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The Week

The President took a thorough beating from the House of Representatives when by a large majority it rejected his earnest plea to pass the bill abolishing public-utility holding companies. His only hope in the matter is now that the Senate will favor this clause—though if it does so, the margin can hardly be more than two or three votes—and that while the difference is being adjusted in conference an investigation of utility lobbying will bring to time the recalcitrant Democrats in the House. The whole affair is a demonstration, to those who favor a new party, of the unreliability of the Democrats even in relatively minor issues when large private interests are at stake. Meanwhile the new $4,000,000,000 spending program is delayed, as informed persons expected it would be, having put only a few hundreds at work. The government has also, according to the expectation of critics of the program, failed to pass the “unemployables” back to the tender mercies of the states. It is announced that in the fiscal year just ended the government did not succeed in spending what the budget estimated, not within $1,200,000,000. And tax receipts were slightly higher than expected. Secretary Morgenthau explained to a congressional committee how various new tax schedules, drawn up in response to the President’s appeal for greater taxation of wealth, would increase revenues. The Wagner labor-disputes bill was signed, though it will not be obeyed by anti-union employers, and Mr. Roosevelt urged Congress to pass the Guffey coal bill, though the Supreme Court is expected to declare it unconstitutional. He wants to make it a further demonstration of just how far the present constitutional system hampers the government. 

Potentially the most important domestic event of the week was the meeting in Chicago of numerous prominent individuals and representatives of groups who desire to create a new political party devoted to production for use instead of for profit. A number of the advanced Congressmen attended— though Marcantonio of New York withdrew—and Senator Nye addressed the meeting. A temporary organization was effected to prepare for the building of a party machinery in the states and the calling of a national convention. Congressman Amlie of Wisconsin was elected chairman, Alfred M. Bingham of New York executive secretary, and Professor Paul Douglas of Chicago treasurer. The American Commonwealth Political Federation was the name adopted. A resolution to exclude Communists was tabled, though the chairman of the meeting announced that this did not mean that Communists would be admitted. The platform tentatively adopted includes public ownership and operation of natural resources, transportation and communication, public utilities, mines, munitions plants and basic industries, as well as of the banking system. It proposes a constitutional amendment giving Congress power to make all laws necessary to provide for the welfare of the people. It favors government regulation of the marketing of farm commodities to give the farmers a price equivalent to cost of production. It advocated production for use by the unemployed, economic-security measures, taxation of wealth, genuine collective bargaining, civil rights, the soldiers’ bonus and international peace.

News from abroad is largely concerned with Ethiopia and Italy, a subject which is discussed elsewhere in this issue in a separate editorial. In Asia, however, gleamed another flicker of the creeping fire of war. Soviet Russia protested to Japan against border violations in the Amur River; at the same time the Soviet press declared that Germany and Japan had concluded a secret agreement for joint action against Russia, should either party go to war with her. Nothing, of course, is more likely. Japan replied to the protest with a proposal for a tripartite commission to settle border disputes between Siberia and Manchuria. The Soviet government, not wanting to incur the danger of war, accepted the offer. Immediately thereafter Japan continued her policy of aggression by joining with Manchukuo in an ultimatum to Mongolia, which is closely associated with Russia, demanding the right to establish a corps of observers in that region. The European pot was stirred again by the approval of a bill in Austria preparing the way for a return of the Hapsburgs, an eventuality bitterly opposed by the Little Entente.

The reply of Secretary of State Hull to Emperor Haile Selassie was widely misinterpreted by the press. It was taken to mean that the United States would not interest itself in the Italian-Ethiopian dispute, and would not invoke the Kellogg-Briand Pact. This is the exact opposite of what Mr. Hull intended to convey. Despite its oblique diplomatic language, the note was a direct slap at Mussolini and Italy’s imperialist ambitions. According to trustworthy sources, Mr. Roosevelt and Mr. Hull are greatly concerned about the impending conflict, and are reported to be in secret consultation with the British government over possible means of stopping it. The interest of the United States is not altogether altruistic. The only recent concession of importance granted by Haile Selassie, that for damming Lake Tsana, is held by an American engineering company, and is looked upon with great solicitude by our State Department. The Department also shares the general opinion that Mussolini is preparing to take a bigger bite than he can comfortably chew. They believe that the conquest of Ethiopia would tie up Italy’s military force for an indefinite period, with disastrous repercussions upon European politics, and in consequence upon the world economic situation. However, there seems ta be little that the United States can do. The Kellogg-Briand Pact cannot legally be invoked until a definite act of war has been committed, and then it will amount to nothing more than a toothless snarl. For the present, the United States will probably content itself with giving support to the fumbling peace efforts of England, whose motives, it may be added, are even more obviously self-seeking than ours.

