Indianapolis Times, Indianapolis, Marion County, 5 February 1950 — Page 14

Times.

A SCRIPPS-HOWARD NEWSPAPER | > ROY ¥ vw, . BOWARD WALTER R LECERONE HENRY W. MANZ

The Lg

Telephone Ri ley 5551

Sobstitute for RFC? THE Reconstruction Finance Corp., a “temporary” gov_million of the taxpayers’ money in loans outstanding.

means that it hasn't quite half exhausted the kitty in pumping your money into businesses of various kinds.

to such companies as Kaiser-Frazer, Lustron, and Tex-Mass, to name just a few, and then to a host of small firms, such as: : : “Hardware stores, funeral chapels, shoe repair shops skating rinks, ice cream plants, sporting goods shops, tourist and vacation camps, flying clubs, beauty shops-—as well as the Oklahoma preacher who got a loan for an automobile because his followers were so scattered. And applications dre Increasing at an unpregegiented rate.

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standing, for a total of $175 mjilion. It considers anything less than $100,000 a small business loan. There are a number of reasons why RFC loans are attractive to small borrowers. The fact that they can have as much as 10 years to repay is one of them. But perhaps the principal reason is the availability of RFC loans at a time when small business enterprises complain . of increasing difficulty in getting loans from private banks and when, though private savings are at record levels, venture capital is reported scarce. We agree with a Hoover Commission report that “direct lending by the government to persons or enterprises opens , ~ up dangerous possibilities of waste and favoritism to indi- _ Viduals or enterprises. It invites political and private pressure, or even corruption.” . no» ; “ nn ow FOR THAT reason; the Senate Committee on Banking and Currency should give serious attention to the bill introduced this week by Sen. O'Mahoney of Wyoming. poses a new system of privately owned capital banks to help finance small and independent businesses, without government loans or insurance. ~—Such a bank would be located in each of the Federal Reserve Bank and Federal Reserve Branch Districts—36 in all. Initially the new banks would be capitalized from ~ the reserves of member banks of the Reserve System and then private investors also could buy stocks. * It calls for no appropriations of the taxpayers’ dollars, * Sen. O'Mahoney says if his measure is successfully _ worked out, there will be no further need. for the RFC to. ~ dabble in the business loan field. : ~The agency then can confine itself, as the law says it must, to loans which aid the national welfare, security and economic stability, and make loans only in cases where the borrower cannot get money from private sources.

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Mile-Post in Character Building

“HIS week Indianapolis and about every city and town in ‘America will observe the 40th anniversary of the founding of the Boy Scouts of America. : The observance, which will include a wide variety of " Scouting ceremonies and talent achievements, will mark an important ‘mile-post in character-building for the youth of as “wn =n Fat . "B® ANY community has been made better through the years by the influence of Boy Scout activities in improving . the minds and bodies of youth for leadership in adult respomsibilities.

character-building projects expand to such proportions that no boy or girl in any community need grow up without in n citizenship for usefu ind ha

HERE can be little doubt that the Chinese Communist

by. Ho Chi Minh hs of Asia as, Chiang Kal-shek charges.

Both of these Communist forces get their orders from ~ Moscow.

; China border they would be expected to work together. China held the key fo the situation on the Asiatic

Kai-shek's government, the door was opened for the Reds

washing its hands of China, Secretary of State Acheson - left himself an escape clause. He said: “Should the Com-

neighbors, we and the other members of the United Nations would be confronted by a situation violative of the principles of the United Nations Charter and threatening international peace and security.” ; ‘But he didn't say what “we and the other members of the United Nations” would do when confronted by that inevitable situation.

