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Evening star. [volume] (Washington, D.C.) 1854-1972, August 08, 1950, Image 1

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Weather Forecast
Sunny today, high about 84. Clear to
night. low about 65. Tomorrow sunny,
high about 85. (Pull report on Page A-2.)
Temperatures Today.
Midnight, 69 6 a.m. .. 63 11 a.m. _.-75
2 a.m.-. 66 8 a.m. ...65 Noon-77
4 a.m. ...64 10 a.m. ...72 1 p.m. ...80
I_
I_!
Lote New York Markets, Page A-15._
Guide for Readers
PM*
After Dark-B-15
Amusements _.B-24
* Classified ..B-15-20
Comics_B-22-23
Crossword _B-22
Editorial_A-8
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Edit'l Articles ..A-9
Finance _A-15
Obituary.A-10
Radio_B-21
Sports-A-12-13
Woman’s Sec. B-3-6
An Associated Press Newspaper
98th Year. No. 220. Phone ST. 5000 **
WASHINGTON, D. C., TUESDAY, AUGUST 8, 1950—FORTY PAGES.
City Home Delivery, Dally and Sunday. $1.20 a Month: when t> te /''i'lJ'VJTPCJ
Sundaya, $1,30. Ni«ht Pinal Pdkton, $1.30 and $1.40 per Month. ± O
River Crossings Peril U. S. Line
As Yank Offensive Gains in South;
Marine Call-Up Gets Under Way
Upward of 9,000
Reds Are Reported
Across Naktong
By the Associated Press
TOKYO, Wednesday, Aug. 9.—
North Korean troops poured across
the Allied Naktong River defense
barrier in Korea and bulged out
two miles eastward on a 2,000
yard front yesterday.
Gen. MacArthur s war summary
released at 11:30 p.m. yesterday
(9:30 a.m.. EDT) said the “pos
sible threat from the small bridge
heads” across the river "has
neither increased nor decreased.”
Upwards of 9.000 Reds were re
ported over in two river crossings.
United States 8th Army head
quarters in Korea said the two
Communist bridgeheads were of
“primary concern at present.”
The two-day old American Ma
rine and infantry offensive in the
extreme south made small and
bloody gains in day-long attacks.
Earlier it was bogged by Commu
nist flanking that pocketed one
arm unit for a while. United
States Marines broke that up and
freed army men from the trap.
Drive Gains 10 Miles.
The offensive had gained 10
miles and was 10 or 12 miles east
of Chinju, Red-held rubbled city
in the south.
The Red bridgeheads posed
threats to Allied forces at two
places.
One was five miles north of
Waegwan. 15 miles northwest of
Taegu, the provisional South Ko
rean capital. The other was six
miles south of Changnyong, which
is southwest of Taegu.
At least tliree Red regiments—
9.000 men with probably more
slipping across behind them in
darkness—were over the river in
the two spots. Front line reports
said one of eight tanks sighted
had been ferried across the river
by the Communists.
Reds Reported Near Pohang.
South Korean army reports said
a Red Korean force of possibly
1.000 troops or guerrillas had
slipped within five miles of Po
hang.
Pohang, east coast port where
the United States 1st Cavalry Di
vision landed, is about 70 miles
north of Pusan- It is 25 miles
south of Yongdok on the Sea of
Japan.
The report, if true, puts the
Communists far behind Allied
lines.
Other reports said a large Red
Korean force was slipping through
the mountains between Yongdok
and South Korean divisions in
land.
Allied patrols were sent out to
check on the reported infiltration.
Three Major Battles Fought.
The front had exploded into
three major battles.
The big one was northwest of
Taegu.
Another flamed in the extreme
south.
The third was at a Red bridge
head across the Naktong near
Changnyong where fresh Ameri
can troops had been ordered to
destroy the Reds by last night.
The Communists had advanced
two miles or more in some sectors
across the river in the Yanggi
sector. Seven Red tanks, waiting
to move over the river, were under
top-priority American air attack.
