PAGE POimfHE DAILY REFLECTOR, GREENVILLE. N. G.

Monday* December 14, 1959

Hondiy, December 14, 1959

Ready For The Holiday Rush

Real Tax Relief Tied To Cost-Cuts

A number of proposals for rewriting the federal income tax laws and affording some tax relief for Americans are making the rounds of congressional circles during the interrim before Congress reconvenes next month.

The lag in federal revenues because of the long steel strike, the determination of the federal government to achieve a balanced budget in the next fiscal year, and the continuing upward move in the cost of government all point to the improbability of any real tax relief being enacted by Congress during the coming session.

On the other hand, the fact that 1960 is a national election year, plus the fact that tax relief has been talked for years now with nothing concrete being done in that direction, may well increase the pressure on Congress to make some sort of adjustment in the federal income tax structure.

Of the proposals that so far has been made from congressional circles, however, most would involve a* rearranging of the income tax structure which would afford the federal government at least as much revenue as it now receives, and would for the most part only afford relief to some taxpayers while placing a heavier burden on others. The percentage of total national income which is required to finance federal operations would remain about the same, and thus the total tax load to be shouldered by the American public would not be lightened from the overall standpoint.

The more basic problem of what to do about the high cost of federal operations seems to have been ignored entirely by those who are seeking to rewrite the income tax laws. They appear resigned to the fact

that government operations will cost more during the next fiscal year, and if federal revenues are reduced, deficit spending must be increased and thus the amount of revenue needed in the future to take care of interest on the growing national debt must likewise increase.

If Congress is to afford any real tax relief in 1960 or in any year, it seems to us that efforts to provide such relief to the public must begin with a careful review of federal expenditures. Demands for defense continue to rise as do the requirements for carrying out foreign and domestic programs of the federal government. If it is essential to the welfare of the nation and its people that more money be spent for these things, there appears little hope for gaining any real tax relief. On the other hand, if some economies may be realized without adversely affecting the welfare of the nation and its peeople, then the savings might be passed on in the form of tax reliefs.

Unless and until there can be a reduction in the percentage of the total national income required to off-set the cost of government can be lowered, there seems little possibility of offering any real tax relief to the people of the nation. If Congress is to afford tax relief next year or any year, the initial approach to the problem must be made in the reajm of the cost of government operations in respect to the national income. Until such an approach is taken, little in the way of genuine relief from the federal tax burden can be realized by the American people.

Should Remember Ivy

!OOks Choice No Country Club

;i^aised Queries

By LYNN NISBET

JUDGES Resignation of Jud^e Reid Thompson of Pitts-^ boro as a special superior court Judge occasioned no great sur-IBise. Appointment of W. Jack Hooks of Kenly, former solicitor of the same district in which Thompson lives, did cause raised eyebrows.

Judge Thompsons friends had known that he did not expect to make a career of service on the bench. He was first appointed early in 1958 to the unexpired term of Leland McKeith-en, deceased, and was reappointed last June for a four-year term ending June 30. 1%3. He will join the legal staff of Carolina Power and Light Company.

Upcoming Judge Hooks served his district as solicitor for 16 years1943 to 1959. He announced for & re-election last year, but withdrew before the primary giving the condition of his health as the main reason.

Question often has been raised about the wisdom or property of elevating solicitors to the bench. At least nine of the incumbent regular superior court judges moved up solicitor, some originally by appointment, although all have subsequently been elected. The former solicitors are Judges William Y. Bic-kett, William J. Bundy, James C. Farthing, Allen H. Gwyn. Walter E. Johnson. Chester R. Morris, Donald F. Phillips. J.W. Pless and Clawson L. Willianis.

George M. Fountain, special appointed from the first division, and the nearly appointed Jack hooks from the second division, also are former solicitors.

HEALTH The surprise feature in the Hooks appointment stemmed from the health angle. It is common knowledge that several of the elderly regular elected judges have missed a good many days of court on account of illness. One of the main ideas back of the special judge plan was to have these men available for assignment anywhere when the regular judges could not serve, either because of excessive work load or physical Incapacity. Governor Hodges told newsmen that there Are some who probably ought to retire.

Information Is that Judge Hooks* health has improved and that he will be able to give full time to the job.