_hold of European colonialism left on the Asiatic mainland. Moreover, the French are backing Emperor Bao Dai in a war against the Communists who are hiding as usual _behind the banners of democracy and nationalism. :

constitutional government, as a “dictator,” and having accepted the Red cry that anyone supporting Chiang is an -, imperialist, the State Department couldn't very well go to the front now for a French-sponsored emperor. ~The Communists know that, and are picking their spots.

o. Now it is roiling out of China in all directions and itg Jill be ‘be difficult to stop anywhere, because the anti-Com-munist forces are divided. They we is dubice of being Jonocked off ons at » time. ¥. rs

“PAGE 4 on “Sunday, Feb. 5, 1950 Owned, and biished. dally by Indianapolis Times Publish Bnd Rd SAE RA tor oy: deliver RA ts» 345% for daily end 10a San 5 fas, . aa, Mal rates in Indians b Hise $1.10 a mon EES Chnada and

¥ Sire Lions, and. the Pensle Wal Pind Their Dien Wav | |

ernment agency past its 18th birthday, has about $1700

It has a total lending authority of $3550 million, which

What kind of businesses? Well, there are the big loans

AS OF last May, the RFC had 11,402 “small loans” out-

It pro-

We hope to see the Boy Scouts and other similar

forces and the Red Indo-China insurrectionists headed hands to drive the French out -

., Betting re-elected from the first

Now. that they. .are-in contact: along the- French: -Indow- ~~ a. he. took. oflice. . But.one.of..-

mainland, and when the United States abandoned Chiang:

“lo move down upon the smaller countries on China's borders. *

WHEN the State Department issued its white paper,

~munist regime lend itself to aggression against China's

‘Indo-China is French territory-the last major foot- .

HAVING denounced Chiang Kai-shek, the head of a

“world-famous auto industry.

nomic disaster. As he tells the This Red drive, in- the opinion of many military men,

; could have been stopped at the Yangtze River two years ago.-

.. Buks in

DEAR BOSS . .. By Dan Kidney

Kern's Career In Tax: ax Court

Former May Mayor Likes U. S. Job as Presiding Judge

WABHINGTON, Feb. g Dear Boss Being

the presiding jtidge of the Tax Court of the .

United States doesn’t lead to headlines, but Judge John W. Kern is finding it as exciting, and far more satisfying, than when he was the ‘boy mayor of Indianapolis. He and his brother both like living in Washington for they went to school In this city when their father ‘was mocratic whip of the U. 8. Senate under the . administifition of President Woodrow Wilson. That was back in World War 1 days, when this basically sleeply southern city first was shaken out of the doldrums. - World War II gave it the finishing touches and the’ place is a bee-hive now of nearKern ly a million and one-half persons In the city and nearby counties of Maryland and Virgfhia. In the ¢hambers of Judge Kern, however, all is serene. And the most exciting contact of his graceful Georgetown home was the operation of a book shop by Mrs. Kern. They recently sold that and really settled down the judge revealed. The. court. is. his whole. life. snow. He. id proud...

Mr.

"to be presiding judge when it celebrates its first

quarter century anniversary this year. Asked to list some of the things which this little known court does, Judge Kern offered the following: The Tax Court is the largest unified court in the United States. It holds sessions at more or less regular intervils in approximately 50 cities throughout the continental United States and occasionally in Hawaii. These sessions are presided over by a single Judge, except in unusual cases. An average of HOOD cases are instituted before it each yea, - In the last 25 years it has disposed of over 125.000 cases involving in litigation a total sum of considerably over $5 billion.

Jurisdiction Increased st IN ADDITION to its regular and normal jurisdiction over federal income, excess profits, gift and estate taxes, it has recently been. given jurisdiction in cases Involving processing taxes and in cases involving renegotiation of war contracts, Most recently the Tax Court has been given jurisdiction over special relief cases arising under sections 721-22 of the Internal Revenue code. This may add 1500 to 2000 cases within the next two years. Over 800 cases have been filed with the court involving the renegotiation of war contracts. The total amount of alleged excessive profits litigated in these cases is approximately a half billion dollars. Although half of these cases have been disposed ‘of, there remain on the dockets of the court 408. spondent is represented by the Justice Department, while in the other cases the respondent is represented by the chief counsel for the Internal Revenue Bureau.