One of Gen. MacArthur's intel
ligence officers estimated North
Korean losses in six weeks were
44,500 men—an average of more
than 1,000 a day in the six-weeks
old war.
In Washington, an Army
briefing officer said that Ameri
can and South Korean forces j
had not captured any Russians
in Korea.
He said that the United Na
tions forces had not captured
any senior North Korean offi
cers either, but that a “few lieu
tenants” had been taken.
He quoted a North Korean
prisoner as having said that his
unit had suffered 400 casualties
from air attacks and that Red
tank crews lived in fear of plane
and rocket attacks.
When the fresh Army troops
were thrown at the remnants of
(See KOREA, Page A-3.)
Keeper Loses Seat
Of Trousers After
Spanking Monkey
■y the Allocated Prtit
SANFORD, Fla., Aug. 8.—Zoo
keeper B. J. Davis who set out to
teach his monkey a thing or two
learned something himself.
Because monk refused to let his
mate eat, Mr. Davis spanked him
and made him sit in a corner.
Mr. Davis turned his head and
monk slashed at his arm. This
brought another spanking and
another corner-sitting session.
Mr. Davis started out of the
cage Monk made for the keeper,
and took the seat of Mr. Davis’
trousers out with his teeth. Mr.
Davis’ doctor took two stitches.
The trousers required more.
- — -.- I II.-. .. . . ■ ■ ■■■■ ■ .4
Korean Sidelights:
'Seoul City Sue' Begins Beaming
'Tokyo Rose' Broadcasts to GIs
Chides Americans for Bombing 'Schools'
And Urges Return to 'Ice Cream Stores'
By th« Associated Press
U. S. 8th ARMY HEADQUAR
J TERS IN KOREA, Aug. 8.—A Red
Korean “Tokyo Rose" began
propaganda broadcasts in good
American English last night from
j Seoul, Communuist-held capital of
' South Korea.
Like the Tokyo Rose broadcasts
of World War II, the aim is to
undermine soldier morale.
Seoul’s woman propagandist
chided American airmen for what
she called “promiscuous bombing
of schools and strafing of farm
ers.” In honeyed tones she urged
American soldiers to “return to
your corner ice cream stores in the
States.”
A 558th Military Police com
pany radio picked up the broad
cast. Enlisted men immediately
nicknamed her “Seoul City Sue.”
The identity of the woman was
not known here. She spoke with
a slight accent that M.P. listeners
could not identify.
Tokyo Rose—Iva Toguri d'Aqui
no—was one of six English speak
ing Japanese women who broad
cast over Radio Tokyo between
1943 and 1945. She was born in
j Los Angeles July 4, 1916.' Last
fall in San Francisco she was con
victed of treason and sentenced to
10 years in prison and fined $10,
000. Supreme Court Justice Wil
liam O. Douglas signed an order
February 7 permitting Toyko
Rose’s release on $50,000 bail
pending appeal action.
Two Manchurian Provinces
Reported Promised Reds
•y the Associated Press
SOMEWHERE IN KOREA. Aug.
8.—A Korean refugee from Seoul
said today Russia has promised to
give Red Korea two Manchurian
provinces after the war.
Capt. Kenneth R. Cornell,
American liaison officer with the
South Korean forces, told a news
conference this information came
from a Korean school teacher who
escaped from Seoul July 27.
Capt. Cornell said he considered
the source and the information
reliable.
The refugee estimated 3,000
persons had been killed in air
bombing of Seoul up to July 27.
Two 18-year-old North Korean
girl refugees said they had been
forced into the Red Army and
given fifth column spy assign
ments. They said they were or
dered to pose as refugees in
Yechon and gather information
on South Korean troops, arms and
equipment.
British Conservatives
Offer New Substitute
For Schuman Plan
Committee of Ministers
Would Wield Veto Power
Over Coal-Steel Pool
By the Associated Press
STRASBOURG, France, Aug. 8.
