Show INSIDE STUFF Politics and Finance W WASHINGTON ASIlI By Paul Mallon Copyright 1934 by Paul M Mallon Mailon Everyone knows Mr Roosevelt has hasa a soft ot spot in his heart for the navy but ut only his i intimates know how howson son soft it is is and and they arc are becoming alarmed at the way the softness is spreading A current c case se is the strong but amiable inner struggle over the navy effort eort fort to gobble up the coast guard Mr Ar R Roosevelt's best friend Treasury Secretary tried ardently ardent- ardent ly y to prevent It IL So did Woodin Senator Senator Senor Sen- Sen ator or Carter Glass and others They have lave lodged confidential protests at atthe atthe the he White House Even Navy Secretary Secre- Secre tar tary ary Swanson is Is' prIvately lukewarm toward oward it t But the navy admirals want it and they arc are going unrestrainedly bout about the job of taking it iL TRICK Those on the Inside at the navy report re re- port that Naval Operations Chief Chiei Staney called the co coat coast t guard several days days' ays ago He ordered o-dered that aides be besen besent sen sent ent over to the navy to to work workout out absorption absorption ab- ab sorption of the coast guard by bY the navy avy The coast guard sent the aides and nd conferences have hav been g going ingon ing on backstage for several days An executive order is due to be announced in a few days officially proclaiming reclaiming the transfer There is Js isa istrick a trick in that The economy ac act gave ave Mr Roosevelt the the right right to shift hift bureaus around a es as he desires His tra transfers become law unless congress con con- gress ress negatives them within sixty days Now congress has protected the coast guard against navy absorption 17 times by a vote vole A majority Is probably against it now But it wile will wil willbe be e almost impossible physically for congress to veto Mr Roosevelt's proposal pro pro- osal within the time limit APPETITE JOne JOne j jOne One thing which makes make the navy sea dogs s so hungry for lor the coas coast guardIs guards guard Is s the fact that tha the saving life boys recently got out of the public works grab bag It is building nine gunboats just small nough enough to be outside the London treaty limitations also Iso Live five cutters manned with sea sea- planes In IIi addition it has its own new school chool at New London training near neary ly y men to be coast guard officers When the navy takes the coast guard guart over ver the admirals will get those jobs job and nd the coast guard officials will be retired This does doe not mean that all the admirals admirals admirals ad ad- arc are wholly selfish in their purpose purpose pur pur- pose ose because some of them then apparent ly y believe sincerely that coast roast guard guart efficiency and ec economy nomy would be promoted promoted pro pro- by the move However a nonpartisan will find lind i it difficult to understand that The Th coast guard people have been trained trainee all their lives in saving lives relieving tag ing ng the disabled combating smugglers smugglers smugglers smug smug- and protecting shipping The The- navy people are trained for an en en- irely different work They are n no nomore nomore more alike than a policeman is like a soldier The only thing they do in ln common is navigate The shipping interests know tha that So do the fishermen Both are supposed supposed supposed sup sup- posed to have objected to the trans trans- fer I The navy says the move move would woul That is is' th the save a year best est argument for it but impartial budget officers do not agree The They think it will cost the navy just a as much to do coast guard work as i ilow it now low costs the coast guard Why M Mr Roosevelt likes the idea so much is that it would provide jobs for the budding budding bud bud- ding admirals who are graduated graduate from Annapolis each year and havno have hav no place to go Another reason Is that when he was a young man in th the navy lavy department he recommended the transfer and somebody turned i it down GOLD passed out these new gold regulations with en on innocent loo look on his face It was almost too inno inno- cent The idea was cr created ted that the regulations regulations regu regu- lations were Just a routine matter o ono of no importance Actually they suggest sug rug gest plenty They came the same sam day the committee for the nation natio started howling th that lt the gold price policy was not a success because th the London bankers are blocking blacking it IL The Th committee has called the turn o on each ch step the administration has taken up to now At present it appears appears ap ap- ap pears to be riding on a back sea seat but out it is still trying to call another turn It demanded doubling the price o of gold If It Mr Roosevelt were going to d do that the first thing he would require is just such regulations as os Morgen Morgen- thau issued CURRENCY There is nothing new about the cu curent current current cur cur- rent idea that the government will i isue issue is is- sue paper money after alter i it devalues devalue That is just an obvious and necessary detail of the original devaluation scheme It Il is being played up now no as if It means Mr Roosevelt is dropping dropping dropping drop drop- ping his lili old Idea and going in fo for lor something new Devaluation to fo 50 cents means meaN the treasury treasury needs only hall half of its gold reserves as a backing for money now outstanding But it cannot keep that gold old profit In a vault The pro profit nat nat- rally must be used to pay the government gov- gov debts The only way to pay them lem Is in lit dollars so it will issue dollars ollars against its gold profits OVERDRAWN The news will n not t be out until congress congress con- con gress ress gets a report but the farm arm credit administration has been payIng payIng pay- pay Ing ng out at a rate of a month la lately ly That has forced it to its account at atthe the R. R F. F C. C The reason that it cannot float its iu bonds is that they must bear an interest interest inter inter- est eat rate of ot only ohly 4 i per cent Only the interest and not the principal of ot those bonds is guaranteed So they are no nomore nomore nomore more desirable investments than or or- inary government bonds which pay round around around 4 per cent Yet the farmers now want to cut down the proposed interest rate to 3 per cent which would make It even more difficult to float loat t them Congress