How to Pay for
New Conflict
THE WAR:
Finance
Great Britain entered the World
war in 1914 with a 649,000,000-pound
debt, raised her tax rate to six shill-
ings in the pound (or 30 per cent)
and probably spent 11,076,000,000
pounds (about $55,000,000,000) to lick
the Kaiser. In 1939 Britain's record
peacetime budget was 1,322,444,000
pounds, of which 380,000,000 pounds
was to be borrowed. Most of this
was for defense, but what bothered
Britishers most on September 1,
when they declared war on Adolf
Hitler, was their current public debt
of 8,200,000,000 pounds, 13 times
greater than 1914's.
To Sir John Simon, chancellor of
the exchequer, fell the financing job.
Up to the house of commons Sir
John carried his first war budget,
SIR JOHN AND BUDGET
U. S. taxpayers can be thankful.
neatly packaged in the ancient case
{see photo) which exchequers have
used for years. Preliminarily, com-
mons knew the war of 1939 would
cost more than the last conflict,
would possibly last longer, and
would positively bleed the British
taxpayer to death. Sir John there-
fore surprised no one with his
budget:
To raise 70,000,000 extra pounds
this year, and 146,000,000 extra the
next fiscal year, Sir John assessed
incomes at seven shillings in the
year the rate is seven shillings six-
pence, or 37 per cent. American
taxpayers should have enjoyed the
comparison:
Income of $2,000 per year:
American British
70.08
246.28
Family with two children ... None §
Married couple, no children... None
Bachelor cssiiannssnnsnnsivg AR
Income of $4.9000 a year:
Family with two children ...
Couple, no children
Bachelor .
Income of $20,000 a year:
Family with two children ... 1, 8.047.
Couple, no children : 8,
Bachelor 8,326.26
Meanwhile fireside economists de-
bated how Adolf Hitler was faring in
wartime. Disregarding his pre-war
debt and his funny financing, it was
a good guess that even should these
obstacles be overcome the allies’
blockade would strangle him. One-
fourth his 1938 imports of $2,000,-
000,000 would be cut off, including
80 per cent of his high-test gasoline;
67 per cent of his grain and all his
cotton, rubber, wool and tin. Even
Russia's new friendship could not be
expected to offset this loss, for the
press of war will keep German fac-
tories busy, thus barring exchange
of manufactured items for Soviet
raw products, And Josef Stalin is
not altruistic.
At Sea
One bright autumn day North sea
villagers in both Norway and Den-
mark heard cannonading at sea, oc-
casionally spotting aircraft over
the horizon. The booming stopped
at night but started with new fury
next day. Both Britain and Berlin
A 20d
ons| Week Week
£5,000 Tons
Ath
Week
3rd
Week
21,000 Tons
i
BRITAIN'S SHIPPING LOSSES
Submarines went down, too.
at first denied a battle, then each
admitted it and claimed victory. The
press could choose between the
Reich's report that one British air-
plane carrier had been destroyed
and a battleship badly damaged, or
the report of London's first lord of
the admiralty, Winston Churchill,
that a German attack had been re-
pulsed with no losses.
Day before, popular Mr. Church-
ill told the house of commons that
“a third” of Germany's submarines
had been destroyed and that ship-
ping losses were about a third what
they were in disastrous April, 1917.
Moreover, losses were still going
down (see chart). What he did not
point out is that Britain has fewer
boats at sea now than on Septem-
ber 1.
Eastern Front
After a 20-day siege, during which
it was “bombed and burned into
an unspeakable inferno,” during
which thousands of civilians died
from bombs, bullets, pestilence or
horsemeat diet, Warsaw surren-
dered and the war in Poland was
over.
Western Front
After a month of see-saw fighting
during which French-British troops
apparently had the upper hand
(thanks to Germany's pre-occupa-
tion with Poland) the battle of Sieg-
fried vs. Maginot apparently got un-
der way. French pressure was
heaviest near Zweibruecken in the
Saar region, and at least one report
said that heavy French cannonad-
ing smashed a hole in the main Sieg-
fried line between Merzig and Saar-
bruecken. Certain it was that heavy
artillery assumed new importance,
enemy shells were falling in small
towns behind the Maginot line, For
the moment, Premier Edouard Da-
ladier could tell his council of min-
isters that the situation was "most
satisfactory.”
