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in Present Prices Recovery Seen Hinging on Revision to Aid ; Production. By DAVID LAWRENCE. President roosevelt has gone back to the ill-fated days of President Hoover for a headline. There must be no wage reductions, says Mr. Roosevelt, and industry must keep up its pro duction. Mr. Hoover called the business men together in the latter part of 1929 and said the same thing—there should be no wage reductions and industry snouia maintain • mployment. Seven years of depression took a big chunk out of thdse surpluses. The record shows that, from 1930 through 1936, all business concerns in the United States paid out, net, about $24. 367.000.000 more than their income during the same period. This enormous David 1-awrfnff. *um went for wages, materials, in terest and taxes as well as some dividends. Surpluses Exhausted. When Mr. Roosevelt asks industry to resume the digging into surpluses «o as to maintain employment and at the same time to reduce prices by eelling below cost, he is facing a differ ent situation than Mr. Hoover did. For surpluses have been consumed in large part and also there is very little cash, relatively speaking, in those •urpluses which remain. Thus the total surplus for all man ufacturing industries is only about 18.000.000.000 and not more than a fifth of it is in cash. To meet pay rolls, cash is always needed. There comes a time when the thing called a “surplus,” being very largely in the form of bricks, mortar and machinery, cannot be converted into cash and paid out in wages, but the company must borrow. Will commercial banks or invest ment banking houses gram, loans to companies which actually sell products below cost, as Mr. Roosevelt advises, or which keep on producing goods that cannot be moved into markets? If the question needs an answer it can be found by asking the bank examiners what they usually say about loans made by banks for operating expenses when the surplus of a com pany is diminshed and the goods are being sold below cost; in other words when a company is just using its funds to subsidize pay roll and buy raw materials for production that eannot be disposed of. Conflict in Policies. Mr. Roosevelt would never ask the farmers to reduce their prices when they have a surplus. In fact, he is planning to grant Government sub sidies to the farmers so they can maintain their prices. Just why the President applies one rule of his economies to support farm prices while, at the same time, he advocates production of prices below cost to the manufacturer of industrial goods is not explained, yet economists assert that business volume grows only when goods may be exchanged at fatr prices between different groups in the na tional economic entity. If Mr. Roosevelt's thesis were cor rect the United States Government could afford to reduce taxes—which are one of the biggest items in pres ent-day costs—and let business re- : dbee its prices. The President, on the other hand, has told Congress that If any tax revision is to be granted it must not be by changes that in any way reduce revenues. As for costs of production today, taxes are usually added on, and the tax bill of the Nation—Federal. State and local—Is about $14,000,000,000. ao that a sizable reduction in prices, stimulating volume, could easily be accomplished if taxes were cut, say, in half. But what would happen to Govern ment credit If taxes were cut out? ! The same thing that happens to busi nesses wher^ they keep on employing people to make goods that they can not sell—their securities begin to drop and their credit, too. Knudsen Gives Answer. Everybody is in sympathy with the Idea of maintaining wage levels, and no sensible business man will cut labor costs except as a last resort, when demand has materially fallen off. The other day at the Senate committee hearing some one asked Willianf Knudsen of General Motors why he didn’t keep the 30,000 men on his pay roll, and he asked the Sena tors: “What would the workmen be doing?” Raw materials cost as much almost as pay roll, and to use up materials to make cars for which there is no demand or to sell cars at prices which are below what other cars already produced are selling for is merely to demoralize the industry •till further. No corporation can long continue to maintain a pay roll when It doesn’t make its production fit de mand. Certain levels can be main tained artificially for a few weeks, perhaps, or even a few months, but It’s a dangerous process. Business men did it in 1930 and 1931, and then the cycle of demand and purchasing plbwer ran so low that the debacle Of 1933 ensued. Today the surpluses in private busi ness are not what they were in 1930, ao industry will be cautious about doing what it thinks are uneconomic things. Mr. Roosevelt refuses to pay any attention to the advice of busi ness men, who say that if the ad ministration will at least define its The Capital Parade Roosevelt’s Attack on I. C. C. Laid to Row Over Pro cedure—Left-Wingers Win Two Important Posts. P,y JOSEPH AESOP and ROBERT KINTNER. WHITE HOUSE effort to make the Interstate Commerce Commission clear all communications with Congress through the Budget Bureau—and therefore through the President—has recently failed. The effort was important because it shows the persistence of the presidential distaste for the independence of the independent agencies. The effort began some time ago, after the Government reorganiza tion bill, which, in its first, form, would have made all independent agencies appanages of the White House, had bogged soggily down. Thereupon, a general White House order was issued through Budget Director Daniel W. Bell, commanding that all recommendations to Congress, from agencies both independent, and dependent, be submitted in advance to the Bureau of the Budget. The commissioners of the I. C. C., some of whom bad been openly fighting the reorganization bill, considered the order and refused to comply. The next move, came when James Roosevelt, acting for his father, asked them to change their minds “as a courtesy to the President.’’ Paced with such a plea the commissioners did agree to submit recommendations about which there was no great hurry, but retained their independence by adding the proviso that they must W TOTwt .. rPRtuOEH&~ be allowed to judge the need for haste. T6 this odd little incident, which is said to have included some thing of a row between the President and one of the commissioners, may probably be traced the President's attack on the I. C. C. at the Business Adinsory Council meeting. The I. C. C.’s independence was what he complained of. * * * * Jams's H. R. Cromwell must be allowed to be one of the most original thinkers in American politics. The fortunate husband of Doris Duke, the richest girl in the world, recently caused some stir by telling the House Ways and Means Committee that the Government ought to stop taxing the rich and raise its revenue by a general sales tax. Before that he interested a Senate committee with the suggestion that the best shot in the arm for American industry would be "negative interest"—by which the Government would lend money to industrial companies, and then pay the companies a handsome interest rate on the money they had borrowed. But Mr. Cromwell's most surprising notion will always remain the little idea he had for a Palm Beach house for his wife and himself. He got the idea when Mrs. Cromwell and he visited the Taj Mahal during their wedding trip. It struck him as distinctly charming, and just the right model for a cozy little villa by the southern sea. A letter war actually written to Palm Beach Architect Maurice Patio requesting that plans be drawn -for a house exactly reproducing the exterior of the Taj ! Mahal. The request was something of an architectural puzzle, since the Taj Mahal is close on to 250 feet high at the dome, and has pierced marble grilles for windows. Yet the scheme might, hate gone through if some wicked fellows had not made fun. One joke arose from the fact that the letter—not written by Mr. Cromwell, but by a member of his irife's family—suggested that the garage ought to be in the same style asythe house. Some one remarked that he supposed the Cromwells would call it their "Garaj Mahal.” * * * * The left-wing White House advisers run a sort of employment agency and personnel office for the Government, which is useful to them because it permits them to put their own men in key positions. Two recent place ments of some importance have been that of James H. Rowe, jr.. as assistant to James Roosevelt, and that of Edward H. Foley, jr., as assistant general counsel of the Treasury in charge of procurement. Rowe's appointment is unusually significant, since he replaces Joseph L. Sheehan, the protege of the conservative Joseph P. Kennedy. Foley was put in because the left-wingers sympathize with Unit'd States Housing Administrator Nathan Straus in his life and death struggle with power-hungry Secretary of the Interior Harold L. Ickes. Foley, a former P. W. A. counsel who couldn't get along uith Ickes, will be useful to Straus because all Government building bills go through the Treasury procurement Division. Rowe, who is something of a left-winger himself, is the last of the long and distinguished line of secretaries to Justice Oliver Wendell Holmes. Incidentally, the Holmes secretaries have an organization of their ow-n, which includes such different thinking but powerful men as Thomas O. , Corcoran, most important left-winger in Washington, and the deeply conservative president of the New York Federal Reserve Bank, George ! Harrison. Among other things, the organization has a book in which is recorded all of the noble old justice's reading. During he year when Rowe served him he read French novels and detective stories almost exclusively, although his last bool: was Thorn'on W’ilder’s "Heaven Is My Destination." To the end Holmes still maintained his habit of commenting on a book when he was done with it. These comments have also been preserved. Another indication that Attor ney General Homer. S, Cummings will soon leave the Justice Depart ment is his application for mem bership in the Bar Association of the District of Columbia. The ap plication, indorsed by District Bar Association members Ugo Carusi, Breckinridge Long and Henry A. Schweinhaut, has yet to be acted on, but, of course, will be approved. There is a rumor going around that, when and if the Attornev General does resign, he will go into the exceedingly prosperous Washington office of his great crony, the Montana lawyer-lobbyist, J. Bruce Kremer. But more probably he wants a membership in the District bar only because he plans to be the Capital man of his own Connecticut firm • Copyricht, ions, bv the North American Newspaper Alliance, Inc.) pasition clearly. instead of zigzag ging every other day. maybe business can do some planning of its own and employment can come back. Re covery will not come through in difference to the fact that taxes are one of the biggest factors in present day prices. Recovery will come only when government revises tax rates so as to encourage instead of dis courage production. Increase In out put per man, either by labor or ma chine efficiency, alone can augment the purchasing power of the whole people. But Mr. Roosevelt never mentions efficiency. (Copyright. 