Monday, June 3, 1963

Legislature Not Going Out On Limb

If Our Timings Right We Can Sneak Through Without Being Caught

Policy

;!%

Two years ago Gov. Sanford insisted that re-1 tax structure which went into effect at the begin-visions in sales and other tax structures of the state ning of the present biennium. Whether a surplus of would put North Carolinas financial structure on a comparable size will be accumulated by the state basis where economic growth would provide suffici- between now and July 1965 is a matter of conjec-ent state revenues to avoid further tax increases, ture.

Experience of the 1963 legislature in hammering out a budget for the next biennium has proved the governor was right ... at least up to this point.

A key factor in the ability of the legislature to

It is significant that the legislature apparently has not gone out on a limb in anticipating revenues at too high a level for the coming biennium. Its revenue estimates, used to balance off proposed spending, are on the conservative side. Barring

enact an adequate budget without increasing taxes major economic setbacks in North Carolina, revenues is the surplus of well over $100 million anticipated produced under the present tax structure should at the end of the current fiscal year. This prplus more than measure up to the legislative estimates, of fundsover and above state spending during the Obviously there are areas of state resiJJ^nsibility past two yearswas made possible by the revised which more funds than ^ave been appropriated

could be wisely spent in the next two years. By and large, however, the budget, meets the more pressing needs of North Carolina in all areas of state responsibility. It is a budget designed to continue the progress of the state in practically every field.

From the standpoint of appropriations and from the standpoint of providing for revenues to balance those appropriations, the 1964-65 budget for North Carolina is both sound and responsible.

; belying Surn

On

.us

By JOYCE WILLIAMS

RALEIGH Indications are that there may be a big surplus in the state budget again In this biennium, but the legislature refuses to count on it.

The memory of the 104 million dollar surplus accumulated over the last biennium is still fresh in the minds of the legislators, and with no major tax cuts in the offing, the prospects are good for another sun?lus. The state revenue department has acknowledged as much. It has raised its original estimates (Ml anticipated revenue In the 1963-65 biennium by $31 million and the chances are that this figure, too, will be considerably short of the final total.

It has been argued that the last surplus was due to the sales tax imposed on food, and some of it was. But it is also true that much of the surplus resulted from the too-conserva-tive estimates of the revenue department on how much would be brought in by all taxes.

The legi.slature Is well aware that the revenue department has a reputation for being conservative; the consistent big surpluses in the budget testify to it.

But if the legislature knows full well that taxes will bring in far more than the revenue department ever estimates, the lawmakers still refuse to count on It. when It comes to appropriating money for use in any biennium.

This was evident in the relatively quick passage through both House and Senate of the conservative $1.2 billion operating budget recommended by the Budget Advisory Committee and the Joint Appropriations Committee.

There were a number of legislators who felt the 32,000 state employes covered by the Personnel Act were entitled to a bigger rai.se than the across-the-board $10 a month allotted in the Budget. And in the House, at least. Rep. Sam Whitehurst of Craven made a good case for the point that there w'ould be enough surplus in the budget to give the state employees a bigger raise.

He urged that the employees be given a $15 across-the-board raise for both years of the biennium and an additional $10 in the second year of the biennium, only if the anticipated surplus in the budget actually materialized.

The initial $15 raise urged by Whitehurst would cost an additional $3,389,371 and would absorb most of the $4 million still remaining in the budget, according to the latest estimates of anticipated revenue. It was largely because the legislature refuses to believe there will be more money than this additional $4 million coming in, that It voted down the Whitehurst proposal.

Whitehurst argued that the revenue department always underestimated future Income and that this would happen again In the 1963-65 biennium.

The money to give the state employees $5 more a month is there, he declared, and it will be there when we come back.

Rep. Roger Kiser of Scotland

put the argimient In stronger terms. We hear the same old scraping tht bottom of het barrel argument every session, he said, we heard it in 1961 and then came back to find the state had a $104 million surplus.

Take it from me, he said. There will be a surplus again in this biennium, and I want to see one. But we d(Hit have to have anything like a $104 million surplus.

When it comes to this point, a surplus is about as big a danger as Indebtedness.

As a member of the Appropriations subcommittee which recommended approval of the conservative budget under dis-cussiwi, Kiser was not expected to be critical of any item In the budget. It is taken for granted that subcommittee members will support the recommendations of the subcommittee.

