Monday, December 11, 1961

Chance For Personal SaleWanship

' Peace Lovhig

President Kennedys visit to South America next would have been great had it been determined that week will afford the Chief Executive an opportunity anti-U.S. feeling in Venezuela and Colombia was too to do some personal selling on his program of stronger high to permit a visit by the President. The visits inter^merican relationships, and it will likewise af- will, mark another important step by the Kennedy ford the communists a golden opportunity tojcreate administration in carrying out his inauguration promise the impression that the United States is hated by its that closer relationships would be built between the South American neighbors. nations of this hemisphere. It will be another indica-

On the strength of reports by top officials of tion of the sincere desire of the United States to assist Colombia and Venezuela, plus on-the-spot reports by its hemispheric neighbors as partners in the develop-members of his own staff, President Kennedy had ment of all of the American nations.

decided the proposed trip does not offer more than

the normal amount of danger to him personally or to 1yiCll!lV C^OHlDOTlfirilS CO the prestige of this nation. Anti-Kennedy demonstra- ^

prestige of this nation. Anti-Kennedy tions in Caracas have been dismissed as the work of a small group and not representative of the feeling of any appreciable number of Venezuelans. Colombian officials have asserted that citizens of that country regard Mr. Kennedy as a true friend of their country.

Into Quality Education

Better staffs and morale, improved libraries, reduced class size, more supervisory staff, more instruc-

In spite of these optimistic reports, it should be tional supplies, better guidance for students, more assumed that the communists and pro-Castro groups special education courses for the handicapped, more will do everything in their power to make the Presi- college preparatory and vocational courses . . . dents visit to Caracas and Bogata embarrassing both more serious study by students.

for the President and for the officials *of those two Higher quality education in our public schools is

countries. If they can succeed, it will be a major propa- made of such things. And significantly for the people ganda achievement that will be used by the commu- of North Carolina a survey of school superintendents nists in other. Latin American countries in an effort indicates that new funds flowing into the public school to*drive a wedge between the nations of this hemis- system of the state has brought about such things in phere. the first months of the quality education program.

All things considered, however, it is a risk the The real impact of such elements cannot be meas-

President of the United States must take. Certainly ured with accuracy in a few months. It will take years

the propaganda material furnished the communists

Contir|uity Anc.

!jiighway Work

By LYNN NISBET

LOST MOTION Chalrmah Merrill Evana told the highway commiaaion at ita monthly meeting here Thuraday that it ia not bound at all by any plana or program adopted by the State high-way;_^commiaaion laat year. And the commiaalon ' decided that come January it will take a careful look at the long range planning ' announced with auch gusto Just a few months ago.

The difference between this attitude and that manifested by the highway commiaalon when it was composed of different people is in degree rather than In kind. Thla ia the most candid

and frank announcement yet heard that In opinion of the highway commissioners each administration la independent and that the concept of continuity and stability in government does not apply to highways.

It is recalled that the commission which was named by Governor Scott devoted major attention to county and

secondary roads, but It had

some long'range plana for primary highway development. Then Governor Umstead appointed different men. but ostensibly to the same Jobs, and they did not like the Scott group program. So the Umstead commission spent some $40,000 to have a big New York engineering firm work out a detailed program for constructing and financing a system of primary highways.

Just about the time that report was complete, Governor Umstead died and Luther Hodges succeeded to the governorship. Governor Hodges did not

from 14 to seven. Sanford went the other direction and increased it to 19. This enlarged commission took office on July 1 this year. It went right to work on problems, inherited and new, and sought to speed up construction. Of course most of the construction work let to contract so far was projected before July, but there are enough new projects ready to use up all the available money as fast as it comes in.

While the plans of the former membership had to be adopted at first, there apparently is no desire to follow them much further. Chairman Evans is quoted by a newsman who was present as saying: You are not bound one iota by what the former commission did. . .nobody has bound you and they cant bind you. Its wide open

For the same reasons the present membership of the commission cannot bind their successors. Therefore, no plans .should be made looking more than years ahead.

CONTINUITY-North Carolinians have boasted for years about the stability and soundness of their State government, and have attributed a goodly part of that condition to continuity in policy. Governors have come and gone, each with his own special program for emphasis, but each in turn recognizing what his predecessors had done. Personnel in both elective and appointive executive offices changed from year to year, but regardless of persons there was feeling of security because the agency or the department carried on. There

for the full force of such improvementa to fully reflect themselves in improved educational opportunities offered the youngsters of North Carolina. But if school superintendents throughout the state are correct in their evaluation of what the new educational program has meant in the past few months, we may be sure that North Carolinas public schools will show marked improvements in the next few years.

