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Evening star. [volume] (Washington, D.C.) 1854-1972, June 14, 1938, Image 9

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Group Power
Blocks Aid
for Rails
Subsidy Method Likely
Unless Foes Exert
GROUP power—the pressure of
the blocs which control huge
numbers of votes—manifests
itself as every session of Con
gress draws to a close. But there has
been no exhibition of group pressure
quite so sensational as that which the
railroad labor unions have been able
to exert in pre
venting the pass
age of legislation
Which would have
permitted the Re
construction P i -
nance Corp. to
lend money to the
railroads so that
they might avoid
Bluntly, the sit
uation is that the
railroads insist
they must reduce
wages so as to get
out of the red, but
the railroad un
David uiwrfnre.
ions say this must not be done and
no Government funds can be forth
coming if any such plan is contem
plated So Congress, being afraid of
the railroad brotherhoods and the lat
ter already having received assurance
from President Roosevelt that no wage
reductions are necessary, nothing is
Last-minute efforts to get something
done for the railroads have been made
but the solution of the whole problem
is not forthcoming. Possibly it lies in
letting the railroad brotherhoods have
their way, keep their wages from being
cut, and letting the holders of railroad
securities get their interest payments
from the Government. This would be
a subsidy which is quite in line with
New Deal philosophy as it applies to
other groups of citizens. But in this
instance the subsidy is inevitable be
cause the President and the Congress
want wages subsidized. The only ques
tion is where the money is to come
from and presumably the source might
be the same one from which farmers’
payments and other spending pro
grams are to come—out of the dim
and distant earnings of taxpayers of
future generations.
$198,000,000 Payment
After all, there is really little dif
ference between paying farmers for
not planting corn and paying railroad
workers for work not done. Accord
ing to one of the Interstate Commerce
Commission reports, the payments in
the year 1937 by the railroads to their
employes for work not done amounted
to about $198,000,000. The wage in
creases of 1935 and 1937 added $320,
000.000 per year to the pay roll costs
60 that the total subsidy which the
railroads have been compelled to pay
amounts to about $518,000,000 a year
or enough to cover the total interest
charges for the railroads and pull
most of them out of receiverships.
Now it could be conceded that the
railroad employes deserve these in
creases, but it cannot be conceded
that capital will continue to be sup
plied for any business which borrows
at a fixed interest charge and then
doesn’t pay the Interest on its bonds.
The wage increases and the payments
for work not done are directly and
indirectly the responsibility of the
Federal Government so that the sub
sidy to pay for them can, as logically
as a farm subsidy, come out of the
Federal Treasury.
Some of the leaders of the railroad
brotherhoods have been talking about
Government ownership of the rail
roads, which means, of course, that
there will be bigger and better sub
sidies to be paid out of general tax
In the last 24 hours all sorts of
efforts have been made to get some
kind of compromise worked out but
each time the railway labor executives
have held the veto and what they say
Is done. The bondholders—being to
no small extent the many educational
Institutions, savings banks, hospitals
and life insurance companies—have
nobody here to represent them, cer
tainly nobody in the White House, so
the drift of the railroad situation Is
bound to be worse rather than better.
The courage to tackle the whole prob
lem on an economic basis is lacking
because politics holds sway.
Old Standards in Use.
“Work not done” is one of the
abuses of the whole railroad operation.
Laws requiring that payment be made
on the basis of 100 miles as a day's
■work, a standard adopted 50 years
ago when trains were very slow, are
still in existence. They are to be
found alongside a series of uneco
nomic practices which cannot be
estimated as to cost. Thus, the rules
require that two men must do the
work of one on Diesel engine cabs.
Then there are additional wages due
to ‘‘full crew" laws and limitations
on length of freight trains in certain
States, and technical regulations
such as paying a full day’s pay to
workers for the 12 minutes required
to take an empty train out of the
terminal at the Pennsylvania Station
In New York to the yards about 3 or
4 miles away.
Similar uneconomic rulings require
that a gasoline car run on railroad
tracks should have four or five men,
whereas a gasoline car run on ordinary
highways is usually operated by one
Under circumstances like these, with
political power supreme and Con
gress afraid to tackle questions of
this kind, the subsidy method is
perhaps the political way out—at least
for the time being, until the Ameri
can people discover the meaning of
group pressure and organize a peo
ple's bloc.
(Copyright, 1038.)
I The handy man will •'fix” it at
less cost than we charge to make
proper repairs—but when rain
comes our work will hold, keep you
dry. Think It Over!
IfnflNC Roofing 033 V St. N.W.