Fifteen Americans, forming a Commission of Inquiry into political and economic conditions in Cuba, were arrested immediately upon arrival at Havana, imprisoned for a day and a night in a government fortress, and then deported back to the United States on the same ship that brought them. This was the answer of the Mendieta-Batista dictatorship to an attempt to evaluate the position of the Cuban people under the present regime. The American Ambassador and consular officials took no official notice whatever of the incident, thus continuing Ambassador Caffrey’s policy of friendship for, and occasional active connivance with, a government regarded by many observers as more brutally tyrannical than even that of Machado. Clifford Odets, brilliant young playwright of the Group Theatre, headed the Commission of Inquiry, and each member of the party was the representative of a national organization. Their sole purpose was to observe and report. The manner of their reception will leave with Americans an even worse impression about Cuban conditions than the unfavorable report that the delegation would undoubtedly have made if it had been permitted to investigate.

The Army Air Corps jubilantly announces the completion of a giant, four-motored bomber capable of carrying six tons of bombs and of cruising six thousand miles without refueling. No Japanese can read this announcement, we imagine, without instinctively recalling the new landing fields that the Air Corps is developing in Alaska. The new bomber has special equipment enabling it to fly at thirty thousand feet, higher than any fighting plane that Japan is known to possess can climb. From Alaska, it could fly to the main Japanese islands, discharge its six tons of bombs, and then, mounting to the substratosphere, return to its base without fear of counter-attack. The War Department also announces that this summer, for the first time in the country’s history, maneuvers will be held on a war scale, with as many as thirty-six thousand men under one command. It is hard to see why the charge of militarism leveled against the Kaiser’s Germany could not be equally well maintained against Mr. Roosevelt’s America. Pre-war Germany unceasingly piled up new and terrible armaments until it frightened the whole world. Though the United States is in far less peril from its neighbors than was Germany, we have embarked upon the same course.

Acting N.R.A. Administrator O’Neill was asked last week whether the voluntary codes submitted by industry would be turned over to him for the “spade work” of investigation. He replied cryptically: “Spades can be used for many things, including the digging of graves.” The grave that Mr. O’Neill had in mind, it is clear, was that of the N.R.A. It will contain not merely the fleshless bones of the Blue Eagle, but a major part of Mr. Roosevelt's labor program. After the Schechter decision, the announcement was made that voluntary codes must contain wages-and-hours provisions acceptable to the N.R.A. Now it appears that the codes, of which more than sixty are in readiness, will go directly to the Federal Trade Commission, and that wages-and-hours provisions may be omitted. In addition, the Federal Trade Commission is reported to be prepared to take a more lenient attitude than in the past towards open-price agreements and other forms of price-fixing. If these reports are true, industry will regain all the privileges it lost, while labor will get nothing. Since the trade-association executives sponsoring the voluntary codes are determined and experienced lobbyists, there is great danger that the most indefensible features and practices of the old N.R.A. will be stealthily revived.

Mayor T. Semmes Walmsley of New Orleans, because of his opposition to Huey Long, has been given more attention than he rightfully deserves. A strike of New Orleans garbage collectors, called because of the city’s failure to pay their wages, has brought the Walmsley-Long feud to the newspapers again. The mayor charges that Long has deliberately crippled the city’s finances in order to force his resignation. Long replies: “I’ll make things so hot for him that he’ll fry in his own grease and be glad to get out.” Meanwhile, despite promises of the F.E.R.A. to meet the necessary New Orleans payrolls, the collectors go unpaid and the garbage remains uncollected. Mayor Walmsley’s days are politically numbered. Huey is out to get him and, in the end, Huey will. It is only a question of a few months before Huey calls his rubber-stamp legislature together and ousts Walmsley from office. This, when it happens, can hardly be called a calamity. Mr. Walmsley, the nominee and titular head of the Old Regular ring, is nothing more than a common variety of American politician and it is conceivable that his removal might be advantageous to New Orleans—were it not for the fact that his successor will be equally incompetent and, in addition, a tool of Huey Long. The whole country might well echo the sentiments of one of our New Orleans correspondents: “When the garbage collectors get hack to work again, it would be a big relief to everybody it they picked up both Walmsley and Long.”

If the chief objective of the Agricultural Adjustment Administration was to raise the price of food, it can look back on the past two years with considerable satisfaction. From the low point of the depression to the high of this spring, at the end of April, retail food prices advanced by nearly 40 percent, according to the index of the Bureau of Labor Statistics. Not surprisingly, the effect of this boost has been, in some instances, to reduce consumption very sharply and to turn consumers to cheaper substitutes. Some illustrations of this are presented in the July bulletin of the National City Bank:

The consumption of butter, which climbed to 38 cents wholesale in New York City last February, has dropped 15 percent below a year ago, while consumption of oleomargarine has nearly doubled.

Beef prices at retail are more than 35 percent above last year, and pork and lard over 50 percent higher, due to reductions in the supply of 17 percent in beef, 38 percent in hog products and 27 percent in all meat products. The drop in consumption has been almost as great….

Cotton-seed oil is another product whose apparent consumption during the past few months has run below a year ago, following a price advance of 110 percent; and egg consumption has likewise dropped.

