New ATL- Hoover looses nomination in 1928

Special to the Baltimore Sun
Washington DC
April 25, 1929

The Treasury department announced today that under the language of the 20th Amendment repealing Prohibition it also meant that the repeal of alcohol taxes was also repealed. Taxes will continue at pre prohibition rates.

The administration sent legislation to Capital hill today to regularize the tax situation. The legislation would result in taxes on beer being reduced by 1/2, taxes on wine reduced by 1/3, taxes on incomes under 30,000 being reduced by 60% and total repeal of taxes on Canadian goods if Canada does likewise within 90 days of the passage of the new tax bill.

In addition the tax on long distance telephone and telegraph service would be eliminated.

Tariffs to England, France, Italy, Finland, Poland, Japan, Yugoslavia and Greece are to be reduced by 15%, tariffs to all neutral powers in the great war are to be reduced by 7%, while tariffs to Germany, Austria, Hungary and Turkey are reduced by 5%. Trade to Russia would remain unchanged.
Effective July 1 wages to all active duty military personal would be raised by 20%

The treasury department noted that prior to the imposition of the income tax the tax on alcohol was the second largest source of revenue to the treasury and is worth over a billion dollars a year, based on 1916 consumption rates.

The administration noted that the new tax proposals were based on rates of consumption that anecdotally seem a great deal lower than current rates of consumption. If by July 30 there seems to be an excess of money flowing into the treasury, income taxes on income below 15,000 per year would be cut even further, as would taxes on beer and wine.
 
Special to the Baltimore Sun
Chicago Illinois
May 6, 1929

Prices for Summer wheat collapsed for the third strait day today. The collapse in prices was general for most raw commodities including beet sugar, cotton, raw steel and coal. The exceptions were for commodities like Orange Juice and Pork Bellies which do not have any international competition.
Traders say the huge sales of Russian Grain and other commodities in overseas markets have depressed demands for US exports. Russian Grain sales over the coming months are supposed to be extremely heavy, but Russian sales of all raw commodities are going to be very heavy heading into November. While not a factor in this years markets, Russian economic planners have announced plans to increase sales worldwide by 1/3 by 1935.
The administration announced plans to seek congressional approval to increase land purchases under the soil conservation scheme substantially if agricultural prices remain depressed.

Interest rates continued to fall. Finance companies report that Americans are paying off loans at a record rate and are not making new ones. Banks have also noticed an increase in deposits since the end of April.

International Harvester and Caterpillar tractor have both announced that orders for new equipment have declined precipitously due to the continued collapse in commodity prices.
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Special to the Baltimore Sun
Ottawa, Ontario, Canada
June 19, 1929

President Schweinfresser met with Canadian Prime Minister McKenzie King in order to promote his concept of freer trade between the US and Canada. The President met with an arctic cold reception for his proposals.
Canada, more resource export dependent than the US is suffering a huge crisis from the dumping of Russian wheat, barley and other feedstocks is suffering badly from the collapse of raw materials prices. Given the current climate in Canada it appears he came here on a fool's errant, but the President said he believes he made progress in presenting his ideas for fostering better relations between the US and Canada.

Much of the President's economic plan still hangs fire. Mostly due to the continuous filibuster of the President's Audit bill by southern Senators opposed to revealing the disparity in funds for White vs funds for Black in public accommodations.

The reductions in Tariffs with former allies and neutrals have all passed. Reductions in tariff's with Germany and Austria died in committee.

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Special to the Baltimore Sun
Chicago Illinois
June 21, 1929

The President today helped out in the Groundbreaking ceremonies for a new Center for the Studies of Atomic Structure at West 59th Street and Wells near the University of Chicago. The Center, funded by an amazing 5 million dollar grant passed by congress in secret session last week is expected to hire a large contingent of technicians and scientists in a closed campus.

After the ground breaking for the new center, the President attended a conference headed by the assistant director Lise Mintner on the possibilities of transmutation of actinide metals by Neutron enhancement. The conference had high hopes in this realm of study. Preliminary studies had been using Uranium, but due to the chemical's high cost, the fact it is only available in Czechoslovakia, and extreme toxicity they will be doing most of their studies with a metal called thorium which is mostly non toxic and is relatively abundant here in the US.
Director Enrico Fermi admitted that there has, as yet, been no transmutation of these metals, but he said that given our understanding of these metals such transmutations were a distinct possibility.
In response to questions about the Transmutation of Gold, Iron and Lead, he the professor said that these metals were not good subjects for the study. "Maybe in 200 years or so" he said hopefully.
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in OTL, the mark up of the Smoot Hawley bill was the frightener that sent the markets down for the crash. The passage of the thing is what lead to the trade war that turned a mild crises into a 10 year long depression.

