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Evening star. [volume] (Washington, D.C.) 1854-1972, December 15, 1937, Image 11

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Recession
Debate
t
Rages
More and Better
Planning In
Order.
By DAVID LAWRENCE.
ENOUGH time has elapsed now
since the stock market break
in October and the flrst pan
icky feelings about the business
recession to form an impression of
what President Roosevelt and his
administration think about it.
The business world may say that
lt'a a "Roosevelt depression,” which
means, in brief, that Roosevelt pol
icies brought the recession and con
versely a revision __
or these policies
can bring an up
swing in busi
ness, but if the
business men
think they have
sold that idea to
the administra
tion they are
' much mistaken.
It took a little
while for the
administration to
get its bearings
after the first
shock that fol
lowed the rather
David Lawrence.
uciiuiv lu owv.iv iuai «vii
prices and in the various indices that
reflect current business activity, but
now it may be said the President and
his associates have crystallized their
thinking into definite lines.
Naturally when an administration
viewpoint crystallizes, it is then ex
i pressed in various ways. Anybody
who reads carefully the speeches be
ing made by Secretary Wallace of the
Department of Agriculture, Attorney
General Cummings and Assistant At
torney General Robert H. Jackson
and also Gov. Eccles of the Federal
Reserve Board can see in clear out
line just what the administration
thinks about the recession and what
it may have in mind to do about it.
Blame Price Mark-l'p.
First of all, the different agencies
of the Government seem to feel that
they can place the blame for the re
cession on the way business marked
up prices early this year and stocked
up on goods at higher prices without
taking into account consumer resist
* anee. From such a premise, the ad
ministration reasons that there was
an absence of competition and too
much private price-fixing. This is
the signal for more "trust busting,”
namely, the filing of more anti-trust
suits and considerable public speech
making on the subject of monopolies.
Some of the realists such as Secre
tary Wallace have not hesitated to
. point out that there is too much eco
nomic power wielded by groups in
their own interest. This touches the
vital problem of labor unions’ de
mands as well as corporation power.
Mr. Wallace puts it this way:
"Even more important than the ef
fect of technology are the actions of
highly organized groups equipped with
great bargaining power which has been
intrusted to them by the Government.
Among these are the corporations,
labor unions, and farm organizations.
These great groups all too often try
to increase their profits, wages or
prices without regard to the public
welfare; all too often they overplay
their hand and bring about either
shortage or an unbalanced abundance
which is equally destructive.”
Cites Labor’s Demands.
This is the nearest any administra
tion has come to putting some of the
blame on organized labor’s demands,
though Gov. Eccles deals with this
delicate point in his speech this week
on the causes of the recession. He
says of the course of events since last
spring:
“Among the factors contributing to
the surge in costs, prices and inven
tory buying were the bonus payments
coming on top of already heavy Gov
ernment expenditures and giving a
sharp additional impetus to consumer
buying. The organizing campaign of
labor, together with the drive for
higher wages and shorter hours, added
to expectations of higher prices.
“The rearmament program in va
rious countries contributed to the gen
eral inflationary sentiment. A sellers’
market developed and widespread ad
vantage was taken of it to increase
prices. Various important sectors of
industry which had not added to their
productive capacity in the preceding
years found themselves unable to
promise quick delivery, leading to still
further piling up of orders and higher
prices. The prices of various inter
nationally controlled raw materials
skyrocketed while bond prices de
clined.”
Hints at Control.
What to do about it? Mr. Eccles
hints at some form of control. First,
he says, “it oould only have been the
absence of competition that permitted
building costs to soar on the low
volume of building that took place
last spring; it is only the absence of
competition that can explain the
maintenance of fixed prices and wage
rates when the volume of activity
declines sharply.”
Some idea of what the administra
tion may have in mind may be gath
ered from this significant paragraph
in the same address by the governor of
the Federal Reserve Board:
“How are we to achieve and main
tain full employment if private groups
and organizations raise prices and
costs whenever increased demand ap
pears, although there is still an abun
dance of idle and unused manpower,
plant facilities and raw materials?
Does this necessitate steady increase
In consumer buying power through
deficit spending? How long can we
* pursue such a course? Are we to at
tempt to return to a truly competitive
laissez faire economy? If not, are the
alternatives facing organizations of
capital and labor either self-govern
ment In the public interest or in
creased regulation in the public in
terest?”
Mr. Eccles hopes it will be the former
alternative but immediately says "a
return to laissez faire” is not possible
and remarks that the ’’development of
the industrial process Itself has cre
- ated larger unite and brought into
being various forms of organization
of both capital and labor.”
