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The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, June 22, 1950, Image 5

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Thursday, June 22, 1950
An Open Letter To The Members Of
The House Ways And Means Committee
Dear Mr. Congressman:
k Because billions of dollars
"involved, we ask you whether
favored or opposed continuing
present “depletion allowance”
the oil industry when the matter
came up in your tax-writing com
mittee earlier this month.
Of course, the question is load
ed with dynamite. The allowance
has actually'amounted to a $20,
000,00604)0 subsidy to the oil in
dustry in the last 32 years. Never
theless, we are sure you won’t want
to hide your answer. Meanwhile,
we’d like to remind you how the oil
depletion allowance got into the
tax laws in the first place.
These big tax loopholes for the
oilmen date from 1918 when an al
lowance known as “discovery de
pletion” was slipped into the war
time tax bill. This was a provision
by which oil land could be “deplet
ed” or “depreciated” on its value
after oil was discovered instead of
on a cost basis. In other words, a
$106,000 investment might be de
preciated on a $10,000,000 basis.
Anyone who owns income property
knows how this would cut taxes.
Y)ilmen claimed the subsidy was
needed for “wildcatters,” small
time operators who would search
for new oil for wartime needs pro
vided they had special encourage
ment in the form of income tax de
ductions. A wildcatter couldn’t
stand his losses when he hit a dry
hole unless he had tax relief from
his successful operations, they said.
The big fellows were careful never
to say they wanted the deduction
for themselves, but their ostensible
concern for the little fellows was
laughed out of court by the House
Ways & Means Committee. How
ever, they concentrated their fire
on the Senate, where Bob LaFol
lette made a vain but valiant fight
against them, and finally got their
scheme through
had their foot in
Congress. They
the door.
to get the Trea
to interpret the
Next step was
sury Department
law for the greatest benefit to the
oil industry. Just how the depart
ment did their bidding didn’t come
out until the middle 26’s when Sen.
James Couzens of Michigan tang
led with Andrew (Gulf Oil) Mel
lon, then Secretary of the Trea
You know, if the public doesn’t,
that there’s a “secrecy” provision
in the income tax laws, making it
a criminal offense for any Trea
sury employe to reveal facts from
an income tax report. Big taxpay
ers see to it that this provision re
.mains on the books. Thus all the
oil lobby had to do was get the kind
of law interpretation and the kind
of tax regulation it wanted with
out telling anyone.
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for happier
Here’s what the Treasury did. It
said the depletion subsidy should
be applied to all discoverers of oil,
not just to “pore li’l ole wildcatt
ers.” It was that simple. The oil
men no longer had their foot in the
door—they’d moved in the house.
Couzens, LaFollette and others
exposed the whole deal. Then Sen.
David I. Read of Pennsylvania, a
Mellon lawyer, came to the oil
men’s rescue. He trotted out the
wildcatter. He said “discovery de
pletion” was hard to administer.
He and others working for the oil
men had a solution, however. Let’s
repeal “discovery depletion”, they
said, and substitute a new law—
one giving the oil companies an
even greater break in the form of
a straight percentage depletion.
Why not 37^ percent, they sug
gested, but quickly settled for
27% percent.
That deduction has stood since
1926. The majority of your com
mittee has yoted to retain the same
deduction in the 1950 tax law. You
know the provision: It’s the one
allowing oilmen to deduct (1) the
cost of developing oil lands, PLUS
(2) 27 percent of their gross in
come, before worrying about taxes.
What’s more, most of the benefic
iaries are corporations having as
sets of $160,000,600—not the “pore
li’l ole wildcatters.” Just to drive
the point a little harder, let us re
mind you because corporation tax
rates have gone up the oil com
panies now save three times what
they used to. Similar allowances
are applied to other resources.
Last January in his tax message,
President Truman, backed by the
Treasury Department, asked you
to reduce this allowance for oil. He
said the oil loopholes were among
the most important loopholes
through which big business escap
ed paying taxes.
