Franklin D. Roosevelt photo

Press Conference with Members of the American Society of Newspaper Editors, Washington, D.C.

April 21, 1938

THE PRESIDENT: I can hardly realize that another year has gone by since we had a gathering in this room. I think this is a little larger one. My impression of last year is that I asked questions and you fellows got into the most awful row among yourselves. (Laughter)

I am not going to ask any questions but I am going to tell you what I said to the D.A.R. today. (Laughter) I am going to preach the same sermon to you that I preached to them. It is a perfectly good text. I said that I probably had a more American ancestry than nine out of ten of the D.A.R. I had various ancestors who came over in the Mayflower and similar ships—one that carried the cargo of furniture— and furthermore that I did not have a single ancestor who came to this country after the Revolutionary War; they were all here before the Revolution. And, out of the whole thirty-two or sixty-four of them, whichever it was, there was only one Tory. (Laughter) Well, they began to wonder if they ought to applaud that or not. And, I said, now I will come down to the text. It is just as good for you people as it was for the D.A.R. I am putting you in the same category. (Laughter) I said, Here is the text: Keep in the front of your heads all of the time, dear ladies, first, that you are the descendants of immigrants. And they did not know whether to applaud that or not. Secondly, that you are the descendants of revolutionists. They did not know whether to applaud that or not. So there is the text and I won't expound on it any further.

Now shoot. (Laughter) [There was no response from the audience.]

Perhaps if nobody wants to shoot, I will read an editorial to you. (Laughter) Probably none of you has read it. It is from a magazine called "Editor and Publisher." And it is based on something that Bill White said. Where is Bill?

Q. He is here. (Laughter)

THE PRESIDENT: It is entitled "Our Business Clinic." It says:

"For a clear-headed diagnosis of current business troubles, we commend among the many appearing in this issue that of William Alien White, the Sage of Emporia. The famous editor of the Gazette, who said a few weeks ago that he had seen yesterday and today and was not afraid of tomorrow, cuts with keen words through the hysteria which has bedevilled the land for ten years.

"Mr. White is correct when he says—

I won't forgive him for this—the connotation of it—

"—that Roosevelt, Stalin, Mussolini, and Hitler—"

Now, Bill! (Laughter) . . . Anyway, these four famous gentlemen, including Roosevelt,

"—can all pass from the scene and that the fundamental world problems would not be changed."

Amen.

"It is a problem as ancient as recorded history and it has sharpened its business edge in the age of steam, electricity and machines. It is the problem of giving to each his share of the world's production. It cannot be solved by any single panacea. It cannot be solved in a year, a decade, or possibly a century, and, human nature being what it is, we sometimes believe it may not be capable of any solution.

"Meanwhile, we've all got to live. We want comfort, according to our lights, and our ideal of comfort may range all the way from a soft mattress to a Diesel yacht."

Not an incorporated yacht. (Laughter)

"No one of us can write what he thinks is his fair share of the nation's produce; none knows how he wants his share paid. But we all want, and keep on wanting, and eventually we can hope to arrive at a compromise with Utopia that will be better than what we have.

"History may appraise Mr. Roosevelt's collision—

I am glad he did not say "collusion."

"—collision with the established order as an over-idealistic and impractical attempt to hasten that happy day, but it may also damn those who followed their selfish (and wholly) normal instinct of self-preservation in opposing him. And long before the historians begin tossing their dry bones around, the strange animal that is homo americanus may reach the conclusion that his savage assaults against the President of the United States of the past few weeks were unreasoning and largely unreasonable.

"It is as futile to expect an armistice in politics this year as it is to look for a solution of the problem Mr. White states—but why not let us have an abatement of hatred and vilification? They have not affected the business decline, except possibly to deepen it and to delay the rebound. They will not keep us from dictatorship, if we are bent on that nitwit experiment. They may hasten dictatorship, if political frenzy is carried to the extent of libeling a President, defeating a bill that had only superficial faults, and then calling the defeat a vote of 'no confidence' in a man who received seventy per cent of the popular vote seventeen months ago. Dictators goose step into power on the heels of governments which lose public confidence, and Mr. Roosevelt, despite his self-admitted lack of qualifications, may be forced to the job by his foes. If not he, someone far less qualified.

"Let us chuck politics and alibis out the window, and get down to business again.

"And so we are down to business again.

Well, last year I asked all the questions and I decided this year I would not ask any of them except by way of reply to questions that could only be answered by counter-questions. That is fair. Now, don't all shoot at once but here I am.

Q. Mr. President, do you sense any growth of racial intolerance in the United States?

THE PRESIDENT: I should say less than there was ten or twenty years ago. I think, in other words, it would be harder to start a movement based on racial intolerance today than it would have been ten or twenty years ago. I still think it can be done. It is always a possibility, but I think we are wiser and there is less sectionalism. I think we have learned a lot.

Q. Mr. President, do you think the South—what we call the solid South—will stay Democratic very long?

THE PRESIDENT: Will the solid South be Democratic very long?The South is a funny place, I have lived there a long time.

Q. I have just come through the South and I lived there fifteen years every winter. That is why I asked the question.

THE PRESIDENT: I am glad you asked the question. You and I remember things that have happened in the South in our lifetime, before you and I went down there. We remember the days of Tom Watson in Georgia. That was an appeal to prejudice. It was an appeal addressed to a very, very ignorant vote. We have to recognize that fact, because the average boy or girl in my State of Georgia—I am talking about the average in the days of Tom Watson—had had no high school and, as far as the grade school was concerned, had had an average school year of three or four months. That was the condition. They did not read the daily paper, they did not read a magazine. They were getting the lowest form of pay in the entire nation, and they were therefore completely susceptible to the demagogue. And, in Georgia, we have had our demagogues, as we all know. You can still have demagogues in Georgia. . . .

The South, because it is still educationally behind the rest of the nation, is peculiarly susceptible to the demagogue. Fair? Fair statement?

Q. Yes.

THE PRESIDENT: I think it is a pretty fair statement to make.

Q. May I offer a comment on the general question of whether the South will be Democratic again or not? Some months ago a friend of mine—I am from Montgomery, Alabama-was in the State of Ohio. Somebody asked him if the solid South is still voting Democratic and he replied, "No damn Yankee is going to stop us; it is going to be the ruin of this country."

THE PRESIDENT: Let me put it this way: I think the South is going to remain Democratic, but I think it is going to be a more intelligent form of democracy than has kept the South, for other reasons, in the Democratic column all these years. It will be intelligent thinking; and, in my judgment, because the South is learning, it is going to be a liberal democracy. The South cannot be fooled any more by the kind of things that were published in southern magazines this past winter.

