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Tyfanny Tax Ways Invite Avoidance Deaf Ears Turned to Small Birsiness Man Being Wiped Out. BY DAVID LAWRENCE. PERHAPS intending only to sensationalize tax avoidances and evasions, the inquiry just begun by a congressional com mittee might yet serve a constructive purpose by seeking to discover just why the citizen is developing toward his Government a strange feeling of hostility. Theoretically all citizens must obey the law, but it does happen that, when a ■ law is unfair, _ Inequitable and §|* vicious, the people begin to nullify it. f| The most con-; spicuous example | of this, of course, 5 was the attitude of many citizens during the late prohibition era. There is, of ' course, no pos- ||‘ stble justification s for the person who evades the law. There may „ .. , , . . .. David Lawrence, be plenty of justi fication for the person who avoids the tax laws. As a matter of fact, there may some day be logic on the side of the citizens of the District of Colum bia, for instance, if they even go so far as to refuse to obey the tax laws im posed upon them. Our forefathers dumped a lot c* tea In Massachusetts Bay and refused to pay a stamp tax because they said "taxation without representation is tyranny.” Today the Congress of the United States is about to Impose a vicious tax system on the people of the city of Washington and this, too, with out granting the people of the National Capital the right to vote for members of Congress through whom their views could be expressed directly on the floors of both houses of Congress. If ever there was a justification for tax avoidance, it is to be found right here at the seat of government. I'Ut IUI » But there are citizens outside the National Capital who also may fed aggrieved as they learn more and more about the unfairness of the taxation policies 'of the national administra tion. Any administration which bluntly refuses even to listen to the pleas of hardship growing out of in equitable and unfair tax laws and merely shrugs its shoulders, so to speak, and says, "Oh, well, we need the revenue,1’ is due for a disillusion ment and awakening some day. Take the rase of the undistributed surplus taxes, one of the most unfair and destructive tax levies ever intro duced. Small businesses are rapidly being broken down by it while strong monopolies reap the benefit. Protest after protest has come to Washington, but influential members of the Con gressional Finance Committees say indifferently, "But the Government needs the revenue.” Paraphrased this means: "We, the hationaj administration, exercise the right to do as we please to the citizen, even'to the extent of ruining his busi ness, and, while the law may work a hardship, we need the money for boon doggling just the same.” Under such circumstances, the citi ren says to himself: "The Government Is unfair—I’ll beat the game if I can.” ' Members of Congress and of the executive branch of the Government who lately have been criticizing the citizenry for alleged lack of morality and defects in patriotism because of tAx avoidance know in their hearts that this is the sheerest hypocrisy and thAt there isn’t a single man in aide the Government who doesn't take all th<$ deductions the law' allows or doesn’t eontrive to get the better of the tak eolleeor by legal means. V «i • . m -» - ^ innjuiucs c .luuiriuus. The tax inequities as well as In iquities are numerous. They are well known to all who have studied the tax rulings of the Government under this < and past administrations. The theory has been that the taxpayer is always wrong and that the Government is al ways right. The king-can-do-no wrong idea has nowhere been more slavishly worshiped than in the Treas ury Department in applying the in rnfrne tRX laws. Equity is an unknown virtue and assess the taxpayer be cause we need the revenue is now the rule rather than the exception. Another serious practice is the way the precedents have been built up and the refusal of Congress or the Bureau of Internal Revenue to reverse them selves when a mistake has been clearly demonstrated. Take, for instance, the * question of business deductions. In terest on a loan at the bank is de ductible as a business expense. But if the bank demands that a key executive or inventor or some one who Is an asset to the business should have his life insured to protect the loan so that the bRnk might- be reimbursed if a valuable personal asset is suddenly lost by accident, the business must take out such a policy and bear the expense. Yet the Treasury doesn't al low tiffs as a deduction for Income tax purposes. It happens to be a part of > the cost of carrying the loan, but for years the Treasury has refused to recognize the simple equity behind ■tlch a claim for deduction. Countless examples of this kind of loose thinking may be cited. Con gress, for Instance, Is chiefly responsi ble lor an unwillingness to treat a human being, with limited