Heavy Volume THE fact that the Tax Court has been able “10 dispose of this volume of | Iitigation—which, whether viewed numerically, quantitatively, qualitatiVely, or geographically, is stupendous speaks well for the mechanics of the process by which it was accomplished. ”

There are 16 judges on the court. Tudge Kern, :

having been chosen presiding judge, assigns them to cases throughout the U. 8. A, He presides here over the weekly motion calendar. His offices and court are located in the fairly new Internal Revenue building. The motion cal---endar-runs between 50 and 75 cases a week #0 with that and keeping the court machinery running smoothly: Judge Kern is ready to retire. to Georgetown at night and rest. Judge and Mrs. State Society party, however.

Courtrooms Scarce ONLY here and in Chicago and New York does the Tax Court have its own courtrooms. The result is that when one of the judges comes to town he often is shunted around the Federal

building trying to find an unused courtroom.

Judge Kern recently asked the tax section of the American Bar ‘Association and the Chief Counsel of the Internal Revenue Bureau to help with this matter. He hopes this will take no additional ‘appropriation. For-Judge Kern is proud of the thrifty record of his court.

The total number of employees of the court

.at the present time is 115, a smaller number "than were employed nine years ago at a time when the court had no jurisdiction over processing taxes, reregotiation of war contracts or special relief cases. There also has been no increase in the number of judges in the quarter century period since the court was created. Maybe these judges get so close to the taxpayers they learn first hand that federal funds:

~don’t. come for free.

LANSING, Mich, Feb. 4 or the Democtats swept inte _ office in the surprise victory of November, 1948, one of the most interesting is the youthful-looking governor of Michigan, G. Mennen Ww illiams, He is now getting set to run for re-slection.

5 and his ¢hances in an ‘state seem fairly good His crities say wryly that he . —of his-time Michigan —

the penalties of the ridiculous two-year term, which prevails in many states, is that the: governor, before he has scarcely warmed the chair of office, must begin to think about his political future, : " =» ONE thing Gov. Williams urideniably has, and that is charm. The friendliness and naturalness so widely adver-

One thing Gov. Williams speaks most proudly of is his drive last fall fosave the apple growers of the state from ecostory, every possible outlet, veit, landslides. including the federal government, was prevailed upon to take a part of the bumper apple While’ Gov. Williams’ elec. * tion mie be discounted as a an Abnormal your,

With regard to these. cases ‘the re-

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CAPITAL "DEMANDS

- WASHINGTON, Feb. +—-Three moves how andes way are oN fa ‘to do something about the need of American small business for additional capital. They involve conflicting ideas of what role the federal government should play. But all assume that thousands of small businesses, although soundly conceived and efficiently administered, are unable to get the Sapital required

to keep going and growing. .

Why this should be involves a controversy

over the effect of government policies, including

surance. Insur

Kern, however, seldom miss an Indiana —

high taxation.

Aside from the controversy, however, there is — Tairly wide agreement on three points:

ONE: Because of the rise in general income, many millions of Americans are saving. They buy postal savings, government bonds and inANCH Teserv at about $50 billion.

Compulsory Savings

TWO: In addition to such voluntary saving; there is a growing volume of compulsory saving

“in the form of payroll taxes levied for Social Security, These reserves, plus borrowings, plus

tax revenues enable the government to make loans: THREE: Small business, because of its a ditionally risky nature, has limited access to the pool of private savings. How to satisfy the demand of small business for capital without harming the free enterprise system is the problem. Sen. Scott Lucas (D. Ill.) has one proposal. He. recently introduced a bill to permit the Reconstruction Finance Corp. to make character

“loans to small business. That is, the RFC could relax the usual requirements for collateral when- - ‘ever it believed that a business firm had man-

. agerial skill, a good earning record, and pros-

pects for profit,

The RFC could make all of each loan 1 the applicant showed that he had tried without sue-

cess to obtain a loan from private sources. Or.

the RFC could join with banks and other lend-

. Ing institutions who were willing to put in as

much as 10 per cent of each loan:

Sen. Joseph C. O'Mahoney (D. Wyo.) topped + the Lucas plan with a bill proposing to aid small

business through the present machinery of fhe Federal Reserve System.

