The Omaha guide. (Omaha, Neb.) 1927-19??, December 02, 1939, CITY EDITION, Page SEVEN, Image 7

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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
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
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 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.
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
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
“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
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
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
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
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 _
• » * 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
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 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 minor li\ i lg expenses
___n( _
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
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.