No Tar Heel expected the quality education program to produce miracles in our public schools in a short period of time. Most agree that the program ia By GEORGE SOKOLSKY one of long range improvement which will take years to reach the desired level of quality in our public schools, The very fact that the new programand the new'funds which make it possibleare providing our schools with such basic elements of improved education as those cited by the superintendents leaves little doubt that the state is moving on the right road.

McKMofat Sffwfioftta, IM.

She

Sneaks

J: earlessly

Copyright, 1961, King Features Syndicate, Inc.

Opening an address at Wilson

The improvements will repayNorth Carolinians many College, Clare Booth Luce said:

time.! over in the years to come for the additional investment they are making in public school operations of their state.

?rice

Of Silver

Naturally Rises

Immediately change the person- _^as some assurance of perma-nel of the highway commissions^ nence in the budget bureau, the but he let it be know he diiflrt revenue department, the board

think much of the Brinkerhoff planand $40,000 worth of work was consigned to the Junk heap.

MORE PLANSAfter Governor Hodges was elected in his own right ho completely revamped the highway set-up, including the size, composition and functions of the commission. Planning was even more emphasized and policy was not to build any road without a long range plan. After nearly three years the Hodges commission produced a master 15-year plan, a comprehensive program that listed construction needs and established priorities going through 1%5. The Governor and his commissioners were very proud of this plan. Machinery of the highway department was geared to put It Into effect.

DISCARDED Then came Governor Sanford and his enlarged commission. Hodges had reduced the number of members

of health, the department of agriculture or public instruction or what have you, even including the highway commission.

Perhaps the highway commission has experienced more complete and serious turnovers in personnel, and more futility in attempting the long range plan-nUig which every commission has insisted was essential, but with all that there has been a feeling that despite changes in members the highway commission was a continuing agency.

Actions of the cogAmission through several different memberships have tended to discount that belief, but the present membership has made it clearer than any of its predecessors that it feels no obligation or responsibility to commitments ipade by a former commission and that the field is wide open for new plans. Subject, evidently, to a three-year limitation.

The Da3y Reflector

INCORPORATED

Published Every Aftemuon Except Sundmj BaUbliflhed 1882 DAVID JUUAN WHICHARD, Publifher

entered at Post Offloa, OraanvUla. N O.. as saeood ciaos maf matter.

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All adrertuins copf must be raoctred al least one day oefure

By RALPH ROBEY

It is a dramatic and important action that President Kenr nedy has Just taken in connection with sliver. Back of it is a rather amazing hisrtory.

Silver always has been a part of our monetary system. At first it was on a par with gold, under a bimetallic standard. That did not work and gradually silver was reduced to a subsidiary position. This was done through reducing the content .of silver coins to the point where it was no longer possible to get as much for the metaJ In the market as the face amount of the coins. For example, silver has to sell for $1.29 an ounce in order to get a dollar for the metal in a silver dollar, and for other silver coins the discrepancy is even larger.

These changes, of course, created great political turmoil and the silver producers were outraged. Through the years the Congress has been attentive to the c<nplalnt& and pressures of the silver interests and at various times has passed legislation Instructing the U. 8. TYea-sury to buy silver. One of these acts was in 1934 and since then the government has been buying our domestic production of silver. The purchase price start-> ed at a little under 65 cents an ounce and was gradually increased to 90.5 cents in 1939, It has been held at this last

price since that date.

We currently have sligbUy under $500 million In silver dollars. and a bit over $1.6 bil

lion in half dollars, quarters and dime.s. The one- and two-dollar paper bills are all silver certificates. The total of these is

about $1.5 billion. There are also some five- and ten-dollar silver certificates, but more than nine out of ten bills of this

size are Federal Reserve notes. All silver certificates are backed doUar-for-doUar by sliver metal. The difference between what is required for this backing and the total owned by the government is called free silver. The peak of such free silver was in 1959 at 222 million ounces. It ia now under 25 million ounces.

This reduction in our holding of free silver reflection of the fact that consumption of the metal Is now running above production. The price in the open market, however, has been held to about 91.5 cents by the U S. Treasurys selling policy. Quite understandably that has been an

noying to silver {gXKlucers, and for many months they have been trying to get the Treasury to stop pulling down its reserve and permit the free market to operate. It was tbelr contention that this would result in a higher silver price and this would lead to greater production.