The Southern Pine Association, aided and abetted by a large number of newspapers in the South, editorially and in their news columns, on the question of the Wages and Hours Bill, carried a full page ad and some of you people ran them and got paid for them. The ads were entitled, "Farmers! To Arms!" And you ran them. They were paid for by the Southern Pine Association. That was a definite, deliberate inciting of the farmers of the South to take up arms. It was wholly indefensible; it was an unpatriotic act for any newspaper to publish that headline. Now you are getting it straight from the shoulder. "Farmers! To Arms!" How did you dare publish an advertisement of that kind in your paper? How did you dare to do it?

And then, what did it say? It went on to tell lie after lie. The chief feature of the ad was this: "If a wages and hours bill, putting a floor under wages and a ceiling over hours, goes through, you farmers of Georgia and Alabama, you will have to pay $3.00 a day to your field labor." That is a lie and every editor who ran that ad knew it was a lie. Go on.

Q. Mr. President, where in your opinion is this strife between the two major labor organizations tending from a social and economic standpoint?

THE PRESIDENT: Where is what?

Q. Where is it leading, the strife between the two major labor organizations?

THE PRESIDENT: Oh, I don't know. When you get that kind of a very personal row, it will end in two wings of labor that will become fairly well established and become fairly permanent, or it may end in their working out some kind of a compromise and agreement between the two. In other words, as I said to you last year, this is in the evolutionary process, similar to that which organized labor was going through in other countries twenty and thirty years ago. It is evolutionary. Probably five years from now we shall not recognize or shall have forgotten the existing situation.

Q. We all want to see renewed confidence and renewed investment on the part of private enterprise and the consequent absorption of unemployment. Do you not think that the repeal of the undistributed profits tax will help a lot?

THE PRESIDENT: I will ask you a question. (Laughter)

Q. I do not think that is fair, Mr. President. (Laughter)

THE PRESIDENT: This is an actual case and I am going to ask you what you think of it: Here are two brothers and they both inherited, each of them, $5,000,000. One brother bought the other brother out. So the brother that was bought out from the cotton mill, which they jointly owned, went up to New York. He went up to New York about ten or twelve years ago and put his $5,000,000 into investments. He got Scudder, Stevens and Clark to tell him how he ought to invest his $5,000,000. They gave him a list of a certain percentage of Government bonds and municipals, State bonds, public utilities, some real estate mortgages, some preferred stock and some common stock, in accordance with the best advice that an investing firm can give you. He received on his $5,000,000 investment about $200,000 a year income by way of coupons and dividend checks, and, on the whole, his investment has turned out pretty well. He has been getting his income and he has been living, because he is a simple man, on about $50,000 of it. But because he had an income of $200,000, he had to pay in State and Federal income taxes about half of it. He had about $100,000 left and, as I say, he only spent $50,000 of it, and he put the other back into what you and I would call "savings." But the taxes he paid were about $100,000 a year and he figured that he did not want to engage in active work. He was very much interested, as a matter of fact, this particular fellow, in art and literature. He never kicked, he paid his $100,000 in taxes year after year.

He came down to see me. Of course, he was in the upper brackets all right. He came down to see me about two years ago and said, "I am going to ask a question. My $5,000,000 is working. I own mortgages, stocks, bonds that are actually producing goods, building buildings, maintaining places for people to live in, building new buildings, starting new enterprises. I am paying half of my total income to the Government every year." He said, "Do not ever mention this to my brother. His $5,000,000 is in that old family cotton factory and he has made, since we parted company, about $200,000 a year profit. Like myself, he is a man of comparatively simple tastes and he spends about $50,000 a year. He only declares a dividend to himself of $50,000 a year or perhaps $60,000 a year. His tax that he pays to the Government is about $10,000. His property, his ownership in business, is the same as mine and his property earns the same return. But, because he owns this cotton mill, he only declares enough in the way of dividends to keep himself going and he leaves all the rest there to accumulate. The net result is that he is accumulating and putting to work $140,000 or $150,000 a year, but that is capital rolling up. All it costs him is $10,000 a year. I have a diversified list of investments and my tax is $100,000 a year. Mr. President, do you think that is equitable?"

I pass that question on to you.

Q. Mr. President, don't you have a section in the Revenue Act to take care of cases like that?

THE PRESIDENT: No.

Q. It is there in the law.

THE PRESIDENT: You have had, since 1913, a Section 102. Cordell Hull introduced it when he was a Member of the House in that year and that section says that the Treasury Department shall have the right to tax any undistributed earnings which, in the judgment of the Treasury Department, are not necessary for the surplus of the business. For twenty-five years, or not that long—for about fifteen years—the Treasury Department took cases of that kind to the courts and they lost in about 99 per cent of the cases that they brought, because the Court said, "Who is the best judge as to what the surplus should be? Why, obviously, the owner of the business. Therefore, we are not going to take the plea of the Treasury. We are going to take the statement of the owner of the business." In other words, it was a completely unenforceable section.

The present Senate Bill attempts to strengthen it by saying that the burden of proof should be on the private company.

Now, you have a choice to make: The Treasury Department, that knows probably more about collecting taxes than any editor in the United States, or the President, says that that change in the law is utter rubbish. You won't be able to prevent the thing you are trying to avoid by putting the burden of proof on the owner of the business. It is utterly absurd. Now, you and I may think it is beautiful language, but the experts who have to collect the taxes, they tell the people of the United States and the papers of the United States that they cannot collect under it. There is your answer.

Q. Mr. President, do you think that the incident which you have elaborated is typical?

THE PRESIDENT: I am glad you asked that question. Every person who admits the principle comes down to me, and I cite an instance or two, or five, or ten, or twenty, and their answer is, "That is the exception." Now, those exceptions in terms of dollars in our lifetime are not exceptions in terms of dollars; they are the rule. In terms of the percentage of corporations that do that, yes, they are exceptions, but they are not exceptions when it comes down to the amount of money involved.

Q. If there is a rat in the hayloft, why burn down the whole barn to get the rat out?

THE PRESIDENT: The treasurer of a company came in to see me the other day. He raised that question, both on the undistributed earnings tax and on the capital gains tax. I said, "You admit the principle?" He said, "Certainly." I said, "The principle ought to be the principle of nondiscrimination. It ought to mean the principle that by the use of the corporate method you ought not to be able to do things that you could not do if you were in business as an individual or a partnership; that you ought not to avoid the payments of taxes through a perfectly legal tax avoidance method." He admitted the whole thing; and then I said, "Well, do you think that I ought, because there is a tremendous agitation at the present time, to say, 'Don't burn down the barn to catch the rats'?" as you say. He said, "Certainly, there come times when you have got to forget principle."

