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Evening star. [volume] (Washington, D.C.) 1854-1972, November 14, 1949, Image 13

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Taxes of 452 Million
Seen Making GM Top
Producer for Treasury
Stockholders Will Pay
$80,000,000 More,
Workers 274 Million
By David Lawrence
When the Government found in
wartime that a company had done
afi excellent job of production, an
*‘E” flag was awarded with much
ceremony. Maybe in these days of
unbalanced budgets. Secretary of
the Treasury Snyder ought to be
awarding an "E" to the company
which makes a record in produc
ing dollars for the United States
Treasury.
Such a record is being made by
General Motors, with an estimated
total for this year of $462,000,000
of Federal taxes.
But if to this sum is added the
tax money which Uncle Sam de
rives from the dividends paid out
this year by General Motors, an
additional $80,000,000 will have
oeen collected from individual
stockholders—or a total of about
$532,000,000.
The significance of such an im
mense contribution to the Fed
eral Treasury can be appraised
when it is realized that this sum
is enough to relieve all other tax
payers in America from paying
the expenses of many departments
and agencies of the Government.
More Than Stockholders Get
Thus with $532,000,000, Uncle
Sam can pay all the salaries and
expenses of the White House and
24 independent agencies, boards
and commissions, including the
Federal Trade Commission, the
Federal Communications Commis
sion, the Interstate Commerce
Commission, the Securities and
Exchange Commission, the Na
tional Labor Relations Board and
several others of major impor
tance. <
But this is not all. Out of that,
same sum, besides paying for the
White House and the independent
agencies, Uncle Sam can pay all
the salaries and expenses of the
Senate and House of Representa
tives and of all the Federal Judges
as well as all the salaries and ex
penses of the Bureau of Internal
Revenue in collecting taxes of all
kinds.
That’s a lot of money to come
from a single company, and it is
far more than the stockholders
themselves will get. Thus, the
440,000 stockholders of General
Motors will retain about $284,000,
000 of dividend money after pay
ing their individual income taxes,
whereas Uncle Sam will be retain
ing $532,000,000.
Labor Gets Biggest Share
Labor receives by far the biggest
shore of the company’s gross in
come. For the payroll will run an
estimated total of $1,370,000,000
this year. Uncle Sam will collect
about 20 per cent of that sum or
about $274,000,000 in individual
Income taxes from the workers.
So, all in all. General Motors
can readily claim that it is the
chief producer of dollars for the
Treasury, not only by the jobs it
maintains in production, but in
the profits it helps to make for
dealers and suppliers whose tax
payments out of profits are, of
course, not included in the above
figures. Nor incidentally is there
included in the data the tens of
millions of dollars paid out of
gross income by General Motors
in local and State taxes.
More important to the Ameri
can system, however, than the
dollars brought into the Treasury
is the reward given to those who
use their savings to invest in the
securities of efficiently operated
companies. For unless a risk
capital system carries with it an
incentive to continued investment
and .reinvestment, there is no
chance to create giore Jobs and
expand the economy.
If an individual bought a share
of General Motors common stock
early in 1945, at the market price
of $65. he would have received in
the last five years a total of $20.75,
being an average income, of $4.15
a share a year. This is an aver
age return ot six and four-tenths
per cent a year. In the annals
of finance, this is considered a fair
return. If more companies could
do that, there wouldn’t be an im
balanced Federal budget. Maybe
they can do it if Government
wakes up to the fact that it has
a partner in American business
who, if encouraged, can produce
more and more tax dollars.
(Reproduction Rights Reserved.)
You Are Invited To
Open
Your 1950
(EfrrtBtmag
§>amnga
rACCOUNT
NOWt
''
Mrtrlet 1171
FIRST FCDCRfil
sflvincsiomASS'n
Conveniently Located:
110 ISth tt. N.W. (Nt. Ft!)
(No Branch Office*)
This Changing World
Omission of Spain, Reich in Defense Plan
For West Laid to ‘Immature Judgment’
By Constantine Brown
MADRID (By Air Mail).—In
public interviews and private con
versations Generalissimo Francis
co Franco has stated what is well
known to all
unbiased o b
servers in Eu
rope: That de
fense of the
Western Hemi
sphere cannot
be comp 1 e t e
without the in
clusion of
Spain.
Gen. Franco’s
views are in
dorsed not only
by top-ranking
American mili
tary men in EU- c“»t“UM Brown,
rope, but also by responsible
French and British generals and
admirals.
Defense of Western civilization
against a possible Russian on
slaught must include all the West
ern countries. It must be general
and not regional. Present plans,
which omit Western Germany
with its 47,000,000 persons and
Spain with its 30,000,000, shows
immature judgment and may
even be disastrous if the Rus
sians decide to attack before we
have completed all preparations.
