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Evening star. [volume] (Washington, D.C.) 1854-1972, May 23, 1936, Image 1

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(U 8 Weather Bureau Foracast) The onJy evening paper
Fair and warmer tonight; tomorrow . ... -al ii
generally fair and slightly warmer; mod- in WHShmgtOn With the •
erate to fresh southwest winds. Temper- A SKnoiatoH Prose Moure
atures—Highest. 72, at noon today; low- j nr , *TeS?, .eWS
est, 52, at 5:30 a m. today. and Wirephoto Services.
Full report on page A-12.
- *■ — ■
Cloting New York M.rk.U, P.,« 13
No. 33,625. sras wc.0,nhingtonmDUcr WASHINGTON, D. €., SATURDAY, MAY 23, 1936 —FORTY PAGES. *** w M.an. Aa.ociat.d Pr.u, TWO CENTS.
Contempt Action Delayed
Until Next Week to De
cide on Course.
Postponement Held Forestalling
Bid for Publicity by Pen
sion Workers.
Four days ago the hero of the
country's sexagenarians faced the
House committee which had been
voted f50.000 for a dissection of
the workings of O. A. R. P., a bogey
• man in the life of every member
of Congress. For two days Dr.
Francis Townsend, the sair.t of the
aged, ansiccrcd questions calmly
enough, but on the third he beat a
sudden and hasty retreat from the
scene of the inquiry, daring the
investigators to cite him for con
tempt. Before he retired, he had
given evidence of o very satisfac
tory income accruing to him since
1934, when O. A. R. P. was
With the prestige of the whole Con
gress at stake, the special House com
mittee investigating old-age pension
schemes is in agreement that Dr.
Francis E. Townsend should be cited
by the House of Representatives for
Announcement, oi mis agreement,
ahared by at least six of the eight
members, is being held up until early
next week for two principal reasons.
First is that the committee is not
jet agreed on which of two forms of
contempt action it should recommend
to the House. Second is the feeling
of the committee that official disclosure
of their decision would be turned to
better publicity use by the Town
aendites over the week end than would
be possible if the announcement is
made early in the week with action to
follow speedily in the House.
In the first instance, the two possi
bilities are trial by the House and trial
before the courts. Precedent exists for
both. Speaker Byrns, after a confer
ence with Chairman Bell of the
committee yesterday morning, men
tioned the possibility of referring the
contempt action to the United States
Chairman Sumners. Democrat, of;
Texas of the House Judiciary Com- ;
mittee. also was consulted, it was
In any rase, the decision of the j
committee and the House is of vitalI
importance to the whole Congress [
since successful defiance of an in- i
vestigating committee would be a pre
cedent damaging to future investiga- I
tions. regardless of their value or jus
tification. At the same time, there is
the real danger of "martyrizing” the 1
pension "messiah" by punishing him,
a fear which contributed to the delay j
in announcing any agreement yester
Committee consideration of the i
problem of dealing with Dr. Town- j
send's defiant action of Thursday, j
■when he walked out of the committee
room after telling them he would tes
tify no longer unless under arrest,
occupied them in executive session for
nearly three hours yesterday after
At the end of that time. Chairman
Bell announced that the committee
was ready to announce no decision.
He did say, however, that he per
snally favored pressing action against
the doctor and that he had made
that recommendation to the full com
mittee. He declined to say which of
the two contempt proceedings he fav
ored, or to admit that violent dis
agreement exists between committee
members on this particular issue.
V^omnmiet uuuusci uttmw rv. oui*
livan also has made a specific rec
ommendation for procedure, but has
not revealed which of the courses he
favors. Early in the hearings he and
his aides are understood to have pre
pared the legal background for con
tempt proceedings and to be ready
for whichever decision the committee
Bell added that if none of the
subpoenaed witnesses appear next
* (See~TOWNSEND7Page 2j
Nashashibi Charged With Incite
ing Jaffa Boatmen to Con
tinue Strike.
By the Associated Press.
JERUSALEM. May 23 (Palcor
Agency).—The Palestine government,
seeking to curb inflammatory racial
propaganda, today ordered the exile
of Fakhri Bey Nashashibi, leader of
the Arab Defense party.
