Monday, February 11, 1963

Who Gels The French Omelet?

Realistic Approach In N.C. Budget

Three most significant factors about the whopping biennial budget presented the legislature by the Advisory Budget Commission and the Sanford administration are:

1. The rate of improvement envisioned in most areas of state services, with particular emphasis on continuing to improve education at the public school and higher education levels;

2. The budget calls for no new tax^ levies by the state; and

3. The budget requests no capital outlay bond proposals that would require approval by voters of the state.

The $1.8 billion budget proposed toHhe legislature is a new record for North Carolina. It represents spendtng on the state level at a rate unprecedented in the state's history. At the same time it provides for that rate of expenditure on the basis of the present tax structure, coupled with an anticipated surplus of $104 million at the end of the current fiscal year.

It is not likely that the budget will be accepted by the legislature as proposed. The odds are heavily in favor of a number of changes, most minor, and perhaps a few major. It appears, however, that the people of the state approve the overall concept of the budget prooosals, recognizing that North Carolina must continue to move forward, and that it now has the tax structure which enables it to do so.

While the budget represents a new record for

! Pulling, Tugging This^ Session

By WILLIAM A. SHIRES

RALEIGH Legislative notebook:

More than the usual amount of political pulling and tugging may be watched for in the 1963 legislature.

This is true especially because announcements for the 1964 state election campaigns lie only a few months away. And a fierce undercurrent of political maneuvering already is apparent.

It has not reached the stage of open lobbying for partcular candidates, but there is jockeying for pc.sition and everything that is being done and said is being studied in the light of pos-sibe c?! imnlications.

The r-'^rnvcring among Dem-ocrrts es usual, and in

seme ' mere spirited than eve' . / ^ '^rvp by Repub

lic'' . for lucre recognition is a new factor.

legislative lieutenant of Senate president T. Clarence Stone who makes the committee &p-pointments.

Crew, several mwiths ago, withdrew as a candidate for Senate president opposing Stone and in the interest of party harmony pledged support to the Senator from Rockingham County, avoiding a showdown in the pre-legislative caucus.

.Agnate redistricting and

t"' I ter election laW btlts

wi:ch came in on the f r' t day of the session were evidence of greater political actwify.

Ii this respect, too, the Republican minority is expected to come up with its own version of a Senate redistricting measure. It also will send un a GOP-sponsored bill to abolish the absentee ballot, a move which stands little chance of success but which is designed as a move that might become a partisan issue in 1964.

Crew then made speeches seconding Stones nomination both in the Democratic caucus and at the time of the formal election.

Crew, by the way, is the only one of the three who has not yet said publicly that he definitely plans to be a candidate for lieutenant governor. He has given strong indications of this, and has been promised support. Crew did say. back in Halifax County several weeks ago, that he does not plan to run for the Senate again next year.

The implication was that be would sit out the 1965 session and run instead for lieutenant governor. If nominated and elected, of course, he would be back in Raleigh as Senate president.

Three men who are at least unannounced candidates for Democratic nomination next year sit facing each other n the gold chairs of the State Senate.

These are Sens. Thomas J. White of Kinston. John R. Jordan of Raleigh and W. Lunsford Crew of Roanoke Rapids.

All are Easterners, sine by the traditional rotation among Democrats the 1964 candidate for govenw should be a man from the west and the candidate for lieutenant governor from the East.

White, at least for the moment, wields the greater political power in the Senate, having served on the Advisory Budget Commissiwi and being named chairman of the powerful Appropriations committee.

There are repoi-ts that Jordan was miffed and, in fact upset when he failed to get the appointment as Senate Finance chairman. This other big money committee post went to Sen. James V. Johnson of Iredell.

White and Jordan both have made public statements indicating their intention to be candidates for the No. 2 post next year. But neither man has issued a formal announcement, simply because it is too early for these.

White made his intentions known some time ago in Kinston. And Jordan indicated his intention several weeks ago in an interview with a newsman in Dunn.

White, of course, is the chief

Stationery bearing the letterhead. Senate Chamber, State Legislative Building, already was printed and being used when Sen. White introduced his bill to name the new State House the State Legislative Building.

Whites bill was referred to a Judiciary Committee ot the first day of the session. This committee has not been appointed. but those who ordered the stationery printed apparently felt they were safe In assuming that the new name would be legal very sohi.

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INCORPORATED

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

Entered at Post Office. Greenville, N. C., as second class mail matter.