—British Conservative delegates
in the European Consultative As
sembly today presented a new
project for pooling Europe’s steel
and coal production as an alterna
tive to the Schuman plan.
The British outlined, drafted by
David Eccles and Harold Mac
Millan, is said to represent the
limit to which Britain would go
in joining such a pool.
British Labor Party delegates
in the assembly said they would
remain neutral in discussions. Sup
port for the new plan, they ex
plained, might embarrass their
own government. On the other
hand, they will not oppose it.
Could Veto Decisions.
Under the Eccles-MacMillan
proposals, the key control over
the international steel-coal au
thority would be a committee of
foreign ministers of the member
countries with the veto right over
authority decisions.
The project was contained in a
21-point resolution for the assem
bly’s consideration when it de
bates the Schuman plan. It out
lines a treaty which member na
tions would submit to their re
spective parliaments.
Like the Schuman plan, the
British Conservative proposal calls
upon European nations to merge
their steel and coal production
and to create a single market for
these two basic industries.
Unlike the Schuman plan, the
proposed authority would not be
responsible to a common parlia-!
ment, but to the European coun-1
cil as a whole. The authority’s
record would, however, be sub
mitted every year to the Consul
tative Assembly for review.
Committee Wields Power.
In the Council of Europe, the
Committee of Foreign Ministers
wields the real power. The as
sembly does not have the right
to act, but only to advise. This
setup would be retained in the
Eccles-MacMillan pool project.
Ministers from nations which
adopt the treaty would form an
economic subcommittee within the
European Council’s Ministerial
Committee. This subcommittee
would supervise the authority,
with power to dismiss its person
nel. The authority would be com
posed of technical experts repre
senting industry, labor and con
sumers.
The Ministers' group would
make its decision by a two-thirds
vote, with one exception. This
concerns appeals from the au
thority’s decisions where they
“adversely affect the basic eco
nomic, social or strategic policy”
of a member state.
In such cases, where the ques
tion under review concerns only
one country, that country may
veto the decision.
44th Veto by Russians
Expected as Vote on
Korea Question Nears
Reds Face Rebuff, May
Lead Council Into More
Procedural Wrangling
By th* Associated Press
LAKE SUCCESS, Aag. 8.—Rus
sit faced another United Nations
rebuff on Korea today, nut she was
expected to strike back with her
44th veto.
Delegates were generally agreed
on this as they prepared to open
the second week of the Korean
diplomatic battle at a session this
afternoon of the 11-nation Secur
ity Council.
Whether the Council would vote
today or later in the week re
mained to be seen. If Russia fol
lowed last week’s pattern, however,
a lot more procedural wrangling
appeared to be in prospect.
The delegates had before them
two proposals, one offered by the
United States and one by the So
viets. When the Council ad
journed Friday for the week end,
it already had become clear that
a majority vote would kill the So
viet resolution and a Russian veto
was waiting for the American pro
posal.
War Not Affected.
•£he actual conduct of the mili
tary campaign in Korea, however,
will not be affected by the council
stalemate.
The Soviet proposal provides:
(1) That the council invite Red
China and Red Korea to take part
in U. N Korean discussions and
(2) that the council call for an
immediate end of hostilities in
Korea and order the withdrawal
of United States and other foreign
troops.
The American proposal con
demns North Korea for ignoring
the council’s previous cease-fire
orders and calls upon all countries
to use their influence to end the
fighting or at least to keep it from
spreading.
The American resolution ob
viously was aimed directly at Rus
sia, since most of the world’s non
<6ee U. N„ Page A-5.)
Navy Puts Freeze
On Retirements
Of Most Officers
By John A. Giles
The Marines today began sum
moning their 80,000 volunteer
reserves to active duty and it
appeared certain that most of
them were destined for service
in Korea.
Officials at the Pentagon said
that it is felt that Gen. Mac
Arthur now has sufficient troops
either in or on the way to Korea
to stabilize present lines, bar
ring unforseen developments.