19.39.) --m Smoke Gets in Your Eyes. We laugh at the English for their time-wasting habit of 4 o'clock tea ' \t *- —and Feel Pain Fade Away FASTI HERE is relief—so soothing, so of sport because it’s both extra effective that you’ll be amazed. fast and extra-safe. Can't burn or Stiffness and pain rub right out blister. Just get a 35* bottle at any as you rub Omega Oil in. The drug store—see why so many doc secret is penetration! This power- , tors, nurses and athletes praise it. ful liniment is used by professional trainers and athletes in every field \ during business hours, but if we could count the time our own employes take for sly smokes, afternoon ctps of coffee, sundaes and washroom gos siping we'd have little to say, com ments the Commentator Magazine. THE 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. "March of Time” Film Tempest Raging Around It Raises Some Interesting Questions of Movie Topical Matter. By DOROTHY THOMPSON. THE tempest raging around the "March of Time’s" film. "In side Nazi Germany 1938,” raises some interesting ques tions, One: Is the film propaganda, and if so, for what and against what? Two: What is the function of the mo tion picture theater? Must it confine ltseii exclusively to entertainment f or should It be ' also a forum for public debate? By and large the film Industry has answered the latter question by edging away from all controversial subjects. Many decisions of the Will Hays office, and notably the decision a little more than a year ago to ban "It Dorothr Thommon. Can't Happen Here'' from the movies, indicates that the industry prefers for commercial purposes to stick to "en tertainment,” Whether they are clever In sensing the mood of the public, in making this decision is doubtful. It is surely not without significance that the left wing theater is the only branch of the legitimate stage that is putting new life into the drama, and it 1s doing it by dramatizing in the theater political, economic, and social questions with which people are genuinely concerned. We have had for years a curious situ ation. namely, that whereas the front pages of the newspapers remind us daily that we live in a revolutionary world—probably in the midst of the : greatest revolution since 1490—and whereas current literature is finding new sources of material in this great human drama, moving pictures and the radio, the media which reach the greatest number of people, have clung to the idea of "entertainment.” and avoidance of anything controversial or political. Nazi Propaganda. Except for so-called sustaining pro grams on the big radio networks '-there opinions ran be heard, and for a very few commentators who are under heavy criticism the mass of radio pro grams all are carefully de-editorialized, the reason given being that since most ; of the air programs pre commercially sponsored, the public must be protect ed against having viewpoints presented which are such that business sponsors will pay for their expression. I see some merit in this argument, but. on the other hand. I don't just see where censorship can begin and end. After all. the final test of any thing is its reception by the public. Nobody is forced to listen to any radio program. He ran turn it off and get something else. If a viewpoint is ex pressed which a very large body of Ksteners are hostile to, you can be sure that it will go off the air commercially in the course of time because the only thing that keeps anything on the air commercially is public support. In this sense there is a continual censorship of everything, but It is a censorship exercised by the public di rectly. Is there any better or less dan gerous censorship? The film "Inside Nazi Germany” was censored at the outset by an im portant distributing agency. Warner Bros., who refused it on the piquant grounds that it is Nazi propaganda. ; Mr. Warner said that the effect of the pictures themselves, without the ac I enmpanying comment, would be to I present a very favorable picture of j Nazi Germany. Mr. Warner therefore ; did nor. want to censor the film on the ground that It was propaganda, but on the ground that It, was the kind of i propaganda he does not like. A Magnificent Piece. I Apparently he thinks that the 1 "March of Time" photographers should have gone around Oermany, seeking and photographing every sign | of distress and misery, and perhaps performed the superhuman Houdlni trick of breaking into concentration camps and prisons and photographing them. But if they had done that they would have produced bad and untrue propaganda, because it would have presented a picture utterly remote from reality. Germany is a highly organized, strongly disciplined country of very competent people, and shows on the surface all the results of that organization, discipline and compe tence, and the “March of Time” pho tographers and commentators have done a magnificent piece