earning power, as different from a business or manufacturing concern, which may take depreciation on its plant and * equipn^ent as a business expense. j»i Mian vvupvns. Thus Margaret Mitchell, who wrote “Gone With the Wind,” had a lucky break When she amassed a nice sum out of royalties, but if she acquired $400,000, she would have to give hall of it to the Government in taxes. She doesn't turn out best sellers every year like a factory does automobiles Yet the Government regards her in come as something to be penalized , while the manufacturer takes depre ciation's* an expense on his plant oi equipment. The mental equipment of, tha human being with earning power! to be sure, may dtalinish oi may be curtailed by illness or death Ijtit the earned income is taxed virtual ly the same as the unearned Income which comes out of clipping coupon! of inherited wealth. ’Mr. Roosevelt, for instance, inher ited a substantial income. He didn’l Have to work for it as did other mer ire America, but the self-made mer who rose out of the slumps by dinl of hard work must give the Govern ment virtually the same amount ol taxes on their earnings as do th< coupon clippers. There is, of courm ’ a small credit on the present tfy STAND FALLS, 14 HURT Photographer's Bleachers Col lapses at Madison High School. MADISON, Wis., June 19 t/P).— Rain-soaked grounds were blamed yes terday for the collapse of a temporary photographer's bleachers in which 14 Madison Central High School seniors were injured. The stand gave way after about 50 of the 190 seniors had climbed to their positions in the back rows, which were about eight feet above the ground, to have a group picture taken. City Attorney Francis Lamb ordered an immediate investigation. —-» Organizer Makes Charges. WALLACE. Idaho, June 19 (/re union organizer, said yesterday he would file charges before the National Labor Relations Board that the Hecla and Sullivan Mining Cos. "inspired” a 435-to-61 vote of their employes de mandng a secret ballot before striking. returns for earned as distinguished from unearned incomes, but it Is in finitesimal. Then take the situation with respect to charity deductions. A man might contribute money to a church in Hindustan or to some local wel fare agency of limited scope and yet get a legal deduction, but if he con tributes the same amount of money to a vital thing like the National Civil Service Reform League, which attempts to fight the “spoils” system and similar cancers in the heart of democracy, no such deductions are allowed. Makes Own Rules. The executive branch of the Gov ernment arbitrarily decides what is and what is not an educational cause and makes its own rules as to what is or what is not deductible in a charitable or educational classifica tion. But the records are filled with ex amples of injustice and arbitrariness. Most of the mistakes are due to the failure of Congress to write fair tax laws. The Income tax personnel itself is honest and well intentioned, but limited by tax statutes. There is hardly a thing which will be un covered in the series of tax avoid ances to be disclosed in the present inquiry which haven’t been known to congressional committees for the last 10 years. Congress has known all along the loopholes, but it has ignored something far more fundamental— the principle of equity and fairness which, if abused, merely leads to tax avoidance on a large scale and ulti mately to nullification. Human beings resent unfair laws— they always have and they always will —and they may not some day regard it as a falling from virtue to defy an unconsciounable administration, espe cially one that spends its money and its powers on one group to the detri ment of the other, and actually denies the taxpaying group a voice in the government. The old slogan that “taxation without representation is tyranny” was never better illustrated than in the deaf ears being turned to the small business men who are asked to pay burdensome and Inequitable taxes today as the monopolistically inclined, with amassed surpluses, stand by awaiting the inevitable bank ruptcies or receivership of their weaker competitors. _ * (Coprrliht. 1B37.) \ DROP ACTRESS’ CASE Officials End Probe of Alleged Attack at Party. LOS ANGELES, June 19 (/P).