The Charlotte News

Wednesday, February 18, 1948


Site Ed. Note: The front page reports that the President asked Congress to appropriate 570 million dollars for a one-year aid program for China, to promote its economic stability and recovery. He said that the country labored under the dual burden of civil war and continually decaying economic conditions. He proposed that administration of the aid be under the same administration as ERP.

The move was seen as another attempt to thwart Communist influence, though General Marshall, based on his year in China in 1946, had reported to the President that the Chiang Government was not worthy of support and that the Communists were at least effecting modernization in the country in terms of agriculture and land reform, that the corrupt Chiang regime was no better than the Communists of the North.

Perhaps, Madame "Cash-My-Check", as President Truman would come to call Madame Chiang, had persuasively prevailed upon him for the help.

Chilean President Gabriel Gonzalez Videla moved to establish a military base in Antarctica at Bernardo O'Higginsland, premised on a territorial claim and the Pan-American peace treaty providing for mutual defense among the signatory nations in the Western Hemisphere. An armada of Chilean ships had been dispatched to the area. The site was part of territory in Grahamland, claimed by Britain. Britain stated that it would support the opposition to such a move by Miles Clifford, British Governor of the Falklands.

In Palestine, a dozen bombs were heard to explode but only one death was reported this date, a Jewish girl killed by an Arab sniper on the Jaffa-Tel Aviv border. Two British constables had been killed by gunfire the previous day in Old Jerusalem, along with three Jews and two Arabs. The deaths brought the toll to 1,257 since U.N. approval of the partition plan on November 29, 1947.

Secretary of State Marshall denied rumors that Russia was putting out "peace feelers" to settle the cold war, after he was asked a question regarding the story at a press conference.

He also said that the U.S. had nearly reached a determination of its position on whether to approve creation of an international police force and use of it to maintain order in Palestine, as recommended by the Palestine Commission to the U.N. Security Council.

In Eire, John Costello was elected Prime Minister following a vote in Parliament defeating Prime Minister Eamon De Valera, an American by birth who had headed the Government since 1932. He mustered only four votes outside his own majority party, the "Soldiers of Destiny" or Fianna Fail in Gaelic. Mr. Costello belonged to the United Irish Party, Fine Gael, and was supported by a coalition of five minority parties. The new Parliament had been elected on February 4.

The Henry Wallace-backed American Labor Party candidate in New York, Leo Isacson, had unexpectedly won handily a special election in the Bronx Congressional district. Progressive Party leaders and Mr. Wallace, who had campaigned actively for Mr. Isacson, were enthused about the implications of the result, especially since several unions had dropped out of the ALP in opposition to its support of the third-party candidacy of Mr. Wallace. New York Mayor William O'Dwyer blamed the result on voter apathy and Communist activities in the election.

James Farley, former FDR kingmaker, stated, in a talk at Colgate University, that the cause of many of the world's ills had been the fact that the late President stood for re-election to unprecedented third and fourth terms—over which Mr. Farley had parted ways with the President in 1940. He said that FDR still possessed a great mind at that time but one which had been worn down by 1940 by the pressures of office, "a worn Lear", and that such had adversely affected the results of the November, 1943 Tehran Conference and those of the February, 1945 Yalta Conference, leaving the world under agreements with Russia providing for Balkanization and spheres of influence.

Some Republicans in Congress wanted to use the paper accounting method approved the previous day by the Senate Foreign Relations Committee, splitting one year's worth of aid under ERP, 5.3 billion dollars, into two fiscals years, 1947-48 and 1948-49, three billion of which would be subsumed under the current year's budget, as a basis for enabling a tax reduction, even though the accounting methods did not lower the actual cost of the Plan as proposed originally by the President, 6.8 billion dollars for the first 15 months.

But as long as you can sell it to the Morons back home who support your re-election bid based on your warm smile and shoe-shuffling handshake, who cares what the actual cost is and whether it leads to deficit financing or not? Right, Mr. Republican? Sell it to them on lower taxes and less public welfare for shiftless criminals in need of punishment and electric shock treatment in the electric chair. That always sells well with the Morons.