Nashashibi has been expelled from
permanent residence in Jerusalem on
charges of inciting Jaffa boatmen to
continue the general strike against
Jewish immigration and in other ways
to disturb the peace of the country.
A number of other Arab leaders suf
fered the same penalty.
A Jew is now chief executive of
Jerusalem. District Commissioner J.
E. F. Campbell of Jerusalem can
celled the municipality's contract with
an Arab for construction of a road
to Jaffa because he had stopped work
owing to the general strike.
A raid by Arabs last night on the
settlement of Kfar Davor resulted in
the burning of a cornfield, the cut
ting down of 100 trees and the de
struction of the herds. )
HAIFA, Palestine, May 23.—A native
policeman was seriously wounded to
day when a mob fired on the Acre
police station. ,
The police returned the fire, dis
persing the demonstrators, whose
identity was not Immediately de
Rail Fireman, Iceman, Widow
Siveeps Winners in D. C. Area
Potomac Yards engineman, flashes a “$2,200 smile” after draw
ing Decorator in the Irish Sweepstakes today.—Star Staff Photo.
and a Water street iceman
were two of the three winners
in this area in the Irish
Sweepstakes draw as the drum spun
at Dublin today.
J. V. Hasson, jr.. 635 Twenty-fifth
street, Aurora Hills. Va., and Paul
Frederick, operator of a couple of ice
trucks from 11 Water street, each got
English Derby non-starters—Decorator
and Singapin, respectively—and will
receive $2,215. The third winner was
Mrs. J. W. Gillespie, a widow, of
Wardman Park Hotel, who drew Haul
fryn, which is due to go postward in ;
the Derby Wednesday and consequent
ly has a chance at a $150,000 grand
prize which a Haulfryn victory would
bring. At any rate she also is sure of
•'It's the first break I ever got in 1
my life.” said Hasson gleefully as the
wheezing engine stopped and he threw
down his shovel to contemplate the
cabled news of his luck
Things haven’t been so good at that, j
After 20 years in service. Hasson, like
thousands of other rail workers, is
just about where he started. Ten
years ago he was running an engine.
_ (See SWEEPS, Page 2 >
Pardon Move Is Indicated
as Wife Is Acquitted in
Death Plot Trial.
Staff Correspondent of The Star.
HAGERSTOWN, Md„ May 23.—
"It's an enormous relief to be freed
of all this tension—I feel fine!’’
Mrs. Anne M. Lyddane received
many congratulations last night as
she announced this after a jury had
cleared her of a charge of conspiracy
to murder her husband.
The jury acquitted the pretty Rock
ville matron on the first ballot in an
hour and six minutes.
The dramatic hush which preceded
the announcement of the jury's deci
sion was followed by a babbie of ex
clamatory voices.
Several members of the jury con
gratulated the defendant and con
sented to pose for newspaper photog
raphers while shaking her hand after
Trial Judges David A. Robb and
Frank G. Wagaman withdrew.
Mrs. Lyddane was accused of hav
ing plotted the murder of her hus
band. Francis (Slom) Lyddane. Rock
ville restaurant manager, with the aid
of John H. (Googy) Carnell, ex-con
vict and former Rockville bartender,
and John Martin Boland. Washington
Pardon Move Hinted.
As Mrs. Lyddane went free Boland
was beginning his second year at the
Maryland State Penitentiary follow
ing his conviction last June on charges
of conspiring with Mrs. Lyddane to
kill her husband.
State's Attorney James H. Pugh of
Montgomery County Indicated he
planned to go immediately to Gov.
Harry W. Nice of Maryland and seek
a pardon for Boland.
Last June Boland and Mrs. Lyddane
were brought to trial in Rockville
jointly charged in the alleged con
spiracy. Boland elected to go before
three trial judges rather than a jury.
The burly Washin8t°n gambler was
convicted. The judges withheld an
nouncement of their decision until
they had presided at the jury trial' of
Mrs. Lyddane. The jury failed to
agree and a mistrial was ordered.
Her counsel. State Senator Stedman
Prescott, then obtained a change of
venue for his client. Her trial here
opened Monday and was concluded
amid a slightly hysterical demonstra
tion by friends of Mrs. Lyddane, over
joyed at her acquittal.