—John E. Bauer, foreman, said yesterday the county grand jury had dropped investigation of the charge of Patri cia Douglas, 20-year-old film extra i that she was attacked at a film sales mans’ party May 5. The jury refused to indict David Ross. Chicago, whom Miss Douglas identified as her assailant. Ross flew here voluntarily to deny the charge before the Jury. Two parking lot attendants testi fied they saw a man follow Miss Douglas to an automobile, but said Ross was not the man. Fingerprinting of Workers Urged DENVER, June 19 (A’l—Finger printing of the Nation's working pop ulation during the 1940 census for so cial security identification was advo cated yesterday by the Fingerprinting Committee of the United States Junioi Chamber of Commerce, in conventior here. . CTHE opinions of the writers on this page are their own, not necessarily The Star’s. Such opinions are presented in The Star’s effort to give all sides of questions of interest to its readers, although such opinions may be contradictory among themselves and directly opposed to The Star’s. Wagner Act Defective Merely Puts Union Agent and Employer in Cockpit. Mediation Board Has No Power. BY MARK SULLIVAN. THE three men whom the Presi dent has appointed to arbi trate the steel strikes—Messrs. Charles P. Taft. Lloyd K. Garrison and Edward F. McGrady, have, in their different lines, excellent reputations. They command excep t i o n a 1 esteem from those who know them. The three as a group are over weighted on the side of labor. Mr. McGrady is an official of the De partment of La bor, a subordi nate of Miss Per kins; Mr. Garri son was head of Mr Roosevelt's M.rk Su11Itsb. first National La bor Board—and that was not a Judicial body; it was, by the statute that set It up, a partisan of labor. The third member of Mr. Roosevelt's newly appointed Federal Steel Media tion Board, Mr. Taft, is not as con servative a person as might be in ferred from the fact that he is the son of a conservative Republican President. Young Mr. Taft, indeed, while a Republican, is thought by m*ny Republicans to be closer to me new iyeai man vu me puny ui urn father. Yet, if the new board, by the past associations of its members, is pro labor, nevertheless they are high minded men who know how to ap proach their present task in a judicial spirit. Two of them, Messrs. Taft and Garrison, have had legal training and experience of a high order. But however judicial this new board may try to be, they will be handi capped by the position of the man from whom they derive authority. President Roosevelt. Less than a week ago Mr. Roosevelt, in a press confer ence, took a position, and a strongly partisan posiLion, on the very question which his present appointees are now supposed to treat without partisanship. Mr. Roosevelt, when he was asked a question about the C. I. O. strikes, said that -no matter what the law says or does not say, common sense says that when two parties have reached an agreement there is no rea son why they should not put it in writing. And whether an agreement shall be put in writing is the principal question which the new mediation board is supposed to deal with. Passive on Use of Name. Mr. Roosevelt's partiality for C. I. O., indeed his identity with C. I. O., is patent. To suggest that he at tempts to conceal it would do him in justice. When C. I. O. was being organized, the organizers, in diverse parts of the country, issued circulars and put up posters which told the workers that President Roosevelt wished them to join C. I. O. This use of his name was called to Mr. Roosevelt's attention. He declined to do anything about it, though ordi narily he is sensitive to use of his name, and has in the past adminis tered public rebuke to persons who used it without authority. The head of C. I. O., Mr. John L. ■ Lewis, made the largest contribution made by any contributor to Mr. Roose velt's campaign fund last Summer. He solicited from his United Mine Workers and gave to Mr. Roosevelt's campaign fund upward of $450,000. A loan of $50,000 from Mr. Lewis' United Mine Workers still stands un paid on the books of the Democratic National Committee. When some Democratic Senators wished to pass a resolution of outright disapDroval of the “sit-down" strike, as prac ticed by C. I. O. at Detroit and Flint, Mich., Mr. Roospvelt resisted. Even if Mr. Roosevelt's new Steel Mediation Board so conducts itself as to escape the cloud of their cnict s partiality, even if they succeed in bringing an end to the present strikes, nothing permanent will have been settled. Future strikes will not be averted. Strikes are inherent in ihe Wagner labor law. No Mediation Provision. Because the Wagner law is called the “national labor relations set,” many assume that its pumose and function is to mediate and settle labor disputes. The Wagner law has no such function. It does not pur port to deal iHth mediation, and the board it seta up, the National Labor Relations Board, does not pretend to be a Judicial body. The Wagner law is a law for the benefit of labor, and the body It sets up, the National Labor Relations Board, Is an agency of labor. So far as the Wagner law affects em ployers, It has the nature of a penal statute directed against them. And so far as the National Labor Rela tions Board has a relation to employ ers, the relation is that of a prosecut ing attorney. This Is the frank In tention of the Wagner law. The law Is written frankly for the benefit of labor, frankly for the purpose of guar anteeing the right of collective bar gaining. The Wagner law makes It ‘‘an un fair labor practice” for an employer "to refuse to bargain collectively with the representative* of his employes.” But