The Commerce Department called for a 48-hour cessation of oil and gas exports to help relieve the fuel oil shortage while the Department worked on a method to cut foreign quotas until the scarcity at home passed.

Grain prices dropped lower, along with prices on most other commodities, on the Chicago market. Cattle prices were down; sheep were up and being counted. Cocoa and hides were down, too. Cotton fell $1 per bale in New York.

Retailers said that commerce was slower than usual during the Lenten season despite lower prices. Consumers were becoming more resistant to the price structure.

Food prices were steadying.

Off Hyeres, France, the search for the eight missing members of the crew of the carrier Midway, believed drowned when the shore-to-ship launch, in which they were returning from shore leave off the Riviera, was swamped by rough seas two days earlier, was abandoned for rough seas and snow and rain. Fifty-three other men on the launch were rescued.

In Anderson, S.C., the Mayor stated that he would disregard a threat by the Klan to "take him for a ride", based on reports of an undercover observer at a Klan meeting in Atlanta. The Mayor had recently refused to grant a permit to the Klan to conduct a parade through Anderson. He said that he had received congratulatory telegrams from persons in eight states for his action.

The Cyclops of the Anderson Klavern of the Klan said that he kould not reveal the identity of the South Carolina Grand Dragon, formerly the late Ben Adams, the full-blooded Indian, but that the Klavern had 501 members and 401 on a waiting list.

Grand Dragon Samuel Green in Atlanta said that Anderson had no Klavern, but the Cyclops said that Dr. Green was not in a position to know their status—it being Klandestine.

On the editorial page, "America's Future in Business" posits that the future of the Western world, as it recovered under the Marshall Plan, was dependent on the strength of the American economy. Morris Sayre of the Corn Producers Refining Company of New York had spoken at a conference the previous week in Charlotte, sponsored by the local Chamber of Commerce and the National Association of Manufacturers, in which he had put forth a NAM-approved plan for American business to follow in 1948. Also on the platform was Don Mitchell, president of the NAM taxation committee, who did likewise with regard to taxes.

The plans proposed had been attacked by those who favored Government planning, regarding it as a scheme to increase the profits of Big Business. But it was a carefully conceived plan and was not without social idealism and a democratic objective. Its central goal was to increase productivity, helpful to the Marshall Plan for supplying demand both at home and abroad.

Big Business had earned record profits in the previous year, 28 billion dollars before taxes, but only 16.9 after taxes, and 10.3 after dividends to stockholders. Mr. Sayre claimed that the latter amount was inadequate to pay for the necessary capital expansion to produce more, estimated by the Commerce Department to be 20 to 25 billion dollars annually. So he recommended tax reduction as a salve.

The piece suggests that the huge confiscatory taxes on the higher brackets, passed to finance the war, were now strangling business incentive to produce more. NAM proposed a 12 percent floor and 50 percent ceiling on individual taxes, a total reduction of eight billion dollars, to produce an estimated 3.5 billion in private savings and two billion for venture capital for business.

The piece ventures that the average individual would benefit from such a plan indirectly out of the increased incentive provided Big Business to invest in increased production capacity.

Sounds all good in theory, until NAM becomes Nam, Man.

But you have no idea what we are saying, and so we excuse your baffled expression, until will come, during the Sixties, the Years, respectively, of the Rabbit and the Monkey.

"Bowles Puts Tax Cut First" discusses the proposal by former OPA head Chester Bowles, as set forth the previous day on the front page, that tax cuts occur all down the line in preparation for a coming recession. A public works project consisting of slum clearance and building of public housing would meet the unemployment factor consequent of such a recession. Establishment of national health insurance, increasing the minimum wage to 75 cents, a public school building program and development of the Missouri Valley Authority and the St. Lawrence Seaway projects, would also fill the gaps between a declining economy with layoffs and the commensurately reduced purchasing power of consumers. Finally, he recommended quick approval of ERP.

