The Charlotte News

Thursday, May 12, 1949


Site Ed. Note: The front page reports that in Berlin, two gigantic rallies comprised of a total of about 225,000 people, one Communist and the other anti-Communist, were held to celebrate the end of the blockade of the city imposed by the Soviets the previous June. The general air of the city was one of jubilation and relief that this phase of the cold war was over. Rail and road traffic flowed freely into the city for the first time in 327 days.

As a precautionary measure, the British-American airlift continued flying for the time being.

The U.S. ordered a halt of removal of further Japanese industrial plants as war reparations, as those remaining were necessary to the Japanese economic recovery. Reparations had been made in limited quantities to the Philippines, China, the Netherlands for the Dutch East Indies, and Britain for Burma, Malaya and Far Eastern colonial possessions.

Senator Arthur Vandenberg of Michigan said that he was not in favor of Spain entering NATO, joining a statement the previous day of Secretary of State Acheson and President Truman this date, endorsing Mr. Acheson's remarks. Both Senator Vandenberg and Senator Tom Connally, chairman of the Foreign Relations Committee, had said they favored renewing diplomatic relations with Spain, contrary to the position of the Administration, which believed the absence of diplomatic relations was a necessary symbolic statement supportive of the U.N. policy on Spain.

The President renewed his support for the U.N. despite its failures to achieve greater security for the world during its four years of existence. He submitted to Congress a report which placed the blame for its failings on Russia's refusal to cooperate.

The President said that he was standing by his demand for a four billion dollar tax increase, primarily on corporations, to offset deficit spending, rather than the proposed budget slash advanced by fiscal conservatives in the Congress, including chairman Robert Doughton of the House Ways & Means Committee.

Secretary of the Treasury John W. Snyder stated in a speech before a savings banks association that postwar adjustments of the economy were now "practically completed" in many lines of business.

The House Banking Committee approved the Administration's public housing and slum clearance bill, to provide for over a million low-cost units over seven years. The Senate had passed a bill limiting the number of units to 810,000 over six years.

A Senate Judiciary subcommittee chaired by Senator Pat McCarran of Nevada met in executive session to hear a mystery witness who was not identified. The subcommittee was studying a proposal to tighten immigration laws on admission of aliens suspected of being subversive, aimed particularly at foreign agents who entered the country as part of U.N. delegations and as members of other international groups.

A heavy set man wearing dark glasses with a hat pulled down over part of his face left the committee room. He wore a white carnation and spoke with an accent—better, we presume, than wearing a pink or red carnation. But this man said that he had not testified, had come with a friend and that the reporters should follow him instead. Presumably, therefore, he was not "Mr. X", whose life, subcommittee staff members claimed, was in danger. They said that the mystery witness had "connections abroad".

Who is it? Who is it?

Senator Clyde Hoey of North Carolina told the Senate that the Government was providing scholarships to known Communists through the Atomic Energy Commission. He had been so advised via a letter from a G.I. student at UNC who claimed to know of an out of state student who was a rabid Communist receiving an AEC scholarship. Senator Hoey said that the AEC had informed him that the scholarships were not screened for loyalty. The student in question had been sponsored by John Gates, one of the eleven Communist defendants on trial in New York for violation of the Smith Act. A Congressman from New York named the student as a professed Communist from Austria.

He probably pulled for N. C. State during basketball season, the Commie.

An INS commissioner stated that a stowaway had been found aboard a Polish ship and positively identified as Gerhard Eisler, the missing alien Communist facing two charges in New York. He had been free on bail, which was forfeited.

The President said that he had no interest in purging disloyal Democrats in Congress, that the people would take care of that. The question arose from his statement to a veterans group earlier in the week that there were "too many Byrds" in the Congress interested more in local than national issues. When told that a Mississippi Congressman claimed that every member of that state's Congressional delegation had been denied patronage, the President said that it was the first he had heard of it.

DNC vice-chairman Frank Hague of Jersey City, N.J., said that he had no intention of retiring from politics regardless of the outcome of the state election the following Tuesday.

Senator Frank Porter Graham of North Carolina returned to the Senate after a five-week illness, since shortly after his appointment in late March to the post to replace deceased Senator J. Melville Broughton.

Tom Fesperman of The News reports on the 25-million dollar school construction and 200-million dollar rural road bond issues set for referendum on June 4. Both matters had been widely covered in the previous weeks.

On the editorial page, "Leaving the Joneses Behind" agrees with Governor Kerr Scott that the state ought stop merely comparing itself to the rest of the South and look to the rest of the nation for a weather vane of progress. It would be harder then to feel good about the state of things generally.

But on roads, the state did fare well vis-à-vis the other states. It ranked fourth, behind only Pennsylvania, California, and Texas in state highway construction and maintenance in 1947, fifth in 1948, with New York added to the states ahead of it, and it was estimated that in 1949, it would be sixth, with Ohio added.

If the state added the 200 million dollars proposed over four years pursuant to the bond issue to build and improve rural roads, it would rise to second in the nation. But all of the states presently ahead of North Carolina had a much greater tax base. New York, expected to be first in 1949 in road expenditures, paid out $8.75 per capita for roads, while Pennsylvania, expected to be second, paid $13.24. North Carolina already was paying $18.45 per capita.

It concludes, therefore, that the bond issue was of questionable wisdom.