Under the date of Nov. 22, President Kennedy directed the Secretary of the Treasury to suspend further sales of free silver. He thus took the action requested by the silver interests, but he also went further. He announced that he would request the next session of the Congress to permit the Federal Reserve banks to include one- and two-dollar bills in their paper issue, and the five- and' ten-dollar silver certificates will be gradually retired. The sum total of this action, granting the Congress goes along with the Presidents request, will in effect provide for the eventual demonetization of silver except for its use in subsidiary coinage.'

The immediate response to the Presidents order was a spurt in the price of silver to around one dollar an ounce, and the price of the securities of the few silver producing companies we have In this country was bid up on the New York Stock Ex-^ change. This was a normal re-' action and means little for the long run, although the price of silver probably will remain above 95 cents an ounce and production will Increase.

Ultimately this may cause the price of silver articles to rise a little, but the increase will be insignificant.

Today the two strongest nations in the world are drawn up in full battle su'ray, facing one another across half the world. Their bombs testing in air, their rockets* red glare, seem' proof to the world that war may be near.

It is not only the Great Powers that shoot at each other, but the little, new states, even parts of states like Katanga, fight for what they believe is freedom. The world is at war not oply one country with another but each country within itself. Mrs. Luce states the American Caise brilliantly: Morality In respect of force consisted in not striking the first military blow. Conversely, any nation who struck the first

military blow against America, ipso facto establi^ied its own immorality.

Consequently, the only mwal casus bellum, or cause of war, which the Public Will has fully supported is the initiation of war on the United States. For almost a century,' statesmanship has been constrained, diplomacy has been confined, and patriotism itself has been defined, by the moral necessity of waiting for Pearl Harbors.

But we are no longer living in a moral world. Perhaps the most significant achievement o the middle of the 20th Century was the overthrow of morality, the renunciation of M<X'aJ Law and the acceptance again of the rule of the Jungle, namely, that he is right who has the will to declare himself to be right and to impose that will upon the Earth. Soviet Russia gathers

Other Editors Saying...

Bring On The Evidence

Fight TB

(Greensboro Daily News)

As Sen. J. Strom Thurmonds shrill campaign in behalf of military wisdom gathers intensity it seems to gather a very high degree of abstraction. There is no body, there are no specifics in his declamations.

At Santa Monica, Calif-, the senator all but suggested that

Secretary of Defense McNamara is llrniting the license of gener-ils "ahd admirals to make political speeches because of a vague decision taken some months ago in Russia. It Is a

serious charge, indeed a vio

lently slanderous charge. But Senator Thurmond provides no documentation.

Latfer in the week. Senator

Thurmond charged that the U. S. State Department has prepared a paper for the turning over of our nuclear weapons to the U. N.a palpably absurd charge, in the unqualified terms In which he made it. Again, he withheld documentation: and

when asked, to get specific all the senator would say was no comment.

The senator from South Carolina. whose passion has now shifted from the wisdom of the Southern secessionists to the wisdom of men in brass hats, is playing essentially the same game Sen. Joseph' McCarthy played so successfully until he finally bored the American people Into their senses. .

But there is a difference. Senator McCarthy, In his casual way, played a numbers game he made a fetish of documents. He would brandish a piece of paperas he did in his famous opening salvo at Wheeling, W. V., in 1950and claim that he had the names of (what was It,

258? or 272? or 58?) Communists still on the State Department payroll.

Senator Thurmond makes charges with the same wild abandon, but his charges are so airy, so generalized, ao unspecific as to defy the very idea that there ever was a document, a provable fact, a specific In-.stance, or a subtlety. Take the matter of subtlety: At Memphis, this^ week. Senator Thurmond declared that.the government must quit gagging the military and let these dedicated men tell us about the dangers of Communism. which Is as if he had said. President Kennedy must quit spanking Caroline and let her ride her tricycle when she wants to. It is in the when are you going to stop beating your wife? category.

Now of course, politicians of all stripes of importance and responsibility find abstractions traditionally convenient. Has there ever been a Democrat who did not, at some time, suggest that the Republicans are the captives of big business? Correspondingly, has there 'ever beena Republican who did not suggest, with equal vagueness, that the Democrats ..arc in the sinister grip of Walter Reuther and big labor?

It is all harmless enough, well within the countrys political traditions. But when a . S. senatora man privileged to sit in the forum of John Quincy Adams, Henry Clay. Daniel Webster and John C. Calhounflapa about the country preaching the disloyalty or downright stupidity of the State and Defense Departments, it is time someone asked him to show some proof.