I pointed out another case to him and he said, "That is an exception." This a case of a man who owned a newspaper, a very successful newspaper. The paper had built up a large surplus, what was supposed to be a wholly adequate surplus. Now, let us assume that it was an adequate surplus, and that the paper ought to have had that surplus in order to make sure that for a lean year or two it would be able to keep going. The assumption is that the surplus was an adequate one. He died, and because most of his money was in the newspaper, when it came to paying the State and Federal inheritance taxes, his family, his executors and trustees did not have the cash to pay it with. Well, that often happens because we Americans do not look forward to what they call "death duties" in England. The average rich man in England makes provision in various ways for death duties. But does your American, like most of us that you know, make provision for paying inheritance taxes when he dies?

Well, the trustees did not have the cash to pay it. So they said to themselves, because, after all, they were trustees not only for the estate but essentially for the paper itself, they said, "Buy some of our preferred stock that we own in the paper out of your surplus." And then, transforming themselves into the owners of the paper, they said, "All right, we will pay you such and such a sum out of our surplus for that preferred stock." As the owners of the paper, they paid to the trustees, who were themselves, enough cash out of the surplus to pay the inheritance tax. As trustees, they delivered to themselves as the owners of the paper, a certificate for X number of shares of preferred stock, which they then proceeded to tear up and put into the wastepaper basket.

The estate owned essentially all of the newspaper before that transaction, and after it was all over, it still owned essentially the same proportion of the newspaper. In other words, while this particular owner of the paper, in my judgment, had never anticipated anything like that being done, he had, in fact, used that surplus, built it up year after year at a price of 12 1/2 per cent tax on earnings, whereas, if it had been distributed to him, he would have paid about 55 per cent on the earnings of the paper.

That is principle, just plain common or garden variety of principle. A newspaper pointed that out, one which has demanded the entire repeal of the tax on undistributed earnings.

Q. In the specific case, that would have thrown that newspaper into borrowing money in Wall Street or from the banks and would have destroyed the—you would have put it right in the hands of Wall Street. We do not want them to control the American press.

THE PRESIDENT: If this man, knowing that some day he was going to die, had done one or two things—if, out of his annual income, he had taken out insurance on his life, which is one of the English methods, and built up a policy to take care of his inheritance tax when he died—

Q. [interposing] Which would have been taxed—

THE PRESIDENT: —the paper would not have had to dip into this surplus and would not have had to go and borrow the money in Wall Street. Or the other English method, if he had set up a special trust fund out of his income and paid the inheritance tax out of that, the trustees would not have had to borrow money or sell preferred stock to the paper.

Q. In the specific case you are mentioning there, under the income tax rates it would have been utterly impossible to set up a fund which would amount to a sufficient—

THE PRESIDENT: [interposing] He could have taken out insurance. The British manage to do it.

Q. Who can do it?

THE PRESIDENT: The British.

Q. Do the British have the undistributed profits tax?

THE PRESIDENT: They have something that is the equivalent of it. They do not call it that.

Q. Mr. President, in the matter of a surplus tax: In my town we have an industry which started out with eight hands and a boss. He is dead now. He had a million when he died. From year to year he put the surplus which he had into the business and one year he had $220,000. So he conceived the idea of building a nice building in our town. He wanted a building in our town—you know I live in a little town in Wisconsin-and he built this nice building out of the surplus. He had to borrow some money and paid 8 per cent on it, but in two years more his surplus amounted to a sufficient amount so that he took it over and owned it in fee simple; he had a warranty deed for it.

Now, under this surplus taxation, it would not have been possible, comfortably for him, with a tax on this surplus, to do those things, because the tax would have taken such a proportion of the savings out of that business that he would not have been able to do those things. And whatever things they want to do now in the expansion of this business, they are held back by this tax. Now, I do not say that this is wrong; I do not discuss it from the standpoint of its being a tax which is a robber tax. Of course I think it is, but then that is a difficult matter to prove. (Laughter)

You and I disagree and we can disagree normally. But he can't do that [referring to the putting up of new buildings]. The president of this organization spoke to me a few days ago and he said, "I would like to build a new building but I am damned if I can do it under the new tax system because it takes away from me—" . . .

THE PRESIDENT: The man who owned that paper, he made $220,000 a year. What was that? That was a profit on his money, wasn't it?

Q. I wish I could do that.

THE PRESIDENT: So do I. It was a profit on his money. If he did not happen to have it in this one thing, a newspaper, on this $220,000 he would have had to pay about $120,000, as, for example, if he had had that income from fifty different newspapers. In this case he happened to own one newspaper and therefore he asks that that $220,000 pay only a 12 1/2 per cent tax instead of a 55 per cent tax. Principle?

Q. Yes, but he might have had some expansion. I am going through, right now, all of this agony of a man who died and owned a newspaper and I happen to be the fall guy and right now I am trying to straighten this inheritance tax out and God knows what we will have when we get through. We might have enough to pay one man, one in the Newspaper Guild, one salary for one week. But what I am trying to impress upon you, Mr. President, from your place here in Washington, where you look over this country, where you see my State with all of those small industries, who have to build up little things—

THE PRESIDENT: [interposing] Right.

Q.—from time to time must have to build up a little surplus for expansion and to make more people work in those places. We have 2,721 factories gone out of business since March 4, 1933, Mr. President, in my State.

THE PRESIDENT: How many went out between 1929 and 1933?

Q. No, I have got them all dated from cheese factories down and we need this surplus so that we can build up there, without extraordinary taxes to take it away from people who want to use it for expansion.

THE PRESIDENT: Has anybody called your attention to the House Bill?

Q. Yes, I am sorry I have, too.

THE PRESIDENT: It says this: It says that the average standard corporation tax is to be greatly increased over what it is now. It is to go as high as 16 per cent. Now, you are a corporation. You are making $25,000 a year. You can soak the whole of the $25,000. You are talking about these stories, about the little corporation that is just getting by. With the little corporation, under the House Bill up to $25,000 a year profit, which is not to be sneezed at, you can put all your earnings back into the property. You do not have to distribute any of them. You pay the normal corporation tax of 16 per cent and then from there on, up to the corporation that makes $75,000 a year, you get a special preference because you are a little fellow.

Let me go on the air sometime and talk about these little fellows, little corporations, the little "small fry" that are only making up to $75,000 a year. Why, they are poverty-stricken, just paying $75,000 a year. And, because they are so small in their profits, they get a special exemption, too. They can distribute almost all of their profits without any penalty whatsoever.

And then when you get to the corporations that make over $75,000 a year, of course the average citizen in this country figures out that that is a pretty successful corporation. Then what happens? If they don't distribute all their earnings, mind you, they get a 30 per cent exemption right away to start with, and if they do not distribute the other 20 per cent, they are subject to a 4 per cent penalty, which raises their tax to the enormous sum of 20 per cent a year instead of 16 per cent. Now, has that been brought out? It has not.