that is as far as the Wagner law goes. The employer Is not required to come to an agreement with his em ployes. Lately, attempt has been made to say that the Wagner law does require the employer to come to an agreement and sign it. This has been repudiated by the author of the law, Senator Wagner. In a letter written November 2, 1935, Senator Wagner said: "The law does not require any employer to sign any agreement of any kind.” Senator Wagner added: “Congress has no power to impose such «* iv^uaciucui. niiu oniBiur rvag ner might have gone farther. He might have said that common sense has no power to compel any two per sons or groups to come to an agree ment about anything. What the Wagner law does ls to throw the employer and the repre sentative of the union Into a cockpit and tell them to ‘'negotiate.” About what happens when the two do not reach agreement, the Wagner law says nothing. There is no provision for appeal to arbitrators. There is no 1 provision for arbitration, compulsory or otherwise. It Ls the lack of provision for arbi tration that has led to the present sit uation. And the present appointment of an improvised Federal Steel Media tion Board Is an attempt to correct the fundamental defect of the Wagner law'. The improvised board has no power to compel assent to its findings. | Whatever comes of the present ges ture, the fundamental defect of the Wagner law remains. It ls universally recognized that the Wagner law must be perfected by making provision for arbitration, and in other respects. (Copyright, iP37.) HONOLULU IS HIT HONOLULU. June 19 (VP).— J. Whal ter Doyle, United States collector of customs, announced yesterday stop overs by passengers on foreign vessels arriving from other American ports had been halted following an order by the Treasury Department to en force a law subjecting foreign *ships to a bond of $200 for each passenger landing. The order hits the island's tourist business. We, the People Black-Connery Bill Might Confine Itself to Child Labor and Basic Industries. BY JAY FRANKLIN. A SPOKESMAN for the Southern textile Interests Informed the Joint committee on the Black-Connery labor standards bill that passage of this minimum-wage, maximum-hours measure would destroy our present foreign policy. This is an exaggeration, but there it no doubt that just as the N. R. A. ended our useful participation in the World Economic Con ference at London In 1933, this proposal to enforce decent labor standards through the commerce clause of the Constitution mag put a crimp in Secretary Hull's trade-agreements program. And so It should. If the price of his policy is the continuation of child labor, sweated labor and starvation wages, his policy is doomed by Its own confession. At the moment, - the State Department 15 particu larly concerned lest the law jeop ardize the proposed trade agree ment with Great Britain. This anxiety Is pretty far-fetched. We will never get a liberal trade agreement with the British unless the Central European mar kets are opened up and London and Liverpool resume their old position as entrepot and clearing house for Northern and Eastern European trade. This is highly unlikely unless Hitler completes the economic unification of Central Europe and wins British consent to the political change which this will imply. A A A A 8uch a. development Is not so unlikely as It seems. The Blum govern ment In Prance is being Inexorably forced into a policy of bank-note infla tio*j, which will lead to disorders, disunion and general unrest in the third republic, even if by a miracle M. Blum retains control of the govern ment. The latest batch of Soviet executions has certainly cast doubt on the ability of the red army to play an important part in European affairs during the next year. Mussolini is tangled up in Spain and England will have her hands full without going crusading against Germany's economic expansion. So it is possible that the European situation will jell along lines calculated to help our export trade. In that case England in her own interest will make the con cessions Mr. Hull desires, without the necessity for our reciprocating. And, of course, if Central European trade does not revive, any trade agreement with England would be a futile and ridiculous bit of face saving. It is even possible that we might deal direct with Germany instead of asking Britain permission, as in the past. I firmly be lieve that we can have our trade-agreements program and the Black Connery bill, too. It would be helpful, however, if the Black-Connery bill should avoid the blunders of the N. R. A. and confine itself to child labor and to basic in dustries instead of taking on the whole Nation at once. Steel, coal, petro leum, automobiles, construction materials, mining products, lumber, tex tile, clothing, shoes, rubber, machinery, electricity—there aren't so many of them that the initial set-up would be too complicated and they include the bulk of the Nation's