PAGE FOUR

fHE DAILY REFLECTOR, GREENVILLE, N. C

Monday, June 13, 1960

Needing More Industrial Diversity

North Carolina occupies an enviable position among 16 Southern and Border states because it has the largest number of people employed in manufacturing of any of these states.

With 505,000 people engaged in manufacturing, North Carolina is two thousand ahead of Texas which occupies the second rung of the regional ladder.

Aside from the number of persons employed in manufacturing, however, North Carolina has reason to be envious of the position Texas occupies. Although North Carolina has more people employed in manufacturing, the total value of the products manufac-:tured in this state last year was slightly more than nine billion dollars while the value of products manufactured in Texas reached 15V billion dollars.

It is apparent therefore that the wealth added to Texas' economy through manufacturing is considerably more than that of North Carolina. It is also apparent from the figures that with almost half its total manufacturing employes engaged in textiles. North Carolina still has considerable distance to go to achieve the diversity of industrial capacity which it has been seeking.

?ar West Votes To Decide Race?

By LYNN NISBET BALANCE Mountain Democrats, especially those living in the 12th congressional district, believe they hold the balance of power in the run-off primary for Governor. Their reasoning is that Sanford and Lake will come out of the east and piedmont just about even, and a lopsided vote in the far west will turn the trick.

These countries are more responsive to organization leadership than those in the eastern part of the state, and while they often distribute votes when a numb^ of candidates are in the running, they usually tighten up when the choice is mainly between two. Witness the 1948 contest when a preponderant mountain majority for Johnson was not sufficient to overcome the margins in the east. The organization leadership is lining up now behind Sanford, and indications are that in these counties he will get a large part of the Larkins and Seawell first primary vote. It isnt all rosy for the Sanford folks. There were several upsets in legislative and local contests, with candidates who were believed to be safe finding themselves voted out. Some of these defeated candidates and their supporters are resentful at alleged desertion and let-down on part of the organizationand they are leaning toward Lake for a protest vote. There is some evidence that a few original Sanford supporters, mostly of the strong Scott branch head faction, are switching because of resentment at reports of alignments between Sanford and Senator Everett Jordan in other parts of the state.

These defections do not greatly concern the organization leaders, who feel sure of at least Ihree-to-one margin for Snford. They are disturbing to some degree because of memories of 1948, and lack of assurance that anything less than a solid mountain vote fote for Sanford will fail to overcome Lakes eastern margin.

CONGRESSIONAL Decision of Thad Bryson not to call for a run-off primary against Roy Taylor for Congress and the official order by Governor Hodges for a special election on June 25 (date of the second primary) to name a congressman to fill out the term of the late Dave Hall, are not expected to have much effect on the voter turnout. Taylor came so near to a majority in the first round, and the third candidate being a Buncombe man, a second primary would have been recognized as futile so far as hopes of the little counties were concerned.

There are complications due to the fact that only Democrats can vote in the primary to nominate a candidate for Governor, but republicans will participate in the election to name a congressman. Write Ins are not permitted in the primary, but may be used in the congressional election.

Hetee RoUman, Republican nominee, is protesting the special election is unnecessary, and has

tried to withdraw from the short term race. He will be in the regular election this fall for the full term in Congress, Democratic leaders concede that for all practical purposes the special election is of little consequence, since the result can be forecast witti certainty. For most part they like the idea of having the special election concurrently with the primary because it will save the expense of a separate election. They also believe that the voting record will serve as precedent for the general electioil In November, and to some extent offset the influence of RoUman Republican money in local county races.

None of the Democrats who were interviewed by your reporter voiced any fear of the congressional result in November. Several of them are apprehensive about legislative and courthouse Democrati candidate in the close counties.

CROSS-VOTING Traditionally party lines have been more tightly drawn in the mountains than in the piedmont counties. With rare exceptions there has been no Republican problem in the east. In recent years there has been noticeable trends toward cross-voting aU over the state. In what used to be recognized as close, or almost certain Republican counties, late elections have shown preponderant Democratic majorities for State and county offices, while an increasing number of counties have given majorities to Republican candidates for Congress and President. This being a presidential year Democratic leaders frankly admit some concern about this trend. The worry is enhanced by the beUef that in some instances Republican mMiey is avaUable to local Democratic candidatesif they will encourage support for the national Republican ticket.

