Monday, Juna 1*

Monday, June 12, 1961

Freedom Riders Defeat Own Goals

Why Worry About the National Debt?

A lot of sympathy self-styled Freedom Riders may have inspired in the early phases of their campaign is being lost. And oddly enough, the reversal of public opinion is largely due the zealots, own bad tactics.

T^r campaign deteriorated from a testing of state laws to a public relations counsellors nightmare gone wild. They were on sound ground testing state laws; but the evidence grows their planning got out oi hand and no longer represents an organized program but a rallying point for crackpots and publicity-seekers.

One can understand that, in the beginning it was necesary to announce travel schedules in advance, so that When and if their Southern invasion w*as interrupted it would become a point in legal arguments. Thev overlooked something: it was like waving a red cloth in the face of a bull. It not only inspired, but invited an angry and violent reaction. For a little while the Freedom Riders almost wore the mantle of martyrs. Provocation is risky.^

Then a counter-reaction set in. Under protection of hundreds of marshals and Guardsmen and police they rode where and when they pleased. It became almost ludicrous. How could they effectively test state laws with a near-army guarding them and

State Financing Of Local Needs

y LYNN NTSBET NIEDED arUDYPot many yean counties and municipal-Itiee, particularly cities, have feh the burden of providing local fovenunent services to prop-trty which paid no taxes.

A bill aponsored by the N-C. AMOciatloD of County Commis-akmrt and the N.C. League of Mui^palittes. and introduced by Rep. Dave Britt of Robe-eoa, aeeka an ai^iroach to a so-hitkJB of the pn^lem.

' The bill would create a cora-to eCudy the Impact of State aoverelgnty upon financing of local fovemment services of functtoae. Three members would be named by the President of the Senate from that bo^; tinee from the House named by the Speaker, and three from the state at large named by the Governor. The commission is required to study the whole problem, and report with recommendations to the Governor not later than December 1, 19P2, for transmittal to the next General Assembly.

SERIOUS PROBLEM Every Incorporated town has to deal with this problem to some degree, because all oi them have churches.,, schools, hospitals or other facilities which require services but pay no taxes.

The situation is especially acute and serious in Chapel HU and Raleigh. The University at Chapel Hill perhaps controls larger share of property inside the corporate limits of the town than is true anywhere else. But in return the University-owned public utilities electric power, telephone, water and hotel serve the entire community at perhaps less cost than private enterprise could do the Job-Every city in which a large State institution is located has to deal with the problem of equitable conflwnsation for services rendered.

RALEIOH-rThe City of Raleigh benefits more than any other from concentration of State government facilities. At the aaroe time, the City of Raleigh is more heavily penalized in providing servicea to the non-paying State agencies.

One can stand at the head of Fi^etteville street on the south aide of cai^tol square and look north, east and west, and see upwards o fty million dollars worth of property which pays joot one cent of taxes. In front Is the captol Itself, and partially visible through the trees the old YMCA and adjacent buildings. now owned by the State; the Agriculture and Insurance-Labor buildings. On the immediate right is the Justice building and Just beyond the High

way and Art Museum buildings occupjring almost a whole block. Turning leftward and looking west there is the Library building and just across the street the Revenue building. Interspersed among these State owned buildings are First Baptist Church (Negro), Christ Church Episcopal. First Presbyterian znd First Baptist. Not quite In sight but in close proximity are ftve other large churches. Raleigh perhaps has no more church and noh-State college property than ottier cities of comparable size, but it has as much.

The Capitol Square area represents only a small part of all State owned property within the corporate limits of the City of Raleigh. The Governors Mansion and the Old Mansion Park hotel, the health and employment security buildings and others added up to many millions.

State College and Dorothea Dix Hospital Campuses with multi-million dollars in buildings lie almost wholly inside the city limits, require police, fire and sanitary servicesbut pay no direct taxes.

WORTH ITIt is quite obvious to citizens of Raleigh and throughout the state that these government facilities are worth all they cost to local taxpayers. Government is still the chief industry at Raleigh, despite the industrial growth of the past few years- The government payroll sustains the business life of the community. To take State government away from Raleigh would have comparable effect as taking Haynes and Reynolds industries away from Winston-Salem.