The proposal, ventures the piece, posed the question of how such a broad program would be financed while reducing Government revenue via the proposed tax cut, but it was noteworthy nonetheless that he made the cut the first priority. The piece suggests concentrating first on this point and quick passage of ERP before the rest of the Bowles plan. If so, the recession Mr. Bowles predicted might not come to be.

Sumner Welles, former Undersecretary of State until August, 1943, finds the United States refusing to face facts on a perilous situation beginning in Palestine, the violence between Arabs and Jews, initiated by the Arabs, regarding the partition plan approved by the U.N. and set to go into effect in October, 1948 after British evacuation in mid May. It was as much resemblant to the behavioral characteristics of the ostrich as were those of the British during the mid-Thirties under the leadership of Prime Minister Stanley Baldwin, preceding Neville Chamberlain.

The U.S. had played a leading role in obtaining U.N. approval of the partition, but now the plan could not be carried out for want of an international police force. The U.N. Palestine Commission had been warned recently by the British that they would be killed by Arabs if they entered Palestine.

We note parenthetically that these Arab guerrillas, to this day, resisting change on some cracked-up theory mixing in a cocktail religion, xenophobia, and politics dangerously to the point of violence, are analogous to those idiots of the South who continued to fight the Civil War even a hundred years after its conclusion, rationalizing white supremacy on supposed Biblical justification, refusing to face reality and that human beings are all alike in the premises.

Mr. Welles reports that there was a cleavage of opinion in the U.S. Government on whether to support the Palestine Commission recommendation to the U.N. Security Council that an international police force be formed for the purpose of maintaining order in the troubled Holy Land. The Army and Navy and some members of the State Department insisted that the U.S. take no action to back up partition because of the growing dispute with the Russians making it unwise to risk antagonizing the Arab states, jeopardizing thereby access to Middle Eastern oil.

But he finds the argument unconvincing, as war would inexorably result in Palestine after the British evacuation without substitution by a police force. In that event, the Soviets would send their own police force to restore and maintain order, on the premise, under Article 42 of the Charter, that the authority vacuum threatened their security. And if war were to break out in Palestine, the oil would not be available to the West in any event. The Arab states depended on royalties from the oil and so would not, for political reasons, cut off that flow to the West for U.S. backing of a U.N. police force to enforce the partition plan.

But even more important would be the fact of such passivity undermining the new U.N. and its ability to enforce its decisions, rendering it no more potent than the old League of Nations had been, to which Japan had thumbed its nose in 1931 by invading Manchuria, doing so with impunity. In 1936, Mussolini, on that example, did likewise in Ethiopia. And Hitler followed in Austria and Czechoslovakia in 1938 and 1939, prior to the September 1, 1939 invasion of Poland to start the war.

If the U.N. was to survive as a viable organization, the U.S. had to support it, regardless of whether its policy was consistent with U.S. policy or opposed to it. Failing to support the League, except when member nations approved actions consistent with their own individual interests, had led to its demise and world war.

Drew Pearson discusses, as does Marquis Childs, the report to the President by the Council of Economic Advisers, on the health of the economic downturn and the absence of likelihood that it would turn into a depression. The President's conclusion was that the price drop had scared commodities speculators out of the market and thus, by not curtailing the spiral of inflation, was salutary. Grocers had been scared into lowering prices as a result even though they would not experience better wholesale prices for several weeks, until present wholesale inventories were exhausted or wholesalers also followed suit. Also, the stock market had remained fairly stable.

One reason for the downturn in prices was that farmers had sent an abundance of hoarded wheat to market after the start of the year, that they might cash in on higher prices and to obtain income tax deductions. The higher income, they reasoned, would be offset in tax ramifications by lower taxes proposed in Congress by both Democrats and Republicans. Another reason for the decline was the new law passed by the 80th Congress, requiring the Government to withhold 150 million bushels of grain in reserve, meaning that the Government would not be immediately impacted by higher grain prices in its purchases for foreign aid.

An inside reason for the gag order imposed on the armed forces officers making public statements was the ongoing feud between Naval aviation and the Air Force, a dispute which Secretary of Defense James Forrestal did not want to leak.

Carl Sandburg might be supported by Henry Wallace as the Senate candidate of the Progressive Party in Illinois.