In counties where the party margin is narrow local RepubU- can candidates sometimes have the benefit of big national money. That is what bothers the Democrats in the 12th congressional district as they go into the general election campaign. As a candidate for Congress in the Democratic primary two years ago Heinz RoUman reported spending more money to get the nomination than had ever been spent by any other North Carolina candidate. When he faUed to get the nomination, he changed his party registration. entered the primary and won the RepubUcan nomination this year, for both the short and long terms in Congress. The short term is of Uttle importance, as RoUman has pointed out in his efforts to withdraw as a candidate.

Democrats mnt the special election held, and cite mandatory law for it. because they think it wUl afford campaign material for the regular November election. For these reasons the June 25th primary and special congressional election in the 12th (Jistrict may give the nomination area more than usual prestige in influencing State Government.

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As North Carolina continues to develop from an industrial standpoint, it is important that consideration be given not only to the number of jobs that will be added to the economy, but also to the kind of industry located in the state and to the value* of the products these industries will produce. These are factors which have a bearing on the economy of the state just as the number of industrial jobs has a bearing on the economy.

The figures released by the State Department of Conservation and Development likewise point out that Tar Heels engaged in manufacturing jobs are employed by 7,'300 different firms in the state. This means, of course, that of the manufacturing firms in the state, the average employment is about 69 persons, certainly not a large number by comparison with the figures announced for some of the new plants being located in the state.

This factor also has a bearing upon the economy of the state. The industrial structure of the state is, by and large, made up principaliy of small manufacturing firms scattered in many communities rather than a relatively few very large plants. From the standpoint of a state which ha.s a major agricultural economy, this is likewise a healthy situation.

North Carolina obviously needs more manufacturing jobs and it needs to continue to diversify its industrial economy. It needs more small industrial plants as well as large plants. These factors should not escape the attention of those primarily responsible for the states economic development or individual citizens of the state whose economic future is closely tied to the progress of the state as a whole.

Its That Deliberate Secrecy We Mistrust

On top of the questions raised about the lack of accounting for expenses of members of Congress in conducting committee business has come the story of the secret pool to be constructed for the pleasure of Senators in the basement of the old Senate Office Building.

So far there has been no explanation of why the approval for funds for the pool construction was kept a closely guarded secret by the Senate. For lack of any other explanation, it must be assumed the matter was handled as it was in an effort to keep the public from knowing the tax funds were being spent in such a manner.

The question again arises, why did members of the Senate seek to hide the expenditure? Why were they not willing for the public to know they planned to spend tax money for this purpose?

Compared with federal government expenditures, the money earmarked secretly for the white tile pool will not amount to a drop in the bucket. Nevertheless, the fact that it was a matter carefully shielded from public knowledge should be a matter of concern to all the citizens of the country.

How many other projects of similar nature have been accomplished with tax funds that the public was not aware of, and how much tax money has been spent in this manner?

Citizens throughout the country look to their elected representatives in the House and Senate to keep the channels of information open in public matters and to prevent the waste of tax funds in every area of government. When matters such as the white tile pool crop up, it cannot help but shake the confidence of the people in those who are primarily responsible for preventing waste.

I Cant Support Em All

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By GEORGE SOKOLSKY

nfair Tax Distinctions?

Copyright. 1960, Kins Features Syndicate, Inc.

Tax exemption is a privilege granted orguiizations which raise funds for charity, education and similar unprofitable enterprises. (The preferred usage is non-profit which begs the question.) The concept is that the income tax is collected on money profits, spiritual lM*oiits being ujameasurable.

At one stage, the mere assertion of intent Vl^as sufficient to make an organization or a Foundation tax exempt. Today the Treasury is more strict, requiring evidence that the association exists for a good purpose and not to give jobe to its

organizers and trustees who evade the tax by taking the profits as salaries and expenses. Furthermore, it is essential that the evidence be clear that the organization, whatever its stated purpose, has not been established as an Income tax evasion gimmick, as is so often the case. When a Founcja-tlon comes into existence which gives evidence tht those in control of it, or a number of them, draw off the funds as salaries for themselves, the Treasury is entitled to investigate Uie bona fides of the operation.

On the other hand, the Treasury sometimes makes distinc-

Other Editors Saying... Suppressing Scanda

D,

riexiDie J:^oiicy As To Money

By RALPH ROBEY

For weeks it has been evident that the Federal Reserve System was keeping the commercial banks under a little less restraint in the making of loans. This now has been confirmed by a reduction in the rediscount rate, which is the charge made by the Reserve System for loans to its member commercial banks.

