The Charlotte News

Wednesday, January 4, 1950

THREE EDITORIALS

Site Ed. Note: The front page reports that in his State of the Union message to Congress this date, the President said that the state of the union was good both domestically and in foreign relations but that progress was still necessary, and so he urged expansion of Social Security, passage of the Brannan farm plan, the civil rights program, and compulsory health insurance, continuation of rent control, repeal of Taft-Hartley, and passage of a "moderate amount" of new taxes, albeit not being specific as to which taxes should be raised or by how much. He said that if the country's production continued to grow at the rate it had during the previous 50 years, it would be nearly four times that of 1950, an amount equal to about one trillion dollars per year by 2000.

He urged continuation of the Marshall Plan in Western Europe despite a reduction of the Communist threat there, and further that the country should begin to rearm Western Europe under NATO. He did not mention the Communist threat to Formosa and made little mention generally of the Far East, urging only his "Point 4" program for underdeveloped nations in the region. He offered no hope that spending could be brought within available revenue for the 1950-51 fiscal year.

House Minority Leader Joe Martin said that the message failed to come to grips with cutting of spending and lowering of the tax burden, the primary goals as he saw it. House Majority Leader John McCormack praised the speech as courageous. Other reaction, with a few exceptions notable among Southern Democrats on the civil rights program and the farm program, also generally cut along party lines.

House Speaker Sam Rayburn said that the President's budget for the next fiscal year would be 1.8 billion dollars less than the budget for the current fiscal year, reflective of a three billion dollar cut in foreign aid and defense spending and an increase of 1.2 billion in domestic spending.

The President omitted from his requests of a year earlier universal military training, although calling for continuation of selective service. He also left out his 1949 inflation control program, except for rent control, and did not repeat his request for a higher minimum wage or extension of his powers under the reciprocal trade agreements. He also did not renew his request for authority of the Government to build and operate steel mills in an emergency. Nor did he recommend four billion dollars worth of new taxes as in 1949, but said he would have more to say on the subject later, presumably in his economic message to follow. Most of the requests he did put forward were a repeat of those of a year earlier.

The Federal debt reached 257 billion dollars at the end of 1949 and the deficit stood at 3.3 billion dollars, on its way to a predicted 5.5 billion dollar deficit for the fiscal year. Government spending had increased from 19.3 billion dollars in the last six months of 1948 to 21 billion during the same period in 1949. Revenue was off slightly, by about 125 million dollars, from a year earlier.

Undersecretary of State James Webb had rejected the request of Senator William Knowland of California to see the report of the State Department sent to diplomats in the Far East the previous month, on the ground that it was classified. Senator Knowland, as explored in an editorial below, was in favor of military intervention in Formosa, if necessary, to resist the Chinese Communists. Senator Robert Taft also favored such a move, as reportedly did General MacArthur. Senator Henry Cabot Lodge, Jr., of Massachusetts and Senator Richard Russell of Georgia, however, opposed the idea as being freighted with too much risk of provoking a war.

Twenty-nine American crewmen of an Isbrandtsen line merchant ship Flying Cloud asked the State Department for either protection for the Shanghai-bound vessel or authorization of release from their contract with the line. The U.S. Consulate informed them that the State Department had already authorized their signing off from the ship without consequence and offered to pay for their return passage to the U.S. Shanghai harbor had been blockaded and mined by the Chinese Nationalists to strangle the lifeline to the Communist-held port.

The Interstate Commerce Commission ordered a one-third cut in passenger rail service on lines using coal with less than a 25-day supply, in recognition of the shortage brought about by the three-day work week in the coal mines ordered by John L. Lewis, reduced to two days for the two-week holiday period.

Emery Wister of The News tells of former Air Force Major General Bennett Meyers, convicted of suborning perjury and sentenced to prison, having heard this date a petition for writ of habeas corpus in the Fourth Circuit Court of Appeals in Charlotte. The District Court for the Eastern District of Virginia had denied the petition, grounded on the assertion that the Senate committee before whom the alleged act of subornation occurred was not properly constituted by a quorum. The direct appeal of General Meyers had already been decided adversely in the D. C. Circuit Court of Appeals and the Supreme Court had declined review.

That appeal had posed the quorum issue and it was rejected by the Circuit Court for the fact that all of the alleged subornation, save that which was redundant and therefore superfluous to the conviction, occurred on a day when a quorum was present. The denial of the petition in the Fourth Circuit, based on the intervening Christoffel Supreme Court decision regarding the quorum issue, would also be affirmed, as Christoffel had been distinguished from Meyers, as well as the fact that habeas corpus did not lie from denial of a motion to vacate the judgment pursuant to a specific Federal statute, as the proper remedy for denial of a motion pursuant to that statute was by way of direct appeal. His appeal of the denial of the motion to vacate the judgment, based on the ground that the motion was not available to correct mere errors of law in the trial but only to attack the judgment for being so devoid of due process as to render the judgment invalid, was still pending, however, in the D. C. Circuit Court of Appeals.

