The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1939-04-13

fore this letter appears In print.
The Committee was also instructed
to confer with members Of the
Senate with view to having the
Agricultural Appropriation bill,
which Is now before that body,
provide for sufficient sum to en-
able the Surplus Commodities Cor
pcration to go into the open mar
ket and buy UP the surplus supply.
A Committee on Policy was also
named and it Is our hope that this
committee will be able to work out
long range program that will
keep the dairy industry on an even
keel. x,
There is no question but that the
tremendous increase in ccnsump-
ton of oleomargarine has had a
very serious effect on dairy prices
and the Policy Committee will give
very serious consideration to that
phase of the situation. Mere about
this in my next letter.
Tax Creates Unemployment
Ever since the Social Security
Act became law, many have con-
tended that workers and employers
were being subjected to an I'M
necessarily high payroll tax for old
age insurance which while suppos-
edly being used to build up a re-
serve that would eventually ag-
gregate Al billions of dollars, is in
fact being used for current govern
mental expenditures. In the Repub-
lican Platform of 1885, the party
advocated that the old-age insur-
ance system be put on a pay-as-
we-go basis, with a moderate con-
tingent reserve, which would per-
NIT a lowering of the excessive
payroll taxes during the next
several years and do away with the
mythical reserve fund OF At bill
lions. Since that time, Republican
members Of Congress have contin-
ued to fight for the pay-as-we-go
principle. This plan was strongly
opposed by the Administration.
Last week they finally capitulated.
Secretary Morgenthau came before
the House Ways and Means Com
mittee, which for the past nine
weeks has been holding hearings
on Social Security revision, and
advocated the very plan fer which
we have so long contended. He
admitted that our criticisms of the
full reserve were valid and that
payroll taxes were unnecessarily
high at the present time. He offer
ed four alternative suggestions for
modification of the payroll tax
structure. one of which would per-
NIT a deferment of the increase
in the payroll tax which is sched-
uled for next year, until 1913. The
Secretary made it plain that in his
opinion the proposed increase in
the rate next year would have a
lettering effect on business re-
covery.
My greatest objection to the pay
roll tax Isl that it has created more
unemployment because the fewer
persons on the payroll the smaller
the tax, so the employer has every
incentive to keep the number en-
ployed at the lowest possible level.
Let Congress Do 1t
The Administration has hurled
a challenge at Congress to balance
the budget. In statement that
must have had administration en-
dorsement, Chairman Eccles Of the
Federal Reserve Board told a
special Senate committee that the
majority of people apparently want
the budget balanced and that the
will Of the majority should pre-
vail. He therefore urged Congress
to get busy and balance the bud
get.
Mr.. Eccles left no doubt that
his own views were unchanged,
that he still believes in the spend
ing-lending policy. He even went
further that that and declared his
belief that a cut in expenditures
would be disastrous. But if the
majority Is convinced that a bal
anced budget will aid recovery,
why don't Congress go to work
and balance it?
PROBABLY the I administration
thinks that this maneuver of plac-
ing the job in the lap of Congress
is coed political strategy. Then if
Congress should undertake to
balance the budget and succeed,
the Administration could take the
credit for having suggested such
an attempt. And if Congress failed
or its efforts proved disastrous, the
Administration coud say, I told
you sc.
The fallacy in the administra-
ton challenge is. as Senator Har-
rison has said, that no one believes
that the budget can be immediate
ly balanced. But the majority of
people believe that the present
spendthrift policy which the ad-
ministration has followed for over