Indianapolis Times, Indianapolis, Marion County, 17 May 1949 — Page 12

a SURIPPS-HOWARD NEWSPAPER “A 0Y W. HOWARD WALTER LECKRONE HENRY W. MANZ President Editor - = Business Manager

PAGE 12 Tuesday, May 17, 1949

Times PubiishOe oo Maryiand Ba. Poste) Zone § Member of Bead bron, Boron ioward hamisaoes NEA Serv 3 toe and Bureau of Clreulations. = Price Marion County, 0 eeats tor dafly o ; Sunday: delivered by or daly snd y. 300 5 week. = | vie aga a oe Yeas 55.00 o your. Bands = all other states 0 8 possessions. pre Bngpes

Serica, daily, $110 & month, Sunday. be 8 copy. : Telephone RI} ley 8551 Give [Aghs ans the People Wili Find Their Own Wey

Joshua Did It, Too . JUDGE NIBLACK was trying to preserve some semblance of orderly government around here this week when he | ruled “in” the overtime doings of the state legislature. That is the legislature, you'll recall, that devoted its first six weeks to horseplay and nonsense, and then found it couldn't get its work done in what was left of the 61 days the Constitution allows it to meet. “It is the same legislature that passed the law forbidding any government business being done on anything except Central Standard Time—and then, within a day or 80 after that law became effective went off Central Stand#rd Time itself by simply stopping the clock and pretending time was not going on. ‘Its own members hadn't, it was clear, very much re- . spect for the laws they enacted, an attitude not hard to understand after reading some of them. But the Constitution of Indiana is pretty plain and quite explicit about -.how long these sessions shall be. It says 61 days. And found here a day is 24 hours, from midnight to midnight, and always has been. oe ) A » ¥y 5» OUR ESTEEMED lawmakers did manage to leave Judge Niblack—and the people of Indiana—on the horns of a graye dilemma, though. If the courts rule out the action taken after the Constitution says the session is over, then the whole state is thrown into intolerable confusion. It, on the other hand, they uphold these actions, then that part of the Constitution becomes a dead letter. ; Judge Niblack took the course he obviously considered best for the whole state in his decision. He said the General Assembly, from away back, always has interpreted the Constitution to mean that it could stop the clock and pretend it was still the 61st day for as long as it needed to wind up its affairs.” He could have gone back even farther, to the slightly more effective means used by Joshua, although it is true Joshua's solution never fell into what might be called

use. v We wouldn't for a minute argue with his decision, which in this instance certainly could save the state a lot of troux . ® 0» ” ._» But we wonder where it might end? THE Constitution says 61 days. If the legislature can make that 62 days by “interpreting” the Constitution, why then what is to prevent another “interpretation” from making it 63 days, or 73 days—or for that matter all summer? And if the legislature can “interpret” the state's Constitution to suit itself on the matter of time, why not on any-

U.S. REVENUE . . . By Royer Stuart

‘than &5 million.

“profits paid approximately $1,500,000 a year

Charitable Tax Setups Probed

Many Trusts Seen Taking Advantage of Loopholes

WASHINGTON, May 17—Charitable foundations operating com e businesses while enjoying tax exemptions are about to become targets in a drive by the Treasury Department. But Sen. Charles W. Tobey (R. N. H.), warned that the proposed crackdown may |: count for little unless the Treasury is armed with new legislation on the subject. Sen, Tobey, whose subcommittee last fail conducted an investigation of Textron, Inc, and other trusts, has accused them of taking advantage of loopholes to avoid taxes totaling millions. 3 A bill recently introduced by him provides that no charitable trust shall receive the benefits of tax exemption unless it has paid the beneficiaries 85 per cént of its annual gross revenue. The measure also would require all trusts investing their funds in or making loans to manufacturing concerns engaged in interstate commerce to register with the Commerce Department. They would be required to make riodic reports to both the beneficiaries and ngress. :

Some Face Probes

THOUGH Treasury officials declined to name the organizations they are after, it was learned that several tax-exempt foundations connected with colleges and universities are likely to be called on the carpet. : The House Ways and Means Committee, which has investigated such setups, discovered that alumni groups operating for the benefit of New York University have acquired at least four different business enterprises since

One of these concerns is the C.F. Mueller Co., 8 New Jersey spaghetti producer. Others include the Ramsey Corp. of 8t. Louis, which makes piston rings, American Limoges China, Inc, and the Howes Leather Co. Annual profits of these four, it was said, have totaled more Their corporate income has been tax-exempt. J Meanwhile, according to the committee, other competitive concerns earning comparable

So Far Nothing but a Faw Weeds!