RVIM* Company North 4423
Edfen A. Many's
The Capital Parade
Eccles’ Move to Tree Banks From Stock Market*
Starts War Among Federal Fiscal Agencies.
NOT long ago, two members of the Securities and Exchange Commis
sion dropped in at the chaste marble temple of the Federal Reserve
Board, to pass the time of day with Chairman Marrlner S, Eccles.
It’s fortunate the conversation was behind closed doors, for, held in
a more public forum, it would have caused an epidemic of apoplexy In bank
presidents’ offices.
The subject, as usual in such talks in these days, was the depres
sion and its causes. One of the
first subtopics mentioned was
the failure of the banks to make
loans to business, and especially to
small business. Mr. Eccles sug
gested that the failure was not
the banks’, but the bank examina
tion systems. He argued that the
system was rigid, clumsy, and cal
culated to emphasize business
slumps by its insistence on liquid
He pointed out that, if a bank lends to the Standard Oil Co. of
New Jersey, the value of the note is determined by the worth of the
company. Yet, if a bank should accept Standard Oil of New Jersey
debentures as collateral, the book value of the loan is determined by
the market quotation of the debentures. Why not cut the banks
loose from the stock market, Mr. Eccles asked.
The S. E. C. officials argued, for they and the Reserve Board members
have been equally pestered by industrialists complaining of money tight
ness. The Eccles’ suggestion itself was only a modification of a plan put
before the board by Howard Bonbright, vice president of the Briggs Body Co.
* * * *
Specifically, Chairman Eccles wants to use the bank examining system
as a sort of governor of the business cycle. During depressions, he would
relax liquidity requirements, in order to get money out of the banks and
into production. And during booms, he would have the banking rules made
more stringent than ever, in order to moderate the enthusiasm of the
His scheme is labeled “cutting the banks loose from the stock market,"
because, for collateral purposes, he would determine a security’s value by
calculating the credit and net worth of the issuing company. Thus, he
thinks, the soundness of the Nation's banks would no longer be affected
by the fluctuations of the stock ticker.
* Ik lk Ik
A really violent bureaucratic war has raged around the Eccles plan.
Obviously such a plan could never be carried out under the present set-up,
which divides authority over the banking structure among the Reserve
Board, the controller of the currency and the Federal Deposit Insurance
Corp. Therefore, when the President was preparing his pump-priming
message, Mr. Eccles submitted a paragraph calling for the unification of all
authority over the banks.
At the urgent suggestion of Treasury officials, the Eccles para
graph was altered by the substitution of the word “co-ordinate” for
“unify.” Shortly after the delivery of the message Secretary of the
Treasury Henry Morgenthau, jr., anxious not to be forestalled, went
to the President to ask what should be done to make the paragraph
effective. The President thereupon appointed a committee to study
the subject and report to him.
Under the chairmanship of Henry Morgenthau, the chosen represents
tives of the Reserve Board, con
troller of the currency’s office and
P. D I C. set to work together.
Before long the Eccles men and
the other committee members had
disagreed sharply. The officials of
the other agencies regarded the
Eccles plan as extreme and im
practical. They protested loudly
against it.
In spite of their protests, how
ever. the Eccles view carried
enough weight to force concessions. In the committee report the relaxa
tion of certain rigid banking rules is expected to be recommended.
* * * *
As matters stand, the officials of the conservative banking agencies
are sweating with fear of further Eccles aggressions. Eccles and his friends,
meanwhile, are chafing at a report which they regard as far too modest
and timid. For the present, the chief interest of the story is in its illustra
tion of the division of New Deal opinion and of the New Deal terror
of increasingly bad times. For the future, it suggests the sort of thing
that may come if times do grow much worse.
(Copyright, 1938, by the North American Newspaper Alliance. Inc.)
Folk Program by Americanization
School Group to Be Given in
July 17 Ceremonies.
Folk dancing by students of the
Americanization School under the di
rection of Helen Kiernan-Vasa will be
a feature of the program for the open
ing of the new Chain Bridge July
17, George C. Shinn, general chair
man, said Friday.
Attired in native costume the danc
ers will represent Germany, Panama,
Italy Czechoslovakia, Russia, Greece,
Spain, Holland, Poland, Mexico, Ru
mania and Ukraine In the opening
“Parade of Nations.”
This ensemble will be followed by
native folk dance presentations.
CTHE opinions of the writers on this page are their own, not
__ necessarily The Star’s. Such opinions are presented in
The Starts effort to give all sides of questions of interest to its
readers, although such opinions may be contradictory among
themselves and directly opposed to The Star’s.