There remains, however, a serious question in equitable distribution of the government service load. Should the other property owners in Raleigh pay for more adequate fire protection and sanitary services for State buildings than they can get for their own premises? Should the resident on a back street, who is willing to pay a fair share of paving costs, have his tax money for city-paid paving diverted to streets fronting State - owned property?

These art questions which need answering, and the answers cannot be given on basis of casual surface information, Thorough study of the problem is overdue, and is provided for in the Britt bill.

The study might develop a more snsible approach to the whgle problem of tax exemption for churches, hospitals and schools. There are many inequities now, and there is no general or comprehensive formula for taxation among the counties.

escorting them wherever they would go? So much protection was embarrassing. Too, there could be no more violent demonstrations which brought great, black headlines North, Sputh, East and West.

I But those same headlines and televised scenes inspired other hot-heads to seek a share in the readymade publicity mill, and the original purposes of the campaign fell by the wayside. Dozens of jumpers on the Freedom Riders* bandwagon have been since arrested for breach of the peace.

On at least two recent occasions, the executive secretary of the National Association for the Advancement of Colored People, has indirectly rebuked the Freedom Riders. Once when he reminded it served no purpose to simply be put in jail; and later, on saying that while testing and challenging are necessary, but affirmative action by judicial, legislative and executive means is indispensable.**

Too, responsible sources have suggested It was no acddent that the Riders* cambaign was planned immediately prior to the Vienna meeting between President Kennedy and Premier Khrushchev.

A churchman, the Monsignor Patrick J. Malloy, of St. Louis . . . founder of an interracial group there ... observes You dont diminish racial ten-.sion by increasing it, and that is what the Freedom Riders are doing.*'

It is held by many that eventually the forces opposing segregation are going to prevail, despite the handicap of Freedom Riders, etc. The Washington (N.C.) Daily News opines that Today more and more young people of the South ^ are re-examining the moral side of the issue, and whether we like it or not, these young people are coming up with answers somewhat different from those held by the fathers. The present generation in the South will continue to resist, to be uncompromising, and to look upon freedom in terms of the definition by which they have been reared.* ^

All of which is quite probably true But deliver us from those who would incite mobs, raise new tensions, hatreds and provocations. They are no assets to the country at large nor to any segment thereof.

^ THe Neveik

rPAV IT.BACK-We CAM vlU^T KEEP EHOUOa td Kggp UP V4ITH THE IKCC^A^HIS iWERE^T PAVMEWT^/

vr"

y

DIDN'T THEY

4i^l^Fo^al

F6ETHAT

KiNb or

BMANCINd

By GEORGE SOKOLSKY

Probable, Not Possible

r

Fhey Will Avoid, .osing Revenues

The Daily Reflector

INCORPORATED

Published Every Afternoon Except Sunday Established 1882 DAVID JULIAN WHICHARD, Publisher

At IPpet Office. OrAenvUle. N. C.. aa Mcoad dAM

mAtter.

SUBSCRIPTION RATES By Carrier (In Towne) Week 30c

By Carrier (Motor Routes) Week 35c

BY MAIL, Payable In Advance Oreenvlllt Post Office, Pitt County, Roberaonvllle, VAneebori WeshinstOD and Chocowlnlty

Three Months ............................ I I.Tt

Six Months ...... TaO

One Teat ................................... IS.Ot

North Carolina (other than listed above)

Three M(ths ........................... |

Six Months .................................. t.lO

One Year ................................... 14.00

All Other Outside North Ceroltna

Three Months .............................. 4J0

Six Months .................................. 8.00

One Year .................................... 15.00

MEMBER ASSOCIATED PRESS Tha Associated Frees Is exclusively entitled to use for publication all news dispatch credited to It or not otherwise credited to this paper and also the* local news published herein Ail rights of publleatloD of special dispatches here are also reserved.

^ NATIONAL ADl'EBTISINO REPRESENTATIVES Thomas P. Clark Co., Inc., New Chicago, Atlanta. Member

Audit Bureau of Ctrcnlatloa.

All advertlflns copy must be revived at least one day before pubUcatKHi date.

