Evening Star Newspaper, October 20, 1937, Page 11

- Stock Decline Holds Lesson for Politics Business Baiting Policy Kills Goose That Lays Tax Returns. BY DAVID LAWRENCE. THE “Roosevelt panic,” as it probably will be called in stock lived or the forerunner of a fundamental business depression, de- pending on how one man feels about it. For if Mr. Roosevelt is responsible for the “‘panic,” he alone can end it and bring about a change for the better in the na- tional psychology. Judging by the way the tele- market history, may be short- | phone wires have been buzzing ; behind the scenes these last 48 hours, the New York viewpoint, generally speak. ing, is that Mr. Roosevelt, brought on the panic by forcing up prices of goods and taxes faster than the consumers could absorb them, that labor troubles are of his making and that the adminis- tration has finally baited business so much as to destroy its incentive and its morale. The suggestion a. to what Mr. Roosevelt should do about it would be somewhat amusing if the whole situation didn't Lave a tragic aspect. ‘The New York idea is that Mr. Roose- velt should acknowledge the error of his ways, issue a statélent of re- assurance virtually conceding that he has been wrong and promising | ‘Wall Street that he intends to be good from now on. No Error Confession Likely. The chances of Mr. Roosevelt ad- | mitting that anything he ever did was wrong or that lis economics could | possibly have been mistaken are about as remote as his asking Herbert Hoover for advice on how to make | prosperity seem to be *just around the | corner.” There exists in Washington | among the New Dealers, to be sure, & somewhat chasterec feeling. There is worry aplenty. The Gov- | ernment economists are issuing opin- jons privately every hour for the| benefit of nervous ¢ ialdom and | there is a good deal of sensible con- versation going on back and forth among the Joe Kennedy type of the administration’s friends in New York in the hope of persuading Mr. Roose- velt to create a reassuring atmosphere | by public statements, propaganda, etc. | But it must be realized that the New Deal doesn’t think it is wrong and | fundamentally the opinion is expressed | here to the reporters by some officials about the stock market decline that the market was tog high anyway. | That “‘gamblers” are largely responsi- | ble for the break and that things will | right themselves in due time. To Hoover for Parallel. Curiously enough, one has to go back to the Hoover administration to | find the parallel. Mr. Hoover thought the “bears” had concentrated against | him to bring about a stock market | decline and it was through his initia- tive that the famous stock market investigation was begun by the Senate, which ultimately brought out most of the scandal that furnished the background or impetus for the passage | 1ater on of the securities and exchange act. Professional bears or bulls are not responsible for the stock market d eline and the administration knows better, though outwardly it likes to blame the Wall Streeters. The truth 1s the market is a reflection of a steady | decline over several months in the business morale of the country due to New Deal experiments and mis- | takes. The decline started when, last | March. it was discovered that the estimates of tax receipts were wrong | and that the undistributed surplus tax was causing such a bad situation inside business. This correspondent has the doubtful satisfaction of having written on the day after the undistributed surplus tax was promulgated that, when the next panic came, the principal cause would be found to be the tax on thrift and the tax on sound business judg- ment which the administration had | introduced in the guise of revenue | yields and social reform. { Drop May Be a Lesson. Today the undistributed surplus tax stands convicted of failing to produce the needed revenue and of having raised Cain with the whole structure of business. If Mr. Roosevelt, by this | time, however, does not know what | cockeyed economics he has been sub- | Jected to by some of his so-called | advisers, it is not likely that the stock market decline will educate him on the point. The fact is, however, Mr. Roosevelt has been getting ready to make a few | concessions to the conservative or sound point of view. He has been letting it be known that he will agree to the revision of the capital gains tax and also the undistributed surplus tax, if they ean be worked out on a “face- saving” basis. Likewise the President is going to drive hard to cut expenses, or at least to improve the