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Evening star. [volume] (Washington, D.C.) 1854-1972, November 22, 1937, Image 13

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Early Revision
of Tax Held
Politics Is Declared at
Bottom of Delay in
Congress’ Action.
i ( "I—VENTUALI.Y, why not
1—4 now?" This familiar slo
I gan might well be applied
-*—4 to the situation that exists
today in Congress with reference to
the revision or the undistributed sur
plus and ctoltal gains tax. Senti
ment for mange is growing to a
point where only a handful of votes [
will be cast against the proposal. Yet
as between revising the law now and
giving instant assurance to business
and waiiing for the regular session
in January, the administration is
strangely enough biding its time.
There is some reason to believe that
the President has
not yet given the f|\
go-ahead signal ifr
to leaders in ’
Congress and
that, they arc
awaiting word
from him If he
so much as called
Speaker B a n k
heari and Major
ity Leader Bark
ley on the tele
phone and told
them to put the
through this ,, , ,
,. , U.i > id Law rr lice.
month or the
first part of December, they could
accomplish it without the slightest
’ difficulty.
What is the reason for the hesita
tion? It sounds incredible, but poli
tics is at the bottom of it. The- ad
ministration fears it will be charged
with a mistake and retreat. It is
looking for a way to obscure the re
vision of the capital gains and un
distributed surplus taxes in a gen- j
eral revision and perhaps increase of
some rate schedules so that the ac
tion will be a combination of left and
right wing tactics at which the Pres
ident has been adept ever since he
took office.
When officials are reminded that
the President said early in his ad
ministration that if he made mis
takes he would be the first to acknowl
edge them and that he Is neither
rectifying his mistakes nor even
acknowledging them, the usual answer
given is that politics does not permit
a direct turn about face.
This does not mean that these'
noxious taxes will not be removed.
Every indication points to their ulti
mate repeal or drastic revision. But
it does mean that at the moment the
furore and stampede in Congress is
far ahead of the administration and
that the latter isn’t altogether sure
the demand is as extensile as seems
to be the case on the surface.
Indue Nervousness.
Perhaps the failure in thp last week
on the part of the President to take
any step openly which would confirm
the promises made in his message to
Congress has brought an undue
amount of nervousness. Certainly the
markets are behaving as if they
didn't believe Mr. Roosevelt was aware
as yet of the panicky trend of busi- '
ness conditions. But it must not be
forgotten that Mr. Roosevelt has been
ill these last few days with an ab
scessed tooth.
Mr. Roosevelt needs at the moment j
every ounce of energy and good
health, for the problems that surround ;
him are more terrifying than any he :
has faced in his whole career. It is
natural for him to bo as piqued about
the business men as they are piqued j
about him. He is surrounded by
radicals who tell him that business
will not co-operate with him and I
that business will only respond if an
Iron hand of discipline is interposed.
These accusations are unfair and *
untrue, but. on the other hand, the
business men who received so coldly
the address of Secretary of the Treas
ury Morgenthau at the meeting of
the Academy of Political Science did !
not enhance the administration's ex- j
pertation of co-operation when the
gesture of good will was marie
It might not to be overlooked that I
The Capital Parade
Roosevelt Is Held Opposed to Third Term, Believing
Younger Man Should Carry on His Task.
WITH the ghosts of Herbert Hoover and all the attendant multitude
of Republican officeholders who lost their political Uvea in the
last depression now gibbering and shrieking through the streets
of Washington.is unusually interesting to get some sort of line
on what Mr. Hoover's successor feels about a third term. The fact that
they may or may not have to face the electorate again usually has an Im
portant effect on politicians' actions, and President Roosevelt is as much a
politician as any other. It may be assumed, therefore, that, in charting
his course through the new depression which seems to be upon us, he will
be much influenced by his intentions for 1940.
* Some time ago, Mr, Davis,
who is very close to the White House, was asked whether he thought that
the President wanted to continue his residence at 1600 Pennsylvania
avenue for another four years. He replied that he did not think so, but
he was later quoted by his questioners as having said quite positively that
the President was entirely without a desire for a third term. Discovering
how his words had been distorted, Mr. Davis grew rather nervous and
wrote off an account of the whole matter to the President. He took the
line that he had only voiced his own opinion, and that in a tentative
fashion, and he apologized for having given rise to the misrepresentation
that followed.
