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Evening star. [volume] (Washington, D.C.) 1854-1972, March 23, 1938, Image 1

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WEATHER.
<V. 8 Weather Bureau Forecatt.l
8howers tonight, probably clearing to
morrow: lowest tonight about 60; colder
tomorrow and at night; moderate south
and southwest winds. Temperatures to
day—Highest, 79, at 1 p.m.; lowest, 60, at
6 a.m.; 78 at 3 p.m. Full report on page A-2.
Closing New York Markets, Page 18
The only evening paper
in* Washington with the
Associated Press News
and Wirephoto Services.
Means Associated Press.
86th YEAR, No. 34,294.
WASHINGTON, D. C., WEDNESDAY, MARCH 23, 1938-FOBTY PAGES. ***
THREE CENTS.
, PRESIDENT US
' LEGAL RIGHT FOR
MORGAN REMOVAL
Says Congress Clearly Has
> Power to Hold Quiz of
u. T. V. A. Issue.
OPINION BY JACKSON
OFFERED IN MESSAGE
r Ouster of Chairman Necessary,
Roosevelt Declares—Senate
Probe Move Lost. ,
‘One Doesn’t Ignore
The President,’ Says
Morgan of Ouster
Ey the Associated Press.
CHICAGO, March 23.—Dr.
Arthur E. Morgan, ousted chair
man of the T. V. A., said at a
. press conference today “ I do not
believe it suitable for me to add
anything now to what I have
said” regarding his case.
"I do not choose to run away,”
he told reporters but declined to
make any definite statement on
his next move.
Dr. Morgan came nere by train
this morning.
Asked if he considered himsell
ousted by the President’s action,
Dr. Morgan replied, “One doesn’t
usually ignore the President ”
He said “legal counsel” could
answer better than he whether
his position with the Authority
was vacant.
BACKGROUND—
Public developmeint of Tennessee
*'■' Valley watershed with generation of
low-cost power as a principal ob
jective was one of earliest social
experiments undertaken during
Roosevelt administration. Directing
giant project has been threc-mar.
• board, split for many weeks past in
bitter personal feud., with President
end Congress each trying to ascer
tain facts and effect settlement.
_
By JOHN H. CLINE.
Asserting it is “clearly the light" of
Congress to conduct a “fair" investi- )
gation of the Tennessee Valley Au-!
thority, President Roosevelt formally
notified the legislators today that he
had removed T. V. A. Chairman
Arthur E. Morgan and submitted an
* opinion by Acting Attorney General
Robert H. Jackson that the President
had legal authority for his action.
Before the message had been de
livered, Senator Barkley of Kentucky,
majority leader, had blocked a Senate
effort to authorize an investigation of
T. V. A.
Senator Bridges. Republican, of New j
Hampshire sought unanimous consent 1
to call up a resolution for a joint !
Senate-House investigation of the
sgeticy, but Senator Barkley objected.
He said there was no question regard- (
Ing the desirability of an investigation,
but that it should not be made by
* "partial" legislators.
Assailing the removal of Chairman
Morgan as "dictatorial” and "arbi
trary,- Senator Bridges said:
“It- must be remembered that Di
rectors David E. Lilienthal and Har
eourt Morgan now are in unquestioned
possession of all records of T. V. A.
Unless there is an immediate investi
* gation of the things to which Dr.
Morgan has referred, these may be
eovered up or whitewashed.”
President Defends Action.
Chairman Morgan was removed yes
terday after he had finally rejected a
demand that he submit to a "fact*
finding” investigation by the President.
Vice Chairman Harcourt Morgan was
named to succeed him.
In his brief message, the President
defended his action, declaring "efficient
administrative management of gov
ernment would be destroyed in short
order” if members of the executive
« branch be permitted to follow Dr.
Morgan's course of conduct.
"It is clearly the right of the Con
gress," the President stated in his
message, “to undertake at any time
any fair inquiry into the administra
tion of the T. V. A. or its policies which
the Congress may deem in the public
Interest. But I cannot in the mean
while abdicate my constitutional duty
to take care that the laws be faithfully
executed. * * *
"Arthur E. Morgan has repeated the
assertion that-he will answer questions
only to a committee of the Congress.
Obviously, there can be no objection
• to hearings before such a committee.