The Political Mill
Kentucky Political Feud Traditions Maintained in
Battle of Chandler and Barkley.
Kentucky has said he will
Join President Roosevelt’s
train when It stops at Cov
ington next month. Looking at It one
way, the Governor seems to be a glut
ton for punishment. It is expected
the President will ..
on that occasion
deliver a speech
supporting Sena
tor A1 b e n W.
Barkley for re
nomination and
re - election
against Gov.
Chandler. Look
ing at it in an
other way, the
Kentucky Gover
nor is merely re
peating history.
In 1935 when
Chandler, then
Lieutenant Gov
G. Gould Lincoln.
ernor, was a candidate for the guber
natorial nomination and was at swords
points with the then Gov. Ruby Laf
foon and Thomas S. Rhea, the LafToon
candidate for Governor, he and his op
ponents were invited to Join the presi
dential train as it entered Kentucky.
Chandler accepted. LafToon and Rhea
declined. In the primary fight that
year. Chandler came out on top.
Back in 1935, however, Gov. Chan
dler was tire favored one, and Gov. Laf
foon was at outs with the administra
tion in Washington—over relief funds.
At that time, too, Senator Barkley was
the friend of Chandler and campaigned
for him in the primary fight all over
the State. Now Gov. Chandler, who
would not listen to the President's plea
to “lay ofl” Senator Barkley this year
and wait his turn for the Senate, is
facing the displeasure of the admin
istration. He has against him his
former supporter. Senator Barkley,
and he has in addition the Lafloon
Rhea faction.
The picture of Gov. Chandler aboard
the presidential train while the Chief
Executive delivers his rear platform
address to the people of Kentucky will
be, perhaps, something to remember,
if the Governor actually goes through
with it. For if the President is to
do any good for his friend, Senator
Barkley, on that occasion he will have
to make it all the more explicit he is
anxious to have Barkley returned to
the Senate.
Odds Favor Barkley.
This latest Kentucky feud has turned i
out to be as bitter as other battles in i
the Bluegrass State. Senator Barkley,
tied up in Washington in recent weeks
by his work as Democratic leader of
the Senate, has scarcely begun his ac
tive campaign. He is hopeful that the
session will end within 24 hours and
he will be free to rush back to enter
the fray. The odds to date appear to
favor Senator Barkley. However, it is
unwise to discount an opponent who
sits in the Governor’s chair. Usually
the Governor controls the State or
ganization, machine or what you wish.
Chandler has built a strong organiza
tion since he entered the executive
mansion at Frankfort in December,
Chandler and his friends have
charged that the W. P. A., with its :
big funds, is being used to aid the
Barkley campaign. Barkley, on the
other hand, accuses the Governor of
using the big pay roll of the State td
bolster his own political ambitions. To
listen to the charges and counter
charges gives the impression that the
senatorial nomination of the Demo
cratic party is cm the auction block,
and will be knocked down on primary
day, August 6, to the candidate who
has been able to throw the greatest
amount of money—public money, by
the way—into the fracas. It is not
a pretty picture, but is the kind of
thing that must be expected when po
litical organizations are given control
of huge sums of money to be used for
The W. P. A., to whom the charges
of political activity in support of Bark
ley were handed for investigation, has
reported that the charges are ground
less; that the W. P. A. workers have
been told they are free to vote as they
desire. This was not unexpected. Har
ry L. Hopkins, W. P. A. administrator,
the other day commenting on the re
sults of the Iowa primary, said that
the victory of Senator Gillette against
his own candidate. Representative
Wearln, in the senatorial contest there,
proved the W. P. A. had not been
used politically. If Senator Barkley
wins the nomination in Kentucky, this
reasoning on the part of Mr. Hopkins
should prove that the W. P. A. had
been successful in Kentucky if not in
Holt Attacks Procedure.
Senator Rush D. Holt of West Vir
ginia, Democratic opponent of the
Roosevelt administration, does not
think much of having the W. P. A.
investigate itself—as it has Just done
in Kentucky. "The people wonder,"
says Holt, "if President Roosevelt
wanted Harry Hopkins' investigators
to find any politics in the W. P. A. in
Kentucky. The same fake procedure
was used in the West Virginia set-up
two years ago. I charged that the
whitewashing was in my State then,
but if they got away with it, such
methods would be used in all other
Turning his attention to the W. P. A.
administrator, who recently stuck his
neck out when he jumped into the
Iowa primary. Senator Holt continues:
“Harry Hopkins is suffering from lost
political hopes. Somebody told him he
was a politician. The only thing that
makes him a political factor is his
unlimited use of the public treasury."
