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AN AMERICAN TRIUMPH AUSTIN Sam Acheson of the Dallas.. News rejoices that commercial TV has won “hands down” in Britain. “After nearly three years in which it has been allowed to compete with the state-subsidized British Broadcasting Corporation,” he writes, “this upstart is financially assured.” What is bigger news, Acheson says referring to a report in the Manchester Guardian, the independent TV chain “bids fair to grab most of the viewing audience.” Such features as “Highway Patrol,” “Wagon Train,” “I Love Lucy,” “Shadow Squad,” and “The Assassin,” he says, are rated by surveys as being watched more than any programs on the B.B.C. “In every region of England and Scotland where the audience could see both networks,” Acheson writes, “a majority chose the independent service” with what the Guardian describes as its heavy preponderance on crime serials, giveaway shows, and quiz games. “The staid Guardian wonders i f British critic Ernest Borneman may not be right in saying that the British TV audience ratings ‘bear no relation to merit’ and that ‘the better the pmgram, the more it is resented’ ” and that there is ” ‘a deliberate deification of bad tastea sort of rebellion of the inarticulate, the uninformed, and the illiterate.’ “Such harsh judgments reflect, of course, the traditional ‘Papa knows best’ attitude of the guardians of British middle-class taste. It is assumed that the masses are not to be trusted to choose their own entertainment or instruction.” Obviously, Acheson infers, “We the People” are in rebellion against such “studied guidance.” How HEARTWARMING it is for us Americans to herald the triumph of all things American, no matter what. How encouraging to see our crime serials, our giveaway shows, our quiz games being exported. pandering to the same lazy passive tastes the world over. Acheson failed to mention, and he should be glad to know, that every grade-B Hollywood movie is also in international circulation. Verily, we have cornered the world market, there is no stopping free private enterprise, for has it not given us the skill and the talent and the money to so outproduce the French and the English and all the rest that they come begging for more? We Americans should indeed be happy when the British working classes, who have just come into their own economically, reject a discussion on international affairs for Shadow Squad, or a concert for The Assassin, or a lecture on history for Highway Patrol. Here are human beings with leisure and spending money for the first time in their lives. They are not misguided. They are doing what the Americans do. I wonder if Acheson and the great corps of perfunctory guardians of our good American tastes ever deplore the steady deterioration of our radio? Ever listen to the latest pop tunes or the breakfast clubs on the way to work? Ever wondered why talks on literature, when tried by a New York TV station, had to be given in the wee hours of morning? Ever appraised the canned monstrosities thrown out by the networks night after night, Published by Texas Observer Co., Ltd. AUGUST 22, 1958 Ronnie Dogger Editor and General Manager Willie Morris, Associate Editor Sarah Payne, Office Manager Dean Johnston, Circulation-Advertising EDITORIAL and BUSINESS OFFICE: 504 West 24th St., Austin, Texas. Phone GReenwood 7-0746. HOUSTON OFFICE: 1012 Dennis, Mrs. R. D. Randolph, Dean Johnston. I Entered as second-class matter, April 26, 1937, at the Post Office at Austin, Texas,’ under the Act of Mareh 3, 1879. questioned what it does for our children, for their parents ? WALK INTO almost any American book shop these days and see the wealth of paperbacks, priced 25 cents to a dollar, books by every AUSTIN The oil depletion allowance, “the most notorious, the most indefensible loophole which our tax laws now permit,” as Senator Proxmire calls it, has seen its best days. Since the last record roll call in the U.S. Senate in 1951, the opposition has quintupled from nine senators to 34. Except for Ives, Saltonstall, and senators from oil producing states, including Yarborough and Johnson from Texas, every liberal in the Senate was among the 22 Democrats and 12 Republicans who were recorded against the allowance Monday night, Aug. b 11. Stunned, the oilmen are hast’ing to their hucksters for new arguments and a better sell on the old ones. If you rely on a Texas daily for your news of the world you are at best dimly aware of the debate last week stretched now across 44 pages of the Congressional Record, but the oil boys have been reading it, mistake them not. Proxmire’s tax amendment, drafted