Dramatic volumes might have
war whipped the slow
sand beds and bottomless pits. At
Los Angeles Mrs. Josephine Mair
filed a notarized document forbid-
ding her two sons from ‘‘participat-
ing in any activity called war.” The
U. S. fleet began secret battle games
in the Pacific, a vast naval training
program was planned at Hawaii's
Pearl harbor, and President Roose-
velt urged a cessation of foreign
purchases of war materials that the
U. 8S. might create its own reserves.
While Texas’ Rep. Martin Dies
waved the flag to forecast all Com-
cut its foreign tie with the Federal
German news
wrestled with
reports,
neutrality
congress
and
and substitute cash-and-carry.
Franklin Roosevelt's administra-
tion was winning, thanks to smart
handling of the issue by Sen. Key
Pittman and colleagues. To placate
anti-repealists and apti-New Deal-
ers, congress
was given
power which
the Presi
dent alone
enjoys under
the present
act, to de-
cide when a
foreign war
exists. In
every other a
provision ———
there was CORDELL HULL
similar rig- No comment.
idity, so that isolationists were left
with little to fight except the fast-
dying issue of embargo vs. cash-
and-carry. Having started the ball
rolling, the White House left neu-
trality severely alone. Secretary
of State Cordell Hull, asked for his
opinions, answered Sen. Arthur Van-
denberg that he had “complete con-
fidence” in the legislative branch
and that he had no *‘particular com-
ment’ to make.
Next day the senate foreign rela-
tions committee okayed cash-and-
carry, sending it to the floor for
“hell-to-breakfast”” debate.
This was war's effect on govern-
ment. On business, the effect was a
fearsome upsurge that may some
day boomerang. Items:
4 On the farm, the department of
agriculture found all larders full to
bursting (July 1 wheat supplies were
275,000,000 bushels over a year ago).
The year's agricultural income, once
expected to slump far below 1038's
$8,000,000,000 mark, may now be
only 100,000,000 shy. Flour output
reached a 12-year high.
4 Railroads everywhere placed
new equipment orders. Typical was
the Burlington's bid for 14 lotomo-
tives. A 22.4 per cent rise in car-
loadings was forecast for 1030's last
quarter (compared with last year).
Steel mills, America’s No. 1
heavy industry, operated at 83.3 per
cent of capacity, dangerously near
the 85 per cent mark which steel
men consider a practical level,
dq Oil production was up. A typi
cal late September week brought
3,681,000 barrels, a gain of 258,000
Barrels over the preceding seven
ays.
4 Electricity production rose, con-
tra-seasonally, about 13.7 per cent
in a week,
NAMES
that made news
GROVER CLEVELAND BERG-
DOLL, World war draft dodger
who fled to Germany, revealed in
his New York trial that he had
returned to the U. S. twice (1929
and 1935) under false passport.
PIERCE BUTLER, U. S. Su-
preme court justice, was seri-
ously ill with a bladder ailment.
FRANCIS J. GAVIN, old-time
northwest railroader, was made
president of the Great Northern
line. Rumors said that Rebert
E. Woodruff might be the Erie
road's next chief.
KING CHRISTIAN X, 69-year-
old Danish monarch, was abed
with a heart attack. Also ill, at
Washington, was Virginia's aged
Sen. Carter Glass,
RUSSIA:
Dance Master
Down from the
Moscow dropped "a passenger plane
bearing German Foreign Minister
Joachim von Ribbentrop. Signifi-
cantly, perhaps, he gave no Nazi
salute nor did his hosts offer a Com-
munistic clenched fist. Otherwise
the setting was familiar, for when
von Ribbentrop reached the Krem-
lin he found it overrun with Balkan
and Baltic statesmen of the type
Adolf Hitler used to summon from
Austria, Czecho-Slovakia and Po-
land. This must have worried von
Ribbentrop; Russia, having split Po-
land's loot with Herr Hitler, was
emerging as a dominant eastern Eu-
VIACHESLAV MOLOTOV
He out-Hitlerized Herr Hitler,
ropean power that must be watched.