By RALPH ROBEY

There will be a tax bill passed by this session of the Congress. This can be stated dogmatically because in the absence of such action the corporation tax of 52 percent would decline and various excises, such as those on alcoholic beverages, tobacco, and so forth, also would drop to a lower level. Neither the Administration nor the leaders in the Congress are willing to permit such a reduction of revenues to take place. But the program which President Kennedy submitted a few weeks ago does not have a chance of enactment, either now or later.

All legislation having to do with taxes has to (Jriginate in the House Ways and Means Coti-mittee. This committee has been holding elaborate hearings on the Kennedy program and. aside from Administration spokesmen, the opposition has been almost unanimous.

The Presidents suggestions, it will be recalled, fell basicaJly into two parts. On the one side was a recommendation designed to get business to increase its investment in plaht and equipment. It was a most complicated formula that was offered and business spokesmen have made it clear that they want no part of it. What is wanted, and what is badly needed, are more liberal depreciation laws. The Presidents plan made no change whatever In the rate at which defgeciation may be charged off, but rather offered a credit based upon the extent by which investment in capital equipment with a life of at least six years exceeded a company depreciation allowance under existing laws-

This tax credit plan was estimated to reduce government revenues by $1.7 billion, and the second part of the Kennedy program consisted of various means for recouping this anticipated reduction. Almost none of these make any practical sense. For example, it was proposed that the deductibility of expenses for entertainment, travel, gifts, and so forth by business be limited by law. In the case of gifts, it was suggested that a maximum of $10 be established; and $30 a day W'as proposed a.s the limit for expenses while traveling and this would include entertainment.

Now there is no doubt- that some business men Uve handsomely. and some even lavishly, on expense accounts and money is spent for activities which have no visible or real relation to their making a living and no one approves of thus. But the proper way to handle such excessive spending

is by more strict auditing of tax refbms. Under present laws' the Internal Revenue Service has the authority to disallow anything which in its Judgment is improper, and this decision can be upset only by court action. Further, a limitation of $30 a day or any other amount, is completely unrealistic because of the difference in prices from one section of the country to another. What would be reasonable in, say. New York, would be excessive in a small town, and what might be excessive In a small town would be quite inadequate in one of our large ditl.

Another example of superficial reasoning is the reccmimenda-tion on dividend income. We have an estimated fifteen million holders of stock in the United States and presumably almost all of them get a dividend. Under the present law each dividend recipient is freed from any tax on the first $50 of such income, and he is permitted to reduce his tax by 4 percent of any dividends over this amount. Kennedy proposed that all such dividend credits be eliminated.

In the hearings there was widespread support for the Her-long-Baker bill. This is the only complete tax rate reform measure before the Congress. It is a five year program and would reduce the income tax of lUl persons by not less than one (Juarter, would gradually lower the corporate tax, would revise the present system of handling depreciation, and so forth. The country would be much better served if the Congress would forget the Kennedy program and enact the Herlong-Baker bill.

Ooinions

In Brief

'Security against foreign danger Is one of the primitive objects of civil society. It Is an avowed and essential object of the American Union.-Barnes Madison.

Copyright. 1961, King Feature Syndicate. Inc.

It 1 clear from President Kennedys ^>eech and from the ccmtinued fighting in Laos that whatever President Kennedy and Chairman Khrushchev said to each other was introductory. Neither side had prepared itself for decision and no decisions were reached. Our President recognizes the continuing dangers that this country faces in the presence of world Com-n^unism. It is impossible not to be realistic. The most comforting statement that he made concerning his visit with Khrushchev in Vienna is contained in these carefully chosen words:

I win tell you now that it was a very sober two days. There was no discourtesy, no loss of tempers, no threats or

ultimatums by either sida. No advantage or concession was either gained or given. No major decision was either planned or taken. No spectacular ^ogress was either achieved or pretended.

Further, the President said:

No new aims 'were stated in private that have not been stated in public on either side. The gKp between us was not, in. such a short period, materially reduced, but at least the channels of communications were opened more fully.

