Imperial Valley press., 1937-11-10
News Behind the News
- Undivided Profits Tax

ASHINGTON.-PreSident Roosevelt is ask
ed about revision of the surplus profits and
capital gains taxes. He replies that the New
Deals chief objective is more purchasing power
for the under privileged "one-third' and that
his wage-hour program and the new crop con-
troll program will be aimed at that.
This reflects the Presidents mind Nirly
accurately according to many VINO nave peen
talking with him earnestly
It is now certain that the heat which has
been turned on Roosevelt in the effort to per-
suade him to ask corporate tax revision will
have to become much hotter if the Presidents
brand of revision" is to satisfy the business
groups and conservative advisers who have been
urging him.
Roosevelt. if some of his intimates interpret
him CORRECTLY is convinced that the business
slump caused the worst of the stock market drop
not vice versa, and that the two chief causes
were:
Industrys stocking heavy inventories at high
prices last spring.
Industrys raising prices higher than the
market would accept Such a view obviously
minimizes any adverse effect of higher wages
scales.
Although the administration has its quota of
CaSSandraS, in general 1t is not seriously dis
turbed by the threat of a business tail-spin. The
business situation will smooth itself out, it's be-
heved in high places.
And if it doesn't the government thinks that
it possesses important remedial powers. The
Presidents warning against soaring prices had
a very definite effect on commodity markets
last spring, it is claimed, and the Federal Re-
serve Boards recent margin requirement changes
started the stock market going up again.
RooSevelts remark that the government in
the last year had reduced its direct contribution
to the national income by S2.50o 100000 may turn
out to be more significant than it appeared.
Despite announcement that they would be
liquidated the spending and lending machinery
of PWA and RFC are being kept oiled and
ready for possible crisis. CHATS supposed to
be a secret) One receives assurances that the
spending lending program will be resumed If
needed"
Despite many recent pleas to him, Roosevelt
says he doesn't think the secret of national
economic success is in relieving the rich man"
or helping him make more money. He holds that
poor men spend money much more rapidly than
rich men, that the dollars of poor people thus
accelerate increase in national income much
faster than dollars Of rich people and that it
consequently is best to feed poor people as many
dollars as possible.
Consequently relief from the capital gains
tax, if Roosevelt has his way, is likely to be
confined to rich who will invest money
in housing construction.
As to the corporate surplus profits tax, the
President thus far sticks to the principle that
investors rather than corporate arrangements
should decide whether corporate profits should
be distributed invested in expansion or slowed
away. He won't accept the New York view that
the tax is wrecking the capital market Appar-
emily, however, he does realize that the tax,
which has no real access to the capital market
No hint whatever appears that Roosevelt
would be willing to modify the SEC act or his
power policy-or abandon any OF his congress
sional program.