The Charlotte News

Friday, January 12, 1940


Site Ed. Note: The Washington Naval Treaty, mentioned in "Baffled", between the U.S., Japan, Italy, France and Great Britain, was signed in February, 1922 and ratified by the U.S. shortly thereafter. It came as the U.S. and Great Britain had begun building their navies in the wake of World War I to previously unknown capacities as a deterrent to another war. Consequently, the U.S. had to destroy a large amount of tonnage in brand new ships, though two were converted to aircraft carriers. A battleship tonnage limit of 525,000 was placed on both the U.S. and Great Britain, with Japan limited to 315,000, and Italy and France to 175,000 each. Carrier limits were separate under the treaty and the United States, being well under its limit of 135,000 tons in that category, built several small 14,500-ton carriers before the treaty was abandoned by Japan in 1936. Italy had also breached the pact by that point by misrepresenting the tonnage of its fleet.

The first battleship begun by the U.S. since prior to the treaty was the U.S.S. North Carolina, the keel of which was laid in October, 1937.

The other three pieces of this date are unlikely by Cash, but we include them for your perusal anyway.

The Bell!*

S. C.'s Kid General Fund Measures Battling Ben Sawyer

In this corner, South Carolina's fat, [indiscernible word] Highway Fund. In that corner, the underfed, snarling General Fund. In the center of the ring Governor Burnet Maybank announcing to the assembled spectators, the Legislature which meets every year, that he saw no reason why the Highway fund shouldn't give its poor cousin a couple of millions to sort of even things up, or, indeed, why the two shouldn't be lumped together.

And in the offing somewhere, canny Ben Sawyer, chairman of the Highway Commission, a quiet power in Palmetto politics.

It does seem absurd, when you come to think of it without prejudice, that a State should have two pocketbooks, and all the more so that one pocketbook should be comfortably filled while the other is usually flat.

However, the absurdities are not all on the one side. It is absurd for gasoline to be taxed at something like 50 per cent of its sales price--taxed to farmers hauling produce to market, to mill hands on their way to work, to shoe clerks on their evenings out, as well as to the well-to-do. It is absurd, that is, unless the revenue from so excessive a tax is expended exclusively for the benefit of those who pay it on roads and road bonds.

Matter of fact, we suspect that the prime absurdity of the lot is the desire of all governments, which are only unions of the people, to render to the people more services than the people can afford. Eh?


Shutting Off Of Circulation Brings Dread Fate To AG&E

There's one consolation about the bankruptcy of Associated Gas & Electric Co., and it is that not a single light anywhere in the rich, populous territory it serves will go out for lack of juice.

For Associated Gas & Electric, the top holding company in a maze of subsidiary companies, dealt in financial legerdemain rather than with machinery. It never got grease on its clothes, which is not to say, however, that it did not soil its hands. Anyone trying to find his way through the labyrinth to the heart of this complex utility organization had, at one time, to take upwards of 200 turnings.

That is, the tedious (deliberately so) corporate setup of the system which AG&E controlled consisted of some 200 companies (nobody ever knew exactly how many). Some of them sold gas and electricity, but some of them sold only "services." One $125,000 engineering company controlled by Howard C. Hopson, the genius of this organization, in six years took in $6,428,000 in fees charged to other companies in the system.

Other units dealt in securities. The Federal Trade Commission reported in 1935 that the system had outstanding three classes of common stock, six of preferred, four of preferred stock, seven issues of security notes and bonds, 24 classes of debentures, and four series of investment certificates.

Howard C. Hopson is an invalid now, and Associated Gas & Electric has fallen on woeful days. SEC broke up its ramified playhouse by ordering its subsidiaries to stop the payment of interest and dividends to the top holding company. As a result, the company that Hopson ran and that in turn ran the rest of the companies, is out of money. It cannot meet an interest payment of $262,400, which would have been chicken feed in the old days.

But still, we say, the lights will go on tonight as usual. And except in the inner circle of AG&E, and among its stultified security-holders, there won't be any wailing at all.


Japan's Rage Against U.S. Is Easy To Comprehend

The Japanese are fuming over the President's plans to spend $1,300,000,000 more on the navy and the proposals for 52,000-ton battleships, which, in all probability, would carry 20-inch guns. It heralds, they say, aggression on the part of the United States. It will, they warn darkly, set off a new naval race. For, of course, Japan will not submit to the "unjustifiable superiority" of the United States in sea power.

All of which was to be expected. In point of fact, the naval race was set off three years ago when Japan denounced the Washington Naval Treaty, refused to give out any more information about her naval plans, and undertook to steal a march on the world by beginning to build 45,000-ton battleships. No country ever leaned over further backward than did the United States in the making of that treaty.

At the time we had nearly a million tons of ships already afloat, with 700,000 more building and nearing completion. But under the terms of the treaty we took 600,000 tons of that--all of it brand new, and including four 42,000-ton battleships, which were to carry twelve 16-inch guns, out to sea and sank it. In return for that Japan sacrificed less than a quarter of a million tons, most of it consisting of mere blueprints or ante-diluvian vessels.

So far as the charge of aggression goes, it is probably true if we accept the Japanese definition. For the Japanese claim as their "right" an absolutely free hand for the complete mastery of the Pacific. That we intend to dispute that "right" is certainly one of the things the new navy means.

But ultimately, the main emotion in all this uproar is simply baffled rage. Japan isn't going to launch any new naval race, for the very good reason that, already bled white by her war in China, she hasn't the resources to enter such a competition and can't get them.

Job's Portrait*

His Headaches Never Seem To Have A Possible End

Mr. John Carson, Consumer's Counsel to the Bituminous Coal Commission, as created by the Guffey Act, has figured on this page a lot of times. And always the point was to commiserate with Mr. John over his perennial headache.

Mr. John has a naturally bad job. In brief it is make noise like a Government which, having just set out to fix prices, is determined to see that the consumer gets a break. And that, of course, doesn't add up to sense. For the experience of NRA, like all other such experiments in every time and place, showed plainly that price-fixing always results in the consumer getting it more heavily in the neck.

In addition to that, Mr. John has to deal continually with the coal industry, which ranges all the way from such headaches as the Harlan operators on one hand to such headaches as John Lewis on the other. Strange as it may seem, some of the operators don't want to fix prices at all, preferring to risk socking the consumer on their own. And apparently virtually the whole crew, including Mr. Lewis, are dead agin giving the consumer a break. Only the other day Mr. John was having to warn us that many of them were going around handing the consumers the phoney that they had to pay more for coal because of the war--though the fact was that the war had had no appreciable effect on demand and there was a surplus of coal in the country.

But probably the worst of Mr. John's headaches has been that Commission with which he has had to work. Mr. John was supposed really to go to work only when the Commission got around to fixing prices. It was scheduled to have fixed them in November, 1937. It hasn't fixed them yet.

On the whole, Mr. John, though he hasn't been able to do much for the consumers, looks like one Government employee who has been earning his pay for the last two years--in sheer human agony.

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