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,T

the state, it is not, in our opinion, extravagant. While it provides for maqy improvements in various state operations, it by no means meets all the needs of the state, its programs or its institutions. Although it proposes larger expenditures than ever before, the budget appears to be framed with careful regard for continuing the sound financial footing upon which the government of the state has operated in th^ past.

On the whole, the budget offers a realistic approach to meeting the needs of North Carolina without imposing an additional tax burden on citizens of the state.

New State House Has Made New Problems

If the big new State House in Raleigh eased some problems for the Genral Assembly, it obviously has created others.

So far, officials of the two bodies havent been able to agree on what basis to assign to individual members of the General Assembly the 170 offices in the new building for legislators. When and how they resolve this problem is going to be of interest to citizens of the state.

Perhaps of even more interest will be the decision on who will pay the 170 telephone bills for the 170 offices in the State House occupied by the 170 members of the legislature. Heretofore thi; legislators havent had private offices, much less private offices with private phones. Theyve done most of their telephoning to constituents from their respective hotel rooms during the session, and this cost, of course, has been paid by the individual legislator out of his daily per diem and subsistance allowance.

Now that the legislature has a spacious new State House with 170 private offices and 170 private telephones for its 170 individual members, whos going to pick up the tab for the thousands of phone -calls that will be made from State House offices between now and the end of the session?

Will the individual legislator continue to pay his own phone bill as in the past, or will the tax-payers of North Carolina be called onby legislative edictto foot the bill for calls made from the 170 State House offices?

Will Proposa'. Meet Problem?

By JOHN ABNEY

Pord, The Psychotic Dog

MEXICO CITY You wouldnt believe all the things we are getting in Mexico these days but the latest item to arrive is a tranquilizer for dogs. These curious little pellets are called something like Dog-quilizers or Tranquilpups. And apparently any d( can walk right into a pet shop here and buy some without a prescription. Animal psychiatrists say the pill industry developed this special formula for canines who bark and romp excessively.

So far. no tranquilizers have been developed for cats. Pos

sibly because cats seldom bark and romp.

But suppose a cat sits cm your back fence some night after you drag home for a fiesta and he begins baying at the mocm. It wakes p the baby, who also begins ba^^g. You can throw the baby at the cat and there is no need for tranquUlzers.

Dr. Eustace Talcumbaum, the eminent Mexican psychiatrist, says dogs DO need trancjuUzers because they have lived too long around people. Dr. Talcumbaum says many neuroses are contageous and dogs, being mans best (and practically on-

Sen. Irwin Belk of Charlotte also has political ambitions for 1964. BeUc is interested in running for governor, but apparently has made no definite decision.

What happens during the ses-sicm, of course, may have a lot to do with what he decides.

By RALPH ROBEY

Any investment that one makes will in time, presumably, either increase or decrease in value. This gives rise to what is known as capital gains or losses when the asset is sold or transferred. For years there has been a controversy over how. if at all, such gains or losses should be treated from the viewpoint of taxation Some states make no distinction between capital gains and any other income. But the federal government does make a distinction, and in his new tax program President Kennedy proposes to modify this in important particulars. \

For many years the federal income tax law has provided that capital gains woul^ not be taxed at more than 25 percent, regardless of what a taxpayer might have to pay on his^ other Income. This has been accomplished by requiring that only 50 percent of any capital gains be added to other Income for tax purposes. If the maximum rate a person was paying wis under 25 percent, then he paid the lower rate on his capital gains. If the maximum rate was above 25 percent, then the taxpayer still paid only 25 percent on his capital gains.

Two other points are important. For profit or loss to be classified as a capital gain or loss, the asset must be held a minimum of she months. Secondly, capital gains can be offset only against capital losses, except a limited carry - over for five years may be deducted from other income.

President Kennedy recommends that all these features be changed. The holding period, he says, should be increased from six months to one year. His reason for this is that with the pres-.pnt holding period it is too easy for investors to shift regular Investment profits into capital gains.

Instead of taking 50 percent of such gains or losses, the President suggests that only 30 percent be taken. If his proposed tax reductions are enacted, the rates applicable to capital gains will be from 4.2 to 19.5 percent.

Finally, the President says that the present five-year limitation on carry - over of capital losses frequently causes severe hantehip, and that there should be no such time restric-

tkm, The present annuai_il .000 maximum for such offset against regular income is to be maintained.

Now, obviously, these are significant changes In the handling of such capital gains and losses. The great question is whether, even if they are enacted, they will solve the problem and end the controversy? The clear answer is that they will do neith-, er.