All the Federal Reserve System can do in the way of controlling the lending policies of its member banks, aside from seeing that they comply with the law, is to increase or decrease the reserves of the member banks. Since every bank is required by law to maintain a reserve of a designated percentage of its deposits. this item of control is quite effective.

There are three methods by which the Reserve banks can exercise an effective influence upon member bank reserves. First is to change the reserve requirements themselves-

There is both an upper and a lower limit to what the reserves must be, but within these limits the Reserve Board may set any figure it believes wise. This power is relatively seldom used because it is of massive proportions.

Secondly, the reserve position

of member banks may be changed by the purchase or sale of Treasury obligations by the Reserve banks. This is what is known as open market operations. and.is the method used for day-by - day and week - byweek control.

Finally, the Reserve banks may change their rediscount rates. This does not change the volume of reserves but it does change the cost at which reserves may be obtained by borrowing frpm the Reserve banks, and it is important as a reflection of the attitude of the Reserve Board on the credit and business outlook.

At all times there are some banks which have more reserves than are required and other banks which are rediscounting in order to meet the re

serve requirement. The degree of pressure exerted by the

Federal Reserve System Upon the lending policies of the commercial banks is determined by the difference between the ex

cess reserves and the deficient reserves. This difference may be either plus or minus, but

when the Reserve banks are exerting restraint the deficient reserves necessarily exceed the excess reserves.

The evidence of an easier credit policy over the past sev-(Continued on page 5)

(The Washington Post)

Without any debateindeed, without any discussion or even explanationthe House of Representatives on Monday adopted an amendment offered by Mr. McMillan to a bill already passed by the Senate amending the law relating to indecent publications in the District of Columbia.

However good its intentions, the amendment wodld be hsird to match for maladroit draftsmanship. The District has long had in its code a provision for punishment of gnyone who sells, or offers to sell, or give away . . . any obscene, lewd, or indecent book, pamphlet, drawing, etc. The terms used in this statute are terms of art to lawyers; obscene, lewd, and indecent, while of uncertain meaning, have been given a degree of definiteness through judicial interpretation. The McMillan proposal employs very different timers, however. It would punish anyone shall engage in the * business of editing, publishing or disseminating any newspaper, pamphlet, magazine, or any printed paper devoted mainly to the publication of scandals, whoring, lechery, assignations, intrigue between men and women, and immoral conduct of persons, or shaU knowingly have in his possession for sale. . .or shall give away such newspaper, pamphlet, magazine or printed matter.

Here is a catalogue of riddles. What is covered, for Instance, by prtUiibition of the publication of scandals? Is the padding of expense accounts by Congressmen a scandal? What is covered by the intriguing phrase intrigue between men and women? A great deal of what is reported in

any newspapera great deal of lifeinvolves intrigue between men and women. Unhappily, a great deal of what goes on in auy city, and of what must be reported in any newspaper commanding the confidence of the public, involves "immiwal conduct.

It is all very well to say. as proponendents of this legislation will no doubt say in great good f?mi, that the McMillan proposal is not aimed at reputable publications but seeks to strike only at disreputable purveyors of pornography. The plain truth is, however, that it affords another example of a current tendency to deal with social illsjuvenile delinquency, for instance by giving the police and the public prosecutors unlimited discretion. This is simply not consonant with a government of laws.

In 1948, the Supreme Court in Winters vs. New York struck down as unconstitutional a New York statute making it a misdemeanor to publish, sell or give away any book, pamphlet, magazine, newspaper or other printed paper devoted to the publication, and principally made up of criminal news, police reports, or accounts of criminal deeds, or pictures, or stories of deeds of bloodshed, lust or crime. . The Court said this was so vague as to violate the First and Fourteenth Amendments. We think the same must be said of the McMillan proposal. The sloppiness of its language is shocking. It is even more shocking that the House should have passed the amendment with a whoop and a holler and not a single dissenting vote, the Senate should stop it.

ttons which are political in nature and therefore unfair. For instance, it seems to be that a sharp political distinction is made when the Committee of One Million (Against the Admission of Communist China to the United Nations) is refused tax exemption whereas such ex-emptton Is granted to the Institute of Pacific Relations.

The Committee o One Million exists to publish educatton-al material In opposition to the admission of Red China into the Unted Nations. Its officers Include a number of distinguished persons.

