The Omaha guide. (Omaha, Neb.) 1927-19??, August 27, 1938, Page Seven, Image 7

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Published Every Saturday at 2418-20 Grant 9t.
Omaha, Nebraska
Phone WEbster 1517
Entered as Second Class Matter March 15, 1927,
at the Post Office at Omaha, Nebr., under
Act of Cotigress of March 3, 1879.
All News Copy of Chrurches and add Organi
zations must be in our oSfice not later than
5:00 p. m. Monday for curren issue. All Adver
tising Copy or Paid Articles not later than
Wednesday noon, proceeding date of issue, to
insure publication. _
Race prejudice must go. The Fatherhood of
God and the Brotherhood of Man must prevail.
These are the only principles whil will stand
the acid test of good.
Today we heax much of credit extension
as vital in the economic ^cheme of things, in
te light of that some statistics found in a re
cent address by l’aul B. Sommers, retiring
president of the iNiational Board of Fire Under
writers are of exceptional interest.
Tho stock fire insurance industry carries
$174,558,886 of its aspe.s in cash most of wliich
is on deposit in bands. It has been conserva
tivey estimated that each dollar on deposit
which is reasonably certain to remain there
for a year or more, is the foundation of $10
in credit. On this basis, ahe cast, holdings of
the fire insurance companies make possible
credit to the tune of $1 >755,588,860—credit,
which is constantly available to the productive
industries of the nation and which creates
wealth* opportunities, purchasing power and
So much for that phase of the industry's
direct contribution of the credit facilities of
the nation. Of still greater importance is the
fact that without fire insurance, credit as we
know could not exist. A\ hat bank or indi\ idu_
al would carry a mortgage on a home, if there
wTero no insurance policy to indemnify him in
case of its destruction by fire? What manu
facturer could extend credit to a merchant
if tftiie stock of goods was not indemnified
against loss? Who could rifjk an investment
in ships, trucks, or any other form of trans
portation wLhout a fire insurance policy to
stand between him and ruin?
Fire insurance is the very foundation
stone of credit’. It performs a national eco
nomic service whose value cannot bp exag
gerated. To this extent, the great institu
tion of fire insurance makes all industry and
all investment possible.
Most of the talk about the “high cost of
electricity” comes from political sources. And
it would seem reasonable to suggest to politi
cians that they take a look at the cost of their
own ‘ ‘ business ’ ’—government.
During 1937 according to Frank E. Fowle
past president; ol the Western Society of En
gineers, the. nation’s total bill for electric pow
er service was $2,200000,000. But that isn’t a
drop in the bucket to wlhjat the federal govern
ment alone, aside from Other units of govern
ment, collects annually. W hat taxes consumed
about 17 per cent more than the combined cost
of rail power and telephone service for the
nation. Where the average total taxes per fa
mily run to about $380 a year, the average
domestic power bill copies to around $36. in
cluding exorbitant taxea.
Furthermore, while the cost of govern
ment; has soared toward the financial strata
sphere in late years, the cost of electricity
in spite of a general upward trend in price
levels' and in spite of materially increased la
bor, tax and material costs—has gone steadily
downward. In 1937 large industrial power and
light users paid 22 pe,r cent less for a, given
amount of electricity than in 1936 small indus
trial power and light paid 24 per cent less
and. the housiehohlers, benefiting from the
largest, reductions of all, paid 37 percent less.
Pages of smilar statitics could he cited.
And they all lead to hut one conclusion: that
no industry cheap political claptrap to the
contrary, has done more to improve i1^
standards of service and reduce its cost ,o the
consumer than tjhe electric industry.
The Rutland, Vermont, Herald goes right
straight to the heart of the railroad problems
when it says: “If the government would sim
plify its contracts witlb the railroads, relax the
rigors and constriction of regulation, equalize
or reduce taxation, permit reasonable rates
for first class service, and, so far a possible,
bring all transportation under the same rules
and standards, it would have done all that any
public agency coull do toward amending a
very difficult situation.”
The railroads ask no favors, no special
privileges. They simply ask that they be treat,
ed exactly as are other agencies of transpor
tation—and they be permittd to operate on a
sound business basis
So far tikis year railroad mcome has been
about eighty per cent under 1937. The rate of
return, figured on an annual basis, has been
approximately one half of one per cent of the
industry’s gigantic investment. In other words
the railroads as a whole are earning next to
nothin.. Some lines are not even making e_
nough to pay their taxes much less their bond
interest. And a great many are experiencing
serious operating losses which, unless checked
must soon result in additional receiverships.