Q. I want to say, Mr. President, that out of a report of the earnings of some 6400 industries in the State of Wisconsin, only eleven earned in excess of $75,000 a year. You see, the rest of them are poverty-stricken.

THE PRESIDENT: Then the House Bill only affects eleven out of 6400 in the State of Wisconsin?

Q. We would like to make more, Mr. President.

THE PRESIDENT: It affects only eleven.

Let us go one step further. The Senate Bill eliminates that 4 per cent for withholding dividends from distribution, eliminates that tax entirely, and substitutes for it an additional 2 per cent on all of your 6,000 corporations in the State of Wisconsin, making a flat 18 per cent corporation tax instead of 16. With this net result—that I have only seen mentioned in about half a dozen major papers in the United States that your 5,989 corporations in Wisconsin will have to pay 18 per cent on their earnings instead of 16 per cent and, by the Senate Bill, you are helping eleven on the condition that they do not want to distribute 70 per cent of their earnings.

Q. Mr. President, I might say that I am opposed to both bills.

THE PRESIDENT: Yes, all right. But we are talking about a practical proposition. Under the Senate Bill you will obtain $30,000,000 more revenue from corporations as a whole than you will under the House Bill. Did you ever print that? In other words, corporate industry in the United States is soaked $30,000,000 more by the Federal Government under the Senate Bill than it is under the House Bill. Now, that is an interesting fact. You are soaked $90,000,000 more to the smaller corporations and $60,000,000 less to the larger corporations, or a net increase in the burden on industry under the Senate Bill of $30,000,000 more than under the House Bill.

Q. Mr. President, do you see any hope of the House and Senate conferees getting together on the tax bill?

THE PRESIDENT: I hope they will, very much. If you were sitting here in my place, as President of the United States, what would you do? Would you say, like my friend of this corporation, in this kind of a situation, "Forget principle"? Would you say that?

Now, we can work this thing out if we approach it from the point of view of giving to the public both sides of the case. I want principle in this country maintained.

Now, coming to the second phase, if you don't mind, capital gains: Back in—some of you people are a little bit older than I am; I think Bill [William White] is a little bit older than I am—wasn't it in 1888 that the Democratic platform contained a recommendation for income taxes?

Q. [Mr. White] I do not remember. I have had such hard work earning a living that I never looked into the philosophy of taxation. (Laughter)

THE PRESIDENT: Well, anyway, it became one of the major party items. The main thought was an income tax based on the ability to pay. It was in 1894, in one of the Cleveland administrations, they passed an income tax on the graduated basis. That is to say, the more you made, the higher you paid. It was declared unconstitutional by the Supreme Court and it was reintroduced into practically every Democratic platform, and finally in 1913 a Constitutional amendment was ratified levying a tax on income from whatever source derived.

The Congress in 1914 passed an income tax law and a capital gains law. Both of them were based on the theory that there are a great many people in this country who increase their income by different means, some from rents and royalties, some from dividends, some from the interest on bank accounts or bonds, and some of them from trading operations in real estate, in stocks or in bonds. The first income tax law that was held valid incorporated the principle of a graduated capital gains tax as well as a graduated income tax on the theory that both of them were taxation of increases in wealth. That, I take it, has been a fairly consistent principle of the American people from that date to this. It happens to be a quarter of a century.

The House Bill recognized what was probably the fact, that the existing capital gains tax was too high. They therefore reduced it, and they reduced it to what was considered a fair differential, a fair graduation of rates to be paid on capital gains. I was entirely willing to go along with it as long as they maintained the principle. That is the principle and it is the American principle. The Senate, however, abandoned the American principle, adopted and held for a quarter of a century, and said this—and I will give you an illustration: The other day I had two men come to visit me, both of them old friends. One of them has got—he is about as rich as I am, which does not mean much. Last year, a few year ago, he bought a couple of hundred shares of stock and he has a nice little profit, even today. He thinks the company is doing well, but he does not want to hold it. He has a $5,000 capital gain in it and he is willing to pay his 15 per cent. The other man who came in has a block of 10,000 shares of a certain stock that he bought at 20 and can sell tomorrow for 70. He has a net profit in that of $500,000. He is all for the Senate Bill because the Senate Bill would only tax him 15 per cent on a half million dollar profit, just like the little fellow, who has a $5,000 profit. Therefore the Senate Bill is a complete negation and abandonment of what has become an established American policy.

Now, what do I do? Do I say again, "Oh, well, let us encourage business, to hell with principle?" And a lot of you are asking me to do it.

Q. What you refer to as principle is not principle in a moral sense; it is just a theory on one sort of taxation.

THE PRESIDENT: Well, I don't know. I think it goes a little deeper than that.

Q. Is it a moral principle?

THE PRESIDENT: I do think so.

Q. That is what is meant by principle.

THE PRESIDENT: I think it is a moral principle. In other words, I think that the man with an income, whether it is from capital gains, or stock, or bonds, or a newspaper, who is making a million dollars a year- and we know a good many people in this country who are doing it; there are somewhere around fifty or sixty at the present time who are making a million dollars a year or more—I think he ought to pay a larger percentage of his income to his Government than the man who is making a salary, as a managing editor, of $10,000 a year.

Q. Well, I do not think anybody disputes that.

THE PRESIDENT: I think that is principle; I do not think it is a theory of taxation.

Q. Isn't the argument for the abolition of capital gains the general benefit the country would have from increased transactions rather than the benefit of saving taxes for the comparatively few taxpayers who actually sell things at a profit?

THE PRESIDENT: "The hands of Esau!" Now, this same fellow who has got a profit of fifty points on 10,000 shares of stock— I have known him for a great many years—I said, "You want to sell it and keep your profit? What will you do with it?" He said, "I have two or three pretty good lines." I said, "What do you mean 'lines'?" He said, "I have watched two or three things that I can go into, things that I think have a big future ahead of them where I can get in on what you and I would call the ground floor."

"Well," I said, "they are going concerns?. . . . Yes."

And I said, "You want to put your money to work?. . . . Yes." "So you would put your money in as new capital in these firms, this half million?" He said, "I will go out and buy my stock on the Stock Exchange, as I did before."

I said, "Is that putting new capital into these companies? No, you are only transferring ownership from A to B. That is not putting new money to work."

Now, half the people, when you come down to it and analyze it, fall into that category. You are not putting your money into new business, you are going and buying something from somebody else.

Q. Can you tell us about your expectations on private spending and private investment?

THE PRESIDENT: Let me put it this way: Somebody at the Press Conference the day before yesterday asked me what was new about this new program. I said it was a new phase. It is going to work, provided the country gets the truth told about it, provided we get all angles presented to the public, provided the element of fear is eliminated with the help of everybody in the United States.