On the other hand, in 1935, the Commissioner of Internal Revenue revoked the tax-exempt privilege of the Institute of Pacific Relations, after hearings before the Senate Internal Security Subcommittee, for

Communist involvement. On

March 31. 1960. the I P.R.s Ux-exempt i^vilege was restored. This was done perhaps in the Spirit of Camp David. Will the privege be revoked now that Camp David has laid its ghost?

In a word, there seems to be no fixed policy except that the Treasury goes easy on Left

Wing organizations and is tough

on Right Wing organizations or vice versa which is equally unjust. If this view is correct, it means *hat the Treasury is using the tax-exempt privilege as a political weapon to strengthen organizations which a current administration favors or to weaken and even eliminate organizations which are not favored.

A tax - exempt organization ought to be defined as a charitable or educational body which earns no profit and n(me of whose officers and directors (except an executive or administrator) draws a salary or has an expense account. When, for instance, a Foundation consists of a few front names but all its other officers draw salaries, have expense accounts, or in any other way enjoy a monetary profit because of its existence, ttien It requires investigation, Also if money is raised for (me purpose and expended for another, the Foundation *is a fraud. This obviously is happening to a large number of Foundations, the purposes of which are perverted by the hired staff. The front-runner trustees are usually great names busy on a hundred fr(mts and attending to few.

Heretofore every effort by Congress to Investigate Foundations and tax exemptions has failed largely because the very rich and influential Foundations have succeeded in bringing pressure against investigation.

(Continued on page 5)

Mooday, Juna 13, 1960

L,abor Costs effect

By ROGER BABSON BABSON PARK. Mass., Dow-Jones Industrial Stock Average has declined frmx a high of 685 on January 5. 1960 to under 600. from which it Is Just rebounding. Manufacturers are wondering why commodity prices have not broken correspondingly. The main reason is the increased costs of labor. All the basic industries are well organized and producers are timid about cutting wages for fear the union leaders will call strikes.

PRICE STABILITY This over-all price stability does not apply to all commodity quotations. We have seen widespread declines in wholesale prices for foodstuffs: and farmers expect to receive less for 1960 crops.

However, owing to the demand by consumers for small quantities of foodstuffs which they purchase at the supermarkets, retail prices have remained high. It not only costs retailers more to sell smaU items, but the cost o packages and displays is. greater. Supermarkets present a fine show which appeals to consumers, but in reality their prices are n<H as low as Is gex-erally supposed.

SUPPLIES ADEQUATE In most cases, supplies of raw materials are suffieieiit or can be incrwksed rapidly if prices should rise. Thcrcofre, changes in most commodity prices may be downward rather than iq>ward for a while. An analysis of price trends sltould consider foreign demand and supply also. Not only will competition become more severe within this country, but foreign imports are crowding us more and more.

When I was m Europe re-centty, I was astounded at the low prices which are being paid there to labor. Japn does not produce many basic commodltie*, but confine* her exports to manufactured products. Wage.s are very low in Japan. Reports from China vary, but presumably wages there are even lower than in Japan. If I can get a visa. I will visit China and get the facts about Chinas wsges and her exports, which now go largely to Russia.

OUTLOOK FOR COPPER AND OIL Copper production In the U.S. is affected by gradually rising wages: hence the price of copper should be well maintained. Copper producers are, how'-ever, handicapped by the fact that the metgJ has a long life; some of that now being used in the electronics industry ooce existed In ithe form of trolley aires or our grandmothers ketles.

In the case of oil. gasoline, and other petroleum products, there is no such problem: when the^ are used up they are totally consumed. However, the world now faces a surplus of oil. Not only have the Arab States large supplies which they are anxious to sell, but the production of the Sahara Desert must be considered. Prance is very much interested in this Sahara production. President De Gaulle is striving for self-sufficiency in order to regain world status. EXCEPTIONS TO THE ABOVFl The main bullish argument for oil is that Nasser. President of Egypt, ntiay succeed In becoming the sales manager for all the Arab countries and stop them from cutting prices or flvtng special favors.

I have recently made studies on the effect faUout might have on commodity prices in case of World War HI. I asked various authorities whether farmers would be obliged to buy more or less fertilizer to offset the radioactivity which might be absorbed by surface crops.