1 do.not agree with a werd thet you sey, but 1.

Keep letters 200 words or less on any sub- | ject with which you are familiar. Some letters | wed will be edited but content will be pre- | served, for bere the People Speak in Freedom, |

‘Indiana Needs Civil Service’ By W. James Wolpert, 4324 Winthrop Ave. Indiana needs civil service for state and city

employee will inevitably run a government office more efficiently. Indiana needs civil service for state eme ployees similar to that of her sister state, Michigan—and 23 other states -in the country, Today 23 of our states and over 1200 cities are on the way to ever-more-sound government through well-established, active civil service laws. Five states now have civil service bills pen , Several other states and cities are p: to amend and improve their present civil service laws. Since its inception, state civil service has been backed and actively supported by nearly all the larger non-partisan civic groups in the United States. In every state which has civil service, the earnest members of these ore ganizations were always working for its pase sage. This power has been a consistent force in the cause of state civil service. Civic groups in Indiana need to contact their assemblymen in behalf of civil service here. The basic and ever-encouraging factor in human progress is the fact that a sound, constructive principle never dies. The opposition of self-seeking groups cannot stop permanently what is good for the people as a whole. A net gain for the right principle finally results. For example, during the past 60 years the social consciousness of our people has awake ened nationally as never before. Charitable institutions and hospitals have multiplied and improved to a remarkable degree. The opportunities for free education have increased far above any other country. Thousands of civie groups have been organized and are actively

in corporate income taxes.

Separate Foundations THE COMPANIES, it was said, operate this way: Separate non-profit foundations, whose directors serve without compensation, were set up to take 'over each business, Their charters

EUROPEAN RECOVERY . . . By Ludwell Denny

Tax Reform Only Hope for Italy

promoting the general welfare. State civil serve ice was a natural outgrowth of all these democratic strides forward. : It was in the beginning of this period that the National Civil Service League twas organ. ized in Newport, R. I., Aug. 11, 1881, The offi. cers drafted and indorsed the Pendleton Civil Service Bill which later became the Federal

wil defend to the desth your right do sey R° |

thing else the Constitution prescribes or prohibits? And how much Constitution would we have left? ‘of : . 4 0 did-suggest tha Al : n 5 it Li

a [AHS legislature men dw 1 n who wot 7" "try to evade the Constitution, and who would take a somewhat more mature view of their own duties and responsi. We doubt if that is the whole solution, but there's no

x Demagoge 5 TD. os J A of New York City,

Tammany candidate in today's election to succeed the late Rep. Sol Bloom in Congress, says he is for President Truman's tax-raising program. : The Republican 80th Congress, according to Justice Shalleck, gave 3 per cent reductions to heads of families making $3000 a year and 16 per cent reductions to those making $100,000. This, he says, calls for correction to reduce the tax burden on low-income families. The Times opposed the tax cuts voted by the Republican Congress early in 1948. We believed that was no time to lower taxes, just as we believe now—the country's economic picture having altered—this is no time to raise taxes. But Justice Shalleck's statement, made in an appeal for votes, is typical of much demagogic figure-juggling that has gone on all over the country. Let's see what the facts are, according to official congressional reports.

» ” » THE 1048 law relieved some 7,000,000 people of the necessity of paying any Federal income taxes ay all. A great majority of them were heads of families making $3000 or less. They got 100 per cent tax cuts. The law cut the tax of a married man with an income of $3000, after allowable deductions but before exemptions, from $100 to $09.60. His tax was reduced from 6% per cent of his income to slightly less than 34 per cent. Now, what did it do for a married man with two’ dependents and an income, after deductions but before ex- ~ emptions, of $100,000? If such a man lived in one of the 12 community-prop-erty states, the tax paid by him and his wife was lowered from $49,500 to $45,642. His tax was reduced from more than 401% per cent of his income to about 45%; per cent.

