Evening star. [volume], March 03, 1935, Page A-2, Image 2

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
YOUNG IDEALISTS
MOURN NEW DEAL
Wallace's Dismissal of
A. A. A. "Liberals" Held
Blow to Morale.
The story of the clash of policies
end personalities behind the recent
"purging" in the A. A. A. is told
here by the deposed senior aisistant
to the consumers' counsel, a former
newspaper nan of wide experience
Who joined the A. A. A. in 1933.
In this, the first of five articles, the
writer presents the viewpoint of the
"Young New Dealers." who con
tinue to proclaim their zeal in
working for the "forgotten man."
BY GARDNER JACKSON.
Something approaching despair has
ieized scores of young men and women
in the New Deal. This large group
of people, brought from college and
university faculties, from social work,
newspaper staffs and the professions,
Is more and more saying, when three
or four of its members gather together:
"This no longer is a new deal. It is
the old deal, with us and our intel
lectual bosses as a front."
"When this thing goes completely
to pot." they add, "and plunges us
into outright Fascism via the infla
tion and chaos route we'll get the
blame. The big boys will say that th<>
condition was caused by the brain
trusters and their satellites."
To which their more cynical, hard
boiled colleagues reply: "What did you
expect? You didn't really hope to
influence the course of government,
did you?"
Long Hours Recounted.
The fact of the matter is that a
great majority of the young New
Dealers did. With a zeal making
them oblivious to long hours, they
slaved night and day in the National
Recovery Administration, Agricultural
Adjustment Administration, Federal
Emergency Relief Administration and
other New Deal emergency agencies to
improve the lot of the forgotten man
for whom President Roosevelt ex
press particular concern. Much of
that zeal commenced to vanish when
Donald R. Richberg—now the man
most universally distrusted by the
young New Dealers—was elevated to a
position closest to the President and
began to do what the young idealists
termed "selling out labor."
Another major deflation of their
drive toward President Roosevelt's
promised objective of a better day
came when Secretary of Agriculture
Wallace summarily dismissed Jerome
Frank, general counsel of the Α. Α. Α..
and five of his associates at the re
quest of Chester C. Davis, the admin- [
istrator. Trying to disccunt the fact j
that I was one of those uncere
moniously thrown out of the Α. Α. Α., |
and therefore might let my feelings j
color my words. I do not believe I am j
exaggerating when I report that Mr.
Wallace's treatment of Mr. Frank and
the others has done more to under
mine the young New Dealers' morale
than any other single episode in the
New Deal
Pinned Hope on Wallace.
For Secretary Wallace, by reason of
the Integrity of his mind as exhibited
in his speeches and his writing, was
the member of the cabinet upon whom
the young idealists pinned far more
faith than upon any other. Though
many of them did not agree with his
projected solutions of the problems
the New Deal was put in office to
tackle, they all felt that he would
never dodge facts for mere expediency
and that the "tyranny of greed," of
which he wrote in his latest book,
would not get the upper hand in his I
department. |
Moreover, it was generally under- ι
stood, and quite freely admitted by
Mr. Wallace, that Jerome Prank, a
brilliant, devoted and technically un
excelled lawyer, was fighting Mr. Wal
lace's own battles—that he was seek
ing to follow Mr. Wallace's explicit
directions that the agricultural ad
justment act should not be made the
instrument of the packers, the can
ners. the large milk distributors and
other processing and distributing in
dustries to gouge both the farmers
and the consumers.
In our opinion. Secretary Wallace,
who is ultimately responsible for the
administration of the act under its
terms as set by Congress, has proved
himself to be a weak man by his sur
render to Administrator Davis and !
the latter's caressing of the processors j
and distributors at the expense of !
the farmers as well as the consumers.
Thought Reports Erred.
That I am not exaggerating the
reaction of the young New Dealers to
Mr. Wallace's yielding to Mr. Davis
Is attested by the scores of telephone
calls, letters and personal visits I
have received from them—all con
veying the same exclamation: "What
happened to Wallace?" One official
high in the councils of the New Deal,
who requested that he be nameless,
was in Paris when the "purge" took
place.
"I saw it in a Paris paper," he said.
"In all earnestness I told my friends
there that I was certain it was an
Inaccurate report. I assured them
that Wallace probably was not in on
the action and would reverse it the
minute he took a hand. I was posi
tive he wouldn't stand for it."
The answer seems to lie in quiet
spoken. humble-appearing Mr. Wal
lace's mystical nature. He is mystical
to a degree little appreciated by those
not close to him and not even by
those who have read his religious
writings. He dislikes administrative
work and abhors the clashes of per
sonalities Inevitable in such work.
When the high-strung, irritable Mr.
Davis, erstwhile associate of the for
mer administrators. George Peek and
Gen. Hugh S. Johnson, went to Mr.
Wallace and said, in effect. "It's either
Frank and the others or me," Mr.
Wallace yielded to the greater pres
sure—just as it seemed to many
of us in the A. A. A. that Mr. Davis
himself had been yielding to the
pressure of lobbying processors and
distributors during the preceeding
year and had. we felt, reversed the
policies announced by Secretary Wal
lace following the enforced resigna
tion of Mr. Peek.