The Spaniards believe we are
making a serious mistake by re
lying almost exclusively on French
and British capabilities. Those
countries were severely drained of
their strength in two world wars.
Reds Still Strong in France.
Moreover, in spite of commu
nism’s recession in Western Eu
rope, neither the London nor Paris
governments could give positive
assurances that their people would
flght to the bitter end if an early
showdown occurs. The Communists
are still very strong in France and
could sabotage the country’s de
fense in the event of an early
war. So long as things are rela
tively quiet and the Marshall Plan
is bringing them an unexpected
economic recovery they are natu
rally pushed into the background.
Nobody wants to offend Santa
Claus. But if—contrary to present
forecasts—the Russians decide in
the immediate future that war is
necessary there is a great deal
of damage that the Communists
could do.
All the Atlantic Pact countries
have suffered serious wartime
losses in manpower and their war
weariness is great. The general
staffs of all these countries are
thinking in defensive terms: De
fense of the Rhine and defense of
the British Isles. Because of their
lack of confidence in the offensive
qualities of their armies, they re
fuge to consider an immediate
counteroffensive in the event of an
attack from the East.
Spain, however, has consider
able manpower, which was un
touched by World War n. More
than 2,000,000 men are available
at present for defense against the
Russians. All these men are thor
I oughly Imbued with a hatred of
communism.
Manpower Unprepared.
For the last 10 years Com
munist efforts to arouse Spain
from within have been entirely
unsuccessful. While unquestion
ably there is opposition to El Cau
dillo himself and to his regime,
nobody in this country wants to
ape communism established in
Spain or any neighboring country.
This explains why the Socialists
have given up all ties with the
Western Communists and why
men like the exiled Spanish So
cialist leaders have adopted a
passivf attitude. One of their
leaders—Indalecio Prieto, minister
of war in the Spanish Republican
government, who now resides near
St. Jean de Luz, France—is trying
to reach an agreement with the
Royalists in an effort to replace
Gen. Franco with Don Juan, the
heir to the Spanish throne, or his
young son.
There is manpower in Spain,
which is so fearful of Russia and
Communist infiltration that it
would fight to the last man. But
this manpower is almost totally
unprepared for modern war. The
best it could offer would be stub
born resistance behind the na
tural fortification of the Pyrenees.
It has an air force of 350 planes
and no anti-aircraft artillery.
Nor does it have tanks and other
mechanized weapons essential for
offensive operations. A common
sight in the streets of Madrid are
burro-drawn two-wheel carts con
taining three or four soldiers. All
the Spaniards have is good will
and a determination to fight if
they beoome involved in war.
A number of American generals
and admirals, representing all
branches of our national defense,
have visited Spain in recent
months. They have been favor
ably impressed wtlh the stamina
of the Spanish troops, but have
come to the conclusion that their
combat value—except as guerrillas
—is negligible. Outside of an al
most fanatical pride they have
nothing to fight with.
Soviet Blits Han Seen.
Neither Gen. Franco, his ad
visers, nor his political opponents
can understand why America,
which is spending so many bil
lions of dollars to create a wall
against Soviet aggression, pur
posely overlooks Spain, which is
one of the best military bets in
Western Europe. They cannot
conceive that disapproval of a
mildly dictatorial regime, much
milder for Instance than that of
Marshal Tito, should blind us to
the point of jeopardizing defense
of the West. They are earnestly
warning American officials, now
swarming into Madrid, that in
this day and age an army cannot
be improvised at the 11th hour.
The Russians have a number of
parachute divisions available.
These are Intended, according to
Spanish intelligence, for a blitz
Invasion of Spain rather than any
other portion of Western Europe.
The Spanish army, using old
fashioned weapons and lacking
aviation and anti-aircraft guns,
could not offer adequate resist
ance^
Performance Is Proof
Truman Is Wise in Way of People;
Wins by the Confidence He Inspires
By Thomas L. Stokes
It is timely in view of last
week’s election to take another
look at Harry Truman the poli
tician as distinct from Harry Tru
man the Presi
ident of the
United States.
It must be
generally recog
nized by now
that Harry Tru
man is a very
able politician.
Performance Is
proof enough.
An intuitive
sense of practi
cal politics is
a necessary in
gredient to suc
cess as Presi- Tbomw L Stokw.
dent, and he has that. This is
demonstrated also by the con
verse. which is that a man with
many fine qualities of mind and
spirit and with the best of inten
tions still can fall short of ex
pectations in the White House
through lack of political Instinct,
of which the most apt illustration
in recent times is Herbert Hoover,
our last Republican President.
Blaster Strategist.
The standard around here in
recent years of the master politi
cal strategist is, of course, Frank
lin D. Roosevelt. The Republican
Party finally developed quite an
inferiority complex about him
that failed to respond to treat
ment.