When the verdict was announced
the defendant's two sisters. Misses
Mae and Helen McLaughlin of Rock
ville, hurried to embrace her, as
did Mrs. Lyddane's father, James
McLaughlin, landscape architect.
Among those missing from this
court room scene was Lyddane. His
(See LYDDANETPage 27)
Man Who Placed
$1,200 in Each of
25 Banks Sought
Disappears on Coast
After Two Days of
Making Deposits.
By Ui< Associated Press.
LOS ANGELES. May 23—A mys
terious middle-aged man. who de
posited more than $30,000 in Los
Angeles banks and then disappeared,
was sought by Federal and private op
eratives today on the possibility he may
have met with foul play.
The Burns Detective Agency, repre
senting the American Bankers' Asso
ciation. gave this history of the case:
A slight, unobtrusive man. about 50,
registered last Sunday night at a hotel,
giving the name of Donald Berg and his
home city as St. Louis. Mo.
On Monday and Tuesday, downtown
i See MYSTERY,-Page 2.)
Man Confesses Being Mem
ber of Mob in Detroit
by the Associated Press.
DETROIT. May 23—From tight
lipped members, police sought today
to expose the secrets of the robed and
hooded Black Legion which, officials
! charge, executed the death penalty,
I without trial, upon a non-member
accused of wife-beating.
Most of the 16 members in custody
adhered to the society's password of
“secrecy always.” At least one, how
ever. talked vaguely of floggings and
other sinister activities, and said that
"to belong to the legion, you have to
have been a member of the Ku Klux
That information came from Urban
Lipps, 32, automobile factory worker
He is one of four men said by Police
Inspector John I. Navarre to have con
fessed that they took Charles A. Poole,
32-year-old W. P. A. worker, 'to a
country roadside and shot him because
a relative by marriage accused him of
beating his wife. *
Mrs. Poole, mother of a 14-month
old baby, denied her husband had mis
treated her.
Known by Two Names.
Posecutor Duncan C. McCrea said
the Black Legion "was known to the
public as the United Brotherhood of
America, but that among themselves
the members refer to It as the Black
Legion, which is the name under which
It was organized."
Several of the members said the
i See’ORDER, Page 9.)
JVim, U. S. Constitution Expert,
To Be Admitted by High Court
Sister Ann Joachim, Dominican nun
from Adrian, Mich., and an expert on
the Constitution, is in Washington to
take the oath Monday which will per
mit her to practice law before the
United States Supreme Court.
The learned sister, who teaches at
the Dominican St. Joseph College in
Adrian, has been a lawyer since 1924.
and a religious since 1928.
Furthermore, she holds a dozen ten
nis cups and was flying her own plane
before entering the convent.
Sister Ann Joachim graduated from
the Detroit College of Law In 1923.
received her master’s degree in law
from the University of Detroit a year
later, practiced law In Detroit for
four years and began her Dominican
novitiate in January, 1928.
Since she received her master of
arts degree from Loyola University,
in Chicago, in 1933 she has been
studying abroad for her doctorate.
The nun's dissertation, published in
Fribourg, Switzerland, is entitled “The
Constitutions of the United States
and Switzerland Historically An
alyzed and Compared." Sister Ann
Joachim translated the Swiss consti
tution, with its 30 amendments, into
English and includes it in the dis
So far as could be learned, she is.
the first nun who has ever sought ad
mission to practice before the land’s
highest bar of Justice. Sister Ann
Joachim is biding her time at the
Dominican Houst of Studies, in
Baldwin Studies Changes
Expected a§ Result of
Thomas Resigning.

Former Foreign Secretary Would
Be Secretary for Dominions.
Budget Probe Continued.
Sy the Associated Press.
LONDON, May 23 —The resignation
of Colonial Secretary J. H. Thomas in
Britain's budget leakage scandal—the
third desertion from Prime Minister
Stanley Baldwin's original cabinet—
raised a probability today of a major
shake-up in the ministry.
The prime minister went to his
country residence. Chequers, for the
week end. there to deliberate long
expected changes.
Political sources predicted a cabinet
turnover which would carry back into
office Sir Samuel Hoare, former for
eign secretary, who was the first of
this ministry to withdraw under fire.
In addition to filling Thomas' place
at the colonial office. Baldwin faced
a possibility of having to find a suc
cessor for Viscount Monsell, first lord
of the admiralty, who was reported
anxious to retire at Whitsuntide, which
falls next week.