Where is it?

hOW' 1 o

V

V *

"nvest 5 In. Stock

By ROGER BABSON

BABSON PARK, Mass.. Almost every one of my readers has at least one share of common stock, and most of you are Interested in many more shares. Unfortunately, few people realize that there are three very important factors Involved in the purchsse or holding of common stocks.

ASSET VALUE

The first factor (but not the most important) is asset value. To ascertain this, you take the value of the assets from the statement which is sent to stockholders and deduct the total of liabilities (except for the com-* mon stock). The difference is the net asset value of the company. Next, divide this figure by the number of common shares outstanding. This will give you the i\et asset value per

When you cdmpare this asset value figure Just obtained with the price your stock is selling for now, and with the price you paid for It, you will probably be surprised. Over a period of years, the ratio of net asset value to the seUing price may average out fairly well, depending upon the industry. The more popular the Industry or the company, the higher.the price will average in relation to net asset value per share. Today, however, most stocks are selling considerably above their set value. Readers who have a goodly number of shares of the common stock of any company should make the above computation.

the forces of strength and power from its doctrine of historic inevitability.

Against that, the President has to establish a renekred moral conc^ among the American people. Already he has spoken of physical fitness, but to be truly cffe<^ve, he must become a moral leader. He must be a high priest of principle. He must be one who not only serves but who leads.

Clare Luce put tt this way:

Let me give you an elegant historical example of wise American statesmanship: the

proclamation of the Monroe Doctrine on December 2nd, 1823. This was a clearly stated political and diplomatic warning to all the nations of the world that the United States would rapidly raise armies to fight any nation which, fw any reason good or bad. sought any conquest in this hemisphere. We said, in effect, that we would not wait until a conflict situation, involving a European power, developed in South America to determine whether our interests were affected. And we certainly would not wait until we ourselves were hit. We would, on the contrary, act at the first sign of European aggresion in our hemisphere.

This ia precisely what our President faces. Dares he to say that no Communist state will be established on the American continent and that if any European or Asiatic power attempts to establish such a state, we will' fight?

The leader among ns who will have the courage to meet this issue straight-forward and without fear will not only be re-, spected by loved by our people who hate war but do not fear death.

Again Mrs. Luce warns the, enemy:

Our attitude in 1945 that it was immoral to alert the Russians to the fact that we might strike first unless a real peace could be negotiated, our long refusal even to warn an avowed enemy, an enemy whose Intentions to bury us and the free world has been clear from the beginning, had paralyzed our diplomacy, saw 600 millions of peoples dragged into slavery behind the Iron Chirtaln, intensified the cold war throughout the world, neutralized many countries, brought Russian power to our very own shores in Cuba, left us inert and humiliated before Castro and now has at long last carried the whole suffering world to Armzr geddon.

In a word, if there must be a challenge, lei us make the challenge fearlessly and positively. We cannot wait to be challenged because we cannot boldly in these days when men (Continued on page six)

EARNINGS AND GROWTH

Why do stocks often sell for much more than their asset value? The reason is that most Investors are looking at the earnings and the growth. If the earnings gradusdly increase and there is a chance for an Increase In the dividend, then these earnings might entitle the stock to sell for the higher figure. In the last analysis, we buy for earnings and not for assets. The Waldorf Astoria would cost more to build on a prairie in Kansas, but its assets would be of no use.

The wise investor, however, does not consider merely the current dividend. Although the dividend may have looked good to you at the time you bought the stock, the market may have caught up with it so that the yield is no longer satisfactory at present prices. To ascertain the rteld, you divide the divi-dent by the price. Many readers will be surprised, when they do this, to see what a small yield they are obtaining on the basis of the present price of the stock. You do not figure the yield on the price you originally paid for the stock,but on the price it is selling for today. This means that the growth feature of the stock is very Important. On this matter ou must depend largely upon your Judgment.

COMPETITION

The competition to which the company is subjected may be even more important than the above factors. There are two kinds of competition. First, that which comes from some new industry taking the place of the industry in which your company is engaged. Second, that which comes from other corporations which can make the same article that your company makes.

Regarding the first. I have related in a previous release about my young days in Glouce.ster when the primary industry was granite, and everyone then in granite was making money. Suddenly the use of cement was discovered for building purposes; and the rapid rise in popularity of the automobile resulted in public insistence that the granite paving stones be covered with asphalt. A a result, nearly everyone in the granite business of my home town went broke, and there are now a dozen empty quarries. The competition of airlines with railroads,' of oil and gas with coal, and various other Illustrations will come to your mind., To keep alerted to this competition, you should carefully read the newspapers and use your own knowledge of what is going on.