Mr. Holt seemingly has in mind the
recent boom for Mr. Hopkins for Gov
ernor of New York, a boom which was
confined to the inner New Deal circle
in Washington, and which is now all
washed up.
Republican leaders In Congress think
they really have something in this
issue of the use of relief funds In
politics. They think that the Demo
crats made a blunder when they de
feated the Hatch and Austin amend
ments to the President's relief and
recovery bill, which would have pro
hibited political activity on the part
of W. P. A. employes. For that reason
the Republicans seem not to care
whether a special committee of the
Senate is set up to inquire into W. P.
A. activities, as now proposed by Sena
tor Tydings of Maryland, by Senator
This Changing World
Admiral Yarnell Needs Only a Tip From Higher-Ups
to Get Tougher Than Japanese.
IT IS from Washington that Admiral Harry Yarnell received the instruc
tions to show what a stlif sea dog he can be in connection with the
Japanese claim that they should control to their heart’s desire the
movements of ships in the Yangtze River.
m Reports from Tokio early last week indicated that the Japanese in
tended, despite the statements from the State Department regarding the
bombing of open cities, to start a campaign of frightfulness on the Yangtze
The President talked the matter over with high officials of the Navy
4 A,
Department and told them to In
struct Harry Yamell to be tough.
And that Is all that Admiral Yar
nell wanted to hear. He could be
tougher than any Japanese.
Officially, the commander In
chief of the Asiatic Fleet has a wide
latitude to take any decisions which
may be necessary for the protection
of the life and property of the
thousands of Americans who are
under his wing. But when it comes
to questions of major policies he must receive a “hint” from Washington.
And a hint he did receive.
* * * *
The Japanese authorities in Shanghai intended to scare Admiral
Yamell off by pointing out the grave dangers American men-of-war might
incur if they were anywhere near the zone of operations. They recalled
discreetly the Panay incident which nearly wrecked the “friendly” rela
tions between the two countries. Admiral Yarnell, despite these friendly
warnings, said he was in the Far East to perform a special job—to protect
American life and property—and he and his ships will be wherever it is
necessary for them to be in the performance of his duty. That grave
dangers have never scared either him or the officers and men under his
The likelihood of having a second Panay incident Is remote.
The Japanese like to make mistakes for which they can apologize pro
fusely later. But they are not in the habit of making such mistakes
when notice is served to them in clear terms beforehand.
* * * *
If the Secretary of State wants to stop the sale of the only real arms
export which is being shipped from this country to Europe and the Far
East, he must urge the manufacturers to withdraw their salesmen from
the European and Kir Eastern capitals.
Reports from London, Parts and Berlin indicate that these salesmen,
who are thinking only in terms of business, visit the air departments of
the various countries and give them the following sales talk—to the British:
"I have just returned from Germany and have been flabbergasted at the
efficiency of the German air factories. They actually produce, each, five
complete bombers a day.” Then they go to Berlin and say: "Lord Nuffield
is a man to be reckoned with. He is Just as energetic and active as Lord
Northcliffe, who was greatly responsible for Great Britain winning the last
war. That man is going to produce airplanes by the hundred every month
and he means what he says.” And the Germans are ordering new air
plane engines and propellers in this country, while the British are rushing
orders for complete airplanes in the United States.
* * * *
The last election in Czechoslovakia has passed without any major inci
dents. But the trouble is not over. Premier Milan Hodza will make public
between now and June 20 his plans for the settlement of the minority
problem. His program is divided in four parts, dealing with the political,
economic, educational and Juridical
status of all minorities. Jfc/iY'i,. '
The publication of that docu
ment will be preceded by a broad
cast of the Czechoslovak premier
explaining the whys and wherefores
of his plan.
The Sudeten Germans are not
particularly optimistic about the
Hodza plan. They are not inter
ested in the minority question from
an academic point of view.
Konrad Henlem claims that since the elections have Proved
without doubt as to how some 90 per cent of the Germans in Bohemia
feel, there is no question of accepting crumbs from the Praha gov
ernment. The Sudeten Germans must be granted complete freedom
to dispose of themselves in any manner they like. Hitler's mouth
piece hints that there should be no interference on the part of the
Czechoslovak government if these Germans were to decide in favor
of an economic and political fusion with the Reich.
How these questions can be arranged is difficult to say—what appears
certain is that the Central European crisis is far from being solved.
The elections have proved that the Sudeten Germans stand by everything
Hetllein—that is to say. Hitler—wants. The C2ech government Is willing
to make Important concessions, but Is not prepared to go as far as to tell
these Germans: "Do whatever you please. Get out of the republic if you
feel you like the Reich better.”