“For example,” the President
told Congress, “during the five
years 1943 to 1947, during which
it was necessary to collect an in-i
come tax from people earning less!
than $20 a week, one oil operator
was able, because of these loop
holes, to develop properties yield
ing nearly $5,000,000 in a single
year without payment of any in
come tax. In addition to escaping
the payment of tax on his large in
come from oil operations, he wasi
able through the use of his oil tax
exemptions to escape payment of
tax on most of his income from
other sources. For the five years,
his income taxes totaled less than
$106,066, although his income from
non-oil sources alone averaged al
most $1,600,600 a year.”
If you figure that the oil trust
hag netted $20,606,000,000 from
the deal—which is one expert esti
mate—you must conclude that it’s
cost each American family about
$800 not to know what’s been going
on. We know you are concerned
with this question, whether you
agree entirely with our view of
depletion allowances—or with the
President’s. We will be glad to tell
the same readers of union news
papers who read this letter how
you voted in the Ways & Means
Committee—and why you voted
that way.
Dinner & Cooking Ware
Seven Floors of Quality Furniture and AU
Furnishings To Make a House a
Comfortable Home
Established 1880 East Liverpool, Ohio
Convenient Terms
Sincerely yours,
Alvaine Hamilton and
Cushman Reynolds
Windsor, Ont. (LPA)—On the
eve of a strike, an agreement was
reached between Chrysler of Can
ada and Local 195, United Auto
Workers. The 3600 workers involv
ed quit work for three hours, then
voted to accept the argeement,
which calls for an llj4-cent pack
age, including a wage hike of 6
cents an hour, company-paid hos
pital care, medical insurance and
increased life insurance, vacation
pay and accident benefits. The con
tract runs two years.
Knowland Booby Trap Exposed in
Senate Social Security Law
Washington (LPA)—An amend
ment to the social security law
which would have allowed the
states to refuse jobless benefits to
workers who refused to scab was
nearly slipped over on the Senate
by Sen. William Knowland (R,
Calif.) in debate leading up to the
June 20 vote on the 1956 social
security law.
Knowland’s description of the
bill was a purely technical one, and
he tried to pass it off as unimport
ant. But a resolution by the CIO’s
executive board, meeting in Wash
ington a few days before the .vote,
^nd the warning of AFL ‘radio
commentator Frank Edwards spell
ed out the dangers involved.
The amendment, which was also
endorsed by Sen. Harry Cain (R,
Wash.), would end the authority
given federal agencies to shut off
jobless benefit funds to states that
violate federal standards. It grows
out of a ruling by Labor Secretary
Tobin, threatening to shut off
funds to the state of California
when it refused benefits to several
hundred striking maritime work
ers in 1948, and tf 269 carpenters
in another strike situation.
“The Knowland amendment,” the
CIO charged, “is the brain-child of
the Waterfront Employers Asso
ciation of San Francisco antj of the
California Employment Security
Administrator who travelled here
at federal taxpayers’ expense to
promote the bill. It is now being
pushed by the Interstate Confer
ence of Employment Security
Agencies. The executive board of
this conference is meeting now in
the city of Washington, having
travelled here at public expense.
“Its members are eating and
sleeping at federal taxpayers’ ex
pense by the Bureau of Employ
ment Security of the Labor De
partment. This scandalous non
registered lobbying organization
which has been operating for years
was rebuked by the House Appro
priations committee in 1949. We
urge an immediate thorough in
vestigation of the Interstate Con
ference of Employment Security
Agencies, with full disclosure of
its expenditures and activities, in
cluding its relationships with such
organizations as the Unemploy
ment Benefit Advisors, Inc, of
which Stanley Rector is legislative
Edwards, sponsored nightly by
the AFL on the Mutual network,
called the Knowland proposal a
“rider” to the social security bill
“which is using that vital piece of
legislation as a vehicle upon which
this cunning bit of underhand acti
vity migh become law.”