Feel Dip Is Temporary.
The administration unquestionably
feels that the dip In the business curve
is temporary and that what It has in
mind to do, especially in housing and
In forcing more competition will be
helpful though, to be sure, what may
be happening concurrently is that
labor of its own accord will be less
aggressive In the use of Its economic
power and business men will be less
„ inclined to force prices up when there
la no economic justification. Some of
this would be very constructive, indeed,
A
The Capital Parade
Coalition Manifesto Circulated by Right-Wing
Senators—Recovery Program Outlined.
By JOSEPH ALSOF and ROBERT KINTNER.
A CONSERVATIVE manifesto, intended to meet the challenge of
the President’s "it’s-up-to-Congress" attitude, is now being very
secretly circulated in the Senate. Half a dozen right-wingers,
both Democratic and Republican, are cautiously combing the
Capitol lobbies for senatorial signatures.
The manifesto, which sets forth a 10-point conservative program,
is intended to attract men of both parties into a coalition movement,
the end m view being positive congressional action against the depression.
Thus far the work of collecting signatures has been rather uphill The
reason for the difficulty was well summed up by Republican Leader
Charles L. McNary, when Senator Peter G. Gerry, Democrat, of Rhode
Island asked him to sign.
"Now listen here, Peter," said the shrewd, cynical Oregonian,
"any one who signs that is going to become a Liberty Leaguer of the
Senate, and that’s a tag I don’t want."
At least one other Republican, Hiram Johnson of California, has
refused to sign, and all but the firmest Democratic conservatives, men
like Gerry and Burke of Nebraska,
have evinced lively suspicions of
the manifesto.
It was composed by Republi
can Senator Arthur H. Vanden
berg of Michigan and Democratic
Senator Josiah W. Bailey of North
Carolina, not long after the cele
brated quail lunch for Lewis W.
Douglas. The collaborators hoped
to make their work a great state
paper, and it bears marks of their
awareness of their potential historic role.
* * * *
"A sudden and extensive recession in business, industry, employment,
prices and values demands instant attention of all in positions of re
sponsibility,” it begins. "• • * in (arresting the recession) as Senators
we have a duty, and in partial discharge of it we have determined upon
this statement.”
The central argument of the manifesto is thereupon rehearsed_
that spending will not answer the new depression problem, and that
"liberal investment of private savings must be depended upon and, with
out delay, heartily encouraged.” Private enterprise, says the manifesto,
is the way out, and it offers its 10-point program as "essential’’ to making
private enterprise effective. The program follows, in summarized form:
Taxation: “The capital gains and undistributed profits taxes ought
to be thoroughly revised at once without reducing revenue, so as to
set free tunds for investment.”
Budget: "Steady approach must be made toward a balance of
the public revenue with the public expenditure, a balanced national
budget, and an end to those fears which deter investment. The
public credit must be preserved or nothing else matters. To under
mine it is to defeat recovery: to destroy the people upon inflationary
living costs."
Labor relations: “We propose just relations between capital and labor,
and we seek an end at once of a friction, engendered by more favorable
conditions, that now serves none but injures all. • * • The maintenance of
law and order is fundamental.”
Government competition: "We oppose every Government policy tend
ing to compete with and so to discourage (private) investment.”
* * * *
Monopoly: "We favor the competitive system as against either private
or Government monopoly. Our American competitive system is superior
to any form of collectivist program.”
Credit: “The sources of credit are abundant, but credit depends upon
security ... We must assure a policy making for the sense of safety of the
collateral which is the basis of credit."
Farm prices: “The spread between the prices paid the farmers and the
prices paid by consumers is notorious. One explanation is that the amount
of annual taxes * * * comes to at least one-fourth the national income.
There ought to be a reduction in the tax burden.”
States’ rights: “Except where State and local control are proven
definitely inadequate, we favor the vigorous maintenance of States’
rights." (With an implication that this applies to the wage-hour bill.)
Relief: "We propose that there shall be no suffering for food, fuel,
clothing and shelter; and that pending the revival of industry useful
work shall be provided to an extent
consistent with the principles of
this address. The deserving must be
provided for. * * * To be done well,
this must be done economically.”
The future: “We propose to
preserve and rely upon the Amer
ican system of private enterprise
and initiative, and our American
form of government. They carry
the priceless content of liberty and
the dignity of man. They carry
spiritual values of infinite import, and which constitute the source of the
American spirit.
