THE MICHIGAN DAILY

iyrnes ires
40 Employes
On Suspicion
'Foreign Connections'
Cause For Removal
WASHINGTON, Aug. 13- (P) -
Secretary of State Byrnes, disclosing
that 40 State Department employes
have been discharged for "close con-
nections or involvement with foreign
governments," declared that the
great rpajority of government em-
ployes are "loyal American citizens."
The 40 were amor g 79 department
employes discharged after prelim-
inary examination, of 3,000 employes
by a screening committee.
Secretary Byrnes made the dis-
closure in g letter to Chairman Sa-
bath (Dem.-Ill.) of the House Rules
Committee who had written for in-
formativp.
Sabath told Byrnes that "it has
been charged freely on the floor of
the House by some members that
hundreds, if not thousands, of em-
ployes have been eliminated from the
State Department by the screening
committee because of Communistic
leanings or activities or membership."
Such statements, Byrnes replied in
his letter dated July 26, "are incor-
rect and do a grave injustice not only
to the employes of the department
but to government employes as a
whole."
Byrnes said that approximately
4,000 employes had been transferred
to the State Department from vari-
ous war agencies and that case his-
tories of 3,008 had been examined by
the screening committee.
As a result, he said, the committee
recommended against permanent em-
ployment fOr 285 individuals and of
these 79 were discharged.
They included the 40 with "close
connections" with foreign govern-
ments, 26 aliens and 13 who had
failed to comply with foreign-service
regulations, such as citizenship, for
15 years prior to foreign assignment.
Army Tlo Call
185,000 Men
Increased Enlistments
Fail To Fill Quotas
WASHINGTON, Aug. 13-- (AP) -
Maj. Gen. Willard S. Paul said to-,
day that barring an unexpected in-
crease in recruiting of volunteers the
Army expects to call for 185,000
draftees in the next seven months.
Without the draft, he said, the ser-
vice would be well under its author-
ized size by November.
For September, Selective Service
has been called on for a. quota of
25,000. Paul, the general staff's per-
sonnel director, did not forecast the
size of subsequent monthly calls be-
fore the draft act expires next March
31.
Recruiting has been running ahead
of Army advance estimates, but Paul
told a news conference that even if
it mounted 100,000 beyond current
expectations the draft would be need-
ed to make up the differential.
On July 1, the Army had a net
strength of 1,715,000 officers and en-
listed men, or 165,000 in excess of its
authorized strength, but Paul said
it was dwindling rapidly. For bne
thing, it included 135,000 fathers,
the last of whom must be released by
the end of September.
Recruits' during July numbered ap-
proximately 44,000, compared with
62,000 in June. The Army figures o
35,000 in August and 25,000 in Sep-
tember but Paul said these estimates
might be exceeded.
Some 180,000 officers, excluding

those on terminal leave, currently
are on duty. Paul forecast that in
addition to 50,000 regulars, about
100,000 national guardsmen and re-
servists would be required indefinitely
to meet the Army's needs for officers.
He said that about 800 would be
nominated about August 20 for ap-
pointment in the Regular Army and
that before the end of the year ap-
pointments would be made under re-
cent authority granted by Congress
to add 25,000 regulars.
Pepper Favors
Wallace for
'48 NoWnation
WASHINGTON, Aug. 13 -) -
Senator Pepper (Dem.-Fla.) said to-
day he would "rather have Henry
Wallace" for the 1948 Democratic
presidential nomination but that
President Truman's chances for re-
nominatiori are "overwhelming."
The Florida Senator told a news
conference that he and others with
like views are going to do everything
they can to see that "the liberal
element in the Democratic party is
strengthened in every possible way."
"We shall not support anybody who
is not a liberal for Vice President,"
Pepper declared:.
Asked if he would be a candidate
for either the presidential or vice
presidential nomination, Pepper said

PICKETS PARADE AS BILBO SPEAKS - A policeman stands at the
right as,;sign-carrying pickets walk in front of a Mutual broadcasting
company studio in Washington where Sen. Theodore Bilbo (Dem., Miss.)
spoke on a nationwide program. l
SOBERING CONCLUSION:
Inflation Still Threatens After
Year of Profits, Emplovment