* * * *
The President answered Mr. Davis' letter in pleasant and friendly
terms, telling him that he need not be in the least upset. And he not
only pooh-poohed Mr. Davis' fear that he had been indiscreet in saving
anything at all; he went much further. He referred to the misquotation
of Mr. Davis to the effect that a third term was definitely out of the
question and. it is understood on the best authority, stated in rattier
positive fashion that, so far as he was concerned, the misquoters of Mr.
Davis had hit the nail of his own altitude squarely on the head. In fact,
the President.is said to have written that lie had made up his mind nut
to run again.
The second bit of evidence is of more recent origin. Not to
mang weeks ago one of those eminent but non-political foreign
visitors, with whom the President especially likes to expand, called
at the White House. The visitor uas an ardent admirer of the Nrw
Deal, a man of large and inquiring mind, and one whose great in
terest was in coming events. Naturally, he and the President settled
down in their tete-a-tete to discuss the state of nations.
As the visitor has told the story to a number of people, both men took
a distinctly gloomy view. They rehearsed all the dark circumstances of
international politics, witli the President's usual emphasis on the future of
democracy In so troubled a world. They emerged with the conclusion that
some sort of international conflagration would become difficult to avoid
by 1939. By 1941 they agreed that it would be still more inevitable.
+ * * *
The problem of the course of the United Slates amid such dangers
suggested the question: Who was to be at the helm to guide the country
through? Once more, according to the visitor, the President volunteered
that he was determined to relinquish the task to a younger and a fresher
man. He said he was beginning to feel a little tired and that by 1940 he
expected to be anxious to go home, conscious that he had done his stint.
He even named the specifications for his successor, which were that the
new man should be young—certainly under 60—that he should be
energetic and that he should be as
fearless as a politician very well
can be. The President pointed out
that an unusual equipment of
courage and capacity for work
would be necessary to enable any
man to handle such situations as
his successor would probably have
to handle.
While both these incidents can
be vouched for as authentic, it
must, of course, always be remem
bered that Presidents can change their minds as easily as other men, and
that Presidents can also occasionally shade the picture of their intentions.
The dreary, hackneyed old saw about no man U'alktng out the
White House door /or the last time without some regret in his heart
has a certain validity. Nevertheless, the two incidents seem to indi
case quite clearly that, for the present at least. Mr. Roosevlt is not
planning to succeed himself.
The question immediately arises what precise effect this self-abnega
tive state of mind will have on the President's approach to the depression
phenomena which now' confront him There is no space for a very com
plete answer, but it appears that it will tend to encourage him to be
himself. That is, it appears that, if the conciliatory attitude toward busi
ness which he has lately assumed should fail to have the desired reviving
effect, then he will return to the habits and expedients of the more daring
days of the New Deal.
If unemployment still increases, if production remains at a standstill
and all the signs of depression are still in evidence by, say, next spring, a
reversion to a strong spending policy and other frontal attacks by Govern
ment on the economic forces look tb be almost inevitable.
(Copyright, Jli.'lt. by the North American Newspaper Alliance. Inc.)
Mr. Morgenthau has been fighting
inside the cabinet for the last two
years for a balanced budgetary trend,
that he is today the chief adviser of
the President on tax policies and that
at his side guiding him in the tech
nical aspects of taxation is Under
secretary Magtll, one of the ablest
experts In tax matters in the country.
Attacked by Pres*.
The press of the Nation did greet the
Morgenthau speech with faior and the
response from businessmen in other
sections of the country apparently ha*
been extensive. If the New York busi
ness men only realised it, the Senetary
of the Treasury is loday their chief
champion in the campaign to get a
more equitable and better balanced
tax system.
But the place for the drive at the '
moment is not In the executive branch
of the Government. It is in Congress,!
where there are still members who
believe the crisis in the Nation's eco
nomic affairs is more fanciful than
(CoprrUttt. li* !70
'J'HE 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.
T. V. A. Myth and Hoax
Policies Are Marked Contrast to Liberalism of Bran*
deis and of British Socialism.