of Journalism in relating the outer show and the ac j tual achievements to the means by which this show and achievement are obtained. And in a very few minutes of highly exciting picture and comment they have given a picture of a totalitarian state from the viewpoint of American democracy. Certainly it is propaganda —such effective propaganda that the German Consuls in San Francisco and Buffalo and the vice president of the ! Hamburg-American Line have pro I tested; a showing of the film before i members of the German Embassy in Washington received a very frigid re ; ception, and Fritz Kuhn, the leader of i the Gcrman-American Bund, threat ens a march on the Embassy Theater, ■ in New York, where the film is being ! shown. I These people obviously do not share | Mr. Warner's opinion. Contrast Is Sharp. And the film Is good propaganda, because it is affirmative, it is for some thing rather than against something. There is not a picture or a comment in the whole film which indicates hostility to the German people or the slightest indication that we ought to interfere in their affairs. It is only when the film switches to the United States and shows German-Americans being harangued and drilled with the same sort of methods used in Ger many, when Swastikas are spotted across the map of the United States, indicating Nazi camps, and finally when the scene is shifted to the Town 1 Meeting at South bury. Conn . wh°re ; the villagers met to keep a Nazi camp | out of their midst, that the film be I comes dxith a protest, and a very 1 simple, telling argument for America’s sticking to her own wav of life. Good Drama and Propaganda. That little shot of a New England village, the contrast of a Town Meet ing so intensely civilian, with the masses of drilled and organized people we have just seen, the rather halting moving remarks of the chief speaker, Rnd the fine forthright words of Jpnny Hinman who rises to say that her ancestors have fought for liberty in this country since the Revolutionary War and she is still for it, are both drama and propaganda on a very high plane. And inasmuch as the only propa i ganda is for certain ideas of civil and human rights embodied in all our great State documents, ideas under which this country has tried to live for 150 years and which it has at least always held before its eyes, who on earth can doubt either the i right or the reason of again in this world making such an affirmative ! declaration? This is Journalism of the school of Zola, transmitted into moving pictures —one of the most effective media which we have—and this column be lieves that it is high time that it should be done, and congratulates Mr. Louis de Rnchemont,. the producer. The film is an expose of an idea, ! a warning of danger, and an appeal in the simplest fashion to certain basic American concept', which are being sadly forgotten in too many quarters ! It is Journalism, and the function of Journalism and a free press is not con fined to the presentation of news. \ • •. have you tried Wilkins Coffee? This Changing World U. S. "Fighting Services” and "Peace Laboratory” Lack Co-operation of Similar Units Abroad. By CONSTANTINE BROWN. IT IS only In the United state* that there is no effective co-operation between the “fighting service*"—the War and the Navy Departments— and the "peace laboratory”—the State Department. . In Great Britain there is an organization called the Imperial Defense Council, which is composed of high officials of the war, navy and foreign office. They meet regularly and exchange information which each department receives from it* agents abroad. They discuss policies and keep each other informed regarding the latest development* abroad and the policies to be pursued by the government. The foreign secretary knows exactly what the army and the navy can do, while the fighting services know what the next diplo matic move will be and act accordingly. * * * * In France the Conseil Supe rieur de la Guerre (the Supreme War Council), presided over by Marshal Petain, is also in a posi tion to frame policies. While less efficient than the Imperial Defense Council because Interdepartmental jealousies prevent whole-hearted co operation, its members are being kept posted about the main lines of France's general policies. The advices of that body are seriously considered by the cabinet. In the last few days another organization has been set up headed by Gen. Gamelin, the Army’s chief of staff. This organiza tion will co-ordinate the activities of the three fighting services and those of the foreign office. * * * * In this country there is practically no co-operation between the fight ing services among themselves nor between them and the State Department. These are based mainly on personal contacts between the officers of the three departments. If they happen to be personally friendly to each other they will exchange a lot of information. In a routine matter the three departments keep each other informed perfunctorily. But it happens frequently that one department keeps from the other some Important piece of information—Just as newspaper men keep a big story to themselves to spring it out as a scoop when the time comes. At times when there is a crisis, like such caused by the sinking of the Panay some of the, important naval officers are called into consultation. But even then, there is a somewhat frigid relationship between the State Department