” r » ” » . THE 1948 law justly extended to married couples in all states the right, previously snjoyed only in the com-munity-property states, Ly dividing their infoxfés 50-50 for the federal income-tax figuring purposes. For a man and wife with two dependents, living in a state where this right did not exist before, the tax on an income of $100,000, after deductions but before exemptions, "was lowered from $62,301 to $45,642. This. man's tax was yeduced from nearly 624 per cent of his income to about And don’t forget that, in many states, men with $100, 1 not only pay nearly half of them to the fedgovernment but also must pay heavy state income

Angle, Bossy? OC ns) story __. that Oklahoma cow sk in a silo and had to be engineered out again, ¢ verdon.. Darned if an Ohio bull named y stunt the other day. to start ignoring these bovine tall they want is to get their

provide that all the income from the businesses must be paid to New York University for educational purposes. Part of the initial profits were said, however, to have been used toward liquidation of bank loans obtained to acquire the properties. ‘No hearings have yet been scheduled on the Tobey bill, which is now before the Senate Finance Committee.

In Tune With the Times

Barton Rees Pogue

ANONYMOUS

The sweetest song in my book I find Is a little old poem with name unsigned; A song that was written in years gone by And tossed aside by some hand to dle.

Where does he sleep—this man who sighed And wrote these lines before he died? Is his resting place anonymous t00-— Forsaken by all the friends he knew?

Well, here's to the man without a name, Whe wrote k with a pen of flame;

Who drea tis dreams in-a place apart, And locked them up in his silent heart.

Gone is the soul, the hand is still; Asleep is the mind and the shining will, Yet still lives the song that brought sweet fame To this man unknown——an unsigned name. " ==MILDRED IRVIN, New Castle. * & :

RESIGNATION

In youth while dazzled by the bright Illusions of ambition’s flame, I scattered salt to left and right In hope some tiny grains would light Upon the tail of fame.

But fame, elusive bird, took wing; 1 plodded on with faltering tread To drink at the Plerian spring Alas, I did not learn to sing; I hum my songs instead. ~-EAN BOYD, Heiney.

ROME, May 17—American aid could be cut if Italy had a sane tax system. Tax evasion here is more than a universal habit. It's a religion. There long has been an open conspiracy between state and citizen to prevent honest collection of direct taxes. “The poor carry the government, through the vicious indirect tax system which they can neither evade nor afford. e coalition cabinet has promised Marshall Plan administrators—the ECA-—to pass and enforce tax reforms. Unless it makes good on that, recovery will fail and political democracy here may not survive, The evil is an ancient one. Mussolini congé pounded it. And the republic is caught with it. Any impatient American can offer a quick cure-all—increase direct taxes and collect them. But the rates are too high already. Often confiscatory. And no real collection machinery exists. So it isn’t that simple. The De Gasperi cabinet has neither the power nor resources for a quick tax revolution. It must move step by step.

80 Per Cent Taxable

THERE are now 40-0dd separate taxes interwoven. -Direct income tax rates are piled layer on layer. A typical income of $5000 may be taxable 80. per cent, and one of $10,000 owe the .government 140. per cent. Honest payment thus becomes impossible. So the citizen never files the return required by law. He either keeps no records or two sets —a false set for the collector. The collector is given a crooked figure, perhaps one-fourth the actual, because it is known that he assumes dishonesty and ‘will double or quadruple any given figure regardless. This happens and the bargaining begins. After prolonged debate a fictitious figure is fixed somewhere between the two estimates. But ‘the citizen does not always pay that too-high or too-low imaginary tax. He may do nothing about it and the blundering bureaucracy never finds out. Bribery may help. Or he can appeal the assessment formally, which is good for indefinite delay. So the reform problem is threefold. One is

intelligent and just rate revision. Second is

creation of a trained corps of honest experts and administrators to enforce a fair law, backed by a cabinet ready to punish big evaders—including politicians and party campaign contributors. <p

‘Government Is a Thief’

THIRD, and hardest, is to change the attitude of the citizen. He comes of a people who for centuries have looked upon the government as an oppressor, He accepts the Roman adage that “government is a thief.” He knows that the Fascists in power are usually thieves. He knows that the same bureaucracy operates today, except for top officials. And he knows that his friendly enemy, the tax collector, is a poor underpaid wretch like himself. Meanwhile, the average per capita income is only $210 a year and taxes take $55. That is to say, the millions who make less and don’t have to worry about income taxes, pay in indirect taxation for the bare necessities of which they never get enough. One of the worst is the turnover tax, which produces 35 per cent of total revenues compared with 13 per cent from direct taxes. This pyramiding multiple monstrosity not only drives

prices out of reach of the majority. It dis-

criminates in favor of monopoly ‘and vertical

=~trusts, and squeezes out the medium and small

businessmen—the middle class, supposedly essential to a sound economy and to political democracy. Steps Forward: 4 THE government is moving. It is increasing this year the share of direct taxes from 13 to 16 per cent of total revenue, and has cut the turn-over tax rate one-fourth without loss of revenue. It is prosecuting a few tax evaders, and training experts with our help. Also it is making budget cuts, especially in subsidies for commodity prices and for a few nationalized utilities. This progress ig due in part to American aid, in part to stabilization of the lira, and in part to a start in general recovery. But the De Gasperi government will have to move much faster on tax reform, while it can ride the wave of American dollars, or risk. losing out when American aid stops.