"Pledging ourselves to uphold these principles, we summon our
fellow citizens, without regard to party, to join with us in advancing
them as the only permanent hope of recovery and further progress."
Thus ends the manifesto. Senators Vandenberg, Bailey, Gerry,
Austin of Vermont and the others who are circulating it hope for 30
signatures, and plan to publish it when 30 are obtained. They especially
hope that some such liberal figure as Senator Burton K. Wheeler, Democrat
of Montana, leader of the opposition in the court fight, may be persuaded
to put his name at the top of the list. But in view of the signature
collecting difficulties to date, it is entirely possible that the manifesto will
never see the light except in this informal manner.
(Copyright. 1937, by the North American Newspaper Alliance. Inc.)
if the Government could also find a
way to diminish its part of the bur
den—taxes—and if governmental poli
cies could be worked out with much
more clarity and definiteness so that
anticipation of labor troubles and other
vicissitudes would not make these sud
den anticipations of high prices and
panicky attitudes that cause businesses
to cancel orders and throw workmen
out of employment.
(Copyright, 1937.)
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J'HE opinions of the writers on this page-are their own, not
__ **ece«#artto Tfce 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.
The Panay Incident
U. S. Government Placed in Difficult Position by
Bombing, Writer Asserts.
BY DOROTHY THOMPSON.
THE Panay, a practically un
armed American gunboat—in
reality a small yacht—has
been bombed and sunk by Jap
anese war planes, while proceeding
peacefully In the Yangtze River, above
Nanking, together with three Standard
Oil vessels. The action occurs while
the Japanese government is making
repeated protestations to the United
states mat it de
sires wholeheart
edly to retain
American good-,
will. And while
Japanese diplo
macy is doing its
best to win Am
erica away from
close co-operation
with Great
Britain.
The question is:
Why did this in
cident occur? How
could it occur?
The Japanese
Ambassador 1 n
Dorothy Thompson.
wasmngton says that this was “a
grave blunder,” a “great mistake,”
and “completely accidental.” We are
informed that members of the Jap
anese cabinet were near tears when
the news was announced.
The circumstances of the bombing
are such as to preclude any possibility
that it was accidental. First of all,
the Japanese navy, according to news
reports, has boasted that there were
no more Chinese ships left in the
Yangtze. Therefore, any other ships
remaining there would be foreign.
Second, the identity of Che Panay was
conspicuously displayed by American
flags on every mast. Third, the
American naval command in Shang
hai had repeatedly informed the Jap
anese navy of the whereabouts of our
vessels in the Yangtze. And, fourth,
the Panay was so small that the
bombing planes had to swoop very
low, where they could plainly see what
they were aiming at. And then they
bombed it four times.
Riding the Whirlwind.
One is forced to draw a few con
clusions from this incident. It would
appear that the civilian government
of Japan Is without authority. There
is no connection between its diplo
matic policy and the actions of the
army and navy, who really rule Japan.
These armed forces of Japan, which
have never been defeated, apparently
think that they ire invincible against
the forces of the world, if need be.
The younger and more radical ele
ment in the army and navy—it was
this element that was responsible for
the murder of Taka Hashi and other
great Japanese moderates—is riding
the whirlwind. It appears that the
military command does not dare to
punish these people for egregious
breaches of discipline. Since this con
flict broke out, there have been nu
merous attacks on foreign ships and
on foreigners—including the British
Ambassador in Shanghai—and while
the Japanese government has some
times reluctantly apologized, and
made vague promises of punishing the
offenders guilty of these attacks, we
have no knowledge that any such
punishment has ever been meted out.
Of Extreme Importance.
These facts—if they are correct—
are of extreme importance. For it
would seem that what we are deal
ing with—and what the Chinese are
fighting—is not a responsible Japa
nese government, or even a responsible
army! That the much-vaunted Japa
nese discipline is, at this moment, a
myth. And that the aggressive ele
ment of the armed forces is criminally
irresponsible and reckless.
It is taking, on behalf of the Jap
anese people, an extremely long
chance, counting on the fact that, by
and large, the people of the United
States are peaceful, and that Great
Britain and Prance, however much
they might be inclined to fight for the
preservation of their interests in
China, are impotent to move, because
of the critical situation in Europe and
the Mediterranean.
