| Show 4 SE N na nal II Hn l i ar N 12 TION L CAPI CAPITAL TAt fy Carter Field Washington How Ilow long the pres pres- present ent tnt breathing spell In the reform battle of the administration against business Is going to last Is ono of the most important questions in Washington Few observers believe that It 11 is anything more than thaI a B strategic strategic stra stra- retreat Most of them believe that the offensive will be renewed with fresh vigor when the present business recession turns as everyone everyone everyone every every- one hopes it soon will Into renewed prosperity Some of the Capitol Hill leaders Jenders predict however that even If business business busi bust ness should blossom like the rose rOle next summer the drive toward planned economy will not be resumed re- re returned re re- turned until utter after the election next November A few even predict that it 11 will not be resumed in full force until after the Presidential election though this seems less probable Such Sucha n a long delay is not compatible with the Presidents President's normal mental proc proc- esses Had It not been for tor the business recession there would have been a battle between congress and the President almost as bitter and probably as significant as that over enlarging the Supreme court last winter Congress was all set for tor revamping of the undistributed earnings comIngs tax and ond the capital gains tax long before the business men back In the districts and states began began be be- gan to blame the whole recession on governmental interference with willi business management and Investment investment investment invest Invest- ment trends The business recession recession recession reces reces- sion simply strengthened this determination de termination Dut But it also determined the President President dent to to yield at least in n part and ond to lay lap more emphasis on balancing the budget This in turn promises less leu government competition with willi private business particularly in the electric electrio Industry To Fight Again The same same battle will be fought M. but the battleground will be bo differ ent The President has hns retreated to toa toa toa a stronger position Son James and Charley West Tommy Corcoran and Charley Michelson t will III be found buttonholing senators and representatives representatives represent represent- to prevent modification from going too far rather than to prevent pre vent any modification at all And there may be no fight tight whatever whatever whatever what what- ever to force immediate power projects into the llie sev seven n In Intact fact tact Sen George W. W Norris is al already already al- al ready giving out interviews that his understanding with the President on that subject seems to be very different different dif dlf- ferent from what the President now thinks it is As another result of this breathing breathIng breathing breath ing spell the President and Sen Robert Hobert M M. La Follette Fonette of Wisconsin Wiscon Wiscon- sin seem to be further apart than th they y have been at any time since Mr Roosevelt entered the White House La Follette has never been afraid of taxes taxes nor nor of admitting frankly that more must be laid on the small income group He lie has consistently scorned the New Deal intimation that th the rich could be made to pay for New Deal spending So he wants to boost the rates rate on small Incomes and end lower the exemptions as well Moreover he wants the government to go right on with spending spendIng spendIng-in- In Increase crease crease it H until every ery available employable employable employable em can be put on the govern government ment payroll Strategically this puts the PresIdent President President dent in between the llie two extremes an extremely enviable political po po- It may make very much harder the task of the southern conservatives conservatives con con- who hope to win party control nominate a conservative and really turn to the right in the next national platform Tax Revision President Roosevelt bends to the gale to Keep the New Deal trunk from tram snapping but even as he bends he shows clearly the resiliency which will lend power to the swing back so soon as the llie gale has ceased blowing With Willi a congress all set for revision revision revision re re- re- re vision of the tax laws to ease the burden business has been bearing the President springs in do with his message saying some changes are ore necessary Then he hints at changes far tar less drastic than congress was determined to make For example he says nothing about when the tax modifications shall be made Sen Walter Waller F. F George of Georgia member of the finance committee and powerful figure among the group of southern conservatives who hope to take control of the party away from the tha New Dealers and nominate one of their number in 1940 1040 wants Immediate revision of both the llie capital gains and losses and of the undistributed earnings taxes Not only that he wants tomake to tomake tomake make the modifications retroactive to to apply appy to 1937 1987 earnings Again the President wants to use the tte modification of the undistributed earnings tax as another club against bigness He lie says flatly that the tat c could be changed by granting exemptions to small companies to so 0 as os to equalize the competition between between between be be- tween them and the big ones Thus he says a long step could be made in the direction of preventing Ule te growth of monopolies Actually