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Show THE SALINA SUN. SALINA, UTAH Scenes and Persons in the Current News SEEN-- -' HEARD around the National Capital iBy CARTER FIELD 525553 i 1 A. E. Giegangack, new public printer, a Eighteen thousand homeless in southern floods. 3 men quell uprising in Louisiana against Huey Long's policies. National Guo -- Lumberjacks Stage Their Own Tilt Washington. The uevv dan for government aid for financially sick railroads, to be made possible by bills just Introduced with the approval of the administration in both house and senate, is a combination of scaling down the capital structure and government guarantee of bond Interest. Originally, ns told In these dispatches last year, the plan was to have the government guarantee the interest and principal in return for a concession by the bondholders both as to amount of the principal and rate of Interest The new plan Is a variation of this, not actually In the fundamental question Involved, but in the method of approach. As in the first place, it is intended to he applied only to railroads for w hlch there Is really some economic hope. It Is admitted that there are quite a few which are simply beyond saving, economically. All the proposed legislation does is to give the RFC the right to purchase railroad bonds, regardless of their maturity date, at the market price. Thereupon the RFC regards the amount paid for the bonds as a debt of the railroad to the RFC and charges the railroad the regular RFC rate. This rate is now 4 per cent. This would not probably enable the . RFC to get anywhere with the situation, were it not for another law already on the books, the new bankruptcy law. Under Section 77 of the bankruptcy act any federal court may direct a scaling down of all classes of securs of the ity of any railroad If holders of each class of bonds and preferred stocks approve. Were It not for the bankruptcy art a small group of bondholders, by refusing to sell at what had been market prices, might either prevent anything from being done or force the government or the railroad company to buy them off. Thus a 5 per cent railroad bond might be selling for 20, Iiut the plan could not be applied because 5 per cent of the holders insisted on being paid par. Many a railroad merger In the past has been blocked by such attempted holdups, and many another has been overcapitalized because the -promoters . paid too much to minorities.two-third- Scene at the first annual blocking contest at Lincoln, Wash., with some of the Wests best lumberjacks entered These blocks are pine and marked with chalk like you would cut a pie and it takes real skill to hit the line and strength to put the ax through the block with one blow. After the block is cut it looks like a cut pie. Otto Johnson, second man on the right, is the champion blocker, winning by two blows. Hits Sharpshooters The new proposal strikes hard at e sharpshooters. It would something like this: The New Fork Cripple Creek, to take an imaginary name, Is a fairly sound railroad, except that It is overcapitalized. It cannot possibly pay the coupons on its general mortgage 7 per cent bonds, or its 5 per cent first mortgage bonds.' So that for the time being the bondholders are getting nothing. As a result, the first mortgage 5s sell down to 40, and the gtneral mortgage bonds sell down to 20. If the railroad company could buy in all those bonds, at tliuse prices, with money borrowed at 4 per cent, it could then emerge from receivership, and earn enough to pay the 4 per cent. Assuming a total of $100,000,000 on each bond Issue, the interest on the general mortgage bonds would be $7,000,000 a ear, and on the firsts $3,000,000 a year a total of a year. Whereas, the Interest at 4 per cent on the market value of the bonds would be only $2,100,000 a year, So appeal is "made to the bondholders s to agree on this plan. If of them will consent, the RFC will buy their bonds. They will get something instead of nothing in the way of inters to of est, and from their principal at maturity Instead of probably nothing. Not only that, but if they act promptly, they will get practically government bonds, so that acSan Diego, Calif., prepares for California Pacific International exposition tually they need not worry tn the future about whether their railroad With many buildings already prepared for exhibits, and other units rapidl taking form in the hands of thousands of workers, completion for Its opening makes money or not. For another secon May 29 is assured. Some 29 nations from all parts of the globe will take tion of the bill authorizes the RFC to part and the installation of big exhibits from all parts of the United States exchange Its own bonds, which In efwill commence shortly. Photograph shows the Avenida de Los Palacios. Scene fect are government bonds, for the securities so taken. from the Tower of the Science of Man. All of which is apt to Induce the bondholders to approve, and as only s need