Mr. O'Mahoney would permit the establish- x

2 ment of a new capital bank in each Resgrve Dis-

-Republicans ‘aware that today he must be .Aaken more. Seriously. ~.......c. The GOP candidate considered most likely to defeat him is Harry F. Kelly who served two terms as governor from 1943 to '47. Another Republican candidate is Fred M, Alger Jr, now secretary of state, mem- - ber of an old and wealthy Michigan family, -

MR. KELLY 15 said to be interested - in the Senate seat

Gov. ‘Williams is the fourth Democrat to be elected’ governor since the start of the - New Deal: in 1933. The preceding * three were one- term - governors comihg in on Roose-

_ BEYOND doubt, Gov. WilTams owes a debt of gratitude to organized labor for getting out the pro-Truman vote, But obvious,

imated—

. By James Daniel

‘Moves to Help Small Business - es

Co-operation Basis "Mo try to head it off, Mr. Lincoln said his company was ready to make small business loans in co-operation with banks. Mr. Lincoln says that if a local bank is willing to provide as much as 10 per cent of a small business loan and serve for a fee as the collecting agency, Metropolitan Life will furnish the rest of a 10-year loan. Each loan, however, must comply with the

laws. safeguarding the investment of- insurance

reserves.

Whee Others Say IT APPEARS that the spearhead of Soviet aggression at the moment is

Yugoslavia, and our opposition to aggression applies in the case of Yugoslavia as well as any-

x

are

tised in his < . most distinguished son, Sen. Sumpigy are ‘Arthur H. Vandenberg. Jus a Pi ~ Mr. Vandenberg’s term exi a pires in 1952, and he said when more liberally he ran in 1946 that he would during his under no circumstarces be a first in candidate for re-election. ig - i It has been suggested that or a wil. Sen. Vandenberg would like to ' we " see his son, Arthur Jr., named liams esti 5h seat should he decide to : mates he has ope Arthur Jr. is now in haps 75000 Brasil where he is directing the ; ov. y > v. Williams | iles tn the of Nelson Rocksteler In South cratic President at the head sitio in ‘Deen broadening nis - America. ety 10 broaden the 5 , Much of the speculation on : base and particularly with the Mr. Vandenbere nd a Soest: base Of support ino siais ig Whose contribution t0 = gor the Senate seat is based on Which; 0 ali 3 : iq pur + ihe economy of the state has the assumption that Michigan poses, B long. The Demo : n ‘overshadowed by the will go Republican again in the or so ng. e Demomass production of Michigan's coy cratic Party was a collection

‘of amiable politicians willing to take the leftovers from the Republican table. Gov, Wiillams has’ tangled ‘with these easy-going regulars in an effort to put backbone into the party.

The Republican legislature is

. coming back in Match and that -

bread was the menu at least five days per week,

¢

‘Higher Retirement Benes &_J

1 do not agree with a word hit you sey, Bull will defend fo the desth your right fe uy #> —————————————,

By William M. Taylor, Morgantown, Ind.

a Just a few years ago, soup beans and.

today are owned by Autos and our modern conveniences only .dreamed of 20 years Seon « ago, are today in most homes. This has been “ Due ~ brought about by mass production and techno- » logical inventions, and wages have risen considerably. That is history undisputed. =~ WASF Many of these industries have been operated {cans in co on the theory of gouge the worker for more : Dr. K labor and gouge the market for er ii . profits. As a result, industry shows a greater are known profit than ver before. Cam of lviig has * Arres risen “until the worker finds ‘purchasing ; power in the market place lower than ever, Russia go The worker has been organized into unions, the basic infor only means he has of trying to win economic .... The w gains to attempt to get enough wages to: buy a food, etc. The failure of industry to share the Igor exorbitant profits with the employees in the known. (Ir form of a bonus or higher wage, and failure scientist, to give the public a reduced price, wil eventually Fred Rose, lead to depression. Semengen). This worker is looking at his days of old: ape. Dot cor Pe He knows at 60 or 65 he cannot maintain the ean spy rin speed-up pace imposed upon younger men. His . “rages -were-insufficient-to-lay-aside for retires Pt “top acle - ment. He is praying that he can pass on before fir Germat he has to go over the hill to the’ poor house. Khaw Rus “ The remaining days of whife hair can be the country, for most romantic and companionable days of all, ud ing hes provided some security is available. Worry and +n additio fear can kill all of this. This worker knows that Fuchs that Social Security is inadequate. Therefore, formation

he is demanding stabilization from the employer.