But they made no secret of-the
fact that more troops will be
needed for the counter-offensive
which will come this fall or early
next year. Overall, Gen. Mac
Arthur now has the equivalent
of about five divisions. Estimates
of ultimate requirements range
from seven to 10 divisions, but
some of these may come from
other United Nations.
The first 50,000 of the Marine
Corps Volunteer Reserve will be
called between August 15 and Oc
tober 31 and the remaining 30,000
will follow at an unspecified date.
The later call-up will affect main
ly the aviatioji branch.
Navy Separations Frozen.
The Navy announced today that
the voluntary separation of its
commissioned officers had been
temporarily discontinued. It esti
mated that the new rule would
eliminate the loss of about 1,700
Naval officers in the next year.
Requests for resignation from
officers with permanent appoint
ments in the regular Navy and
for retirement with less than 30
years' service will be held in abey
ance. Similarly, officers commis
sioned under the Reserve Officers
Training Corps-Holloway Plan
will get no action on requests for
termination of appointments or
transfer to the reserve. •
Naval Reserve officers will have
their requests for inactive duty
held up. and no resignations of
Naval Reserve officers either on
active duty or on inactive duty will
be approved except in cases where
it is determined that their services
will not be necessary to meet im
mediate or future requirements.
In effect, the policy will suspend
the voluntary release of all officers
from active duty except those re
questing retirement after 30
years’ service. The same policies
apply to women officers, including
nurses.
Army May Order Up Officers.
It is expected that the Army
soon will call Reserve company
grade officers—lieutenants and
captains—without their consent
since the voluntary applications
from these men have not been up
to needs. Last week the Army
ordered 62.000 enlisted reservists
to active duty “with or without
their consent.”
There are no immediate plans
for further National Guard calls.
However, officials emphasized that
(See DEFENSE, Page A-5.)
Truman Will Seek
New Subversive Law
President Truman will ask Con
gress today for new legislation to
curb subversive activities.
The President’s plan was an
nounced this morning by House
Speaker Rayburn after Mr. Tru
man’s weekly conference with leg
islative leaders.
Mr. Rayburn said the message
would deal with “sabotage and the
Communists.”
Later White House sources dis
closed that the President’s appeal
will be based on deflciences that
have shown up in existing laws
during the various Communist
cases.
It was learned the message will
call>on the country to avoid hys
teria and will urge that whatever
legislation is enacted give full
protection to civil rights.
Senate Move From Chamber
To Save Repair Costs Favored
A special Senate committee to
day unanimously recommended
that the Senate move to the old
Supreme Courtroom In the Capitol
to make way for reconstruction,
of the Senate chambers starting
next Tuesday.
A resolution to this effect was
rushed to the Senate floor im
mediately afterward, by Senator
Chavez, Democrat, of New Mexico,
chairman of the committee in
charge of the reconstruction job.
Majority Leader Lucas said
later the resolution would be con
sidered tomorrow by the Demo
cratic policy Committee.
The committee recommenda
tion came as something of a
suprise because of the critical in
ternational situation. Senator
Lucas had said the Senate was
working on a day-to-day basis'be
cause of the Korean crisis and
that he knew of no one who want
ed to move out.
Senator Chavez told the Senate
that if the work of rebuilding the
interior of the chamber were de
layed even one year it would cost
at least $150,000 more. A longer
delay would mean an even greater
loss, he said.
The resolution was signed by all
members of the special committee.
Besides Senator Chavez, they are
Senators Green of Rhode Island
and Byrd of Virginia, Democrats;
Taft of Ohio and Kem of Mis
souri, Republicans.
The House is faced with a sim
ilar situation. House leaders have
objected to moving to the new
House Office Building, where it
met last summer while a new roof j
was constructed. 1
M/ss Chadwick Slashes Hour
Off Record for Channel Swim
Shirley May France
Is Forced to Give Up
8 Miles Off Shore
By the Associated Press
DOVER, England, Aug. 8.—
Florence Chadwick, San Diego
swimmer, conquered the English
Channel today in record time, but
Shirley May France was forced to
give up 8 miles offshore.
