Indianapolis Times, Indianapolis, Marion County, 26 August 1952 — Page 14

The Indianapolis Times

ROY W. HOWARD WALTER LECKRONE HENRY W. MAN President Editor Business Manager

PAGE 14 Tuesday, Aug. 26, 1952

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Pe unty 8 pents a for Sunday: delivered by carrier daily A unday 35 w ally only 25¢. Bunday only 0c. ail rates in Indians da nd Bui day $10.00 a year. daily $500 a year, Bunday only 0 al other states. U. 8. possessions. Canada an Mexico ally $1.10 a month. Sunday 10¢ & copy

Telephone PL aza 3351 Give Light and the People Will Fina Thelr Own Way

Taxes and Prosperity

HERE IS a relationship between taxes and prosperity, and that relationship now is dramatically on view in Puerto Rico. This island possession of the United States long has been known as the poorhouse of the Caribbean. Despite extensive aid from the mainland, its slums rivaled the worst in the Orient. But now modern housing developments are replacing disease-ridden tenements, roads are being built and the island is otherwise improving the lot of its residents. This seems to be due, in a large way, to a relatively simple gimmick in the tax laws. New industries moving to Puerto Rico, which are certified as Suitable for the island, are exempt from taxes until 1959. After that, they work up to regular tax rates on a gradual basis over a three-year period. Actually, reports Columnist Fred Othman from San Juan, the legislature even is talking of exempting these new corporations from taxes—forever. The idea is that the benefits to Puerto Rico—in greater employment and income from other taxes—will justify this move.

“ . . » THIS POLICY is the direct opposite of Washington's “policy, which is to slug the wicked corporation to the limit the traffic will bear. Perhaps that is sound psychology, or good politics, but it just possibly may be bad economics. When the United States gets back to a normal economy, minus the artificial boom created by defense production, it will have a problem similar to that in Puerto Rico—the problem of finding jobs for a growing population. That means new plants—and people with capital willing to risk their money on such plants. If taxes discourage risk capital, there won't be any new plants. Our fundamental aim, as always, is better living standards, better housing, better jobs. If there is a better way to do this, we ought to be looking for it. Perhaps Puerto Rico's present boom is a flash. Perhaps new tricks won't work, over the long haul. But at least we ought to examine our prejudices and, take a good look at what is going on in our Caribbean possession.

Saving Iran HE AMERICAN and British governments are reported at loggerheads on what should be done to prevent Iran « from being lost to the Reds. But can anything be done to save a country which is bent upon self-destruction, as Iran seems to be? The rival American and British formulas are the old, familiar ones. The British would muddle along, letting bad matters become worse. In the hope that Premier Mossadegh will be replaced by a stronger man with whom they can do business. This has been the British attitude since the outset of the controversy and the one which led them into their present blind alley. The American plan likewise has been tried and found wanting. It is to supply Mossadegh with money to keep his government in operation in the hope that, given time, the aged premier and his followers may regain their sanity. o s a uo 8 o WE'VE BEEN helping Iran with money and free advice for a quarter of a century, with nothing but kicks and bruises to show for it. We are doing more now than ever beforé, yet American prestige is at an all-time low. But seemingly the idea will not die that we can do anything with money. : Between his fainting and crying spells, Mossadegh used the Communists and the religious fanatics to expel the British. Then when both of these vicious groups turned their guns upon the U. S. for no reason at all, the premier didn’t make as much as a gesture to restrain such attacks. Yet this is the thin reed the State Department would prop up with our money to save his country from the very elements which he has allowed free rein. The British formula impresses us as the better since it costs nothing, for whichever viewpoint prevails the side . which yields probably will be able to say, “We told you so.”

The Wicked Flee

ILITARY police in Korea, reports the United Press, have arrested hundreds of prostitutes who have flocked as far north as the battle zone. They are checking to see if the girls are Communist agents. Perhaps they're just running away from that New York Grand Jury.

The Machine Age

N Denmark, a traveler reports, there are coin machines which dispense a pocketbook when two kroner are inserted. The Danes should learn from us. Out in Nevada we have coin machines which empty the pocketbook and dispense a lemon, an orange and a bunch of cherries.