Tolley Brilliant Mind.
At Mr. Davis' right hand stands
Howard R. Tolley, the man upon
whom he has leaned steadily through
all the events and struggles leading
up to the elimination oi Mr. Prank
and the others. Mr. Tolley, former
professor of mathematics and now
director of the Gianninl Foundation
of California (on leave for Govern
ment service), is short, stocky and
a person of few words. But behind
his silence there lies one of the most
effective brains in the New Deal and
one of the strongest determinations.
As assistant administrator and di
rector of planning of the Α. Α. Α.,
Mr. Tolley has fathered the market
ing agreement program, especially for
California crops—a number of the
latter agreements, it is significant to
note, having price-fixing arrange
ments from producer to consumer
which guarantee comfortable margins
all around.
What were th· issues underlying
the long struggle between the con
sumers' counsel, headed on one side
by battle-scarred Frederic C. Howe
(now demoted), the legal division
and. more often than not, the secre
tary's office, including Undersecre
tary Tugwell, and on the other side
by Administrator Davis and his vari
ous section chiefs? In essence our
position was that the forces of com
petition should be encouraged and
kept open wherever possible, in order
to hold distributors and processors'
margins within reason and thus pro
tect the consumer. Wherever mo
nopoly privileges were granted by
agreements, contracts and licenses—
in virtually every case—we felt the
A. A. A. should exercise strict super
vision over the processing and dis
tributing industries involved and
should have complete access to all
their books and records. Only in this
way, in our opinion, would the farm
ers and consumers have a chance
of getting a fair deal at the hands of
the giant food processing and dis
tributing industries.
We have been termed "radicals"
by some commentators. If some one
in the Senate or in the House calls
for the records of the consumers'
counsel and the legal division and
spreads them before the public it will
be amusingly ironic to see what
an old-fashioned, orthodox brand of
economies the records exemplify.
(Copyright 1935 by North American
Newspaper Alliance. IneJ
Fate of $30,000 Ransom Money
Still Lindbergh Case Mystery
Hidden, Scattered or De
stroyed Is Question
Baffling Experts.
Authorities Far Apart on
Theories of Bills*
Disappearance.
Note: Herewith is presented for
the first time a detailed drawing
together of all the threads of tn
formation on the Lindbergh ran
som, from independent investiga
tions and from official records and
testimony. Much of the material
never before has been published.
(Copyright, lfl.15. by the Asiocltted Press.)
NEW YORK, March 2.—The ran
som phase of the Lindbergh ease re
mains tonight, three years and one
day after the actual kidnaping oi
the child, only "two-fifths solved."
Of the $50,000 paid by Col. Charles
A. Lindbergh to a ransom collector in
a Bronx cemetery April 2, 1932, only
$19.715 has been accounted for.
Somewhere — either in a hidden
place, in actual circulation still, or
perhaps destroyed by the Treasury
Department—there is $30,285 of the
currency which Dr. John F. Condon,
the Lindbergh intermediary, handed
over to the ransom collector.
Where is it?
Some authorities who have been
active in the investigation of the
crime of the Sourland Hills believe
Bruno Richard Hauptmann, under
death sentence for the murder, has
the money in a hidden place.
Others believe Hauptmann suc
ceeded—despite the fact that the
numbers on each bill were listed and
known to all banking houses—in
putting it into circulation.
One official of the Federal Reserve
Bank, however, used tonight the word j
"impossible" as regards a theory that j
the ransom bills could have been1
passed through the banks unrecognized
to be finally destroyed or stored in the ;
old money vaults of the United States ;
Treasury Department.
Reverse View Held.
The Internal Revenue Department, !
on the other hand, holds that much !
if not all of the $30.285 which is still j
unaccounted for must have passed !
through the Federal Reserve Banks j
and been finally destroyed.
"Either this." observed Hugh Mac- I
Quillan. special agent in charge of
the New York division of the Internal
Revenue Department, "or the bills are ;
still in circulation.
"There are probably quite a few i
of the bills still being used or stored
away by the public, but a large part !
of it must have slipped through the
banks into the Treasury Department." |
An official of the Federal Reserve
Bank in New York, who has worked
on identification of the Lindbergh
ransom money, said that either of
these possibilities would be "out of
me ifutokiun.
"There is one possibility of the
money getting past us," he said, "and
that is very remote.
"During the two weeks following j
the payment of the ransom, things ;
were in such a mess, that with check
ing the numbers serially and arrang
ing pamphlets publishing the numbers,
money might have got by us.
Doubts Later Slip-Cp.
"But following that period, not a
single bill could have gone through
the Federal Reserve Bank in New
York and according to what other J
banks report, equal vigilance was ex- '
ercised elsewhere."
He said that even during the huge
turnover occasioned by the President's
gold order in May. 1933, it "would
have been impossible for one of the
bills to have escaped our attention.
We were so careful."
With regard to the bills remaining
in circulation, he said, "the life of a
$5 bill ranges from six to eight months.
During this period they become so
used thrt they are returned to the
Treasury Department and replaced by
new bills.
"The life of a $10 bill is considerably
longer. They circulate less, but they
are returned to the banks more fre- j
quently.