will either have to increase in crease the interest rate or guMan guarantee the he principal of the bonds It probably probably abl ably will do the latter NEW EW YORK Br By James McMullIn lc McClure Copyright Newspaper Syndicate Syndicate Syn Syn- For once once Jesse Jones drew a cheer from New York That was when he went on record as definitely opposed to 10 direct industrial loans by the theR R R. F. F C. C What encourages the boys is the conviction that Jones would not Hot have spoken so flatly without approval from tram the powers above They Inter Inter- pret the Jones Jones' statement as a light beam sent by the administration through the clouds and Noah couldn't have been gladder to see the olive branch They only hope that congress will heed its masters masters masers maser's mas mas- ter's ers voice on the subject Private New York promises of cooperation cOoperation cO co Ca- operation in credit had something to do dOt with do-with with the shift on the R. R F. F C. C front If the promise is performed performed per- per formed it will vill get the results Washington Wash Wash- ington wants without either increasing increasing ing the public debt or involving the government In direct Industrial management man man- The former Point anneals t to the administration and the iatter latter to banking and industry so everybody ought to be happy RAILS BAILS But the bankers are not so happy at the implied R. R F. F C Co Cd refusal to bail them out of ot any more railroad swamps From now on its looks as if railroad bankers and security holders will have to swim by their own efforts efforts ef forts or sink The Illinois Central with Central with maturities maturi maturities ties this year running around fifty million dollars will dollars will provide a significant sig test of ot this policy The road has applied for an R. R F. F C. C loan to I cover half its maturing obligations on I the ground that market make public refunding impossible Kuhn Loeb has more than an academic aca new demic interest in the R. R F F. F Cs C.'s decision de dc which which will seta precedent f fOI 01 the handling handline of railroad Illinois Central Central Central- is is- is solvent e enough ou on or ona a current basis but it cant can't pay of off fifty million without help from some some- somewhere where Total railroad maturities for 1934 amount to around but nearly halt half the amount mount represents issues is issues issues is- is sues of roads already in rec receivership including for the Rock Island in March and April None of the remainder presents any serious problems i if the bankers do their stuff stull It seems to be up to them them not not to Mr Jones Jones from from now on SECURITIES A New York underwriting house i is planning to i grab the s securities curties act by the hor horns Its idea is to handle a number of or issues and frankly label them speculations It figures it cannot cannot cannot can can- not be called for misrepresentation if it the issues fail to shine There may not be enough speculators Iett in the world to make snake distribution on these terms possible BOND POOL The famous New York bond pool headed by the Morgans h has s at last been fully liquidated Its managers showed unusual skill in getting rid of their holdings without exerting pressure on the market A small and select list of ot dealers w was told what they had to offer and the dealers dealer found private and institutional customers customers cus cus- outside the regular market That way there was no dumping or even offering through public chac cha neb nels In a way this delicate maneuvering was a useful f form rm of new deal co co- co operation Rough or carel careless ban hm dUng in a thin market would hay have cracked bond prices es wide open and lent color to the now forgotten sound money moneys gh ghost stories f STOCK EXCHANGE The stock exchange I Ia 11 developing acute jitters as aJ congressional regulation regula tion comes closer Authorities W as u fussy as u a man walking o on eg ec about Christ Christmas as gifts gift and bonuses Even the most innocuous present virtually had to be approved by alt all the officials within writing distance One firm rm wanted to stage a Christ mas party in its office and got tot p p. p mission front from the r I I member hue it t could rca reach h Next day daj the exchange tried to revoke Its ap approval ap after the party had bad started ted but the host flatly declined to give hi lila hW guests the gate and the authorities finally conceded it was probably harmless One form of ot regulation In Sn sight eight if II the separation of ot houses that trade for loz their own account from t those the e that do doa a straight comm commission ion business busine The Tha commission firms except to reap cus customers tomeu who didn't realize reallie thir on own brokers might be operating against them The trading firms will probably proba bly lly keep time big-time speculative business busIness busi bust ness which lik likes to be on the inside or to think that it is TAXES t Local conservatives have bave a a. slant of 01 their own on the taxation c of larga largi Incomes which they think Washington Washing Washing- ton ought to consider They have fig figures figures ures to show that surtax receipts hOD fron incomes above the 20 per cent bract bracket amounted to less than last year They claim that the relatively small sum thus collected would mostly have gone otherwise to hospitals hospital col leges and charitable institutions Institution many of which are on the verge of ot starvation from lack of ot support They Insist that the government is Ii adding to its it own relief burden out of proportion proportion proportion pro pro- portion to the revenue U it gets gets' from Irom large incomes They also alo contend that capitalists are not going to risk business ventures ventures ven venlo tures if it most of ot their prospective profits are certain to be eaten up by taxes They maintain this win will breed industrial stagnation n by killing the incentive for tor the production of ot more moro wealth and more jobs They They- believe a maximum tax of 20 per cent on th tha largest incomes would bring the best l results for tor recovery SIDELIGHTS Wall street hears rumors that it will i have havea a f few w deen defenders ers on th the floor of congress It hardly seems seems pos pes- sible Archie Roosevelt on son n of T. T R. R R. will will continue In lathe inthe the municipal bond business with the firm of ot R Roosevelt Roose e velt j J A |