5220 CONGRESSIONAL-RECORD-SENATE APRIL 9 investigate the activities of commercial and civil aviation industries engaged in interstate commerce; to the Committee on Rules.

By Mr. GREEN: Joint resolution (H. J. Res. 564) making an appropriation to aid in the financing of non-Federal proj­ects submitted to the Public Works Administration and rec­ommended for approval by State engineers <P. W. A.) and advisory boards; to the Committee on Appropriations.

By Mr. MARTIN of Massachusetts: Concurrent resolution <H. Con. Res. 47) declaring the policy of Congress toward funded war debts due the United States; to the Committee on Foreign Affairs.

MEMORIALS Under clause 3 of rule XXII, memorials were presented and

referred as follows: By the SPEAKER: Memorial of the Legislature of the State

of New Jersey, regarding the transfer of the Delaware and Raritan Canal; to the Committee on Rivers and Harbors.

PRIVATE BILLS AND RESOLUTIONS Under clause 1 of rule XXII, private bills and resolutions

were introduced and severally refened as follows: By Mr. DOBBINS: A bill (H. R. 12227) granting a pension

to Lawrence A. Golden; to the Committee on Invalid Pensions. By Mr. GOLDSBOROUGH: A bill <H. R. 12228) for the

relief of Mrs. George E. Richardson; to the Committee on Claims.

By Mr. HARLAN: A bill <H. R. 12229) granting a pension to Mary F. Clark; to the Committee on Invalid Pensions.

Also, a bill <H. R. 12230) for the relief of Donald L. Book­walter; to the Committee on Claims.

Also, a bill <H. R. 12231) for the relief of Chester Earl Rist; to the Committee on Naval Affairs.

By Mr. KLEBERG: A bill <H. R. 12232) for the relief of Llewellyn B. Griffith; to the Committee on Military Affairs.

By Mr. LEWIS of Maryland: A bill <H. R. 12233) for the relief of the heirs of William F. Stearns; to the Committee on War Claims.

By Mr. McFARLANE: A bill (H. R. 12234) for .the relief of Roy Burns, alias Arthur Clark; to the Committee on Mili­tary Affairs.

By Mr. MAVERICK: A bill (H. R. 12235) authorizing and ·directing the appointment of Joseph W. Harrison as a cap­tain in the Chaplain ReServe Corps; to the Committee oti Military Affairs.

By Mr. PETERSON of Florida: A bill (H. R. 12236) grant;.. ing a pension to Sallie E. Perrin; to. the Committee on Invalid Pensions.

By Mr. SCHULTE: A bill (H. R. 12237) for the relief of Roscoe D. Guy; to the Committee on Military Affairs.

By Mr. SNYDER of Pennsylvania: A bill (H. R. 12238) granting a pension to Milton Warner; to the Committee on Invalid Pensions.

By Mr. WELCH: A bill <H. R. 12239) for the relief of Charles F. Stone; to the Committee on Military Affairs.

PETITIONS, ETC. Under clause 1 of rule XXII, petitions and papers were

laid on the Clerk's desk and referred as follows: 10695. By Mr. BACON: Petition of 116 citizens of Nassau

County, N. Y., principally from Albertson, N. Y., protesting against the enactment of the so-called ~err immigration bill <H. R. 8163), and praying that the House of Representa­tives defeat this proposal; to the Committee on Immigration and Naturalization.

10696. By Mr. CONNERY: Petition of the city council of Cambridge, Mass., disapproving the abandoning of Civilian Conservation Corps camps in Massachusetts; to the Com­mittee on Appropriations.

10697. By Mr. FITZPATRICK: Memorial of the New York State Assembly, requesting an annual appropriation of $2,500,000 for the maintenance and operating expenses of

the New York State canal system; to the Committee on Appropriations.

10698. By Mr. SMITH of Virginia: Petition presented by Frances M. Mabry, of Ballston, Va., and Mrs. G. A. Hamilton, of Clarendon, Va., and signed by several thousands of indi­viduals, endorsing House bill 8739, introduced by Mr. GUYER, of Kansas, during the first session of the present Congress; to the Committee on the District of Columbia.

10699. By Mr. TERRY: Petition of the Chamber of Com­merce of Little Rock, Ark., duly adopted April 6, 1936, re­questing the Congress to include in the new flood-control legislation now pending in the Senate, levee and reservoir projects provided in House bill 8455, on the White and Ar­kansas Rivers in Arkansas; to the Committee on Flood Control.

10700. By Mr. WILLIAMS: Petition of George Keeney, of Rolla, Mo., and others, requesting changes in tenure of office and compensation of star-route mail carriers; to the Com­mittee on the Post Office and Post Roads.

SENATE THURSDAY, APRU. 9, 1936

<Legislative day of Monday, Feb. 24, 1936)

The Senate met at 11:30 o'clock a. m., on the expiration of the recess.