I can only cover a few of the things that lead to problems. The first five year plan out of Russia was dumping huge quantities of raw materials into the world markets in order to gain cash for the modernization drive. So I am keeping that. When I was researching this time line I noted that during the time of the first five year plan raw materials prices in the west dropped by as much as 50%. Most of that was due to the Smoot Hawley collapse of trade, but a substantial part was Russian dumping.

I have yet to make up my mind whether my guy gets a better trade bill passed, or whether he has to veto Smoot Hawley and faces an over ride battle.

I am sort of at a loss as how to deal with the precipitous grain price declines that year. On a small scale I am buying up marginal land with the hope of butterfliying away the dust bowl.

I am thinking that a coalition of bankers desperate to get out of the German loan merry go round and industrialists wanting to expand trade will push through the program. It seems hard to justify though
 
June 28, 1929
Washington DC


After months of wrangling over the President's economics proposals, Congress adjourned today after approving most of the package with major changes. The president was abandoned by much of the Republicans in Congress over the Tariff proposals, and both sides defied him in terms of farm relief, but after all the battles were over, he got much of what he wanted.

the first proposal was the passage of the Military Highways Act. It imposes a gasoline tax of 6 cents a gallon to be used to build Six military highways. First a highway from Chicago to Seattle, Second a highway from St Louis to Salt Lake City. Third a highway from Salt Lake City to Portland OR. Fourth a Highway from Salt Lake City to San Francisco. Fifth a Highway from New Orleans to Los Angeles via Dallas Texas. Sixth, a Highway from Dallas to Salt Lake City. Other Highways running from Charleston, Richmond and Pittsburgh to St Louis are planned for future years if the tax raises enough revenue.

The new Gasoline tax is seen as a "take that" to Ford and the other major motor manufacturers who spent a lot of effort supporting Al Smith.

Re negotiations of the treaties with the European governments regarding war debts extended the tariff provisions to August 1961 in the cases of the Allied powers and August 1974 in the case of Germany, plus a requirement that Germany buy 16 tons of US Sugar per year at 28 cents per kilo helped sweeten the deal for Senators from Louisiana, California, Alabama and Mississippi. US Banks put tremendous pressure on congress to approve the deal. However, the Treasury is assuming German indebtedness with discounts of 20%, French and Italian bonds with a discount of 11% and English Bonds with a discount of 8%. All other bonds are assumed with discounts of between 12% and 16% depending on that country's payment history.

In a major victory for Mining interests and the Bryanist wing of the Democratic party, the US mint will coin silver with only a 1.3% fee, rather than the usual 5%. Gold will continue to be coined with a 5% fee. Further, the US treasury will take raw silver in payment, which has not been the case since the Civil War.

Alcohol taxes have been reduced by only 10% on distilled liquors and only 25% on beer and wine. Residual prohibitionist sentiment is credited for keeping taxes on alcohol high. Tariffs however have been reduced greatly for most countries, except the former Russian Empire. Tariffis on Irish goods have been cut by 40%, English and French goods by 30%, Italian goods by 25%, German and Turkish goods by 18% and Polish, Finnish, Austrian, Yugoslavian and Scandinavian goods by 22%.

There will be no reduction in tariffs on Canadian goods because Canada has raised tariffs on US goods in their last Parliamentary session.

Income taxes have been reduced by 50% and flattened to where there are only three rates.

The Administration also managed to secure increases in the permitted levels of immigration and an end to the asian exclusion acts. However, there will extra hurdles for new immigrants in the form of a examination in Algebra and English, where immigrants will be obliged to pass a test of 70 questions in mathematics using story problems in english of at least high school complexity.

The major stumbling block to a deal on the tax package has been the precipitous decline in farm prices this year due to huge amounts of Russian grain on world markets this year. Congress and the Administration came to a deal whereby US Farmers can sell grain to the Government if grain prices are reduced by 8% from year ago prices at prices 4% lower than last years price for a given week. The government can sell grain back into markets if prices rise by more than 9% over last years prices.