Would he prefer a higher retirement benefit person. here

thorities sa

under Social Security, help paying the bill? ‘He certainly would and welcome it. Suntaete ¢ Congress has failed to do the job. . Tart > i N » and his clique, the Dixiecrats, the pansied Demo- n'iNew 101 crats, all in collusion. are taking a page from represented the Communists and Fascists of confuse, divide secret confe and rule. In conclusion, I would like one answer ‘Britain and to this question. The miner has not been giwen ic security. one cent raise, yet coal is raised from $2 to $5 Fuchs ap per ton. Who is getting this money? urider close years. Rea was that he

‘Sheds Light on Investments’

. which force By H. E. Martz, Indianapolis.

British and

In considering the soundness of the Federal oa him, _Bocial Security Agency in investing its reserves. [Our scien in government bonds, it should be borne in’ ** ' IEPs on mind that an average of 60 per cent of the re- : Aes. ears Tp Surly Bri Ew Banks Willd be: capital- serves - of private insurance companies and Many A 0 sponsoring wise are invested in government * fed Fuchs But private investors also could buy Sock. Janks ke * » : cently, offi This fact should shed some light upon the are suspe Three Aid Plans soundness of -such procedure in assessing the plices.” The capital banks would do three things: fiscal practices of the institutions 80 investing. Arrest w Lend directly to small business; buy stock in 7 iu Jemipts oo small business—actually sharing in the risk; : , ai e'll admif and insure commercial banks against loss on. © WHAT DO WE NEED IN 1950? a gcientists t loans to small business running up to $10,000. : ° ® without ch Individual loans by the new banks would be y Ch Jed A ol “ie Fuchs ‘was limited to $250,000. ore I i tary, when The Lucas bill contains a considerable ' 5 i mii “project, -on “amount of government aid. The O'Mahoney bill By ira Bert €: Ms Keuamous Presiiey i; Indian government has some, For example, profits realized by the Po : : ) ‘ TT “Arrest al: new capital banks would be exempt from the This is a great challenge-to each of us. How gressional | corporate income tax for 15 years, although can we improve Indianapolis in 1850? To make suming old _ dividends to investors would be taxable from Indianapolis a better place in which to live we i owitheGirent the start. must have more parents who really care. Co-operat The third move to aid small business is Our PTA program is constantly trying to “Ing war, purely private in character. This came up last develop interest in parent education. We still atomic pro fall when Leroy Lincoln, president of the Metro- “find that too few people are c. military tc politan Life Insurance Co., told the joint eco- working for the interest of all Prégstre h nomic report committee his Sompany feared children. That old expression née partne more government lending. Tt takes a heap of living to

make a home” is still true. What is a home? What is a “family? Indianapolis is known as a city of. beautiful homes—but what is a home without the true understanding of family living? Families are the laboratories of democracy. Modern life has brought ype. McCammon - striking changes to our society, but we can never change the need for nt RS spect, and understanding. Our. PTA he this year as stated by our national presi : - “The Citizen Child—his destiny in a free What is the destiny of our youth of i: . apolis? Why do we like Indianapolis? Are we proud of Indianapolis? Are we doing our shire - in the many organizations designed for the. ete : “torment 0 of youth? Together, let us resolve to give every. child in Indianapolis a good home with parents who’