budget showing, be- tween now and the end of the fiscal year. Also it is said on good authority that he is getting ready to put a bit of pressure on the labor leaders to eut out some of the unnecessary in- terruptions in production due to labor serife. Taken all in all, there is & bit of & soared feeling here, but it is mot whet Wall Street imagines it to be. W is true the President has been ham- mering away at business so long that he has brought about discouragement. Even if one agreed with the social objectives of the President, and even ¥ one assumed that his economics might some day work when human pature is changed, it must be admitted $hat Mr, Roosevelt is making the error of Kkilling the goose that' lays the golden eggs. For there can be no big fnerease in tax receipts unless busi- ness prospers and has incentive to ex- pand its activities and create jobs. And incentive and enthusiasm are not incurred by hitting your prospective enthusiast with a brick every time there is a “fireside chat” or a message to Congress. Business Morale Shaken, 8o long as the capitalist system @xisis, and there is no wholesale con- fiscation of property or introduction of communism, the Government must David Lawrence. | week that wage and hour legislation | THE What’s Back of It All EVE New Revolt Rises Against Government Cotton Pro- gram—Contribution Attributed to New York Broker. BY H. R. BAUKHAGE. OME New Dealers are afraid they have discovered signs that certain economic royalists are plotting to wreck the administration's cotton program. The revolt is raising its head when everybody had just about decided that the Southerners were ready to take the administration’s cotton relief program as handed them and give in return their support to the wages and hours bill. The “Committee for Cotton” is the name of the new insurgents, and Oscar Johnston, cotton adviser to Secretary Waliace, says a New York broker has contributed $15,000 toward starting the organization off. Mr. Johnston warned the Mississippi raisers in a speech there recently not to join the “Committee for Cotton.” He alluded to the new group as what its members “ were pleased to call” representatives of “all branches of the cotton trade.” He told his hearers to spurn such entangling alliances and to sign up with the American Farm Bureau Federation. The “Committee for Cotton” is charged specifically by New Dealers with planning to fight crop control legislation in general and the cotton program in particular. Strangely enough, Mr. Johns- ton declared that Col. Lawrence ‘Westbrook, Washington representa- tive of the Association of South- ern States Commissioners of Agri- culture, was a8 member, if not a moving force, in the new group. Col. Westbrook, you will recall, was credited with having played an active part in getting the last- minute measure through Congress providing for cotton loans and sub- sidies. * K K K Following those lightning negotiations, Mr. Westbrook was credited in certain circles with having the President's ear. He himself has had nothing to say about his reported connections with the “Committee for Cotton,” whose declared objectives are: 1. To make a complete and authoritative diagnosis of the problems confronting the cotton industry. 2. To interpret this diagnosis in such a manner as to win the under= standing of the general public. 3. To study all proposed legislative measures and estimate their probable effect upon the various elements engaged in the cotton growing industry and the South as a whole. 4. To make the necessary contracts with editors of newspapers, columnists, radio commentators, public speakers and other agencies furnishing media for public information to the end that the diagnosis arrived at and the conclusions reached may be given the fullest publicity. Right now. apparently, pressure is being brought on prospective contributors to the “Committee for Cotton” to keep them from supporting the new organization, which, it is said, is asking for $250.000 to carry out jts immediate program. It hopes to engage a stafl of experts, economists, writers, radio and motion picture men. P It would take a powerful telescope to find any sign around Washing- ton indicating reconciliation between the A. F. of L. and the C. 1.O. Moreover, you won't find any Government officials ready to wave the olive branch publicly, either. They all say it would be fine if John and William got together, but they aren’t promising they can do anything about it. Those who dare take a long look at the labor situation find no reason for a vital clash between the two groups