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tU. S. Weather Bureau Forecast.) Showers tonight and tomorrow; warmer tonight, with lowest temperature about 60 degrees; moderate winds. Temperatures today—Highest, 62, at 2 p.m.; lowest 50. at 6:15 a.m.; 61 at 3 p.m. Full report on page A-2. Closing New York Markets, Page 16 The only evening paper in Washington with the Associated Press News and Wirephoto Services. Means Associated Press. 86th YEAR, No. 34,301. WASHINGTON, D. C., WEDNESDAY, MARCH 30, 1938—FORTY-TWO PAGES. Entered as second class matter T’TJ'OTT'ir /'ITT'VTPC! post otBce, Washington, D. C. InilXjJj lo. REORGANIZING BILL DEBATE BEGINS IN BOUSE TOMORROW Special Committee Reports Four Early Measures as Amendments. COCHRAN ASKS LIMIT OF SIX HOURS ON TALK Gifford and Taber Protest on Refusal to Hold Public Hearings Now. BACKGROUND— Legislation to change line-up of government departments and agen cies is one of Administration's favored reform measures. Despite bitter opposition, becoming in tensified in last few days, Senate leaders pushed bill through this week, but circumstances forcing its return to House once more jeop ardize its enactment. By WILL P. KENNEDY. The special House Reorganization Committee, by a strict party vote of 7-2, today reported* the four House bills on reorganization as an amend ment to the reorganization bill that passed the Senate and voted to a^t the House to start six-hour debate on the bill tomorrow. Chairman Cochran this afternoon introduced the new composite bill with each of the four previous House bills being a separate title. He also submitted the identical reports that were made on each of these bills last session. The committee will ask the House by unanimous consent to meet at 11 a.m. tomorrow, and to limit debate to six hours. Unanimous consent also will be asked to read the bill by title in order to save time. Chairman Cochran announced that the committee agreed that no debate on a legitimate amendment under the 5-minute rule should be shut off. The committee itself considered no amend ments. He said that he hopes to have debate finished tomorrow. Agreement is Reached. An agreement was reached, he said, that in the event the bill passes and goes to conference and the provision in the Senate bill to establish the Na tional Resources Board is included in the conference report, the House com mittee pledges itself to bring the bill back to the House for a separate vote on the National Resources Board pro vision, which was not Included in the original House bills. A demand for hearings was made by Representatives Taber of New York and Gifford of Massachusetts, the Republican members of the Reorgani zation Committee, After discussion the committee decided not to hold hearings. Mr. Cochran explained that hearings had been held for 15 days before the joint committee and the Senate held hearings for 14 days. He also emphasized that the repre sentative of the Civil Service Com mission had sat with the committee helping to perfect civil service reor ganization provisions. In this, he said, Mr. Tabor had offered several amend ments which had been accepted. Asks “Breathing Spell.” Representative Gifford, when asked If the minority had concurred in the committee action, replied, "The mi nority has to be satisfied.” I begged with all the power and earnestness I have for action to be delayed so that the public mind can be eased of its distress over this question and be assured that it is our intention to retain the Controller General,” he said. "The country is in an awful condi tion today. All financial writers are tying up reorganization with the financial situation in the minds of the country. We should have a breathing spell,” Representative Gif ford declared. Mr. Gifford also protested that “the House committee never had a single day of public open hearings—every thing was done in secret. Besides, the state of the public mind is nothing today as it was months ago. The people are aroused and deeply con cerned regarding reorganization. They ought to be heard.” Representative Taber, Republican, of New York yesterday made a final attempt to postpone floor debate by asking for public hearings. Admin istration lieutenants termed them un necessary. The failure of the Democrats to invite minority members into their conference yesterday prompted Re publican Leader Snell to complain wrathfully to the House about “a purely partisan matter.” He called it a "very unfortunate approach to such an important problem.” Telegraphic Protests Pour in. Chairman Cochran replied that it was customary for majority members of a committee to work out strategy for handlnig bills. Both supporters and foes of the administration’s broad program agreed the House struggle would be as intense as that in the.Senate. The thousands of telegraphic protests which Senators bad