But the Congress will, I am sure, real
ize that if any member of the executive
^ branch of the Government* of high
degree or low degree, is given the right
by precedent to refuse to substantiate
general charges against other members
of the executive branch of the Govern
ment and to Insist on disclosing specl
, fleations only to a committee of the
Congress, efficient administrative man
agement of government would be de
atroyed in short order.”
Cites Alleged Wrongful Acts. ‘
The President also set forth the al
leged wrongful acts of which he ad- ]
Judged Chairman Morgan "guilty.”
included were the making of “grave
and libelous” charges against his co
directors and refusal to sustain them,
"obstructing” the work of T. V. A. and
• refusing to give facts to the President
when asked for them.
The opinion in support of the legality
of the removal was prepared by Mr.
Jackson in the absence of Attorney
General Cummings. It was written
March 18.
“I think I may state it is an unas
sailable proposition that if any of these
charges is established, the power of
removal ought to exist,” Mr. Jackson
wrote. “Furthermore, the T. V. A.
being an executive agency, performing
executive functions, and (therefore in
, the executive branch of the Govern
ment, the ppwer of removal ought to
be In the Prissident.”
He then cited the so-called “Myers
(See T. V. A.,-Page A-37)
V
I
Wages in South ‘Far Too Low,’
Roosevelt Tells Gainesville
Assails 6Feudal System/ Declaring
Prosperity Is Being Blocked
by Selfishness.
B> tl.e Associated Press.
GAINESVILLE, Ga„ March 23
President Roosevelt declared today
that national progress and prosperity
"are being held back chiefly because of
selfishness on the part of a few."
In a prepared outdoor address re
plete with fresh attacks on "special
privilege” and the "feudal system,”
which he ranked with Fascism, the
Chief Executive also bluntly told Geor
gia and the lower South that their
wages were "far too low.”
He called for "co-operation all along
the line" to rebuild the Nation on
sounder lines.
“We propose to go forward and not
back,” he said.
Stopping here en route from Wash
ington to Warm Springs, Ga„ for a 10
day rest, the President dedicated
Roosevelt Square, center of Gaines
ville’s resurrection, with Federal aid
from a disastrous tornado two years
ago. The President arrived aboard his
special train at 11 a.m.
Gainesville’s co-operation in the re
building, he said, presented a prin
ciple which if applied to national
problems would "amply solve our na
tional needs.”
Mr. Roosevelt then declared pros
perity was being retarded by a "sel
fish” minority who believe in a "dif
ferent theory of government,” give lit
tle thought to the "one-third ill-fed,
ill-clad and ill-housed,” and regard
balancing the budget as more Impor
tant than appropriating for relief.
“But this Nation,” he said in taking
his audience back to the Harding.
Coolidge and Hoover regimes, "will
never permanently get on the road to
recovery if we leave the methods and
the processes of recovery to those who
owned the Government of the United
States from 1921 to 1933.”
Hitting at his critics in Congress,
he said the "selfish” few had the
“same type of mind” as those who
"vote against legislation to help social
and economic conditions, proclaim
ing loudly that they are for the ob
jectives, but do not like the methods,
and then fail utterly to offer a better
method of their own.”
Then turning to conditions in “this
my other State,” the President spoke
in vigorous language against low
wages and low buying power. Many
inlthe audience believed he was refer
(Sec ROOSEVELT,”Page A-5 )
AlY BILL SETS
18-YEAR RECORD
$447,808,555 Appropriation
Is Urged by House
Committee.
Ey the Associated Press.
The House Appropriations Commit
tee today asked Congress to provide
more money for the Army than it
has in 18 years.
The sum. $447,808,555, for the fiscal
year beginning July 1, was $32,545,
000 more than the current year and
only $30,754,000 short of the figure for
1920-1, when the army of occupation
still was in Germany.
The committee’s recommendation
was below the Budget Bureau's esti
mates, but included almost all of
the money President Roosevelt asked
in January for anti-aircraft guns,
manufacture of machines to produce
armaments and for replenishment of
ammunition supplies.
Approximately one-fourth of the
total appropriation, $124,000,000, would
go to the Air Corps. The committee
said that among other tmhfs this fund
would provide 476 new planes, bring
ing the Army’s total to 3,302.
Bureau Overruled.
The committee overruled the Budget
Bureau's recommendations in two
major instances. It increased the Na
tional Guard appropriation *1,355.737
to provide an expansion in enrollment
from 200.000 to 205,000 on April 1,
1939.