his own Treasury department department depart depart- ment has proved to its Us own satisfaction satisfaction tion from horn Its i iown own figures that the undistributed earnings tax did not bear so heavily on small corporations corporations corpora corpora- as on large ones Actually most of the he suggestions as to why the business recession had come was aimed at big business concerns rather than llian small ones Not This Session This administration eagerness to confine modification of the undistributed earnings tax is excellently il illustrated illustrated il il- also in the statement made by Sen Alben W W. Barkley Darkley Democratic leader after a talk with the President Darkley Barkley said In my Judgment we cannot act net this session meaning the short session session ses ses- sion slon on proposals for amendment of the undistributed profits tax to relieve new and debt-burdened debt cor cor- Contrast this with Senator George who says There can 1 be e no business recovery recovery re reo covery unless those who employ la labor la Ia- bor can retain some of their earnings earnings earn earn- ings to pay debts and to expand operations I am confident the congress con conn gress will wm modify the provision imposing imposing im im- posing the surtax on undistributed earnings and allow those hose earnings to be used by business in the Inter inter- Interest est cst of the workers Some very shrewd observers do donot donot donot not believe the President will insist on the text of his first message They think it was almost purposely put In general terms Certainly It left plenty of loopholes Even his flat fiat declaration against speculative profits profits profits-an an old dogma of the New Deal doctrine was doctrine was not specific On this point congress is determined determined determined deter deter- mined to permit tho the spreading of losses over at least two if not three years in clear opposition to the New Deal theory that saving for a rainy day merely makes it H rain harder and sooner Again Soft Coal Like the poor the soft soft coal coal industry industry in in- is always with us a high administration official lamented at ata ata a little gathering of the best govern govern- governmental mental minds At present two agencies of the government the interstate commerce commerce commerce com com- merce commission and the bituminous bituminous bituminous coal commission are not Just seeing eye to eye on this terrifically important problem Intensified at atthe atthe atthe the moment by the fact that the administration is straining every nerve to get business out of Its Hs doldrums The National Coal Is indignant both bolli at the boost in rail rail- railroad railroad road freight rates on coal already granted by the I 1 I. I C. C C C. and at the present demand for a R further increase increase in in- crease of about 15 IS per cent The present increase the associations association's associations association's tion's bons officials claim Is to take effect effect ef ef- feet despite the evidence that high rail raU rates are diverting coal in large tonnage to truck transportation as aswell aswell aswell well as accelerating consumer use of substitute fuels which move by pipe pipeline To add another 15 per percent percent percent cent increase to rail roll freight rates on coal as now asked for by the railroads will be suicidal The bituminous coal commission n which earlier maintained that the increased cost of coal would be borne mainly by the railroads and utilities and not by householders is now perturbed It is opposing vigorously the Increase now on the table before the I I. I C. C C C. C But the Railroads Dut But on the other hand what Is tobe to tobe tobe be done for the railroads Weakness Weakness Weak Weak- ness in their stocks is regarded bythe by bythe bythe the administration experts as one of the big factors in the recent stock market slides and in the general recession of business Administration tion agents have been delving eagerly eagerly ea ea- gerly into the possibility that business buss busi ness could be revived by railroad buying First there was the idea of lending them more money pour money pour pouring ing it out Dut But they learned that this would interest only a few roads chiefly those already in financial trouble The stronger roads would prefer to do their own financing financing- it and if-and and that has been the trouble trouble- they considered the situation justified justi fied fled the spending So it has become obvious that the railroads must be permitted to earn more not just to have cheap money loaned to them in order to start any real amount of spending On this phase the I I. I C C. C C. Is Inclined In in- dined to agree but it has learned through sad experience as indeed have the railroads that rate advances ad vances are n of bigger earnings Freight diverts quickly to trucks The I I. I C C. C C C. C has rather reached the conclusion that the only rate freight rate advance that is sure to produce more money money in the railroads railroads' railroads railroads' rail raU- roads' roads treasuries is one on products so heavy that truck hauling Is uneconomic un un- economic Of these coal and ores stand out like sore thumbs Dut But the danger point polet has been reached on coal the bituminous coal commission believes It is concerned concerned con can about the switching from coal to other fuels though of course not concerned with whether traffic is diverted from the railroads to trucks 6 O Ben Bell Syndicate Service |