The essence of our difficulties with Soviet Russia is that neither pe<H)le understand the other. To Soviet Russia, our materialistic capitallmi is without his-torlc meaning at the present time: to us. their atheistic materialism is without human

Other E(ditors Saying Patriotism Isnt Deac.

Tlie truth is that blue laws are a combination of religious, economic and traditional influ-ence.s varying from state to state.

. We happen to believe society may be better served by a law that provide for a day ot rest than by an absence of regulation that allows, even encourages, business to go full tilt seven days a week.The Charlotte News.

(Rocky Mount Telefnom)

In a day when materialism is the criterion of success it is refreshing to hear about the two Seattle businessmen who turned down a chance to make a business deal worth $500,000 to them because they put the Interests of their country before personal gain. Patriotism, a word much reviled and Jeered in recent years by the sophisticated set. apparently is still alive.

The two men in Seattle had recently developed a lumber-sorting machine. They refused to sell it to the Soviet Union. The machine would have enabled the Russians to build the largest and most highly automated sawmill in the world. Their decision is keeping both mens telephone lines hot with thankk-yous from many other patriotic citizens they dont know at all.

The decision took some soul-aearching, because it meant turning down a possible half-million dollars worth of business. But the two men, Gordon D. Anderson and M. E. Hillman, feel that we are in a hot economic war and that to send this equipment to Russia would be giving one m(MT tool to our enemy.

The gadget represents the solution to the last big problem m the automation of sawmills. Thus, the importance of this deal can be appreciated. What was the core of their refusal? Very simple, according to Hillman. who reasoned thusly:

"The USSR has avowed un-numerable times the ultimate destruction of our democracy either by all-out war or by economic warfare. Daily throughout

the world in a relentless, predictable program we see Russia slowly but surely achieving that goal.

The one advantage we In North America have over the Communist bloc is our production know-how and it was that single ability more than any one factor which brought about victory in World War I and World War II. and at the moment still ensures our victory in world war III.

To knowlingly give away even the tiniest proportion of that production superiority represented by the excellence of the sys-tm we developed would reiwe-sent to us the admission of ^he Inevitability of world domination by communism. To this we-W1 never admit.

Recently a business representative was in Moscow where he was told Russia couldn't train enough technicians in the next 20 years to achieve building of the tremendous lumber mill. But purchase of this equipment in North America or use of Yankee know-how would close the gap from 20 years to two years. Who wants to give them that mucn advantage?

It is high time the West stop supplying the Russians with the needs they cannot supply iheirr selve. Until the day when they are wUllng to provide the rest of the world with the space data, gained in recent space tests together with advances theyve made in the nuclear field, then we should consider it fair to tell the Russians to solve their own technical and industrial problems.

meaning. What we call faith, they call superstition: what we call democracy, they call monopoly. Marxism is not only a complex of new ideas but a distortion of old ones. For the first time, an American President stated the enormous differences between the Western and Communist mind in precise and accurate terminology;

For the facts of the matter are that the Soviets and ourselves gWe wholly different meiinings to the same words; war, peace, democracy and popular will. We have wholly dif-irent views of right and wrong, or what is an internal affair and what Is aggression. And above all, we have wholly different concepts of where the world is and where it is going.

Furthw President Kennedy said;

We believe in a system of national Ireedona and independence. He (Khrushchev) believes in an expanding and dynamic concept of world Communism.

And therijuestion was whetti-er these two systems can ever hope to live in peace without permitting any loss of security or any denial of V^e hreedom of our fiiends.*

Ultimately the conversation between Kennedy and Khrushchev came down to a conflict of threats, gently given on an historical basis in most polite terminology. Khrushchev believes in the eventual and inevitable triumph of Communism. He believes that nothing can stop the advance of Communism and that he does not' need wars as an aid. He believes that all the new nations of the Earth will be Communistic. On the other hand, Kennedy take the position;

Yet all this does not mean that our nation and the West and the free world can only sit by. On the contrary, we have an historic opportunity to help these countries build their societies until they are so strong and iM-oadly based that only an outside invasion could topple them. And that threat, we know, can be stopped.

We can train and equip their forces to resist Communist-sup-y-plied insurrections. We can help^ develop the industrial and agricultural base on which new living standard can be built.

