North Carolina Newspapers

THE PERQUIMANS WEEKLY. HERTFORD, N. C, FRIDAY, MAY 6, 1938 PAGE THREK loo;ii;:g at 17as!ii;:sto;i By Hugo Sims, Washington Correspondent Blril i I II III. I House and Senate Compromise - Taxes ' The conflict between the House and the Senate on the : $5,800,000,000 revenue revision bill was settled as all such disagreements have to be settled in legislative bodies by com promise. The Undistributed Profits Tax is retained in modified form, thus up holding the House, and the present system of taxing long-term capital gains as ordinary income is abolish ed in favor of tne principle advo cated by the Senate. The bill as agreed upon provides that corporations earning more than 25,000 pay, a tax of sixteen and one half percent on their undistributed profits. The House bill provided for sixteen per cent plus four per cent. The Senate bill had a flat rate of eighteen per cent The new bill divides capital gains into short-term, (those involving as sets held less than eighteen months) to be taxed as ordinary income, and long-term gains, to be taxed at twen ty per cent if the assets are held less than two years and fifteen per cent if they are held longer than two years. The House bill contained the present system of taxing a percent age of gains on a. graduated basis according to the length of time the assets were held. The Senate bill provided for a flat rate of fifteen per cent on gains on assets held more than eighteen months. ' . The new law will stand only for the calendar years 1938 and 1939. Cor porations earning less than $26,000 will be" entirely exempt from the principle of the undistributed profits tax. They will pay twelve and one half per cent on the flrst $5,000 of profits, fourteen per cent on the next $15,000, and sixteen per cent on the next $5,000. There are also two "cushions" for corporations having debt or impaired capital. Corporations with a loss in one year can carry it over to offset profits shown in the next year in calculating the undistributed profits tax. In addition, earnings used for the retirement of debts, created prior to January 1st, 1938, will be exempt from the undistributed profits tax. While the agreement continues the principle of the undistributed profits tax, it is far removed from the pro visions of the present law. Former- ontly, the income of a corporation paid a normal, tax, .graduated from eight to fifteen per cent, plus a super-tax ranging from seven to twenty-seven per cent on. undistributed earnings. Undoubtedly .the undistributed pro fits tax will be an issue in future political campaigns. President Roosevelt has been outspoken in favor of the principle of the tax. He con tends that without it there will be a disparity between the taxation of in dividual proprietors and partnerships on the one hand and of corporations on the other. The argument advanced by the President for the undistributed pro fit tax is as follows: Individual pro prietors and partners are taxable at the usual normal tax and surtax rates upon the entire income profits of their businesses, whether taken out of the business or left in it. Cor porations, however, being legal en tities, can withhold the distribution of profits and thus the share-holders who really own the business are not required to pay any personal income tax on their part of the withheld profit. from seven to twenty-seven per cent on undistributed profits. It is this extra tax on undistributed earnings that the President Insisted upon. Without it, he says, . the partner ship or individual proprietor is dis criminated against as compared to the corporation. Moreover, without it, the avoidance of surtaxes through the use .of corporations' becomes a readily available device for those persons in the higher surtax brackets who seek legally to keep their net personal incomes down for tax-paying purposes and to hide their actual profits by leaving them undistributed in the corporations they own. New Deal Faces Third Test in November Twenty-seven weeks from next Tuesday, the people of the United States will go to the polls to pass judgment upon the administrtion of the affairs of the Government of the United States. The election in November will be the third test of what is known as the "New Deal." The members of the House of Representatives and one-third of the Senators must face their constituents, who will have the opportunity of passing upon their records. Most of the congressmen who seek re-election understand that their political life depends upon pub lic sentiment toward the policies of By illustration: If three men i President Roosevelt and their own operated a business as partners and (classification as supporters