"A $20 bill comes back to the bank J
usually before it has circulated a
month. It is not so much used as the
$10 bill, but it shows up for scrutiny
more than twice as often."
In prosecuting Hauptmann. New
Jersey's Attorney General David T.
Wilentz contended that Hauptmann,
and Hauptmann alone, kidnaped the
baby and collected and spent the ran
som.
Wilenti Lists $49,986.
He said Hauptmann disposed of $49,
986 of the money as follows:
In brokerage accounts $16,942.75
In savings accounts 9,073.25
For one mortgage 3,750.00
Gold coins found in home. 120.00
Ransom money in Haupt
mann's garage 14,600.00
Advance to Isador Fisch
for furs 5,500.00
Total $49.986.00
This accounts for sums of money
traceable to Hauptmann. but does not,
except by implication, attempt to ac
count for the actual currency in the
ransom bundle.
The only part of the ransom pay
ment definitely recovered is $19,715—
'ess than two-fifths of the total—and
it is accounted for as follows:
Found in tin can in Haupt
mann garage:
492 $20 gold certificates.... $9,840
390 $10 gold certificates 3*900
Found in hole in plank in _
same garage:
84 $10 gold certificates 840
Found on Hauptmann's per
son:
1 $20 gold certificate 20
Pound In banks between April
4. 1932, and October 12,
1934:
434 $10 gold certificates.... 4,340
115 $5 bills 575
4 $20 Federal Reserve notes. 80
6 $20 gold certificates 120
Total accounted for $19,715
Two Bill Types Missing.
So far as the authorities have dis
closed. none of the $5,000 in Federal
Reserve notes nor of the $10,000 in
$5 bills included in the ransom bundle
have been traced to Hauptmann.
The money which Hauptmann ad
mitted he possessed, and which he
contends was left with him by his
now-dead friend and business part
ner, Isador Fisch, was in $10 and
$20 gold certificates.
Hauptmann said he had spent
"maybe a little more than $100" of
the ransom money between the time
he says he discovered it in the pack
age Fisch had left, the middle of
August, 1934. and his arrest, Septem
ber 18. 1934.
On May 1. 1933. authorities discov
ered that $2,990 of the ransom money
had been converted to other currency
at the New York Federal Reserve
Bank. The amount was traced to
"J. J. Faulkner." which the police
decided was a fictitious name. The
State made no effort to compare
"Faulkner's" handwriting with the
admitted specimens of Hauptmann
when Hauptmann was tried.
Three days before the President's
gold order became effective two other
large sums of ransom money were
exchanged at New York banks.
Findings Withheld.
On April 28. 1933, $500 in ransom
$10 gold certificates were turned in
at the Manufacturers Trust Co.
Except to mention at Hauptmann's
trial that they were turned In,
authorities have not made public the
findings of their investigation of this
affair.
The other large ransom money
transaction received equally slight
explanation. Another $500 in ransom
$10 bills was turned in at the
Chemical National Bank in New York
on April 26 or 27, 1933.
Outside New York City only nine
points in the United States received
ransom money.
It is significant that six of these
cities received ransom bills within a
few months early In 1934. Haupt
mann has consistently contended
that Isador Fisch left the ransom in
a shoe box when he departed for
Germany, where he later died, early
in December, 1933.
Hauptmann said he did not know
that the box contained money, and
consequently did not begin to spend
the bills until the middle of August,
1934. There is no public record of
ransom money turning up in New
York City during the interval be
tween Fisch's departure and the date
set by Hauptmann for the finding of
the money.
Bills Are Scattered.
Ransom exchange poihte are largely
concentrated In upstate New York.
On March 3, 1934, two $5 ransom
bills turned up in Newark, N. J.; one
week later another bill appeared in
Huntington, Long Island, Ν, Y.
Other bills were identified as fol
lows:
April 28. 1934, a $5 bill in Albany.
May 10, 1934, a $5 bill in Troy.
May 25, 1934, one or two *5 bills
in Utica.
Early Summer. 1934. at a point In
Michigan, near Chicago, 111., another
bill.
June 13, 1933, a $10 gold certificate
near Cheery Valley, Ν. Y.
October 15, 1932, a bill at Tarry
town. Ν. Y.
June 30, 1932, a bill at Mount
Vernon, Ν. Y.
Three bills were discovered to have
been in Asia. One of them, a $5 bill,
was later learned to have been in
Colombo, Ceylon, prior to the kid
naping.
Excluding the money found with
Hauptmann, the three large ransom
exchanges in New York banks, which
authorities have not traced to Haupt
mann, and the bills that have turned
up out of town, about $945 of the re
covered ransom appeared In New York.
Bills Circulate Quickly.
The first bill to be recognized turned
up at the East River Savings Bank
two or three days after the ransom
payment. During April and May.
1932, five bills were passed in New
York.
Federal and banking authorities say
they know of no ransom money that
has turned up in Boston. Reports
were circulated that two ransom bills
were offered an airplane office there
in payment for passage recently.
According to official records the last
bill to turn up was a $10 gold certifi
cate "floater" that was recognized in
Newark on October 12, 1934. This is
believed to be one of the bills Haupt
mann admitted passing.