French Logic

RENCH politics may ‘puzzle and exasperate us, but a dispatch from Paris proves that in other ways the French are still the most logical people in the world. This month, when hordes of foreign tourists descended upon their city, 1,637,000 Parisians simply left town for vacations of their own—in the country.

Up and Up “(QUTPUT ‘of livestock products seems likely to top all previous years,” says a report from the Department of Agriculture. So do the prices.

Paunchy Soldiers i w GTON, the Army has set up special diet tables " because so miany of its chair-borne soldiers are getting tof. . Ln bier a t However, there are€o reports of such a problem on the

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FARM ECONOMY? . . . By Peter Edson Drought Is Toughest Test of

"ede ALBYR TR

Federal Crop Insurance Plan

WASHINGTON—The drought is giving the government's experimental crop insurance plan its toughest test to date.

Crop insurance is of course something that no private insurance company would dare to write, except, perhaps, at prohibitive rates. The risks are too great and there aren't any actua tables on how the weather and bugs will ve. Nevertheless, for the past 14 years, Congress has authorized the Department of Agriculture to run a Federal Crop Insurance Corporation to see if some kind of practical formula could not be worked out. In 1939 Congress authorized a wheat crop

~ Insurance program on a national basis. In 1941

cotton coverage was authorized. But the cotton and wheat losses of 1942 and 1943 caused the whole program to be suspended in 1944. Another program was started in 1945. In that year and the next two the experience was pretty good in everything except cotton, Congress therefore decided to cut back the program again. It was put on an experimental basis in 400 selected counties out of the United States total of over 3000. This was expanded to 800 counties in 1950 and to 850 this year, covering wheat, cotton, corn and flax, tobacco, dry edible beans, and multiple coverage for two or more crops like peanuts and soybeans. The authority for this program expires in 1953. So one of the big problems for the new Congress will be to decide whether to expand crop insurance, kill it, or continue it as an experiment.

$2 Million Reserve Not Enough

SINCE 1949 the Federal Crop Insurance Corporation has taken in $58 million in premiums, and paid out $356 million in indemnities. Last year $2 were collected in premiums for every $1 paid out. In spite of the $2 million reserve, any insurance company executive would say you can't make money that way. What's more, if FCIC had to pay 100 per cent loss on all its insured crops this year, it would have a liability estimated at from $58 million to $60 million. But of course that won't happen

because it won't have to pay 100 per cent loss on every crop in every area. In the drought areas, which cover a total of some 1100 counties, FCIC has written crop insurance policies for nearly 100,000 farmers in only 1368 counties. : The crop insurance policy which the government writes for the farmer covers only his operating expense losses from unavoidable causes. These causes are of course the “acts of God"—{flood, drought, storm, plant disease or insect pestilence. The amount of indemnity the farmer can collect under a crop insurance policy is not the value of the crop he might have grown and marketed, but only his expense in planting.

Not a Money-Making Proposition A MAXIMUM liability is written into each policy. The farmer makes a report on what he plants. FCIC then figures the total coverage of each farm. The premium rates charged the farmer vary from county to county and crop to crop. For tobacco the rate may be only 3 to 4 per cent of the coverage. For cotton it may be 7 or 8 per cent. For multiple crop coverages the rate goes down to 3 and 4 per cent. As a typical small farm policy, the case of a farmer with 10 acres of cotton is cited. If his costs for seed, planting and cultivation run $20 an acre, his premium protection would be $200. His premium, at 7 per cent, would be $14. In a fair year, with a yield of 100 pounds to the acre, and with cotton selling at 40 cents, his gross receipts might be $400, if he harvested his crop. But in case of drought he might get only 25 pounds to the acre, or $100. His insurance indemnity would then be $200 minus the $100 he got for sale of his crop, or §100. The question arises as to whether a farmer is better off with crop insurance or without it. The premium is of course an added cost of operation. But in case of disaster like the present drought, the farmer with insurances doesn’t have to worry about borrowing money from his local bank or the Disaster Loan Corp. to carry him over. Crop insurance is thus a stabilizing factor in farm economy. It is not intended to make money for the government,