or oppon it made $75,000 profit, each of the three partners would have to report $25,000 income and pay personal taxes on that amount. If the same three men owned all of the stock in a corporation which made $75,000 in a year, they could pay $30,000. out in dividends, making each individual liable to personal income tax on the $10,000 dividend. If the corporation retained $45,000 of their profits, without distributing it as dividends, the individual owners would not have to report the extra $45,000 as income and thus would escape the personal income tax. Therefore, says the President, where corporations do not distribute earnings, the Federal Treasury does not collect additional taxes op the personal income of the stockholders. In the case of individuals with large incomes, the loss might be consider erable. The reader should not lose sight of the fact, however, that corporations, under prior law, paid. a normal tax of from eight to" fifteen ' per cent of their earnings, plus a tax ranging ents of the Chief Executive's pro gram. Everything in the political arena today indicates that once again Pres ident Roosevelt, while not directly in volved in the election, will occupy the center of the ring. There will be, of Course, side acts going on in some of the states, but, in- general, the ap plause which will greet the perform ers will depend largely upon the spectators' attitude toward the ring master. As the big show gets under way, we find the President standing near the center, a little to the left. He is flanked on each side by a number of loyal supporters, thoroughly con vinced that he is pursuing the proper course. This group, to the right, fades imperceptibly into a band of dissatisfied, conservative Democrats, who merge witlj what is generally termed the Old Guards of Republi canism. On the other side to the left of the President, his supporters disappear into a band of so-called Liberals, in cluding many Progressive-Republicans, and these in turn fade into the group of radicals who occupy the ex treme left This is the set-up, and the basis of the President's strategy is the belief that by shifting his position, slightly to the .right or left, he is assured of sufficient additional support to give him. the necessary majority. Last week there was activity on both ends of the line. At Madison, Wisconsin, Governor Phillip, F; La Follette outlined a tentative pro gram, apparently intended to capture the Progressive group and, if possible lead it into a Third Party movement. To the right, where the Old-line Re publicans congregate, there was re newed vigor as various spokesmen criticized the President's policies and attempted to formulate the issues which, in their opinion, should be the dividing line between the parties. The activity of the La Follette's, John L. Lewis, Mayor La Guardia, and others generally associated with Third Party movements, do not, as yet, mean a Third Party in the presi dential campaign in 1940. On the other hand, the speeches of former President Hoover and former Gover- , nor Landon of Kansas, when linked with the activities and efforts of the Republican organization, indicate a new spirit on the part of the G. O. P. and evidence an intention to vigor ously contest the issues. The further development of either activity will depend more upon the showing made in the congressional elections this fall. It is too early to make any predic tions as to the outcome of the No vember election. Most political ob servers take it for granted that the Republicans will gain a number of seats in Congress. Present indica tions' plainly point to such a result. Frankly, we risk no prediction until certain key primary contests can give a clearer indication of popular trends. Our caution is fortified in this respect by. the recollection that, in 1934, the President s opposition failed to make the advances forecast and in 1936, the election was far more one-sided than was helieved possible by most observers. USES GOLD BATH TIM Cannes, France. In the villa re cently leased by the Duke and Duch ess of Windsor at a cost of $16,000 annually, is a twenty-carat gold bath tab, located in that part of the house which is reserved for the Duchess' apartments. The estate includes a 250-foot swimming pool and harbor. Musicians' Slang In musicians' slang, a trombone is a "slushpump," an accordion is a "box of teeth," a band leader is a "front man," and a woman vocal ist is a "canary." Road to Great Pyramid It took Egyptians ten yean to build the road for hauling material to the sit for the Great Pyramid. PROMOTE The Man You Have Observed In Important Public Office For TEN YEARS And Personally Known For SIXTEEN YEARS