“The booby trap amendment of
Sen. Knowland,” Edwards warned,
“would remove those simple, sen
sible federal protections from the
nation’s workers. If the Knowland
amendment becomes law, state
politicians can kick workers off the
unemployment rolls if the recipient
fails to do the bidding of the poli
tician—,” at least until the months
and perhaps years that the work
ers* appeal might be in the state
Would Plug One Tax Ixxjphole
Washington (LPA)—The House
Ways and Means committee, slow
ly working its way through a new
tax bill, had written into it at the
end of the first week in June one
new loophole-plugging provision.
This would make it impossible for
speculators in securities or commo
dities to pick up a little extra cash
by making short-term profits look
like long-term profits. It will in
crease the taxes they pay about
$2,900,000 a year, according to com-,
mittee experts.
The inimitable Marx Brothers give forth with some of their most excrutiatingly funny shenanigans in
Lester Cowan’s production, “Love Happy,” which premieres at the Ceramic Theatre this Sunday through
United Artists release. Three gorgeous blondes—Ilona Massey, Marion Hutton and Vera-Ellen—play oppo
site the famous fun-makers, adding a fillip of romance to the plot. Groucho, in the smooth role of an ace
sleuth, also serves as narrator of the story. ______________________________
Annual Meeting
Of LPA Opens
In Washington
Washington (LPA)—The second
annual meeting of the Labor Press
Association will be held in Wash
ington June 15. Ruben Levin, LPA
president, announced that among
the invited speakers will be Secre
tary of Labor Maurice Tobin
Joseph D. Keenan, director of the
AFL Labor’s League for Political
Education, and Jack Kroll, director
of the CIO’s Political 'Action 5om
Business sessions are set for the
forenoon and afternoon, to include
clinics on the various services furn
ished by LPA. Ready to answer
questions will be the full LPA Mtaff
in Washington Sidney Margolius,
who edits LPA’s How To Buy fea
and Bernie Seaman, who
LPA’s famous political car
At the business sessions a
ooaru of directors will be elected,
and revision of the by-laws will be
discussed. The sessions will be held
in the conference room in the Ma
chinists’ Building, 9th Street and
Mt. Vernon Place, NW.
There will be a cocktail party at
5:36 p. m. at the National Press
Club, sponsored jointly by LLPE
and PAC. Various members of Con
gress, at the request of the dele
gates, have been invited to the
Incorporation of Labor Press As
sociation as a cooperative Sept. 1,
1949, marked a new development
for the labor movement, declared
Levin, in announcing the annual
meeting. LPA, he pointed out, has
proved its value to the labor press
in supplying it with unbiased news,
with news that the commercial
press has ignored or distorted or
Especially since LPA won a bit
ter fight for admission to the Con
gressional press gallery, its cov
erage of vital news of Congress and
Congressional hearings has helped
labor editors present the real news
to their readers.
Since becoming a cooperative
LPA has launched an extensive ex
pansion program, increasing its
staff, changing from a weekly to
a daily news service, and adding a
number of new features. LPA is
owned by its members, and its af
fairs between annual meetings are
administered by the board of dir
ectors, on which are represented
AFL, CIO and unaffiliated unions.
LPA has correspondents in the
major cities, and has an exchange
agreement with the Cooperative
Press Association of Canada. In
addition to labor papers and mag
azines, LPA serves co-op papers,
co-op radio stations, union’s radio
stations, and several government
agencies including ECA.
In connection with the LPA an
nual meeting, the Department of
Defense has arranged an all-day
conference for the following day,
Friday, June 16, at the Pentagon,
where LPA members and other in
vited labor editors will be given
first-hand information by top of
ficials on defense problems.
“We welcome the opportunity to
bring labor editors together,” said
Levin, “so that as members of LPA
and also as its clients they will
have an opportunity not only to
meet each other and our staff, but
also to discuss our mutual pro
blems and tell us what they like
and what they do not like about
LPA services. We think that in the
past we have done
far, but we know
for improvement.”
well and
there is
Lobby Probers
Specifically Vote
Subpoena Powers
Washington (LPA)—The House
Select Committee on Lobbying Ac
tivities removed all doubts about
the power of its chairman to issue
subpoenas at his own discretion by
specifically voting him that power.