Miss Chadwick, who is 31 and
a professional swimmer, cut the
woman's record set by Gertrude
Ederle in 1926. She made it in
13 hours 28 minutes, 1 hour and 3
minutes under the Ederle mark.
She swam to Dover from Cap
Gris Nez, Fiance, on a course of
at least 22 miles and scrambled
ashore through seaweed.
Thousands of persons lined the
white cliffs of Dover. Reporters
asked Miss Chadwick if she was
all right. “Yes," she said, “but
these slippery, jagged rocks are
FLORENCE CHADWICK.
not so good to scramble over after
a long swim.
"I feel fine and am quite pre
pared to swim back.”
When she was only a quarter
(See SWIMMERS. Page A-6.)
2 Destroyer Escorts
To Be Given to France
Under Arms Aid Act
Bonnet Will Accept
First 2 U. S. Warships
At Philadelohia
. ly th« Associated Press
Prance will get its first two
United States warships under the
foreign military aid program
August 12 at Philadelphia.
The two vessels are the 1,240
ton destroyer escorts Samuel F.
Mills and Riddle, both in service
in World War II.
French Ambassador Henri Bon
net will accept the ships from
Rear Admiral R. E. Schuirmann,
commandant of the 4th Naval Dis
trict.
France is the second country to
get warships from the United
States under the assistance pro
gram. Two destroyer escorts were
transferred to the netherlands on
June 1. Eight more ships of the
same class are now being prepared
in American shipyards for early
delivery to western European
allies.
six Snips Sent to Indo-Cmna.
Indo-China has received six
support landing ships and eight
C-47 transport airplanes from this
country.
Turkey will (take delivery of a
submarine rescue ship on August
15. Two submarines now being
refitted by the Navy also are ex
pected to go to Turkey.
Burma is expected to get a num
ber of small patrol craft in the
near future.
The tempo of arms aid to the
smaller nations of Southeast Asia
is likely to be stepped up soon,
defense headquarters indicated,
following receipt of the prelim
inary report of the United States
survey mission now in Southeast
Asia.
100 Navy Planes Received.
France has already received;
about 100.United States Navy air-!
planes. They were ferried across i
the Atlantic by the French escort
carrier Dixmude.
Great Britain has taken delivery
of a substantial number of B-29
Superfortresses in the last few
months. The total number of
these bombers to be given the
United Kingdom has not been an
nounced but it is generally under
stood here that it will run to!
about 70.
Although defense officials have
declined to give out the exact!
number of guns, tanks and other
heavy ground equipment included
in the current arms aid program,
spokesmen s6id today that the
movement of armament from the
United States to Western Europe
is proceeding steadily.
Two Men and Girl, 4, !
Die in Wild Shooting
Spree in Ozark Hills
Father of Slain Child
Is Hunted as Gunman;
Two Others Wounded
Sy the Associated Press
EMINENCE, Mo.. Aug. 8. —
Three persons were killed and
two others wounded in a wild
shooting spree in the Ozark hill
country last night.
The gunman fled into a heavily
wooded area near this South Cen
tral Missouri town and was re
ported surrounded by posses there
today.
The dead include R. N. Fansler,
about 63, a farmer; his son, Homer
L. Fansler, and a 4-year-old girl,
Barbara Harris.
Capt. J. A. Tandy of the State
highway patrol identified the
gunman as William Harris. 39,
father of the slain child.
Motive Not Known.
Sheriff Hubert Wright said Har
ris' wife had been living at the
Fansler home recently, although
it was not definitely known
what motivated the shooting.
Harris appeared at the Fansler
farm home unexpectedly last
night and shortly afterward be
gan firing.
Fansler and the Harris girl were
killed instantly. ' Homer L. Fans
ler died en route to a hospital.
