds School Board in Expulsion of Six Children. B a Staft Correspondent of The Star. UPPER MARLBORO, Md,, June 9.— Appeal from a Circuit Court order upholding the expulsion of the six | Ludke children from Prince Georges County schools was planned today by attorneys for the youngsters who re- fused to salute the American flag. August A. Ludke of Stlver Hill, an | employe in the Washington Post Office and father~ of the children, said the case would be “carried to whatever lengths possible.” The youngsters were refused ad- mission to the Oxon Hill Consolidated School last Fall, after they declined to take the Oath of Allegiance to the flag at daily patriotic exercises. They sald theif action was based on tenets of the Jehovah's Witnesses, religious | sect. Reaffirm Their Stand. Ranging in age from 7 to 14 years, the children failed to join in the patriotic exercises more than a year | ago, They were permitted to finish the school semester, but the senior Ludke was warned by the Prince | Georges County Board of Education that they would be barred from at- tendance the next Fall if their refusal persisted. When the youngsters re- affirmed their stands, on the basis that the salute “put the flag before God, and therefore violated the Ten Commandments,” they were not per- Seeking reinstatement of his chil- dren, Ludke, through Attorneys Ed- mund Campbell of Washington and J. Frank Lillard of Hyattsville, filed a petition last November for a court writ of mandamus to compel their admis- sion into county schools. Court Issues Order. The Circuit Court issued its order, dismissing the petition, yesterday. No opinion was given, but Chief Judge | more hospital, is understood to be pre- paring one. Similar action was recently taken in nearly parallel cases by courts in Mas- sachusetts and New Jersey. The Ludke case, according to current plans, will now be carried to the Maryland Court of Appeals. Since their expulsion the children— Ruth, 14; Frances, 13; Prederick, 12; Anna Louise, 10; Walter, 9, and Es- ther, 7—have been receiving private instruction at home. Ludke said today that the domestic classes had recessed for the Summer. Jails (Continued From Fi Page.) vances in every other respect, our jail system is still in the dark ages.” | The commission, headed by State Senator Vivian Page of Norfolk, ap- proved the following methods of| carrying out the five recommenda- tions: Abandonment of jails as places of‘ sentence serving—consolidation of the 119 jails into a smaller group to be | used only to house persons awaiting | trial. Pointing to the recent trio of fires | in small Virginia lockups, in which three prisoners were cremated, the report said that most of the present jails are insecure and are operated by men who are untrained in jail work. Establishment of regional farms— at least three regional farms should | be established in the State, accord- ing to population areas. The report estimated the farms could be estab- | lished for $100,000 each. Other Suggestions. Replacement of officers’ fees with salaries—present methods of compen- sating officers on the the fee basis | should be abandoned and these of- | ficials paid fair and equitable sal- aries, The report stated that no one knows what these officers are receiving at present, “least of all themselves.” Indeterminate sentences: Upon the adoption of the indeterminate sen- tence as a fixed policy hinges the ef- fectiveness of almost all the other reforms, the report said. State control of the entire system: The remedy suggested calls for the creation of a Bureau of Correction | In Peril DOCTOR IN IGNORAN EXPOSURE TO DISE. Police between Rochester, N. Y., and Los Angeles have been asked to locate Dr. Har- old A. Cohn, Rochester ra- diologist, who is traveling to the West Coast, and warn him that he has been erposed to dread spinal meningitis. A few hours after he left Ro- chester, a friend whom he had visited, was taken ill with the disease and died. —Copyright, A. P. Wirephoto. and operations carried on as a by- product of the Department of Public Welfare. As methods of keeping Virginians out of jail the commission urged a more extended use of bail; release of minor offenders on their own recogni- tion while awaiting trial; a system of probation; installment paying of fine: making prisoners with money pay their own jail keep, shortening the period of waiting for trial, Fatality Rate in Mines. A new low fatality rate was set by coal mines in 1936—2.568 deaths per million tons of coal mined, as com- MARKHAM SEES BIG FLOOD FUNDS Vast Control Appropriations Due After Economy Wave, He