Capital gains are not Inccane in the sense that wages, salaries, interest, dividends, and profits are Income. It is highly questionable, therefore, whether capital gains should be taxed at all. Further, lengthening the holding period from six to twelve m(Miths accomplishes nothing for all practical purposes. One of the strongest and most legitimate complaints against the taxaticHi capital gains has been that it tended to make investments less fluidtended to freeze an owner into pai-ticular stocks or bonds. The President apparently believes that by doubling the holding period this freezing will be ended. It can have no such effect.

A prime requisite for maximum, healthy growth of our economic system is the ability of capital to seek places and produce products which need development. Tsuces on capital gains hinder this in two ways. First, they reduce the amount of capital: secondly, they make it unprofitable for an investor to sell his holdings unless the potential rate of return from the new venture promises to more than offsetjhe shrinkage of his funds as a result of the taxr

Some years ago it was provided by law that if a person sells a home and reinvests all the proceeds in a new home within a specified time there is no tax liability. The same principle should be applied across the board. This would mean th^t if an Investor owned stock, or bonds, and for some reason decided it wise to sell, he would not be subjected to a tax on any profits granting he reinvested the proceeds within, say, a year. If he did not reinvest, he would have to pay a tax. Such a system would put an end to direct taxing of capital as such, and would once again give us the fluidity * for investment w^hich is essential lot the welfare of the nation.

Other Editors Saying... Charmed Life Of Powe

(Richmond News Leader)

Delawares soft-spoken Senator John Williams, one of the ablest men in the Congress, performed a public service on Tuesday when he spoke up loud and clear on the subject of Harlems Adam Clayton Powell.

It is almost unheard of for one member of the Congress to criticize another bv name on the floor. Mr. Williams is as conscious of this parliamentary custom as any man, but if ever there were a proper occasion for breaching the custom, the recent activities of Mr. Powell provide a notable cause.

Senator Williams put in the RECORD for all men to see the specific charges brought by the Internal Revenue Service against the New York Congressman. These are the rounded figures:

Estimated Fraud Tax tax penalty Penalty

$ 5,512 $ 2,756 $ 515 2,643 7,442 6,203 2,141 941 1,124

Total$26,006 $13,003 $2,000

Those; deficiencies were charged against Powell in April of last year. I find no evidence that the Treasury Department is really trying to collect the money, Senator Williams said.

But if the Treasury Department i.s soft on Powell, it is only one of several Federal agencies that are petting this Harlem cat. Senator Williams disclosed that the Department of Health, Education and Wel-

Year

1949 '950

1951

1952

1953

1954

1955

1,322

3,721

3,101

1,071

470

562

408

533

346

37

131

30

fare had turned over $250,000 of the taxpayers funds to something called Associated Community Teams, Inc., which proposes to sponsor a domestic peace corps in Harlem. The corporation is made up of Mr. Powell and four associates. With a quarter of a million dollars at their disposal, they propose to raise the moral tone of Harlem.

Mr. Powell set a remarkable example in this regard last summer, when he deserted his congressional duties to go cavorting around Paris night clubs with a couple of feminine companionsall at the taxpayers expense.

TTie Harlem Congressman also is deeply involved in some high-flying real estate deals. Senator Williams disclosed that the Federal Housing Administration is processing Powells applications for mortgage insurance on a 358-unit apartment project in the Bronx a 407-unit hotel in Washington, and a 183-unit building in Newark. If the deals all go through, the taxpayers will insure loans by Powell and his associates amounting to $11 millicm on properties set up for purchase at $85 million; the difference represents various rehabilitation expenses that are not exactly specified.

Adam Clayton Powell is, of course, chairman of the potent House Committee on Education and Labor. To a considerable degree, the fate of Mr. Kennedys omnibus- school bill rests in his hands. The political realities are plainand they seem to add up, we are sorry to say, to a good deal more than a tax bill.

ly) friend, are bound to catch something.

Todays canine is the victim of personality disorders, phobias, obsessions and even nervous tics. He is plagued by anxiety and doubt because he has read, or at least seen on television, where dogs are shot to the mocm or end up being arrested by dog catchers. Just for being dogs.

Mexicos constitution prohibits dogs from making their owti living and decrees that all canines must be owned by people; apparently a setup devised because people are more easily convinced to pay mcmey for dog licenses the same as they must buy plates tor autcnnobi^.

I once had a dog with a district license, a city license, an anti-rabies license and, countless others. He devel()ed what la known as a license syndrome and thought he was a 1936 station wagon. We called him Ford.