RECOGNITION Promotion of Major Dave Lambert to the rank of colonel and his selection as commander of the highway patrol, succeeding Col. James R. (Bull) Smith, resigned, has been hailed by patrolmen and others are deserved recognition of proven capacity. Promotion from the ranks on basis of merit.

not solely because of seniority, tends to improve morale all down the line.

Col. Smith was the first commander to come up all the way. He was one of the original patrolmen when the outfit was established in 1929. Lambert Is also an original, previous commanders had been picked from outside, although in most instances they had military experience.

Veterans of the patrol have commended on the higher morale throughout the force under the leadership of Col. Smith, one of our own men. They predict continued improvement under Col. Lambert, who says he will carry on the policies inaugurated by his predecessor.

MORALE While that indefinable spirit called morale is good throughout most of the State agencies, and is much better among educational folks than it was a few years back, it definitely is not good in the highway department and is very low in the prison system.

Conditions In the prison department w^ere noticeable before the recent mass escapes. Poor morale undoubtedly contributed to the laxity of guards which made escape easier. Certainly, the killing of a guards which niade escape easier. Certainly, the killing of a guard in Ashe county by escaping convicts, the murder of a Raleigh man by a newly discharged prisoner, and the menace of armed criminals roaming the countryside, has tended further to lower morale among all prison system employees.

Long working hours, low pay and no compensation for overtime work, are the main causes of dissatisfaction. There has been complaint that in some instances convicts are treated much better than the guards. They dont have to work as long hours, and there are rules against taking them out on jobs in bad weather, while employed personnel has to report for duty regardless of weather.

One veteran of many years with the prisons, now retired, observed the other day that he was happy when the trend started toward more humane treatment of prisoners. Admittedly it was cruel and inhuman in some early instances. He wonders now,;, however, if the emphasis on rehabiUtiation hasnt defeated the primary purpose of imprisonmentwhich is punishment for crimes committed against the public.

Whatever may be the reasons, and which is cause which effect, the fact is that morale throughout the prison system Is dangerously low.

Recaptured desperados who escaped from Ivy Bluff prison camp have made it a point of emphasizing the terrible condition.s at what is recognized as North Carolina's wor.st prison for its worst prisoners.

One, allegedly the ringleader of the 20-man escape, said after his capture at Martinsville, Va., that he was on his w'ay to Raleigh to tell Governor Hodgey first hand about the terrible conditions at Ivy Blufl Another, captured earlfrr, declared he had not had a bottled drink or candy bar since he had been at Ivy Bluff. Others have made various charges and indeed seriou.s charges against prison officials generally and specifically those at Ivy Bluff.

It should be remembered, however, that Ivy Bluff is a prison camp set apart for the most incorrigible prisoners in North Carolina. The camp was never meant to be a country club. Neither was it meant to be as lenient, as pleasant (if that word can be used), or as easy as the other state prison farms scattered around North Carolina. Ivy Bluff was reserv'ed for the most hardened prisoners in the state systems . . . those who could not be handled by other prison camps in the state. Furthermore, prisoners who are sent to Ivy Bluff are those who have proven beyond a reasonable doubt they are incorrigibles that could not be handled at other prisons.

Conditions at Ivy Bluff might well be investigated again by prison officials of the state, but such an investigation should be carried on objectively. Statements of recaptured hardened criminals who escaped from Ivy Bluff should not cause the public to jump to the conclusion that conditions at Ivy Bluff are not as they should be.

A Gentle Rein On Bank Loans

By HAL BOYLE

terns Learned By Mail

NEW YORK (AP)-Things a columnist might never know if he didnt open his mail:

You are more likely to get wiser than richer as you age. Three-fifths of U. S. citizens over 65 had an income last year of less than $1,(X)0. Only one in five got more than $2,000.

Everyone has seen the painting of WhitsUers Mother. but few know that Whistlers father George Washington Whistler, has a claim to fame, too. Hfe built the first American locomotive equipped with a steam whistle.

Wives, if your husband gets tired of the salstds you serve, why not pep up your next one with a lily? Lilies are grown for food in both China and Japan.

Our quotable notables: The greatest freedom man has, says Bernard Baruch, is his freedom to discipline himself. Christmas warning: Be careful about giving your children sharppolnled toys. Americas school children suffer more than 100.000 eye injuries a year.

The pencil is still our most

popular writing instrument. We use more than billion a year, or about eight for every person In the land.

A ton of wheat drinks 486 tons of water during its growth period. A ton of alfalfa requires nearly 634 tons of water, and a ton of cotton about 657 tons.