There is the usual camouflage talk about
scaling down the industry's capital structure,
consolidating lines, and similar palliatives. But
facts show the fallacy of sudh proposals in the
present cris’s. First and foremost, the indus
try must be given an adequate rate structure.
Second, it must be permitted to further reduce
operating costs where possible. Third, it must
bo given equality of legislative treatment with
its competitors. Tlrnn, and only then, can a
real start be made toward solving the problem
—and toward an industry which is responsL
blc, direct or indirectly for millions of jobs,
for billions in purchasing power, for hundred
of millions of taxes, and for the existence of
scores of other industries which supply it with
services and materials.
v ^ V
The average person takes railroad service
for granted because he Ivis always been able
to get it when lie wanted it. He cain’t con
ceive that anything could happen to the rail
roads that would interfere with the service he
is used to.
He will use motor transportation over pub
licly bulit highways; he will use boat trans
portation favored with publicly buitt and
maintained facilities; he will use airplane
transportatoin that depends for terminal faci
lities upon publicly built airports, and he will
enjoy the public highways in his private auto
mobile—bue, when storms block the roads;
when fogs stop the airplanes, and when inland
waterways and s.eamship lines are tjed up, he
turns to the railroads for transportation as
naturally as he puts his window up at night
for ventilation.
The fact that the railroad' existence is
threatened by tvery known form of subsidized
and unregulated transportation never enters
his head. He overlooks the fact that, unlike
their competitors, the railroads are so string
ently regulated in every phase of their activ
ity, even to the management of their propert
ies, that the only thing they are left free to do
without restriction, is to pay their enormous
tax bills to ei.y, county, state and federal gov
The average citizen who runs a meat mar
ket, clothing store, sawmill or farm, would
throw up his handls in horror if it were sug
gested that 48 state legislatures, our national
House of Representative^ atxd United States
Senate, the Interstate Commerce Commission
and upwards of 48 Estate railroad or similar
regulatory bodies, were to take over the func
tions of management of his business, as they
have the railroads—set the prices he could
charge for lidf{ wares; limit his profit, if he
was able to make any, to a starvation figure,
and prevent him from discontinuing unprof
itable oprations if he saw fit.
The average citizen would kick like u
steer at such on arrangement, hut lie calmly
watches merchants, lawyers, doctors and what
not who are elected to public office, proceed
to take over the management of the railroads
without a dollar of investment on their part,
without, in most cases, the slightest know
ledge of railroad operations, and without the
public and the investment^ of millions of cit
izens in railroad property. The net result to
day, after a generation of su,dh. political man
agement of Ijie railroads, is that they face
The average citizen does not realize this.
Ilia railroad service ,is still uninterrupted.
The railroad worker won’t believe that such a
catastrophe could happen. But unless our
political appointiees in regulatory positions,
are allowed more liberty in running the rail
roads, we will find ourselves without railroad
transportation such we have been used to,
or with some form of government ownership
that will waddle us with debt* that will make
the present federal dificit look like chicken
feed. Railroad employes will find themselves
working for the government and, instead of
dealing wit)h railroad managements ,they will
have to deal with congress! and »ta,te legisla
tures, thus hamstringing their freedom to
strike or negotiate regarding grievances—
they will find th ran selves on a par with sailors
soldiers, and postdl employes in .securing con«
sidcra.ion—Their hands will, be tied—you
don’t strike against the government.
It’s high time the average citizen and
worker not only thought about the railroads
situation, but demanded that practical relief
be given them, and that the destructive type
of one sided regulation to which they have
been subjected, be dhanged to more honest
and fair methods.
The crime of arson is universally condem
ned. The deliberate setting of lire can have
no justification in any ease, and the person
committing it is properly given severe punish,
incut when apprehended
It would be a fine tiling for the country
if some of that condemnation were extended
to the man who causes fire because of his own
ignorance, carelessness or stupidity. For the
grim harvest reaped by the “unconscious ar
sonist” is definitely] greater and more a frail
excuse indeed when lives and property are de.
Certainly the man who carelessly discards
smoking materials in dry woods that are ready
to explode into flame ;U the touch of a spark
is deserving of little public sympathy. Neither
is the man who want only permits hazards to
exist on Ins property and endangers the pro
perty of everyone else in the community.