The committee also recommended
that citizens' military training camp
appropriation remain at $2,275,000, al
though the Budget Bureau had pro
posed cutting it to $1,000,000. The
Army will train 35,000 youths with the
money.
Among the President's recommenda
tions which the committee followed
were appropriation of $6,800,000 for
anti-aircraft material; $5,000,000 for
manufacture of guages, dies and other
aids in making Army material, and
$2,000,000 to make up deficiencies in
ammunition.
The committee did not approve Mr.
Roosevelt’s suggestion that $450,000
be provided for creation of a new en
listed reserve force, on the ground that
legislation creating the reserve had
not been enacted.
Major Items in Bill.
Major items in the big bill are: Pay
of the Army, $165,316,700; Quarter
master’s Corps (food, clothing, trans
portation, etc.), $86,485,402; Air Corps,
proper, $70,799,532, plus authorization
to contract for $19,126,894 worth of
new equipment; Ordnance Depart
ment, $33,620,074; seacoast defenses,
(See APPROPRIATIONS, Page A-4.)
i Controller, ‘Too Diligent,’
Displeased ‘Those in High
Office,’ He Says.
' BACKGROUND—
Regrouping of Government de
partments and bureaus is one of the
most cherished reform measures
of President Roosevelt and White
House advisers. Aware of strong
i opposition, administration leaders
withheld bill from debate during
special session last fall, but arc de
1 termined to pass it in present ses
, sion Early Senate tests on efforts
to amend bill indicate sufficient ad
| ministration power.
By J. A. O'LEARY.
The Controller General's office in
j curred the displeasure of “those in
high office” by refusing to approve
certain Federal expenditures in recent
years. Senator Byrd. Democrat, of
Virginia, asserted in the Senate today
in a final plea against abolishing that
office under the pending reorganiza
tion bill.
Leading the opposition bloc, the Vir
ginian is fighting to strike out the
provision that would split the func
tions of the General Accounting Of
fice by lodging control over current
accounting in the Budget Bureau, with
a new auditor general to make post
audits.
In view of the failure of the opposi
tion to change other essential features
of the bill, however, the odds favor
the administration to sustain the pro
posed new accounting system.
Following a decision on the General
Accounting Office, possibly late today,
the only remaining major test will be
the motion to recommit the entire bill.
“Too Diligent”
Senator Byrd declared that, stripped
of all its technical phases, the pending
issue is “whether Congress should have
an officer, responsible to Congress, to
prevent unauthorized or illegal ex
penditures, or transfer the function to
the director of the budget, an officer
subject to removal by the President.”
He said no one has charged that the
controller general failed to carry out
the purpose for which the office was
created, namely, to prevent unauthor
ized expenditures. The main charge,
he said, is that he has been too
diligent, “and has incurred the dis
pleasure of those in high office.” As a
result, the Senator added, 19 New Deal
agencies created in recent years have
been exempt from supervision of the
General Accounting Office.
| Some of the decisions which Senator
I (See REORGANIZATION, Page~A^4T)
Summary of Today's Star
Page Page.
Amusements B-20 Radio . B-8
Comics B-18-19 Short Story A-14
Editorials . A-10 Society . B-3
Finance . A-17 Sports .. B-10-12
Lost & Pound B-14 Woman’s Pg. B-13
Obituary . A-12
FOREIGN.
Rumely defies Senate lobby group
after new subpoena. Page A-l
Moderate bombings. Pope appeals to
Franco. Page A-l
Mexican workers seek special taxes to
pay oil firms. Page A-2
Life of Blum’s cabinet hinges upon
Senate action. Page A-4
500,000 Chinese peasant Reds harass
Japanese. * Page A-4
Panic in Austria since union is denied
by Nazis. • Page A-5
Henlein rallies non-Nazi Germans In
Czechoslovakia. Page A-5
NATIONAL.
House group asks $447,808,555. for
Army, 18-year record. Page A-l
Roosevelt hits low wages in South in
Gainesville speech. Page A-l
President notifies Congress of Morgan
removal; probe due. Page A-l
Japanese and all non-navy craft barred
from U. S. harbor. Page A-2
Elimination of duplicated taxes in
dorsed. •- Page A-2
Probe ordered in stabbing of ' Scotts
boro case” prisoner. Page A-2
Labor aid for rearmament sought by
Chamberlain. Page Ar4
WASHINGTON AND VICINITY.