All this also throws a light upon
the claim of the Japanese that they
are in China, not because they have
any quarrel with the Chinese people,
or because they have any territorial
ambitions—such is the official prop
aganda—but merely because they wish
to restore order in China, and free
China from the machinations of irre
sponsible politicians and irresponsible
military leaders. It all breaks down
to the argument that irresponsible
Japanese firebrands are engaged in
freeing a neighboring country from
irresponsible leadership, and thus be
comes idiotic.
What Does It Amount To?
The Japanese government has "ac
cepted full responsibility” for the at
tack—so the question now is: Is the
Japanese government in a position to
accept such responsibility, and what
does it amount to?
If one reads the situation rightly,
or even part rightly, then one will
have very little faith that a promise
not to let such events occur again will
or can be kept.
Meanwhile, the position of our gov
ernment is difficult in the extreme,
and the State Department needs the
sympathy of cool-headed citizens.
There will be those who will counsel
that we withdraw everybody from the
Par East, and abandon even the most
peaceful pursuits there. But, if a large
part of the world, and by no means the
most responsible part, had not become
convinced that the democratic nations
were unwilling to defend anything,
and that anything goes in treatment
of them, I doubt whether the Panay
incident would ever have occurred.
We have done a lot to encourage the
thought that long chances have excel
lent hopes of succeeding.
(Copyright, 1937.)
BEAN BALL TONIGHT
Maryland U. Will Hold Annual
Dance to Aid Needy.
Pj the Associated Press.
COLLEGE PARK, Md.. Dec. 15 —
The University of Maryland annual
“bean ball” will collect loads of food
stuff for needy residents of College
Park and vicinity tonight.
Each admission to the ball, for
which two orchestras will play, will be
three cans of any kind of food.
The "bean ball” last year netted
almost a ton of food.
Name Lingers On.
Connecticut is called the "Nutmeg
State” because of an alleged practice
of some early citizens of manufactur
ing and selling wooden nutmegs as
genuine.
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This Changing World
• ..
Japanese Foreign Office Seen as Cat’s Paw for
Military’s Attack Plot.
By CONSTANTINE BROWN.
WILL the Panay become a* famous as the Maine in the history of
the United States? y
This question was being asked by almost everybody since
last Sunday night.
There is no doubt the administration is getting tired at the in
numerable acts of open or covert hostility from the Japanese.
The Japanese military authorities are irked at the presence of
American citizens and naval forces in China. They overlook the
fact that American and other nationalities have been in China for
many more years than they have been; that the Western nations
have gotten along better with the Chinese in recent years than the
Japanese and that, after all, the Japanese have no right to object
to the pretence of Americans in China.
Prom all sources, it appears evident that last Sunday’s incident had
• provoked, not by some irresponsible youths flying Japanese airplanes,
but by the Japanese high com
mand in the Nanking area.
There is no doubt that the
Japanese foreign office has been
in the dark regarding these plans
of the military. The Japanese
diplomats need not be told of
what the army intends to do;
otherwise their apologies and ex
pression of regret would not ring
true. In Japan the foreign office
is Just a doormat for the con
venient use of the army.
* * * *
The purpose of the "unlimited apology” offered by the foreign office
Is suspected to be gain of time. The general staff in Tokio hopes that
American people, afraid of complications which might , lead to a conflict,
will be only too happy to receive a sincere apology and some cash for the
losses sustained because of the aerial attack and call it a day. An in
vestigation to place the actual responsibilities on the flyers must neces
sarily be a long one. There is going to be conflicting testimony regard
ing the height at which the planes were flying and the visibility on that day.
And by the time the investigation is over, the general staff hopes, the
American people will be once more so busy with the farm bill, wage-hour
bill and many other legislative measures that they won’t bother about the
Par East any more. Then another incident might occur and in the end
the American people will be so fed up with the Chinese problem that
they will be delighted to get out of China altogether.
The military branch of the Japanese government is following
with utmost care what is said about this incident in the Congress.
The Embassy is cabling Tokio detailed reports about what various
Senators have to say and interpret the "get out of China" speeches
in the Senate as the true reflection of public sentiment in this
country.
* * * •
In 1932, at the height of our conflict with Japan over’Shanghai, a
Japanese admiral visited this country. He was entertained by a senior
American naval officer and they discussed in a friendly manner the
prospects of a conflict between the two countries. The Japanese, while
not denying the sterling qualities of the American people, said: "You
have had too many years of prosperity and easy living. This has killed
the fighting spirit in your people. They are afraid of the discomforts
of war. Your pioneer spirit has become now just a legend. You want an
army and a navy and an air force larger than any in the world, because
you want to boast that everything in this country is ‘jumbo ’ But you
will never light again, unless you are like us, with the back against the wall.”
