"Breathing Spell"

One morning last week dressy little Roy W. Howard, board chairman of the Scripps-Howard newspapers, was in San Francisco about to embark on a trip around the world. Just before he went aboard the S. S. President Coolidge he was handed a letter from the President of the U. S. About the same time, on the other side of the continent, Presidential Secretary Steve Early was handing out to the Press at Hyde Park the same letter, together with one Mr. Howard had previously written his good Friend Franklin Roosevelt. When this exchange of correspondence was headlined up & down the land, Democratic politicians beamed. Republicans pooh-poohed, businessmen made weighty statements and the stockmarket zoomed (see p. 53).

In politics, correspondence for publication is rarely a matter of spontaneous combustion. Generally letter and reply are discussed in advance, then carefully drafted, and finally sent through the mails as a preliminary to being given to the Press. It was a political secret how and when Publisher Howard first approached the White House with the suggestion that it would be a good idea for him to write a letter raising popular criticisms of the New Deal, for the President to write an answer putting them down. Franklin Roosevelt thought the idea good enough to try, succeeded in touching the country's political hearstrings by saying exactly what the country wanted to hear.

Dated Aug. 26, Publisher Howard's letter fairly oozed personal friendship, while setting up certain familiar criticisms of the Administration for the President in his reply to knock down. Excerpt:

"That certain elements of business have been growing more hostile to your Administration is a fact too obvious to be classed as news. So long as this hostility emanated from financial racketeers, public exploiters and the sinister forces spawned by special privilege, it was of slight importance. No crook loves a cop. But any experienced reporter will tell you that throughout the country many business men who once gave you sincere support are now not merely hostile, they are frightened.

"Many of these men whose patriotism and sense of public service will compare with that of any men in political life, have become convinced and sincerely believe:

"That you fathered a tax bill that aims at revenge rather than revenue--revenge on business;

"That the Administration has sidestepped broadening the tax base to the extent necessary to approximate the needs of the situation;

"That there can be no real recovery until the fears of business have been allayed through the granting of a breathing spell to industry, and a recess from further experimentation until the country can recover its losses."

President Roosevelt wrote his reply to Mr. Howard on the day last week's hurricane hit the Florida Keys, swept nearly everything else off the front pages (see col. 2). Four days later, after the storm headlines had passed, it was issued to the country. Choosing his words carefully the President undertook to reassure the country on four points:

"I can well realize . . . that the many legislative details and processes incident to the long and arduous session of the Congress should have had the unavoidable effect of promoting some confusion in many people's minds.

"I think we can safely disregard the skeptics. . . .

"We can also disregard those who are actuated by a spirit of political partisanship or by a willingness to gain or retain personal profit at the expense of, and detriment to, their neighbors. . . .

"But there are critics who are honest and nonpartisan and who are willing to discuss and to learn. I believe we owe, therefore, a positive duty to clarify our purposes, to describe our methods and to reiterate our ideals. . . .

"The tax program of which you speak is based upon a broad and just social and economic purpose. Such a purpose, it goes without saying, is not to destroy wealth, but to create a broader range of opportunity, to restrain the growth of unwholesome accumulations and to lay the burdens of government where they can best be carried.

"This law affects only those individual people who have incomes over $50,000 a year and individual estates of decedents who leave over $40,000.

"Moreover, it gives recognition to the generally accepted fact that larger corporations enjoying the advantages of size over smaller corporations possess relatively greater capacity to pay. Consequently the act changes the rate of tax on net earnings from a flat 13 3/4% to a differential ranging from 12 1/2% to 15%.

"No reasonable person thinks that this is going to destroy competent corporations or impair business as a whole. Taxes on 95% of our corporations are actually reduced by the new tax law. . . .

"Congress declined to broaden the tax base because it was recognized that the tax base had already been broadened to a very considerable extent during the past five years.

"I am aware of the sound arguments advanced in favor of making every citizen pay an income tax, however small his income. England is cited as an example. But it should be recalled that, despite complaints about higher taxes, our interest payments on all public debts, including local governments, require only 3% of our national income as compared with 7% in England.

"The broadening of our tax base in the past few years has been very real. What is known as consumers' taxes, namely, the invisible taxes paid by people in every walk of life, fall relatively much more heavily upon the poor man than on the rich man.

"In 1929 consumers' taxes represented only 30% of the national revenue. Today they are 60%, and even with the passage of the recent Tax Bill the proportion of these consumers' taxes will drop only 5%.

"This Administration came into power pledged to a very considerable legislative program. . . .

"It seemed to Congress and to me better to achieve these objectives as expeditiously as possible in order that not only business, but the public generally might know those modifications in the conditions and rules of economic enterprise which were involved in our program.

"This basic program, however, has now reached substantial completion, and the breathing spell of which you speak is here --very decidedly so."

"Breathing spell" became the political catchphrase of the day. Delighted with the country's enthusiasm, President Roosevelt told newshawks at Hyde Park: "All I tried to do was to quiet the nerves of some of the boys." No less pleased was Publisher Howard who, before sailing from San Francisco, in effect, telegraphed the President as follows: "Your letter was fine. The story certainly went over big."

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