Wounded were Fansler’s wife,
Rosa, 60, and a brother-in-law,
Elmer Nichols.
It was believed the Harris child
was accidently killed during the
wild shooting.
Two Girls Taken as Hostages.
Harris forced Fansler’s daugh
ter, 15-year-old Lola Jean, and
16-year-old Joyce Thomas to ac
company him to his car. Miss
Thomas is a friend of the Fansler
family.
The car went into a ditch about
a mile and a half down the road.
Two farmers, attracted to the
scene, were fired on but escaped
injury.
Harris fled into the woods tak
ing Lola Jean with him. Miss
Thomas was released unmanned.
There were conflicting reports,
on the whereabouts of Lola Jean.'
Barbara Harris’ body was found
In her father’s car. The sheriff
said he believed Harris was at
tempting to take her to a hospital :
when his car ran off the road.
Prosecuting Attorney Friend
Greene said Harris was an ex- 1
convict and formerly lived in St.
Louis. 1
* * s
House Puts Off Debate
On Control Bill to Let
Banking Group Work
Spence Unit Goes Over
Measure Reported Out
By Senate Committee
By J. A. O'Leary
Administration leaders side
tracked House debate on the eco
nomic control bill again today to
give the Banking Committee more
time to try for an agreement.
The House committee, presided
over by Chairman Spence, Demo
crat. of Kentucky, was in closed
session going over the bill the Sen
ate Banking Committee reported
out last night, giving President
Truman a free hand to decide
when and how' to apply price, wage
or ration controls.
After conferring with Mr.
Spence at noon, Speaker Rayburn
announced the House would turn
to some other business today. If
this decision had not been made,
the House might have found itself
in the same deadlock that pre
vented final passage of a control
bill last week.
McKinnon Presses Plan.
The pending question in the
House ks the motion of Represen
tative McKinnon. Democrat, of
California, to revive his plan of
requiring Mr. Truman to do some
thing about prices and wages
whenever the cost of living index
rises 5 per cent. This plan was
adopted, then killed, and re
offered last week.
Buchanan Expects Agreement.
Representative Buchanan of
Pennsylvania, an administration
supporter, said this afternoon he
thought the House committee was
close to an agreement on the price
and wage control amendments on
a standby basis. The committee
met again at 2 o’clock.
Meanwhile, Chairman Maybank
of the Senate committee told a
press conference that in the bill
reported last night his committee
tried to tie prices and wages to
gether, but on a standby basis.
President Truman has made it
clear he opposes the McKinnon
plan, or any other rigid formula.
Last week, however, his House
floor managers were not in the
driver’s seat. As so often happens,
Southern Democrats held the bal
ance of power whenever they went
along with the Republicans.
The Senate bill contains one
mandate concerning wage controls.
It provides that if he applies
price ceilings to a “substantial”
part of the economy he must in
voke wage ceilings generally. Pre
sumably, however, the President
also will make the decision as to
when price curbs are affecting “a
substantial part of all sales at re
tail and materially affecting the
cost of living.”
Would Cover Two Years.
The Senate committee bill con
tains a section authorizing the
President to create machinery
similar to the War Labor Board
to promote labor-managementi
peace during the two years the •
control bill would be in effect. It!
stipulates, however, that such!
agency would have to work within 1
the Taft-Hartley law.
Senator Maybank, Democrat, of
South Carolina, said his Banking
Committee was unanimous in or
dering the discretionary bill re
ported, but noted that some mem
bers reserved the right to oppose
parts of it on the Senate floor.
Senator Capehart, Republican, of
Indiana, said that he. Senators;
Bricker of Ohio and .Tobey of
Sew Hampshire, both Repub
icans, reserved such rights.
East- German Police Desert
BERLIN, Aug. 8 (/P).—Eight Ger
nan policemen from the Soviet
;one, frightened by recurring
umors they would be sent to;
Sorth Korea, fled to West Berlin
:arly today for asylum. Last month
.67 members of the Eastern mili
jirized police force deserted.