Truman Signs
Bill Revamping
Foreign Service
Salary Raise May Help
Bring Effective Peace
WASHINGTON, Aug. 13 - () -
President Truman today signed a bill
revamping the United States foreign
service and increasing the annual
salary of top dilomats from $10,-
000 to $25,000.
Terming the measure a step to
make American efforts to win the
peace "much more effective," the
President thus authorized the first
major changes in the career diplo-
matic service in 22 years.
The President's statement said the
bill was signed into law at a timea
when Secretary of State Byrnes and
other American diplomats in Paris
"are demonstrating how great a stake
the United States has in world af-
fairs."
Sponsored by Rep. John Kee (Dem.
W.Va.), the legislation was aimed at
attracting top-notch negotiators into
the State Department by raising their
salaries to a level approaching private
industry.
In addition to providing a $15,000
yearly raise for ambassadors and min-
isters in the larger countries, the bill
also makes it possible for lower-
ranking foreign service officers to
receive a maximum $13,500 salary.
Other changes enable the State
Department to:
1. Set Up a Foreign Service In-
stitute, similar to the Army-Navy
staff college, to train diplomats.
2. Retire service officers who fail
to gain promotions.
3. Bring American attaches home
once every two years, to keep them in
closer touch with domestic events.
Georgiam"Tech
Students Slap
Ticket Slight
ATLANTA-(P)-Georgia Tech stu-
dents, dissatisfied over seats 'allotted
them in the football stadium, threat-
ened yesterday that unless the situa-
tion is remedied they'll sit on the
playing field and cause the calling-
off of the Nov. 9, Tech-Navy game.
The Navy tilt is the big game of
the season for Tech, the 27,000 avail-
able seats for which have been sold
out.
A student leader who declined to
be quoted by name said 4,000 students
would sit' down on the football field
on the Navy date unless better seats
in the stadium, were provided.
Grant Field, the Tech stadium, is
a horseshoe affair, and the field runs
north and south. Student of both
Tech and the opposing school are
seated on the east side from the 40-
yard lines toward the end zone. The
choice seats between the 40-yard
lines and the back-to-the-su seats
in the west stands go to alumni and
the general public.
At a mass meeting yesterday at-
tended by 350 students, James Craw-
ford, Georgia Tech head of the Amer-
ican Veterans Committee, promised
that student funds would be collected
to place newspaper advertisements
asking the public to boycott the games
this fall.

WASHINGTON, Aug. 13 -(P) -
President Truman today signed a
bill authorizing federal financing of
one-third of a $1,125,000,000 hospital
building program spread among the
states according to their needs.
Mr. Truman declared the legisla-
S need Testifies
In WAA Probe
WASHINGTON, Aug. 13- UP)-
House investigators heard today that
the War Assets Administration's Phil-
adelphia office sold hundreds of kegs
of hard-to-get nails to Benjamin F.
Fields, Washington promoter, despite
absence of proper certification on his
applications.
Lucian Sneed, hardware sales man-
ager for the office, testified lie al-
located nails to Fields from govern-
ment surpluses on direct orders from
his superior, William J. Gilrein, the
general sales manager, after protest-
ing the improper certification.
Testifying before the House surplus
property committee, Gilrein had de-
nied that any "special treatment" was
given Fields' applications. He also
declared there was no connection be-
tween Fields' dealings and his own
dismissal from his job August 7.

tion contained objectionable prece-
dents. In spite of them he signed it,
he explained in a statement, because
of "the urgent need of a prompt
start" on the five-year plan, "par-
ticularly the -survey and planning
aspects.",
The President pointed to these two
"shortcomings:"
1. A council "composed of individ-
uals who are not to be full-time of-
ficials of the government" may veto
certain actions of the Surgeon Gen-
eral, including his disapproval of a
state's plan because it does not meet
federal law. Mr. Truman said such
power over federal officials respon-
sible for administering a grant pro-
gram involving federal funds is "a
potentially dangerous precedent."
2. A state agency may appeal to
the federal courts from denial of a
instruction project by the federal
administrator. Mr. Truman said the
bill thus.sanctioned for the first time
"the judicial overriding of adminis-
trative discretion" given by Congress
to an official it holds responsible for
granting federal funds.
Allotment of federal construction
funds will follow a formula based
on needs ascertained through popula-
tion and average per capita income.