Science has found that monkeys, when confronted with executive - type decisions, develop ulcers just like human executives. The moral is, dont monkey around with big problems, or try to ape another fellows worries.

Sixty-three per cent of Americans now belong to a church, and the nation spent 863 million dollars on church buildings last year. Each member contributed an average of $63.17 to his church during 1958.

Many a man rents his tux or tails for a special occasion, but a Manhattan furrier now has extended a similar service for the ladles. He rents mink or sable fur coats tp bachelor playboys who want to give their dates a real Cinderella evening.

Other Editors Saying No TV Censorship

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By RALPH ROBEY Every bank in the nation is required by law to keep a reserve against its deposits. The purpose of this legal provision is to limit the lending power of banks, and it is effective, in this regard because most deposits are the result of loans or investments. The amount of the reserve is always stated as a percentage, and varies rather widely. On the average It amounts to about one-sixth of the volume of deposits.

The Federal Reserve System exercises its control over the credit system, and the money supply, by Influencing the reserve position of the commercial banks. If It is desired to le.ssen credit expansion the Federal Reserve takes steps to tighten the reserve position of the commercial banks; if greater credit expansion is desired the reserve position of the commercial banks is eased.

A GeoUe Rein For many months the Reserve Authorities have held a mild restraining rein on the lending power of the commercial banks, by keeping these institutions in hock to the Reserve Banks by approximately $400 million. This has not been a matter of shutting off credit. It has merely been a policy of keeping credit expansion in reasonable bounds.

How does the Reserve System exercise such control? There are three ways:

First the Reserve Banks may change the rediscount rate. This is the fee charged commercial banks when they borrow from the Reserve Banks. As the rediscount rate goes up, so will the rate charged its business customers by commercial banks.

Second Is open market operations. This Is the buying or selling of U.S. Treasury obligations. Such purchases or sales are handled by credits or debits on

the books of the Federal Reserve Banks and thus have a direct effect upon member banks reserves. Since these operations may be either small or large this is the method used by the Reserve Authorities for their day by day operation.

Third Is a change In the reserve requirements themselves. This is a truly massive power and can be used only w'hen the monetary authorities want to make an enormous change in the lending power of commercial banks. The power has been used many times in the past, but it does not lend itself to week-by-week operations.

As a part of the reserve requirement power the Reserve Board requested and obtained in^ the last session of the Congress the authority to count any or all of the vault cash of banks as reserve. This is a most important power because heretofore only deposits with the Reserve Banks could be counted as reserve. It also is important because by making such changes the Federal Reserve has another sensitive power for regulating reserves.

Reason for This Discussion

Why bring up this whole subject now? It is brought up because the Federal Reserve Authorities a few days ago issued an order which permitted an estimated $230 million of vault cash to be counted as part of the legal reserve. The net effect of this action is to reduce by that amount the volume of Treasury obligations that otherwise would have had to be purchased to meet the season Christmas demand for cash and credit.

The action does not indicate a basic change in Federal Reserve policy. In other words.there Is no basis for assuming that Interest rates will fall within the next several months.

(Rocky Mount Telegram)

American Civil Liberties Union appears to be a misnomer for the group now demanding government regulation of radio and television networks. It would seem, at first glance, that this organization which incorporates the word liberties in its title, would primarily espbuse the cause of liberty, for institutions such as television and radio as well as for individuals.

Such is not the case, it would seem. ACLU has urged the Federal Communication Commission to *sk Congress for authority to regulate radio and TV networks. Noting that the networks provide at least 80 per cent of prime evening television programs, the ACLU said, The commission should have the right to regulate networks directly and thereby to apply sanctions where they will do the most good.

Patrick Malin of New York City, the groups executive director, said that the PCC should exercise existing power to make broadcasting outlets provide the maximum possible range and balance in subject-matter and treatment In their overall programming.

Isnt this censorship, pure and simple

Who Is to say what the networks may or may not put on the air, so long as the programs are not obscene? Certainly the government has no authority in that

field, and definitely should not have such authority, for where would it end? Eventually, under such a scneme as Malin proposes. the government could tell the networks whats good for the people and what isnt. That is Hitlerism and StaUnism all over again.

And if were going to dctate program policies to the networks we might as well do it to newspapers and other publications, too. He can we draw the line of censorship on one public communication medium and not on another? That would amount to discrimination on top of censorship.