In other words, if we work together on this thing, it is going to work. If we do not work together on it, it may fail. At the present time, the responsibility for that rests more essentially on the Press of the country than it does on the business of the country.

Q. What would you suggest that the Press tell business?

THE PRESIDENT: I would not tell business anything.

Q. Treat them rough. (Laughter)

Q. Mr. President, do. you think the American Press—we are newspapermen here and not stock market speculators and not anything like that—do you think the American newspapers have been unfair?

THE PRESIDENT: I do not think they have been unfair, but I think they have been more responsible for the inciting of fear in the community than any other factor.

Q. I would like to ask you, Mr. President, in what particular?

THE PRESIDENT: I will give you, if you want, examples. I can multiply them about a thousand times.

As my old friend up the river says, I broke out of the papers the other day some clippings. Here is an example: The other night, oh, three nights ago, two nights ago, there was an A.P. story. Well, I never expect an A.P. story to give my side the lead. I have not for years and I have always managed to survive.

Q. Do you think the A.P. is unfair to you?

THE PRESIDENT: I am not saying it is unfair. Listen, let me finish: Every time, for example, that there is a debate in the Senate— well, you have got, what is it, 11, 12, 13, 14 Republican Senators, 3 or 4 Progressives like George Norris and La Follette, and you have got, oh, a half dozen, 6 or 8, old-line Democratic Senators who, if they lived in the North, would not be Democrats anyway. All the rest are Democrats.

Now, what happens? You have got a very small minority, less than a third who are not Democrats. Arthur Vandenberg gets up, or somebody else gets up, Carter Glass gets up, and makes a speech. Then the majority of the Senate hops all over him and makes some speeches on the other side.

Now, what is your lead? I know the mechanics of the thing. Your lead is based on speeches coming from less than a third of the Senators every time.

Now, your Press associations, especially the A.P., will, in their second or third paragraph, mention the fact that Alben Barkley or somebody else replied, and they will give them space, but your lead and the headlines of 85 per cent of the larger papers of the country will feature the speech of the Minority Member of the House or the Senate.

The other day, there was a party on the air. There was Vandenberg, and on the Democratic side there was Senator Hill of Alabama. Well they each, I think, had—whatever it was—half an hour on the air. The first I knew about this fact—I very rarely listen on the radio and I had not arranged it in any way—was the next afternoon when I got the first edition of the New York Sun. I read the headline, "Huge Recovery Plan Attacked by Republicans; Vandenberg Denounces Roosevelt Relief Program; Says Pump Priming Means Bigger Debts, Bigger Deficits." Then there is the Washington headline, A.P., and it goes on. This is the main story, right-hand column. And it goes on, "continued on page 7," and talks all about what Vandenberg said. And then it goes on and talks about what John Hamilton gave out.

"Well," I said to myself, "that is funny for the A.P. I do not believe it left out what Mr. Hill said, but there is not a peep, there is not a mention of Lister Hill in the Sun."

So—it happened to be on my bed that night—I happened to pick up another New York paper and this story carried the whole of the A.P. story. Now, this A.P. story in its lead mentions the anti-New Deal attacks of the Republicans, it mentions Hamilton in the second paragraph and eventually, in the third paragraph, it talks about the feeling in the Congress. In the fourth paragraph it talks about the Administration side. That was left out of the Sun story. In the fifth paragraph, it talks about my weekly conference with the Congressional people—that was left out in the Sun. The sixth paragraph [reading] "The Vandenberg speech was made during a broadcast with Senator Hill of Alabama. Hill said—" And then Hill's remarks were carried in the seventh, eighth and ninth paragraphs. In other words, outside of the lead, the A.P. did give you a truthful newspaper story. It did not mention Hill in the lead but, further down in the story, it said what Hill said. And the New York Sun deliberately cut out what the A.P. had said to them. If you people think that is fair newspaper editing, I do not. Now, you find hundreds of cases of that kind.

Then, there are papers that have their special bureaus in Washington. You know perfectly well that the special bureau chiefs down here write what the owner of the newspaper tells them to write, and they leave out half of the truth. They give a one-sided picture to the American people.

Q. In the Sun of the previous day, did they not carry, in full, your Address to the Congress and your radio remarks of the same day?

THE PRESIDENT: Oh, they have to do that. That is not what I am talking about.

Q. Can you name an instance in the history of the world where continuous borrowing has led to anything less than a great catastrophe?

THE PRESIDENT: Yes. Read the history of England during and after the Napoleonic War. Read the editorials and get the figures and facts. You can get them from the London Times. It is an amazing story.

Q. William Allen White said, "Treat the businessmen rough."

Perhaps he means from the Kansas point of view. I am from the New England industrial region. I have never seen industrialists in our section more down in the mouth over the troubles they are facing, and it comes primarily from the taxation, from the things that we have been discussing here. They have surpluses which they have been in the habit of keeping through generations, in looking out for the rainy day. May I ask, under this load of taxes, who is going to hold the umbrella over those corporations in the rainy season that seems bound to come? Is the Government to hold the umbrella or who is to hold it?

THE PRESIDENT: That is what I would call an extremely unfair question because they are allowed to put 30 per cent back and any amount up to 100 per cent at a 4 per cent tax. That is not going to prevent them.

Q. If the going is good; but unfortunately the people up there are not like people, your friends, who are buying stock at twenty and selling it at seventy.

THE PRESIDENT: Your corporations in New England are, unfortunately, not earning the $75,000 which would be exempt.

Q. I think there are a good many Washington correspondents who are accredited from Washington papers. I have never got an order from my publisher, in all the fifteen or sixteen years, to write a story one way or the other. I might have written your story wrong, but I never got an order. I think it is true of the bulk of them.

THE PRESIDENT: It is true of a great many. But, do you know the number of people who have resigned all over the country because they could not go along with the orders they have got? We get them every week. I have got a letter here from an exceedingly good editor who was fired for writing a pro-Administration editorial—two of them. However, he is now asking for a job. He says he will take a hundred dollars a week.

Q. He will get it, too, won't he? (Laughter)

Q. [Mr. William Allen White] I think I have a little comfort for you. Seven years ago I was down here on another visit, and a man tapped me on the shoulder and said that the President wanted to talk to me, and here, in this hall, walking up and down, was the President. And he was talking about conditions and grumbling with his hands behind his back. He said, "Look here, here is the New York World; here is the New York Sun."

Now, what is the difference between a Republican paper abusing a Democrat and the Democratic paper abusing a Republican? I would forget it. That is the way they make their money and that is the way they want to run their paper. It cannot hurt you, and it gives them some comfort. (Laughter)

THE PRESIDENT: Well, there are two points I would like to make on that:

You never saw me walking up and down with a long face because of anything I ever read in any newspaper. There is a difference from the incumbent of seven years ago.