received were being duplicated in the other chamber. The Senate and House reorganiza tion programs differ most widely in their treatment of the General Ac counting Office. The Senate bill would place its functions in the Budget Bureau. The House bill would retain the office of controller general. Wheeler Answers President. The Associated Press reported that President Roosevelt, vacationing at Warm Springs, Ga., told reporters yesterday that Senate approval of the reorganization program “proves that the Senate cannot be purchased by organized telegrams based on direct misrepresentation.” Senator Wheeler, Democrat, of Mon tana, one of the bill’s leading foes, commented after learning of the Pres ident’s statement: "If there was any purchasing done, it wasn’t by telegrams. All the as surances that came on the bill, came from executive departments.” ^ Ah Pitts, Realty Man, Found Dead Where Boy Killed Self HARRY B. PITTS. witch was on, but the motor was not •unning and the gasoline tank was hree-quarters full. The garage door was closed, but the rear doors of Mr. Pitts’ automo jile were open. At Mr. Pitts’ office here, employes said he had worked there until about 5 o'clock last night and seemed in ;ood spirits and good health. Police -hief J. William Garrett and Sergt. Earl Brudine, who began an inves tigation immediately after the body was discovered, said no notes were found. An autopsy was being performed, aowever, by Dr. E. A. A. Dunn, who (See PITTS.’ Page~A-5J -- President of Company Dies of Fumes From Car. Montgomery County polioe this morning found the body of Harry B. Pitts, 48, of Chevy Chase. Md., a well known real estate operator, seated in his ear, parked in the same garage where only two months ago a 17-year old Woodrow Wilson High School ath lete had killed himself. Mr. Pitts, owner of the vacant house and garage in the rear of 4856 Chevy Chase boulevard, was dead of carbon monoxide poisoning. He had died in the same manner as Truman W. Cole, 17, ot 4620 Hunt avenue. Chevy Chase, whose body was discovered in the ga-4 rage on January 24 alter the boy had been missing for a week. Mr. Pitts, who was president of the Harry B. Pitts Real Estate Co., with offices at 1019 Fifteenth street N.W., had been missing since last night from his home, at 2 Blackthorn street, Chevy Chase. He had left his house to keep a business appointment with Clarence J. Poland of Aurora Hills, Va., and a salesman, Lagerson Floyd, 806 Maple avenue, Takoma Park, Md. It was Mr. Floyd who discovered the body of the Cole boy while preparing to show the house to a prospective ten ant in January. When he learned this morning that Mr. Pitts had not returned- home over night. Mr. Poland notified police and gave them a list of houses for which the Pitts firm was agent. After a brief search, Officers E. R. and Carroll Jones discovered Mr. Pitts’ body on the rear seat of his car. parked in the Chevy Chase boulevard garage. The ignition CANCER INJECTION IS FATAL TO SIX; Orlando (Fla.) Women Die of Tetanus—Inquiry Begun by U. S. By the Associated Press. ORLANDO. Fla., March 30.—Dr. H. A. Day, president of the Orange County Medical Association, said today six women have died here and four other persons have been stricken with tetanus during the last 24 hours fol lowing injections used in treatment of cancer. He said Orlando physicians feared a number of other persons might be stricken, since an undetermined num ber had been given the injections. The six women have died in Or lando hospitals since midnight. The^r and the four who are in a serious con dition were stricken with tetanus (lockjaw) yesterday. Dr. Day said that in every case death came much sooner than usual in tetanus cases. Hospitals said the dead are Mrs. Jack Sweetman, Mrs. L. J. Jackson, Mrs. W. R. Thompson and Mrs. Eliza beth Sunderburke. all of Orlando, and Mrs. W. C. Braswell of Holopaw. Fla., and Mrs. H. B. Homage of Cocoa. Fla. Dr. Day said every effort w>as being made to locate all persons who had received treatment for cancer. He de clared the serum used in the cases which had proved fatal came from the office of a physician here. Most of the injections, he said, were admin istered Saturday. Drug Held Contaminated. CHICAGO, March 30 (VP).