FRONT SEAT . ... By Frederick C. Othman

Democrats Investigate Democrats And GOP May Collect the Laughs

WASHINGTON —Now we're investigating the investigators who did the original investigat-

. ing in St. Louis, my home town,

and before this week is over we may have some headlines black enough to make the Republicans chortle. These are Democrats investigating Democrats. The House Judiciagy subcommittee looking into alleged monkeyshines inside the Department of Justice. What's bothering Rep. Frank L. Chelf (D. Ky.) and company is the career in government and/or big business of smiling Jimmy Finnegan, the one-time Collector of Internal Revenue at St. Louis. The red-faced, roundpaunched Jimmy settled tax bills on a mark-down, cut-rate basis for those who saw fit to buy life insurance from him. Any 8t. Louisan in a bad jam with the Bureau of Internal Revenue automatically became a good prospect for Jimmy's insurance agents, n ou ”

SO 28 angry Missourians sat for 18 long months as a grand jury, passing out indictments against a wide assortment of thieves, including our Jimmy. Only the jurors claimed they got no help, no help at all, from the Justice Department in Washington. U.8, District Judge George Moore finally issued a statement, charging Washington with a‘ peculiar lack of enthusiasm for prosecuting Jimmy. On again, off again seemed to be the word for the Finnegan case. Eventually he did go to tria}

and e ually he was conviet Louis got another more tax collector. The detalls t happened on

the Washington-St. Louis telephone never became. public but

jjppareutly they l} be on the record now for all to see. Rep. Chelf, one of the hard-

est-working of all our congressional sleuths, has subpenaed for sworn testimony half a dozen members of that St. Louis jury, including Foreman Henry J. Butler. Their troubles all seemed to stem from one assistant attorney general who, at this writing, still was unnamed. » " »

HE SEEMED to have. the idea it was poor politics for one branch of the federal government to be prosecuting a member of another. When the Finnegan case did come into the open, thanks to the operations of still another congressional investigating committee, it led to a complete overhaul of our tax-collecting ‘system.

# So I have staked out a front seat for the Chelf proceedings. It developed further that Congress has so many investigations in the works it has run out of office space for its detectives. “The Chelf committeemen I found in a beaten-up suite of offices in the old George Washington Inn, across the street from the House Office building. There the investigators found themselves being entertained by an elderly lady in the lobby practicing on an elderly plano. Over and over she tinkled the notes of “My Old Kentucky Home.” In trib ute to Rep. Chelf, maybe.

o ’ -

HIS COMMITTEE went to work last spring, looking into alleged skulduggery among the whisky distillers, who were charged with bankrupting many of their smaller rivals. This led to a memorable debate on the merits of Kentucky - straight whiskies versus blends of a little and a lot of alcohol, but there have been no _ other results. ’ : Shortly before St. Louis case came up, , Chelf's

chief “counsel, Steve Mitchell, resigned to become chairman of the Democratic National Committee. His assistant, Robert Collier, who used to be a G-man, took over. End introduction; now go on with the story, one installment daily,

beginning here tomorrow,

SIDE GLANCES

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¥ "Going to the ~~ still has to pick up some dirty clothes on the way!"

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POLITICAL PATTER + .. By Richard Starnes =

Who Made Prices Go So High Will Be $64 Question This Fall

WASHINGTON — This fall politicians will: Kiss babies. Pose in Indian headdress. Hire hillbilly bands.

Discuss crops, Yalta, Communists, flood con-

trol, the Taft-Hartley Law, the boll weevil and the high cost of staying alive. On the last count, each party is going to do its best to tie skyrocketing prices onto its opponent. Democrats already are saying that

‘ the Republicans in Congress were responsible

for weakening economic control laws until price control machinery was fatally damaged. Republicans reply that the Democrats didn’t use the control law Congress gave them until inflation had a running start. Neither side is likely, however, to dip below the surface and attempt to show just where inflation came from.