We can encourage better administration and better education, and Jietter tax and land distribution, and a better life for the people.

All this and more we can do because we have the talent ind the resource, to do It if w would only use and share them

Let us face this speech frankly, it is a warning to the Amer-(Continued on page six)

itility Stocks ! Review y

By ROGER BABMW BAB80N PARK, Mas. At* one time riectric light and_pow-er stocks wwe as electronic stoeks are ttx^y. The favorite was Kieetric B<md & Share, which shot way w 1 the stock-market bobm of MOO and then plummeted down to practkally nothing. There so many almar cases that President Franklin Rooeevelt had Congreas pass Iwlslatt to take the water out of thece stocks and diaeolve electric utility holdtng eompaniM.

WHY lECURrnES Ah ) EXCHANGE C<OIHWiOK It was at this time that the Securitiet k E^hange Cooomls-Sion was formed, with ProMdent Kennedys father as Chainnan. And it was as a result ol this housecleaning that Electric Bond k Share <h*oppW almost out of sight! In laot. instead o a stock <vidend there wax a reverse apMt -which forced itock owners aharehcidlnM virtually out of esristenee. 1 fear that the present exsggerated

orace ovar eleetronloa may later run into ataftUar trosSries fcH* some of the companies.

Electric Ught and power stocks have since become both safe and popular. This km been due tb the growth in population and also to the numerous new uses for electric*^ in every' home, store, and fastory. Furthermore, such public plants as -the Tennessee Valley Authority s and the setni-pubclir owned plants of the Northwest have served to keep rates Rom becoming too high and hsoee retarding growth. Electric rates are the lowest M history and consumiJtion per family baa increased 8 tlaaea. I behwre that_ much more growth is ahead with the greatly expaixied use of eieo-tricity fqr heating and air aondl-tionlng. ' )

FIRST MORTGAGE

_ AND PREFERREDS The safest electric utility securities for the small or large investor to buy today are the first mortgage booda of an electric Ught and power company. Your local baidc will be giad to

select such a bond for you. Otherwise. purchase Rom your broker such a bond issued by the comi>any wMch sends you your bin each month! You should then get a yield of about percent. You must, of course, pay regular taxes on the income from the bonds and for other securities of an electric company (with a lew exceptions).

In addition to the bonds, moet electric compaxea issue both preferred and common stock. The prefrired s4oek carries a fixed dividend, if earned, which ' usually yields over I pereent. Be sure Hiat any preferred which you buy is cumulative and. if possible. noBrcallable.* A cumulative stock means that if the dividend is not paid in y year, it must later be made up and surely paid belcurs the common stockholders get a penny. Non-cellable noeans ttat the ' commmy camiot call in Hm stock and pay you off for Jt if money , rates ge down. A eaBsWe preferred is a case heads or tailsRlth the odds ii^ favor of the company, H tim ftock is callable aiul nooney rates go down, the company pays you off; but if money rates go up, the company leaves you holding the bag, so to speak. (Xh-er tMngs being equal, you can buy the ix'eferred of your local compaiy.

ELECTRIC UTILITT COMMON 0TOC1S If you V young and patteat, the beet iBveetsnent may bt In tlie common sSoek of your elec-^ trie powo* eo^>any. This has no ^ fixed or cmncdative dividend; but you ske eotttled to all the eamhigs (less proper reserves) after tiie fixed interest is paid oa the bonds and the accumulated interest is psdd on the preferred stock. Such common stocks are growth stocks. They do not yield much ino< wtmn you buy th^; but the Ineome should increase every year wtth the growth of the population and the prosperity of the ootmtry.

There is an aaception to all rulas, and it may now bt too early to sail and take your profits on dectrooie stocks and reinvest in electric power stocks.! Much depends upon the interna- ' tional situation. Ths chief pres-' ent customer et the eieotronic ccHnpanies is theU.S. Government. Electronic devices are an Important part of evwy mlaoBe.