THE JOURNAL

On request of Mr. RoBINSON, and by unanimous consent, the reading of the Journal of the legislative proceedings of the calendar day April 8, 1936, was dispensed with, ~d the Journal was approved.

MESSAGE FROM THE HOUSE A message from the House of Representatives, by Mr. Chaf­

fee, one of its reading clerks, announced that the House had disagreed to the amendments of the Senate to the bill <H. R. 11663) - to require reports of receipts and diSbursements of certain contributions, to require the registration of persons engaged in attempting to influence legislation, to prescribe punishments for violation of this act, and for other purposes, agreed to the conference asked by the Senate on the disagree­ing votes of the two Houses thereon, and that Mr. WEAVER, Mr. Mn.LER, Mr. CELLER, Mr. WALTER, Mr. HESS, and Mr. GUYER were appointed managers on the part of the House.

The message also announced that the House had passed the following bills, in which it requested the concurrence of the Senate:

H. R. 11006. An act proViding for the examination of the Nueces Riv~r and its tributaries in the State of Texas for flood -control purposes;

H. R. 11562. An act to renew patent no. 25909, relating to the badge of the United States Daughters of 1812; and

H. R. 12037. An act relating to compacts and agreements among States in which tobacco is produced providing for th~ control of proouction of, or commerce in, tobacco in such States, ~and- for other PUrPoSeS. ··

The message further announced that the House had agreed to the amendments of the Senate to the bill (H. R. 11053) authorizing the President to present the Distinguished Service Medal to Commander Percy Todd, British NavY, and the Navy Cross to Lt. Comdr. Charles A. deW. Kitcat, British Navy.

ENROLLED BTI.LS SIGNED The message also announced that the Speaker had affixed

his signature to the following enrolled bills, and they were signed by the Vice President:

S. 536. An act for the relief of Ada Mary Tomau; s. 754. An act to amend section 21 of the act approved

June 5, 1920, entitled "An act to provide for the promotion and maintenance of the American merchant marine, to repeal certain emergency legislation, and provide for the disposition, regulation, and use of property acquired · there­under, and for other purposes", as applied to the Virgin Islands of the United States;

1936 CONGRESSIONAL RECORD-SENATE 5221 8. 903. An act for the relief of the Holyoke Ice Co.; 8.1152. An act relating to the carriage of goods by sea; 8.1824. An act for the relief of Abraham Green; S. 2021. An act to recognize the service of Brig. Gen.

Edward R. Chrisman; S. 2336. An act granting compensation to Mary Weller; S. 2682. An act for the relief of Chief Carpenter William

F. Twitchell, United States Navy; S. 2697. An act for the relief of the United Pocahontas

Coal Co., Crumpler, W.Va.; S. 2922. An act for the relief of Rose Stratton; S. 2942. An act for the relief of John Hoffman; s. 2943. An act for the relief of John Morris; s. 3125. An act for the relief of J. A. Hammond; 8. 3367. An act for the relief of James G~ynor; 8. 3445. An act to authorize the Secretary of Agriculture

to release the claim of the United States to certain land within the Ouachita National -Forest, Ark.;

S. 3655-. . An act for the relief of the Vermont Transit Co., Inc.;

S. 3684. An act to· authorize the settlement of individual claims for personal property lost or damaged, arising out of the activities of the Civilian Conservation Corps, which have been approved by the Secretary of War;

S. 3777. An act to authorize the Secretary of the Treas­ury to execute an agreement of indemnity to the First Granite National Bank, Augusta, Maine;

S. 3872. An act for the relief of the present leader of the Army Band; and

S. 4232. An act to create a commission and to extend fur­ther relief to water users on United States reclamation proj­ects ·and on Indian irrigation projects.

CALL OF THE ROLL Mr. BACHMAN. I suggest the absence of a quorum. The VICE PRESIDENT. The clerk will call the roll. The Chief Clerk called the roll, and the following Senators

answered to their names: Adams Copeland La Follette Ashurst Couzens LeWis Austin Davis Logan Bachman Donahey Lonergan Bailey Duffy McGill Barbour Fletcher McKellar Barkley Frazier McNary Benson George Maloney Black Gerry Metcalf Bone Gibson Minton Brown Glass Moore Bulkley Guffey Murphy Bulow Hale Murray Burke Harrison Neely Byrnes Hastings Norris Capper Hatch Nye Caraway Hayden O'Mahoney Carey Holt Overton Clark Johnson Pittman Connally Keyes Pope Coolidge King Radcliffe

Reynolds Robinson Russell Schwellenhach Sheppard Shipstead Smith Steiwer Thomas, Okla. Thomas, Utah Townsend Truman Tydings Vandenberg VanNuys Wagner Walsh White

Mr. ROBINSON. I announce that the Senator from Ala­bama [Mr. BANKHEAD], the Senator from Colorado [Mr. CosTIGAN], the Senator from California [Mr. McADool, the Senator from Nevada [Mr. McCARRAN], and the Senator from Florida [Mr. TRAMMELL] are absent because of illness.