Encouraged Inflation

THE DEMOCRATS while carrying on a noisy

and expensive fight on inflation with one hand, have quietly been encouraging it with the other. ; When the average person thinks of inflation, he thinks of high prices. This is roughly comparable to thinking of a broken arm in terms of inability to shake hands. High prices and high wages are a sympton of inflation. But they are are not the disease itself. Inflation comes when the supply of money exceeds the supply of goods or services for sale. The result: Prices go up and so do wages. Inflation inevitably follows on the heels of war, primarily because wars are financed by borrowing, because the money is spent for nonproductive goods and services, and because there is a corresponding shortage of civilian goods and services to soak up the excess money which is created.

Methods of Control

METHODS For controlling inflation include: ONE._Mechanical means—use of ceilings on prices and wages. r TWO-—More production. THREE —Balancing the government budget by spending less and taxing more. This siphons off some of the loose money and acts as a brake on inflation. FOUR—Managing currency and: public debt by methods which create as little “new” money as possible, a: The first two methods are the ones held in highest esteem by the present administration. But controls alone are ineffective over the long haul since they only bottle up inflationary pressure. When the cork is pulled, as it was after World War II, there is purchasing power all over the ceiling and, usually an economic hangover. Production is of limited effectiveness, since in time of war or defense buildup most production expansion is in the field of munitions. The third method, favored by most econ-

BANANNNNARANARARANARRNSRRRANNNANARNGRRNAL ana

omists, runs into the gloomy political reality that nobody likes to pay taxes and few politicians dare to suggest such a thing. . That means the government has to borrow money to finance its wars or other extraordinary expenses. It is in this vast and misty field

- that the Administration has laid itself open to

the charge of tacitly encouraging inflation, while simultaneously beating Congress over the head for not helping control the same thing.

Borrow as Much as You Can DURING both World Wars, the Federal Reserve System was a powerful instrument in helping the Treasury borrow enough money to meet the government's needs. In essence, what the Federal Reserve System said to the Treasury was this:' “You borrow as much as you can from corporations and individuals and we'll lend you any more money you need.” There is one huge and vitally important difference between selling government bonds to the public or to corporations, and selling them to the Federal Reserve System (called the “Fed” in the money markets). . When an individual or a corporation buys a government security (in effect lending money to the government) no new money is created. You paid the $37.50 in cold cash out of the sugar bowl every time you bought a $50 War Bond. You did not create any new money. But when the Federal Reserve System buys Treasury securities the effect is to create new money. And when it spends this “new” money, it increases the nation’s money supply and adds to inflationary pressure.

New Money Is ‘Hot’ NOW, DESPITE the obviously inflationary character of the new money, the system was attractive to the Treasury because it enabled it to borrow money at a low rate of interest (about 21% per cent on long term bonds and 33 per cent on short term “bills”). Interest on the national debt could be kept low, and a vir tually inexhaustible supply of new money was available. > Lo But the new money obtained in this method helped cause inflation. And inflation made it necessary for the government to pay a lot more for its guns and airplanes. < : There is another and highly complex relationship between inflation and the Fed's program of supporting U. 8. borrowing. Every dollar spent by the Fed to buy Treasury securities increased the reserve in the member banks of the Federal Reserve System. And that is “hot” money, because for every dollar in its reserve, a bank is legally entitled to hold deposits of up to $6 and to lend up to $6. Thus, every dollar of “hot” money added to bank reserves actually increased the available money supply of the country four, five or six times.

SENEIRASINRRNAALY

SE ENE ARNT TIr NRE NINN INERT RRR OR NRNRIRRANIRNSOUISRAOREI DES

MR. EDITOR:

Much has been said and printed condemning Gov. Schricker in regard to thé stand he took to eliminate bloodshed at the Allis-Chalmers strike in Terre Haute.

I feel our Governor has been slurred by people who refuse to see the situation without prejudice and impartiality. Gov. Schricker has acted in a fair, impartial manner and has proved to the people through his many years of political service that he is a capable leader. As the election draws nearer, false propaganda always rises to great proportions. These systematic efforts to destroy the fitness and capabilities of our candidates will be seen for what they are. Such conniving will only strengthen our convictions and cause us to unite more closely in our great fight to keep the Democratic Party in control. The race should be an interesting one and the independent voter will want to be informed