"Plight of the Investor" tells of the ideas advanced in a piece below by Stacy Jones regarding the desirability of tax revision to encourage investment. Emil Schram of the New York Stock Exchange, with a somewhat different approach, had suggested to U.S. News & World Report that the period for determining capital gain be reduced from six to three months, and that the rate of taxation be lowered on capital gains from 25 percent to 10 or 15 percent, that all dividends paid in excess of 50 percent of a company's earnings be made tax-free to the stockholder.

Both agreed that taxation had been very harmful to investment in business, as very little income was left after taxes.

The piece favors adjustments to the Tax Code to encourage investment.

"Local Support Needed" agrees with the President's statement to Congress that legislative authority for reorganization was necessary to achieve effective management of the Government. The House had already passed a bill which gave the President authority to reorganize, subject to veto by both houses of Congress within 60 days. The Senate version limited the President's authority until April 1, 1953, but provided that either house could veto within 60 days. Both measures were now before the Senate.

It urges creation of a local citizens committee to advocate for the reorganization bill, similar to a national citizens committee formed out of Temple University in Philadelphia.

Drew Pearson tells of the President enjoying his 65th birthday party, including the unwrapping of his 70 presents. He kept everyone up until 2:00 a.m., to the consternation of House Speaker Sam Rayburn, as under protocol, no one could leave until the President retired.

The President said that he would give a set of after-dinner coffee cups, presented by the Cabinet, to his daughter Margaret, who was too ill to attend.

Frankie Govan played the accordion, including "My Old Kentucky Home" for Chief Justice Fred Vinson and "Wagon Wheels" for Vice-President Barkley.

Speaker Sam Rayburn talked about the Alamo, as a visitor from Boston asked him if he had heard of Paul Revere. Wisely, he did not say that he was the fellow who warned the British of the approach of the American patriots.

The President took turns with Jose Iturbi playing the piano, the President playing Paderewski's "Minuet in G" and "Battle of Waterloo" by Chopin. At the request of the President, Mr. Iturbi replayed both pieces. Jessica Dragonette of the Metropolitan Opera sang several selections, concluding with the requested "Some Enchanted Evening" from "South Pacific". Mr. Iturbi continued to play to apparent exhaustion at the close of the party.

Champagne was served during dinner and the highballs were delayed until just before adjournment, enabling everyone to leave the affaire d'honneur sober, considerably different, he relates, from the result the previous year.

Marquis Childs discusses the refusal of the Senate to confirm three nominees of the President, Mon Wallgren to be chairman of the National Security Resources Board, pigeonholed in the Armed Services Committee at the instance of Senator Byrd's vote with the Republicans, Thomas Buchanan to a position on the Federal Power Commission, held up since the previous July, and John Carson to the Federal Trade Commission, appointed in April. The White House viewed the obstruction as an effort to deprive the President effectively of his November victory.

The thwarting of the nomination of Mr. Carson was especially telling. He had been an able public servant for 25 years who had worked diligently for social reform in the liberal-progressive vein. He believed in the cooperative movement, consistent with the endorsement of the Catholic Church of which he was a devout member. He believed the cooperative was an alternative to both Communism and Fascism to cure the deficiencies of capitalism, which the Catholic Church had recently denounced with the advice from Pope Pius XII to European employers that they share responsibility with their employees for the direction of industry.

But Mr. Carson had been subjected to smear tactics, claiming that his views on business were radical. The National Association of Manufacturers found that he would be an "active" member of the FTC in pushing investigations into business. But one of the chief functions of the FTC was to protect consumers from monopoly and unfair trade practices.

Stacy Jones, in a piece from the Saturday Evening Post, as referenced in the above editorial, finds private financing reprehensible to many people in Washington. Harvey Gunderson of the Reconstruction Finance Corporation was an exception, believing that the Government was killing off the American stockholder with taxation and if it did not cease the RFC would be forced to run all of American business.

Bank financing was increasingly timid, especially to small investors if they had any past financial trouble. Loans, even of good quality, were increasingly being unloaded onto the RFC.

In addition to money for going concerns, investment was necessary for establishing new business. Mr. Gunderson wanted to limit taxation to 25 percent of the first $25,000 of income from stocks, the same tax rate on long-term capital gains. It would offset somewhat the double taxation on dividends, paid first by the corporation on its profit and then by the stockholders when the dividend was distributed. Both Secretary of Treasury John W. Snyder and former OPA head and Governor of Connecticut Chester Bowles recommended elimination of the double tax.

The ordinary citizen had the greatest share of the wealth because of numbers. The New York Stock Exchange was encouraging individuals therefore to invest, but it did not have the sales staffs of the insurance companies or their inherently secure investments as a sales pitch.

Mr. Jones suggests that perhaps the idea proposed by Mr. Gunderson for a tax break on stocks would encourage stock investment. He proposes alternatively that the insurance companies could be permitted to take about 10 percent of the money invested in insurance and place it in stocks.

A letter from a nurse advises that it was "polio time" again and that proper sanitary precautions with garbage cans and fly abatement should be undertaken to avoid the epidemic of the previous year.

A letter writer urges a return to God for the society, to remedy the spiritual and moral decadence pervading it.

A letter writer finds that letters to the editor praising the Administration were delayed while those critical of it were printed regularly and without delay, causing him to wonder whether free speech was truly democratic or held by a monopoly.

A letter from H. P. Harding, retiring Superintendent of the Charlotte Public Schools, thanks the newspaper for its salute to him in its editorial of April 27.

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