So Kiser. In speaking up for the Whitehurst proposal was breaking precedent. House members knew it and listened attentively.

For a while it actually locked as if the House might break from tradition and okay a higher budget than that recommended by Appropriations and based upon the usual conservative estimates of revenue. But in the end, the innate conservatism of the legislature asserted itself and the final vote against the Whitehurst proposal was 71-40.

There probably wei-e some other factors than conservatism that affected the vote. Reports are that some legislators who came into the session prepared to support Whitehurst changed their votes after learning that state employees receive three weeks paid vacation and 10 paid holidays a year. It w^as pointed out that the 10 paid holidays were equivalent to two additional weeks off. so that state employees actually had five weeks paid vacation.

Another thing which may have influenced the vote against the additional salary raise for state employees was the fact that bills totalling some $70 million have yet to be acted on by the Appropriations committee.

These bills include $2.5 million for community colleges, $1.5 million for expansion of the educational television channel operated by the University of North Carolina, $750,000 to implement the Kerr-Mills plan for medical aid to the aged and numerous other bills.

There is little chance for any money being appropriated for many of these bills if the budget is based on the conservative estimates of the revenue department. But many legislators may have felt that there was at least some chance for getting through any bill in which they were particularly interested so long as some money remained in the budget.

More than these considerations. however, it appeared to be innate conservatism, that is refusal to count on surpluses that influenced the final vote on the budget.

The Daily Reflector

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Airplane Value Proven In Highway Safety

Without prejudice is the tag the Senate Judiciary I committee has put on the House-passed bill that would prohibit the highway patrol from using airplanes to spot traffic violators.

Tuesday the bill is slated to be debated on the Nfloor of the Senate, and presumably the Senate will take action on it. It is to be hoped that the majority of the Senators are not without prejudice toward the proposal to clip the wings of the highway patrol.

In the interest of all North Carolinians who travel the highways, it is to be hoped that members of the Senate will soundly reject the proposal that has come over from the House. Use of airplanes by the highway patrol in its operations has proved to be another worthwhile step toward improving traffic safety. To be sure, it increases the chances of traffic violators being apprehended. It causes no little concern to the habitual speeder who, accustomed to keeping an eye peeled for a patrolman in the rear-view mirror or a whammy stretched across the highway, must now also worry about a plane overhead. _________________________

But after all, what is the purpose of any highway safety measure if it is not to encourage drivers to abide by the laws and exercise greater care in the short period in which planes have been used by the operation of their motor vehicles? Certainly in the highway patrol, the planes have proved their worth.

The Senate Judiciary I Committee may be without prejudice neither for or against greater safety on North Carolinas highways. We trust the Senate will show conclusively that it is in favor of greater highway safety by rejecting the House-passed measure that would ground the highway patrols planes.

O

By ROGER BABSON

..nvestments in i he Land

Obiections To

BABSON PARK, Mass. We have been taught since childhood not to put all our eggs in one basket. That, however, ^was when ^)ur parents Ten nothig about stocks and bonds, but even then made the mistake sometimes of putting all their savings in one bank. Well, the investment future is just as uncertain now as it was fifty years ago.

FOREST LANDS

Forest lands, like all other investments, have advantages and disadvantages. Trees grow din-ing week-ends and holidays as well as any other day of the year. These trees have no labor unions and never argue about wages. Their value depends upon various factors,such as the state the forest land is in and also how near it is to transportation to a cutting mill.

Hence, the price varies from $10.00 and acre to $200.00 an acre according to the location and the length of time for the growth^ to mature. -------------------

Cutover land with spruce or pine trees a foot or two high may be the best investment for young people, if is properly located. However, such trees in the north are not ready to be cut or sold for fifty years. Then too. we must not forget the fire dangers or wind hazards,

WHAT ABOUT PASTURE LAND?

I have been successful in buying pasture land in Kansas where grass grows which is excellent for feeding cattle. The cattle raisers of Texas buy a railroad ticket to ship their steers to the stockyards in Kansas City or Chicago to be slaughtered and sold for beef.

T

?ricina

By GEORGE HAGEDORN

In recent congressional hearings on administered prices, Dr, Gardiner C. Means proposed a method for controlling prices through the income tax laws. He suggested that large corporations which are judged to have substantial pricing power be placed in a separate legal category subject to special rules. Where such corporations adopted pricing policies approved by the government, management bonuses paid to their officials would receive especially favorable tax treatment. If they refused to follow the prescribed price policies, the corporation would be subject to a punitive excess - profits tax.