Grand jury refuses indictment in Keys
police shooting. Page A-l
Lesh urges “real local self-govern
ment” for D. C. page A-$
Fireworks display high light ofCherry
blossom program. Page B-l
House group favors three more justices
for District. Page B-l
*
Income and business privilege taxes
hit by Colladay. Page B-l
District supply bill sept back to
conference. Page B-l
Odom indicted for second-degree mur
der in Metcalfe stabbing l»age B-l
Wage board hears conflicting claims
over room rent. Page B-l
EDITORIAL AND COMMENT.
Editorials Page A-10
This and That. Page A-10
Washington Observations. Page A-10
Answers to Questions. Page A-10
The Capital Parade. PageA-ll
David Lawrence. PageA-ll
Dorothy Thompson. PageA-ll
Constantine Brown. PageA-ll
Lemuel Parton. PageA-ll
FINANCIAL.
Secondary bonds slump (table).
Page A-17
Steel rates higher. Page A-17
D. C. insurance average leads.
race a-jlb
Stocks down sharply (table). Page A-I8
Curb shares lower (table.) Pare A-19
Power output gains. Page A-19
SPORTS.
Griffs’ need of righthand punch is
being exemplified. Page B-lg
Yanks’ strength, makes Job of pilot
an easy one. PageB-10
Cubs. Cards, Bucs menace Giants in
National League. Page B-11
Alntree turf classic Friday is rich in
romance. Page B-li
A1 Schacht discloses secrets of success
as clown. Page B-ls
MISCELLANY.
Shipping News. Page A-g
Vital Statistics. Page A-g
City News in Brief. PageA-14
Bedtime Story. Page B-7
Nature’s Children. Page B-9
Letter-Out. Page B-lg
Cross-word Puszle. Page B-lg
Contract Bridge. PageB-19
Service Orders. Page B-t#
I
VATICAN APPEALS
TWICE TO FRANCO
TO EASE BOMBING
Plea Is Reiterated After
Anglo-French Protest
on Barcelona.
MSGR. READY HITS HULL,
‘INCONSISTENT’ ON SPAIN
Toll of Attack Upon Loyalist
Capital Rises to 872 Dead.
Rebels Shift Drive.
BACKGROUND—
Franco's spring offensive to reach
Mediterranean seacoast of Spain
has carried his legions within 50
miles of objective, threatening to
sever communications between
Valencia and Barcelona, temporary
Loyalist capital. Barcelona ripped
with insurgent bombs last week
during 48 hours of raids which took
lives of more than 800 persons.
By the Associated Press.
VATICAN CITY, March 23.—Pope '
Pius has made two appeals to in
i surgent Generalissimo Francisco!
' Franco to use moderation in the air
bombing of the civilian population in
the Spanish civil war, Osservatore
Romano, the Vatican newspaper, dis
closed today.
Great Britain and France had asked
| the Pope to join in appeals to Franco
after last week's terrible bombings of
Barcelona, the governmental capital,
in which at least 872 persons were
killed. Monday, American Secretary
of State Hull expressed a "sense of
horror" at the Barcelona slaughter.
Appeal in February.
Osservatore Romano said the Pope
made “a warm appeal” to the Spanish
insurgent chieftain in February and
i received "a reassuring reply.”
| On March 21. after new bombard
| ments of Barcelona, the Pope ordered
Msgr. Antoni Utti, the Holy See's rep- i
resentative in Salamanca, to take a
new appeal to the generalissimo.
L'Osservatore Romano said, "The
Holy See has always done whatever ;
was possible to succor war victims and ■
call combatants to a sense of mod
eration.”
Previously the Vatican had denied
reports that Franco nad been ap
proached in line with the French and
British appeals, which were directed
to the Pope and to both sides In the
Spanish war in hope of obtaining an
agreement for abandonment of air at
tacks on civilian centers.
A Vatican news service said it had
no knowledge of the Vatican having
made any appeal to the Barcelona
government in connection with bomb
ings of the civilian population. It added
that this presumably was because the
Vatican had no diplomatic representa
tion at Barcelona.
Msgr. Ready Assails Hull.
By the Associated Press.
Msgr. Michael J. Ready, general
secretary of the Catholic Welfare
Conference, said last night Secretary
of State Hull was not consistent in
his treatment of events in Spain.
The clergyman declared Secretary
Hull was silent when priests were
murdered, but expressed horror at the
bombing of Barcelona.