TERM "HITLER" HURLED
AT SENATOR CLARK
IN FOOD BILL HEARING
(Continued From First Page.)
women, representing manufacturers'
associations, ice cream makers and
women's organizations asked to be
heard on the bill. It is a much modi
fied outgrowth of the contested "Tug
well" bill before Congress a year ago
and would prohibit falsç advertising
and labeling of foods, drugs and cos
metics.
For the most part, those appearing
yesterday indorsed the bill in its
amended form, but Clinton Robb, rep
resenting a medicine manufacturers'
association, described it as "more un
fair" than the Tugwall bill.
a
Many Voids Found
In Story of Bills
Paid to Kidnaper
Here, approximately. Is what
happened to the Lindbergh ran
som:
Lindbergh ransom...... $50,200
Still missing 30.285
Hauptmann had 14,600
Hauptmann admitted
having spent (about).. 100
"J. J. Faulkner" ex
changed (May 1, 1933) 2,900
Exchanged at Manufac
turers' Trust Co. (April
28, 1933) 500
Exchanged at Chemical
National Bank (April
2«, 1933) 600
Appeared outside New
York City (about).... 80
Turned up in New York
City business houses
(about) 945
Total $50,000
PROSPECTIVE KING
IGNORANT OF FATE
Prince Ananda Lives as
Typical Schoolboy in
Swiss Retreat.
(Copyright. J0.15. by lh* Associated Preu.l
LAUSANNE. Switzerland, March
2.—Prince Ananda, schoolboy heir
presumptive to the Siamese throne,
is going to classes here unaware that
he may be the king of 11,000,000 sub
jects before his next birthday.
Nobody has told him his uncle
Prajadhlpok has decided to abdicate.
A slender, sloe-eyed, sober-faced
youngster, who wears knickers and
pull-over sweater as casually as any
American boy, Ananda has barely
started his western education which
his family considers essential for any
modern-day eastern prince. He has
been at an exclusive school In
Lausanne for two years.
His mother's solicitude for his
health Is responsible for his Swiss
schooling. While he is robust enough,
the mother thought the Alpine air
was better than that of other Eu
ropean centers.
Lives in Seclusion.
Incognito since their arrival, the
prince and his mother, who is the
widow of the late Prince Mahldol,
King Prajadhipok's brother, have not
been available to Interviewers. It was
learned, however, that politics and
the kingship are never discussed with
the prince.
His teachers say the lad is "bright,
clever and industrious."
If King Prajadhipok finally abdi
cates, young Ananda is expected to
stay In school until he completes his
education, like little King Peter II of
Yugoslavia. A regency would rule
Siam until Ananda's majority, when
he probably would have an elaborate
coronation.
Family History Curious.
A curious family history Is respon
sible for Ananda's chance at the
throne.
His grandfather, old King Chula
Long Korn, had numerous wives.
When his eldest son by the first
Queen died, Chula Long Korn made
another wife, Sowabha Por^si, mother
of Prajadhipok, queen. Her eldest son,
Rama VI, came to the throne, and
Prajadhipok succeeded his brother on
the letter's death in 1926
Since the present ruler has no
son. the succession reverted to the
descendants of the first Queen.
Ananda's father, Prince Mahidol, who
died In 1929, was her son.
ABDICATION AWAITED.
BANGKOK. Siam, March 2 <#) —
The fate of political prisoners facing
death sentences in Siam hung in the
balance tonight as the formalities of
King Prajadhipok's abdication were
awaited
The King, from his residence in
England, had demanded restoration
of his royal powers of pardon. He
also insisted that prisoners be tried
by ordinary courts in public, Instead
of by committees in private.
With Parliament ready to receive
and debate the King's abdication, the
official press bureau said it had been
informed from London the King
would sign the document today.
Previously it had refused to accept
the terms the tiny King laid down
as the price of withdrawal of his
threat to abdicate.
In addition to political prisoners
already held, ten arrests have been
made in connection with the recent
attempt to assassinate Defense Min
ister Luang Bipul Songram. who was
shot and wounded February 23.
MISSIONARY KILLED
BY CHINESE BANDITS
Hope I« Abandoned for Wife of
Australian Cleric—Two
Others Missing.
By the Associated Press.
SHANGHAI. March 2—The death
of another missionary at the hands
of kidnapers was reported from Sian.
Shensi Province, today. The China
Inland Mission at Changsha, Hunan
Province, sent word that it could not
confirm the rumored death of two
others seized last October.
The Sian report, ascribed to sol
diers, said Rev. S. C. Frenchan, Aus
tralian, had been slain and hope had
been abandoned for his young British
wife, who was seized with him not far
from Nankiang last week.
Advices from Changsha said the
China Inland Mission headquarters
there and other sources had received
no reports of the death of R. A. Boss
hardt and A. Hayman, captured by
Communists in Kweichow Province
last October.
Troops from Nankiang, seat of
Prenchan's mission, sent word of his
death, and two British missionaries
who set out to search for Mrs.
Frenchan telegraphed that they also
had received the report. The s?arch
ers found no trace of Mrs. Frenchan,
who was an expectant mother.
Moratorium Bill Signed.