Truman Leaning
To Multi-Billion
Tax on Profits
O'Mahoney Will Seek
Anti-Profiteering Levy
On Corporations
ly tha Associated Press
Close associates said today Pres
ident Truman has made up his
mind to ask Congress for a multi
billion-dollar excess profits tax on
corporations.
This word reached Capitol Hill
as some members of his own party
threatened to go beyond the
President and tack on an “anti
profiteering” levy on the $5 billion
“first installment” general tax
boost which the President request
ed to help pay for arming against
Communist aggression.
Mr. Truman did not mention an
excess profits levy in his first re
quest for more taxes at the out
break of the Korean war. His re
ported intention now to call for
one was subject, of course, to de
velopments.
A drive had developed in Con
gress to put it into law, without
his recommendation, just as sup
port piled up for a similar move
ment to give him economic pow
ers—over prices and wages—
broader than he requested.
Waiting for Showdown.
Senator O’Mahoney, Democrat,
of Wyoming, and Representative
Mills, Democrat, of Arkansas,
each is wating for the opportune
time to call for showdowns on an
excess profits tax. Senator
O'Mahoney said he has in mind
an ’’anti-profiteering” levy that
would collect about A billions a
year.
It is not certain whether some
thing bordering on a stampede
“to take the profits out of war,’*
as sponsors put it, will be averted
now by word that the President
himself intends to ask for the
profits tax later.
Mr. Mills said “if Congress is
going to authorize ceilings on
wages and prices it certainly must
put a ceiling on profits.”
Meanwhile, the new general tax
bill—being built around Mr. Tru
man’s *5-billlon' request—began to
take shape in the Senate Finance
Committee.
Income Tax Boost Planned.
Indications now are the com
mittee may approve:
1. New levies of about $3-billion
annually on individual incomes, to
put the total near $22-billion a
year. To do this the committee
may follow the President's grad
uated formula that would raise
the tax bill of some income groups
by as much as 20 per cent, or it
may call for a flat percentage
increase across the board for all
taxpayers. The increased rates
may be effective October 1, to take
about $700-million from individ
uals in the last three months of
this year.
2. An additional take of $1 bil
lion from corporations by increas
ing the regular corporate income
tax rates. This would bring cor
poration taxes to about $12 billion.
The committee voted yesterday
to pick up new millions by tax
ing—at the regular corporation
rates—the unrelated business ac
tivities of educational, charitable
and other tax-exempt organiza
tions.
Would Plug Loophole.
This plugs what Mr. Truman
has called a “loophole” in the
tax laws. Several such competi
tive businesses, operated for or
by universities, now pay no in
come tax.
The President hoped to get $500
million of the $5 billion in new
revenue by loophole plugging, by
taxation of the investment income
of life insurance companies and
by a withholding tax on corpora
tion dividends that would collect
taxes on dividends that some in
dividuals now fail to report on
their income tax returns.
However, the Senate Committee
has rejected the dividend with
holding which was calculated by
the Treasury to yield $175 million.
In its action yesterday on urn
related business income of tax
exempt organizations, the commit
tee liberalized procedures already
approved by the House.
It said the research by an edu
cational institution or hospital,
even if done for a private firm for
pay, shall not be considered as un
related business for taxation pur
poses.
Stories Related
To Page I News
Relating to Korea.
Texts of Official Reports on Fight
ing in Korea. Page A-3
West Germany Rearming Would
Star.t War, Eckener Says.
Page A-7
Naktong River Line Expected to
Be Static for Months. Page A-3.
Relating to Defense.
District Air Guard Starts Intensive
Training Saturday. Page B-9
Danada and U. S. Planning War
Production Pool. Page A-3
Recruits Now Being Sought by
Coast Guard. Page B-l
3yrd Says Truman Will Ask $15
Billion More. Page B-l
Relating to the U. N.
U. N. Women Workers Find Jobs
Are Rugged. Page B-U

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