The temperature in Washington reached 69 degrees, an all-time high for this date, breaking the previous high of 66 set in 1874—which was nearly three years before the fateful election of 1876 and two and a half years before the Battle of the Little Big Horn.

On the editorial page, "Ten-Year Platform—I" discusses the twelve-point program proposed for Charlotte for the coming decade, as set forth on the front page by reporter Tom Fesperman the prior Monday. The piece begins by discussing the proposal for urban redevelopment and urges that Charlotte and other North Carolina cities begin preparing for an effort to convince the 1951 General Assembly to approve receipt of Federal funds for the purpose, funds which had been allocated but access to which had not been authorized by the 1949 biennial regular session of the General Assembly.

"Mr. Hoover on China" tells of former President Herbert Hoover agreeing during the week with Senator William Knowland of California that the U.S. should utilize its Navy, if necessary, to protect Formosa from the Chinese Communists, refuse recognition of the latter, and continue recognizing the Chiang Nationalist regime, relocated to Formosa. Republican foreign affairs specialists in Congress generally agreed with the former President on these points, but possibly only for political reasons.

Mr. Hoover believed that such a policy would produce a "wall" in the Pacific; but to build such a wall would be so costly as to run counter to Republican fiscal conservatism. He also asserted that control of Formosa was required to defend Japan and the Philippines. But it was not likely that Communist China would seek to engage the U.S. in war unless the Russians ran operations out of the country. Only in that latter event would Japan or the Philippines be endangered. But the days of limited-range planes were past and Formosa was not as close to Japan as Communist-controlled Shanghai or as close to the Philippines as Canton.

Mr. Hoover's objection to recognition that it would create "nests of Communist conspiracies" in the country would add nothing to the fact of existing "nests" of Russian conspiracies in the country.

Another objection to recognition was that it would cause Communist China to become a permanent member of the Security Council, as China had such standing as a member of the Big Five. But Britain's presumed recognition, along with that of India and several other U.N. members, had already assured that status. The U.S. could only utilize its veto to stop it and, in that event, would face an untenable moral position.

His last objection was that recognizing the Nationalists would give them a chance to find freedom again. But his optimism ignored the reality that Chiang's regime was dead and beaten on the mainland.

It suggests that Mr. Hoover would do better by focusing on the problem of strengthening Southeast Asia through more practical means, as economic assistance and convincing new nations as Indonesia and India that private initiative and democracy were superior to Communism and totalitarianism.

"Deficit Financing" refers to the following piece by Dr. C. K. Brown of Davidson College, finding it timely for the fact of a looming 5.5 billion dollar deficit in Federal Government spending during the 1949-50 fiscal year, increasing the debt to 262.5 billion dollars by June 30.

To cut defense and foreign aid to make up the difference would compromise security, and so it advocates keeping other expenditures to a bare minimum. But meanwhile, the Administration was urging new domestic programs of "unproven merit".

Dr. Brown disposed of the fallacies of deficit spending and pointed to the uncertain financial brink which lay somewhere ahead if it continued. The people, it urges, needed to come to grips with what was taking place with their economic system.

Dr. C. K. Brown, dean of faculty at Davidson College, discussing, as indicated above, the fallacies of deficit financing, first relates that Government expenditures had increased ten times in the previous 20 years and in all except two of those years, the Government had a deficit, 140 billion dollars in the aggregate. The volume of bank deposits during the same period had tripled.

Since 1945, the country had drifted insofar as its fiscal policy. Those favoring that which had been called "sound" fiscal policy favored both smaller Federal budgets and a surplus to reduce at least somewhat the public debt. But they would not pursue it in a manner which would reduce the total volume of money for fear that such reduction would lead to a depression. They would rather seek to allow the volume of production and trade to rise to meet the increased supply of money.

The advocates of spending did not make it clear whether they favored only more spending, whether more spending plus deficits, or a deficit so financed as to lead to further increases in the volume of money. Those who favored high expenditures and were willing to have it financed by taxes believed either that much could be accomplished in that manner, such as equalizing educational opportunity and providing public housing, or that they were in a position to reap sufficient benefits from Federal spending to exceed their contribution in taxes.

But the present size of the Government, he ventures, could only be sustained through a loss of individual freedom and the reduction of opportunity to deal with problems on a local level.

The basic question was therefore whether the people desired to run their own affairs, the answer to which was not clear.