His Friends Say He Has EARNED And DESERVES The Nomination By Service For A Decade In Office of DISTRICT SOLICITOR HERBERT LEARY OF EDENTON TO JUDGESHIP It is being extensively circulated, in an effort to injure my candidacy, that my opposition to Hon. C. E. Thompson is INOPPORTUNE and WITHOUT PRECEDENT. All of which is without foundation as the following instances will conclusively show: In the Second District, Walter Bone is opposed in the coming Primary by Itimous Valentine; in the 19th District, A. Hall Johnston is opposed in the coming primary by Z. V. Nettles, PRES7 EOT SOLICITOR OF THE DISTRICT, and in f the 21st District, E. C. Bivens is opposed the 'coming Primary by J. M. Sharp and .Allen H. Gwyn, the last named being the PRESENT SOLICITOR OF -THE DISTRICT, and ALL THREE OF THEM,- BONE, . JOHNSTON and BIVENS ARE RECENT APPOINTEES OF ' GOVERNOR HOEY . ; TO THE SUPERIOR Kv:: COURT BENCH. In the Third District. F. D. Winston, Windsor, , was appointed to the Bench fat December, 1900, tt by Governor Aycock and defeated in the .Primary W-bf R. B. Peebles in 1902. Judge Peebles died 1916 and F. D. Winston, former'? appointee of .. Cninuii AwwV u attain - annointed to tne Bench by Governor Craig and was again defeat-' -ed in the Primary by SOLICITOR John H. Kerr, ; and Winston held office omy aoouc six morons. - I.The voters decided the SOLICITOR was entitled to the Promotion although F. D. WINSTON HAD THE ENDORSEMENT "by appointment" -A of TWO GOVERNORS. , , ' In the Fifth District, formerly the1 Third, Governor Kitchin appointed D. L. Ward of New Bern to fill an unexpired term on the Superior Court Bench and he was defeated under the old CONVENTION system by Harry W. Whedbee, of Greenville. In the Seventh District, J. S. Manning, of Raleigh, was appointed by Governor Kitchin to the SUPREME COURT of North Carolina in 1910 and was defeated in CONVENTION by W. R. Allen in 1912. Governor Gardner appointed Cameron Morri son to the U. S. Senate and R. R. (Bob) Rey nolds defeated him for the nomination in the Primary by more than 100,000 votes. And there are, of coarse, numerous other in stances of like character throughout the State, but these should be sufficient to prove the fallacy of the argument that no appointee of a Governor in Primary or Convention should be opposed ' and opposition to an appointment is usually un successful, v .;' ;' : '- But notwithstanding such arguments, you cer tainly HAD NO VOTE OR CHOICE in tne selection of Mr. Thompson and you assuredly , have the right ,r to. approve or disapprove, the ' choice of another, even though such person hap- pens to be the Governor of our State, and I am appealing to the voters throughout the District to express their opinion as to whether or not I , have earned and deserve, the Nomination by ser vice 'of ten years in an office recognized every , where as a stepping stone to the Bench. ElZIT LEARY, EdsntGii, Cfcn County Tha rtiowan" Herald under date of February 9, 1938, made the following editorial reference to my decade Mr. Leary has served faithfully and well as a District Solicitor, and few. If any complaints, have ever been lodged against him. His earnestness and zeal in the prosecution of cases A hrouffhtto his attention have always been pronounced. He is now an aspirant to succeed i Walter . . Small as a Superior Court Judge and The Herald is for him out and out without straddling a fence . rail He seeks promotion, which should be every man's ambition, and he has earned the right to such . protion.,'Vv?;--Y'V' : :-'74; 450 Below Zero on Mercury During its mad dashes around the sun, the planet Mercury's tempera ture rises several hundred degrees on the side next to the sun, but, on the dark side, remains at 450 de grees below zero. TAYLOR TREAT BE EDENTON, N. C. THE BEST ENTERTAINMENT Today (Thursday) and Friday, May 5-6 Jeanette MacDonald and Nelson Eddy in "THE GIRL OF THE GOLDEN WEST" With LEO CARRILLO, BUDDY EBSEN and CLIFF EDWARDS News Saturday, May 7 Bob Steele in "THUNDER IN THE DESERT" ZORRO RIDES AGAIN No. 11 COMEDY Monday and Tuesday, May 9-10 MARK TWAIN'S BELOVED CLASSIC "THE ADVENTURES OF TOM SAWYER" With TOMMY KELLY, MAY ROBSON, WALTER BRENNAN Filmed In Technicolor News Wednesday, May 11 Movita and Warren Hull in "PARADISE ISLE" A Romance of the South Seas ACT SPORT COM IN "Judge Hardy's Children" "The Adventures of Marco Polo" Jesse Crawford In Person - Wettinghouae Electric Range cook fast, cook better, save money, because they alone have the famous Corox Econo mizer and exclusive SuperOven! Certified reports from 103 home like yours Kitchen-prove jWestinghouse Range ad vantages. 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