OCR Text |
Show NEWS BEHIND THE' NEWS 1 Written for The Tlegr.m ; By Tucker reserve, controller and F D I C permit them again to evaluate their government holdings at an artificial figure. Ironically, it has been their holdings of private securities-rails securities-rails and industrials which have temporarily enabled banks to survive the crisis. The danger gave a start to certain longheaded long-headed federal financiers, and it may force them to revise their fiscal policies if that Is possible at this late date. The likeable but temperamental temperamen-tal Steve Early may become one of the casualties of the European war. The usually able White House secretary has tripped himself him-self several times during the war crisis, and has been gently reproved re-proved by the president, despite the Utters affection for his aid. Mr. Early's advance conclusion . that the Athenla carried no munitionsuttered mu-nitionsuttered before any evidence evi-dence had been assembled helped to precipitate charges that the administration Is unneutral. His disclosure that F. D. R. was consulting GOP Leader McNary ' about the date of a special session ses-sion angered influential Democrats Demo-crats who had not been let In on the White House secret. His assertion that the war had tossed "the brain trust out the window" provoked a fierce duel inside the family, and brought a repudiation repudia-tion from F. D. R. Privately the latter would have liked to let Early's statement stand, for It tended to appease conservative elements, but the pressure from the left forced the president to repudiate his secretary something some-thing Mr. Roosevelt rarely does. Steve has been boosted for the post of chairman of th war publicity pub-licity committee in the event that semlmlltary agency Is revived, but it looks now as if he has lost ouR George Creel is angling for It (remember his report of the battle that never happened?). hap-pened?). F. D. R. is amused by the quippish Californlan, but his appointment is extremely doubtful. doubt-ful. Lowell Mellett, now NEC director, is th best bet because of his exceptional qualifications. Copyright, 1939, McClur Syn. WASHINGTON The Poles' dismal performance on th battlefield bat-tlefield may precipitate a surprise sur-prise diplomatic coup upsetting all calculations and expectations on the war's duration and en-gulfment en-gulfment of nations which have hitherto held aloof. Inside circles cir-cles here and abroad bristle with secret reports of "another Munich." Mu-nich." British and French leaders ar disappointed disgusted with Poland's failure to withstand Hitler's onslaught. Warsaw did not live up to military promises upon which Anglo-French assurances assur-ances of war declarations were based. The Chamberlain and Daladler governments, no doubt, ache to smash Hltlerism, as they have assured the world, but It la doubtful if their peoples would give them unlimited support-suffer support-suffer and die in the face of Poland's prospective dismemberment dismember-ment Russia's apparent rush to grab a waiting lion's share Is another cause for dismay. With Poland gone. Great Britain Brit-ain and France face the fearful responsibility of deciding whether wheth-er there shall be another general gen-eral war. Hitler's devastating triumph has maneuvered them Into that dilemma. He will, in his expected peace offer, seek to embarrass President Roosevelt by asking F. D. R. to exercise his great Influence for peace rather than continued conflict Within the next few weeks the world's fate may be decided by the governments rather than by the .governed by the heads of states rather than the generals and .the doughboys. Don t be surprised If the war blows up like a firecracker with an unseen un-seen but unusually short fuse. A crushed Poland and the prospect of another Anglo-French Anglo-French compromise will exert a deterrent Influence on congress In its current consideration of neutrality revision. Hitler is obviously ob-viously striving for a knockout on the battlefield in an attempt to block American reinforcement of the allies through repeal of the arms embargo act. In the last analysis our congress may determine the outcome war or peace. It is almost a two-to-one bet that congress will not accede to the White House wishes If Hitler and Russia have partitioned Poland before a final vote. Defiance De-fiance of the president is certain If. in the interim, London and Paris have capitulated again to der fuehrer. Therefore, should Hitler make a peace offer, it Is probable that the allies will haggle hag-gle and stall until they discover what congress will do. But the congressional chess plovers will likewise filibuster until .they learn w hat Chamberlain and Da-ladier Da-ladier will do to or for Hitler. Place no bets on the result. It may flar Into the most desperate desper-ate and historic tug-of-war in world annals. But be prepared for an abrupt cessation of fighting fight-ing another wishful peace or a fight -to -the -finish. Rearrange your business plans so that they can be "changed without notice." November 1, possibly October 15, should tell. r ... . . The state of the government bond market has given gray hairs to banking experts on the federal fed-eral reserve board. - Though they won't admit it publicly, the war crisis has exposed vital fallacies In the administration's financial policy of loading up the bank with low-Interest federal securities. securi-ties. Th prospect of war naturally produced a terrific slump in the prices of government bonds. That advantaged individual purchasers, purchas-ers, for the depreciated price gave them a higher yield. But It almost proved fatal to several thousand small banks whose portfolios ar loaded with Secretary Sec-retary Morgenthau's issues. It lowered their reserves and the value, of their capital stock. Should the government bond market sink 10 points lower, many banking institutions will face a crisis unless th federal |