People could not have security against everything and if the people wanted the government to make them secure against all potential economic debacle, then they would have to give up "security against tyranny on the part of the government."

He finds that borrowing the difference between revenue and spending and thereby avoiding higher taxes, as advocated by Robert K. Pepper in "What's Good about the National Debt?", was one of the cruelest fallacies in economic thinking. The advocates of free spending argued that the debt was owed to the country itself and thus was not truly a debt, could even be canceled without destroying any physical wealth. And through inflation, the value of the debt would be reduced over time. But to cancel the debt would be immoral, he asserts, and would cause a loss of faith in the foundations of the country.

He urges that deficit spenders should openly advocate the kind of country which deficit spending would produce over time, instead of pretending that it would make no difference. Those advocates sometimes made absurd statements in justification of spending, such as that increase in the supply of money was not a controlling factor in determining prices, "'established by directly operating factors'", again quoting Robert K. Pepper.

The remainder of the piece is not available as it was continued on page 7-A.

Drew Pearson tells of House Minority Leader Joe Martin warning Republicans in the House that they had to rid their staffs of non-working personnel to avoid the scandal which wound up in conviction and jail for Representative J. Parnell Thomas of New Jersey, former HUAC chairman in the previous Congress. Mr. Martin had set a good example as he had never had a relative or non-working employee on the Government payroll. Speaker Sam Rayburn and Majority Leader John McCormack would likewise warn Democrats of the same need.

Russian cameramen had photographed a U.S. military attache in Moscow taking pictures of Soviet planes flying overhead during a gala military parade and used the pictures in theaters as propaganda, supposedly demonstrating American espionage at work. He notes that the FBI also watched the Soviet Embassy in Washington via cameras positioned across the street.

He reviews the predictions for the new session of Congress, generally that it would be unproductive in an election year, with much carping about civil rights but nothing enacted, with the possible exception of the ban on the poll tax. The FEPC bill would pass the House but would be filibustered to death in the Senate.

The education bill, already passed by the Senate, would be revised in the House to meet Catholic demands regarding provision of public transportation for both public and parochial school students, and would then be passed.

Legislation increasing either corporate income or excess profits taxes would pass in the House but would be opposed by fiscal conservatives in the Senate.

There would be no repeal of Taft-Hartley and no passage of the Brannan farm plan.

A bill would be passed to support the President's "Point 4" program to encourage private sector technical support for underdeveloped nations. But there would be a backward shift toward isolationism regarding Marshall Plan aid. The Congress would be looking to ERP for cuts to help balance the budget, without help from a tax increase.

The discriminatory tax on margarine would be removed.

The National Science Foundation bill would finally become law.

There was little hope for public power projects or compulsory national health insurance.

Representative Frank Buchanan of Pennsylvania, chairman of the House Lobby Investigating Committee, had ordered his staff not to pull punches in investigating major lobbies on Capitol Hill, especially the real estate lobby which had pushed for an end to rent control, the same lobby which had sought to sabotage public housing in the House Banking & Currency Committee, of which Congressman Buchanan was also a member.

James Marlow tells of January 16 being tax day for those, such as farmers, who had no tax withheld from income during 1949, not true for most people. You may read of it for historical purposes if you wish, or if you did not have tax withheld in 1949 and think you might owe the Government a return on January 16.

Frederick C. Othman asks the question we asked at the turn of the century, whether, in the case of determining the half-century mark, the new decade should be calculated from the "0" year or the following year. He tells of getting into rueful arguments with people over the question.

Senators did not know the answer as they knocked off work in November thinking it was still September—actually a correct assessment if adjudicating the matter by the Roman rather than the Julian or Gregorian calendar. One Senator ventured that the problem was akin to race horses, which turned a year old on January 1, even if born December 31. Another expert had said that 1951 was the proper half-century mark as there was no year 0.

An elderly income tax collector, who remembered 1900, told him that the same controversy had currency then, but they nevertheless celebrated the new century in 1900, a celebration as nobody had ever seen before. But by 1901, they had decided that they had made a mistake and so began celebrating all over again, had a good time doing it.

He wishes the same to his readers.

A corollary question is thereby posed: Whether, to fulfill President Kennedy's stated goal in May, 1961 of getting a man to the moon by the end of the decade, the mission had therefore to be accomplished by the end of 1969?

In any event, Rice beat the University of North Carolina in the Cotton Bowl on January 1, 1950, whether at the beginning of the second half of the Twentieth Century or at such point minus one turn around the Sun, by a score of 27 to 13, the last game of Charlie Justice as a Tar Heel.

Eleventh Day of Christmas: Eleven Plumbers Watergating Foggy Botttom in Trumplanderkind.

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