—Dr. Mor ris Fishbein, spokesman for the Ameri can Medical Association, said today the compound used in cancer treat ment at Orlando, Fla., apparently had become "contaminated.” Dr. Fishbein said the drug, known as ensol, was manufactured in Kingston, Ont., Canada, and was introduced in September, 1935. At that time, Dr. Fishbein said, the medical association warned against its use as an unstand ardized product. He said the cases would be investi gated by the Federal Food and Drug Administration and the United States Public Health service. Investigators obtained samples of the drug for bac teriological examination. Dr. Fishbein said he did not expect deaths would be widespread since the product, because of its foreign manu facture, would have only limited dis tribution here. It is administered only by a physi cian, is not sold to the public across the counter, and its sponsors claimed no other uses for it than for cancer, Dr. Fishbein said. Cancer sufferers, Dr. Fishbein wrote in 1935, had been "stimulated to false hopes” by the product. U. S. Inquiry Ordered. The Federal Food and Drug Admin istration ordered an investigation to day into the deaths last night of six persons at Orlando, Fla., which officials said had beep attributed to a "cancer cure” drug. ' Dr. J. J. Durrett, chief of the drug division of the administration, said two investigators now located in Florida had been instructed to go to Orlando to make the investigation. They are M. O. Rentz and Lowrte M. Beacham. Dr. Durrett said the administra tion would seize all the drug that could be located in this country. It is manufactured, he said, by a drug concern at Kingston, Ontario, Canada. The Canadian Legation here, Dur rett said, had promised to co-operate in every way to obtain a list of sources to which the drug had been sent in this country. Dr. Durrett said he had been in formed the drug had not been placed on the market yet, but that samples had been distributed among physi cians for clinical trial. “Whether or not this is the case,” he said, “we will not know until we hear from Canadian health officials through the Canadian Legation.” Ship Voting Booth. MANILA, March 30 (/P).—A char tered German ship will carry German and Austrian residents of Manila be yond the 3-mile limit so they can vote in the April 10 plebiscite on Ger many’s annexation of Austria, the German consul general said today. FRANCO ADVANCES ON WIDE FRONTS Rebels Are Within 11 Miles of Lerida, With City’s Fall Nearing. BACKGROUND— Spanish civil war, which began in July of 1936, has been moving rapidly toward climax in last few tveeks. In early days of tear Gen. Franco's Fascist rebels advanced siciftly and then began seige of Madrid. Government Loyalists sur prised by defending city, and entire cause took new hope. But grad ually by skirmishes and many air raids Rebels gained. .Then several weeks ago Rebels wgan big of fensive on Barcelona, now gov ernment capital, in effort to end war. By the Associated Press. WITH THE INSURGENTS IN SPAIN, March 30.—One wing of In surgent Gen. Franco's eastern army renewed its smashing toward the Mediterranean from the Caspe and Alcaniz sector today while the other hammered Catlan resistance within 11 miles of Lerida, the “gateway” to Barcelona. Gen. Garcia Valino’s division of Italians and Navarrese stormed the Sierra de Caspe and moved in the di rection of Gandesa without resist ance. (Dispatches from Irun quoted insurgent officers as saying this divi sion was only 6 miles from Maella, which is 38 miles from the coast.) A few miles to the south, Gen. Miguel Aranda's army captured the town of Palanques Heights, near Zorita in Castellon Province. Forty miles north of this sector, in surgents fighting along the road to Barcelona, widened their spearheads before Lerida. 80 miles from the gov ernment capital. Occupy Important Posts. They occupied important positions southeast of Frasa, including Aytona and Seros in Catalonia Province. These towns southwest of Lerida are Segre River Valley electric power cen ters which supply much current for (See SPAIN, Page A74.7 ----> Belgian Strike Threatens. BRUSSELS, March 30 UP).—Coal workers threatened a general strike today, after announcement of a 5 per cent wage cut beginning April 3. Already 1,450 St. Vaast miners had laid down their tools. The cabinet was expected to seek a solution to night. SNELL BELABORS Resolution Held Effort to ‘Muddy Waters’ to Bar Intelligent Report. PRESIDENT’S QUIZ HELD STAR CHAMBER SESSION If Inquiry Is So Broad Nobody Will Ever Be Able to Get to Bottom, He Says. ' * BACKGROUND— Dr. Arthur E. Morgan, deposed chairman of Tennessee Valley Au thority, forced a sweeping Congres gessional investigation of that agency by refusing to produce facts in support of charges against co directors at hearings arranged by President. Although in some dis agreement as to proper scope of in vestigation, it is expected House and Senate will compose differences and authorize probe of all phases of T. V. A. By JOHN H. CLINE. House Minority Leader Snell to day assailed the Senate resolution for Rn investigation of the Tennessee Val ley Authority as an attempt to "muddy the waters" so no intelligent report can ever be made of the dissension within the power agency. Talcing the floor as the House be gan debate on an amended resolution called up by Chairman O’Connor of the Rules Committee, Mr. Snell de clared: “The fundamental issue involved in this controversy and the primary