The Omaha guide. (Omaha, Neb.) 1927-19??, December 02, 1939, CITY EDITION, Page SEVEN, Image 7
EDITORIALS Q THE OMAHA GUIDE X Q Ail News Copy of Churches and Organiz- X (j »t'* ns must be in our office not later than X X 5:00 p. m. Monday for current issue. All U U Advertising Copy or paid articles not later Q Q than Wednesday noon, proceeding date of X X issue, to inu-ure publication. y Q Race prejudice must go. The Fatherhood a X of God and the Brotherhood of Man must pre- 'J X vail. These are the only principles which w ill Q Q stand the acid test of time, A Q James H. Williams, James E Seay, Linotype X Q Operators and Pressmen X X Paul Barnett, Foreman _V 0 Published every Saturday at 2418-20 Grant X X Street, Omaha, Nebraska— l hone WE. *61* X X Entered a- 2nd Class Matter March 15, 19-7 M 0 st the Post Office at Omaha, Nebr., under X X Act of Congress of March 3, 1879. X ^ “COMPANY CO-OPS” Voluntary, wholehearted support b> producers has been responsible for ,il3 scuaay expanion ci the “marketing co-peraAve.” The c.ntinued success Cx the marketing cooperative relies utterly on this kind for support—for with it tin movement is an econ.mie asset to the nation. Accoruing to Henry A. Wallace, Sc-re.ary of Agriculture, the proo.em now tac. d by tile marketing co-ops is a rise in psued i “company coopei a tives” termed arbitrarily by private distributors purely as a “front.” Pro ducers have no voice in management or organization of this type of mar keting cooperative which may or may not operate in the best interest of tne so-caned “members.” Producei s and distributors alike will do wull in tin; lorg run to avoid diverting the marketing oj-:p move- - ment away from its original purpose —stacle markets Jer producers and reasonable prices to consumers. _ / _ ---U\J v BELLY FULL OF DESTRUCTION Chain stores are highly commend ed in a report to the Pennsylvania Newspaper Publishers Association by its special chain store committee. The report says in part: ‘One ot the simp lest and yet nr.st import..in steps any group of newspaper publishers can take in establishing friend y re.ation ships with the chains, is to adopt a resolution in opposition to the Patman anti-chain bill and other discrimina tory and punitive tax measures. That this is not t:o much is shown by the fact that ten other publisher and press associations have already tak.n that step. Chain stores ask our support in repealing and preventing anti-chain stores legislation and they ask this not merely for their own salvation, bue, because it is uneconomical, unpracti cal and because inteiligent business generally fears anti-chain store- lega tion as a dangerous precedent.” The press at large has full reali zation of the fact that any punitive law or any class tax which unfairly penalizes any legitimate business is a menace to all business—once a busi ness-killing policy is established oth.r fields of endeavor will inevitably come in for similar treatment. In the case ot the chains, ruinous legislation is even more than erdinarily inexcusable —the modern chain, no less than the modern cost of living. The American people have had a fc;lby-full of laws that hamstring busi ness. The nation needs policies that will encourage business and create jobs, and increase national income. -0O0—— HOUSE WAKES UP The action of the House in remov ing the undistributed profits tax from the new revenue bill by the astounding majority of 358 to 1 (and the single dissenting vote was cast by a repre sentative who favored the tax’s elimi nation, but voted “no” because he felt that the bill should have gone farther the most heartening acts of this con gress. in the way of tax reform), is one of It is very deiimteiy a step in the i ight erection aiter many years during which tax changes have invari ably been of a punitive, business-des tr yii.g character. The House has tarned the respect and commen lation of the entire country. However, worthy as this action is, it will be of little practical importance unless it is swiftly followed by further sai.j tax reT rm.