immediately. There is plenty of room for expansion for both the A. F. of L. and C. 1. O, each in its particular field. Later, when both organizations be- gin to compete for members in the same industries, trouble will begin. At present the A. F. of L. can expand where the craft unions are already entrenched, and the C. 1. O. can go after the mass pro- duction industries, like automobiles and steel, without much interfer- ence with each other. If an American city the size of Norfolk, or Miami, or Albany. were wiped off the face of the earth every 10 years, it would be of considerable concern to the Nation. But that is equivalent to what is happening in terms of the number of American mothers who die in childbirth every decade. And it is what concerned the group of medical, civic and other leaders which gathered Tuesday with experts of the Children’s Bureau to talk about a more extensive program of maternal care The social security act includes maternal and child welfare among its activities. But there is still a gap between what is being done and what must be done to cut the mortality rate among mothers, the experts say. It is interesting to observe that the recommendations of the General Advisory Committee on Maternal and Child Welfare Services, which formed a basis for the Tuesday discussions, are against “socialized medicine,” as the doctors call it. In other words, the committee holds that, instead of free medical advice being furnished by a staff of paid physicians, a woman should be given the right to choose her own doctor. (Copyright, 1947 |and | banks, | is NG _STAR, WASHINGTON, D. C, WEDNESDAY, HE opinions of the writers on this page are their own, not necessarily The Star’s. Such opinions are presented in The Star’s eflort to give all sides of questions of interest to its readers, although such opinions may be contradict amon, themselves and directly opposed to The Star’s. e ¢ Government and Stocks Drop in Market Creates Agencies Created to Aid Are Doing Nothing. BY DOROTHY THOMPSON. HATEVER the unprecedent- ed stock market break proves or does not prove, one fact stands out glar- ingly. There is, at this moment, & complete breakdown of the Govern- ment regulatory system, which we have been asked , to presnme exist- ed, and which was to save us from just this sort of thing. We are in a national emergency. A de- flationary course has started which, if it con- tinues, can snow- ball us downhill with incredible rapidity. That course was actu- ally started by the Government, presumably as & move to check too rapid expansion. Now that it is under way there is paralysis. For many reasons the private forces which nor- mally might act do not do so. Neither does the Government. Tt is as though the Government had put a padlock on | the national economy and thrown | away the key. Middle Class Suffers. For the first time in our entire his- tory securities have suffered an unin- terrupted decline for two months, with a fall of 67 per cent in 100 major stocks. In this decline the small stockholder, the middle class of the country, has suffered unprecedentedly. Holding his equities outright, and hav- | Ing confidence in the state of the| Dorothy Thompson. National Emergency and lightly. One is reported to say that it | will go on for another two months and then rally. If it goes on for another two months we shall be in the soup. Rumors run around that the President doesn’t really care what happens to the men in Wall Street—it's a gam- blers world, anyhow. It is impossible to believe anything so wild. Obviously the market does not exist in a vacuum, insulated from the rest of the econ- omy. When the equities owned by banks, insurance companies and trust funds—railroad bonds, for instance— fall as they have done; when produc- tion is receding and thousands of men are being laid off every week, it is ridiculous to believe that any sane person thinks that only speculators are involved. Test of Government. Meanwhile we have a presidential speech about prosperity, and the an- nouncement that the Government will decrease its spending, a procedure ex- cellent if there is prosperity, but add- ing to the disaster if there is not. We are to have an emergency session of Congress, apparently to discuss every- thing except the emergency. 