question for investigation is whether the directors of the T. V. A. have honestly, intelligently and efficiently spent the public money. “The Senate proposal to investigate propaganda disseminated by the pri vate utilities opposing T. V. A. and the recommendation that the committee investigate any financial loss to mu nicipalities or farm organizations caused by preventing their purchase of power from the T. V. A. are attempts to muddy the waters. “If we are going into such matters, the investigation will be so broad in its scope and so complex in form that no committee will ever be able to get to the bottom of the matter or submit an intelligent report to Congress and the people.” At one point, Mr. Snell was inter rupted by Representative Allen, Re publican, of Illinois, who said the ma jority of the people regard President Roosevelt's “fact-finding" investiga tion of T. V. A. dissension as a “star chamber proceeding" and evidence that the President was prejudiced against Dr. Arthur E. Morgan, who was removed as chairman of the T. V. A. by Mr. Roosevelt. Representative Al len said the demand for a congres sional investigation is imperative. Mr. Snell said Dr. Morgan had an enviable reputation as an engineer be fore he was named to the T. V. A., and pointed out that the President’ was unreserved in praising his character, ability and integrity when he selected Dr. Morgan to head the power agency. No Precedent. "In view of the President’s opinion of Dr. Morgan at that time,” Mr. Snell said, “it would seem abvious that the charges he has made against his co directors merit the serious attention of Congress and demand that we made a fu'l and complete investigation of them.” In calling up the amended joint res olution, Mr. O’Connor said there was no precedent for that form of investi gation and that the Rules Committee would have insisted upon subsitution (See t7v. A, Page A-57) 150 MOROS KILLED Philippine Soldiers Report Fifty Strongholds Destroyed. MANILA, March 30 UP).—Common wealth soldiers returning today from a four-month campaign in Lanao Province reported more than 150Moro outlaws were killed and 50 forts were destroyed. The 106 soldiers were sent to Lanao when the regular garrison reported it was unable to cope with a Moro out break. At present, officers said, the province is peaceful except for isolated clashes between patrols and outlaws who escaped into the jungles. Summary of Today's Star ^age. Page. Amusements C-4-5 Radio_C-5 Comics C-10-11 Short Story_.C-12 Editorials .. A-8 Society_B-3 Finance ... A-14 Sports_C-l-3 Lost & Found C-5 Women’s Pg. B-ll Obituary_A-10 FOREIGN. Cardenas, facing revolt by labor, calls Congress. • page A-l Rumanian cabinet of "old men” re signs. Page A-4 Chinese and Japanese mass war ma terials for "big push.” Page A-4 NATIONAL. Snell assails Senate resolution for T. V. A. probe. Page A-l House reorganization bill debate begins tomorrow. Page A-l Pendergast wins in Kansas City, but lead is cut. Page A-10 WASHINGTON AND VICINITY. Senators favor tax exemption in “death sentence” action. Page B-l Early grand jury action promised in Landis case. Page A-2 Highway Bridge improvement to result from Jefferson Memorial. Page A-2 D. C. supply bill goes to President with parking meter plan. Page A-3 Washington to vote April 29 on D. C. suffrage. Page A-5 Revised estimates of business privilege tax revenues too high. Page B-l Official "suggestions” complicate life in Greenbelt. Page B-l D. C. crime probe by special House group urged. Page B-l Nine indicted on lottery charges as result of raid. Page B-l House group votes to close Military road for airport. Page B-l EDITORIAL AND COMMENT. Editorials. Page A-8 This and That. Page A-8 Washington Observations. Page A-8 Answers to Questions. Page A-8 The Capital Parade. Page A-9 David Lawrence. Page A-9 Dorothy Thompson. Page A-9 Constantine Brown. Page A-9 Lemuel Parton. Page A-9 SPORTS. Failure of Chase, Krakauskas crimps Nationals’ plans. Page C-l Baseball injury jinx on job ahead of time this year. Page C-l Colorful Cards an “if” team, but a flag possibility. Page C-2 Terp tracksters would duplicate suc cess of nine. Page C-2 Thomas pins hopes on landing early against Louis. Page C-3 Prospect for Escobar title fight here brightens. Page C-3 MISCELLANY. Nature’s Children. Page B-5 Shipping News. Page A-6 Vital Statistics. PageA-12 City News in Brief. Page A-13 Service Orders. Page A-13 Bedtime Story. Page B-2 Letter-Out. Page C-10 Cross Word Puzzle. Page C-10 Contract Bridge. Page C-ll ka W&0& ' iflfOMtOCAU? " SAFETY FOR THE THRIFTY ! CARDENAS FACING REVOLT OF LABOR Calls Urgent Session of Congress After U. S. Sends Strong Protest. Hull Acknowledges Mexican Rights but Insists on Payments By the Associated Press. Secretary Hull formally ac knowledged Mexico's right to ex propriate American oil properties today but demanded adequate payment. "This Government has not un dertaken,” he said, "and does not undertake to question the right of the government of Mexico • • • to expropriate properties within its jurisdiction. “This Government has, however, on numerous occasions and in the most friendly manner pointed out that in accordance with every principle of international law, of comity between nations and of equity, the properties of its na tionals so expropriated are re quired to be paid for by compen sation representing fair, assured and effective value * * * BACKGROUND— Expropriation of foreign oil in dustry in which more than S400. 