In his puppyhood. Ford was free of psychic disturbances. He spent many happy hours fishing in Acapulco and attendng the animal carnivals in Ma-zatlan and Veracruz.

Later, after fraternizing with people and having several pounds of license plates attached to his collar, he became moody and developed conflicts. Dr. Talcumbaum believes Fords political phobia was projected to rabbits.

He (Ford) pursued them Incessantly. Perhaps if we had renamed him Missile It would have gven him a sense of security.He might even have learned to fly and hunted birds instead of tearing across stony fields, which proved to be his undoing.

One Spring day while chasing a rabbit across rough terrain and honking at the top of his voice, Ford had a blowout, lost control and turned over several times. He died in Dr. Talcum-baums arms and his (Fords) last word was a pathetic Be-e-e-ep. If (Mily there had been dogquillzers In those days we could have ^ept him asleep for years.

At any rate, I found out about these pooch de-energlzers after the Lady from Puebla bought some in bulk for the neighbors dog which is in love with a Water Spaniel next door. She put them in an empty bottle labeled Sodium Bicarbonate Tablets and I took six (Xie night after reading the front page of a newspaper.

It was the best months sleep I ever had and the Lady from Puebla says I didnt howl once.

Weird

3oarc.

Action

By JOHN CHAMBERLAIN '

Copyright, 1963, King Features - Syndicate, Inc.

Altliough I do not approve of State or municipal censorship ol the products of writers (for one thing, it always defeats itseL by calling attention to the objectionable book or c -'ui. I rea-Ize that school braids must concern them.sch c ; with the sort of literary fare that is assigned in ctars to immature boys and girls. No responsible school'board coud afford to sit idly by if the .senior class in high school should be required by a teacher to read the more flagrantly pliysiolosical passages in D. H. Lawrence's unexpurgated Lady Chatterleys Lover, for one example, or such recent obscenities as Naked Lunch, for another. The high school teacher who lac':s plain, ordinary horse sense in the matter of prescribng a reading list for students is not fit to hold his job, and in tlie last analysis it is the duty of the school board to render judgments cm arguable cases.

Sometimes, however, it is the school board itself that proves Itself unfit to oversee the edu-catl(m of the young. This seems to have been the case in Wren-shall. Miss., where a teacher, Richard Wyman, has been forced to resign by the board for making his English .students in the college preparatory class read George Orwells magnificent satire. 1984. (Mr.Wyman Is now a hod carrier.) This is the weirdest instance of 5uppressi(Mi by a school board that has ccrnie to this columnists attention in many, many years.

Just what a soundly patriotic school board could find objectionable In the Orwell novel is utterly beycmd my comprehension. The story of 1984 Is, as every good American republican or democrat should know, a fierce indictment of the sort of dictatorship in countries like Castros Cuba and Mao Tse-tungs China, where regimentation and ideological murder have been carried to extremes that havent been witnessed since Hitler and Stalin were liquidating Jews and kulaks by the thousands. No teacher who wishes to Instill In his students a hatred for CommunUm or Fascism would do better than assign 1984 for reading and discussion. Indeed, if our patriotic societies were really on their toes, they would be busy ci-u-sading to make this particular Orwell novel compulsory reading in all the high schools of the land. No better warning against Communism Is to be found in print.

When I heard of the astonishing dismissal of Mr. Wyman.

I went out and bought a paperback of 1984 to make sure my memories of it were correct. I hadnt read it for thii> teen years. It was Just as forceful and shivery as I had recalled. The figiUTe of Big Brother, Mr. OrweUs scathing portrait of the ultimate in a totalitarian dictator, made me tremble all over again lest we lose our grip on ourselves and capitulate in the Cold War.

Tru enough, it 1s an obscene and inunoral society of the future that Mr. Orwell fears may come Into being every-wtere on this poor, benighted gl(>be. Thus the Wrenshall school board may be technically correct when it uses the word obscene to describe some of the happenings In 1984. But to label the book Itself immoral or to think of its lesson as obscene is to indulge in the same sort of deplorable newspeak and doubletalk that Mr. Orwell has satirized as the anti - human language of the 1984 Communist thought police.

In 1964 Orwell warns against the perversion of meaning that comes about when Communist Ministries of Truth take over the job of brainwashing the inhabitants of a country. In the newspeak era of 1984 the Ministry of Truthor Mini truehas succeeded in forcing all English Socialists or Ingsocs to belcve without blinking in such slogans as War is Peace and Freed(Hn is Slavery and Ignorance is Strength. Big Brother Is Watching You is the (Continued on Page 5)

Tax Cut Plans To Affect Stocks

Strength For Today

By EARL L. DOUGLASS

DO HEALINGS CONTINUE?