Sir Samuel Hoare, original scape
goat of the Italo-Ethiopian crisis now
being hailed as a ‘ far-seeing prophet"
for his peace plan to give Italy only
part of Ethiopia, might return to the
cabinet as secretary for the dominions,
informed sources said.
Malcom MacDonald’s Post.
Malcolm MacDonald, under this re
arrangement, would switch back to
his old post at the colonial office.
Other political sources said Sir
Samuel might go to the admiralty,
with William Ormsby-Gore. first
commissioner of works, becoming his
majesty's secretary for the colonies.
Baldwin. with the "National
Union" character of his cabinet
broken further by the downfall of
the former Laborite, Thomas, was ex
pected to seek to strengthen the
largely conservative ministry at any
rate to hold it together until King
Edward's coronation next year, when
many believe the prime minister him
self will retire.
Thomas' first duty, now that his
resignation has been announced, will
be to visit Buckingham Palace early
next week and hand his seals of office
to the son of his late friend and
sovereign King George. King Ed
ward's acceptance of the resignation,
together with that of Baldwin, was
announced last night.
Thomas, one-time engine wiper, who
won friends in high places and posts
in five cabinets, must then consult
the Derby constituents he has repre
sented 27 years, to determine whether i
he should continue as their member
of Parliament.
He may make an explanatory state
ment from the back bench of the
House o Commons—as did Sir Samuel
Hoare. when he was forced out of the
foreign office—after the tribunal in
vestigating an alleged escape of of
ficial secrets makes its report.
Piles of letters and cables lay on
the doorstep of Thomas’ London
apartment under the eye of a solitary
May Take Sea Voyage.
The former colonial secretary was
understood to be staying at Sussex
and may take a sea voyage later in
an attempt to regain his once hearty
health, which has suffered in the
political turmoil of the last month.
The three-man budget tribunal con
tinued its private study of evidence
in the investigation as to whether
shrewd calculations or tips from the
cabinet room precipitated a rush 'for
insurance against increased Income
and tea taxes before the budget was
announced, April 21, to The House of
The commission concluded its hear
ings Wednesday—the day Thomas’
resignation was presented—and was
expected to publish its report to Par
liament next week.
Testimony was introduced that two
intimate friends of Thomas, one of
whom bought the cabinet member a
house, made $96,500 by insuring in
advance against the tax increases.
Thomas himself appeared before
the tribunal twice to declare stead
fastly he never disclosed any official
secrets to any one at any time.
In his letter of resignation to Prime
Minister Baldwin, Thomas said, “I
have come to my decision because
the way my name and private affairs
have been bandied about renders m.v
(SeeSHAKE-UPT"Page 97)
Most of Southland Passengers
Norfolk Children on Way
£ere for Parade.
Despite an hour-and-a-half delay
while she was hauled off a sandbar
near Old Point Comfort, Va„ last
night, the steamer Southland, owned
by the Norfolk St Washington Line,
arrived here on time at 6:30 am.
today and 200 passengers disembarked
Most of the passengers were Norfolk
children en route here for the Safety
League parade of the American Auto
mobile Association.
The ship was pulled from the bar by
another Norfolk St Washington
steamer, the District of Columbia,
which was following the vessel. One
line attached to the stern of the
Southland was broken before the ship
was freed.
J. Alien Rlordon, general manager
of the company, said the steamer’s
pilot was unfamiliar with the new
position of a recently moved buoy.

y/AnoRjL'. J
Traffic Light Study Launched
In Effort to Speed Carriers
Transit Company Assigns 2 Engineers
to Work on Connecticut Arc. With
Van Duzer's Approval.
This is the seventh of a series
of articles on the mass transporta
tion problem in Washington.
Realizing that the maze of traffic
lights In Washington directly affects
its business, the Capital Tran'it Co.
has begun an intensive study of the
light-control system here in an effort
to work out some means of increasing
the operating speed of mass trans
portation vehicles.
As a preliminary step, the company,
with the approval of Traffic Director
William A. Van Duz.er. is beginning a
survey of the lights on Connecticut
avenue, where busses were substituted
for street cars last September.