Says. E» the Associated Press. Maj. Gen. Edward M. Markham, chief of Army Engineers, believes | there will be a substantial increase in congressional flood control appropria- tions “after the economy wave.” He testifled before the House Flood Control Committee yesterday on a proposed $800,000,000 reservoir and | Ohio Rivers and their tributaries. | “If flood control is good business for the Federal Government, to re- duce the terrific damage caused by floods,” Markham said, “appropria- tions will doubtless be very vastly speeded up after the economy wave.” He said that while the Federal Government’s share of the proposed program would cost about $500,000,- 000, appropriations totaling only $52.- 000,000 had been récommended thus far. Markham disclosed that the lives of at least 125 persons had been leopardized by the dynamiting of a floodway at New Madrid, Mo.,, during last Winter's floods. Asserting the blasting had been delayed “as long as we dared” while | fruitless efforts were made to evacuate all persons, Markham said: | “We actually blew that floodway | when, to the best of our knowledge, 125 people still were in there.” | He sald the landowners had fused to vacate their property re- even men. “None of us up here liked that” Markham said, “but we felt it was the | only thing we could do in the emer- | gency.” He said the dynamiting was necessary to save Cairo, Ill Markham cited the incident as the | major factor which had impelied him to recommend that in construction of future floodways the Government ac- quire fee-simple title to the lands to that a session Friday would constitute | Walter Mitchell, now ill in a Balti- | which would absorb the present duties | pared with 2.926 in the preceding year. ! be flooded. a preliminary investigation of Bridges’ | charges. At his request, postal officials were compiling a report about alleged | refusal to accept parcels of food for mailing into the strike-beset plants “The committee has no ax to grind,” said McKellar. “Certainly no private individual has the right to censor mail. If evidence is produced to substantiate * charges that this has been happening, rates on Federal obligations would rise to exorbitant levels Commerce Department figures £howed about $38.000,000,000 of exempt or partially exempt securities are out- standing. If these yielded an average | petjtors.” of 4 per cent, removal of all present | " .1t js doubtful” he added, “if the exemptions would subject about $2,- | Federal Government ever has adopted 820.000,000 to income taxation. |a piece of major legislation which fs Less revenue would be realized, | more inequitable and more discrimi- Treasury officials said. from removal | natory, or with greater disregard of of tax exemptions on State and Fed- | the harmful effects upon the national eral employes because most of them | pusiness structure.” are in the lower brackets, where low | The undistributed profits levy was a tax rates prevail. One authority egti- | part of the 1936 revenue act. It was | Chamber’s Federal Finance Commit- | tee, said in a statement that the profits tax “discriminates against cor- | porations in financial difficulty to the advantage of their well-financed com- mated receipts from that source at |designed as a two-way instrument for | less than $100.000,000. increasing Federal income. (Federal employes now pay only| On corporations which retain profits, Federal income taxes and State em- | it imposed taxes ranging from 7 to ployes pay only State taxes.) |27 per cent. Corporations which dis- If any action is taken on removing tribute profits to avoid the tax in- these exemptions, informed persons | crease incomes of their stockholder: said, it probably will not develop until who thus were subject to higher in- the tax-dodging inquiry is completed. dividual income taxes. Publicity 0. K. Necessary. | The House resolution, passed with- out a record vote, would require the &pecial committee of six Senators and 8ix Representatives to give approval be. fore confidential information on tax returns could he made public. Almost unrestricted authority to publish income tax returns was voted by the Senate last week atfer President Roosevelt condemned tax evasion and avoidance. The two versions must be | reconciled before the inquiry can start. The House debate yesterday included frequent reference to J. P. Morgan's statement that taxation was a legal &nd not a moral question. Representative Boileau, Progressive, | of Wisconsin, said he agreed, although he added it was unusual for him to be supporting the financier. | Representative Harlan, Democrat, of | Ohio asked: “How can you avoid a feeling of loathing, a feeling of resent- | ment and detestation when you read his (Morgan's) statement?” Here it is)” he (Harlan) said: “‘You do only what you are com- pelled to do by law.’” “This is the greatest financier in the United States talking. * * « ‘That sentiment, Mr. Speaker, is | rugged individualism in the raw. It | is the directing sentiment of the con- fidence man, the cheat, the exploiter, He owes nothing to society, or human decency, He takes generously of the blessings of civilization, but only con- tributes what is taken from him by | law “It is just as true now as of old, ‘the defense of sin is the law.’” “Legal” View Supported. | Boileau asserted he thought “there | 15 a good deal that can be said in behalf of the position that the amount of taxes due to be paid is a legal‘ question rather than a moral ques- tion.” “If we permit loopholes to exist in | our Jaws,” he said, “we cannot absolve | ourselves from blame by trying to place | the blame upon some one else for mak- ing use of them.” Also referring to the moral question, Representative Treadway, Republican, of Massachusetts, asked: “If it is im- = e AT THE AYFLOWER % Lobbies % Coffee Shop % Dining Room % Barber Shop % Lounge (Continued From First Page.) include in his proposed inquiry “the moral conduct of both parties to the strike” and alleged illegal transporta- tion and use of fircarms and strike entl % Ballroom % Public Rooms 250 Bedrooms and Suites always comfortable, with weather a la carte AYFLOWER R L POLLIO, Manager IaY — | mittee MOST STYLES fgsomz;lOso HAHN MEN'S SHOP @ 14th & G e 7th & K e 3212 14th we shall want all the facts made public.” Postmaster General Farley and As- sistant Postmaster General Howes ex- pected to confer on the situation before | the committee meets. One of them may appear, perhaps in a public ses- | sion, A resolution somewhat similar to Bridges' was introduced in the House by Representative White, Republican, ! of Ohio, who said Chairman Mead of | the House Post Office Committee had | promised to submit it promptly to Farley's department. White said he was not “trying to judge the merits” of how mail to | strike-bound plants was being han- dled, but that he wants all the facts. { The Republic Steel Corp., contend- | ing the law allowed no discrimina- tion, asked Farley yesterday to in- struct postmasters in the strike cities to transmit to the affected plants all properly addressed mail. Otherwise, it said, legal steps would be taken. Immediate unionization of Great Lakes seamen was sought by John L. Lewis, whose aides in the Com- for Industrial Organization said they hoped to keep supplies from upper Great Lakes mines from reach- | | ing the steel mills. | President Roosevelt declined com- ment yesterday on the strike situation, 2, F1ORSHEIM ateds Florsheim cut out the holes to cut down the heat and give your feet a chance to breathe. Try a pair today; you’ll find there’s nothing finer when it's 80° in the shade. { levee program for the Mississippi and | {after a warning by National Guards- \WEATHER DELAYS - ANELIA EARHART |Noted Flyer Studies Maps of Africa as She Awaits Favorable Reports. By the Associated Press. DAKAR, French Senegal, June 9.— Amelia Earhart bent her tousled blond head over maps of Africa’s wild ex« panses today while awaiting the fa- vorable weather report that would send her on the next stage of her flight around the world. Assisted by flying officials and Air France headquarters, the American airwoman set the course she and her navigator, Capt. Fred Noonan, will take across Africa. hart hopes to take off in her silvery, twin-motored monoplane some time today, but that depended on the weather. She left Miami, Fla,, June 1 on the “just for fun” journe in which she is following the Equator as much as practical. Bound for Khartoum. in the Anglo= in the Frer imately 1 approx- east from she and Noonan e 850 miles east and Then the, ONTIA I Sixes & Eights C MEDIATE DE ERY R o = e WE NEED USED CARS Flood Motor Co. Direct Factory Dealer 4221 Connecticut Ave. Clev. 8400 will bear 34 YEARS OF DEPENDABLE ICE strvice:! to serve you. Complete sanitary conditions pre- vail throughout our entire delivery service. - Time has indelibly linked the name of Blick to the field of good ice service in Northwest Washington —and has given to us ay experience in the service of ice to the leading Hotels, Clubs, Restaurants, Stores, and private homes that guarantees to our customers an intelligent understanding of their needs. 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