Evening star., 1940-06-18
BY ]. A. O'LEARY.


By ]. A. O'LEARY.
The 10 per cent cut in non-
defense spending called for by the
national defense tax bill will not re-
duce the basic salaries of Govern
ment employees, but may result in
some Of them being put on fur
1oughs, Senator Byrd, Democrat, Of
Virginia. told the Senate today as it
approached vote on the question.
Senator La Toilette, Wisconsin
Progressive, said it was his under
standing employees would not have
their rates of pay changed, "but
large numbers may be deprived of
their salaries entirely"
Senator Byrd replied that, while
there may be some furloughing, it
Will not apply to any great number.
A few minutes earlier the Senate
struck from the s1,OO7 100000 tax
Dill the Townsend rider seeking to
halt the Treasury purchase of for
elgn silver. 1t was put in the bill
In committee, Is to 4, but went out
on the floor, As to IS.
Senator McKellar, Democrat, OF
Tennessee also interrupted to ask
Senator Byrd if his economy amend
ment would affect Federal employees
or war veterans pensions. When
Senator Byrd explained that both
these items are exempt, because
they are fixed charges, Senator Nc
Kellar said that, with that under
standing, he is in sympathy with
the amendment.
Senator Byrd explained that his
amendment does not require a hori-
Zontal 10 per cent cut in each agency
or appropriation item, but merely 10
per cent of the non-defense total,
with presidential discretion to de-
eide where the reductions should be
made.
The Senator said the extent to
which furloughs may be applied will
depend on whether the 10 per cent
cannot be saved by slowing up on
non-essential projects.
Government salaries, Senator Byrd
explained, fall under three headings,
namely, postal employees, customs Of
flcers and teachers. fixed by special
laws; departmental employees gen.
orally. governed by the Classification
Act. and limited number of emer-
gency employees, whose rates of pay
are fixed by presidential order.
Sono for pyyrA e;1oJ G,,&
two salary groups are definitely fixed
charges. While the salary rates of
the last group could be reduced, he
said the President already has au-
thority to change these salaries even
without this amendment.
Meeting an hour ahead of time in
the hope Of passing the revenue
measure by evening. the Senate
quickly approved the Finance Com
mittee's action in eliminating the
100-gallon exemption the House had
allowed retail liquor dealers for
stocks on hand before applying the
increased liquor taxes. The bill
boosts the whisky tax from $2.25 to
So gallon. with a further tax of 40
cents gallon on rectifying.
The Senate also accepted the
committees action in calling the 10
per cent increase in all income tax
bills a defense tax" instead of q
super tax"
Controversy Develops.
A controversy then developed over
the silver rider. On motion of Sen
ator Townsend, Republican, of Della
ware, the Senate passed the silver
purchase ban on May as a sepa-
rate measure, but, when it met with
delay in the house, Senator Town.
send succeeded in having it tackled
onto the tax bill, which would force
House action
Chairman Harrison urged drop
ping the silver question from the
tax bill, pointing out that the sepa-
rate Townsend bill has just been
taken from the Speakers desk in
the House and sent to the Ways
and Means Committee for action.
Townsend Insists on Vote.
Senator Townsend insisted on a
vote, however.
Senator Downey, Democrat, of
California, warned that the silver
purchase ban would offend and dis
rupt Americas friendly relations
with Mexico.
The same argument applies only
to lesser degree to South America
and Canada, Senator Downey add
ed. 1t is fortunate for the United
States that the present government
of Mexico is friendly and "sees
eye to eye with us regarding the
situation in Europe" he declared.