Evening star., 1942-07-30

S@$*$ - creased an
David Lawrence. now, under the
new formula of wage "stabiliza-
tion," are to be increased still more
to make up for rise in the cost Of
living. the people who have saved
their money are undergoing a con-
siderable slash in their income from
savings. Nobody has as yet pro-
posed relief or income stabilization
for the millions of persons who are
suffering a loss of interest income
on savings or who have been un-
dergoing such steady decline by
reason Of New Deal policies before
and after World War II began.
Treasury bonds which used to
yield the investor 3.6 per cent in
1929 and as high as 1858 in 1892
have been forced down by govern
mental policy so that the yield is
down to 1877 per cent.
During that same period, average
weekly earnings in manufacturing
industries have more than doubled,
going from $17.S6 in 1882 to $37 40
in May, 1912.
Interest Rates Cut.
Interest rates on time deposits
have come down from 81 per cent
in 1892 to close to l per cent in
1912. This is a wage cut for in
vestors Of 6625 per cent. Certainly
II there is any "stabuization" re-
quired here is place where there is
. crying need.
Take first-rate bonds of corpora
tions. Whereas the rate was about
s per cent in 1882, the yield of in
come in May, 1912, had been re-
duced to the 285 per cent level.
This, of course, is the direct result
of the way the Treasury has cut
down interest rates and slashed the
income OF the thrifty who save
their money.
Now, in the face of the foregoing
trends which show that persons
who have savings suffered severe
cut in wages in the last decade, it
Is proposed by the labor politicians
that another kind of a cut be i'm
posed on those who have saved
money and invested 1t in corpora
tions-a cut by means of heavy
taxation that will make it difficult
for some companies to meet inter-
est payments on bonds and impos-
sible for other companies to pay
dividends on stocks in which the
thrifty may have invested their
money hoping for steady income.
There are hundreds of thousands
Of persons who have invested their
money in, the large corporations,
many of which are now announcing
q cut in dividends. War taxation is
q necessity and persons who are
having their dividends cut are fully
aware of the necessities which re-
quire such a course. But they look
askance at the other groups of
citizens which, in the face of big
wage cut for one group, are ac-
tually insisting on a wage increase
for their own groups. There hardly
seems to be uniform sacrifice in
that kind of public policy.
InSr,ra ma Endo on~araI
There are literally millions OF
persons who own insurance policies
They have been told that their
premiums would run about a GER
tain figure each year They now
face the fact that insurance COM
panies cannot possibly invest theil
funds and get normal yield. This
may mean a rise in the cost of in
surance premiums and on top Of
that the Treasury refuses to permit
the citizen any deduction from in
come taxes on account of insurance
premium expense to the individual
Another aspect of the insurance
bltudIAoi AOlCCu Oil IllC tiHily CAV
izens of the Nation by unsouno
policies of the New Deal relates te
the yield that can be expected when
the proceeds of insurance policies
are invested by widows and orphans
Many a man who has paid premium:
year after year expecting to leave
q sum for his family out Of which
q certain income could be derived
must now revise his estimates. The
Treasury policies have forced 9
wage cut on the earnings of those
who put their savings in life in
surance policies.
Blow to Thrift.
What's the use Of being thrifty
anyway If you save it you have
the wages Of your capital cut dowr
by the politicians and the selfish
pressure groups who rule the day II
Washington. II you try to inves
your money in Government bond
you must be prepared for a low
income relative to other investments
and you wonder what will happen II
the bonds and the income some da,
II something isn't done soon to stol
imitation. which could mean virtua
reputation Of public obligations
You wonder, too, what good tn
yield will be If you will be able Il
buy for a dollar some day only
half or a third Of the quantity o
goods you could have bought will
the same dollar the day when 70,
0arned 1t in 1912.
The tendency is to force spending
now rather than saving. In Britain
Lovo r,,,, iv,f n trp,,hln with thI