Payroll Deductions Seen
As Direct Inflation Cure
‘Seven Keys to Economic Security’ Won’t
Carry War-Cost Load Unless American
Public Takes Voluntary Precautions.
By BAUKHAGE
News Analyst and Commentator,
WNU Service, 1343 H Street. N.W.,
Washington, D. C.
The war may cost Mr. John Q.
Taxpayer an extra seventy-five bil
lion dollars—$75,000,000,000 (written
that way it looks more like what it
really Is.) If it does, it will mean
that this country will go through a
depression that will make the black
'30s look like a June day.
That is the warning sounded by
the Office of War Information.
All we have to do to realize this
is to look back to the period of the
last war, when the cost of living
rose 63 per cent between 1914 and
Armistice day, 1918— and kept right
on going up for nearly two years.
Those were the days of 67-cent but
ter and 92-cents-a-dozen eggs. Then
came the crash. Hundreds of thou
sands of farmers lost their lands.
Five million workers lost their jobs.
The cost of the war was partly to
blame, of course. When other
prices went up, the war-cost in
creased by 13V4 billions. On that
basis, it is estimated that if prices
run away now, it will mean a 75
billlon dollar rise in the war debt.
This time, of course, the govern
ment has tried to put on the brakes,
but the brakes are already smok
ing. The seven “keys to economic
security"—the checks on the cost of
living are all right, but they won’t
hold the load unless the public takes
certain voluntary precautions. If it
doesn’t, stricter regulation must
come. Some are bound to come
anyhow.
Let s look at those seven keys and
see if they are really locking the
door against inflation.
The first is “tax heavily”—keep
personal and corporate profits at a
reasonable rate. Well, you have to
define “reasonable.” Profits, wages
and salaries are high. The current
tax law, although it is better than
expected by many persons, does not
do the Job, according to fiscal ex
perts in Washington.
The next “key” is the price ceil
ings.
According to Price Administrator
Henderson, the cost of price-con
trolled foods fell seven-tenths of 1
per cent in the two months after
May, 1942, while uncontrolled foods
went up 7.3 per cent Now all prices
are "stabilized,” but last month in
order to assure maximum food pro
duction, the ceiling on farm wages
was raised and a bloc in congress
began agitating for a rise in the ceil
ing on farm prices. Certain civilian
manufactured goods are caught be
tween the ceiling and the cost of
raw materials and may burst the
bounds, too.
Wage Standardization
The next brake on Inflation is sta
bilization of wages. That was
achieved by the freezing of wages,
but allowances had to be made for
the people not getting a living wage.
Then the labor shortage in war in
dustries made it necessary to call
upon women to fill the gap, and
women had to get the same pay for
the same work, which seems fair
enough. That put more money into
pocketbooks—and, of course, put
more people on payrolls.
Another stabilization move was
rationing certain commodities.
That, of course, is effective as far as
It goes, but it covers a limited field.
Then there were the voluntary
measures—which haven't worked so
well and which provide the real
outlet for the possible boost in all
costs in spite of the artificial checks.
Citizens were urged to buy war
bonds, to save their money instead
of buying things they didn't need, to
pay off their old debts and refrain
from making new ones.
So far voluntary methods have not
been successful. There is a limit to
which a democratic country can go
imregulating the lives of the people.
It was hard enough to get the na
tionwide gasoline rationing through,
but finally it was accepted. Perhaps
when the public “understands" it
will be willing to save instead of
spend, but financial experts in and
out of the government predict that
compulsory savings is the next key
on the list.
Recently I talked with a hard
headed official. He does not direct
the fiscal policy of the government,
but he is indirectly concerned with
national finance. He picked up a
chart on his desk. “This is not
official," he said, “but it shows what
is going to happen if the country
keeps on spending at the rate it is
spending now.” He pointed to a line
that shot upward. Where it climbed
off the paper it was marked “twc
hundred billion dollars." That is
what our war debt will be.
“The only way to stop it," he said,
"is to get hold of this spending mon
ey at the source. Payroll deduc
tions. That money has got to be
put away—some of the deductions
will go to pay taxes, some into
bonds that will be redeemable when
the government decides it is time
to redeem them.”
Britain'« Method
He went on to explain that out of
what Great Britain and Canada
spend on the war effort, they finance
one-half through taxes. We finance
only one-fourth through taxes. They
borrow the other one-half—and of
the amount borrowed, two-thirds is
borrowed from the public and one
third from the banks. We borrow
two-thirds of what we do borrow
from the banks and only one-third
from the public.