by Sen. Paul Douglas, Illinois, would leave the allowance at 27.5 percent for independents and wildcatters, who make most of the new discoveries. Taxpayers with more than $1 million a year in gross oil income, however, would be able to deduct only 21 percent of their gross income as depletion, and if their income exceeded $5 million a yearthat is to say, if they were big oil corporationsthey could take only 15 percent. The amendment’s estimated annual yield to the treasury would be $310,000,000. Counting senators not present who announced their dispositions, the Proxmire amendment* lost, 59-34. On another amendment to lower the allowance to a flat 15 percent, the Senate divided 64-28. Voting for the Proxmire amendment : Clark, Douglas, Ervin ,Gore, Green, Humphrey, Jackson., Davits, Jordan, Kennedy, Langer, Lausche, Magnuson, Mansfield, McNamara, Morse, Neuberger, O’Mahoney, Pastore, Potter, Proxmire, PUrtell, Williams; and announced but absent, Kefauver, Hennings, Payne. OHNSON LAY in the rushes like an alligator while Yarborough stepped forward to argue as best he could, and not very well at that, for the big oil corporations. He plugged first for his bill for a protective tariff of 84 cents a barrel on Middle Eastern oil. Instead of fighting to bring this oil to American consumers at the lower price which its 38-cents-a-barrel production cost makes possible, Yarborough is trying to keep it out of the country. He argued that the domestic oil industry is “sick””suffering and in a state of near ruin.” He didn’t make it clear that he was talking about the independents, who wouldn’t be hurt by Proxmire’s bill, and Proxmire heard no challenge when he said later, “Let someone name a giant oil corporation that has gone bankrupt recently.” Published once a week from Austin. Texas. Delivered postage prepaid $4 per annum. Advertising rates available on request. Extra copies 10c each. Quantity prices available on orders. We will serve no group or party but will hew to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will be overlook or misrepresent the truth to serve the interests of the powerful or cater to the Ignoble in the human spirit. thinker and writer from Socrates to Dante to Faulkner. Here we are, we Americans, we have arrived, the richest people with the longest weekends and the largest schools in the world. “Where, sporteo, do we go from here ?” asked John Phillips in an our Finally Yarborough argued that “the entire credit structure of the oil business is ‘based on the depletion allowance,” as though the Congress should be bound by the alleged optimistic assumptions of interested corporations about the persistence of a tax rate. If the senators have been this considerate of ordinary citizens before raising their taxes it has escaped our notice. To Yarborough’s argument that production in Texas is down to eight days a month, Proxmire and Douglas replied finethere’s been over-investment in the industry anyway, encouraged by the depletion allowance boondoggle “I am not speaking for the big importing companies ; I am speaking for the domestic producers,” Yarborough explained. This , was a useful clarification coming from a senator who in most respects has spoken for the people who elected him. When Sen. Carroll of Colorado rose to take his stand for the reduction, he remarked, as the Record reports : “Colorado is developing greater oil and gas production each year. As production grows in proportion, it may be that I shall have to change my position in the future, so far as a policy on Presumably the senators expect the voters to be as cynical as they about the vicissitudes of raising campaign funds in the oil producing states. Genuflecting before the derricks as we pass we shall nevertheless persist in the suspicion that some Texans will be diverted by the arguments for reducing the allowance. Franklin D. Roosevelt in 1940 and Harry Truman in 1948 and 1949 asked for the reduction of the allowance to 15 percent. Truman cited the case of a Texas oil millionaire who raked in $14 million over a five year period but paid income taxes of only $80,000 for the periodabout half of one percent compared to the lowest rate of 20 percent for a single man who earns less than $2,000 a year. The 27.5 percent rate, Proxmire explained, was set in 1926 when the corporation income tax was only 13 percent. Since then the tax rate has increased to 52 percent, multiplying by four the value of the allowance. In 1946 the value of the depletion allowance for various minerals \(80 percent of the amounts for oil and in 1947 they mounted to $1.2 billion and by 1956 $2.8 billion. Proxmire