In case of World War m, our government might not allow the planting of new crops. Milk, beef, and other products from livestock which feed on grass could be severely affected if contaminated by unfavorable fallout winds. I, however, am con-fidentialljr Informed that this contamination could be offset by the free use of water and lime-The price of lime has not varied much in the past three years, but has been around $10 per ton F.O.B. quarry. In short, I believe that downward pressure will continue in most Industrial commodities, especially the metals and oils, and in farm and other commodities where large surpluses exist; but lime may be an exception.

Most Overprophesied Setback

Strength For Today

By EARL L. DOUGLASS THE BEST TIME IS NOW

In seventeenth century Britain, when war had bitterly divided the people, there was built the chapel of Staunton Harold In Leicestershire. The dedication iiisciption is as follows: In the year 1653 when all things were throughout ye nation either demollLsht or profaned. Sir Robert Shirley. Barronet. founded this church: whose singular praise it is to have done the best things in ye worst times and hoped them in the most cal-lamitous.

The Apostle Paul writing to the Romans declares that tribulation worketh stedfastt ne.ss: and stedfastness, ap

provedness; and approvedness, hope: and hope pulteth not to shame; because the love of God

has been shed abroad in our hearts, Sir Robert Shirley was like the great Apostlein the worst times he attempted to do the best of things and hoped them in times most callami-tous.

Certainly the time to do good things would appear to be a season in which people appreciate the value of good things. Why cast pearls before swine? But the Apostle Paul reached preached the gospel in an age when all he got for his troubles were blows, curses, and finally death And Sir Robert Shirley when all things throughout England w'ere either demolished or profaned built a chapel. It remains to this day a temple to the glory of God and a monument to a man who hop(^d fw better things in times most callaraltous.

By ELMER ROESSNER

The recession of 1961 has been called the most overprophesied setback of the century. Certainly, many economists, forecasters and soothsayers are talking about it as If it were as certain as the outcome of the Johannson-Patterson fight.

One investmtnt service is advising subscribers, We think It would be orudent to prepare for a business recession In 1961. Other commentators have, remarked on the failure of the Surging Sixties to start surging.

There are six faults to predictions for a slump in 61:

1. The economy Ls basically sound.

2. Consumer buying is holding up and is showing no sign of future slackening.

3. Personal income is continuing to rise.

4. The gross national product has already topped the half-trilliou-dollar rate.

5. The rise in defense spending

will keep on as long as Russian intranslgience does, adding to both income and national production.

6. Predictions themselves will require the government to have remedies at hand i( a slump starts.

Of course, even with all those assets, there can be minor ups and downs in the last half of this year and into 1961. But the dips cannot be great as long as those six factors prevail.

OTHER FORECASTS

Here are more peeks into the future:

A good auto year. However, it will be irregular. There was a dip in the first three months, but sales rose in April and in May hit the highest mark for that mouth since 1955. June sales seem to be doing even better so far, and orders will probably be good through most of the summer.

However, they will dip in early fall if not in late summer due to the confusion manufacturer*

themselves are stirring up. If leaksd rumors about new cars in the 1961 lines continue to increase as they have in recent w'eeks, many prospects will begin to hold off in late summer to see what these changes amount to.

Bikinis. Orders this spring .show that retailers in almost all sections of the country expect & brisk demand for bikini suits. This Indicates their local public opinicm surveys show tliat the girls want them more than conservative elements want to outlaw them PLASTIC PIPE

Rise In plastic pipe sales. Greater possibilities for hlgh-denslty plastic piping are increasing sales proepects this year. While most uses are Industrial. several manufacturers are working to devtlup plastics that W1 be cheaper and will out-wpar pre.sent metal plumbing.

Less Inflation, Some observers are already predicting deflation . and these have been given color by the drop in in

terest rates. However, *ome inflationary forces are stUl at workthe wage-price apiral for instanceand a moderation of inflaU(Mi seems to be the beat that can be hoped lor for aome time.

OLD PROMOTER WORKING ON MOST. WANTED INVENTION Im working on a projeet that will make a fortuA*, sakl th* Old Promoter oa hi* reekly stop-by today.

No Itiverixnent, we mi. Wait until yc^i lv:*r *il cauttoned. I.m

zippH*. Im tryng to dWviiep le that won't cti-x oi eeec. WM th> t never nemls kvgarif to MAe 1 zip, one from which to# Uo never falls, one that <We> t get off the ttwck or plotih % fiL^h Furthermore, if my aoper should fail, all the user wev.id have to do would be to lip out the defective zipper and lip In 4 new one. '

1! he can come up with a working nnricl, I might invest in It. If I had any money.