PIERRE. S. Dak., March 3 (IP).—A
bill providing for a two-year mora
torium on the foreclosure of real
estate mortgages was signed today
by Gov. Tom Berry. The law, pat
terned after the Minnesota act, auto
matically expires May 1, 1937.
Council Spokesmen Say Poll
Does Not Require
Walkout.
Br th· Associated Pre»».
DETROIT, March 2.—The Na
tional Council of United Automobile ■
Workers adjourned a week's session j
this afternoon without further com- ]
ment on the "secret" strike vote It!
has ordered among the 178 American
Federation of Labor locate In the
motor car Industry. At federation
headquarters here it was said the
council would not meet again until
definite returns had been received
from moet of the locals.
The statement of Francis J. Dillon.
A F. of L. organizer, and other union
officials, that the call for the strike
vote "did not necessarily mean a
strike would be called," was as near
as any authority would come to ad
mitting the action was taken pri
marily a/s a test of federation strength
in the industry. Figures tabulated
by the National Automobile Labor
Board so far on collective bargain
ing committee elections in automotive
plants showed the federation repre
sented only a fraction of the 200,000
workers.
Criticitcd by Green.
It was opposition to the Labor
Board's procedure in these elections
that precipitated the A. F. of L. strike
vote action. The board has been
criticized by President Green of the
A. P. of L., and by Dillon as failing
to accomplish any real benefit for
the workers.
President Green was understood to
have initiated efforts authorized last
week by the National Council toward
negotiations with the Automobile
Manufacturers' Association concern
ing wages and hours in the industry.
His action was independent of the
Automobile Labor Board, which was
appointed by President Roosevelt a
year ago when a strike threatened the
industry. There was no information
here, however, concerning the prog
ress. if any, which had been made.
The Labor Board announced today
it expected to complete its elections
in the industry by about April 15.
It has already canvassed 93.611 work
ers. The tabulation announced to
dav listed affiliations as follows:
Unaffiliated, 68.787.
Employe associations. 10.604.
Associated Auto Worker» of Amer
ica. 6.061.
American Federation of Labor,
4,040.
Mechanics' Educational Society,
507.
Blank, 1.526.
Void, 1.953
The remainder were scattered
among half a dozen organization*.
COURÏTgÛARDËD
AT GANG HEARING
One Sentenced, One Pleads Suilty
and Trial of 12 Set in Aid
ing Nelson.
By the Aseodtted Presi.
SAN FRANCISCO. March 2.—In a
court room bristling with armed
guards, one man was sentenced to
prison, another pleaded guilty, and
the trial of 12 other defendants was
set for March 18 as the Government
moved today against alleged aides of >
the slain gangster, George "Baby
Face" Nelson.
Jack Perkins, Chicago bookmaker,
was the first to plead guiity to charges
of having harbored Nelson while ne
was a fugitive from justice. Perkins
received a 2-year prison term and a
$1,000 fine from Federal Judge A. F..
St. Sure
Joseph fFatso) Negri pleaded guilty
to a conspiracy count, while another
indictment against him was continued.
He will be sentenced March 18.
Grace Perkins, wife of Jack, will
be tried with the 11 men who have
denied their guilt. She heard her
husband described by E. P. Gulnane.
Department of Justice agent, as a
"probable participant" in the June 30
hold-up of. the Merchants' National
Bank at South Bend, Ind.
Guinane said Perkins had been iden
tified by three police officers and one
bank official as one of the hold-up j
quartet at South Bend. A policeman '
was killed in that robbery.
JUDGE TO STAND TRIAL
Suspended Florida Jurist Is Loser
in Grand Jury Qûiz. x
MIAMI, Fla., March 2 VP).—Sus
pended Judge E. C. Collins of the
Criminal Court today lost his fight
to quash grand-jury indictments and
was ordered to trial next Monday on
charges of bribe-taking, embezzle
ment and malpractice.
Judge Jefferson B. Browne of Key
West. In denying a defense motion to
dismiss, held the State's Informations
contained evidence which should be
submitted to a jury.
Collins is immediate past president
of the Florida Baptist Association and
was attending its annual convention
when the recent country crime grand
jury indicted him. He was sus
pended by Gov. Dave Sholts.
The bribe-taking and embezzlement
charges grew out of the release of the
son of W. J. Davis, sr., a planter of
Jemison, Ala., accussed of stealing an
automobile.
To Speak in Forum
What the American people can do
In the next two years to assure the
continued recovery of the first two
years of the Roosevelt administration
will be discussed tomorrow night In
the National Radio Forum by Secre
tary of Commerce Roper.
The forum is arranged by The
Washington Star and broadcast over a
coast-to-coast network of the Na
tional Broadcasting Co. The address
will be heard locally from Station
WRC at 10:30 p.m.
The broadcast is to occur while the
cabinet is host to President Roosevelt
at the annual cabinet dinner, insti
tuted Just a year ago on the first
anniversary of the inauguration. Be
cause of this, a microphone will be
placed in the Mayflower Hotel and
Secretary Roper will leave the dinner
long enough to deliver his address.