Msgr. Ready’s statement follows:
“Secretary of State Hull's exression
of abhorrence at the hundreds of
deaths in Barcelona due to air bom
bardment of that city reiterates this
Government's honorable position in
respect to a humane prosecution of
war. Mr. Hull's reputation as a
distinguished American statesman
bears out the sincerity of his ex
pressed grief. However, it cannot
fail to emphasize in many minds Mr.
Hull's complete silence when, also j
in Spain, not hundreds, but many
thousands of priests and religious were
wantonly murdered. These killings
had back of them not even the at
tempted justification of military ex
igencies; they were perpetrated on the
simple basis of the victims being re
ligious. Nor did Mr. Hull feel called
upon to express horror, when, nearer
to our own country, in Mexico, civilians,
as well as religious, were killed in the
course of a vicious religious persecu
tion which still persists.
“Gen. Franco in Spain asserts that
Barcelona held many military ob
jectives, such as munitions factories,
and that this justified the aerial
bombings. No one can be anything
but deeply regretful and shocked over
the fart that civilians in Barcelona
have suffered death from the air,
under whatever circumstances. One
would, however, expect from the lead
ing cabinet officer of our Government
somewhat more consistency in the
matter of such expressions as Mr. Hijll
has just issued.”
Arms Withdrawal Demanded.
PARIS, March 23 (A5).—French offi
cial sources said today France had told
Britain she was convinced that with
drawal of foreign armaments from the
Spanish civil war must be linked with
the question of withdrawal of the men
when this issue is discussed in the cur
rent Anglo-Italian talks.
Premier Blum, it was said, made this
clear to Prime Minister Chamberlain
through diplomatic channels. Officials
here estimated that 400 modern war
planes manned and commanded by
Italian and German officers were con
centrated in insurgent Spain. The per
manent character of strong insurgent
air bases at Burgos, Zaragoza and
other cities has worried the French air
ministry.
Insurgents Shift Offensive.
HENDAYE, France, March 23 (JP).—
Insurgent guns thundered east and
northwest of Huesca today as Gener
alissimo Francisco Franco shifted his
drive northward to liberate that pro
vincial capital in Eastern Spain from
its government “pocket”
Simultaneously, the southern Ara
gon army dug in along the Alcaniz
front with its guns raking the main
Valencia - Morelia - Gandesa highway
from advantageous positions.
i
INTERNATIONAL
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_ CRITIQUE OF TECHNIQUE!
Nj
Second Subpoena Fails to
Produce Records for
Lobby Inquiry.
By the Associated Press.
Dr. Edward A. Rumely refused again
today on service of a new subpoena to
produce records of the National Com
mittee to Uphold Constitutional Gov
ernment for scrutiny by the Senate
Lobby Committee.
Committee representatives served a !
new subpoena on Dr. Rumely, execu- j
tive secretary of the committee, calling ’
for letters written by Frank E. Gan
nett. newspaper publisher and spon- ;
sor of the organization, to Dr. Rumely
and Glen Hancock, assistant secretary.
The subpoena called for letters writ
ten on specific dates in May and June,
1937, which might "influence, encour
age, promote or retard legislation."
This was during the Senate fight over
President Roosevelt’s plan to reor
ganize the Supreme Court.
The subpoena also asked for records
on the committee’s efforts to "control,
directly or indirectly, the sources or
mediums of information.”
Answers to Be Same.
"You refuse to produce those letters
in obedience to this subpoena?’’ asked
Chairman Minton.
Absolutely," Dr. Rumely replied.
He said every reply to requests for
records in what he termed a "fishing
expedition” would be the same.
Dr. Rumely, called by the Senate
committee last week for an investiga
tion of the committees activities in
opposition to the reorganization bill
pending in the Senate, refused then
to produce records demanded by the
committee's first subpoena.
The witness told the Lobby Com
mittee today that he would not. produce
a list of persons who had contributed
$100, or more, to the Gannett organiza
tion, because no such list existed.
Says Authority Exceeded.
Elisha Hanson, attorney for Dr.
Rumely, told the committee he had
advised his client not to comply with
the new subpoena because he charged
the information on which it was based
was obtained illegally by H. A. Blom
quist, committee investigator.
He said Mr. Blomquist had learned
the dates of the letters when he ex
amined the organization's files in New
York under authority of the first
subpoena. Mr. Hanson characterized
the original subpoena a "general
search warrant,” in which he said the
committee had exceeded it's authority.