diplomats and the Navy blue and gold. On paper, we have the United States Council of National Defense. It is composed of the Secretaries of War. Navy, Interior, Agriculture, Com merce and Labor. The organizers of that council forgot the Secretary of the Treasury, who, in time of war, is as important as the Secretary of the Navy. So has the Secretary of State been forgotten. But it does not really matter; this council never meets. * * # * At the present time the heads of the important national defense de partments rely mainly on the information received from their own agents, on the newspaper reports and on the little titbits of intelligence they may receive from some kind-hearted friend in some of the other depart ments. The result of this is that most of the time the right does not know what the left is doing. The British have set up a spe cial broadcasting service for the Arabs. But so far they have made little progress in counter-acting the Italian propaganda. The reason why the British station nas so little success compared with the Bart station is that the Arabs prefer to hear exaggerated news coated with a good deal of sensa tionalism in preference to the somewhat dull British broadcasts. The entertainment offered by the Italians is also more spicy and more to the ta'te of the Arabs than the British programs. ! Their function is to create continual j debate, to provide a forum, to give opportunity for the expression of and by this means to formulate the Ideas by which we live. (Copyright. 1P3S.> -• 19 Colors in Exhibition. Nineteen different colors will be used to knit together the buildings of San Francisco's 1939 Golden Gate International Exposition: the palette will include such tones as beige fawn, parchment yellow, pale coral, rose taupe, deep apricot, mauve and ecru. By 1939 our recession red may be replaced by something approximating a boom blue, says the Commentator. UNION SPLIT VOTED Mailers’ Referendum Foil Shows 1,995 for Separating From I. T. U. INDIANAPOLIS. Jan. 26 UP).—A Canvassing Board report disclosed today that mailers voted 1.995 to 1.762 in a recent national referen dum in favor of separating from the International Typographical Union and forming an independent organi zation. An injunction suit filed by mailers who opposed separation is pending in Federal Court here. Wood ruff Randolph, I. T. U. secretary, said. Who’s Who Behind the News Outer Mongolia Has Fine, Modern Army, Dr. Ludwin Declares. By LEMUEL T. PARTON. IT JUST happened that, ax the news came In yesterday from Paotow that the Outer Mongolian Armv Vas starting some shadow-boxing with the Japanese, I was having a talk with Dr. Leonard Ludwin, who, unless I am misinformed, is the world's greatest authority on Outer Mongolia. He recently returned from a trip to the heart of that forbidden desert land, one of the few men who have ever made this round trip, and he brings back an amazing story of the magnificently equipped modem armv of the MongoLs, now poised for a thrust at the Japanese. It is a story which, i believe, never has been told, at least in this country. Dr. Ludwin. explorer, writer, lec turer and aviator, speaking 12 lan guages and holding degrees from Aus trian, French and Russian universities, has flown ortm vast sections of the planet, including the jungles of South America, mapping airplane routes and following his journalistic and scientific pursuits. He is, of Swedish-Austrian parentage, happened to be in Austria when the World War started, and fought with the Austrian armies. Army of 250.000 Men. "The Mongols have a highly trained and completely equipped army of 250, 000 men," said Dr. Ludwin. “with ad ditional reserves, now in training, which will bring it. to 500.000, as formidable a fighting force as any in the world. This forgotten country, which Is about two-thirds the size of the United States, is a tremendous, and. I think, possibly determining factor in the vast and complicated power complex of Asia This army is beginning to move—against Japan. "Outer Mongolia is under Chinese suzerainty and a Russian protectorate. Under international law, it may enter the war on the side of China, but it has been readied for war by Russia, primarily against Japan. "The army is equipped with ma chine guns, flame-throwers, tanks, automobiles, airplanes and all the best of completely modern equipment. For years, the Russians have been training them in mechanized warfare. To my astonishment. I found that these no mads arc fairly good fivers and can use machine equipment, although I suppose that in actual warfare, most of the pilots will be Russians. Best Cavalry in World. "They are the best cavalrvmen in the world, taught to ride from the day when they were two years old. Cav. alrv will be Important, in warfare spreading over wide desert areas. It is 12n in the shade tn the summer in Outer Mongolia and 45 below zero in the winter. In either temperature they are always in good fighting and i riding trim and I predict plenty of i trouble for the Japanese or any other army which tries to engage them on their own ground. They have many \ thousands of huge, woolly Baetrian camels, whi<"n car, travel vast dis tances. packing 600 pounds, on no more than a few nibbles of desert i moss.” —Sloane’s ■711 Twelfth Street' More Of The Big Floor-Covering Specials One is a group of genuine Persian Sarouk Orientals. 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