Then the ACLU turns right around and says it is in full agreement with existing law which prohibits the FCC from exercising any censorship over specific programs. Well, what is the exercising of power to make broadcasters provide the maximum possible range and balance in subject matter and treatment except censorship?

On one aspect, we must agree with Malin. He said: "Instead of viewing the right to broadcast as a public trust, networks and stations have viewed it .. .as an open door to private gain. . . He was speaking of TV quiz fixes, advertising frauds, payola, etc. The networks can do the job of cleaning up themselves, if they will, thus forestalling the need for censorship. This would be the wiser course, certainly better for all.

Quote...

But someone Is reading books; someone is viewing entertainment critically; someone Is listening to music with love and discernment; someone is being sufficiently creative to do amateur acting and amateur painting. Maybe things arent too bad after all.Nanton (Alta., Canada) News.

V/here

Our broken homes; According to Harvard sociologist Pitirim Sorokin, about 12 million of 45 million U. S. children dont live with both parents, as a result of divorces, separations and desertions.

Visitors to New York City often complain about the difficulty of finding a parking space. The city has only 50,000 parking meters, but 89,981 fire hydrants.

Strength For Today

By EARL L. DOUGLASS Foundation And Superstructure

There is only one way to understand Christianity and that la by trjdng to put its principles into operation.

One can take a copy of the New Testament and read it through in a comparatively short time. But one does not know Christianity simply by reading the New Testament. Holy as the book is out of which we get our information, and authoritative as it is, it by no means tells the whole story. Sometimes the whole of Christianity Is a mystery to us until we come in contact with some plain, wholesome man or won?an who lives Christian principles every day and lives them joyfully.

We become living epistles and living Gospels of the Christian religion if we take seriously and try to put into peration the faith we profess. It is true that the principles of the Christian religion are written on pages of paper, but they are even more significantly and deeply inscribed on the human heart and mind.

And let us be sure that men and women everywhere understand this truth and judge the Christian religion more by the way we. as Christian believers behave than by anything we may say. The New Testament given us by God Himself is the foundation. The superstructure Is of our making. Let us never forget this in our daily walk and conversation.

Fo Buy ^ahd?

By ROGER BABSON

Babson Park,There arc various tests for selecting the right city to buy land for a new supermarket or apartment house or merely for an investment. One test is population growth; others are the tax rate, water supply, and very important the condition of the schools, the churches, and the character of the people.

THE PLIGHT OF MOST CITIES

Although we are now In a period of prosperity with eatlth increasing rapidly, yet we are not using this wealth to improve our daily living. We certainly have not provided the mobility for our citizens which good business and good health deserve. Our streetcar lines are going into bankruptcy; our railroads are giving up passenger business; our roads are overcrowded with private cars and trucks. Therefore people are moving to the suburbs while still working in the cities, creating an impasse in mobility within the cities.

All of the above means that the best cities In which to invest money are those which have widened their roads, provided ample parking space, and are making trucks deliver and pick up at night. Although our present prosperity is due largely to the automobile, it is this very industry which is revolutloniz-our cities, and crumbling real estate values. We owe much to Henry Ford, but I wish he were alive today to help us out of this dilemma.

MOTOR AGE PROBLEMS

The automobile has given us new freedom; but, paradoxically this industry to wBch we owe 0 much is also threatening to strangle us all and make us live and work in city caves. Yet the biggest part of the transportation program has barely started. The huge roadbuilding program will not only change the faces of all cities, but will set the location for new cUes. these may be very Jong and narrow, with very wide * streets for autos. In the rear may be streets meant wholly for trucks to pick up and deliver merchandise; while our sidewalks will have two stories and our stores two ground floors.

No city should be blamed for getting into the present messy condition. The New England locality in which I am writing this column had Its streets laid out by coes 3(X) years ago. These cowpaths were gradually widened for ox wagons, then for horse-and-buggies. Most cities have inherited todays problem. But, oddly enough, most clty-v-residents do not own autol^T'-get' very t upset about the congestion, so city planners find It hard to get recommendations adopted.

TRAFFIC* PROBUCM i

CAN BE ELIMINATED

It is hopeful that cities are

beginning to study the traffic problem and are employing

traffic engineers. Newspapers axe Joining the demand for a olution which will restore the prestige of their cities and not leave them manufacturing, business, and living slums.