Civil Service Act. This naturally pointed the was to state and municipal civil service. Let's establish civil service for state employees here—and let's see fo it that it sticks.

$ 4 - Puts Blame on England By Glenn E. Burress

In my opinion England plays the biggest part in the story between the U. 8. and Russia. I. believe that if England would keep her nose out of our business, and let us give fair square deals, our country wouldn't be in the shape it's in now. : No, England wouldn't let us.do anything kind. England is the kind of a country that lets the other country scrap with her enemy, She is smart, and puts on a two-faced act. She stands and puts chips on the United States’ and Russia's shoulder and tries to get the other person to knock it off . : Anyone, if he will look at the other side of the story, can see that England is two-faced enough to talk friendly to Russia's face and to stab her in the back when she isn't looking. Bhe would do 1pe. same bun without hesitation,

What Others Say—

THE cause of world peace will be best advanced as the peoples of the world come to know how one another work and live under whatever political and economic system they have chosen.—Wallace F. Bennett, president, National Association of Manufacturers. : * 4 &

WE can suppress it (rising nationalistic spire it in Germany) by running it underground, or we can watch it quietly to see if the better forces in Germany can prevent its growth before we take action. I think the latter course more ade visable.—~Gen, Lucius D. Clay, American Mil. itary Governor in Germany. ¢ 4

WE should go ahead calmly (with ratificae tion of the North Atlantic Treaty) and not be influenced by various peace offensives or wars of nerves.--Secretary of State Dean Acheson.

RUSSIA . . . By Jim G. Lucas

Red Military Might

WASHINGTON, May 17—Uncle Sam's high command peri odically takes inventory of Russia's obvious military strength and weakness. In a general way, this is what it shows now:

On the one side, Russia could—

ONE: Mobilize 10 million men in short order. TWO: Launch a major drive across Europe, with secondary

SIDE GLANCES

By Galbraith

‘COLD WAR’ . . . By Earl Richert

Blockade on Trade

WASHINGTON, May 17—The blockade in trade between the U. 8. and Russia remains in full force despite the easing dee velopments on the political front. There seems to be no immediate prospects for its lifting un= less the forthcoming conference of foreign ministers should achieve some miraculous results. y The situation in trade is this: We're willing to let Ivan buy all the cotton, tobacco and

efforts northwest from the Baltic and North Russia; south from the Black Sea and the Trans-Caucasus. Weaker operations could be supported in the Far East and Central Asia. THREE: Increase long-range bomber construction, but still turn out only 65 to 75 per cent of the World War II peak because of aluminum and fuel shortages,

Naval Power

FOUR: Support advanced troops by air. FIVE: Develop a moderate warning screen, particularly around large cities. SIX: Cause serious trouble at sea with submarines and naval aviation, plus shore-to-shore amphibious operations, making up for technical weakness by willingness to take heavy losses. On the other side, these are Russia's Weak spots: ONE: Shortages of fuel and transportation. TWO: Poor air defense, particularly in electronics. THREE: Long distances between industry-population cen- * ters and raw material sources. FOUR: Concentration of critical production in a few areas, Russia's transportation system is based on her railroads. Other than that, she has little mobility—a few river and canal systems, .a_ pipeline recently built from. Saratov on the Volga to Moscow, and airlines which generally follow rail routes. Eighty per cent of Russia's rails are west of the Volga, where almost 70,000 miles were destroyed in World War II. East of the Volga, only the Trans-Siberian to Viadivostok and the line from Kirov to Molotov are double-tracked. Important lines serving Central Asia—-Kulbyshev to Tashkent, Novosibirsk to Tashkent and Tashkent to Krasnovodsk—a single tracked and of light construction. Lack of transport in this area is a serious handicap, since Tashkent is Russia's major post war industrial development and there have been reports of uranium discoveries there. :

