Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-01-06
RooSeveIt'S Relief Stand
Encouraging-Budget
Problem Is Next.
PRESSURE INCREASED
AS LIVING COSTS RISE
Wholesale Commodity Index Hits
Four.Year Peak in Week.
Higher Taxes Due.
BY CHARLES F. SPEARE.

Special Dispatch to The Star.
NEW YORK, January 5.-As the
next impulse TO business, in one d1-
rection or the other, will come out of
the contents of President Roosevelt's
messages to Congress. it was to be
expected that the holiday period
would be followed by dizziness in re-
Gently active lines of trade and hesi-
tation in the markets for securities.
While there was much that was
idealistic in President Roosevelts Fri
day address, it took a realistic and
practical view of the relief question
and one that gave satisfaction to
business interests long demanding
that the Federal Government be less
generous with its spending and that
made work" be done at rate of pay
that will not compromise private in
dustry.
Business was also encouraged by
the statement that such appropriation
as has to be made for public works
will be within the sound credit of
the Government" to maintain it. AL
together the message confirmed the
impression that in matters Of ma
tional economy the President is all
the time becoming more conservative.
The pattern and policy Of many
industrial and financial commitments
will be made by what the administra-
ton sets forth in the budget message
Monday and by such outline of legis-
lation as Congress presents at the
opening of its session.
The public has now read and di-
gested the many financial reviews
printed during the week and has
taken note of the optimistic tenor of
most of the opinions expressed
therein. There is a widespread feel
ing that recovery is on the way,
though its pace this year may be dis
couragingly slow to the impatient. If
this mood can be preserved, it will
do more than any other factor to
stimulate the flow of capital into
those lines of industry that most need
help and to which the largest number
of the unemployed are related. The
rise Of Az points in iron and steel
production to Al per cent of capacity
and the statement that s205. 900 900
has been used in better housing are
encouraging.
Living Costs Rising.
In his message to the New York
State Legislature Wednesday, Gov
Lehman said, Relief must 60 on as
long as the present economic crisis
remains with us" This is the cruX
OF the financial problem Immediately
facing State and National law
makers. They must work out the
most equitable form of administering
relief. The pressure on those with
out employment, as we'll as on those
who are receiving direct or work re-
lief, is increasing with the steady
rise in the cost of living.
This week the wholesale commodity
price index has touched the highest
point IN four years. The conspicuous
gains have been in foodstuffs. It is
IN them that the advances in the next
six months will be greatest. Farm
products, as a group. show an appre-
citation of 80 per cent since the end
OF 1888. The average rise in wheat,
corn, oats and rye has been % per
cent. Other food products are up 20
per cent, with beef so per cent highx
and lard double the cost at this period
last year. Cotton costs IS per cent
more and rubber is up As per cent.
The major items in arbitrary liv-
ing costS-namely, food clothing. fuel
and, quite commonly, rents-are a
more severe tax on the family budget
than they have been since the early
days of the depression.
Higher Taxes in Prospect.
If the intention is to throw back on
local communities and on the States
a larger proportion of relief expense
than they have heretofore borne, this
will mean either greater direct taxes
by such political divisions or larger
issues of bonds. There appears to be
agreement that Federal income taxes
are not to be increased this year. On
the other hand. there will undoubtedly
be spread of the sales tax method for
meeting emergency costs. About 80
States already have it in effect. The
impracticable Townsend old-age pen-
sion plan does not suggest the sales
tax as new idea but one whose re-
turns are to be multiplied
A recent survey made by the Ma
indicates that total taxes annually
paid in the United States amount to
$4,000, 100000, or one-fifth of the
present yearly income of the Nation.
A fair revision of the tax laws would
place a larger levy on those with the
highest incomes. a reduction in the
normal tax in the lower brackets. re-
moval of the exemptions from all civil
servants, some of whom have in
comes, tax free. of $4,000 to S17,500,
and the application of the tax payment
principle to every citizen earning over
$500 a year. The sales tax has the
virtue of reaching thousands who
today should contribute toward the
cost of government but by various
indirect methods avoid it.
(Copyright 1885. by North American
Newspaper Alliance. Inc)