approve to have a court order the plan In effect, the path to reorganization on a sound basis has at least been smoothed. these NEW FOOTBALL COACH would-b- work $12,-000,0- W. H. (Bill) Britton, who sucIt. It. Nejland as football coach of the Unhersity of Tennessee. Neyland has been transferred to the Panama Canal Zone, being an army ofli cer on active duty. Britton is not new Mnj ceeds Maj. to the university, as he has been end coach for the past nine years. HITS LUMBER CODE two-third- one-fift- Christens New U. S. Destroyer h two-fifth- two-third- Cummings on Spot Unite States District Judge Alex ander Akerrnan of Tampa, Fla., in deli ing the government an injunction to prevent Logan A. George, local lumber 1 dealer, from operating without observing the lumber code provisions, has rendered a decision that holds the wage and hours provisions of the NUA lumber code unconstitutional. Sodium Sulphate Deposits Chemical analysis of the newly discovered sodium sulphate deposits at Grenora, N. D., reveal the chemical is more than 93 per .cent pure, according to Univeisity of North Dakota minerol-ogi.-ds- . They believe the deposit Is the largest and purest yet found In the In ted States and estimate there are Dv km ),ooo tons in northwestern North Dakota. Mrs. Edward C. Dale of Philadelphia acting as the oilicial sponsor for tin Dale, new destroyer addition to the navy, as the vessel was christened and launched at the Brookljn navy jard. With her Is Bear Admiral Iates Stirling, Jr. U. S. S Attorney General Homer S. Cummings has Jumped from No. 10 to No. 1 In the list of most criticized cabinet members since he argued before the Supreme court the constitutionality of what the government had done about the gold clauses, lie is not only being criticized by lawyers outside the administration, but by New Deal Insiders. The criticism, as usually Is the case, comes from two extremes those who think he did not mnke the case strong enough, and those who think he made It too strong. Instancing the latter viewpoint, a very prominent diplomat, at a recent dinner party, was asked what he thought would he the effect If the Su- preme court shoqlt) rule against the government. I would rather ask. that question than answer it, he began,' In true diplomatic fashion, but then, suddenly, out, exclaimed: seeing a perfect but I am Inclined to agree with your Attorney General Cummings that It would mean chaos. That is exactly the kind of talk the administration does not want going on. Especially as It does not believe the efTeet of an adverse decision would be anything like chaos. A representative of Important financial Interests In Washington has Just completed a canvass of a large numbei of prominent constitutional lawyer? who have been practicing for years before the Supreme court as to their opln Ion of the outcome. A very large majority thought the court would uphold the government. What was appraised as a very intelligent minority did not But here Is the Interesting polnl about this minority view. It held thal the court would probably uphold tht right of the government to change the terms of private contracts, but not tc change the terms of government bonds Just Supposing SHADOW OF DOUBT Now assume for the moment that the court will rule this way, and consider the results. The government would have to pay gold for its gold clause bonds on maturity. But the Supreme court has upheld the right of the government to commandeer gold at the old price. So that anyone holding such a bond could demand the gold, receive It and then have it taken right away by the government at the old price. The net effect of which, so far as American holders of the bonds are concerned, would be precisely zero. Foreign holders of such bonds, 'however, would not be subject to having their gold commandeered at the old price. So that the net effect, assuming all foreign holders demanded and received gold at the old rate for their bonds, would cost the government, it Is estimated, less than $00,000,000. Not so good, but hardly chaos. But there are other complications to minimize even this. For instance, the Hague court decision that the action of the American government had settled the matter! What gives that worried look to the treasury tax experts, trying to figure out the next taxes to be advocated to ward the end of this session, Is hot the dilllculty of devising taxes which will raise the money In the least painful manner, but the Idiosyncracies as they see them of senators and mem hers of the house on this point. For instance, .when the sales tax was proposed there was a hullaballoo about taxing the poor mans groceries Whereupon food and clothing were promptly eliminated. But there has hardly been a peep about the process lng taxes, designed to aid agriculture, though these touch the poor mans groceries, shirts and clothing, carefully skipping over most of the luxuries Mrs, Hardface was trailing her diminutive husband round the big store much against his will. After