Connecticut avenue represents the
largest bus operation in the District
and the company has experienced
considerable difficulty in getting its !
service there on a smooth operating j
Two Engineers Assigned.
The principal trouble has been in
securing an even spacing of the 1
busses and fast operating time. Be
lieving that the traffic lights have
contributed to irregular spacing,
which results in the overloading of
some busses and the underloading
of others, and slow speed, the transit
company has engaged two engineers !
and assigned them to make a
thorough study of the problem.
The Public Utilities Commission
shares the company's view that fast
street car and bus travel is essential j
in a city like Washington. Slow
service. Commissioner Richmond B. I
Officials Silent on Whether
He Will Be Received
as Sovereign.
Emperor Haile Selassie of Ethio
pia fled his capital May 2 before
the Italian advance on Addis
Ababa. Two days later he boarded
the British cruiser Enterprise at
Djibouti. French Somaliland, ac
companied by his family and a
number of his closest advisers.
The imperial party landed at
Haifa, Palestine port. May S, and
went immediately to Jerusalem.
Among the Emperor's companions
are two former commanders of
Ethiopian forces—Rases Kassa and
Desta Demtu.
By the Associated Press.
LONDON, May 23.—Emperor Haile
Selassie of Ethiopia will board the
British cruiser Capetown at Haifa this ,
afternoon en route to London, the |
foreign office announced today.
The king of kings submitted the
proposal to visit the English capita!
and received aproval from the gov
ernment, it was learned officially. The
length of his visit was not disck*ed.
The Emperor is to travel only as
far as Gibraltar oi» the cruiser and
will make the rest of the trip, by
regular passenger steamer. He will
bring a party of eight persons, but
official sources in London are not cer
tain whether the Empress will be in
The foreign office declined to say
whether the Negus will be received
as a sovereign or as a private citizen.
The only restrictions on his visit will
be the same as those enforced during
his stay in Palestine—that he not
participate in any action leading to
further hostilities between Ethiopia
and Italy.
From Haifa to Gibraltar. Emperor
Selassie will be traveling through seas
studded with hundreds of British and
Italian warships rushed into position
when war clouds gathered last Pall.
Despite Premier Mussolini's desire
the British reduce their armada, the
capture of Addis Ababa caused no
dlmunition of the fleet.
The Queen Elizabeth arrived at
Gibraltar today from England to re
lieve ships en route to British home
ports to give crews shore leaves.
GENEVA, May 23 (IP).—'The extent
to which Italy’s export trade has been
hurt by League of Nations’ sanctions
is shown in the March trade figures
issued today by the League.
The League statement shows ex
ports from Italy to 28 countries fell
from $131,200,000 gold In March,
1935. to t6.200.000 gold in March,
Among the 28 countries are the
non-sanctionist nations of Germany,
Albania, Austria and Hungary.
The League statement said that ac
cording to official Italian statistics the
28 countries concerned accounted in
1932-3 for 62 per cent of Italy’s
total Imports and 65 per cent of
Italy's total exports.

Sister, Driving Auto, Loses
Control Passing Truck
on Road Shoulder.
Anthony Gioffre. 8. was killed to
day when a roadster driven by his
sister, a newly licensed driver, over- |
turned after passing a truck on Cen
tral avenue near Largo. Md.
The sister. Anna. 18. and two other ;
Gioffre children. Joe. 5. and Jose- j
phine. 7. received minor injuries and
were admitted to Gallinger Hospital.
Anthony was dead of a fractured
skull when he reached the institu- '
Charles Summers, a neighbor of the
Gioffres. who was working near the
scene of the accident, said Miss
Gioffre bad passed a big truck and
was driving with the right wheels
of the roadster on the gravel shoul
der of the 14-foot road.
Car Turns Over and Rights Self.
When she attempted to get back on
the highway, the roadster overturned,
threw all the children out. then
righted itself again. Summers said.
A Washington motorist took the in
jured to Gallinger.
Summers said Miss Gioffre had ob
tained her driver’s license about three
weeks ago.
The children live on a farm off Cen
tral avenue, near Largo, with their
father. Fortunate Gioffre. Their
mother is dead. Hospital officials were
told there are nine children in the
family, in addition to those who were
in the automobile.
Father in Capital at Time.