workers. Congress could add to the list from time to time, as the need arose, and a trade-agreements prog-.am cofild be adjusted so as to protect the basic industries and sacrifice, if necessary, the marginal and uneconomic industries. * * * * On the other hand. It is becoming increasingly apparent that the unreconstructed tories hope to wiggle out from under the New Deal via the State Department and through those mysterious diplomatic phrases so dear to the Hoover administration. A world economic conference is the trick which will be pulled on us sooner or later and a lot of nice Idealists will rally enthusiastically around the idea that we don't need to reform our Institutions if world trade or world peace oir what-not is in the air. This notion is the real danger to Mr. Hulls program. It is up to him to demonstrate that there is no essential conflict between orderly foreign trade relations and domestic reform. * * * * The State Department is all In a dither. Assistant Secretary nf State Wilbur J. Carr has taken the first licking in his bureaucratic history. After an internal dispute which drew in the White House, G. How land Shaw received the Job of di rector of foreign service personnel and the Carr protege wag passed over. Bob Kelley, special pleader for the old anti-Soviet policy, has been nominated for a consul generalship, and. if confirmed, ig to be sent far afield. Hugh Wilson, American Min ister to Switzerland, is under con sideration for the vacant post of Assistant Secretary of State. It is not the happiest appointment which could have barn made, because it suggests that the State Department is still hankering for another orgy of peace-monger ing and irresponsible disarmament. Wilson is our expert on disarmament and the League of Nations, and knows the principal European diplomats. He will be used as a policy expert and not allowed to have a finger in foreign service administration or personnel. (Ceprrtgtu, 1P3?.* , Who’s Who Behind the News In William R. Castle the Republicans Have a Dynamic Coach. BY LEMUEL F. FARTON. ILLIAM R. CASTLE. JR, and William Hard, the new Republican pep team, rally party leadership to help along that Democratic "revolt.” That's just what it is, says Mr. Castle, and In his opinion the Jefferson Is land harmony conference won t help any in restoring the President's "one man power.’’ Mr. Castle, acting chairman of thp National Committee, became a sort of line coach for the Republicans last February, and a liaison between party headquarters and the few G. O. P. men now encysted in the Democrats Congress. Aided by Mr. Hard, pint sized word-gunner, and one of the best in the business, he has been entering vigorous dissent from any and all Democratic doings and making the organization look a lot less moribund than It did a few weeks ago. It frequently has been noted that the administration has been afflicted with the academic itch, and the present party defection has been charged to too much professorial meddling and muddling—the school men displaying an elaborate ignorance of the rules and personnel of oldline politics. Maybe so. but, when the Republicans wanted t,o hike their steam pressure, they put on the job a rormer English teacher, novelist and assistant dean of Harvard, and a clever journalist, who, in his 34 work ing years, neveT mixed in politics until last year. Such are the rough out lines of Mr. Castle and Mr. Hard. Where are the Tom Platts, the Uncle Joe Cannons, the Tom Taggarts and the Lemuel Quiggs of yesteryear? They, and not the professors, used to take charge at a time like this. Mr. Castle, an intimate friend of Herbert Hoover, was Undersecretary of State under Secretary Stimson, leaving the department in 1932. He is a conservative of a precise, legalistic pattern of mind, a marked success in his 13 years in the State Department, adroit and skilled in diplomatic punc tilio. He was born in Honolulu, the son of an Island magnate, was graduated from Harvard In 1900. taught English from 1903 to 1905. published a novel, “The Green Vase." in 1912, "The Pil lar of Sand” in 1916. was with the Red Cross in the war and in the State Department in 1919. He says the chief trouble with the Democrats Is that they hate ruined the country and wrecked our democratic system. (Copyright. 1937.> PAINT BRINGS SCREAMS COLUMUS, Ohio UP).