-Our stagyeWng total tax burden is difficult emu or the nation t<; bear—and :ur manner of collecting revenue in many instances makes the problem core serious still. The “nuisance” taxes, of which the undistributed pd tits tax is one, are a case in point. For the most part they produce little revenue—hardly enough t;j to visible in our enormous Federal tudgets of today. Yet they frighten the invest' r, discourage industrial ex pansion, and thus contribute to unem ployment, to be declining national in come, and to continued depression. rl he capital gains tax is probably the w'.'rst of the remaining “nuisance" levies. A minor revenue producer, it has practically driven “risk” capital— tile money that normally goes into the new, untried enterprises, which fur nish the background for the great em ploying industres of tomorrow —out of the picture. Under its terms, the man who takes a chance on a new thing must absorb all th? loss if it fails. If it succeeds the government takes most of the pr tit. What sane investor will venture his savings un der such a circumstance? S~ all praise to the House for its ringing disproval of the undis tributed profits tax! And may this step mark the start of a real and sweeping program of tax revision to the end that prosperity may be res tored. -ySJ FUNDAMENTAL NECESSITY “Even those who are not directly c nneeted with the railroad business know that without reasonably pros perous railroads we can have no en during ano satisfactory national pros perity,” said J. J. Pelley of the Asso ciation of American Railroads, re cently. “This is so because of the wide spread holdings of railroad securities by individuals and institutions. And it is so i r an even more important reason—the absolutely fundamental necessity to this country of low' cost, rc.iable and efficient rail service.” The railroads aren’t complaining because they aren’t earning the return which they and econ mists think they should earn—the fact of the matter is that the railroads are earning almost nothing on their gigantic property investment. For the 12 four months ending April 30, their return, figured „n an annual basis, was 1.56 per cent. And even these microscopic profits are made possible only because a few lines due to special local conditions, have been able to show prefits approaching the “fair return” level. Scores of lines are running in the red—even as scores of lines are today in the hands of receivers. As M. J. Gormley has observed, “Government subsidy is the curse of the transportation industry.” The taxpayers have poured untold hund reds of millions into waterways which consistently show heavy annual oper ating 1 sses. They spend hundreds of millions more to provide doubly ex pensive rights-of-way to support commercial m o t o r transp rtation. The meaning of that is that the public dorectly and indirectly, spends enor mous sums of money to subsidize shippers using these favored forms of tranport— while the heavily-taxed, thoroughly- regulated, self-supporting railroads go begging for business. If such a policy breaks the rail roods we’ll all pay the bill. We’ll pay it in I' ss of jobs, opportunities, taxes, and orders for business large and small. Let’s hope, for the sake of all of us, that we discover how vital rail roai' prosperity is to nati nal pros perity before it’s too late. -— yj V, yj BEATING THE BREAD LINE Even in these days when we’re used to astronomic figures, $532,000, 000 is a lot of m ney. That is the amount of new, ordinary life insur ance sold in the single month of May. It means that several thousand A me icans have purchased half a bil lion d liars additional i rotection to be paid them in the future when they need it most. It meens that children veil be educated'—dependents left chro nically secure—old age made happj and independent for workers. It means earned “social security’’ —bought by a foresigh ted and indi vidualistic pa.pie work are determin ed not to become wards of govern ment. -0O0— THE “PROFIT SYSTEM” FOR GOVERNMENT The tremend us cost of taxation to the average consumer is bee niing more and more apparent. The cost of modern government is taking the big ger slice of the consumer’s dollar when cunpared with the earnings of the investor and business. lugures recently released oy me capital stock fire insurance companies show that the proportion of the pre mium dollar absorbed by taxes in creased 54 per cent—from 3.41 rents in 1927 to 5.28 cents in 1937. Translate this into terms of operating factors in the industry and its true impor tance is more readily recognized. For example, in 1937: 1. For evory dollar paid to policy holders in losses, taxes paid amounted to $12.89; 2. For every dollar paid in dividends to stockholders, $54.77 were paid in taxes; 3. For every dollar paid in home office salaries, $73.13 were paid in taxes. 