THE present T. V. A. and cor
relative administrative policies
are a marked contrast to tra
ditional liberalism, as best ex
emplified In Brandels, both as a lawyer
and as a judge. They also are in
contrast to the spirit and procedure
of British Socialism, which is also
liberal in temper. .
To fair - minded
people who go
through the rec
ord there can be
little doubt that
as a yardstick the
T. V. A. is a myth
and a hoax.
The allocation
of costa to power,
judging by the
independent testi
mony of the Army
engineers, is In
adequate and
arbitrary; the ac- „ _.
Dorothy Thompson.
counting is too
manipulated to be comparable, and,
finally, the operations are so extrava
gant as to be decreasing T. V. A. net 1
earnings in time of recovery while,
with rates lower than costs, it tempts
monopolistic enterprises to locate on
its lilies.
In tlie absence of critical review by
Congress of T. V. A. operations, and
in the absence of Independent gov
ernmental supervision, it makes con
tracts with one local utility without
resale guarantee, and cancels more
favorable contracts with another for ;
political reasons; It conducts propa
ganda against private utilities and
engages In circumventing chances of |
solutions as those chance* arise, and
it continually keeps local communities
in a public ownership storm. This
latter lias unquestionably interfered
with the industrialization of the South.
From the standpoint of the tax
payers of the country the T. V. A. is .
the Federal holding company yacht, |
Incorporated to escape taxes, and to j
compose compensatory taxes by rea- |
son of uneconomic and inequitable '
competition of private industry.
rvunuimc Aiavca.
Now, having failed to make a proper
accounting for an experiment that
is a failure as a yardstick, it is pro
posed to venture on seven economic
superstates, with broad powers In
business and even in municipal affairs.
The two bills drafted by the anony
mous secretariat ana introduced last
session do not provide for boards re
sponsible to Congress, but for single
directors, each of whom is supposed
to be a sort of viceroy for the Ex
ecutive.- These boards not only can
carry on water conservation, flood
control and power development, but
they can engage In the fertiliser busi
ness, can condemn and acquire land
before fixing compensation, and can
interfere with the functioning of ex
isting enterprises on the ground that
their use of water tends to "pollute or j
make unsightly water flowing into
navigable streams."
The original T. V. A. Act had a pro
vision requiring the board members
to Lake "in oath or affirmation to sup
port the Constitution of the United
States and to faithfully and impar
tially perform the duties imposed upon
him by this act." The oath to the
Constitution is dropped out by the so
called Norris and Mansfield bills,
which Instead require of the directors
that they profess "a belief in the
feasibility and wisdom of the act"!
If we start being negligent now
about the proper accounting of gov
ernmental ventures in power, we will
end by challenging the Issue whether
the Government is accountable to the
people. The logical fulfillment of un
limited power bv increasing encroach
WJiunL jB*ach.t
ment is the unlimited state, and the
logical fulfillment of the unlimited
state is the totalitarian state.
Yardsticks Are Slapsticks.
This fight that is going on la not a
question of the compatibility and
feasibility of co-ordinated functioning
between public and private utilities.
At the World Bower Conference in
Washington 15 months ago our brand
of public private competition by yard
sticks that are slapsticks was advo
cated by a speaker from New York as
a means of bringing down the general
rate level. The comment of an English
representative, John C. Dalton of the
London Electric Supply Co. on these
remarks was: "After the tirade we
heard, let us by every means in our
power keep the politician away from
this industry of ours of which we are
so proud at last.”
In this series of articles I have not
Been presenting the case for the private
utilities. I have been trying to point
out that to solve the utility problem,
as well as to solve other economic
problems, we need recovery of the
rational processes of liberal democ
Brandris Theaea Cited.
Two basic theses of Mr. Justice
Brandeis stated in certain historic
opinions may be cited: "The greatest
danger to liberty lurks in insidious
encroachments by men of real, well
meaning, but without understanding.”
And "to declare that in the adminis
tration • • • the end Jutrtiflea the
ceans • • • would bring terrible retri- ;
button. Against that pernicious doc- !
trine, this court should resolutely set
its face.”
Once we return to the methods of
free deliberation and negotiation we
will be sure to find that we have
enough understanding and co-opera
tion between the governmental and
Industrial managements and civil serv
ice stalls, and enough outside Im
partial judgment and social inventive
ness to work out a solution just to all
parties and contributive to general
welfare—a solution tnat might mark
as significant and progressive an
arrangement for the conjoint func
tioning of public and private power,
as Mr. Rj-andei*’ adaptation of the
sliding scale rate base was a generation
(Couynslit, 1 VST.)