Q. It was the same intestinal disturbance. (Laughter)

THE PRESIDENT: Number two, I do not think, taking it by and large and speaking seriously, that the New York World at that time, and other papers that brought out unfair attacks on Mr. Hoover, did the Nation very much good. I do not think it is to be condoned because of the fact that editors and papers and candidates—and candidates—did it in the past and that, therefore, it is all right to do it again.

Q. [Mr. William Allen White] I don't either; I did not think so then and I do not now.

THE PRESIDENT: I do not think it helps the country. The point that I get back to, the point that I made before, is that the Press can be largely responsible for cutting out the petty stuff and getting their shoulders in behind national recovery, if they want to do it.

They won't hurt me. Oh, no! It is a much bigger thing than any individual. But they may hurt about 125,000,000 people. They have a very great responsibility.

The responsibility is based on a very simple effort that I hope the Press will make, and that is to tell the whole story, both sides, evenly, equally and fairly, without recriminations, without the kind of petty stuff that we have been so accustomed to, both from the New York World of the old days and the Chicago Tribune, let us say, of these days. It does not do the country any real good. As I have said, now for the fifth year, you are only hurting the Press.

People like to read the Walter Winchells and the Paul Mallons and the other columns; they like to read the amusing stories, the Pearson and Allen stuff, and so forth and so on. But, in the long run, they are getting to the point of saying, "Oh, it is funny, it is grand; I love to read it every morning but what can I believe? I have read so much of this sort of stuff now for years and years."

And I want to tell you, with due solemnity, that we are beginning to get a phrase in this country that is not good for this country; it is bad for this country and it is bad for the newspapers: "Oh, that is one of those newspaper stories."

Now, that is an actual fact, and, mind you, I am more closely in touch with public opinion in the United States than any individual in this room. I have a closer contact with more people than any man in this room. I get a better cross-section of opinion.

Do not fool yourselves about "yes men." I have had them ever since I have been in public life. I have paid more attention to the "no men" than I have to the "yes men." I can tell a "yes man" inside of a couple of weeks of association with him. I do not get fooled.

You, all of you— it is an essential thing— it is not a derogatory statement on my part—you cannot get a national picture the way I can. You cannot understand, no matter how hard you study the thing, the rounded aspect of the national problems the way a man right here in Washington can.

In the first place, your business is a local one. Some of you are connected with chain papers; you rely to a certain extent on the judgment of people who, again, are in the local field. There is not a newspaperman that comes into my office that understands the ramifications of the national problems. They try awfully hard and they are a grand crowd. I am for them—I won't say a hundred per cent—but I am for them ninety five per cent.

Among any group—lawyers, doctors, clergy and editors and politicians' there is a certain percentage of people out of a hundred that you cannot trust. In the newspaper game those boys down here in Washington have as high a standard of ethics and morals and fair play as any profession in the United States. I take off my hat to them. But a lot of them labor under a very big handicap. It does not trace back, of necessity, to their editors. It traces back to the owner of the paper, essentially.

Q. Are these charges that you lay at the door of the newspapers-do you find that true of the majority of the newspapers? When you say, "the Press as a whole," we would like to know of how many you find that true.

THE PRESIDENT: It is awfully hard to give figures. In the first place, I would eliminate practically all the country newspapers because that is a different story. But take the newspapers that subscribe to A.P. or U.P. I would say that eighty-five per cent of them have been inculcating fear in this country during the past year.

Q. Mr. President, do you think that has been intentional on the part of the owners of the papers? Do you think eighty-five per cent of the owners of the papers—

THE PRESIDENT: Yes, intentional in a perfectly natural human way. The owner of the paper has seen the thing from his own personal view and, if I were the owner of the paper, I might do the same thing.

Q. There has been interest in Congress on the matter of American neutrality. I wonder if you would comment, possibly on the Scott Resolution and also on the broader question of achieving neutrality through legislation?

THE PRESIDENT: This being off the record, I think I can tell you the story the way I told it to Bill Borah [Senator Borah] today.

Senator Borah came down to lunch with me and he has been a good deal disturbed-a good many of us have—by the fact that this country has split up and become so emotional over the Spanish situation. Well, we had an extremely satisfactory talk and when I had explained the Spanish thing, he said, "I think you are a hundred per cent right and, if you get a chance, I hope that you will tell the public the story you told me."

Well, I hesitate to do it. I have not had a chance to talk to Steve [Mr. Early]. I thought of doing it tomorrow morning at the Press Conference, but I do not know whether, in Press Conference, in formal conversation, the idea can be got across.

Now, as he and I both agreed, the object of neutrality is to prevent the United States from doing two things: first, from becoming involved in a foreign war. The second is, in the event of a foreign war, to put the United States in a position where it won't help one side or hurt the other side. In other words, where we will be fair to both sides in the conflict.

Then I went back and I pointed out that, when the Spanish Revolution broke out, and after it had been going for a comparatively short time, they began to kill a lot of people. In other words, from that point of view, it was war. It was generally recognized by the world as a civil war, which came under the Act.

The Act, however, to my sorrow and to Senator Borah's sorrow, attempted to lay down a mandatory rule. As he said to me today, it is impossible in English language, in the form of a statute, to anticipate every future foreign trouble that may happen because every one is apart from every one that happened before.

Well, we had undoubtedly a Spanish civil war with apparently two equal sides. Both sides, both the Spanish Government and Franco, had navies of approximately the same size; they were about equal. Therefore, we figured, that by declaring that there was a war, therefore the Neutrality Act applied, and therefore there would be an embargo placed by us on the shipment of planes or munitions or guns or anything else. In that way, we would not be favoring either side. For several months that resulted in a fairly strict neutrality. We did not help one side more than the other. Very few shipments of planes or munitions or guns went out of this country and got into Spain on either side.

Then the advent of war brought about a situation where Franco got complete control of the sea. This meant immediately—and he has had it ever since—that if, by some hook or crook, I could determine that there wasn't any war in Spain and thereby allow the shipment of arms to both sides, both to Franco and to Barcelona, the effect would be that Franco, controlling the sea, could send his ships directly to the United States and load them up with bombs and airplanes and anything else that he could buy and take them over right to his own army.

The Spanish Government, the Barcelona Government, because it did not control the sea, would not be able to buy anything by direct shipment to Barcelona or Valencia. Therefore, to have changed the neutrality proclamation in the last few months would have been definitely aiding and abetting the Franco Government.