4, For every dollar of miscellaneous expenses, including the cost of printing, advertising and maintaining the cost of organization structure, such as rating and inspec t n boards and bureaus and company organizations, 91 cents were spent in taxes. Such examples art now so com mon the public begins to realize that the greatest beneficiary of our much misrepresented capitalistic system is government, and that the cost f gov ernment, which demands taxes, is rapidly becoming paramount in the cost of living today. It is cutting down earnings on invested live savings to the vanishing point. The “profit sys tem” now means primarily profit for government on any earnings of con seouence, instead of the individual who risks his money in an attempt to create profit and unemployment. _aAa _ POWER SOCIALISM CASTS ITS SHADOW • » * it Washington and Oregon have new legislation to permit and encourage the organization of Public Utility Districts (Pud’s) for the purpose of utilizing power from the govsrment owned and tax exempt Bonneville and Grand Coule. hydro electric develop ments. A recent showing where transmission lines are under construc tion from Bonneville, shows that they are going through territory which is n ow being served, and which has been served by private companies since electricity was first used in the North west. This means that highly-taxed pri vate companies will either be super seded by government projects or that such companies will be prevented from expanding and taking up new loads. Publicly-subsidized power will take o.eu this tieia :f private enterprise. The argument is advanced that government plants can deliver electric current to consumers at a lower price than can private companies. Any in dustry enjoying tax-subsidization from the stand;* i it of capital re quiremnts and various tax exemptions not accorded private enterprise^ why should the principle not be ex tended to such iturns as food, cLthing anti rent, which absorb the bulk of every tamily income, instead of to om of the ml.st minor li\ i lg expenses power? ___n( _ “SUMMIT OF ECONOMIC FOLLY” Who gains when the government spends millions to improve impracti cal inland waterways for commercial transportati n? And who loses? Those imp rtant questions are aptly answered i:i a. re cunt editorial in the Kansas City Journal. At the present time the govern ment is estab i hing a navigable chan r:1 in the Missouri River from the Kansas City to Sioux City. The cist is estimated at $92,000,000 of the tax payers’ money, and maintenance at . $2,500,000 a year. ‘The g vernment is spending this vest sum,” says the Journal, “so a few privet'' industres v. i b s jial trans porter. needs can used the river. “The consumer will not benefit unless the saving in transd utation costs is passed' on to him in the form of lower commodity prices. If the ship] ;i' did that, there would be no point in his using the river at all. ‘ The farmer will not benefit for the reason that his v heat never sees the li °r until long after it has passsd out of his hands. Who, then, are th: benenciariesr “Grain commission men whet do rn export business and a few indus tii' ■ producing bulk commodities adaptable to river shipping. “And who are the losers? “First of all, the consumers, who pay the millions in tax money to fi nance river improvement and who receive no tangible benfits from if.. “And second, the railroads, which are deprived of needed rev.nue at a time when most of them stand on the financial brink.” In other words, unec nomic river development penalizes the many t v lavcr the few—and every citizen of t.ho country must chip in to pay the gigantic costs. Certainly Congress should have learned by this time that tbs hundreds of millions spent for “po litical” river improvebent have beeii largely wasted—that the result has been to help cripple our greatest sin gle industry, the railroads—that the cost of most inland waterway pr . jects far exceeds any conceivable benefit, even to the favored few—and that it is time to call a halt. The Journal sums' up tin- situation aptly when it says: “River development reaches the sum mit of ec;nomic folly.” __nOn_i i "V THE FIRST INVESTMENT Property with a high value today may be lees valuable in a few years. Securities which look gilt-edg'e now may face a depressed market tomor row. Nevertheless, savings in the bank or in stocks, Innds or real pro perty are splendid to have, and a cer tain share of everyone’s savings should be so invested. But wisdom dictates that the first investment for nine men out of ton. i;h,uld be life insurance to care for their dependents, if thev die—and tor themselves, if they live beyond the productive years.