—William Saf ford, 16, fell through the glass roof of a theater marquee, landing on his feet 10 feet below. His head and clothing were crimson. Women screamed, and Saflord was rushed to a hospital in an ambulance. Not until he reached the institu tion did the youth have an op portunity to explain the •'blood” was red paint, spilled from a bucket on the marquee. He was unhurt. What’s Back of It All Loss of Treasury Prestige Feared in Tax Evasion Probe Now in Progress. BY H. R. BAUKHAGE. HISTORY is quite an old lady and often repeats herself, but she man ages to put a highly novel Huirk into some of the tales she tosses out as news. As tax evasion investigators hunt the headlines, some tax . collectors shiver a little. Because—and here history winks reminiscently—there is certain ap prehension lest the public lose confidence in the Treasury itself as an efficient tax collector. A sentiment held by no less a person than John Nance Garner—once. “1 just want the House to understand this situation (the collec tion of taxes and refunds), and especially my Republican brethren, as to how much dependence can be placed upon statements of the Treasury Department, based upon any statistics it gives • • * give me an opportunity to investigate the Treasury Department, and / will do it.” Tltof urn* t ___ l ■ _ , __ - -- wmuu cpuuviun, ujuf, i-ftueiuuer id, iyou. * * * * The investigation that the then^ member of the House of yiEE.wfE t/ff Representatives was trying to pro- t’S Ac<v<.c> mote was aimed at Treasury methods, primarily, in permitting the evader to evade. He was unsuccessful. Two years later, the picture changed. It is now July, 1932. Repre sentative Gamer has become Speaker Garner, but, more than that, vice presidential candidate. — 1 stiu have the same opinion about the necessity of an investigation,’* he said. But he did not want to carry it out and have the people of the country lose confidence in the Treasury; those were the disturbed days before the bank holiday. In Uvalde, Mr. Garner reads the news of the hearings. Perhaps he wonders. Old Lady History chuckles at the new turn she has given an ancient tale. + * * * The La Follette Civil Liberties Committee is making history. Police officials and others who took part in the Memorial day riot In Chicago will face themselves on the witness stand. For the first time, a moving picture film will testify at a congressional hearing. It has also been used to identify the policemen and others who are to be called to Washington to appear before the committee. When the film is shown officially before the committee, an important break, it is asserted, will be filled by the amateur shots of a minister who had his camera trained on the riot scene. The Interruption in the sequence occurred when the newsreel men switched from a long “shot” to a close-up of a striker just before the firing began, it is said that the minister's film will reveal the fatal “first shot.” * * * * The cameraman who took the pictures in Chicago may go down in history. In any case, his handiwork will. This mechanical witness that can't be cross-questioned will stick to its story as long as celluloid lasts, even then can be recreated and called back to the stand indefinitely, and become a part of the archives of the United States. As testimony before a committee, it is a part of the official records of the Senate. Gradually, all records are being transferred to the fire-thief-and-bomb-proof vaults of the Archives Building The Senate has no safe place to store that inflammable and inflamma tory negative. The Archives Building has. In fact, it has the most up-to date vaults in the world for storing film in heat-and-damp-reslsting con tainers. 6 The official reason for the withdrawal of the film from public presentation in the theaters is that, like other -horror” scenes it isn't “good theater.” As the tax evaders’ investigation rolls on, grrat shovels tear into the earth where the museum will soon rise which is to hold the collection of priceless masterpieces donated by _. Andrew Mellon to the American f”"*7—s people. 7TT - V At the same time, behind the V Sfefc'-'ruvJc dull red facade of an ancient three- ;. j i,' story-and-basement house on Uafayette Square, across from the — Write House, hammers are ringing. Here Mr. Mellon will have an office. Close by is the tall Brookings Institution, of late severe critic of certain New Deal activities. Around the comer, wtiere once the wide branches of a historic elm once shaded the home of Daniel Webster, rises the imposing Chamber of Commerce of the United States. Gradually, this tree-filled square, upon which Dolly Madison once looked from her own windows (the house still stands) is being denuded of its historic landmarks. But unless architects order a modern front, Mr. Mellon's Washington headquarters will not change the profile of what is left of a treasured and reminiscent skyline. (Copyright, lb.-)?.) H* Jt)flun9 JMaf I • Quigley’s Pharmacy—2036 G St. N.W. Is an Authorized Star Branch Office 'VV%AITING for some one or something to "turn up" isn't a very good way to sup ply a want—especially when there is a quicker and surer way. Make use ‘of the Star Classified Section—which is read regularly and carefully by so many, MANY people that— III! Mil—.... n WI II ,nr-— | Star Classified Advertisements DO Bring Results Just a few steps from wherever you may be, in town or nearby suburbs, you'll find an au thorized Star Branch Office where copy for the Star Classified Section may be left, to appear in the first available issue. 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