Now, as a matter of fact, the situation is this: We have also read about this terrible, inhuman bombing of the civilian population in Barcelona. We have also read—and while I have no information on the subject, it probably is true-that American-made bombs have been dropped on Barcelona by Franco airplanes. That is possible. If those bombs were of American manufacture, they were bombs that were sold by American manufacturers to Germany, that is to say, either to the German Government, which is a perfectly legal thing to do, or to German companies, which is also perfectly legal, and they were shipped to Germany and reshipped down to Franco's forces.

At the same time, we also know that there have been munitions which have left this country and have been sold in France. That is a perfectly bona fide sale. These sales, either to the French Government, or to French agents, or French companies- being entirely legal- in all probability, a good many of these shipments have all gone to the Barcelona Government, so the net effect of what we have been doing in the past year and a half has been as close to carrying out an actual neutrality-not helping one side against the other—as we can possibly do under the existing law.

Now, the same thing applies to the Japanese-Chinese situation. In that case we have not put into effect the neutrality proclamation, for the very simple reason that if we could find a way of not doing it, we would be more neutral than if we did.

Now, if we declared neutrality, what would happen? Japan could not buy any munitions from us, but they are not buying them anyway. China is buying munitions from us via England, via Singapore, via Hong Kong—not direct-through English purchases and, undoubtedly, American munitions are going into China today. But, on the other hand, Japan has complete, free access to all of our raw material markets because they dominate the ocean. They are buying their copper, their oil, their cotton—they are buying all kinds of things, scrap metal by the shiploads, which is going into munitions, and they would be able, under the Neutrality Act, to continue to buy oil and copper and scrap metal.

Therefore, by virtue of this excuse that they are not at war—it is only an excuse—we are maintaining, in fact, a neutral position.

Q. We are achieving that, despite the neutrality?

THE PRESIDENT: Despite the neutrality law; and that is the trouble with a neutrality law that attempts to tie the hands of an administration for future events and circumstances that no human being can possibly guess.

Q. Would you mind saying what your thought is on the Scott Resolution?

THE PRESIDENT: The Scott Resolution is a perfectly simple thing. It asks the State Department, in effect, to repeat to the Congress what is already known to everybody. That, in the case of Ethiopia, we took such and such a position. That, in the case of China and Japan, we took such and such a position. And, I think it will be answered in that way. We shall simply lay the records before Congress of what we have said and done in the last two years.

Q. There is something that I do not quite understand; perhaps you would be willing to explain. I think, in your last Fireside Chat, you spoke about certain legislation this Administration got through, the T.V.A., the Wagner Act, the Utility Act, and others. I think you admitted they were not perfect. Why has not legislation started so that they would not be one-sided?

THE PRESIDENT: For this very simple reason: The Wagner Act ought to have various amendments made to it, but we are a funny people over here. We at once go to the extremes, both on the side of labor and on the side of the employer. We all get upset and excited, and we say things we do not mean, and we make overstatements.

Now, in England, when they put social legislation on the statute books, they do it with the knowledge that every year or so they will amend it. Social security over there went into effect in 1911 and I think, without exception, every Parliament has amended it. Now, how do they amend it? They have a Royal Commission that looks it over. The Commission is nonpartisan, there are business men on it, and there are labor people on it. They decide that the thing needs certain improvements. The Royal Commission makes a report to the Parliament, and the thing goes through, almost automatically, without fuss or feathers.

If we had that temperament over here, we would have improved the Wagner Act this year and improved the Social Security Act this year, keeping them out of politics.

Q. Perhaps that is what Congress needs?

THE PRESIDENT: I think you are right.

Q. Why does the National Labor Relations Board regard itself as a bunch of prosecutors instead of a fact-finding body?

THE PRESIDENT: Well, that is a statement, and I do not know that it is wholly justified. I think it is in some cases, but on the other hand, there is another side to the picture.

Let me tell you a story that is known to four or five of you who are here tonight. There is a certain cotton mill in the South. The conditions of wages in that cotton mill are good; the conditions of housing are good. They are well above the average. As long as ten or twelve years ago, the owners of this mill abandoned the company-owned house. Pretty nearly every operative in that mill owns or rents his own house. The cotton mill does not own or rent any houses at all. Taking it by and large, the conditions of employment are good. They have had very little labor trouble.

Not long ago, the Cotton Textile Workers' Union, in pursuance of organization provided for in fact by the law—it is perfectly legal—sent down to this town two organizers. Well, I happened to know one of them; and that particular man is just as good an American as anybody in this room. He is a labor organizer but he is a very good citizen. He took with him another man; I do not know him but his reputation is exceedingly good. They went down to this town with the specific purpose of seeking to create a union among the textile workers.

They got in town about ten o'clock in the morning. They had a list of eight or ten of the operators. They were going to see them at the noon hour.

So they went to the factory and they asked, "Where is so and so? Where can I find so and so?"

They were engaged in asking questions, when one of the mill police tapped him on the shoulder and showed his badge and said, "Come with me."

He said, "We have not done anything; we are outside and on the street and just asking to see some fellows."

"Oh, we know; come with me."

They were taken to the police station and locked up in a cell on the charge of vagrancy. Both of them had, oh, fifteen or twenty dollars apiece in their clothes.

They said, "We are not vagrants; we came down here from such and such a city."

"But you are organizers."

"Of course we are organizers."

"Well, you are in a bad place."

They were kept in jail until five o'clock, just before dark, and the judge came in and said, "What are you doing here?"

"We are down here to try to start an organization of the textile workers of this mill."

"That is what you think," he said. "Ten dollars fine and out of town before six o'clock, and do not come back."

They did not know what they were fined for, but they paid the fine, and as they went out of the courtroom, one of the marshals, or policemen, went up to them and said, "Which way are you boys going?" They said, "We have got to get out of town and we thought we would go to such and such a town, ten miles away."

"Well," said the policeman, "I will give you a lift; I turn off two miles short."

They rode with him and he said, "This is where I turn off." They got out and started to hike down the road. They went about a quarter of a mile and out of a clump of bushes came some men with blackjacks and they got the worst beating up that any two people could get without getting killed. They spent a week in the hospital, and they were served notice by a man who brought the message, "Do not go into that town." Now, those were authorities of that government, town and county.

Now, you do not get those facts, and that is one reason why the National Labor Relations Board sometimes tries to bring out facts of that kind. It is their duty to do it. They have a perfect right to go into that town. It is their duty.

Q. Mr. President, what would you do in a case like this: There came into Tupelo, from Baltimore, a C.I.O. organizer. He did not know a blessed thing about conditions in that community. There was a cotton mill. The workers were satisfied with the working conditions. They had good houses and all of their children were in school.

Those organizers proceeded to organize a C.I.O. body. Well, the owners of the mill said, "We cannot meet your terms and conditions. We are just barely keeping our heads above water and so, therefore, we will close down the mill. We will simply liquidate." As a result, 400 workers were thrown on charity.