Senator Capper, Republican, of
Kansas told a radio audience last night
President Roose\ell's message to the
special session of Congress indicated
"more of a willingness to work with
Congress instead of trying to dictate
to Congress ”
Capper expressed the hope that the
President's message "also means that
a more sane and sensible attitude will
be taken toward business as a whole
than has been evidenced several times
in the Iasi few years.”
This Changing World
Breaking Down of Tariff Barriers, as Desired By
Secretary Hull, Is Slow Process.
THERE U a feeble attempt on the part of rertaln diplomats to In
terpret the trade agreements among the United States and the world
democracies as an effort, to present the German-Itallan-Japanese
bloc with a bloc of the liberal rations.
Thla effort was made recently, when Secretary Hull announced that
negotiationa for a British-American trade agreement have begun.
* * * *
Secretary Hull has Initiated trade agreements with the view of solving
political international problems by breaking down economic barriers.
He Is of the opinion that if
people all over the world were set
to work; if there were a freer in
terchange of goods among nations,
the aggressive governments would
not be able to follow a policy of
There is no doubt that Mr.
Hull's idea* are correct. The
trouble is that this breaking down
of tariff barriers is a slow process.
* * * *
For several year* the European democracies have been deaf to the
pleadings of the American Secretary of State. Their ambassadors in
Washington listened patiently to his arguments, shook their heads politely
and avoided him because they could not stand to be bored by the "Stale
Department evangelist.’’
Not only uere these nations hored and reluctant to follow the
"dollar policy'' of the United States Government, but they became
annoyed when it was suggested that they should adopt a more lib
eral policy toward the "hate nots" and consider seriously returning
the colonies to Germany. Before the modern holy alliance adopted
as its slogan, "We take,” the liberal nations maintained as their
slogan, "We keep."
Great Britain said she could not part with any of the territories
obtained in Africa from Germany because public opinion is opposed to any
yielding of British territory. Furthermore, London added, the British
government could not force its dominions, such as South Africa, to part
with a territory which Is their own.
The French maintained that the worthless colonies taken from the
Reich had been paid by the blood of the sons of France and the Ttench
honor would not permit such a humiliation and abdication before the
threats of Hitler.
' * * * *
Now when the have-not* have banded together in a determined
effort to take *11 they can by threat*, the liberal nations think that
economic agreements, auch as Mr. Hull suggested flve years ago, might
be of some value. They say that if they do not yield anything practical in
the field of economics, they might give the impression to the other nations
that there ia a Paris-London-Washington axis.
The chief weakness of the economic alliances—a* opposed to
the political and military alliances—is that the former are slow and
will not be able to give the desired result in time. The understand
ing among the world democracies—whatever the word may mean
these days—goes at the buggy and horse pace while the agreements
among the dictatorships has the speed-of a racing automobile.
While the democratic nationa get into a huddle and talk and argue
and pull wires and strings, the autocratic governments act with lightning
Our old war-time friend, Mr.
Foreign Propaganda, la bark with
ua. He haa a few new clothes, but
otherwise has not taken much
trouble to disguise himself ao as
not to be recognised by hia old
The methods he is adopting
are somewhat different. There is
no longer question of convincing
me Aiuri icbu propie mat me cause oi a or i is rignt. Me lias sumcient
imagination to underatajid that the American people believe that things
have been ao messed up by our former associates and enemies in the last
war that nobody can plead "justice" any longer.
Efforts are being made to convince the people of this country
that they are too weak and impotent to fight another war—even if
such a war were to safeguard the future interests of the American
people. Furthermore, it is asserted that nothing but a physical
invasion of this country could affect our national security.