Does God continue to heal disease today? Has not modem science assumed this responsibility? Doctors would be the first ones to declare that neither they nor their science ever healed anyone. They are accustomed to say that they can only assist nature, by which they mean that they can only help put Into operation the laws of God concerning physical restoration.

Many a Ume when doctors have thrown up their hands in despair, something has happened to the patient which everyone Is compelle(lHo admit is outside the circle of human understanding. Such miracles still occur. We do well to believe in them, to accept them, and to beseech God to grant them.

All healing, whether it comes from medical practice or prayer is wonderful to behold and beyond our understanding. We should never forget that the progressive discovery of new medical truth by physicians and research workers is a revelation from God precisely as revelations which apparently occur in the realm of religion. God has revealed Himself through the physicians and scientists and He continues to do so. But we must also admit that Influences beyond science, surgery, or any scientific knowledge of man often takes place and heals to the amazement of the medical world.

If miracles ever occurred they still occur. As Christians we believe that they did occur. We should have faith in medicine and faith also in powers far beyond present medical knowledge.

By ELMER ROESSNER The Presidents tax-cut program will affect the price of stocks. As personal income and corporation tax cuts appear likely, prices of sound common stocks will tend to rise. At the same time, fluctuations in stock prices will tend to show what Wall Street thinks of the chances of a tax cut.

The reasons are clear. If Congress cuts corporation taxes in the neighborhood of 5 per cent, their net income after taxes will be about 10 percent higher. This should be reflected In dividends around 10 per cent higher, making stocks worth a tenth more.

If the tax cut does stimulate business, as the President said it will, net earnings may be still higher and stock values proportionately greater. Thus, if a tax cut increases a corporations net Income by 10 per cent and "The resulting boom increases it another 10 per cent. Its stocks earning power will be up 20 percent and its market price approximately the same percentage greater.

MORE. STILL MORE It doesnt end there.

If personal Income tax rates are cut, e^y family may

have more expendable Income. Some will go for new cars, new washers, new toasters, color TV and so on; some will be invested in the stock market. This fresh flow of pigeon money will tend to push prices up even further, since newcomers usually buy Instead of selling short.

The tax cut may fuse the biggest stock market boom in historythat is, if the cut amounts to much.

Note: Some of the possible effects of a tax cut have already been felt on the market. Thats why some stocks have been rising.

And here are more lookaheads in business:

JINGLING CASH REGISTERS

Rising retail sales: Dips in retail sales so far this year have been caused by two things: severe weather that kept shoppers at home and the rls' in Social Security taxes which took more change out of their pockets.

But the prospects are good. Consumer confidence and higher wages are already having effects on store sales. Americans will have an average of 3 to 4 per cent more spendable

money tls year, according to reliable estimates. Auto sales show signs of continuing the rate set last year.

Safer S&L deposits: A bill Increasing Insurance on individual savings and loan deposits from the present $10,000 to $25,-000 will be Introduced Into C(m-gress and is likely to gH favorable action. But its not important legislation, however, because the man with $25,000 today can simply deposit it In three associations and get C(hh-plete insurance.

CONGRESS AND PARCEL POST

New parcel post rates: These will come if Congress resumes control over them, Ccmgress turned rate-making over to the Post Office Department and the Interstate Commerce Commission, which have not been able to agree on a change. Meanwhile. Congressmen are under biter fire by constituents who want parcel post broadened, and by transportation companies who keep pushing the government to get out of the parcels business. These pressures may cause Congress to resume control of parcel post rates.

No-tobaectt riaarctte: Once

more a tobaccoless cigarette will be put on the market, perhaps next month. While no-to-bacco smokes failed before, the new manufacturers say past mistakes have been studied and the new smokes, Sentry, will be a hit. Makers will try for a free ride on current fears of lung cancer.

OLD PROMOTER OFFERS HORSES-MOUTH TAX ADVICE Want your Income tax prepared, sure fire, for only $25? the Old Promoter said wlren ha came in today.

You know I dont net $25 a year. I said, wrincing, and, besides, I wouldnt trust you to add up a breakfast check. My work guaranteed, he said.

I dont believe it, I said. Yes, he replied. I do the best I can and then take the form to the Internal Revenue Service, pretending to be the taxee. Nice men and women help me put it in order and calculate the tax. Thats why I say my work is guaranteed. The Old One has an idea; perhaps I will give him a bit of business after all.