Significantly enough, you hear
it said around here now that
Harry Truman is as good a poli
tician as his predecessor, and some
go so far as to say he is evep
better. Among the latter are those
who still are mystified about the
1048 election and so conscience
stricken about their wrong prophe
cies that they are ready, finally,
to throw up their hands and take
refuge in the diagnosis that it
was Harry Truman’s doing, in
which there is most of the truth,
and therefore that he was a mir
acle man, or medicine man, in
that campaign. They go on nat
urally to give him top rating now
with another triumph in the off
year elections which usually don’t
go too well for a party in power.
He is good —no doubt about
that.
Leaving comparisons to history,
where it is safe to leave them, it
is presently interesting to com
pare the techniques of the two
Presidents.
Mr. Roosevelt was a master of
what might be called “the grand
strategy,” while Harry Truman’s
technique is grounded in the sim
ple approach of folks to folks.
The former, because of his family
and background, fitted well into
the grand manner which our peo
ple like, however they may deny
It. And when, as in his case, this
was coupled with an interest in
the welfare of ordinary people,
the result was something close to
idolatry with millions, as the his
tory of that era revealed.
Wise in Ways of People.
Harry Truman gets his results,
and more successfully thus far
with the people than with Con
gress, by simply being himself, a
man of the people, ,very wise in
the ways of people and winning in
the end by the confidence he in
spires* of sincerity and earnest
ness in their behalf. He plays the
role of Harry Truman, and never
overplays it.
He calls things by their simple
names and is able to make great
and often complex public issues
simple. He reacts like the rest of
us and he blurts out those re
actions. so that his frankness,
which often also is blunt, has its
appeal. In his off-the-cuff re
marks, about which his protective
aides used to worry so, he often
comes close to the old-fashioned
cracker-barrel philosopher, and
there’s still a lot of cracker bar
rel in all of us. We are all Harrys,
Toms and Dicks underneath.
Harry Truman’s political gift is
in recognizing this and knowing
how to capitalize on it.
LOUIE
—By Harry Hanan
JUUHBOKH
F*n
Krug Stayed Too Long
Downfall Traced to His Failure to Give
Sufficient ’48 Campaign Contribution
By Doris Fleeson
The departing Secretary of the
Interior, Mr. Krug, is another
man who stayed too long in his
prestige job in Washington.
Mr. Krug’s path here has been
booby - trapped
ever since the
1948 campaign
to which he did
not, in the
opinion of the
palace guard
and influential
Democrats, in
cluding the
finance chair
man, Louis
Johnson, make
a sufficient con
tribution.
H e couldn’t
have been in ®#ri*
any doubt about his status. Re
liable quarters publicized the
politicoes’ complaints that he took
to the briar patches of the
sparsely populated West and
j spoke on the issues rather than
vehemently defending Harry Tru
man where it counted. He was
a protege of Bernard M. Baruch
and when Mr. Baruch and the
President fell out, it obviously
weakened him. He had no back
ground of old friendship with
President Truman to fall back on;
they scarcely knew.each other un
til near the close of the war.
!
Truman Not Vindictive.
The President, however, showed
no desire to be vindictive after his
surprise election and Mr. Krug
sensibly refused to be stampeded
by lesser fry. Nevertheless, h)s
detractors had the Inside rail and
showed no signs of moving over
to let him join them.
' Mr. Krug had two choices. He
could have got out on his own
time, without a public rift and in
circumstances which would have
made him more valuable to busi
ness by stressing his White House
connections. Or he could have
fought back through the jungles
of White House power politics,
which is hard work but for a
cabinet officer who can grant or
withhold many favors is not im
possible.
It must also have been clear to
Mr. Krug that in Undersecretary
Chapman, Mr. Truman had ready
made a new Secretary. When
President Roosevelt died, Mr.
Truman saw in Mr. Chapman
only a New Dealer who had been
for Henry Wallace for Vice Presi
dent in 1944. By 1948, Mr. Chap
man had performed some of the
President’s most delicate political
chores and had demonstrated an
unqualified »loyalty to the Fair
Deal which was unaffected by his
personal fortunes under President
Truman. In fact, the politicians
had begun to press Mr. Chapman’s
claims to Interior to the point
where the high-minded Mr. Chap
man Intervened In Mr. Krug’s
behalf.
End Bon Around Budget.
But Mr. Krug was apparently
lulled by the President’s Inaction.
He neither got out nor devoted
himself to rebuilding his position
within the administration. He
rarely saw the press—who, at the
least, are useful reminders of what
seems to be going wrong with
one’s affairs. The bureaucrats
began to complain that it was
hard to get a decision from Mr.
Krug. The question of his busi
ness Interest in a textile mill in
TV A territory bobbed up in the
newspapers via a suit filed in New
York regarding it.