The Secretary plans to review the
first two years of the administration,
pointing out what has been accom
plished along the hard road back to
recovery. He also will discuss the
problems still confronting the Amer
ican people, and outline what he be
lieves the people can do to help in
the solution of these problems.
Secretary Roper Unexpected also to
touoh upon puritng legislation and to
I
SECRETARY ROPER.
Interpret the significance of many pro
posals made m a part of the admin·
Utration'a program.
«
Examples Help Explain Puzzle
Of Earned Income Tax Credit
Public Generally Is Beivildered by
Official Instructions on Deducting
101 Per Cent From 1934 Returns.
"How do you deduct that 10 pei
cent earned income credit and where?'
This question now causes mori
scratching of heads and chewing o:
pencils by income taxpayers than an;
of the changes made by the 193'
revenue act.
The surtax ha* been altered, th<
method of signing returns has beer
changed—In fact, so many new thing!
have been put In the tax act that th(
Government has issued a circular en
titled "Important Changes In the In
ternal Revenue Laws."
Generally these changes are sup
posed to lift the load from the "littli
fellow" and increase the load on th<
"big fellow." But In practice, it ii
working out here in Washington thai
even some of those with larger in
comes have so many exemptions thai
they are actually paying less tax this
year than last. Others are paying
much larger taxes.
Surtax Starts Lower.
Last year the surtax didn't stari
until $6,000 and then at 1 per cent
Now it starts at (4,000 at 4 per cent
Last year no credits were allowed be
fore computing the surtax. This yeai
the credits for personal exemption
and for dependents are permissible lr
computing the surtax This haj
helped many men with large families
Generally the heavier taxpayers, how
ever, are paying much larger levies tc
the Federal Government.
But by and large, big and little
they are all puzzled this year ovei
that 10 per cent "earned incomi
credit." They are all trying to fine
out, and without much success unless
they consult a Government expert
just exactly what the Government
does mean by this language on the
income tax return:
"In computing the normal tax, but
not the surtax, there may be claimed
a credit against net income of 10 pei
centum of the amount of the earned
net income, but not in excess of 1C
per centum of the amount of the net
income. If the net income is not
more than $3,000 the entire net in
come shall be considered to be earned
net income and if the net income ii
more than $3,000 the earned net in
come shall not be considered to b<
less than $3,000."
To the average man that looks easj
to start with, but before he gets
through it reads like "so much Greek.'
according to many who have got
tangled up, particularly with that last
sentence. It is causing more trouble
than any new feature of the incomc
tax returns.
To understand the matter, Govern
ment officials explain, it is necessarj
to realize that there are two entirelj
different kinds of net income in
volved. One of these is just plair
ordinary "net income," but the othei
is "earned net income." There is ι
vaut difference.
If only the problem were as simpli
as taking 10 per cent of the earnec
net income and subtracting it, tha
would be easy. But it is not so simpl(
as that by any means. So many "ifs
ands and buts" come into the picture
Take the simplest example first
however—of a man whose salary t:
less than $3.000 a year, say $2.500
without a home on which to pay taxes
or interest, no contributions and with·
out a wife or children for exemption!
and credits. He would simply figuri
10 per cent of his earned net incomi
of $2.500, which Is $250, and go aboui
his figuring as follows:
N't income ...... $2.501
Less earned income credit $"50
Less personal exemption. l.UDO 1 .—5)
Balança of Income subject to _
tax $1.251
Tax at 4 per cent $oi
Means Several Things.
But under this new 1934 law, th<
words "earned income" mean tw<
or three things. In the first place
generally, it means salary. As ex
plained in the income tax returr
1040, "earned income" is defined ai
"wages, salaries, professional fees anc
other amounts received as compen·
sation for personal services actually
rendered, but does not include an;
amount not Included in gross income
nor that part of the compensation de
rived by the taxpayer for persona
services rendered by him to a cor
poration which represents a distribu
tion of earnings or profits, rathei
than a reasonable allowance as com
pensation for personal services actuallj
rendered.
"In the case of a taxpayer engagec
in a trade or business, in which bott
personal services and capital are ma
terial income-producing factors, ι
reasonable allowance as compensatior
for the personal services actually ren
dered by the taxpayer, not in excesi
Df 20 per centum of his share of th«
net profits of such trade or busines;
shall be considered as earned In
come."
"Earned income deductions." it ex
plains, "means such deductions as art
allowed by section 23 of the revenu»
act of 1934, for the purpose of com
puting net Income, and are properlj
allowable to or chargeable againsi
earned income.
Earned Net Defined.
"Earned net income means th<
excess of the amount of the earnet
Income over the sum of the earnet
income deductions."
For the man with a net income o:
more than $3,000. but a salary of lesi
than $3,000, the rules appear to guar
antee a credit of at least $300.
But the top limit on earned incom*
credit is placed at $1.400, which is It
per cent on an earned income o:
$14,000. In other words, for the pur
pose of the law no one is supposet
actually to earn by his own persona
endeavor more than $14,000 "earnet
Income."
Now, turning to the other kind 01
net Income, Just plain "net Income,'
It is derived by the great rank anc
file of small and moderate lnconw
taxpayers by adding up all their in
come and subtracting from it certaii
Seductions, such as taxes paid, con
tributions and certain other things
such as interest on personal debts
That gets the figure for "net income.'