4 pro- gram of numerous bills is laid out, perhaps good, perhaps bad, likely in any case to ad4 to the general un- certainty, but likely in no case to deal with the situation which confronts us. This situation, right now, is the test of Government planning, of Govern- ment regulation. The second Roose- velt administration, like the first. has got to meet a crisis. But this time it is not a crisis created by the new era of Mr. Hoover, but a situation occur- ing in the midst of the New Deal. It is the New Deal system which is in- Nation, he has held on, right down to the last minute. Every index justified | his confidence. The market was not | exaggeratedly high in relation to earnings. None of the conditions which prevailed in 1929 were present. | There were no top-heavy brokers' | loans, no excess development in the capital goods industries, no large and | uncertain loans abroad, and plenty of credit. Nevertheless, we have at this| moment a situation in which stocks in excellently organized companies are selling for three times their annual earnings! In 1929, when the economic structure was really and basically unsound, action from private groups individuals repeatedly checked | the panic. Thus, Mr. Rockefeller | jumped in and bought publicly, and hugely, to check the fall. Again, the under the leadership of Mr. Morgan, and with the co-operation of | the Federal Reserve formed a pool of | $50,000,000 to support the market. In the end nothing could hoid a funda- mentally unsound structure from collapse. Nothing Holding Market. But now we are seeing that nothing | holding & fundamentally sound | structure from collapse! The Rocke- | fellers—the economic royalists—are | not holding it. The capital gains tax | operates to prevent them from doing s0. ‘The market itself is not hnldmzi i it, too, is crippled with regulations. | The banks, as reorganized, cannot hold | it. And the Government is not hold- | | ing it, either! | It is reported that important of-| ficials take the stock market collapse question is whether Washington is at all aware that there must be a change. is to be superimposed on top of all | My judgment is that Mr. Roosevelt the other grief and woes of the eco- | will move sufficiently to the right in nomic system. did not indicate that | the next fev weeks to help values to Mr. Roosevelt was much concerned | be restored, but when he thinks the about the morale of the business world | patient is sufficiently convalescent he together with the announcement last or that he is as yet disillusioned in | will undertake the next surgical oper- | his theory that business men will work | ation of his social reform program. just as har< with a punch in the jaw as they will with a pat on the back ‘ So while New York stews in the | It may stay the hand of labor for agony of a market decline which is | a while. It may cause those who have having some psychological repercus- | been advancing prices unduly to pause sions already in & business way, the | and consider the possible drop in vol- Meanwhile the stock market panic | itself may have some beneficial effects. | | ume. It may also perhaps wake up the administration to the importance of renewing its efforts to increase the volume of transactions growing out of world trade. On the whole the trend in business should be upward until the end of the year, and when Congress gets back there may be less militancy toward the business world and less of a disposition to quarrel with the sensible demands that are coming from all quarters in the busi- | ness world for a well-rounded and well-balanced tax revision program. (Copyright, 19 Diary Revealing Startling Circumstances Surrounding the Discovery of the Corpses on the Island and the Disappearance of the Baroness and One of Her Lovers Ia an attempt to solve the Galapagos mys- tery—the tantalizing riddle of the Pacific —Charles J. Hubbard and five intrepid sailors braved ocean storms in a 47-foot boat, sailed to the very scenes of the Para- dise in the Pacific where the Baroness Eloise Bosquet de Wagner Wehrborn set herself up as Empress of Floreana. She ruled ruthlessly. She used her charms to wheedle gifts from millionaire yachtsmen and enforced her will at the point of a gun. Death rode the waves. Two men were found dead on the sandy shores. The Baroness and one of her two lovers mys- teriously diseppeared. Hubbard brought home a diary written by Mrs. Heinz Wittmer—last living woman of the death-infested Eden. It re- veals an amazing new version of this south volved, not somebody else’s system. And it will be too bad if it turns out that all the regulation has been done with monkey wrenches, which have been left inside the patient. No Time to Call Names. One thing is certain: This is no time to call names. The country is less interested, at the moment, about who is to blame than about what is to be done. If the feeling of