000.000 has been invested has cre ated grave economic situation in Mexico. Lacking foreign market for oil, business in other industries has been at standstill since March IS. Move' resulted when 17 companies refused to comply uHth orbital award, sharply increasing wages. Companies declared wage increases were confiscatory, since revenue did not make them possible. By the Associated Press. MEXICO CITY. March 30.—Presi dent Cardenas, summoning an "ur gent” session of Congress to help him, was confronted today with near-revolt by a segment of labor, and a vigorous Uhited States protest against expro priation of the $400,000,000 oil indus try. The American protest was presented to the foreign mmistry yesterday by Ambassador Josephus Daniels, and a high Mexican official Indicated it was an energetic note demanding explana tion how Mexico intended to pay for the 17 American and British oil prop erties. The indications of labor dissatisfac tion came from Carlos Flores, labor department inspector in Tampico and member of the powerful union there which controls 6,000 ex-employes ol the Aguila (Royal Dutch Shell) Co. The government “took advantage ol labor-capital conflict to create inter national political conflict” by the ex propriation, Flores charged. Denies Labor peace. Asserting he spoke for other mem bers of his union, Flores contradicted assertions by union headquarters in Mexico City that all was peaceful among the workers. The Tampico union ousted a capital-approved ad ministrative council, demanded wage increases and other benefits. “We are all discontented. We were far better off before,” Flores said. Tampico reports said every storage tank there was filled with oil, and there was no place to put crude or refined oil since the lack of foreign markets created by expropriation of the com panies March 17. Asphalt, packing, shipping, marine and other departments of all shipping termini were closed, and nearly 3,000 part-time workers were released. From Poza Rica came reports that workers there were not paid Saturday or Monday, although the oil labor syndicate asserted “payments were effected normally throughout the in dustry” last week end. A permanent commission of Con gress was to meet late today to set a date for the congressional session, probably for the second 10 days in April. Cardenas’ request for the session (See MEXICO, Page A-5.) BULLETIN HONOLULU, March 30 VP).— Five Navy flyers were missing to day and officials feared they were killed in the crash of a big patrol bombing plane at Waianae, on the Island of Oahu. * Weds in New York ELIZABETH VANDENBERG PFEIFFER, uuuyruer uj oenaLor vanaen berg of Michigan, who ivhs married yesterday in New York to Edward Pfeiffer of that city. News of the mar riage was revealed today by the Senator. (See Page B-3.) CLASS 1 RAILROADS’ DEFICIT IS $2,136,481 February Operating Loss Is First Since 1921—Made $38,792,779 Last Year. By the Associated Press. The Nation's class one railroads re ported today an operating deficit for February, the first since February, 1921. The Association of American Rail roads said a deficit of $2,136,481 was shown by the 137 class one railroads last month, compared with net oper ating income of $38,729,779 in Feb ruary, 1937. The association said 69 class one railroads failed to earn expenses and taxes in the first two months of 1938. Twenty-eight of these were in the Eastern district, 10 in the Southern district and 31 in the Western dis trict. Class one railroads are rail carriers with gross annual revenues of $1,000, 000 or more. For the first two months this year class 1 railroads had a net operating income of $4,783,395, which the asso ciation said was at the annual rate of return of 16-100 of 1 per cent on their property. In the first two months of 1937 their net operating income was $77,659,615, or 2.58 per cent on their property investment. In the first two months of 1930 their net railway operating income was $113,013,227, or 3.79 per cent on prop erty investment. Sacrifices Life. QUINCY, 111., March 30 (TP).—Gor don Holbert, 35, a Davenport (Iowa) crane operator, drowned in the Mississippi River here last night when he tried to rescue a fellow workman. School Filled With Pupils Is Hit—Many Taken to Hospitals. BULLETIN. COLUMBUS. Kans., March 30 (/Pi.