Great Britain and France were
would give Germany more trouble
i
i
|
1
WASHINGTON.—The late Lord
observation
During the
early days of 1917 before American
once uttered an
of world hostilities,
Balfour sald to a group of
editors and
“The central powers will be de-
feated in this war, but the test will
come after peace has been enforced
by arms. The test will be whether
the peace we have thus gained will
be worth having—whether we can
preserve liberty and democracy. 1
believe we will be able to sustain
that peace and preserve that free-
dom: and 1 believe, moreover, that
it will be the people of rural Amer-
and the small
towns—that will lead the world back
With the congress giving consid-
eration to President Roosevelt's ur-
gent request for repeal of the arms
embargo as a means of preserving
our neutrality in the present Euro-
pean conflict, but with propaganda
stirring up emotions on sides,
there seems to be a need for that
vgane thinking’’ that Lord Balfour
mentioned. And, as I said above,
it is made to appear that the people
of the farms and the small towns
are going to have to lead the
again; they have th: sponsibility
because they obviously will be less
affected by selfishness, racial inter-
est, foreign influence and mass emo-
tion that upsets thought on issues
of this kind. Whether we are able
to stay out of this war or whether
all
way
is the resident of the small town
or the farm has the job of preserv-
ing our traditions and our civiliza-
Having made such a sweeping
sibilities, I will attempt to show
going on in Washington and else-
where, that has a bearing on the
trol the Baltic, and Germany the
But later it looked like
Russia was taking everything:
Esthonia’'s nervous Foreign Min-
ister Karl Selter scurried to Mos-
cow with explanations of why an
interned Polish submarine had been
allowed to escape, later sinking a
Russian freighter. His explanation
was ‘“‘unacceptable’’ and soon So-
viet troops, warships and planes en-
circled Esthonia. Under this pres-
sure, and while Moscow radio at-
tacked the Esthonian government,
the little nation soon found it wise
to sign a “mutual assistance’ pact
which grants Russia the right to
maintain naval and military bases
on islands off the Esthonian west
coast. Latvia and Lithuania, her
neighbors, wondered which would
be next.
Turkey's Foreign Minister Sukru
Saracoglu was there, too, and soon
there were sound reports of a Russ-
Rumanian-Bulgarian-Turkish ‘Black
sea bloc" which would smash Adolf
Hitler's hope of Balkan expansion.
Rumania, between two fires, was
leaning Moscow-wise and away from
Berlin. Bulgaria's special envoy to
the Kremlin established a Moscow-
Sofia airline to be followed by a
trade pact. Jugo-Slavia had a rep-
resentative there, too, on a secret
mission.
The only fly in this ointment was
Herr von Ribbentrop and the 35 “ex.
perts” who came with him from
Berlin. While Dictator Josef Stalin
stayed in the background like any
well-behaved master mind should,
Premier Viacheslav M. Molotov
called the tune that made big Ger-
many dance as violently as the lit
tle Balkan and Baltic states. The
mere fact that Hitler's men had
gone to Moscow, and not Stalin's
men to Berlin, offered good evidence
that Russia has grown in one month
from a silent, sulking and overgrown
boy into a dominant European figure
which der Fuehrer must fear.
Only strengthening this suspicion
was the official German news agen-
cy's report that Russia has agreed
to co-operate in an attempt to bring
peace between the Reich and the
allies. Obviously Herr Hitler was
frantically sparing no effort to end
the war. The previous weekend had
brought a peace feeler from Benito
Mussolini, but the result had been
negative. Therefore Germany had
coaxed and begged Russia into
the peace effort, even though the
price for this co-operation was a loss
to German prestige in eastern
. International
g that Adolf Hitler had
himself playing with fire, decided
that Der Fuehrer may yet be con.
sumed by the fire of Josef Stalin's
Communism,
Embargo Debate May Clarify
[ssues in Public Mind
President Roosevelt's ‘appeal for
repeal of the arms embargo was
predicated upon his conviction that
such action will help us to stay out
of the conflict. He argued that there
and forbid the sale of airplanes
made from aluminum, and so on.