When the committee adjourned
Chairman Minton issued a statement
in which he charged that "Frknk F.
Gannett’s lobbying organization” was
attempting “to thwart the Senate in
quiry by the old dodge of delay through
legal process which he and his lawyers
well know would collapse in the end.”
Senator Minton contended the Com
mittee to Uphold Constitutional Gov
ernment had mailed out more than
16,000,000 pieces of literature and has
spent "hundreds of thousands of dol
lars” in attempting to influence legis
lation.
“The Senate committee has an ob
ligation to the American people, by
direction of the Senate, to ascertain
whether, or not. such organization’s
sponsors have any motive other than
appears on the surface,” Senator
Minton said.
LITHUANIAN PREMIER
CONTINUES ON LEAVE
Likelihood of Cabinet Crisis Soon
Discounted as Tubelis Stays
in Switzerland.
By the Associated Press.
KAUNAS, Lithuania, March 23.—
The leave of absence of Premier Juozas
Tubelis. who Is 111 in Switzerland, was
prolonged for a month today, indicat
ing a cabinet change was not immi
nent in the wake of the Polish crisis.
At the same time it was learned Col.
Kazsls Skirpa, Lithuania’s delegate to
the League of Nations, would be named
Minister to Warsaw.
Ship Rescuers Dispatched.
TROMSOE, Norway, March 23 (IP).—
A Norwegian government fishery pro
tection vessel was dispatched today to
the rescue of the sealing vessel Isf jell,
with 21 men aboard, disabled In pack
Ice between Spitsbergen and Green
land. The Isfjell lost her propeller
Monday and radioed that a hurricane
and heavy swell made her position
critical.
England Holds
Italy 6De Facto9
Ethiopia Ruler
By the Associated Press.
LONDON, March 23.—Haile Selassie,
the exiled Emperor of Ethiopia, lost
another, battle today.
Chancery Court refused jurisdiction
in Selassie’s $50,000 suit against Cable
& Wireless, Ltd., and ordered him to
pay court costs.
The Negus contended the money
was due him under an agreement for
wireless service to London the day he
fled Addis Ababa in 1936.
The case revolved about whether
Selassie still'was the sovereign power
of Ethiopia. The foreign office, in re
sponse to the court's inquiries, said it
recognized the Italian government as
the "de facto government of virtually
the whole of Ethiopia.”
The cable company had contended
King Vittorio Emanuele of Italy is
now the Ethiopian sovereign and that
Selassie’s cause for action was vested
in the Italian government.
However, Mr. Justice Bennett point
ed out that Britain also continues to
recognize Selassie as Emperor "de
jure” and eaid Selassie’s remedy
should be through diplomatic instead
of legal channels.
STOCKS SELL OFF
$1 TO $5 OR MORE
U. S. Steel Hits New Two-Year
Low at $47—Break in Carrier
Issues Starts Drop.
By i he Associated Press.
NEW YORK. March 23.—Selling
which left the reporting machinery
several minutes behind transactions
drove stock market prices down $1 to
$5 or more for many active leaders in
early trading today, but prices recov
ered a little toward midday.
Brokers saw many of the bell
wethers of the list at or approaching
the cross-roads of the lows touched
in last fall's selling wave and feared
the psychological effect on holders if
a downturn should carry decisively
through those levels.
The general uneasiness was said to
have induced selling by some big in
vestors. which in turn had induced
many others to liquidate.
Rails, under the strain of falling
revenues and recent rate increases
which many termed “inadequate,” ap
peared to have started the decline,
which quickly spread to other divisions
of the market.
United States Steel made a new
two-year low before meeting support
around the $47 level, and others show
ing losses of as much as (2 or more
included Bethlehem Steel, Chrysler,
International Harvester, J. I. Case and
Johns-Manville. Westinghouse Elec
tric and Allied Chemical were off more
than $5 each near noon.
As midday approached selling slack
ened and the ticker tape was able to
catch up and relaxed selling pressure
permitted many of the earlier losses
to be reduced by $1 or so.
GRANT HOLDS LEAD
Goodwyn Trails in Primary for
House Seat in Alabama.
MONTGOMERY, Ala., March 23 Off”).
—George M. Grant, a 40-year-old
Troy bachelor, attorney and sports
man, held a 620-vote lead over R.