In some European countries, notably
France, the law provide* that if a fire starts
on anyone’s property through the fault or
negligence of the owner, lit? is financially re
sponsible for the damage to other property.
There’s small chance of passing such a law
here—but the principle it represents is worth
thinking about. Most of tlhe hazards that cause
firo can be easily eliminated. And the argu
ment. that many of us don 't recognize hazards
when we see them, isn’t valid, ignorance of
firo dangers, lige ignorance of the law, should
not constitute an excuse.
Are you an “unconscious arsonist?” Its
easy to say “no”—but can you be certain
that's the right answer?
.._Thirteen months from now, according to
slide rule cacu'lations of a government econo,
mist, the national debt of the federal govern
ment will l>e in, excess of 43 billion dollars—
double what it waq five years ago. For the
fiscal year, 1939 beginning July 1, next con.
gress has authorized the expenditure of 12.5
billions, 6 billion of which will be “deficit fi
nanced. ” ,
Breaking this vast sum, it is, found that
during fiscal 1939 the federal government will
spend $1,027,397,250 a month ;4 $34,246 575
every da<y; $1,426,940 each hour; $23,782
every minute; or $396 every second!
ho what. Soak the rich, you say? Accord,
ing to the government economist (who got his
figures from a treasury report), only forty
three out of (line 130,000,000 in The United
States had ineo-injes if a miH'on dollars or more
in 1937. Their aggregate income was 72 million
dollars and if every penny was squeezed from
them it would barely meet the government ex.
penditures for 48 hours
Everyone is iamiiar wuli the legislative
attacks made upon the chain store industry—
culminating in a law offered during the last
session of congress which, if passed, would
have prae.'ically destroyed the industry. But
everyone is not familial- with the chains’ tre
mendous economic contributions to the United
A few figures tell the story vividly. Chain
stores pay $450,000,000 each yea.r in rentals
to 140,000 property owner* They pay $200,
000,000 a year to newspapers, magazines and
printers for advertising, handbills and other
literature. They pay $225,000,000 annually
in city taxes alone. Tlhiey buy $6,000,000,000
worth of products from United States manu
facturers, And they pay $1,200,000,000 a year
in wages.
So much for the landlord, the publisher*
tho tax collector, the producer and the work
er. What about the consumer?
bW te country as a wfhole, reliable figures
on bow much the chains save consum
ers are lacking- But an authoritative purvey
recenty conducted by the Real Estate Associa
tion of the State of New York indicate that die
chain stores save the consumers of that state
alone $040,000,000 a year. New York accounts
for about ten per cent of ihe population of the
United states. As a result, if chains sa,ve con
sumer in Mine other states as much a.^ they
save the conumers of New York, the total sav
ing reaches the gigantic sum of almost, $10,
000,000 a year.
This, then is the economic picture of the:
chain stow industry as it exists today. Its
beneficial influences are felt in every strata
oi our national life. Tlu> pavings of mass dis
tribution are responsible for raising the av
erage standard of living. It is, incredible that
there are men Tiohling responsible positions in
government who would destroy this industry
at an unknagined cost to workers, consu
mers, and to producer^ of all kinds.
A good substiitude for the term “agricul
tural markerting cooperation” would lie ‘‘com
mon sense cooperation.”
Cooperation is simply sound business prac
tice on the part of the farmer. The growth and
progress of American industry was largely
tiho result ol tjhe application of the cooperative
principle. 1 lie growth of American agricul
ture will be largely the result of the same fac
tine farmer, standing alone can have m>
voice in determining markets, prices agricul
tural policies or other vital -matters. Ten thou
sand farmers, represented by an aggressive,
responsible organization, can stand on their
own feet and fight tJaeir own battles. That’s
*,common sense operation.”
The argument that government-owned bu
siness and privately owned business can exist
together in harmony may sound well—but in
this practical world, it won't stand analysis,
when highly taxed private business is forced
to feed tax_exeinpt government business.
Every time govrnment goes into one busi
ness it means that tomorrow govenment will
go into another business. The racapacity of
politicians is notorious. Give them inch and
they take a mile, until private property is
eliminated. .
In stoty, the lion and the lamb should
lie side by side. In practice, the lion eats the
lamb. And that’s exatly what government
business does to private business. We can have
a socialistic naton, or we can have a nation
based on free enterprise. We can’t have both.