where else.—Geérge V. Allen, U. 8. ambassager reall Then we will have a better place in 3 “to Yugoslavia. . r a A Yell nye Place | Adm. Sher @ “ RE SE : _ THE final eradication of the Franco-German What are your ideas on ways to improve In- Preparatior animosity will certainly lead to a close relation- dianapolis during 19507 Send your sugges- Just routin ship between all Western European nations, in- _ tions to: Defense cluding Great Britain—Konrad Adenauer, chan- “1950 Editor,” The Times, 214 W. Maryland #aiq United cellor of Western Germany. St. tacked ‘“‘wi VE ~ 3 : } with unpre _ GI INSURANCE... By Earl Richer rei fer Soni . A 3 ® A. = : i TE wr Fs on EER Two fa) Cl INS NCE... By Earl Richert: Ere pr : De us ° i in an hour or e- : — rend fen and is reac = : we could “I WASHINGTON, Feb. 4 The Veterans Administration is ak “Joe Stalin ing :Congress for $4.8 million to prepare the second batch of GI thing. ; » insurance dividends, even before. the bulk of the first lot is in the Alr Sec mail. __waid Sovi

——And more millions will be needed: each year to prepare the § forces gre tvidends for what the VA hopes will be a continuous flow. Estt= fi ~~ U- San mated cost of preparing the .. § Force strc . current $2.8 billion dividend is all wars have been atfended , Im mear $17 million. That doesn’t in- _by epidemics. — k world’s. 1 "clude the cost of fasuing &nd “No epidemic “occurred res ey 5 mailing the checks. ‘ing or following the last war should not the pre- and the GI premiums, along Naval “ope miums be reduced to keep the - with those for most private forces In government from having to companies, have been more made “as -- ~spend 50 much to send money than adequate, Mr. Breining with the - back to the GI holders of 89V- said. State Depa ernment insurance? ‘. # a _. newing Ber . 8. ! HE SAID that low premiums Blo hake H. W. BREINING; head of would result in large losses Ione the -VA Insurance Department, for the government if thére Vishin s | said the premiums could not were an epidemic, since no éx- demand be reduced, except prospec- tra premiums could be as- > HRjirghit =p sessed. = : ae - trial a 3 He told the House © “In other words,” crimin; ations Committee that the “this program has betn a ante: Bom eeu rates were a matter of CON- guard as far as the govern. our:prosecu between the insurance ment’s finances are concerned, 8%: Japan and the government. rgther than & cost to the gov- ! WE tris ' cannot be changed by ernment. We can return any. said there v act of Congress, he said, but excess premiums, but we cane more “rea: only by agreement between the not assess extra premiums. if to try Sta ‘government and the holder. the mortality experienced SEairma fread To change the premiums, the proved greater than was as- ate: reig: : government would have to get sumed in the table” = tee, spoke | Barbs mip dg ly ARRIGO By surance ; a : . FOLK with the most money .y,nge in benefits, Mr. Brein- the pesioa from October, 1940, man to pre a little change. nn Batd, . anniversary ; of mass de : . gs =» — . 3 any policy in 1048. The *Chairma LI . HE ALSO said that in op- second dividend will cover 1948 gressional THIS isn't a health column, eratihg a mutual insurance to 1951, inclusive, with about ng but we can tell you how to | program government must 65 per cent .of the policy hold= said live to be a hundred. Drink & charge a rate conservative = ers due to receive these divi- could be. glass of water every day for to pay a dividend. ‘dends in the fiscal year begin= seconds, c 1200 months. “It does not matter as to Ning July 1. The. om En. administrative cost if. the re- Will receive’ the second divi= y "ROOSTERS in, the country fund is 10 cents or a dollar or dend the following year. - a ‘and alarm clocks in the city 5 hundred dollars” he sald. “also As : re nko ene want to For up by © Adminisratively, it costs the 1 3 att, Jake peoble want io get.up iw dame to pay & divigtnd.= ey . Svaeute 2 Bra 2a IR Se GL insuzang ‘ th Raa AE ; _ ¢lsion on aim of all people’ ED rapitoes tople oy. el A Ny DOTY idl lo a0~ ai