Can either the farmers or the workers tolerate rises in the price of food if incomes of consumers do not increase enough so that the food can be purchased? What is the administration going to do about that?

The United States Senate included in its unanimous-consent calendar for June 24 a virtually unnoticed item that now stands revealed as one of the most pernicious measures ever passed by that body. This is the so-called “incitement to disaffection” bill, which was introduced by Senator Tydings of Maryland, referred to the Naval Affairs Committee, reported out and adopted without even the formality of a public hearing. The bill provides “That whoever advises, counsels, urges or solicits any member of the military or naval forces of the United States, including the reserves thereof, to disobey the laws and regulations governing such military or naval forces, or whoever publishes or distributes any book….” having the same objectives shall be punished by a fine of as much as $1,000 or two years’ imprisonment, or both. Such a measure would have the effect of outlawing practically any spoken or written protest against war, on the ground that such a protest might eventually reach a member of the military establishment and weaken his resolution in the performance of his duty. A second section of the bill provides for search and seizure of suspected writings, and if this drastic invasion of civil liberties is enacted into law, it will mark the first time America has had a peacetime sedition act since 1798. The bill carries a particular menace for labor because it would forbid any protest against the use of troops in strikes, and, indeed, a striker who might appeal to a National Guardsman to desist from shooting or gassing him would automatically be liable to imprisonment. The American Civil Liberties Union, The American League Against War and Fascism and other organizations are carrying on an active campaign against the measure. It is to be hoped that the House of Representatives, where the bill now lies in the hands of the Military Affairs Committee, will effectively dispose of it for all time.

One way to penalize a worker’s efforts to make a living for himself is to invoke a criminal-syndicalism law. This recently has been done with particular severity and injustice in the case of Kyle Pugh, who was sentenced in Jackson County, Oregon, for selling “subversive” literature. His story is an interesting one. He was born in Marion, Virginia, forty-eight years ago and as a child was taken by his parents to Blackfoot, Idaho. He was permitted to remain in school until he reached the ninth grade.He helped out on the family cattle ranch in summer and worked in the mines near Butte in winter. In time the family lost the ranch, and Kyle worked variously as a miner, a prospector and a sawmill hand. He managed to save a little money, and a few years ago set himself up in business as a breeder of donkeys. The venture failed, and he turned them out to graze. With so many prospectors needing pack mules, most of the animals soon disappeared.The remainder he sold for salami. He just kept one donkey for himself, and, in a home-made cart,set out to investigate rumors of a gold strike on the Rogue River in Oregon. The rumor proved false. At the end of his resources, Pugh applied for relief. This was denied because he was not only unmarried but, retaining his one donkey, he was still a man of property. In May, 1934, on behalf of the United Farmers’ League, he began selling literature to the impoverished farmers of Jackson and Josephine Counties. The pamphlets told of what other countries, especially Russia, were doing for farmers, and described what a collectivized economy might accomplish for workers and farmers the world over. For one brief summer he supported himself by selling pamphlets, and then he was arrested. In the United States of America, this man,so thoroughly American in his background and the variety and tenacity of his individual enterprise,was rewarded with a sentence of five years in the penitentiary.

The facts in the case of Walter Baer, thirty-seven-year-old civil engineer of Portland, Oregon, who stands in the shadow of deportation to a hostile Nazi Germany, seem to warrant intervention by the Secretary of Labor. Baer incurred the displeasure of Portland authorities by his efforts on behalf of relief workers, and an order for his deportation was obtained on the ground that he had served a short prison term for forgery in 1923. Although he later married the daughter of an Oregon pioneer, has three children and, according to The Oregon Journal, “in the interim has lived an exemplary life, has acquired an honorable profession … and served with distinction in the United States geodetic survey for the city of Portland,” efforts to have the deportation order rescinded have proved unavailing. Neither Baer nor his wife and children can even speak the language of Germany, and in recent times we have had all-too-vivid testimony as to what happens to men of Baer’s political views at the hands of Hitler’s Brown Shirts. To send Baer to Germany under these conditions imposes a sentence far more drastic than any contemplated in a mere order of deportation. It is a sentence that we hope the Secretary of Labor will have the common humanity to avoid.

Sir Josiah Stamp, the noted English economist, who recently visited the United States, told his countrymen on his return that “there is a general tendency to industrial revival. Everywhere I went I saw the appearances of well-being.” This was no doubt meant as a friendly little statement, but if it is to be taken seriously, one wonders where in the world Sir Josiah went. To some of the better clubs, hotels and country homes, no doubt. We should not expect him to consort intimately with the sharecroppers, coal miners, textile operatives, or with any of the 20,000,000 people on relief or the more than 10,000,000 unemployed. But, as an economist, he would be expected to go to some repository of the statistics covering these matters, or at least to see an index of industrial production, which has been declining ever since February.

This article originally ran in the July 17, 1935, issue of the magazine.