Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-11-15
Prediction Bogies Are
Now Being Dissipated
ny OVEN L. SC0TT.

Those bogies are being disstpated by the
very groups that raised them, adding
further to Mr.. Roosevelt satisfaction.
The President admitted to newspaper
men early In the week that he was
made happy by the turn Of events In the
last few days. BY relieving tensions
and suggesting at least brief era OF
good feeling, they appeared to make
easier the dificult tasks Of adjustment
that confront him as he faces second
term. e....
In the heat Of the campaign, workers
were told. through their pay envelopes.
that wage deductions were In store Tor
them. Stockholders received warnings
that their interests were jeopardized by
Federal policies. The people were told
that the American system OF Govern
ment was threatened and that President
Roosevelt hankered to be o dictator.
And now, what do the people find
after election7 They discover that, while
wage deductions are to be made when
the old-age insurance plan takes enect
In January, many industries actually are
ordering wage increases far greater IN
amount than the coming deductions OF
per cent. At least million workers are
to share In the higher pay schedules
announced In the first few days follow
Ing election, More hundreds OF thou
sands received word Of wage bonuses to
be given them before the close OF the
year.
Stockholders. many Of whom had been
warned that Federal policies were jeop-
ardizing their interests, found right after
election that they were to receive huge
special dividends, II owning stock IN
number of important companies. Those
dividends will add hundreds Of millions
of dollars to their income for this year.
and are expected to bring corporation
distributions to the largest total In his
tory.
Regular dividends, spectacular special
cash dividends and stock dividends are
reported In announcements that dot the
financial pages In manner reminiscent
Of 1929.
The President, who had been pictured
as greedy for power and for q fling at
dictatorship. emerged from the battle In
his same old character. quick to admit
that he had underestimate his own po-
litical strength. Then, instead Of pre-
pairing q new dose Of medicine for his late
opponents, he turned to search for q
basis of cooperation, and prepared to
let the country settle down in the period
between now and January.
Newspaper men found Mr.. Roosevelt
no different after election than he had
been in the heat Of the campaign or
during the period since his first inaugu-
ration.
But the happenings In industry gave
him an opportunity. If he had wanted
to take 1t, to pose as something Of q
miracle man.
The President had held out the pros
pect Of better times for workers and in
vestors and farmers in his prediction
statements. Since the election, 1t has
appeared that quick delivery was being
made on promises, with industry and
Wall Street doing the delivering. The
lavishness Of distributions caused it to
look almost as though employers and
nnanciers were celebrating Roosevelt
victory.
Actually. they were bowling to New
Deal law, the fate of which had been at
stake In the election.
This law. enacted during the last ses-
sion of Congress, imposes q graduated
surtax on the income of corporations
that fail to distribute their earnings to
stockholders. Government experts long
ago found that controlling stockholders
in many large American corporations
were able to escape the full effect Of the
surtaxes on personal income by having
their companies hold big part Of earn
ings in the company. where they would
be taxed not more than IS per cent. II
paid out In the form of dividends, those
earnings would be much more heavily
taxed.
So, when the Supreme Court upset
processing taxes and when Mr. Roosevelt
needed more money to fill that gap, he
decided to close up the escape section
of the income tax law.
Now that 1t is closed, corporation after
corporation is deciding that the best way
to meet the law is to pay out earnings in
the form of dividends or in the form OF
wage increases or wage bonuses, allow
ing the individual to settle his tax prob
lem with the Government.
What looked like a miracle really Is Q
new tax law at work. That tax law Il
adding to what promises to become q
new presidential problem-boom control
Throughout his first term, Mr. Roose.
welt strove in every way to get money
into circulation. Public works, work re.
lief, farm bounties, c. c. c. camps ant
other agencies supplied machiner,
through which public funds were pumped
to fill the gap left by a contraction Of
private spending.
Now money is circulating more rapidly
Retail trade volume is approaching Z
record in many lines. Industry aftel
industry is swinging back into heavy
production. Talk is heard Of shortage.
| Of goods and of skilled labor shortages
| Christmas business promises to set rec.
ords. Unemployment is declining rather
rapidly.
In other words, the stage is set nov
| for private spending and lending on Z
scale that could produce a boom. TIL.
new tax, by encouraging distribution ant
quick spending Of corporation earnings
| Just adds fuel.
So the President, as he looks ahead
needs to think of plans to keep TIT
upturn from becoming little more thar
| q speculative spree that could end II
| much the same manner as the 1929 spre,