It would be more nearly true neu-
trality, he asserted, if we said to
any and all belligerents that they
could come here and buy anything
they want—provided only that they
pay cash on the barrelhead and haul
their purchases away in their own
But while the President was mak-
waded into rather muddy
fact that much additional employ-
can
It may
be secondary to the great human
desire for peace, but the profit
Be that as it may, the senate is
it faces a long
there will be a crystallization of
Mr. Roosevelt called in congres-
cussion of the plan. He explained
publicly and to the members of the
conference that party politics should
be adjourned--that this was no
time for politics.
Reaction to Conference
Is Favorable to President
The general reaction to the con-
ference with congressional leaders
appears to have been very favorable
to the President. The public thought
on inclusion of former Governor
Landon of Kansas and Col. Frank
Knox of Illinois, Republican nom-
inees for the presidency and vice
presidency in 1936, however, was
quite different. Mr. Roosevelt ad-
vertised the invitation to these gen-
tlemen to the conference as evi-
dence of his desire to adjourn poli-
tics. That ballyhoo did not take
hold very well, Many observers
wondered how the President figured
that Messrs. Landon and Knox could
have anything to say about national
policy Ww! is the exclusive re-
sponsibility of congress. They were
defeated, discredited as leaders, by
the voters in 1036. Thus, critics
suggested that Mr. Roosevelt—with
ourned--had
litics nad played
BO I Trond oT politics
and Messrs. Landon and Knox
swallowed the bait in the fashion of
amateurs. The President has put
the whole Republican party on the
spot, with the assistance of its mem-
bers, and there are signs that =
Republican effort will be made to
offset the move.
Now, there is another thing crop-
ping up. Beneath shouts of patriot
avoid getting into the raging mad-
ness overseas, there is a feeling
that congress ought to remain on
the job straight through the winter.
The determination of the President
and his spokesmen in congress is to
limit action in the extra session to
the subject of repeal of the arms
embargo. If that is all the actual
work that is accomplished, it would
require only a short time. On the
other hand, there seems to be a
feeling that Mr. Roosevelt should
not be left with all of the respon-
sibility of a war threat hanging
over head. Since the entire mem-
bership has been called back here,
the observation has been frequent
that they ought to stay on until the
regular session begins in January
to be of help to the President as
ing-like changes take place in
he situation abroad.
One hears a great
deal of dis-
onaition.
ved the fact that
cial anc
suddenly have
there exists a national debt of more
than $45.000,000,000—almost $20,000,-
000,000 more than total of the
debt when the World war ended. It
is not a pleasant thought, it
must be faced.
the
yy
JUL
Turn to Rural America to
Lead Way to Sane Thinking
And as to the government itself,
attention lately has been called to
the fact that there are now 927,887
persons on the government payroll.
Contrast that with 817,760, which
was the greatest number employed
by the government at any time dur-
ing the World war. The military
and naval forces are not included in
the figures given. These facts were
mentioned to me at the Capitol the
other day because some members
were looking to conditions after an-
other war. It was explained that
there was very little contraction of
the government's size after the
World war and that was more than
offset by expansions in the last
gix years. In other words, a war
ple, that will become a permanent
thing.
as well as major questions, are hav-
ing an effect upon the thinking of
the country. While they are not
so intended, all of the many gov-
ernmental changes and plans and
conditions turn conversations to the
subject of war.
statement. From a long period of
observation of people, it seems to
me that those folks who form the
backbone of America are likely to
be less influenced by the various
things I have mentioned than
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Observations
When observations are drawn
from so many particulars as to
become certain and undubitable,
| these are jewels of knowledge.—
Dr. Watts.
Isms and Insane Ideologies
Have Their Origin in Cities
in the United States.
sary only to recall that all of the
isms and insane ideologies through
which we have passed since the
cities.
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FASE 2
lated areas.
that they gained much more head-
way than any one thought possible.
They are again on the way out,
however, because such things have
no appeal for the type of citizens
to which Lord Balfour referred.
When the situation in Washington
is summed up as bf this time, there.
fore, one can properly ask wheth-
er it makes any difference what
congress does about the arms em-
The things about which we
gether, they constitute national pol-
icy. If each of these little things
tends to involve the United States
just a little bit more each time,
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Liberty Grows Fast
Liberty, when it begins to take
root, is a plant of rapid growth.—
Washington.
SEEN
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