Next It is from this net income tha
the taxpayer subtracts still furthej
his new earned income credit, per
sonal exemption and credit for de
pendents. The earned income credl
is not deductible for purposes of thi
lurtax.
A general rule has been adopte<
in attempting to simplify the matter
which says that in computing thi
10 per cent credit for earned income
jrou simply take 10 per cent at thi
f
salary, or the net income, whichever
' is the smaller. But, in many cases
: that will not work, because ol excep
' tions.
And It is one of these exceptions
: that comes under the last part of the
official sentence which is so difficult
: to understand.
This sentence, to repeat, says, "If
; the net income Is not more than
ι $3.000, the entire net income shall
be considered to be earned net income.
; and if the net income is more than
S3.000. the earned net income shall
not be considered to be less than
, $3,000.·'
ι To explain, take this hypothetical
, ί case of Joe Doe:
ι Income
ι Salary $2 ΟΠΟ
, Other income 5<»0
Other Income 100
Total Income..·,·
Deductions
Taxes paid
Contributions
Interest paid
S3.500
S100
jfM
76
Total deduction!... 275
Net Income . . $3 225
i Earned income credit . $300
Personal exemption 2.5ou
! Credit lor one child . 4<»o
Total . 3.200
Balance taxable $25
Normal tax at 4 per cent of $26.· $1
Why It Didn't Work.
In this hypothetical case, the rule
ι of talcing the salary or net income,
: whichever is the lower for figuring the
! 10 per cent credit, failed absolutely,
because the earned income credit was
neither 10 per cent of his salary,
ι $2,900, nor was it 10 per cent of his
net income. - $3.225. Instead, it wax
$300 fiat. This was calculated on the
basis of· the sentence hard to under
stand: "If the net income is more than
$3.000 the earned net income shall
not be considered to be less than
$3,000." Or, in other words, it might
have been written, if the net income
is more than $3,000, you can take
off at least $300.
A word of warning is sounded by
Government experts, however, against
the 10 per cent limit placed against
the earned income credit. Taxpayers
should be sure, it is explained, that
in their calculations they do not at
tempt to take an "earned income
credit," which will be in excess of 10
per cent of the actual "net income."
Many taxpayers, no doubt, unless they
have consulted a Government agent,
probably will take 10 per cent of all
th»1r xnlarv which ma ν he much
; larger than 10 per cent of their net
Income, and in a few months will be
getting letters from the auditors over
in Baltimore, the headquarters for
this district, explaining that they took
I too much earned Income credit.
( Therefore, they will owe the Govern
ment such and such in additional
taxes.
Here's another good point to re
1 member, however. The taxpayer mak
ing a return on form 1040-A can in
crease the amount of his earned in
: come credit, and thus decrease his
1 taxes due, by the simple expedient of
: increasing his net income, adding
dividends from domestic corporations
and interest of Federal securities.
; This has the effect of increasing the
net Income only for the purpose of
allowing a larger 10 per cent earned
income credit, but it does not mean
that taxes have to be paid an the
dividends so reported.
Married persons this year should re
member, it is pointed out, that if a
1 i joint return is filed, both man and
ι ; wife must sign. It is not necessary,
however, for both to appear in person
ι j at the office of deputy collector to
swear to the return. The husband, if
he has made out the return, may bring
! it in, swear to it, and then return
, i it to his wife at home, for her signa
I ture, and then drop it in the mail.
All income tax returns are due on
or before March 15. midnight, with at
least one-quarter of the tax. Returns
may be mailed to the Collector of In
ternal Revenue, Baltimore, Md.. or
filed at the office of the deputy collec
tor. Room 1002. Internal Revenue
Building, corner Twelfth street and
Constitution avenue. Beginning to
morrow, tax experts will be stationed
in many banks to assist the public.
At the office of the deputy collector
here the hours now are from 9 a.m.
to 5 p.m. daily, and from 9 to 4:30
on Saturday. On March 15. as usual,
the office will remain open until mid
night.
Although there is a bitter fight in
Congress over attempts to repeal the
"pink slip-' publicity feature of the
1934 act, taxpayers are advised to fill
out and sign these pink slips. This is
necessary until that part of the act is
repealed.
!
Clings to Presidency De
spite Growing Violence.
Holds Batista Support.
By the Associated Press.
HAVANA, March 2.—A new alarm
ist campaign got under way to the
roar of bombs today as Col. Carlos
Mendieta, veteran of many political
upheavals, held steadfastly to the
presidency In the face of insistent de
mands that he resign.
With Col. Fulgencio Batista, army
commander in chief, still behind him
despite intimations that Batista might
take the office If things came to a
crisis, Mendieta ignored the demands
of the new opposition "common front"
and 300,000 striking students and
teachers.
Terrorists set fire to 40 mall boxes
In Havana, partly destroying cor
respondence, and placed two bombs,
one at the home of Gustavo Herrero,
newspaper political writer, and the
other at the residence of Carlos
Narto, former mayor of nearby Hoyo
Colorado.
The two buildings bombed were
badly damaged. A political meeting
was going on at Narto's home, but
none was injured.