(Contimied on page six)

6 Minutes; Half-Million Dollars

Strength For Today

By EARL L. DOUGLASS QUESTIONS Children sometimes annoy us by the Insistence and persistence with which they ask questions. They keep a barrage of questions directed towaid us all the time. We may, indeed, grow impatient. But we must remember that they/ are encountering for the first Urne situations to which we have long become accustomed. They must know about these things. They learn by asking questions.

This, of course, Is a truism everybody realizes this. But so often we find it hard to enter enthusiastically with the child Into this enterprise of discovery.

Let us remember that it is the naUon or the race Intent on asking questions which makes discoveries and ge.ts ahead in the world.

Columbus wanted to know what was beyond the horizon. Astronomers search the skies with their telescopes. They want to know. They have questions in their minds. In thousands of laboratories today men are working hard on experiments, and in the back of their minds are questions.

There may be some questions which will never be answered. Perhaps they do not need to be answered. But we can be sure that all the questions which need to be answered will be answered.

Our great international questions w'lU be answered if we keep on asking them hard enough. Our spiritual questions wiU be answered not perhaps the way we reque.st that they be answered, but answered after Cods iashioa.

By ELMER ROESSNER

If it takes you six minutes to read this column (some people throw the paper away without ever looking at it', during that time Americans will pay half a million dollars In interest charges.

Figures compiled by the Department of Commerce show that at the end of 1950, the total net public and private debt was $882.9 billion. TTie net figure does not Include money owed by one government agency to another. or money owed by subsidiaries to corporations.

In actuality, the total Is probably even greater, because the government figures cannot include money owed among faml-illes, debts among indlvld-uaLs and unincorporated enterprises. including ambulatory loan sharks.

TWO ASSUMPTIONS

But a.ssumlng the figure Is correct, lets assume that this Indebtedness is drawing 5 percent interest * year. The average is

probably higher. Federal state and local governments usually borrow for less. So do prime businesses, which could borrow at less than 3 pe?cent ,at the start of the year. Rate.s on mortgages. farm loans and small biLsiness borrowings are 5* percent or higher. And interest on consumer indebtedness ranges up to 24 percent.

If the total is 5 percent, then this indebtedness means the transfer from borrowers, including governments, to lenders of $44.145.000.000 a year. That.a $120,943.000 a day. or a little, more than $5,000.000 an hour, day and night.

That come to about $500,-000 every six minutes. Your own arithmetic can tell you how much changes hands every time you sigh. . .

.BIG CHUNK PER PERSON

The Census Bureau estimates there were 182,018,000 Americans in January, this year. That works out 1o i $4.301 share of governmental and private debt

for each man, woman and chd.

And every person who does not owe on any mortgages, promissory notes or Instalment c-ccAints, still owes a $1,558 share of Federal, state and local government debts. That goes for Carolina Kennedy, too.

Here is how the debt is divld- ed. in billions of dollars; Federal government and

agencies ................ 241.0

State Sc local governments 60 00

Total public debt 301.0

Corporations ............. 295.0

Residential mortgages (1-4

fmily urban) .......... 134.7

Con.sumer ................ 56.0

Bu-'ilness and farm........ 96.1

Total private ......... 581.9

The figures do not add to $882.9 billion because of rounding.

Totals in each of the above elassiilcaUona except one were substantially higher than for the end of 1959, The exception (prepare for a .surprise! > w a.s the Federal indebtedness. which was $243.2 billion a year ear

lier. However, the Fedsral tn-debtedness was I2M.7 UlMoa at the end o 1998, showing a net rise of $8 bdUon in two jrtops.

LABOR, MANAGEMENT

.UNITE ON TAX PLAN

One of the curious coosmbmao-es of the Administrattons proposals to limit tox-deduottbls entertainment expenses is the united front developed by oertaia unions and their eos^oytrs.

Unions of cabaret, luxvy restaurants, sports and entertainment Industry employees ore joining to pressure Congressmen to oppose the proposals.

However, J. S. Seidmoa, oo-countant. tax authority and angel of many Broadway shows, has come out strongly for the change He said it will be go# olth

finest things ever to liappen to the theater. . .Then the Hteater will go back to the peblle. The public despairs about gcttjag good .seats for hit shows because so often the seats are gobbled up at premium prices by oare-frec, tax-deductible spendlag.

c