Meanwhile, Chairman Frank Buch
anan (D, Pa.) told reporters he
firmly believed he was given the
authority to subpoena recalcitrant
witnesses by the House resolution
setting up the lobby probe.
Buchanan disclosed his reinforc
ed subpoena power in announcing
he had called Merwin K. Hart of
the National Economic Council to
appear before the committee June
20 to be followed by Dr. Edward
P. Rumely of the Committee for
Constitutional Government, top
lobby fighting the Fair Deal. Earl
ier this month both Hart and
Rumely were subpoenaed by Buch
anan to appear before the commit
tee and bring financial details
about their backers they had re
fused to give committee investi
gators. Hart complied in full, but
Rumely, an old hand at defying
Congress, refused to produce the
requested information although he
did put in an appearance.
Buchanan said there was no plan
now to cite Rumely for contempt
of Congress, an offense for which
the CCG executive head has been
tried twice. He said the plan was
to conduct a full inquiry into
Hart’s and Rumely’s organizations.
If Rumely still refuses to name his
big backers, known to be big corp
orations and their representatives,
he can be subpoenaed again or an
attempt can be made to get Con
gress to cite him for contempt of
the old su^)oena.
Joe Kamp of the Constitutional
Educational League, who also de
fied a subpoena, has not yet been
scheduled for a committee hearing,
Buchanan said. Kamp was slated
to start serving a four-month pri
son term June 16 for contempt of
an earlier committee.
Buchanan said that more than
160 of the 166 corporations he ask
ed to supply data about their legis
lative activities in Washington had
asknowledged his request and that
nearly 66 had already submitted
Commenting on the apparent
outright refusal of Inland Steel
and Southern California Edison to
comply, the Pennsylvania Con
gressman said he planned further
correspondence with the two com
panies. He didn’t think their re
fusals were final, he indicated.
However, observers believe these
cases to be crucial in Buchanan’s
attempt to probe the big corporate
lobbies. If they are permitted to
refuse to submit data they will set
a precedent that may make the
whole inquiry fruitless, it is be
Detroit Guild Negotiates Pension
Detroit (LPA)—An agreement
on a company-financed pension
plan has been reached between the
Detroit Guild and the weekly Mich
igan Catholic, official organ of the
Detroit archdiocese, for 20 em
ployes. Eligible will be employes at
65 after 20 years’ service, who will
then have a choice between pen
sions and severance pay, which now
runs to 30 weeks. No figure for
pensions was set, but they are to
be no lower than those paid retir
ing clergy. The employes are not
covered by social security. Should
the law be changed, federal bene
fits will be subtracted from the
management contribution.
Demand the Union Label.
Comment On
World Events
President Truman to
a proposed Export-Im
loan to Franco Spain,
for Democratic Action
turn down
port bank
(ADA) through its national ehair
man, Frati is Biddle has suggest
ed that ti»e U. 8. send food and
medical supplies for direct distri
bution to the Spanish people, by
passing their “repressive” govern
This seems easy to say but hard
to do, if Dictator Franco is oppos
ed. But ADA says there is a “ready
means’* of sending food and makes
this proposal, which quite likely
would work:
“The United States can send
food and medical supplies as a gift
to the Spanish people, with the
provision that they be distributed
by an independent and non-political
agency such as the American
Friends (Quakers) Service Com
mittee or the Red Cross. This
would make.it plain that our dis
dain is not for the Spanish people
but for the government which
forced itself upon them that
humanity the United States
afford much, but for tyranny
regime of Franco wiU not prevent
his altinsate economic collapse.
And, when that collapse comes,
the Spanisr people will not turn to
the nation which tri»-d to bolster
the d. dor wnom they have by
then c^carded.”