Cities have long been con

scious of water pollution, and most cities have pure water today. Some are concerned about air pollution but are just awakening to the importance of proper zoning, and the development of parks, forests, and conservation projects. Although we have only 60 people per square mile, , compared with Japans 620, yet traffic conditions in Japan today are better than In the U.

S. Better living and transportation conditions would justify increasing taxes; people would accept a higher tax f they got more for their money.

CONCLUSION !

In view of the above, the wise investor in real estate is giving much more attehUon to traffic condittma; f .^rking

space, and road tOntm When one builds a new heme, the value of the house decUnes from year to year; but if the city has proper traffic control, the value of the land w'ill increase year by year. This is something city newspapers as well as real estate agents should emphasize.

I believe in reviving the old city centers, with proper traffic regulations. The new shopping centers may be fads which are now at their zenith.

Chambers of Commerce Boards of Trade, and Merchants Associations should therefore give their primary thought to improving the transportation and parking facilities of their cities. 'They should remember that their task is not to keep things as they are, but to forge ahead and prepare for the great changes which are already In progress.

njustinea Jrrenzy in hroDings

D

Opinions In Brie::

Juvenile decency may not draw sensational headlines, but it should be remembered that far more of the citys young people are actively engaged in, worthwhile activities than ever run afoul of the law.'-New York Times.

The test of good manners is to be able to put up with bad ones, Dawson County (Ga.) News.

Now, friendliness is all right in its place and there is no re

quirement that government-cus-tomer relationships be carried on In a less pleasant atmosphere. The fact remains, however, that costly entertainment does place an obligation upon the receiver and, perhaps over factors being equal, it is one which might conceivably affect his judgment on sotne fine question. For the sake of their own Impartiality and freedom of action, government officials should not expose themselves (o this form of subtle salesmanship.-Washington Star,

By ELMER ROESSNER

It may be that the drug companies have slapped unconscionable markups on their wonder drugs; It may be that their profits have been larger than justified.

But it also seems that Congressional showmanship has stirred up a frenzy unjustified by the facts, and that there has been a prostituUon of arithmetic by Sen. Estea Kefauver (D. Tenn.), chairman of the subcommittee investigating drug prices.

The hearing developed tha( production osts of something called Netlcortelone are 1.6 cents per tablet and the wholesale price of 17.9 cents per tablet represented a 1,118 per cent markup.

Now a 1,118 per cent markup sounds like a tremendous profit.

ADDLED ARITHMETIC

Then evidence was presented to show that research costs for the manufacturer were 8h per cent of sales last year, while the industrys average distribution costs were 23Vi per cent of sales.

Press wires quoted Senator Kefauver as saying; Add 8Va per cent and 23V per cent and its a long w'ay from 1,118 per cent.

It surely is. And Estes Kefauver Is a long way from seventh grade arithmetic.

The Senator effectively smeared the drug industry and the Bcherlng Corporation, which happened to be on his dissecting times table.

The Senator used two bases for his figuring. The 1.118 per cent Is based on the COST; the

other two figures are based on the SELLING PRICE. This, by the way, is not to defend drug pricing, but to rally around seventh-grade arithmetic.

EXPLANATION #

The tablet sells for 17,9 cents wholesale, according to the evidence. The cost is 1,6 cents. If research costs at 8Vi per cent of the selling price, they are 1.5 cents. If distribution costs are 23*1 per cent, then they are 4.2 cents.

The basic costs are 7.3 cents per tablet, or about 40 per cent of the selling price which is about what a lot of other products cost. And if the total cost Is 7.3 cents per tablet and the wholesale price Is 179 cents, then the markupas a seventh-grader can tell Congressis 245 per cent, not 1,118 per cent.

Senator Kefauver also said

that the retail pric of 29.8 cents a plU' was a markup of 1.863 per cent, but again he eliminated research and distribution costs from his base. If a wholesaler buys a pill for 17.9 cents and sells it for 29.8 cents, his markup is 66*/ti per centfat, but not 1,863 per cent.

How much markup is too much? There are no standards.

After he finished belaboring the drug Industry, the Senator might go after the bakery business, where a pound of flour costs less than 6 cents and a pound of bread costa 23 cenUs or the steel business, where a pound of steel costs 3 cents and a three - pound axe head costs $3.50, or my business where 4 cents worth of copy paper and typewriting ink may cost a pub-,.lisher $100-and the reader lesi than a thouaanth of a cent.