Those who believe in a free-market economy will find such a proposal doubly objectionable. First, it is a disguised form of price control. Price controls, whether direct or indirect, are a method of substituting the judgment of govenment officials for the demands of customers in guiding production. Second, the proposal is a perversion of the income tax system from a means of raising necessary revenue into an instrument for regulating the economy.

Dr. Means is one of the originators of the term, administered prices. It has never been given a precise meaning. If it simply refers to the fact that in some lines producers have to make administrative decisions in regard to their prices, nobody can deny that such is the case. Indeed, it is impossible to imagine a modem. economy operating in any other way. ^

Too often, however, the term Is given a sinister connotation.

Policies

It is taken to imply that effective competition does not exist in the market for certain products. According to this interpretation, sellers simply set their prices at whatever level pleases them, and thus are in a position to exploit the public.

Our antitrust laws are intended to preserve competition. They make It illegal to monopolize any line of production or trade, to set prices in collusion with competitors, or to commit acts in restraint of trade. Enforcement of these laws, and not manioulation of the tax sy.stem. is the prooer means for preventing monopoly.

It Is sometimes aiVged. however. that in Industries where relatively few firms accnunt for a large percentaee of the output they have power to set their prices arbit.rarllv without fear of competitive damage. This power has been blamed both for unempiovmept In the ip30s and for inflation in the 1950s.

The main trouble with this theory is that It does not iibe with the facts. Careful studies bv skilled economists have *shown that there was practically no relationship, either In the 1930s or the 1950s. between the amount of Price change In an Industry and the degree to w'hlch the industry is concentrated In relatively fe^ hands.

These studies are on the record. but we should not be too hooeful that they will put an end to proposals for orlce regulation In various forms. Administered prices has had a long career as a political catch-phrase. and mere facts are unlikely to Interfere with Its continued lisage.

Other Editors Saying... Sacrifice For Freedom

(The Henderson Dispatch)

Few knew and perhaps still fewer could have believed that in the 188 years of American independence the nation has engaged in nine major wars, with more than 602,000 lives sacrificed on the altar of freedom. The figures are calculated by The Associated Press after careful tabulations from Lexington in the Revolution to Korea ten years ago.

It is highly appropriate that a day be set aside for grateful tribute to the memory of the men who gave their all that this nation might survive with its liberty perpetuated, at least as they believed. Memorial Day should be a time of gratitude and appreciation of the efforts and sacrifices that marked those long periods of hostilities.

Unfortunately, we who came through unscathed from these terrible ordeals are prcme to take it all for granted in the thought we have always been free and always shall be.

Despite the fact that this country has fought nine major wars, Americans are not a warmongering people. When they have fought they have done so in the convictlOTi that they were compelled to defend their way of life. No nation and no pecH?le would be more content or more satisfied to see these desperate struggles ended for all time. But such is not to be.

There have always been ag

gressors and vlll be for the foreseeable future. It was so thousands of years ago as covetousness gripped the minds of men in reaching for terrkories that were not theirs. It has been so as individuals and groups have been motivated by the passion for power, for control and for the benefits and luxuries attendant upon victory. But too often these triumphs have been at the expense of the freedom of subjugated peoples. Men who were free have been willing dowTi through the centuries to risk their all for preservation of their rights and their liberties. The effort has always been costly in human life and possessions.

And so, Americans pause, at least after a fashion, year after year in grateful tribute to those who sacrificed for freedom. We would be unworthy of the brave men who sleep In eternal rest in hallowed spots around the world if we did not remember. We who live owe it to those who died s<j to order our way that in the long, long reckoning of the ages we shall have made some contribution, however feeble, toward the sanrie cause for which so much blood was spilled.

The least we can do is to utter peace to their ashes and rest to their souls, with a more fervid dedication in the struggle toward the far off goal of peace on earth and good will to men.

They find that by giving these steers a stopover in Kansas on their way north to be fed OIL a pasture like nne for two montlis the steers increase materially in weight and are worth much more when they get to market.

Sometimes such pasture land will produce oil. Your real estate agent will send you a map showing what he has to crffer for sale and indicating what the chances are that oU might be found on your ptisture. Pasture land varies in price from $75 to $150 an acre according to the availablTity and quality of water for the cattle and also in accordance with the possibility of oil. I have never heard of anyone taking losses on such pasture land if it was purchased through a reliable broker. When Texas cattle are pasturing on your land It is customary to pay a professional caretaker so much a head for watching the cattle. All of this Information you can get from many sources; but my business I have handled through the office <rf Carl C. Chase of Eureka, Kansas.