“When you borrow from the pub
lic,” this very earnest official con
tinued, “you cut down the amount of
money that is used for spending and
bidding up prices. When you borrow
from a bank, you really create new
funds, which is inflationary."
“What about the present tax
law?” I asked, "Isn’t that going to
take all we’ve got?”
“The new tax law is better than
it looked at first,” he answered, “but
it falls far short of touching the
funds — the pay-envelope funds—
whicb are the chief cause of infla
tion. Under the new law there will
be 27,000,000 taxpayers. In 1940 there
were 3,896,000 taxpayers. Of the
new taxpayers, so many are spend
ing their money at such a rapid
rate they will not possibly be able
to pay their taxes. They will be
come tax delinquent.”
• • •
Rock in a Weary Land—
Federal Reterve Building
There is one building in hectic
Washington which stands like a rock
in a weary land—an oasis of calm
and quiet in the desert of tumult
and shouting. It is the Federal Re
serve building.
I called there recently and the
moment I put my hand on the door
knob I felt an atmosphere of sereni
ty, an almost British solicitude and
decorum, as the uniformed guard
leapt up and opened the door. He
didn't ask for my press pass. He
said: "How can I help you. Sir?”
The elevator man bowed me into
the car. When I approached the
guard in the anteroom of the offices
of the board members, he arose and
bade me welcome.
I began to feel very small as I
walked along the wide corridor with
high ceilings. Voices were hushed.
I entered an office presided over by
a dignified secretary, a noiseless
typewriter and a tickless telechron.
Furniture of mahogany and mellow
leather. Even the file cases sug
gested period pieces. The walls were
gray with a hidden touch of laven
der. The kind, I am informed, which
are used in psychopathic wards to
quiet the nerves. However, there
was no need for such a sedative
there, for the only suggestion of the
vulgar world of finance was the
muted sound of the Dow-Jones
ticker.
As I sat waiting for my appoint
ment, dropping the ashes of my
plebian cigar into a beautiful recep
tacle which doubtless had collected
the residue of many a Corona Co
rona, and gazed at the walls and
ceilings. I suddenly felt that I should
be wearing tails and striped trou
sers. The delicate hint of lavender
in the gray panels was like the faint
tint, a soupcon of which brings add
ed charm to the coiffure of a silver
haired matron.
Lost in these thoughts. I heard
my name announced. If the uni
formed Negro sentry (who remind
ed me of a White House footman)
had been saying. "Mr. Morgan.” (or
“General Lee"), "the chairman wUl
be glad to see you. Sir.” he couldn’t
have done it with greater dignity.
Frankly, I enjoyed it thoroughly
after fighting my way past sentries,
guards and policemen to get into the
War Production board.
B R I E F S . . . by Baukhage
In the High Plains section of the
country—part of what some people
called the “dust-bowl”—some 60,000
families are not only supporting
themselves on their reclaimed land,
but are growing food and feed crops
that are vital to our fight for victory.
• • •
The army and the navy needs all
the fine feathers and down the coun
try can supply.
-— -— I
It takes 199 pounds of wool, or
the fleeces from exactly 26 sheep, to
outfit a soldier for the first year.
Fortunately, the United Nations con*
trol over 90 per cent of the world
supply of wool.
• • •
At Fort Mac Arthur, Calif., the
camp paper reports they are saying:
"All work and no play makes JAP
a dead boy."
WHO’S
NEWS
This Week
By
Lemuel F. Parton
Consolidated Features.—WNU Release.
NEW YORK. — With the gold
standard sidetracked by a
strong-arm economy all over the
world, Nellie Tayloe Ross, director;
Spotlight Swinging
On Our Gold Cache ing tjie for-.
a j n- < d gotten worn
And Director Ro„ an In the
Niebelungen legend, old Phafnir
could only sit on his Rhein gold and
there wasn't much more for Mrs.
Ross to do with our frozen $23,000,
000,000 horde at Fort Knox and West
Point. But there are signs of a
thaw, and gold may be moving again
in considerable quantities. Lieut.
Gen. Dwight D. Eisenhower took a
considerable supply of $20 gold
>ieces to Africa.
Never In history has a sound
gold coin lost Its sheen or its
allure, and since expediency is
now uppermost in our world di
plomacy, as it Is always In war
time, it won't hurt Uncle Sam
to be known as the old gent with
$23,000,000,000 In his buckskin
wallet. Just now, with staff and
scrip, he fares far in hungry
lands where gold pieces clink
and click more convincingly
than a thesis on managed econo
my. And, traditionally, he is apt
to say, “This Is on me.”