That does not sound quite cricket, Mr. Pearson, as Mr. Sandburg had, two years earlier, taken up residence in the North Carolina mountains, at Flat Rock, where he would spend the remainder of his days.

Dr. Thomas Parran was resigning as Surgeon General, and the fact had been kept from the press so that it would not appear that he was being fired. But, in fact, he was part of a general purge of old FDR allies and friends by the Truman Administration. Dr. Parran had been close to the former President since the days when he had been Governor of New York. The final reason for the firing was that Dr. Parran had refused to allow former vice-chairman of the DNC, Oscar Ewing, to run the Public Health Service.

Senator Taft could not claim the Solid South as support at the Republican Convention. Governor Dewey reportedly had just received a pledge of Alabama's delegates.

Harold Stassen's supporters predicted that he would win the Wisconsin primary over favorite-son candidate General MacArthur.

Marquis Childs discusses the slump in commodities prices and the Council of Economic Advisers advising that the downturn was not a sign of coming depression. Despite that being reminiscent of similar assurances by President Hoover in 1930 following the Crash of October, 1929, it still appeared to the Council thus.

Unsatisfied demand pent up from the war was still great and income was still at record-breaking levels with unemployment commensurately low. Public works had gone wanting during the war and could be resorted to if prices were to drop on materials.

The President's experts added the caveat that firms were running low on operating capital and should they run out, they would need float stock offerings, in which case the question arose as to whether the market would support them. In addition, the Council warned of volatile markets impacting the economy further, from fear produced by the speculation on commodities, causing many investors to exit, reducing the capital injected into the markets. The Advisers speculated, however, that better worldwide crop reports from a favorable winter and prospects of a favorable spring, without the floods inherent in the winter run-off of the previous harsh European winter, may have contributed to the falling prices.

Senator Taft had made the statement the previous January at a Republican policy conference that the prices appeared to be leveling off and had encountered jeering from the statement. While prices went down rather than merely leveling off, the statement proved essentially correct.

If the break in prices signaled only "corrective recession", it would be healthy in reducing the spiral of inflation, especially important in the housing market.

But, he notes, Moscow was paying attention to this downturn as a sign of a new depression with resulting unemployment and social disorder, based on the Marxist model.

Samuel Grafton wonders at a question posed by Joseph C. Harsch in the Christian Science Monitor: what would happen if Russia suddenly changed its hard-line policy and became conciliatory toward the United States? Mr. Grafton posits that the foreign policy was prepared for everything but that contingency. It could even reduce support for the Marshall Plan as being no longer necessary to establish the bulwark to Communist influence and expansion.

It reminds him of the distorted perspective of "The Cabinet of Dr. Caligari". The country was now living those earlier screen images. There were observers who feared rapprochement with Russia on the basis that it would have that result, destroying incentive to enter the Marshall Plan. But the Plan was actually not superior to formal agreements with Russia. And the Plan was needed for rebuilding Europe, regardless of the Russian threat. The threat, however, helped to sell the need for the Plan to the people and to Congress. Mr. Harsch recognized the fact.

But, Mr. Grafton continues, the reaction from conservatives under such circumstances would be to diminish the importance of the Plan, as they would cry that the Plan was being violated by entry into agreements with Russia.

The goals were both to rebuild Europe and establish peace, goals not in opposition to one another. The conservatives who thought that they were understood neither peace nor the plight of Western Europe.

Another "pome" appears from the Atlanta Journal, this one "In Which Light Is Thrown On A Threadbare Expression Used To Denote Those Who Are Heavy In The Poke:
People 'of means'
Have dough in their jeans."

We choose not to touch that one, even with a ten-foot pole.

A Quote of the Day: "After tangling with a wire coat-hanger, best two out of three falls, we have a personal theory that some of the more strenuous athletic events were omitted from the program of the Olympic games." —Roanoke Times

Another Quote of the Day: "Add signs of the cock-eyed times: A used car dealer asks Congress to put a ceiling on used cars so that they can't sell higher than new cars of the same make." —Greensboro Daily News

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