Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-05-26
Political Morality

Senator Morse, who Is seldom at loss
for the extravagant word, has charged
that President Eisenhower's political
morals are more or less on a par with
those Of Dave Beck, the Transfers boss.
We do not set ourselves up as any Judge
of political morality, never having OBJ
served enough Of it at any one time to
be sure there Is any such thing. 1t may be
useful, however, to examine the real,
as distinguished from the demagogic,
basis of Senator MorseS difference with
the President.
The Senator's complaint is directed
to what he calls an interest free" loan
to the Idaho Power Co. for development
Of the Snake River power project. This
really is a political fight between the
public power and the private power advo-
Gates, with Senator Morse, of course,
being public power man.
But Congress voted down a Federal
power program on this project and the
Supreme Court has affirmed the legality
Of the license for private development.
So Senator Morse and those allied with
him have turned their fire on the "fast"
tax write-off which has been allowed the
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stand 1t, to uncover another Dixon
Yates case.
The fast tax write-off permits a de-
veloper to depreciate a substantial por-
ton Of his investment within I'VE years,
thereby reducing his tax liability during
that period The Government, during
this period, loses tax revenues and has
to pay interest on money 1t borrows in
lieu Of the taxes 1t would otherwise have
received. OF course-a point which SEN
ator Morse doesn't mention-the devel-
oper pays higher taxes after the five-year
period (the usual depreciation period is
20 years. and the Government at that
time gets more revenue and presumably
recoups some Of the interest money lost
during the flve-year period. No one
knows just how this will balance out
In the case of the Snake River project.
The real question is whether the
authorization for the tax write-off In
this instance conforms to the intent of
Congress, and on this point there Is room
for-and there is-honest difference of
opinion.
The write-off was first authorized by
Democratic Congress in 1910 as q pre-
war measure, its purpose being to encour-
age investors to take the risk Of building
defense plants which might be shortlived
as money-makers. This authorization
lapsed after the war, was revived In 1850
during the Korean crisis, and was con-
tinued in 1854 as feature of the defense
mobilization program.
It was against this background that
the Snake River project came to the once
Of Defense Mobilization, the fast write
OF having been recommended by the
Interior Department. ODM, wanting to
stimulate a step-up of electric power
production in the Northwest, where many
defense installations are located, APP
proved. We are confident that this was
done in complete good faith, regardless
Of the wisdom Of the decision We doubt
very much that the President had any
personal knowledge Of the details.
The Snake River fast write-off GER
tificate was one Of 80 such certificates
granted to private utilities since January
/, 1855. ODM has received no protests
concerning any Of the others-a circum-
stance which suggests that there is a
little politicking in the case Of Snake
River.
AS a matter of fact, substantial
number Of fast write-off certificates have
been issued during the past seven years
for projects, including private utility
projects, in Senator Morse's home State
Of Oregon. Some Of them may have come
since the end Of the Korean fighting.
We are not aware, however, that Senator
Morse has accused the President of pick
ing the pockets Of the taxpayers in con-
nection with any of these. In fact, we
have not heard of any protest from him.
If he has protested 1t would be interest
ing to know the details, for that would
help in any examination of what consti-
tutes political morality.