Mrs. Ross won’t decree new gold
coinage or deploy strategic gold
pieces to help win the war, and
there is no suggestion that we will
buy our way through.
Suffrage is now 24 years old and
Mrs. Ross, first woman governor of
an American state when she was
elected to succeed her deceased hus
band in Wyoming in 1925, was out in
front with Mabel Willebrandt, Ruth
Bryan Owen, Frances Perkins,
Grace Abbott and other capable
women who, presumably were to
lead a growing phalanx of women
into high public office.
Women now have more than
one-third of the votes, and their
public offices have not come
along in that proportion, but
Mrs. Ross has stayed on as di
rector of the mint since April,
1933. War has complicated her
problems in many ways. War
wages boom Juke boxes and the
way Juke boxes wolf nickels Is
nobody's business.
Mrs. Ross, born in St. Joseph, Mo.,
in 1877, of Tennessee and Kentucky
stock, met her future husband, Wil
liam Bradford Ross, in Paris, Tenn.
He went to Wyoming for his health,
opened a law office and went to
Omaha and married Miss Tayloe.
Their twin boys, George and Am
brose, are grown, and George was
a Rhodes scholar.
Mrs. Ross has said she never had
any interest or training in politics
until she was elected governor, but
found that experience as a house
wife had been a pretty fair prepara
tion for keeping things in order. By
all accounts, she has done a most
satisfactory job in running the mint.
Each year she alertly supervises the
"opening of the pyx.” Pyx is Greek
for strong box, in this instance a
two-by-four oak case in which are
deposited 2,000 coins, representative
of the year’s coinage. In this an
cient custom, Mrs. Ross passes on
each coin for weight and fineness.
That sounds housewifely.
THE job of building our political
fences in the Middle East falls
to George Wadsworth, career diplo
mat, one-time schoolmate and life
Goe» to Levantine
of Col. Wil
Countries, Knowing liam J. Don
The Political Score Do?£
van’s diplomatic maneuvering was
crossed up a bit by state depart
ment and OWI plans but may be
working again. Mr. Wadsworth takes
a swing trick down along the high
way to Bagdad, as America’s first
diplomatic representative to Syria
and Lebanon. Recalling Robert D.
Murphy’s recent spectacular success
! in softening up North Africa for
' Gen. Dwight D. Eisenhower, it is
interesting to see another veteran
diplomat of this same general re
gion at work in one of the last gaps
in the ring around the Nazis.
When Mr. Wadsworth became
Egyptian golf champion In 1930,
without impairment of diplomat
ic standing, it was noted that
he must be a good diplomat as
in his profession one is supposed
not to win too handily in bridge
or golf. At any rate, he moved
on smoothly through various
Mediterranean consular posts to
charge d'affaires at Rome in
1941, with a steadily accruing
reputation for both sagacity and
diplomatic finesse.
Mr. Wadsworth is an erudite but
practical person. He formerly was
a teacher at the University of Bei
! rut, with a master of arts degree.
He is a diligent student of middle
eastern history and politics.
Back in 1917, he resigned his
teaching post at the University of
Beirut to become a clerk in the
Beirut consulate. That led soon
thereafter toW first diplomatic post
as consul at Nantes, France. In
the succeeding years he served at
Constantinople. Alexandria, Cairo.
Teheran, Bucharest, Jerusalem and
Rome.
Prime Condition
“ You haven't looked so well for years,
| old man!"
“Ah, it's the exercise I get, tossing
about in bed at night worrying about
the business."
'
Curious Lad
Golfer—Dear, dear. I’m cer
( tainly not playing the game I used
to play !
Caddie (disgustedly) — What
; game was that?
The way some secretaries type
the boss’ letters is a triumph of
mind over mutter.
Caught Him
“MacPhersin’s a cheat, and I’m
not goin’ to play golf with him
again.”
“How’s that?”
“Well, how could he have lost
his ball a yard from the green
when it was in my pocket?”
In Duplicate
Barber—Well, my little man,
how do you wish to have your
hair cut?
Little Man—I’d like it cut just
like my daddy’s, and please don’t
forget to leave that little round
hole on the top where his head
comes through.
Asking for Trouble
The door of the ladies’ hairdressing
shop opened and in came a meek-look
ing little man.
One of the assistants approached him.
“If hat can l have the pleasure-“
she cooed.
“Er—could you spare me a blonde
hair for my shoulder?’’ he stammered.