At the time of the tragedy the father
was marketing in Washington. The
family operates a roadside stand at
Largo and Miss Gioffre told Summers
she and the children were going to get
supplies for it when the accident oc
curred. Hospital records show Jose
phine received cuts about the face. Joe
had body scratches and Anna was
Two bicycling brothers rammed into
an automobile in which their aunt
(See-\CCIDENIsrPage 2~)
Townsfolk Greet Executive
as Special Train Reaches
Hyde Park.
By flic Associated Press.
HYDE PARK. N. Y , May 23 — Pres- j
ident Roosevelt arrived at his family
home here today and found his 81- ;
year-old mother. Mrs. Sara Delano,
Roosevelt, resting comfortably follow-,
ing a hip injury sustained in a fall in :
New York City 10 days ago.
A small group of townsfolk greeted
the Executive as he left his special;
train. A little red-headed boy pre- i
sented him with a buddy poppy and
he v.as off to the family estate.
The President went straight to his I
mother's bedside, before breakfast. i
and found her in a cheery mood.
Dr. Scott Lord Smith, the family j
physician, told newspaper men Mrs.
Roosetelt had sustained a fracture of
the great trochanta bone projecting
from the upper part of the thigh bone,
but that no complications had devel
oped and he did not expect any.
Dr. Smith said the hip was not im- ;
pacted and what the patient needed
was complete rest.
“Sistle" and ‘Buzzie” Dali, children
of the President's daughter. Mrs. John
Boettiger. whom Mrs. Roosevelt was
visiting in New York when she tripped
over a step and fell, greeted the Presi
dent on the front porch of the man
The President had no engagements
for the day except to witness the
opening of a new road on the estate in
the afternoon and press a button to
start a celebration in connection with
the opening of a new harbor at Balboa,
wmte Mouse omciais accompanying
the Executive said no engagement had
been made to see Gov. Herbert H. Leh
man, who had announced his intention
not to run for re-election, much to the
disappointment of the President. It
was considered probable, however,
that the Governor, in New York for
the week end. might come to Hyde
Park before the President leaves Mon
day evening for Washington.
“Generally Fair and Warmer" Is
Weather Bureau Forecast
for Week End.
Higher temperatures can be ex
pected in Washington and vicinity to
day. spelling the end of the current
‘‘cold" spell, according to Weather
Bureau predictions. The mercury may
hit the high 70s if all goes well.
The outlook for the week end is for
“generally fair and warmer."
The highest temperature yesterday
was 72. reached at 4:15 p.m. The
lowest today was 52, at 5:30 a.m.
PARIS, May 23 OP).—Henri de Reg
nier, 72. noted poet, novelist and mem
ber of the French Academy, died from
heart disease at his home today after a
three-month illness.
M. De Regnia was a convinced
classicist and a "man of the Right,"
whose predilections were emphasized by
the Latin titles he frequently gave his
volumes. His novels, like his poems,
were devoted to “the remembrance of
things past.”
Bombed by Army, Housewife
Is Irked by Loss of Setting Hens
I. j itiv nodvviavvu a »vao<
SACRAMENTO. Calif., May 23 —
□lad to be alive to tell it, but angry
Because her setting hens were jarred
out of tbe notion. Mrs. Edgar Miller
described today how she felt when
two bombs from an Army airplane
exploded at her back door.
Lives of nine persons In two ad
iacent ranch homes were endangered
in the accident yesterday afternoon.
‘T was mad twice and afraid once,”
Mrs. Miller said. "I was too mad to
Be afraid when I first heard the noise
and thought some one was shooting
right at my back door.
"When I found out what had hap
pened, I was too scared to be mad.
Then when I discovered several set
tings or eggs had been spoiled. I was
too mad to be frightened. I gpess we
know something about how the Ethio
pians felt.”
The two 100-pound practics bombs,
lUtturu wmi uiaut uiowwu v*
high explosive, dropped from the
plane of Lieut. N. F. Timper, of the
31st Bombardment Squadron, Mather
field. He said defective bomb rack
equipment caused them to drop as he
flew over the Rowland and Miller
The bombs started a grass Are.