hatred and hostility, of exaggerated lack of confidence on both sides were dimin- ished, that, of itself, would ease the crisis. We have been living in a witch-burning atmosphere, spending our energies chasing devils, thinking that if things went wrong the way to| right them was to find the responsible | scoundrels. Maybe there aren't any very outstanding scoundrels. Maybe the trouble is that we are all pretty | ignorant, rarely wise. given to the energetic pursuit of self-interest. | nevertheless anxious to behave as well | as possible and conscious that we are | &1l bound up, for life or death, in the | Nation and the economic system of which we are a part. On that basis we might try to get together, bridge the gap between business and govern- ment, wWhich have been operating in separate rings, like a circus, and be- | gin again in an atmosphere of mutual Round Trip 12.6 ALLENTOWN ATLANTA _ BERRYVILLE _ BINGHAMTON B fe oSG seas mystery. By all means, read this re- markable story, “Death Over Galapagos,” beginning in this week’s Liberty. It’s fasci- nating real-life mystery adventure. STON = X BRIDGEPORT, CONN. $7.65 BUFFALO $12.60 BUTTE CHICAGO _ CINCINNATI CLARKSBURG CLEVELAND GREYHOUND TERMINAL und Tri COLUMBUS, OHIO $13.15 CUMBERLAND $4.50 DALLAS DENVER DETROIT _ FREDERICK GRAND RAPIDS . GREENSBURG _ HAGERSTOWN HARTFORD INDIANAPOLIS _ JACKSONVILLE ___$18.75 OCTOBER This Changing World 20, 1937. Chance of Settling Spanish Issue as Great as "That of Getting Japan Out of China. BY CONSTANTINE BROWN. Tml is as much chance to settle amicably the question of foreign volunteers in Spain as there is to induce Japan to get out of China at the nine powers conference. Unless the British and French agree to a farcical settlement of the Spanish problem, there is going togpe trouble in Europe. Mussolini is sending every week reinforcements to Libya, and will soon have a considerable force there. He has, for the time being, the Arabs with him. They like to fish in troubled waters and believe that they have a good opportunity of doing so by siding with I1 Duce. On the other hand, the British are having more trouble in the Near East than they have bar- gained for. ‘The Arabs in Palestine are on the war path and have become more deflant than usual. Mus- solinl is openly backing them. That they may soon be able to count on Hitler's moral support seems likely. Der Fuehrer will always encourage movements de- stined to worry the Jews. Il Duce’s antics in North Africa and in the Near East are not prompted by any desire to go to war in those regions. They happen to be the vulnerable spots of Great Britain and France and the more he can threaten these two powers in other parts than at home the greater con- fusion he is likely to cause in the public opinion of his potential antago- nists. The authoritarian states have adopted a policy of shooting in the air in order to create a panic in other countries. They hope to obtain by this novel diplomatic method all they want, new territories, economic assistance and trading privileges. * % * A similar policy is likely to be adopted at Brussels when the nine powers gather to discuss peaceful means for the settlement of the Sino- Japanese conflict. If Japan is not represented in the Belgian capital and the powers—minus Italy—agree to offer a mediation what methods can be adopted to induce Japan to accept such a compromise? The answer must necessarily be: Force. It is doubtful, however, that France and Great Britain. confronted with enormously difficult problems at the present moment in Europe, will be willing to shoulder any responsibilities in the Far East, * x X x Mussolini leaves nothing to chance. When he knew, a few months ago, that he would visit his German colleague in Berlin he decided to make his speech to the German people in their own language. He realized that a translation, regardless of how good it may be, would weaken his address. S0 Mussolini, who speaks Ger- man, but not well enough to go on the speaker’s platform, started pre- paring his one speech last July. He hired a German professor, Dr. Mayer, to go over his speech and teach him the exact pronuncia- tion of the words. He studied three times a week and when he went to Berlin he had learned by heart his speech and the correct pronunciation of each word just like an actor learns his lines. « * x % The versatile Queen Marie of Rumania has just completed a ballet A Rumanian composer wrote the music and it is said that the whole thing is quite good She wanted to produce her new work in Rumania, but the diplomats decided otherwise. The