Truman Approves Federal Aid
In State Hospital Construction

CPA Probes'
Shoe Industry's
Threatened Halt
WASHINGTON. Aug. 13-- (') -
Morris Verner, official of the Civilian
Production Administration, said to-
day the government had "shaken
loose" 500.000 to 1,000,000 cattle hides
after official warning of danger of
a shoe production shutdown.
Verner, CPA compliance chief, told
reporters that an investigation of
producer and tanner stocks had forc-
ed about 300,000 hides to market
during the first 48 hours of the sur-
vey, launched a week ago.
About 300 CPA investigators are
making the inventory check.
, Reconversion Director John R.
Steelman ordered the investigation
of stocks that hide producers and
tanners had on hand. CPA regula-
tions permit only "minimum practi-
cable working inventory."
The Steelman statement last week
also reported the Justice Department
was asked to investigate what he
described as a reported industry
"conspiracy" to hold back hides until
thq government is compelled to in-
crease or remove ceilings. This in-
vestigation is underway, officials said.
Verner reported that hides forced
on market as a result of the CPA in-
ventory investigation had been sold
at the ceiling price of 151/2 cents a
pound.


WASHINGTON, Aug. 13 - (A') -
The nation has achieved "substanti-
ally full employment" and record
profits in a year of peace, Recon-
version Director John L. Steelman re-
ported in a victory day statement to-
night, but the "threat of inflation
still casts a shadow over the future."
"We must maintain' a fiscal policy
of high taxes, reduced publicex-
penditures, credit controls and debt
retirement," Steelman declared as a
sobering conclusion to an otherwise
optimistic progress report.
"We must not mistake, temporary
gains in production, employment, and
income for permanent stability," he
said.
"Public support of prices and re-
straint in buying are no less import-
ant now than before the fighting
stopped."
Production Rate Soars
The yearly production rate of goods
and services for civilians has soared
more than $30,000,000,000 since V-J
Day, the anniversary report stated,
while total construction has jumped
almost four times.
Nearly 250,000 new businesses were
established in the last half of 1945,
Steelman continued, and there is
reason to expect the birth of new
concerns will continue at a high rate.
As foreseen, the profits of heavy
industry sagged sharply because of
the loss of war contracts and the
high cost of reconversion, but in the
rest of the economy "profits after
taxes were at the highest levels on
record."
Income Payments Climb
"Total income payments to in-
dividuals today equal or exceed the

war peak of $163,000,000,000 and
have climbed more than 60 per cent
over the peacetime peak of $100,-
000,000,000 in the fourth quarter of
1941," the reconversion chief said.
In attaining full employment the
economy has created nearly 5,000,-
000 new jobs, Steelman estimated,
bringing civilian employment to 58,-
100,000 as against 51,200,00 in the
slump that followed V-J Day.
"But inflation remains a constant
threat. It must be fought daily by
all of the people and with all the
powers of their government."
Unemployment Proportion Low
The proportion of unemployed is
"probably the lowest for any peace-
time year since we became an in-
dustrial nation," the, report stated,
adding that no significant increase in
joblessness is expected for. the rest
of this year.
"Labor shortages are beginning to
appear in some areas and in some
industries. Fewer than one million
recently demobilized veterans are
still looking for jobs.
"During the past 60 days ,there
have been no new strikes in key in-
dustries, hampering national produc-
tion.
Packard Workers
To return to Jobs
DETROIT, Aug. 13- (4')-An esti-
mated 11,600 workers, idle for eight
days because of a dispute between
Packard Motor Company and the
CIO United Auto Workers, are due
to return to their jobs Wednesday.

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