'•There was a terrific wnistling
sound that seemed to flatten my ear
drums." said Harry Avery, who was
in the other house. "Involuntarily
everyone in the house cowered. Then
came a tremendous explosion rattling
windows. The screen door nearly
burst from its hinges "
Mrs. Miller said she did not hear
the plane overhead before the boom
boom and ling, zing."
Maj. Harold E. Smith, in charge of
the squadron, said there would be
an Army Inquiry, but declined fur
ther information.
New Dealers Concentrate
on Putting Teeth in
Present Law.
Question of Motive. Making Levy
Difficult to Administer, Prob
lem of Leaders.
Before 1936 was a fortnight old, j
the Supreme Court declared the
A. A. A. unconstitutional. Two
weeks later Congress passed the
bonus over the presidential veto.
Money had to be found to pay the
farmers who had agreed to crop
reduction under the A. A. A. and
to finance the bonus. The Presi
dent suggested a new revenue law.
The House agreed to the White
House proposals for a higher in
dividual income tax and a levy on
corporate surpluses to replace the
tax on corporate income. But the
Senate Finance Committee dis
agreed and is seeking to rewrite
the measure to suit its members
and yet raise more than $600,
By tne Associated Press.
New Dealers began a last-ditch
struggle today to equip the Govern
ment with a big stick to force certain
corporations to distribute large sums
in dividends.
11 - 1) n a _ d
ivun moi/ uiv uvuiivv a ••
mittee has turned thumbs down on
the proposal to levy stiff graduated
taxes on undivided corporation in
come and has approved instead a
comparatively lean tax of 7 per cent,
administration men have concen
trated on an effort to put "teeth” in
existing penalties against corporations
"improperly” accumulating surplus.
The present law provides that such
corporations shall pay a tax of 25
pei cent on the first $100,000 of net
income and 35 per cent on all over
$100,000. These levies are much
stiffer than those on other corpora
tions. which are taxed from 12 ’ a to 15
per cent on net income.
Question of Motives.
However, officials declare the pen
alty taxes have never been easy to
administer. The subjective question
of motives enters into the problem,
opening up a wide field for long legal
arguments as to whether a corpora
tion is or is not " improperly” accu
mulating income.
As the Senate Finance Committee
gathered today the New Dealers
planned a quest for ways and means
of tightening up this section of tffe
Also remaining to be settled was
the question of high penalty taxes on
certain corporations which, some Sen
ators contend, are used as tax avoid
ance devices by men who, without
them, would pay high taxes on their
personal incomes.
By forcing money out of corpora
tions into the hands of stockholders,
where it would be subject to both nor
mal income taxes and surtaxes, the
Administration Senators hope to in
crease the estimated yield of the
program which has been tentatively
agreed upon, in other major details,
by the Senate Finance Committee.
The new bill imposes an 18 per
cent levy on corporation net income,
a 7 per cent tax on undistributed
corporation earnings, subjects divi
dends to the present 4 per cent nor
mal income tax as well as the grad
uated surtaxes, and gives corporations
making no more than $15,000 a year
a $1,000 exemption from taxation.
t-.." ni—_
One of the latest moves of the
committee was to eliminate what was
called a “tax on taxes." This was
done by stipulating that the 7 per
cent undistributed profits tax should
not apply to the 18 per cent of in
come which a corporation cannot dis
tribute to stockholders, because it
must go into the Federal Treasury.
This change cut the bill's estimated
revenue by some $40,000,000. There
were differences of opinion today as
how near the bill would come to
raising the $623,000,000 in permanent
revenue asked by President Roosevelt
to finance the farm program and the
additional cost of paying the bonus
One estimate was that it would
raise $529,000,000. The committee
is awaiting final estimates by the
Treasury. Several Senators, however,
showed a disposition to lay aside
(Ser TAXES,Page~9.)
Daniels Leaves for TJ. S.
United States Ambassador and Mrs.
Josephus Daniels traveled to Wash
ington today, where the diplomat will
visit State Department officials.
Readers’ Guide
Answers to Questions.A-8
Church News_B-5-6-7
Comics .A-15
Death Notices_A-6
Editorial _A-8
Lost and Pound*..A-3
Music . B-4
News Comment Features A-9
Radio _A-12
Serial Story_B-7
Short Story...C-10
Society_ ...A-7
Sports .A-10-11
Washington Wayside.A-2
Women's Features.B-8 1

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