Eight Major Rail Lines

MOSCOW is the heart of the Soviet transportation system. Eight major lines, all but one double-tracked, radiate from the capital. In all, Western Russia has six double and 11 tracked railway terminals, The Black Sea area has two double and eight single-tracked lines, plus a few narrow-gauge. In the Far East, past Lake Baikal, there are only seven single-tracked lines and the double-tracked line to Vladivostok. On the Finnish frontier, there are four single-tracked lines and four spurs to the White and Barent Seas. Toward Turkey, five single-tracked lines extend from the Trans-Caucasian loop. In Central Asia, Russia has four single-tracked lines. ‘ It is estimated Russia has only 75,000 miles of railways.

Moreover, highways are scarce or non-existent south of Moscow anfl West of the Don.

Industrial concentration is ax serious a weakness, All Soviet northern

aluminum, for instance, comes from two plants in the

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A PAGEANTS

Sat COMM BY a \IRVICE, My, TM AEN U & PAT. OFF, "Look, Mr. Miller! Won't your wife be tickled when she sees this? She made Page One for knocking the top off a fireplug!"”

Urals—Kamensk Basin, at Stalinsk. Voronezh produces all synthetic rubber. Most Russian trucks are made at Moscow and Gorkl. " Russia has rebuilt much of her war-wrecked industry. Her production now is roughly that of the United States. Even #0, there are critical weak spots. Russia has only 38 refineries, many of them second-hand from this country. She fs barely able to satisfy civilian demand. Her oil reserves are substantial, but she has made little headway getting this oil above ground. In manpower, Russia far outstrips us. But it is believed that ~in a showdown--the United States and Soviet Union each could put 8 maximum 25 million fighting men in the field. Rights needs three men in industry for a job which requires one man here.

Finally, our reports show Russia could cut into our civilian ecoriomy only 12 per cent without affecting herpability to fight. We ‘ould divert another 30 per cent of our ct economy to war without serious effect, military men say.

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horsemeat he wants from us and is able to pay for. But we won't let him buy construction cran-s, oil-well drilling equipment, mining machinery and electrical generators—the things he wants most from us. Ivan, on his part, is willing to let us buy all the furs, cigaret leaf, cotton linters and linen goods we want. But, to retaliate, he has practically cut us off from his valuable manganese and greatly reduced our purchases of chrome-—the items we want most from him. >

Export Controls

WE STARTED this semi-blockade ourselves in March, 1948, when in conjunction with the Marshall Plan we clamped on a tight system of export controls which practically banned ship ments of industrial machinery behind the Iron Curtain, and pare ticularly to Russia. Our official explanation was that we needed this to send exe portable machinery to the countries we were aiding. Shipments to Russia dropped at once from miillions of dollars a month to just a few thousands. Ivan chose to overlook this situation at first because U. 8. dollars were always a good thing to have. He continued to send us manganese, chrome and other goods all last year. This ree sulted, for the first time in many years, in the balance of trade swinging in Russia's favor last year—Russia sold us $78 million . worth of goods while we sold her only $27. millon... .. .. . he The, yothow saving. anything officially, the Russians near of last year gan refusi new manganese sentacts with our private dealers. ns a) sapost ur manganese imports, which had averaged $770,000 a month ‘in 1948, dropped 50 per cent to $396,000 in January. And in March, the last month for which figures are svailable, we got only $80,000 worth of manganese from Russia.

Lower Grade Ore

STOPPAGE of the Russian manganese has caused us to ste up imports from other countries buf in most cases the il ganese ore is of lower grade and is more expensive. We got $72,« 000 worth of manganese from the Belgian Congo in March, for example—more than we got altogether in 1948, We imported $654,000 worth from India in March, an amount almost double our ‘monthly average intports last year. - Commerce Department amelals think that Russia will have resume manganese en us whether lift our Jachinury ban. om of ‘ - © Their ic runs this way. Russia's steel industry only about half of 1s mangansse Output and were (he Times: market in the world. Also, we can get manganese elsewhere, even if it is a poorer grade and costlier, So, they think, the Russians “will decide nothing is to be gained by keeping their ‘manganese from us, Metnwbile, Rowsvar the trade war is

some business feet at home. declining, some companies have been putting great pressure of the export licensing division to approve | | machinery exports to Iron Curtain tries,

John M. and H of Indianapol Laker, Toledc Mrs. Omer J. John W. Kelle

Set Shut-l

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