It is difficult to estimate exactly how much money has been spent
In this country for propaganda purposes by alien governments. But. ac
cording to conservative estimates, it is believed the dictatnrsh.ps have
disbursed so far some $2,570,000 while the others lag behind with less
than $1 000 000. |
Headline Folk
and What
They Do
Obrrlin M. Carter, 81,
Still Fights to
Clear Name.
old, again appeals to the Su
preme Court in his incessant
fight of 39 years for readme—
*ion to the Army and the voiding of
the court-martial verdict which sent
him to prison for fraud. Powerful In
fluence has backed the former ca.i
tain, and hi r
friends call him
•'the American
Dreyfuss ” The
case against him.
on charges of
fraud involving
many millionu
was ore of the
notorious scan
dals of the Mc
Kinley adminis
tration. He had
been in charge of
river and harbor
reel amation at
Carler Savannah.
gifted, of a distinguished family, Capt.
Carter was second in scholarship onlv
to Robert E. lee in all the history of
West Point. A newspaper account of
March, 1839. reveal* him at Savannah
just before the turn of his fortunes:
"Capt, Carter was an exceeding!'.*
popular man in club circles and among
his numerous female acquaintances.
He was polished in his manner, ex
ceedingly cordial to all and ran toward
the rapid set. He was a very fashion
able dresser, his attire being the ad
miral ion of the ladies. He general!'/
appeared in three or four stiffs of
clothes daily and never failed to don
his evening suit for dinner.”
Tile quick-change record or some
thing npi>ed him to the job of helping
man the tea cups at the American
Embassy in London. A* he prepared
to leave Savannah, there weie routs,
assemblies, fetes and army blow-o s
to honor him on his departure.
Seeing him off at the boat was
Comar. E Gillette, a salty, weaiher
beaten old sea dog Capt. Carter's
gush of affection embarrassed him
The captain insisted that the com
mander make use of bis house, his
furniture, his horses, anything and
everything he had.
The old commander was inclined to
suspect over-mannered or ovpr-genet -
ous persons. He pondered the eap'ains
conduct and then went to the office
of the Engineering Corps. On a map
he saw a retaining wall of mason.v
spotted up as having been built at a
cost of S7.000.000. Then he strolled
down the river, looking for the wall.
It wasn't there. He kept on exploring
He reported to the war office tha'
57 000,000 had been spent for nothing
more than marks on paper.
The handsome captain was jerked
back from London, court-martialed
and found guilty on 18 of 37 eount
He served four years in the Governor's
Island Prison and has been fighting
ever since to "vindicate his honor."
'Copyright 111117.1
Thanksgiving . . .
with Three Lusty Cheers
• Here’s the grand finale for a royal
Thanksgiving dinner — R&R Plum Pudding
—the traditional dessert classic of grandfather’s
day and yours. Fine imported fruits, superior
spices and snow-white suet combined after a
rare old Plum Pudding recipe. R&R is consid
ered the last word in plum pudding perfection
by those who know their "bag puddings”.
Everybody loves plum pudding when it's R&R.
Withal its unmatched goodness it is
really one of the most inexpensive desserts
you can buy. Food stores everywhere
feature R&.R Plum Pudding for you.
The first ana most con
crete bit of evidence tending
to show that the President
has no wish to run again
iand will, therefore, be more
ready to go his own V'ay in
the bad times) comes from a
recent exchange of letters
between him and his confi
dential European Ambassa
door at Large. Norman Davis.
bOrr*uXE I
Come back to the home of Thanksgiving
. . . Come to Massachusetts where this old
New England holiday is a heart-warming
celebration. Clasp the hands of old friends,
visit your folks and enjoy a real Thanks
giving in Massachusetts.
Here in Massachusetts, “playground of
New England,” you may hunt, hike, climb
great hills or indulge in your favorite fall
sport. Later on you’ll find the
finest winter sports. You can enjoy
yourself at every season of the year '■
in Massachusetts.
Here you will find the nation's
finest hotels and also typical New
England guest homes. You can
travel from one pleasure area to
another on the finest motor roads s
in America. Enjoy Cape Cod,
the North Shore, the peace
ful, rolling country of the
Berkshire Hills in Western
Massachusetts, and beautiful old towns
and cities replete with stirring historic
reminders of the great men and women
who founded America.
Every week, every month, every season
of the year, Massachusetts is an
ideal place for the change you need
iJpsa . . . whether invigorating sports
■> 1 ' or rest for a tired body and over
J Hi . taxed nerves.
11 ‘
The Massachusetts Development and
■KT Industrial Commission
State House. Boston, Massachusetts

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