purchasing several articles she paused and looked pensive. Ah, she said at last, I rememe ber. We want a for the drawing room light. Presently the- - article in question caught her eye. I "Theres the very lamp-shad- e wanted!" she cried. Its two guineas. Dont you think It will do, lamp-shad- John?" He shook his head. No, my dear, he replied miserI think its a shade too dear." ably. Betrayed Bagshaw was pouring out his unhappy experience to his friend at th club. "And what caused you to leave before the meeting was over? asked the latter. looked uncomfortable. he stammered, the lecturer stated that ones shady character Is denoted on the lower part of the face. Well, what of that? asked the Bagshaw other. The dejected one lowered voice. Why, he murmured, a double chin. Good Bag Jones came along the street 1 Reciprocity Treaties Protracted delay In obtaining the reciprocity treaties that were to liven up American exports and permit entry Into this country at lower tariff duties of goods, which would not do very much harm to American workers, Is being widely criticized, especially in view of the high hopes with which George Peek and Secretary of State Hull embarked on the enterprise. The chief, If not the whole, trouble has been the most favored nation clause existing lit nearly all American treaties with other countries. Which means to say that If America reduces the tariff on brandy, ns a concession to France, for example, America would also have to admit Italian, Spanish, Greek and South America brandies at the same reduced rates. Whereas, none of these other countries might be making appropriate concessions to take more American goods. At the present moment negotiations with Spain have virtually bogged down. The whole trouble is that It has been found next to Impossible to define slier ry wine In such a way that only Span ish sherry would be meant Merely to reduce the duty on sherry would not solve the problem. The Spanish negotiators, say, with some point, that cheap they call thorn imitation sherries are produced In many countries, notably Italy, Portugal and Australia, not to mention South America. They are willing to reduce duties on American goods, which would result In a very fair increase In our exports, indeed, according to experts, but only If this country makes a special concession to sherry produced in Spain only. Which the "most favored nation clause makes it impossible to do, as our Department of State views the situation. Causes Mirth All of which, however, Is causing gales of laughter In most of the foreign chancelleries. They say, very privately, of course, that no nation In the world Is so utterly squeamish about such things as the United States of America. But they do not say that to the State department. It seems to be a sort of gentlemens agreement among the other countries of the world that not even for the selfish advantage of any one of them may that one tip off Uncle Sam to what is going on, lest the efforts of that tipping off recoil on them all. But Just as an Illustration of what Is being done. Britain has special trade agreements with both Spain and Portugal. In those agreements, curiously enough, sherry figures for Spain, and port for Portugal. The agreement with respect to sherry is so drawn that no sherry t.vpe wine from any other country is affected. It is done by the sim-piexpedient of defining sherry, as far as the terms of that agreement are concerned. as wine produced in the Xeros district of Spain and exported to Britain from the port of Cadiz! In the agreement with Portugal the same technique Is followed, the district of Portugal being specified, and the port of Oporto. And jet Britain has mo- -t favored nation 'clauses in her treaties. Nor has any nation gotten anj where protesting against this discrimination against her In favor of Spain or Porg tugal Copyright. VYKU Service. his got , look- ing wet and unhappy. Hello, said hia neighbor : Where have you been? replied Jones mournFishing, fully. Catch much? was the question. "A lot, Jones replied. First train there; first train back. Caoght In a thunder storm; caught a cold. I shall an after thought And catch It when I get home. ' NOTHING DOING Youve got a cold, old man. Yes. Don't know how I caught It, but it seems . Now, look here. I know a sure cure that Is, If you take it right away, No use. Seven men have made . me promise to try theirs first and I cant take yours right away, so It won't be any .good at all. Sorry, Good-by- . Jut a Suggestion Mrs. Jowles With feet the size of yours, you should get a Job with the government. Mr. Jowles What doing? Mrs. Jowles Oh, stamping out forest fires, perhaps. Hm-- m 1 Defendant (being questioned on the stand) Ive been wedded to the truth from Infancy! Prosecutor Is the court to Imply from this statement that you are now a widower? Every Time Wife Man is the stately ship; woman the little tugboat at its side. Hubby Sure; Its the ship that always gets torpedoed, not the tug. WNF W 635 |