Show INSIDE STUFF Pol Politics i tic s r i it t F Finance i n a 11 ce r WASHINGTON By Paul Mallon MalIon Copyright 1933 b by Paul Mallon Most Washington secrets usually are re re passed around in stage whispers sooner or later The recent hurried g of ot federal reserve bank governors gov Wa was one secret that was really kept kept Those In the meeting would not riot nat even ven tell their best friends about it The governors are arc known to have been summoned hastily No one knew they were to meet until after alter their session opened Governors from the far fari west were left out because thc they could not get here in time After a general council meeting the board itself held a private session ses ses- ion sion at which the real business was transacted At this session a resolution tion zion was drawn up and signed Certain tam tain legal authorities were called in inand inand inand and consulted consult d on the text of the resolution reso reso- lution before it was sas signed These facts acts carry certain definite implications GUESSES The only legal question about which the f federal deral reserve would be reso reso- at this time is the ownership of gold held neld by federal reserve banks Their gold is or was the basis of our currency If II Mr Roosevelt devalues to 50 ce cents ts he would seize half of or orthis this gold for the government The Theres res reserve bankers have been murmuring murmurIng murmuring murmur murmur- ing behind their hands that this would be illegal The obvious deduction is that the council wanted to protest against the legality of ot seizure of their gold that it instructed the board to prepare such sucha a resolution that the board prepared it with l legal gal help and presented it to Pr President ident Roosevelt You can be reasonably sure that is what happened HASTE That docs does not mean mein the federal reserve people felt that Mr Roosevelt would devalue right away Their private private private vate information indicated that he would take no steps along that line for three months Other items discussed at the meeting were A What about the small banks which cannot qualify for the deposit guarantee guarante fund B the influence influence in in- fluence on on banking of ot direct government govern govern- m meat ment nt loans to industry and C how howl l loans ans may be made to municipalities Jt was th these e items rather than the resolution on gold ownership which caused all the haste in summoning the meeting RESISTANCE Congressional Republicans have discovered in their private powwows one common ground upon which trey they will resist the administration They will combat all legislation centralizing ing lag more power in Washington The keynote to that campaign was sounded by Senator in a speech to newspaper business men out west recently A good constructive construe construe- tive fight Ight can be conducted on that plane without involvement in poll poli tics States State's rights Democrats in congress congress con con- gress can be stirred up to resist the trend toward federal absorption of authority In fact they already have STEPS STEPS STEPS' That was the feeling behind the house ways and means meano action 1 ing lag the treasury plan of ot having the federal government collect all liquor taxes and refunding the states their share States and municipalities arc are already already already al al- al- al ready indebted to the federal government government government govern govern- ment through R F C loans which can cannot cannot cannot not be repaid any time soon The AAA and PW A have similarly simi simi- arly strengthened federal jurisdiction jurisdiction jurisdiction tion on every side Prohibition repeal repeal repeal re re- re- re peal was hammered through the state legislatures by unusual federal presure pres pres- sure Lure Banking is being federalized by strong progressive steps If the administration recommends legislation to handle municipal debts that will mean another strong link linkin in lathe the ever widening chain This point will probably furnish urn h the underlying theme for the whole coming congressional ional session MILK Agriculture Secretary Wallace is exercising his muscles daily dally for a strong blow at th the milk problem Those nearest to him whisper that they have heard him fowling about the various producers producers' organizations being nothing more more than distributors In overalls The solution he is working on will Include a fixed farm fann price but no retail price He figures that retail prices prices' will be lower if permitted to seek their own level That program will be announced shortly NOTES No ni matter how much is done the federal reserve will give up its gold in the end Mr Roosevelt can avoid art an argument if it he wants to by getting authority from congress Ss Those on the inside at t the e economic I school chool Columbia university still ex expect ex ex- peet Professor Tugwell U back in February February Feb Feb- but Tugwell'S associates here My uy there is not a chance now now that his war with George Peck Peek has bas been settled However Tugwell will lecture lee Ice ture once a week at Yale next semes emes- Continued on Paste Page Ilir INSIDE STUFF Continued from Pose Pue One ter although an announcement about that is yet to be m made de S When Mr Roosevelt was last at Warm Springs he called a government government govern govern- ment official at home here by long distance and reversed the charges He was at the Warm Springs foundation and did not want to charge the call to the foundation bill but the official is out that much NEW YORK By James McMullin Copyright McClure Newspaper Syndicate Wall street insiders have done more than usual year end security selling to o establish tax losses this month Henry remarks about the need of stiffer taxes to balance balance bal