estimates that conservatively they will cost the treasury $3 billion in 1957 revenues. A Library of Congress study last year disclosed that while the taxes Of the large industrial firms average about 48 percent, the taxes on oil and gas companies average only 28 percent. The President’s Materials Policy Commission, reporting in 1952, showed that in 1948 the oil and gas companies charged more than 19 times as much allowable depletion as they would have been permitted if they had been limited to simple recovery of the costs of their capital investment, like other businesses. If the allowance were cut to 15 percent the large corporations would still be able to charge off more than 10 times the cost of their investment, Proxmire said. On top of this, American oil companies operating outside the U.S have been permitted a depletion allowance even though there is no conceivable justification on grounds of national security \(as even Louisiana’s Sen. In fact the national security argument had almost wilted away last week, since the depletionists generation novel, The Second Happiest Day. Being proud always of our exported Loveable Lucys and our Patrolmen Crawfords ? Personally I wouldn’t mind at all us having our own staid B.B.C. owned by the federal government, General Motors. the Dallas News, or Sam Acheson. Perhaps we in America need a few guardians of taste to guard us against the guardians of no taste at all. W.M are also the protectionists who are trying to bar from the U.S. the very foreign oil which relieves consumpforeign companies, in what is now an open scandal, entered into cynical agreements with Ibn Saud, for example, whereby rather than pay Saud more oil royalties, they agreed to Saud raising their taxes exactly enough to cancel out the taxes they would otherwise owe the United States. This shake-down of U.S. taxpayers was made possible by an old U.S. law allowing U.S. companies abroad to subtract, dollar for dollar, foreign taxes from U.S. income taxes due. Sen. Morse made the point that “this oil depletion alldwance tax steal” is causing more and more ordinary taxpayers to become cynical about the payment of their own taxes. Proxmire condemned “the myth of the great risk.” His amendment would preserve the allowance for the small independents who might need it to encourage them to risk a strike on the odds of one producing well out of nine exploratory attempts ; but the idea of one-in-nine risk, he said, is absurd for multi-million dollar corporations which reduce probabilities to cost accounting charts. THUS IS OIL omnipotent yet in Texas and the loudest voice in the Senate of the United States. Texans who resent oil money flooding out their elections and their statehouse, buying up the ranches one by one and fencing off the rivers, will have to look. to other states and other politicians for leadership on the issue. R.D. Joiner on Taxes Ernest Joiner in his weekly Ralls Banner : L L An alert New Mexico legislator has suggested New Mexico annex eight West Texas counties. At first shock, it seems a ridiculous suggestion. On sober reflection, we think it a fine idea, and we have reasons. First, we’d like to “farm out” the people in these counties to New Mexico so they can’ get a taste of what it means to live in a state where Fair Trade Laws are in effect. They can find firsthand how it feels to pay from 25% to 50% more for manufactured goods than they now pay in Texas. Let ’em buy themselves a bottle of Old Charter for pay 39.9c for a gallon of gasoline, $10 to $15 a night in some crumby motel or hotel, and so on right down to the actual necessities of life. Then let them enjoy the luxury of paying a 2% state sales tax on top of all this, so that all they have left jingling in their jeans is a cupfull of pennies without which no transaction can be completed. And let them figure out how wonderfully relaxing it is to pay a state income tax on top of a million other taxes at the end of each year. Let them become acquainted with an estimated 125,000 New Mexicans whose only means of getting by is their refusal to file their state income tax returns each year. Give them practical experience in the fine art of paying the federal government $2 for every $3 spent in New Mexico. Give them a chance to pay 10c for a 5c Coke with 4c deposit on the bottle. Then, after this economic and spiritual uplift, admit them back to Texas so they can tell us all how badly we need a state sales tax, a state income tax, and that great outrage that is breaking the backs of the low-income people, the Fair Trade Laws. 7 Page 3 . August 22, 1958 al i t &MIS Mbstrurr o Ralph, Lyndon, and Big Oil