King of Utah and other Democrats.
The Republicans really believe that the
people will be aroused and turn down
New Deal candidates in the coming
congressional elections. The probabili
ties are, however, that the New Deal- I
ers have something much more effec
tive politically in the hundreds of mil
lions of dollars they will spend for
relief, for farm benefits, and in a
months. Virtue, in politics, is some
times its own—and only—reward.
An American
You Should
Farm Engineering Head
Makes Life Easier
For Rural Families.
IT IS the prime consideration of the
Bureau of Agricultural Engineer
ing and of Samuel Henry McCrory,
Its organizer, co-ordinator, chief,
to apply the principles of engineering
to agriculture.
The bureau is young. Seven years
of quietly effective research on a
Mr. McCrary.
Federal-State co
operative basis
have diagnosed
and remedied
many farm prob
lems. The bureau
la small. There
are 184 full-time
workers all told.
Of these 86 are
engineers. The
bureau’s service
la authoritative.
The results of ex
haustive research
are developing
constantly better
methods of irri
Station and drainage, malting farm
machinery more useful and farm
houses more livable by resistance to
heat and cold.
Engineering has always been Mr.
McCrory’s business. Even his hobby,
he admits Is the bureau, or perhaps,
he adds, the reading of old books with
sn eye to how the ancients tackled
their agricultural engineering prob
lems. Quiet and serious, Mr. McCrory’s
hair has retreated quietly, though not
seriously. He Is a big man with re
cessed eyes, that are both keen and
kindly. Born in Iowa Ci\y, Iowa, In
1879, a graduate engineer from the
University of Iowa, Mr. McCrory has
projected his influence on the De
partment of Agriculture ever since he
entered It as a drainage engineer In
In "recognition of the high value to
agriculture and to society of the 30
years devoted to research and research
administration in the Department of
Agriculture,” Mr. McCrory will receive
formal presentation of the John
Deere gold medal in June. He is the
first recipient of an annual award, to
be presented hereafter by the Ameri
can Society of Agricultural Engineers,
as a "memorial to the man who ham
mered a piece of saw blade into the
first all-steel moldboard, providing a
plow that solved a stubborn tillage
A century has elapsed since this in
vention. the harvester, and the cotton
gin. Mr. McCrory is a modern soil
pioneer. His accomplishments In the
realm jf drainage, soil erosion, tillage
machinery, etc., were the basis for his
recent honor. "It was the nicest thing
that ever happened to me,” Mr.
McCrory said.
New tools for the soil are constantly
emerging from this bureau. A cotton
dryer and variable depth planter are
two of the many new inventions.
Work is progressing on a mechanical
machine for harvesting the sugar beet.
It automatically thins the beets wher
planted. The bureau is taking th»
lead in the fertilizer question. The
Division of Structures is trying oui
cotton seed hulls for house insulation
testing improvements in the locatior
of windows and doors for ventilation
Thus is life for the formerly forgot
ten farmer being relieved of elements
of drudgery, hazard, inconvenience.
Over towering mountains
— 4.000 feet high — the
trade winds bring the
coolness that tempers the
tropics in Puerto Rico.
AMERICAN industry, as well as travel, follows the fruits, and needlework. Pnerto Rico, with nearly 2 mil
trade winds to Puerto Rico, Puerto Rico is now the sixth Hon people, is not only a market itself, but is also close
best customer of the mainland United States. Yearly to the markets of all the Americas. It offers industries
Pnerto Rico buys over 90 million dollars worth of the of many types, a favorable combination of raw mate
products of America’s plants and the produce of its rials, modern facilities, equable climate. Full informa
farms. Its exports include sugar, rum, coffee, citrus tion and specific data will be supplied upon request.
Tropical Puerto Rico has a lower summer tem
perature than many a more northern clime
average 76s. Seas, mountains, and trade winds
combine to make it so. Discover Puerto Rico
and live this vacation • « , race the white
breakers on a palm-fringed beach , , , stroll
through strange, balconied streets... linger in
an old Spanish garden ... or watch a golf ball
soar against a tropic sky and towering moun
tains. Sip superb rums at cocktail time • f. and
live your night life where the moon sparkles
in the sea spray ,. . and the rhumba blends
with the whisper of surf and laughter.

Yout travel agent can plan everything — OP
write to Government of Puerto Rico, Institute
of Tourism, 630 Fifth Avenue, New York City.
Step from a modern hotel into 16th
century Spain with its old cathe
drals, plans, and quaint cnstomsb

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