bal- ance the budget impressed them plenty The They have a definite idea that unearned incomes are arc in for the worst jolt olt yet and they want to shrink them themas themis as is much as is legally possible while theres there's time Talk in inner circles confirms the recent report in our Washington column column col- col imn that an undercover drive will willbe willbe wille be e staged to keep congress from agreeing on a new tax program before before be- be fore ore 1934 income statements are filed Also political wires will be urgently pulled to prevent any tax legislation legislation legisla- legisla tion ion that is passed from being made retroactive BUDGET Despite the National Economy league cague there isn't as much opposition here to government spending as you might think Even in banking circles you find support for the double budget idea with the corollary that only the curent current current cur- cur rent ent one needs to balance bllance Those who hold told this view maintain that the governments government's governments government's governments government's gov gov- capital expenditures represent represent rep rep- represent resent an incalculable investment inhuman in inhuman human morale as well as a tangible investment in public works They compare government borrowing for forthe forthe the he capital budget with an art individual borrowing to build a house whereas borrowing sorrowing to meet the current budget would be bc equivalent to going into debt to live above your income level This school of thought contends that as long as Interest and amortization charges on the capital outlay are amply covered In current estimates there here is no possible cause for alarm 1 about government credit They believe be- be lieve the president sees this picture clearly One well known conservative says that hat the government must spend more than han it receives if it it wants to lift lilt purchasing power He says that if taxes axes and expenditures just balance its t's simply taking money from one pocket to put into another I SECURITIES I IA A possible amendment to the se ties act is getting attention in informed informed in in- formed local quarters It would exempt exempt ex ex- ex- ex empt outstanding security issues from 1 registration requirements for resale Nothing has been said about it out loud oud but the possibility of selling the idea dea to congress is under discussion The point is made that d distress selling selling sell sell- ing lag by people who needed money has depressed the prices of ot many corporate corporate corporate corpo corpo- rate bonds well below their true value to to the detriment of all concerned Normally security houses which saw sawan sawan sawan an an issue undervalued would be interested interested interested inter inter- ested in accumulating it for redistribution thereby supporting the maret market market mar- mar ket et and pushing prices up But the securities act makes redistribution very complicated and the velvet is too thin hin to make such accumulation worth while Hence the continued sag in inmany inmany inmany many bonds bond Sponsors of the idea are not over- over sanguine about making a dent in con con- gress They believe Washington is convinced convinced convinced con con- vinced that security profits are arc im im- im- im moral But they claim their remedy would make credit and refunding problems much easier to handle CLUB In the past such accumulation has sometimes been as a club on the corporation who whose bonds were supported supported sup supported ported The house which had accumulated accumulated accumulated ac ac- cumulated would ask a 3 cut of the corporations corporation's corporations corporation's corporations corporation's cor cor- next financing on penalty of f dumping their sack of ot bonds on the he open market thereby market thereby depressing prices and damaging the corporations corporation's credit credit it If they didn't get what they wanted MAGAZINE The magazine Neues Neue New Diary in Paris has become the leading publication of the German ref ref- ref ref- The of its inside stories on German on goings-on has won wont it t an astonishingly large subscription list 1st Fifteen hundred copies are mailed weekly to the United States alone Among the secret contributors are several high nazi officeholders who are dissatisfied with the way things are being run in the third reich REVOLT The first revolt among nazi storm troopers reported in this column on December De-cember 4 has been followed by others others oth oth- ers of a more extensive extensive nature about which all nIl news has bean been completely suppressed A number of ot storm troop units inthe inthe in inthe the eastern Harz mountain district rebelled en masse Strong detachments of ot Hitler's coated black-coated special guards subdued their brown broth broth- ers Order was restored with the score nine dead 20 wounded and a total of ot years at hard labor imposed imposed im im- posed by the new nazi courts martial GUNPLAY The official German university students students' students students' students students' stu stu- stu- stu dents' dents magazine has just been renamed renamed renamed re re- re- re named Book and Rifle The first edItorial editorial edi edI- tonal states From the unbelievably powerful unity of ot book and rifle a anew anew new reality determined by the PrussIan Prussian Prussian sian spirit must arise and no one may believe that he is ls entitled to neglect the rifle for the book Another article article ar ar- ar- ar tide entitled Socialism and Foreign Policy began When I hear the word ideology I reach for my gun ARCHITECTURE In order to protect the German people from the poisonous effects of Oriental Jewish architecture the buildings bureau in Berlin dorf has forbidden the construction of houses with flat roofs I |