The terrorism came in the face of
Batista's warning, issued last night,
that the government might be forced
to take drastic measures to handle
an island-wide movement for a gen
eral strike to unseat Mendieta.
Asserting he hoped the government
could handle the problem "without
extreme measures." Batista, never
theless. said he was afraid that "the
moment may come, and it may be
very near, when the thing must be
settled in another way."
Asked if he himself would take over
: the presidency in an emergency,
Batista replied. "I would not shirk
* · * responsibilities should our na
tionality become endangered."
'BUTCHER MURDER' CASE
DEFENDANT IN HOSPITAL
Stenographer, 33, Bests as Court
Becesses—Accused of Slay
ing Mother.
Br the Associated Press.
LAUREL. Miss., March 2.—Oui da
Keeton, Irail 33-year-old stenographer
on trial for her life, rested under
armed guard in a hospital today ap
parently unconcerned over the State's
initial effort to link her with the grue
some "butcher murder" of her wealthy
widowed mother.
The murder trial was recessed over
the week end after Presiding Judge
W. Joe Pack declared, "There is a limit
to human endurance." The defend
ant. had appeared in court in a wheel
chair, being carried back and forth
from her hospital for each session.
She was indicted jointly with W. M.
Carter, Laurel business man and her
former employers, for slaying Mrs.
Daisy Keeton last January 21, and
dismembering the body to dispoee of it.
«
FOUR HURT IN AUTO
Baltimore Quartet Injured When
Car Turns Over in Skid.
VINELAND, N. J., March 1 OP)—
Pour Baltimore residents were injured
last night when their car skidded on
a muddy stretch of road and upset in
nearby Landisville.
Dr. A. D. McPadden. his wife. Mrs.
Sue McFadden. and Mr. and Mrs.
Nelson Bond were treated at a hos
| pital. All except Mrs. McFadden were
discharged. She suffered a possible
fracture of the vertebrae. Her con
dition was said to be good.
! .
Midwest Quake
Produces Bumper
Crop of Stories
Might Man in Telephone
Office Thought Some
body Pushed Him.
By the Associated Press.
LINCOLN, Nebr., March 2.—The
earthquake that shook Midwestern
States early yesterday wasn't severe
enough to cause any damage, but it
was bad enough to grow a bumper
crop of earthquake stories.
The night man at the Lincoln tele
phone offices said he was lying on ft
desk when he thought some one had
come up behind him and tried to push
him off. He arose to see what was
happening, and noticed a blotter
"walking across the desk."
A justice of the Nebraska Supreme
Court came down to his office in the
morning and said:
"I didn't hear it. but my wife said
there was a quake and when she says
so there is-no appeal."
How Mellon Collected Art
For National Museum Told
By the Associated Press.
PITTSBURGH. March 2.—Some of
the details about the $19,000,000 art
collection gathered by Andrew W.
! Mellon to create a national museum
in Washington were disclosed today
by the financier.
He told of the manner in which he
> obtained five noted paintings, worth
more than $3,000,000, from the Hermi
tage collection in Petrograd.
"We had been collecting pictures for
ι many years," said the white-haired
former Secretary of the Treasury, "and
one of the New York firms from
whom we had made many purchases
I said they had an opportunity to make
sortie purchases at the Hermitage.
"They wanted to know if I would
be interested in helping finance the
' venture.
"I agreed to arrange for the funds
in return for a contract giving me the
right to select any pictures I wanted
ι for the purchase price, plus a com·
mission.'*
Other* to Be Sold.
Paintings not selected were to be
! sold, with Mellon and the art firm
sharing equally In any profits.
Mellon did not disclose how manv
pictures were purchased by the art
; dealer. M. Knoedler Sc Co., from the
ι famous collection made by the Czars
of Russia, which was estimated to ln
I elude 1,700 paintings.
The outstanding works selected by
! the financier were Raphael's "Ma
, donna of the House of Alba" ($1,
i 106,400); Titian'· "The Toilet of
ft
à
Venus" ($544.320) : Sandro Botticelli'»
"Adoration of the Magi'· ($838.350);
Perugino's Triptych, "The Crucifix
ion οf St. John, the Magdalen and
St. Jerome" ($195.615), and "The!
Annunciation" by Jan Van Eyck
($503.010).
The method whereby Mellon pro
vided funds for the purchases was not
revealed.
60 to 70 In Collection.
For 30 years Mellon has been as
sembling quietly a collection of 60 or
70 paintings, all of outstanding lm- "
portance.
Friends of Mr. Mellon said he plans
later this year to turn most of his
attention to plans for building the
projected national art museum—
which will not bear the name of Mel
lon. but *s designed to be eo cosmo
politan m character that American
art lovers will leave collections to it
from time to time. ·
They said the former Secretary of
the Treasury does not intend to segre
gate his collection into one section of
the building, but rather to separate the
pictures according to schools.
The site of the building has not yet
been selected, it was said.
Mêlions collection already ranks
with the best of those made by Ameri
cans, including the famous gathering
by the late Henry Clay Frlck, that of
the late Mrs Jack Gardner in Boston,
the Widener collection in Philadel
phia, the Kahn collection in New York
and the Huntingdon collection In
California.
f