Kankakee Valley Post, Volume 8, Number 18, DeMotte, Jasper County, 31 March 1938 — Washington Digest National Topics Interpreted [ARTICLE+ILLUSTRATION]

Washington Digest National Topics Interpreted

National Topics Interpreted

by William Bruckart

National Proas Building-

WaMhfnrton, D. C.

Washington.—lt is often the trick of political spokesmen to let their real feelings become known by a

statement that makes no definite reference to the broader policies in

which they are interested. Such a statement was that made lately by Sen. Pat Harrison, Mississippi Democrat, with reference to what the senate will do on the pending tax bill. At least, nearly all of the observers here who know the lovable Pat Harrison were quite convinced that, when he said the senate would grant business relief from unfair taxes, he actually was proclaiming congressional independence of President Roosevelt. This question of taxation is one with which the New Dealers are gravely concerned; they are just as much concerned as is business and the country as a whole. But they are concerned for a different reason. Sane minds throughout the country long ago began to beg congress and the administration to make changes in the tax laws to permit business to go forward with employment and production. New Dealers attacked anyone who said that as an “economic royalist’’ or “tory” or some other one of the various things that the New Dealers profess to hate. After so long a time, however, the New -Dealers conceded some changes were necessary—and then began the greatest face-saving maneuvers yet to be tried by the wishful thinkers. When word went to the house ways and means committee that it could make modifications in the two pet New Deal tax laws, the ageing Chairman Doughton, ? of that com-, mittee, followed instructions. Of course, there were seventeen Democrats and seven Republicans on the committee and that enabled the New Deal to carry out its plans for “modification” of tax laws—and to save faces. Regular Democrats and Republicans" in the committee membership still were in the minority in the house of representatives, °and the New Dealers had their way. The tax bill debate in the house, nevertheless told of more slaps at the administration that lay ahead. At this point in the developments, Senator Harrison enters upon the stage. He is chairman of the senate committee on finance. His statement, therefore, that the 1938 tax bill is going to give some basis upon which«business can break even, at least, can be taken as indicative of the final form of that law when it emerges from congress. The house, under the lash of White House lobbyists, managed to hold part of the ways and means committee draft in its original shape while losing other parts of it. Thus, when the senate has acted and the bill is sent to conference committees for adjustment of the differences, it is rather plain to see how Democrats and Republicans are certain to override New Deal face-saving. ♦ ♦ * I have written much in these columns about present tax policies

heretofore. There is little need to repeat the ijacts which continue to

be important factors in the development of the Roosevelt depression. The assinine tax on undistributed earnings, fathered by the radical Prof. Herman Oliphant of the Treasury staff, has not allowed any corporation to build up a reserve. It took all of the earnings of last year, a period in which some corporations did make money in a limited way. Now that the depression is on us again, corporations obviously are scared stiff. Wage cuts are cropping up here, there and everywhere, and every time there is a wage cut the nation’s buying power is reduced to that extent. But what is an employer going to do? Go broke, in order to keep his payrolls up? That is hardly human, it seems to me, since everyone desires to protect whatever funds he may have, be it a dollar or a million. So, when Senator Harrison spoke out boldly that something was going to be done to eliminate some of the obstacles which wishful thinking New Dealers have built up in their experimentation, it means, I believe, that Senator Harrison proposes, to do just that. The politics of the situation is another matter. That phase is equally important and significant. Senator Harrison would not have spoken out a few years ago, or even a year ago, as he has done lately. The house a year ago would never have rejected w’hat has been called the “third basket” of taxation. (The socalled third basket was a new type of tax that would have made »the rates sky-high on corporations held by only a few stockholders, familyowned corporations like thousands of small companies usually are,.) No, the house would not have killed that a year ago, but it did this year. And, when Senator Harrison dared to say congress will do thus and so, Senator Harrison was simply voicing a fact. He was saying, in effect, “Whether you like it or not, Mr. President, we will write the tax law in the interest of the country as we see it.”

In the course of the tax bill debate in the house, there was a curious disclosure, a rather biting piece of debate. Representative Treadway, who would be chairman of the ways and means committee if Republicans were in the majority instead of being only a handful, told the house that the father of the surplus earnings tax had never come before the committee since the time he laid out the silly scheme which led to its enactment. Professor Oliphant has been so silent about his sponsorship of the plan that it has become almost thunderous. And Mr. Treadway thought it was unusual that a parent should shrink from acknowledgment of parenthood. He obtained no answer or explanation. The surplus earnings tax, in a modified form, was still in the bill as reported to the house, however, and there was sufficient New Deal strength in the house to hold it there. It will be different in the senate; and’ the speech by Senator Harrison simply is an announcement in advance. • • * It has been interesting to me to review these facts because I am in-

dining to the opinion that the situation in congress is more or less a re-

flection of the opinion in the entire country. The November elections lie ahead. Mail from home is pouring in, and the character of that mail is always closely studied by the politician seeking re-election. That is to say, the average house member or senator is keeping very close tab on what the feeling is back home. They were not put to that necessity* during the first four years of Mr. Roosevelt's administration.; All that was needed was for a member to say that the President wants this or that, and vote that way. So clearly has all of this been made apparent that few who so desire are afraid any longer to assert themselves —to say what they think even if that is in administration opposition. It is a healthy sign. It means that congress, while going along with Mr. Roosevelt many times, will put more and more checks on his proposals that have had their birth in the little red house, of Georgetown’s section of Washington, where all of the New, Dealers congregate. It means fur-; ther—in the opinion of some of the real Democrats—that the New Deal has played out. They are, therefore, getting back into their harness as Democratic leaders. And, in this light, there has been another development that should not be overlooked. I refer to the collapse of Robert H. Jackson’s candidacy for governor of New York. When Mr. Jackson, who lately was made solicitor general of the United States, was “going to town” as the expression is, left wing press agents had him all but elected in New York. A big banquet was tendered him in New York city. Mr. Roosevelt was quite instrumental in that banquet plan. He lent aid in stirring up attendance. It was notable, however, that the banquet created no excitement. That is, there was no excitement of importance, and. just there the candidacy began to sag. • • * ■ I do hot know what the real reason was for Mr. Jackson's subse-

quent statement that he would not seek the New’ York governorship. It is

just possible, however, absence of Postmaster General Farley from the banquet sponsorship had something to do with the flop—for flop the dinner and candidacy surely did. Now, everyone around Washington knows that Mr. Roosevelt no longer takes the postmaster general into the executive confidence, even though Mr. Farley is chairman of the Democratic national committee. Indeed, it was printed in several widely read columns that Mr. Roosevelt actually distrusted Mr. Farley. I would not be able to report on that detail, but I can not overlook the fact that left wingers, especially the long-haired group, have been sniping at Mr. Farley for months. It is just possible, then, that they have persuaded Mr. Roosevelt to the point of conviction. He has listened to that group a very great deal and they may have made him feel that Mr. Farley is undermining the President. In any event, one may follow the tax pronouncement by Senator Harrison right on through the significant silence of Mr. Farley. One may find how Mr. Farley has had numerous and sundry conferences, or chance meetings, with a good many powerful old-line Democrats. But to examine the thing from a congressional angle again, I am pleased by the defection, the establishment of the line of tion between Democrats and New Dealers. Not that I care who runs the government, or is charged with responsibility. My interest lies deepqr. I know from having watched: the wheels go ’round that too great a majority of one party in congress produces bad laws. It can nbt be avoided. * © Western Newspaper Union.

Taxation Problem

Harrison Speaks Out

Healthy Sign

Ignores Farley