“I want to make my wife jealous.”
Fell for Her
“Fortune knocks at least once
at every man’s door.”
“That may be. But it was her
daughter, Miss Fortune, who
called on me.”
Orson W elles Introduces
.Many of Him to a Fete
Orson Welles, of "Citiecn Kane’*
fame, once gave a small town lec
ture. There were but few listeners
and no chairman present. So he
up and introduced himself in the
following fashion:
"1 am a director of plays,” he
said. “I am a producer of plays.
I am an actor on the legitimate
stage. I am a writer of motion
I pictures. I am a producer of mo
tion pictures. I am a motion
picture actor. I write, direct, and
act for the radio. I am a magi
cian. I also paint and sketch. I
am a publisher. I am a violinist
and a pianist. Isn’t it a shame
that there are so many of me and
so few of you?”
-—---,
Our Telephones
In this country today, the 25
associated Bell telephone compa
nies serve 7,128 communities hav
ing 18,841,000 telephones, while
6,350 independent companies serve
12,072 communities having 4,609,
000 telephones, reports Collier’s. In
addition, there are more than
60,000 connecting rural lines owned
by groups of farmers.
Uncle fihil{
S?&y5; '^A
We Offer the 23rd Paalm
Our language, used by an artist,
can produce something as grand
as anything heard at a symphony;
concert. An example: Lincoln’s
Gettysburg address.
Well-bred people are a delight,
and often an object of envy.
We delight to indulgently smile
over the peculiarities of the
friends we love.
The only fun worth having is the kind
that is still funny when you get up the
next morning.
It's So Exciting, Too!
Since millions enjoy headlines
more than any other part of the
newspaper, why not try one that
is mostly headlines?
It is often cosier for a woman to holf"
a strong man than her own tongue.
Beauty is only skin deep, an(
often the look of wisdom, also.
Usually a narrow-minded mat
doesn’t care if he is, and you can%
shame him in that.
Yes — It’s true! If your present tires cannot be
recapped, you are eligible to apply for a certificate to
buy the new Firestone War Tire no matter whether
you hold an “A”, “B” or “C” gasoline ration book.
The new Firestone War Tire is now on sale
at Firestone Dealers and Firestone Stores. Its
construction has been tested and proved by more than
two years of service. Naturally, you’d expect Firestone
to build the best War Tire that can be built, because
Firestone has always been a pioneer in developing new
processes and creating new products made from rubber.
And with its unequalled background of experience in
building tires that successfully withstand the most
gruelling tests of durability and safety, it is not surprising
that Firestone is building a War Tire with such exclusive
features as:
Safti-Lock, Gum-Dipped Cord Body — same
construction that has made Firestone Tires so strong,
so safe, so durable on the road as well as on the
PROTECT YOUR TIRE MILEAGE
Tirtston*
LIFE PROTECTORS
For longer mileage and greater safety,
equip every tire with a Firestone Life
Protector. This amazing double*
f chambered tube keeps your tire
1 inflated in event of a puncture or a
blowout, so that you can stop safely
without cutting or slashing the precious
tire. Any certificate for a new tube
entitles you to buy a Life Protector.
Speedway. The body of the new Firestone War Tire is
built to outwear several treads and can be recapped
for thousands of miles of extra service.
Firestone Non-Skid Tread — famous for
performance and protection against skidding.
Vitamic Rubber— made by adding a new wear*
resisting rubber vitamin, called “Vitalin.”
If your present tires can be recapped—be
sure to have them recapped by the Firestone Factory
Conti oiled Method. Firestone has the largest system
of recapping shops in America, strategically located to
give you better service. This nation-wide system is
strictly supervised and uniform in workmanship. For
longer mileage, bring your tires to us for recapping.
COME IN AND SEE IT! The new Firestone War
Tire is now ready for the car owners of America. Your
nearby Firestone Dealer or Firestone Store will be
glad to help you make out an application for a tire
rationing certificate.
flretfon*
WAR TIRE _
SIZE LIST PRICE*
4.40/4.50-21 *.90
4.75/5.00-19 9.95
5.25/5.50-18 11.10
5.25/5.50-17 1 2.20
6.25/6.50-16 16.65
7.00- 15 17.30
7.00- 16 18.25
• PLUS EXCISE TAX
6.00-16
PLUS BXCISI TAX
Listen u the Voice oj Firestone trilb Richard Crooks, Manor el Speaks amd the hr estate* Orchestra, mseder the directum of Alfred Wallenstein, Monday t tennis, over S. B. C