—The tornado which tore through this town of 3.500 near noon today twisted apart a school and 30 other buildings and in jured an estimated 50 persons, many of them children. It was one of a series which dipped into Arkansas, Oklahoma. Missouri and Kansas. Three were reported killed in Boone County, Mo. A woman was killed at Republican, Ark. Bj the Associated Press. COLUMBUS, Kans., March 30 —A tornado struck the western side of this town of 3,500 shortly before noon to day, severely damaging a school build ing and injuring scores of persons. The West Side Highland School Building was filled with children who were preparing to leave for lunch when the storm struck. One survey indi cated as many as 40 houses were dam aged. Columbus is located in the extreme southeastern corner of Kansas, near both Missouri and Oklahoma. Emer gency calls to nearby Joplin, Mo., and Pittsburg, Kans., summoned cars of doctors and nurses. Hospitals Fill Up. Prom 30 to 35 beds in the city's two hospitals were rapidly filled with in jured. Only one telephone wire was operating out of Columbus and that was taken over by the officials and rescue workers as an emergency line. The tornado cut through an area of from eight to ten blocks. The roof of the West Side School col lapsed while brick and mortar poured through the second floor. Virtually all the windows of the community high school, in which were 750 pupils, were blown out, but it was believed none of the high school pu pils was injured. Classes Just Dismissed. The lower grades of the Highland School had been dismissed for noon before the tornado struck, and as some of these have their classrooms on the second floor, this may have saved many lives. The tornadic winds were accom panied by a heavy rain and hail stones as large as good sized mar bles. The storm raged with great severity for about 20 minutes. It swept the west and north sections of columbus, striking from the south west. Gandhi 111. CALCUTTA. March 30 <£>).—Doc tors announced today that Mohandas K. Gandhi had suffered a “fairly bad” breakdown in health after he attended a conference on village education and rural uplift at Berbhoi Orissa. Nevertheless the former mahatma was expected to resume discussions shortly with the Bengal government on release of political prisoners. ‘Singograni1 Is Latest Wrinkle In Modern Message Sending Djr U. AVAAIS tlUWAKil. One never knows what to expect over the radio when it is tuned in at random, but the telephone, up to a short time ago, seemed to be a little more specific. Now, however, that has changed. Picking up the receiver, one may hear some one crooning "Happy Birthday to You,” or some peculiar greeting or advice from an entirely unknown voice—and, what might be embarrassing, a girl’s voice. Don’t be worried. It’s the "singo gram,” the latest business-getting idea of the telegraph companies. Pick out any popular song and the singogram operator, whether In voice or out, sings it to your best friend over the tele phone. If she lives at Des Moines and Des Moines hasn't a good singing operator, she gets the message from Cedar Rapids. First of all, there appeared about the same time with both telegraph companies what is known as "kiddie grams.” These messages to the chil dren followed the Christmas, Easter, Thanksgiving Day, birthday, Mother’s. Day and Father’s Day greetings, which were sent by both companies at vastly reduced rates, regardless of what part of the country they were intended for. A number was used to signify the particular thought to be expressed. a But numan nature is iuu oi iun and practical jokers. The messages that are supposed to be for children sometimes reach adults. Imagine your surprise (and your wife’s) if you should receive No. 1381, “Here is a big X and a big round O, a kiss and a hug for one I love so! Happy birthday.” And Junior and Jane tucked in bed these two hours. Or No. 1394: “Brush your teeth, comb your hair, hurry to bed, say your prayer, and before you know it I will be there.” Then there's No. 9, under engage ments: “Never mind, old man; it could be worse and probably will be before long. Cheer up.” And No. 853, children’s birthday anniversaries: "If I were there you wouldn’t dare to turn your little back because, as you know, I am never slow to hand a birthday crack.” Another one. No. 871, “Little birdie whispered you were being good, little birdie said tweet-tweet. I just knew you would.” So if an operator calls you up to sing “Happy Birthday to You” and says the call is from Joe Zilch, don’t mind, unless the song is rendered too late at night. Probably these lines of communications have a limit there, too. CAPITAL GAINS TAX TO MPT mt SENTENCED TO DIE Senate Committee Moves to Protect Utility Security Owners. INVESTMENT TRUSTS BLANKETED INTO