TRUSTEES HAVE THEIR

ADVANTAGES AND DISADVANTAGES

Many readers of this column have put money in the hands of trustees of banks or other trustees in favor of their children and grandchildren. These trcs-tees have their advantages; they are careful, honest, and reasonable in their charges. On the other hand, tehy naturally do not like to buy forest or pasture land if it pays no Income, as their fees depend up<m the income from the estate. There-vfore, although there are times when certain non-dlvldend-pay-ing stocks are really safer than Dow-Jones gilt - edge stocks, yet trustees refrain from buying them because they yield no Income to the trustees.

The trustees fees, however, can be so arranged that both tre principal involved and the income received will be recognized. This is both fairer, and often safer in the long run, for the beneficiaries. Never hesitate to be liberal with the trustees upon whom your children and grandchildren are depending. Therefo^p, whether you are taking care of your own fund or employing a trustee, I urge you to have some of the money invested in forest or pasture land.

2 Ways

By JOHN CHAMBERLAIN

Copyright, 1963, King Features Syndicate, Inc.

The U. S. Government seems committed to keeping exiles from Castros Cuba frwn carrying on counter - revolutionary work against a dictator who has become a complete pawn of a distant European power. What this does to make a mockery of the Monroe Doctrine is obvious. But what is not so well appreciated is the fact that our suppressi(xi of anti - Castro activity is not even consistent with U. S. policy elsewhere In the world.

There is the little matter of our stance In regard to Portuguese Angola, for example. Back In 1960 the General Assembly of the United Naoos adopted a resoluticKi calling for the independence of all colonial peoples. As a general rule, the right of a people to self - determination cannot be gainsaid. B u t there is the question o Individual rights, too and premature national Independence that is quickly followed by chaos, bloodshed, and the emergence of a repressive one-party dictatorship, is no bargain for any population that cares more for the rights of man than it does for the rights of that high-level abstracti(xi, the nationstate.

The question about Angola is; what would follow if it were to be liberated from Portugal tomorrow? I dtxit know, for I have never been to Angola, which is deep in sub-Saharan Africa. But the history of the agitation for Angolan freedom is not reassuring. Nor, for that matter, is the official Washington relatlra to it.

The UN, having taken its stand in support of abstract freedom for colonial pe(H)les. has, from time to time, censured Portugal for refusing to grant immediate recognition of the right of Angola to Independence. Meanwhile, t UN which stands behind the C>'rille Adoula Congolese government, has permitted the organization on Qmao s(kl of terrorist bands which have made forays across the border into Angola.

The "Uberatiwi group, run by Holden Roberto, a non-Portug-uese-speaking Angolan who has hardly ever lived in his own country, is called the Angolan Peoples Union, or the UPA. Holden Roberto maintains a training center for this group some miles out of Le(H>oldville. the capital of the Caigo. Prom this military seat of a government in exile Holden Roberto s UPA stirs up continuous trouble for the Portuguese. And, with the apparent approval of both the Congo and the UN, other training camps for Angolan terrorists are in course of being set up on Congo soil.

Whether the UPA represents the legitimate aspirations of a majority of Angolans Is something that cannot be determined short (rf a plebiscite.

The attitude of the Portuguese is that the freed(Hn ra o v e-ment in Angola is mostly a figment of Holden Robertos imagination. The Portuguese, who have never followed a policy of race consciousness or race dlscrimlnatioi in any of their colonies, claim that Angola Is part of great Portugal, a league of citizens of all colors who have equal individual rights and equal claims to protection under the law. Since the h u g e South American nation of Brazil, which was originally colonized by the Portuguese, has no legal race dlscrimloatk today (the social reality may not be as idealistic as the law), the assertion by the Portuguese government in Lisbon that It makes merit, not color, t basis for Its Angolan policies carries with it a good deal of conviction.

It is not my purpose here, however, to Judge between the Angolan liberation m o v e-menl and the Portuguese. What concerns me Is our own pretense to honesty and consistency in foreign policy. The United States contributed more than its share to the UN (Operations in the Congo that kept Katanga from seceding, and it still channels a good deal of economic aid to the central Leopoldville government. Having denied the right of the Ktkangans under Molse Tslvmibe to self - de-terminati(Hi, we are indirectly helping to sustain Holden Robertos training camps, which propose to bring "self-determination to Angola. We could (Continued on Page S)

A Lus,h Business Month Aheac.

