The Charlotte News

Friday, September 9, 1938

FIVE EDITORIALS

The defeat of another county liquor store election, this time in classic Orange, pretty well clinches the fact that most of North Carolina is still "that way" about prohibition. This affinity is hard to explain, for if ever there was a state unfaithful to the beloved, our hearts will not swell with pride when we name her. Not even the most impassioned prohibitionists can muster the nerve to contend that the dry portions of North Carolina haven't, under prohibition, most of the evils of liquor to contend with and none of the benefits of control to compensate for them. We profess obeisance to the form of dry laws and wantonly disregard form and spirit.

Which is not to say, necessarily, that any considerable number of us are hypocrites. There's something of that in the mixture, to be sure, but the more comprehensive, and by all odds the most complimentary, explanation is that we are a people sharply divided. We are divided in our habits, our ideas, our manners. We are divided geographically, historically and by occupations. We are divided into towns people and country people, and we are about, some say, to be divided politically.

The worst of it is that, for the most part of North Carolina, the division favors prohibition. So it turned out once more in Orange, a county that is distinguished at one and the same time as the seat of learning in the state and site of some of the drabbest unenlightenment you ever laid your eyes on. The learning center, it is to be noted, went 2-to-1 against prohibition.

No evidence was found by the Department of Justice that Mayor Frank Hague of Jersey City had violated an obscure Federal statute prohibiting conspiracies to deprive any United States citizen of his constitutional rights of free speech and peaceable assembly. Accordingly, the investigation ordered last May by the Attorney General has been dropped.

Any other procedure, whatever the Department of Justice had found, would have been astonishing. For one thing, Mayor Hague doesn't have to "conspire" to suppress civil liberties. When he closes the door to his office, the municipal government and the courts of Jersey City have gone into executive session. And for another, the head of the Department of Justice, a man named Cummings, and the Mayor of Jersey City are lodge brothers. They both belong to the Democratic Party. The Mayor, in fact, is vice-chairman under Jim Farley of the Democratic National Committee and a ponderable factor in swinging the whole state of New Jersey into the Democratic column. No purge has been undertaken against Hague because of his notorious illiberality, nor has he been asked to step down from his party office. There's an election coming off in New Jersey this November, and in it a man named Ely, Hague's man, is running for the Senate with assurance, he claims, of White House support. The corollary of that--Hague's assurance of Ely's support to the White House--may fairly be taken for granted.

A good many people have always had a sneaking suspicion that one explanation of the perennial "plight of the railroads" was their excessive capital structure. The railroads will stand you down about that, and cite figures to show that their stocks and bonds in the hands of the public are well below the depreciated value of their properties.

According to a railroad reorganization recently approved by the ICC, however, at least one major railroad was top-heavy with bonded debt. The Chicago Great Western's capitalization was cut from $139,247,313 to $62,291,827, its annual fixed interest charges from $1,705,532 to $767,071. First-mortgage bondholders alone came through the reorganization with par equities unimpaired. Preferred-stockholders got less than 25 per cent (and that in new common stock), while former common-stockholders were left out in the cold altogether. The whole operation represented a 55 per cent cut in book capital.

Perhaps this case is not typical of the railroads as a whole, and of course enlarged capital glands are not the only symptom of their malady. In fact, there is no assurance that the Great Western can earn its way on its new capitalization. But the ICC certainly did take a whack out of the certificate-holders.

No such classified advertisements as this is appearing in the papers, for one reason because the Treasury's offerings are so popular that the applications usually exceed the supply several times over. But by putting the notice of new Government financing in this appealing form, it may be that the transaction will be brought down to earth where it may be examined more closely.

When the Treasury goes through what it euphemistically calls a "financing," stress is usually placed upon the investment features of the procedure. That is, here is an offering of gilt-edged securities with a modest but a sure return: so step up investors, and place your bids. This only obscures the real significance of the deal, however, which is, abruptly, that the Government is having to borrow money. In this instance, it is borrowing $700,000,000 of new money and $433,460,900 to meet previous borrowings.

Altogether, the Government will owe when it completes its September financing some $38,300,090,000 in direct obligations, plus one billion or more to Social Security funds. Its credit is still excellent, and let us hope it remains so, for once it begins to be questioned, down will go McGinty. Whether or not there is any limit to the amount the Government can owe with safety to itself and its people, we don't know--don't know any more than we know how in the world the Government is ever going to pay back this money or any considerable part of it. In fact, about all we do know with any certainty is that Mr. Roosevelt is taking the country for a wild fiscal ride on a road that no country has ever safely traversed before. His brakes aren't working and he's distracted from his driving by the socially-significant scenery as it whizzes past, but it's hold on, everybody, here we go again!

The Mexican Supreme Court, a "third horse" which is pulling along docilely with the other two of the team, has ruled that British and American oil companies, whose properties were expropriated March 18, must pay a "discharge" wage to their former workers. Before expropriation, Mexico's Labor Board had ruled that the old companies had broken contracts with their employees, which was equivalent to discharge. The law is that discharged workers shall be paid three months' wages plus 20 days' pay for each year of service.

But the law was nothing compared to the demands made upon the oil companies by Mexico's labor syndicate, which corresponds to an American union. One stipulation was free medical, surgical and dental service for workers and their families, families being defined as wife, children, grandparents, grandchildren and sisters and brothers under sixteen. To a worker on vacation the companies were asked to furnish first-class round-trip railway accommodations to any place he might select, without limitation as to how many leagues or how many lands away. In addition to regular vacations, legal holidays, bonus days and feast days--an aggregate holiday which left only 223 days in the year for the prosaic matter of work--a worker was to be granted three-day leaves of absence with pay upon his request at any time, with no limit upon the number of such leaves. And if a week rest day, an obligatory rest day and a holiday, (and the Mexican calendar is full of holidays) happened to fall on the same day, a man working that day was to receive four times his usual pay.