Bucharest politicians are greatly interested in strengthening the Bucharest-Warsaw aris. Since diplomatic visits and expressions of friendship are not considered sufficient they urged Carol to ask his mother to go to Warsaw to produce her ballet there with a Polish dancer in the titie role. The King prevailed upon the dowfiger Queen to help her country diplomatically, and Marie isnow packing her bags and trunks to go to Warsaw to supervise the rehearsals and the production of “Taina,” her new play without words. trust, since, after all, we all sleep under the same roof. And sleep is restless with a pistol under the pillow. in 1933 President Roosevelt demon- strated what could be done by an ap- peal to the best instincts of every- body, by an appeal to a constructive social spirit. I wish he would get out his own early speeches and read them again. They had a temper and tone which would be refreshing at this mo- ment. They got a reaction, which v .ld be useful at this moment (Copyright, 1937.) Senator Barkley, Barkley, Choice of Some . i for 40, Might Prove Good Reconciler. ROM many sources word has been coming to this departe | ment that there was an active, Alben W. Barkley as the Democratie presidential nominee in 1940. Anama- teur but knowing political scout, in port. sa; “Many Demo= cratic leaders are idea of Barkley for President. A few are actively plans to get him the nomination. On the whole, I gone far beyond the feeling and groping stage. how much of it is spontaneous and how much of it is engineered. But force behind Barkliey. “The Senate fight of last July, when Barkley defeated Pat Harrison for a possible reconciler of factional ani mosities. The party bosses are worried. They know that the sectional split and means just surface scratches, and how to flux the conservative South in the New Deal stew is keeping them awake who has New Deal and administration | support, they think. might prove to be the great amalgamater | tional Committee told me he th Democratic presidential preferences wouldn't shape up very definitely conference—if they h rally, they are keenly interested in possible opposition issues and candi- to be just an undertow until they know which way the Republicans are head- jed. A few weeks ago an angry South- | wages and hours bill, told me Gar- ner could get the nomination if he wanted it, but rather gloomily ad- | ter man to pull the party together. To repeat, there is an inner ecircle movement for but it is too Senator Barkley ith the Neal Deal than did the late They Do BY LEMUEL F. PARTON. | off-stage, build-up for Senator ‘Washington for investigation and re- toying with the at work, making don’t think it has One can't tell just there is definitely a coalescing party floor leader, has advanced Barkley as the right and left division are by no nights. A loyal Southern party man “A member of the Democrat until after the Re lican midterm dates, and any one-man drift is apt ern Congressman, incensed over the mitted that Barkley might be a bet- early to make much out of it."” whom he replaced | Never a has strung & less reluctantly Senator Robi as floor lead | He fought the Sm bill and was an early advocate of the recognition of Soviet Russia. He took the New Deal table d'hote as it came As to presidential trad jthen he rustied b unaided thron & couple of small Kentucky colleze t-Hawley tariff ions, his was OF COURSE, you wouldn't step right up and buy this gleaming blue-and-white Greyhound Super-Coach. just as you would purchase a pri- vate auto! After all, nothing can quite replace the faithful family car, for trips around town, and a hundred familiar uses. a second family car that Greyhound offers . . . It's the service of a luxury coach you can use on every out-of-town trip. to near or distant cities, from ocean to ocean, to Mexico and through Canada—at fares averag- ing slightly over-1 cent per mile, Here's a smooth-rolling cruiser that can’t be matched in riding ease by the swankiest limousine ever built —yet it saves you dollars on every trip. You'll enjoy the fleeting glory of Autumn to the fullest, traveling by Greyhound. 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The imposition of taxes and the arbitrary rise in labor costs, h HOUND " BLUE N RIDGE 1403 New York Avenue N.W. Greyhound Phone: NAtionel 8000 Plue Ridge Phon Metropolitan 1523 @ Liberty s IN THE SAME ISSUE: “Can the Legal Prvfenionk Clean House?” Madame ,“A Yardstick for China” » Eddie Cantor sriting, “Get Chiang Kai-shek swriting, Thee Behind Me, Trailer!” * "The C. 1. O. and the Sit-Down Strike,” by Will Irwin A