The climax of Mr. Krug’s inat
tention came in the reclamation
matter. When the President dis
covered that Mr. Krug had made
an end run around the Bureau of
the Budget to get various projects
TRAILWAYS IUS TERMINAL j
12Hi b N«w York Art. IN. 4200
___
across the congressional goal line,
he wrote the Secretary three very
harsh letters.
Mr. Krug apparently did it for
jfear that Agriculture Secretary
jBrannan, who has been feuding
with Interior’s Reclamation Com
missioner Straus, would prevail
with the Budget. But Mr. Bran
nan is a Truman favorite and well
able to fight a White House battle
—especially when he could show
that a White House „ verdict
through the Budget had been by
passed.
Senior Cabinet Member.
When newspapers advertised the
fact of the letters, Mr. Krug
panicked. When the President
returned merely “no comment” to
questions about the matter at his
press conference, the Secretary
wrote his resignation. That Mr.
Krug announced it to reporters
before the resignation got to the
President was merely an un
fortunate error by a messenger,
but it also annoyed Mr. Truman.
Mr. Krug is the senior member
of the Truman cabinet. His re
placement by Mr. Chapman, the
simon-pure New Dealer, under
writes the extent to which the
President, tvho at first put himself
in the hands of his cronies, has
come around to those principles
he now calls the Pair Deal.
Time was when its advocates
counted on only one Trumanite in
the Cabinet—the late Postmaster
General Hannegan. Now they
count on five—Secretaries Ache
son, Johnson, Brannan, Tobin and
Attorney General McGrath—with
Secretary Chapman coming up.
(Released by the Bell Syndicate, Inc.)
McLemore—
Asked for His Opinion
On Princess' Smoking
By Henry McLemore
It always surprises me when any
reader turns to me for an opinion
on any subject whatsoever.
It makes me doubt the good
sense of my
readers, and no
columnist likes
to suspect that
he is writing
for a group of
people whose
buttons aren’t
all there.
Yet readers
do write to me.
Only last week
I got a number
of letters want
ing to know
what I thought
about Princess Henr* McL*“#r*
Margaret smoking a cigarette in
public. To tell the truth I hadn’t
given a thought to her smoking in
public, but I guess if I am going
to think about her smoking at all,
I had better think about her
smoking in public. So far, the
Princess has given no indication
that she ever intends asking me to
a private smoker in Buckingham
Palace, or a roll-your-own party
at Windsor Castle. That’s for the
likes of Sharman Douglas, Danny
Kaye, and the Marquis of Who
ever-It-Is-at-the-Moment.
Smoked Privately First.
Wonder if I am capable of
thinking about such a monumen
tal question as the rightness or
the wrongness of a princess of
royal blood drawing nicotine and
coal tar into her lungs and then
blowing it out again, while com
moners look on?
But in these inflationary days,
when readers don’t go as far as
they used to, one cannot afford
to let them down, so here I go
a-thinking about the puff that
was heard around the world.
From what I read about the
celebrated first public drag it was
obvious that Princess Margaret
had been hitting the old weed in
private, because there was no
mention of her coughing, half
choking, and letting out those lit
tle putt - putt - putts .of smoke
which are the giveaways of the
novice smoker.
It is my opinion that, although
a gasp of surprise ran through
the room when she lighted up,
her first public smoke didn’t give
her half the thrill the first one
she had in private did. That was
the one. I’ll bet you, that she had
from a cigarette slipped from her
Dad’s case, and which saw her
lock herself in her room, and open
wide the windows so no tell-tale
odor would linger there. And I’ll
bet she sucked a mint, or brushed
her teeth twice as vigorously as
usual before kissing her mother
goodnight, so that the smell
of that first bootlegged smoke
wouldn’t be on her breath.
If that isn’t about the way it
worked out. then Princess Mar
garet isn’t like most other girls,
which she surely seems to be.
What puzzles me is how Prin
cess Margaret, when she started
smoking on the sly pretty regu
larly, managed to get her cig
arettes. She couldn’t very well
summon a lady-in-waiting and
send her flying down to a tobac
conist’s, nor could she afford to
bum them off the palace guards.
They might have been tattle
tales.
What a fortune awaits the prin
cess if she cares to follow in the
footsteps of less distinguished
lady cigarette smokers and go in
for Indorsements! After exhaust
ing tobacco indorsements, she
could enter the field of cream
(cold, vanishing, and cleansing),
silver (sterling and plate), beer
(dry and wet), and hand lotions
(left and right). She could put
England on its financial feet in
a year.
Now to think about something
really important. Rocky Grazi
ano’s home life, say.
(Distributed by McNausht Syndicate. Ine.)
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Extra effort of this sort has enabled us to an
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