: - i HOOSIER FORUM—‘Impartial’ | “I do not agree with a word that you say, but | will defend to the death your right to say 5

on many important issues. It behooves voters to bring our campaign to a higher standard and judge our candidates on record, intelligence and patriotism. —A. C. W., Shelbyville

‘AN ANGEL'S TEAR'

One tear rolled down an angel's cheek . . , and fell toward the ground . . . it kissed the earth with tenderness . . . and didn’t make a sound . . . and sometime later flowers grew . . . from where the teardrop fell . . . to form an everlasting shrine . . . we call the sweet bluebell .. . now just what made the angel cry . . . I really do not know . . . but one stray tear that touched the earth . .. made little flowers grow . . . and I suppose the same holds true . . . with all flowers on earth . . . God caused an gngel’s tear to fall... to give each one their birth. —Ben Burroughs.

DEAR BOSS . . . By Dan Kidney Hoosiers Go Into High Gear

To Aid Republican Campaign

WASHINGTON -— Being the headman, from the House side, in charge of the speakers bureau for the National Republican campaign, may help Rep. Charles A. Halleck, Rensselaer, become a speaker himself some day—Speaker of the House that is. Should such be the case, it would mean the realization of a life-long ambition of the dean of _all Hoosiers in Congress. Meanwhile he is working hard to see that Congressmen he can count on get the best of help in the way of speaker assignments, within their districts and speaking engagements outside. ” o » SUCH COURTESIES count in political life. Mr. Halleck long ago learned how to make the most of them. That is why

By Galbraith

dance in a foundry truck is Bad enough, but he

when the Indiana Republicans kept him off the Chicago convention delegation, they may have done him a good turn, even if their intentions were quite the contrary. ” ” »

BESIDES Mr. Halleck, Hoosiers who have offices in the Washington Hotel campaign headquarters here include Rob-

ert Humphreys, Mr. Summerfield's one-man brain-truster and member of the high strategy board, and William 8S. Warner, executive secretary of the congressional campaign committee of which Mr. Halleck is vice chairman. Boosters of Mr. Halleck for Speaker of the House, should the Republicans win frankly admit that present minority leader Martin (R. Mass.) can and probably will take it again, just as in the 80th Congress. They are equally certain, however, that “Charley” will be Majority leader in that case, just as he was in the 80th. In that GOP Congress his closest competitor for the post was Rep. Clarence Brown (R. O.). Since Mr. Brown was one of Sen. Robert A. Taft's presidential campaign managers, it is considered unlikely that he will

Barbs—

A physician says many city people walk about with their eyes on the ground. Is modern architecture that bad? : * 8 = FOLKS are already dreading zero weather though it really amounts to naught. # » o ABOUT 2,000,000" children are born In the U. 8. every year. That's 2 million reasons for all of us to drive carefully. 2 8 » IF MORE birds and animals than hunters are shot, hunting season will be considered a success. . . . PESSIMISTS think that every season comes at the wrong time of year. . 2 8 = A BLANKET owned by an Ohican was traced back 400 years to Ireland. By an under-

ana man’s. voice — just what

divorce does for a lot of men, ¢

be in the running this time— if Eisenhower is elected. Mr. Humphreys took over the post of public director for the national committee, after the Eisenhower reorganization of headquarters. He succeeded William M. Lander, when Chairman Summerfield announced. the Humphreys appointment, he termed him the best brain for the business in the whole U. S. A. He had been holding a similar job with the House congressional committee. . ” » " “BOB,” as he is known

among Indianapolis newspaper men who worked with him both as INS reporter and GOP state committee publicity man, went back into politics after becom--ing national affairs editor of News-Week magazine. He was for some years a capital correspondent for INS before entering‘the magazine field. His fellow workers here credit him with having more ideas in an hour than the Republican Party has had in the last 20 years. That makes it kind of tough for some of the oldheads who work with him. They say he thinks too fast for them. So far it has paid off handsomely.

SOME MEN send the wife and kids away on a separate vacation—and finally become bosses in their own homes. . . 2 WHEN trying on a new wardrobe, prospective brides are in a glass by themselves. 8 Ld - A GIANT ant-eater has a tongue two and one-half feet long. When two females get together it should be a riot. .

tting you is to keep you out of the spotlight.

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