Tyler Goodwyn, Montgomery veteran
lawyer and legislator, m a special
congressional Democratic primary to
day as returns trickled in from rural
areas. The second district seat in the
House was vacated by Lister Hill, now
in the Senate as the successor of
Justice Hugo Black.
SLAYING DF KEYS
Report Automatically Clears
| Officer in Death of War
Veteran.
BACKGROUND—
The killing of Leroy Keys was
subject of two protracted coroner's
inquests, with jury failing to agree
\ in each instance, although second <
panel visited scene, and both heard
numerous witnesses. Presentation
to grand jury was ordered by United
States Attorney David A. Pine, task
requiring three days and 42 wit
's nesses.
The District grand Jury, which con
ducted an exhaustive investigation
last week into the slaying March 8
of Leroy Keys. 38, shell-shocked col
ored World War veteran, officially
ignored the case today.
The jury's report automatically
clears Policeman John W. Nally of
a homicide charge placed against him
after two coroner's juries had been
unable to agree as to whether he
was criminally responsible for the
j shooting. His $1,500 bail was auto- '
j matically discharged.
Unless new evidence comes to light.
, official investigation of the killing
I probably is at an end, since the grand
! jury’s action represents the final step
j in the orderly legal procedure.
Keys was slain in his home at 2470
Ontario road N.W., where he had
locked himself in, defied capture and
then set the place afire, an act which i
police believed endangered the lives!
of other persons in the house. Sev- :
eral shots were fired at him, and bal
listic tests indicated, it was said, that
a bullet frfom Officer Nally's gun end
ed his life.
Mr. Nally is the son of Detective
Sergt. Thomas Nally, veteran mem
ber of the Metropolitan Police force.
He is a former Catholic University
and Eastern High School athlete ana
holds a second lieutenant's commis
sion in the Army Reserve Corps.
A number of civic and veterans’ or
ganizations criticized the shooting, ex
pressing the belief less drastic meas
ures, such as tear gas, could have
been employed.

THREE DIE AS PLANE
FALLS AND IGNITES
Pilot, Unidentified Woman and
Son of Foreman of Auto
Plant Killed.
By the Associated Press.
BENTON HARBOR, Mich., March
23.—Two South Bend. Ind., men and
an unidentified young woman were
killed shortly before midnight Tues
day when their four-seat plane crashed
into a swamp and burst into flames 2
miles north of Benton Harbor.
The men were Fred Wharton. 25. a
pilot with separate years' experience,
and George V. Hepler, Jr.. 19, whose
father is general foreman of the
Studebaker Corp. plant and active in
South Bend public affairs including
promotion of aviation.
The plane cracked up shortly after
it left the Benton Harbor Airport on
a return trip to South Bend.
As the pla^ie fell in a swamp depu
ties and volunteers went to the scene
to carry out the bodies.
The two men were badly burned but
the woman’s body was thrown clear
of the flaming wreckage.
Part of Old C. and O. Canal
May Be Bought for U. S. Park
Confidential negotiations are under
way between the Federal Government
and the owners of the Chesapeake &
Ohio Canal, it was learned today, with
a view to purchasing part of the prop*
crty for park and recreational pur
poses. Government appraisers are at
work estimating its value.
The plans of the National Capital
Park and Planning Commission have
considered the possible use of the old
canal, which runs from Cumberland,
Md„ to the mouth at Rock Creek here,
as part at a scenic development and
adjunct to the Washington parks sys
tem. One plan proposes that a high
way be constructed over the canal right
of way. Another program would prs
4
serve the scenic aspects of the historic
waterway for its historical value. The
Government officials see in the old
canal potentialities for canoeing in
still water; picnic groves and other
attractions.
Ownership of a portion df the canal
in the vicinity of K street and the
Rock Creek and Potomac Parkway has
been in dispute in recent years, the
Federal Government claiming part of
it for the parkway. A portion of the
canal is now entering within the Rock
Creek and Potomac Parkway, near
where the creek flows into the Po
tomac River.
At present the canal company fur
nishes water power for the operation
of some paper mills in Georgetown.
i
HIGH OFFICIALS
-EXEMPT IN 0. C.
INCOME FAX HAN
President, Cabinet, Jurists
and Congress Members
Are on List.
SUBCOMMITTEE BACKS
LEVY FOR THIS YEAR
Quarterly Installments, Payable
Starting Next March 15,
Are Provided.