Well, the people who took the load became tired of supporting those 400 idle workers; and a few nights ago they took the C.I.O. organizer out and gave him a fairly good strafing, although not as good as he should have had. They had a woman and they gave her a little beating up, too.

Now, there are 400 people destitute because they came down here and disturbed the conditions.

THE PRESIDENT: Were they a majority of the mill?

Q. There were none of them keen about it. There were just a few in there. The majority of them did not want it.

THE PRESIDENT: Did the majority join?

Q. No, the majority did not.

THE PRESIDENT: What did the National Labor Relations Boarddo?

Q. The National Labor Relations Board apparently got a man down there to hold a hearing at the mill and he started the hearing after the mill closed.

There you have a case of force, and that ought not to be allowed to close the mill. That was the will of ten per cent; and they had no right to close the mill.

THE PRESIDENT: The answer is not in beating up. The answer is going to the courts about it. Now the machinery—heavens above!—the machinery needs improving, of course it does, but do it the English way. Do not damn everybody about it. Try to get the thing improved.

Q. Is it true that the press is taking an unfair advantage of the National Labor Relations Board when it prints that defendants before the Board were absolutely prohibited from presenting their testimony as they chose to present it? Is that another evidence of the unfairness of the press?

THE PRESIDENT: You will have to give me a specific case on that.

I was once a lawyer; and I know that by the presentation of testimony you can tie up a case for weeks, if you want to. It is a very simple thing. It depends on the judge. Again, you may be before a court that shoves off too fast.

Q. There was an important decision last week. I confess I have forgotten the title. It was a steel concern. They were denied the right to testify.

THE PRESIDENT: Now, you talk about the press. Every month, on the average, since that particular Board has been going, they have handled approximately 200 cases. At the end of the month they give a report on what happens. Out of the 200 cases, you will find on the average that 185 have been settled by some local arbitrator and they never turned up in Washington. That is about 185 out of 200. You will find that another ten, out of the fifteen, are still pending, without any proceeding whatsoever and that, out of 200 cases, there will be five that are not settled or are in the process of being settled. Well, 195 cases out of 200 is a pretty good average.

Now, those figures are given to the newspapers every month. I will put it this way: For the first month after the Board made its report, it was printed in the papers that they had settled 195 out of 200 without fuss or feathers. From that time, there never was a word about that monthly report.

About a month ago, I told the Press about it in a Press Conference and it was printed only because the President of the United States called their attention to it, and pretty nearly everybody sent a story to their papers about it. Half the papers did not print the story. It was not on any first page. Most of the stories were cut from half a column down to a clip on the fourteenth page.

Q. Do you think it would do any good for the Government to conduct elections in a great many towns, where there seems to be uncertainty, so that no one knows which side is in the majority; and they sit around, not knowing what will happen, because the C.I.O. doesn't work, and the other side can't work. Couldn't the Government go in and have an election?

THE PRESIDENT: My opinion is Yes, and that we ought to do it.

Do you remember the Detroit case in 1934, when that automobile strike threatened? Do you remember, I appointed a board of three, that they went out to Detroit and this board of three ran the election themselves? I think it is a good thing to do.

Q. I am from Canton, Ohio, and a couple of weeks ago, the National Labor Relations Board decided in a steel case that the company should deal with the C.I.O. if they are in the majority. A couple of weeks ago they decided that the company union should disband itself, yet there is a feeling that it is in the majority. Should the Government go in and decide?

THE PRESIDENT: I think they should do it. When either side raises a question on the actual representation, I think the Government should have a vote under its jurisdiction.

MR. ALFRED H. KIRCHHOFER: It is with reluctance that we will have to take our leave.

THE PRESIDENT: It is grand to see you. But I do want to repeat, in the utmost friendliness, that this situation is very largely in your hands. And do not worry, it is nothing in your own lives. Not a bit. That part of it is easy. I am thinking about the American public and I am thinking about the newspapers of this country. I do not want them to lose their influence as newspapers giving all the news. I feel very, very strongly about it for the sake of the public and even for the sake of the Press; and if, from now on, we can have a presentation from the Press of both sides of the news, it will be a perfectly magnificent thing.

I will tell you a story: A year and a half ago, when John Boettiger went out to take charge of the Seattle Post-Intelligencer, we all knew he had a hot potato. In the first place, he had a paper that ran between three and four hundred thousand dollars a year in the red. That is no joke. In the second place, he had old man Hearst as a boss, which is no joke either. (Laughter)

However, he had got a pretty good understanding out of the old man, Hearst, that he would not have to run those box editorials that Hearst wrote. Well, that was something. (Laughter) That was a gain. Then, in addition to that, he was going to a city that has had more violent labor troubles than almost any other city in this country.

He said, "What would you do?" I said, "Two pieces of advice from a student of publicity. Eliminate your editorial page altogether. Nobody reads it."

Now, that is horrid for me to say that to you. Mr. Ochs told me a great many years ago—not so many, about four or five years ago—that in his judgment only eight per cent of the readers of The New York Times read any of the editorials, and less than half of one per cent read one editorial all the way through. Now, that is Mr. Ochs.

So, I said, "John, cut out your editorial page entirely. Run some features on it, run some cartoons on it, run letters to the editor on it and clip editorials that appeal to you from other papers or weeklies or monthly magazines." (Laughter)

I said, "Number 2: On your news stories. You are a newspaper. You are in a labor dispute town. The next time you have a strike down on the water front, take two of your best men and say to Mr. A, 'You go down and you cover the water-front story for tomorrow's papers and you get in your story, the story of the strikers from their point of view, and write your lead that the strikers claimed yesterday that so and so and so and so, and that the leader of the strikers, Bridges' man, said so and so and so and so.'

And then say to Mr. B, 'You go down there and you write your story from the point of view of the shippers, the owners of the freight that is tied up, the point of view of the steamship owners whose ships are tied up, and you write your lead that yesterday on the water front the shippers and the shipowners claimed the following.' You run those two stories in parallel columns on the front page, and do not make them too long, so that the reading public will get both sides at the same time."

Q. Did he follow your suggestion, sir?

THE PRESIDENT: He did not. (Laughter)

Q. Has he made a big success of his paper?

THE PRESIDENT: He is in the black, probably because he did not take my advice. But I will say this, that he did honest reporting.

Q. That was good advice, Mr. President.

THE PRESIDENT: You think it was good advice? Well, anyway he got in the black and that is the main thing.

MR. KIRCHHOFER: We are very grateful to you. We hope we can come next year.

THE PRESIDENT: I enjoyed all the shafts and I think I returned them with interest, so it is all right. (Applause)

Franklin D. Roosevelt, Press Conference with Members of the American Society of Newspaper Editors, Washington, D.C. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/209637

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