The Japanese military has somewhat revised this point of view in
recent months. But all the same, when the Embassy in Washington
cables that prominent Senators and Representatives are shouting from
the top of the house, "Get out of
China if you don't want to get
into a terrible mess,” the general
staff is smiling with satisfaction.
The generals who run Japan today
tell the foreign office to go ahead
and apologize, and even pay. That
will satisfy the American Congress.
Then, the army of occupation will
perform some new tricks—no pay
next time—and the Americans will
clear out of the Far East.
*
President Roosevelt had a specific purpose in mind when he com
municated with the Emperor of Japan through the Secretary of State,
through Ambassador Saito and through Foreign Secretary Hirota.
Had he appealed, as it was possible, direct to the Emperor, the
Japanese would have interpreted it as a sign that he was scared and
implored the Emperor to prevent a clash between the two countries.
But the method used by the President—my boss tells me to tell
your boss to inform your boss to tell his boss that he is shocked—
removes any possibility of such an interpretation.
The President's "request” that the Emperor be informed sounded
to many people more like a warning than any diplomatic notes sent to
Japan so far.
\
Headline Folk
and What
■They Do
Ludlow First to Step
From Press Gallery
Into Congress.
By LEMUEL F. P All TON.
WHEN Representative Louis L.
Ludlow introduced Joint
resolution 199, to require
a national referendum to
get us Into war, It received little at
tention. As tensity and uncertainty
in the Far East increases, it is dis
closed that Mr. Ludlow’s proposal for
a constitutional amendment has the
signatures or more
than 200 Repre
sentatives, nearly
enough to launch
it in the House.
It has become
the touchstone of
unsuspected ex
treme pacifist
sentiment, but,
judging from this
observer’s look at
Eastern papers,
generally ignored
or sharply op
posed by the
press. If events
of the next few
Mr. Ludlow. '
uajs lurce a new ciarmcatlon of at
titude In Congress, Mr. Ludlow and
his plan doubtless will be In the thick
of the fight.
He was the first newspaper man to
step down from the press gallery—
this being a literal and not figurative
allusion—to the floor of Congress. He
was the Washington correspondent of
Indiana newspapers for 28 years be
fore becoming a member of Congress,
in 1929; the author of "Senator Solo
mon Spiffledink,” a book in which ha
satirizes Congressmen, not too roughly.
His other books are “Hooslerland,” a
story of Indiana pioneers: "From
Cornfield to Press Gallery,” "America
Go Bust” and and "Hell or Heaven,”
the last disclosing the fervent peace
sentiments which underlie his House
resolution.
His boyhood home was a heavily
wooded wilderness, 7 miles from Con
nersville and 50 miles from Indian
apolis. Like other Hoosiers, he was
given to meditation "when the frost
is or. the punkin’ and the com Is In
the shock.” These boyhood medita
tions were on war and peace, on the
American Indian, on the tarlfT—the
general outline covered by the Lyceum
Lecture Bureau of those days. He
wrote them down and when he was 18
went to Indianapolis, with a new suit
of jeans and $1.96 in his pocket. He
didn't sell his manuscripts, but he did
get a job as a reporter on the Indian
apolis Sun, marry the society editor
and. In a few years, hit up a fast pace
which made him a Washington corre
spondent in 1901.
He is a former president of the
Washington Press Club, with a wide
acquaintance in official Washington
and in the press corps. He Is a Demo
crat, backed by the iate Tom Taggart
in his congressional race in 1928, gen
erally homespun In ideas and attitude
and suspicious of big-town chicanery
which might get this country into
trouble. He hates bureaucracy and
bureaucrats and has deep distaste for
years he represented several Indiana
papers and became known back home
as "the James Whitcomb Riley of
prose.”
(Copyright. 1937.)
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$38.50 REVERSIBLE COATS. $29 50 J50 TOpCOATS $42 an
$45 REVERSIBLE COATS. $36.50 TOPCOATS. $42.50
$50 RFVERSIBLE^ COATS. $39 50 WOMEN’S COATS
*45 PILE LINED GABARDINE $29.50 $35 MAN TAILORED COATS, $25
COATS *36.50 $47.50 $50 MAN-TAILORED COATS, $42.50
An Early Selection Will Be Decidedly To Your Advantage
LEWIS & TIPS. SALTZ
INCORPORATED
1409 G STREET, N. W.
NOT CONNECTED WITH SALTZ BROS INC.

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