Regarding the second form of competition, to keep in touch you must study he relative earnings of your company and of competing companies. This is a difficult task for individual investors to do without employing an established investment service. ^

Use Christmas Seals

Madness Illustrated By Ruling

Strength For Today

By EARL L. DOUGLA.SS

CONCERNING A CERTAIN BURIAL

Henry Ford was one of the greatest men of vision produced In modem times, not because he produced a cheap automobile. but because of the way he produced it.

The economic theory which had persisted until his time was to keep wages as low as possible and prices as high as possible. and the difference between cost of production and the selling price was the producers profit. Ford turned that upside-down. He said, I will make an automobile and will Introduce methods of production which will enable me to sell that ati-tomoblle cheaper than my competitors sell theirs. Further-' more, I will pay my workmen such high wages that they will be able to buy the machine they

manufacture.

People, of course, said he was crazy and should be locked up In so Insane asylum. A man like that would destroy American buainesa. The truth is that he gave our country a new type of capitalism. The type pf capitalism against which Karl Marx protested more than 100 years before was a type of capitalism which needed to be protested against. It was industrial servitude. Henry Ford by his capacity for vision gave us a new type of capitalism, and he so influenced (apltal-Ism throughout the whole nation that we confidently believe that our capitalism will endure when communism has perished in the dust.

Khrushchev should not be too confident about burying us. Maybe -> only maybe, with a big question mark after It.

By ELMER ROESSNER In a ruling that demonstrates that Congress or Internal Revenue Service lawyers are slightr ly mad, the IRS has declared that facial tissue dispensers designed for use in qutos are auto parts or accessories and hence subject to the manufacturers excise tax.

The ruling concerns a company that makes and seUs several types of tissue dispensers widely used in autos. Some are designed to be attached to other parts of a car, and some are designed with compartments for used tissues.

Although primarily sold through automotive channels, the tissues are also advertised for 'use in homes, offices, shops or boats,

IT,S THE LAW The IRS point out that the law imposes a tax n the sale by the manufacturer, producer or Importer of parts or accessories, other than tires. Inner tubes and auto tadlo and tele^

vision sets.

FHirthermore, it notes that the -law defines parts or accessories to include "(1) any article, the primary use of which Is to Improve repair, replace, or serve as a component part of an automobile truck or bus chassis or body, or other automobile chassis or. body, or taxable tractor. (2) any article designed to be attached to or used in connection with such chassis, body, or tractor to add to ita utility or ornamentation, and (S) any article. the primary use of which is In connection with such chassis, body, or tractor, whether or not essential to Ks operation or use.

Obviously, since a tlaaue dispenser is not ao Inner tube and since U can be attached to ah auto body. It Is taxable.

As a corellary, it seenhs obvious that bumper sign aaylng We saw Diatyland. and that decals reading. California or bust! aqe taxable atnce they art to be attached to.an auto

and add to Its ornamentation. For that matter, why should not paint and battery water also be taxed?

If you think this ruling is Idiotic. dont write to Mortimer Caplan, Commissioner of Internal Revenue, to me. Write to your Congressman, who votes on revenue laws.

FREEMAN 18 PROPRIETOR OF WORLDS BIGGEST GROCERY Orville L. Freeman, Secretary of Agriculture, appears to be the proprietor of the worlds largeet grocery store.

On (me day (Dec. 1) recently, his department announced:

An offer to buy 17,6iS.160 pounds of rolled wheat for domestic and foreign .donation;

The authoiizaUon to finance the purchase of up to $10,875,-000 worth of upland cotton tor the Philliplnea;

Authorization to flnance the purchase of $5,800.000 worth of milled rice for Indonesia; Acceptance of an offer to pro

cess about 100,000 bushels o wheat into bulgur (parched crushed wheat) for foreign donation;

An offer to buy 11 million pounds of pinto and pea beans for welfare use;

An offer to finance up to $5.5 million worth of cottonseed oil and soybean oU. for the United Arab Republic;

An authorization to finance the purchase of $1,792,000 worth of white wheat for Syria;

An authorization to provide for the purchase of $576,152 worth of wheat or (lour for Pak-' Istan;

The purchase of 14.134.112 pounds Of 'pea and pinto betuui for the school lunch and instltu-^ tion program: and

An authorization of the pui^ chase of $80,000 worth of com for Iceland.

All this was only one day's business al the Freeman grocery gtort. Moot of the sties were oo tab and you. sweet, gentle taxpayer. will eventually pick upi that tab.

\