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
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
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
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
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
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
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
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
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:
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