Strength For Today

STRENGTH FOR THE DAY A By EARL L. DOUGLASS SCHOOLS AND COLLEGES June Is the month of graduation and commencement. Do you have someone this year marching up with a big grin on his face or hers to get some kind of diploma? If so. you ought to count yourself happier than any earthly monarch.

Young people should be reminded that the two words graduation and commencement are significant.

The word graduaticxidiscloses the laborious and unfolding character of education. How nice it would be if we could be educated by taking piUs or having knowledge injected into our veins. But that is not the way it comes. Day by day, line upon line, precept upon precept. It gets tiresome both to teacher and student, but it is the

only way that is consistent with an existence the outstanding characteristic of which is growth.

The word commencement is even more significant. Who ever chose this word generations, or perhaps centuries, ago to describe the final exercises of a school year was a penetrating genius. For noUiing, of course, ends.at the occasion. It is the commencement of a new life. One may go to college, or graduate school, or into a profession, but whatever he or she does the commencement exercise is the beginning of It all. And when the end of the educational proces comes there will be another commencement.

Graduate. Graduate. Graduate.

Commence. Commence. Commence.

Thus is life. And It is good.

By ELMER ROES8NER

At the start of each month, Ehner Roessner gives his estimates of businefss Immediately ahead. Last mtmth he said, The May business outlook Is flowery. The current rise In business activity Will be accelerated by seasonal pushes.

June will be a lush month.

Travel will begin to rise. The increase In transatlantic fares will not slow down foreign travel, and domestic travel will ciMitinue its regular rise, boosted by more early vacations.

Housing starts, which have been Increasing In May, will approach boom proportions In June. Available mortgage money has increased so much that lenders are beginning to shave rates to bring more buyers into the market.

Retail sales will c<mtinue their upward trend. The coming oi 1964 models has not yet slowed down new car sales, but It may before the end of this month.

.JOBS, JOBLESS UP

t i<

The June labor paradox will be repeated. The number of employed and the number of unemployed will both increase. The employed will rise becuse of the seasonal increase in farm and Industrial activity; resorts and travel enterprises will begin increasing employees.

At the same tiine, the number of unemployed will rise simply because millions of college giiads and undergrads, plus hundreds of thousands of high schoolers, will break out upon the labor market. There arent Jobs for all of them, but there are statistical niches for every boy and girl, and the unemployed figure will rise. By the same token, It will go down somewhat in September.

Sugar will continue to rise but bread wont come down. The world shortage of sugar will cixi-tinue to push up prices (rf the granulated stuff, but the world surplus of' wheat which may be increased by free American farmers this year will have almost no effect cm the price of bread and rolls. The cost of

flouer is minor in bread. The big dough goes not to the farmers but to the bakers, the slic-ers, the packagers and the team-

MORE SPENDING MONEY

The fairly steady increase in personal income will continue during June. Consumers will have more money to spend, which will result in such diverse (xmsequences as increasing the retail siEdes, as noted above, and providing more funds for mortgages. also noted.

Congressional action will be speeded up. With next year a moment of truth at the polls for many Congressmen, and the White House expected to renew pressure for tax reform, it is possible that the tempo oi legislatlim will rise.

However, the Kennely program has been shot through with more boles than a mc^ialr coat stored without moth balls, 80 ncA too much Is expected.

However, there Is little chance (rf agreement on tax reform, even though some small clmnges may pass.

OLD PROMOTER WEIGHS EUROPEANS, FINDS THEM WANTING Those Europeans are somewhat stupid, The Old Pnznoter declared on his visit today.

Watch your language, I said, Some of our best ancestors came from Europe.

1 am talking about the present generation, he said, those whose ancestors were ncA smart enough to migrate to Canada or the United States years ago. These stio(-at-home, through the International Air Transport Association, have forced up Jet tourist rates.

As I understand It. almost two thirds of the lATA trans-atlanlic passengers are Americans. But Americans fly by budget. So every extra dollar the airlines squeesse out of them for fares will be one less dollar spent in Louden. Paris (n* other spots in Europe. In the end, this gTMt condracy against the American traveler will yield exactly nothing.

He may have eometliing thera.