The WFTU is losing the ICFTU
is gaining, which is all to the good.
Here is the story for May:
ADA said it had been informed
that the question of the loan—now
being considered by the Export
Import Bank—may be referred to
the President for decision “on ac
count of the significant implica
tions of such a change in our
A loan to Franco, Biddle wrote,
would neither help contain Russ
ian imperialism nor strengthen
democratic freedom, the two ave
nues of American foreign policy
for the achievement of peace.
“Spain stands as a symbol of re
action and dictatorship to men
everywhere,” Biddle said. “Aiding
the Franco government places Am
erica, in the minds of European
democrats, in the Fascist camp
and strengthens in their minds the
Soviet propaganda that, when the
time comes for action, the United
States is found on the side of the
The Communist-dominated World
Federation of Trade Unions
(WFTU) lost 2 member unions,
and the International Confedera
tion of Free Trade Unions
(ICFTU), which includes the AFL,
CIO, and United Mine Workers of
America, gained 3 members in
May. Israel’s Histadrut, with 180,
claimed members, and Colom
j.a’s Confederation de Trabaja
dores (CTC) disaffiliated from the
Communist WFTU, and the Col
ombian union was accepted into
the ICFTU.
New Zealand’s Federation of
Labor, representing 165,000 work
ers, and Mexico’s Confederation
Nachr do Trahajadores (CNT)
were a*«o admitted tn the TCFTU,
which now has mer ers from 56
countries representing more than
50 million free trade-unionists. The
Burma Trades Uf'n Congress
with 100,000 member^, joined the
WFTU in May.
Donnell Blocks Hiring Hall Bill
Washington (LPA)—When the
bill to amend Taft-Hartley to
make the maritime hiring hulls
legal eame before the Senate, Sen.
Forrest Donnell (R, Mo.) objected
to taking it up. Under Senate rules,
this means thea the measure, al
ready approved by the Senate
Labor commitee, la pulsed over,
and may not reach the floor during
this session of Congress.
Challenging the assertion that
“a loan to Spain is no different—
morally speaking—from to loan to
Tito,” the ADA chairman said any
such aid “must be judged by its
results in furthering our large
“The assertion of Yugoslavia’s!
independence has been a telling I
blow to the Kremlin,” Biddle said.
“A loan to the feeble and rotten I
Enriched with Vitamin and Iron
this trying to find a parking place
when you go downtown on a busy day!
When you come right down to it
there are just too many cars for the
number of parking spaces available
But, when you go by bus, you can get
off in the heart of town with easy
access to all stores, ft’s convenient,
comfortable and safe. Try it next
Valley Motor Transit Co
Dear Str:
My Daughter, Wilds Moore Wil
son, was accidently drowned in the
bath tub on June 8, 1956.
Mr. George H. White, Claim
Manager of The N. B. O. P. Group
Insurance, came to my home on
June 10, 1956. He explained that
my daughter was insured for
$606.00 for a Natural Death under
the Union Labor Life Insurance
Company Policy. He also informed
me that The Hoosier Casualty
Company policy, which is part of
the group insurance, provided
$560.00 additional benefits for an
Accidental Death.
I signed the necessary forms and
Mr. White immediately gave me a
check for $500.00 in payment of
the accidental death under The
Hoosier Policy. He explained that
I would receive a check from the
Union Labor Life Insurance Com
pany for $500.00 Natural Death
benefit within a few days.
I deeply appreciate the quick
service rendered by the Group In
surance. 3.
Very truly yours,
Bertha Moore.
Barden Named Labor Body Bead
Washington (LPA) Graham
Bard i (D, N. C.) war formally
named chairman of the Labor Com
mittee of the House of Represent
atives on June 6. He succeeds the
late John Lesinski (D, Mich.). The
election of Barden by the House
was a formality, since under the
seniority system observed by Con
gress the member of the commit
tee who is of the majority party,
and has the longest tenure, is auto
matically made chairman.
Ask for Union Labeled merchan

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