BILL Both Actions Are Taken With Approval of S. E. C. After Chairman Testifies. By JOHN C. HENRY. The Senate Finance Committee to day exempted from taxable income the capital gains or losses accruing from dissolution of utility holding companies under the so-called death sentence. The action would have the effect of protecting from prohibitive taxa tion the equity of security owners in utility holdings, involved in changes in corporate structure under the act of 1936. At the same time, the committee blanketed into the ordinary corpora tion tax group all investment trusts, thus making them subject to the flat 18 per cent income tax. with credits allowable for corporations. Previously, investment trusts had received preferential treatment. Both actions were taken with ap proval of the Securities and Exchange Commission, whose chairman, William O. Douglas, appeared before the com mittee this morning. iiueu udvlous injustice. Although not Important particu larly as to revenue, the decision on the utility transfers has the effect of correcting an obvious injustice in Gov ernment policy and should lead to comparatively rapid progress in the integration of utilities as provided in the Public Utility Holding Company Act of 1936. Under section 11 of this act. the S. E. C. is directed to supervise the simplification of the corporate set-up of the utilities and to accomplish a geographic integration of the system. It is this latter task, implying the con solidation of utility enterprises now existent or their transfer to different parent groups, that give rise to the “death sentence” description. Briefly, the job may be accomplished through voluntary action of the com panies or by specific direction of the commissicar. Under present tax law, however, the capital gains and losses resulting from the shifting of ownership of securities in these utilities are subject to the or dinary tax treatment accorded to all capital gains and losses. The effect, in other words, was to compel transfer of the securities and at the same time compel payment of heavy taxes on the forced transfer, a condition which Chairnran Douglas described this morning as “too much like putting a gun at the head of the industry.” Second Qualification. A second qualification specifies that the exemption should not be effective in case of transfers for cash—that is, if the holder of the securities sells them outright rather than accepting securities of different status in the exchange. Also the transaction be comes a taxable one at a later date if there is an initial transfer under sec tion 11 and a subsequent outright sale. The committee was to attempt to complete its consideration of the reve nue bill in a second session this after noon. Meeting in a four-hour session last night, the committee responded to the leadership of Chairman Harrison, Democrat, of Mississippi by conclu sively voting down all “special inter est” pressure to load the measure with extraneous tariff provisions. Extra Year Allowed. Most important decision, however, was that of liberalizing the tax re quirements applying to liquidation of personal holding companies. The com mittee decided to allow them an extra year in which to complete their liqui dation and pay their taxes on an in stallment basis. By the amendment, such companies could take three years for the process of liquidation and those receiving the proceeds from sale of assets could spread their tax installments over four years. Many of these companies, rendered virtually useless by the 1937 law tightening avoidance loophopes, have stood idle for the past year with billions of dollars thus withheld from the reinvestment market because of the prohibitive taxes which would have applied had they proceeded with liquidation. Fork Tax Excluded. Chairman Harrison estimated last night that from $2,000,000,000 to $4, 000,000,000 has been frozen in these companies. Several witnesses appear ing before the committee during the open hearings placed the figure as high as $6,000,000,000. Availability of an important part of these totals in the investment market should be of material help in stimulating new business, it is felt. In its decision to exclude tariff pro visions from the modification meas ure, the committee was complying with administration wishes as ex pressed yesterday by Secretary of State Hull and Secretary of Agricul ture Wallace. Stricken from the House bill was an import excise tax of 6 cents per pound on prepared (See TAXES, Page A-5.) BRANDEIS IS ILL justice Mieses Second Session of Court—Has Cold. Associate Justice Louis Brandeis, who is suffering from a slight cold, re mained away from the Supreme Court Bench today for the second consecu tive session. At his home it was said the 81 year-old Justice was not confined to bed and would have resumed his duties today except for threatening weather.