The Administration also secured an increase in the size of the Army to 80,000, and a rise of $3 per month in enlisted pay. The navy was also authorized a new Naval Aviation Platform ship, to be called the USS Cowpens. All future Naval Aviation Platform ships (Referred to in the Navy as Carrier Vessels) will bear the names of Revolutionary war battles.

One final measure to reach approval was a new Mexican treaty dealing with the end of their mild civil war there with the clericalist party arranged by Ambassador Morrow, the father in law of the famous Aviator, Charles Lindbergh. The treaty specifies that different parts of the Mexican constitution will be held in abeyance. The anti clerical parts will become a dead letter, and the part referring to the nationalization of the Mexican Oil industry will be delayed until 1945, provided that tariffs on Mexican goods are reduced to 10% and the US maintains a Royalty level on Mexican oil at certain high levels adjusted higher every year until 1945. The Mexicans also promised to nationalize by purchase rather than expropriation after 1945. It is hoped that the end of the anti clerical disturbances in Mexico will lead to reduced violence in the border regions.

An attempt by Prohibition forces to force a tax on recreational smoking of hemp was turned back. The tax was seen as idiotic as no rational person smokes hemp, and taxing its use would be prohibitively expensive.

An attempt to re introduce the Harrison Narcotics act, which was inadvertently repealed by the 20th Amendment remained bottled in committee. The Administration has proposed instead tougher standards and regulation under the Safe Foods and Drugs act.

Congress heads home for the long summer session and is not due back until October.
 
July 22 1929
Tuskegee AL

The US Army and the US department of Agriculture announced programs today to purchase several million tons of cotton seed and Peanuts over the next three years. The cotton seed would be purchased this year only.

The US army will be testing designs for the new Mark II tank to be deployed in 1934. Designs from Chrysler, General Motors and Ford will be using Diesel powered tanks using vegetable oils. Designs from DeSoto and Plymouth will be powered by Gasoline engines.

Lt Col. George Smith Patton Jr. announced that the designs will be tested in Minnesota during the winter, in Tennessee during the fall and spring and in New Mexico during the summer. It is assumed by the US army that the new tanks will need to be in service in areas with no roads, very muddy or snowy conditions or areas of drifting sand. It is further assumed that any bridges will be slightly larger than 107" inches across. There is very little petroleum in Europe, so it is to be assumed that the tanks will have to be run off of vegetable oils.

The US army plans on purchasing 200 - 250 tanks, depending on how they perform on tests.
 
Chicago Illinois.
August 23rd 1929

Prices for grains have stabilized since the passage of the latest agriculture bill in Congress. However prices for other commodities have continued declines with cotton prices the latest to collapse under pressure of Russian dumping of agricultural products on world markets.

Prices stabilized when Administration officials annoyed a new Civil defense initiative that would result in the US Army purchasing tents for 140,000 people in case of earthquake, hurricane or other calamity.

The Agriculture department also announced plans to step up the purchase of depleted farm lands under the soil conservation scheme.

Commodities traders have been surprised at the huge quantities of Russian commodities exports over the last year. Prior to 1925 the amounts of Russian exports were very small. Changes in Russian Farm Policy since the end of the Civil war have resulted in large gains in Russian exports since 1925. However Russian Agricultural policy changed again last year. It was not expected that there would be such a huge amount of exports this year under the new policy.

Trader Seamus McGinnus among others have been wondering if the russians are selling everything and are going to go hungry this year to make all the sales this year. Mr McGinnus pointed out that the Russian government has a huge capital goods purchase program for this year in order to increase industrial production. The Russian government has a poor financial reputation and has to purchase all its capital goods almost exclusively with barter.
 
New York New York
September 20, 1929


Stock prices continued to drift lower in sympathy with lower commodity prices in the agricultural sector. Banking stocks have been especially hard hit, as well as retailers such as Sears and Montgomery Ward with large agricultural customer bases, and manufacturers of Farm products such as Deer, International Harvester and Caterpillar Tractor. Capital purchases in the agricultural sector are down 10% from last year levels, and there are signs that September will be especially poor for agricultural capital spending.


The Administration announced new legislation to be proposed when Congress comes into session to permit the Treasury department to keep failed banks open with multi branch national banks in case of crisis. Congressional leaders were skeptical about the bill however.
 
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