By JAMES E. CHINN.
The President, cabinet officers, mem*
bers of the Federal Judiciary and mem
bers of Congress and their secretaries
who are not residents, will be exempt
from payment of the proposed local
income tax, the Fiscal Affairs Sub
committee of the House District Com
mittee definitely decided today as it
applied finishing touches to the 1939
revenue bill.
The subcommittee also decided to
apply the tax to incomes for the cur
rent calendar year and make it pay
able between March 15 and May 15,
1939. Thereafter, the tax can be paid
in quarterly installments, like the Fed
eral income levy.
The original revenue bill wduld
have made the tax retroactive by ap
plying it to 1937 incomes.
The change in the application of
the tax from the 1937 to 1938 incomes
was made because of a belief that a
retroactive levy might not be held
constitutional. Under the new plan,
it was pointed out, the tax will not
be retroactive, and the municipal gov
ernment at the same time will get the
revenue in the coming fiscal year in
which it is needed to balance the 1939
budget.
5 Million More Revenue Seen.
The income tax will apply both to
individuals and corporations and is
estimated to raise about $5,000,000 in
additional revenue. The net return,
however, is estimated at about $2,000,
000 because a credit is to be allowed
for Federal income tax payments as
well as local intangible tax payments.
Before the subcommittee met, Ed
ward P. Colladay. president of the
Washington oBard of Trade, told
Chairman Palmisano of the House Dis
trict Committee that a *1.70 real estate
tax rate, coupled with the proposed
$l-a-barrel local levy on beer and the
50-cent Increase in the tax on hard
liquor, will raise sufficient revenue to
cover the now anticipated $3,700,000
budget deficiency in the coming fiscal
year. The real estate tax rate is
now $1.75.
If this tax program is followed,
Mr. Colladay said, it will be unneces
sary to add either an income tax or
a modified business privilege tax.
May Wait Until April 11.
Chairman Nichols of the subcom
mittee had planned to have the bill
ready for consideration of the full
committee at its regular meeting to
day, so a favorable report would place
it on the House calendar in time for
"District day" Monday. Recent de
lays. however, now indicate the meas
ure will not be called up in the House
until April 11.
In his letter to Chairman Palmisano
Mr. Colladay said:
me ooara oi iTaae. logemer witn
many other organizations, opposed the
continuance of the present business
privilege tax. In lieu thereof the
board urged a retail sales tax as be
ing the most effective means of sup
plementing the many other taxes
which we have as permanent parts
of the District of Columbia tax sys
tem. We thought it was necessary
to make a certainty of raising a defi
nite amount of money and that the
sales tax would do that better than
any other form of tax.
"We are now informed that your
committee has definitely decided
against the retail sales tax and also
not to renew or extend the business
privilege tax, at least in its present
form. We are also informed that
your committee is giving serious con
sideration to reporting to the House
of Representatives a general Income
tax with rates graduated from 1 to
10 per cent with certain credits.
Opposed to Income Tax.
“As you have already been informed
at the hearings, this organization is
unqualifiedly opposed to a general in
come tax to be added to other taxes
now in our permanent law.
“In view of the foregoing, we re
spectfully suggest that your commit
tee give consideration to a modifica
tion of the business privilege tax to
raise any revenue needed to meet the
requirements of the District of Co
lumbia appropriation bill for the fiscal
year ending June 30, 1939. The busi
ness privilege tax under various names
has been in use in several jurisdic
tions in recent years, and we believe
it is possible to modify the present
business privilege tax so that it will
raise any needed revenue and yet have
removed from it those inequalities and
injustices which caused the general
demand for its elimination. We will
be very glad to co-operate with your
committee in solving this problem if
you are willing to take it up.
“However, the report of the con
ferees on the appropriation bill indi
cates a deficit of only 93,700,000. A
rate of 91.70 on real estate with beer
tax and increased liquor tax added
thereto, we believe, win raise sufficient
revenue to cover this deficiency. If
these taxes should be approved by
your committee it will be unnecessary
to add either an income tax or a
modified business privilege tax.”
15TH INFANTRY BACK
Regiment Returns to U. S. After
35 Tears In China.
TACOMA, Wash., March 23 UP).—
The 15th United States Infantry,
which went to China during the Boxer
Rebellion, returned to the United
States today for the first time in 95
years. They will be based at Fort
Lewis.
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