The Senator from New Mexico [Mr. CHAVEZ] is absent be­cause of illness in his family.

The Senator from Mississippi [Mr. BILBO], the Senator from Oklahoma [Mr. GORE], the Senator from Virginia [Mr. BYRD], the Senator from Montana [Mr. WHEELER], and the Senator from Dlinois [Mr. DIETERICH] are necessarily de­tained.

The VICE PRESIDENT. Eighty-one Senators having an­swered to their names, a quorum is present.

PETITIONS AND MEMORIALS The VICE PRESIDENT laid before the Senate a concur­

rent resolution of the Legislature of the State of New York, favoring the making of an annual appropriation by the Con­gress to the use of the State of New York, in the sum of $2,500,000, for the maintenance and operating expenses of the New York State Canal system. which was referred to the Committee on Commerce!

(See concurrent resolution printed in full when presented today by Mr. COPELAND.)

The VICE PRESIDENT also laid before the Senate. a letter in the nature of a petition, signed by David Lasser, national chairman of the Workers Alliance of America, praying for the prompt making of an appropriation to provide housing, food, and return transportation to about 200 of the delegates to the second national convention of the above-named or­ganization now in session in the city of Washington, which was referred to the Committee on Appropriations.

Mr. COOLIDGE presented a resolution of Local Union No. 2178, United Textile Workers of America, of Millbury, Mass., favoring the enactment of the so-called Ellenbogen bill, per­taining to the textile industry, which was referred to the Committee on Education and Labor.

He also presented a resolution of Local, No. 38, United Shoe and Leather Workers Union, Lowell, Mass., favoring the enactment of the so-called Marcantonio bill, being the bill <H. R. 11186) ·to provide for cooperation by the Federal Government with the several States and the District of Co­lumbia in relieving the hardship and suffering caused by unemployment, and for other purposes, which was referred to the Committee on Education and Labor.

He also presented a letter in the nature of a petition from G. A. Henderson, chairman of the general grievance commit­tee, Brotherhood of Locomotive Firemen and Enginemen <Boston & Maine Railroad System) , Boston, Mass., praying for the enactment of the .bill (S. 4174) to foster and protect interstate commerce by authorizing the Interstate Commerce Commission to approve or disapprove of the consolidation or abandonment of carrier facilities of public service, which was referred to the Committee on Interstate Commerce.

Mr. COPELAND presented the following concurrent reso­lution of the Legislature of the State of New York, which was referred to the Committee on Commerce:

Whereas the State of New York has invested, and continues annually to appropriate and invest, huge sums of money in the construction and maintenance of a State canal system; and

Whereas the facilities of said canal system are and have always been available to the shipping of all the States of the United States and have contributed greatly to the development of com­merce in the entire United States; and

Whereas there is no other State in the Union that maintains a canal or canals for the use of the public at its own expense; and

Whereas the State of New York contributes annually to the Federal Government more money than any other State in the Union, which for the last fiscal year amounted to the sum of $724,000,000; and

Whereas Congress, recognizing this fact, passed legislation in 1931 appropriating $2,500,000 for maintenance of the State canal system with the condition that the State surrender title to said canal system to the Federal Government, which condition was refused by the legislature of this State; and

Whereas the Federal Government subsequently, in the year 1934, appropriated the sumo~ $27,000,000 for the deepening of a portion of said canal system with no condition for the surrender of title to the canal system by the State of New York: Now, therefore, be it

Resolved (if the senate concur), That the Congress of the United States be, and it hereby is, respectfully memorialized to appro­priate annually to the use of the State of New York the sum of $2,500,000 for the maintenance and operating expenses of the New York State canal system; and be it further

Resolved (if the senate concur), That a copy of this resolution be transmitted to the Clerk of the House of Representatives, the Secretary of the United States Senate, and to each Member of Congress elected from the State of New York.

REPORTS OF CO~TTEES Mr. BURKE, from the Committee on Claims, to which

was referred the bill <H. R. 2119) for the relief of Mrs. E. L. Babcock, mother and guardian of Nelson Babcock, a minor, reported it without amendment and submitted a report <No. 1757) thereon.

Mr. COOLIDGE, from the Committee on Claims, to which was referred the following bills, reported them severally without amendment and submitted reports thereon:

H. R.1265. A bill for the relief of N. N. Self (Rept. No. 1758);

H. R. 3513. A bill for the relief of Archie P. McLane and Hans Peter Jensen (Rept. No. 1759);

H. R. 4965. A bill for the relief of M. M. Smith <Rept. No. 1760);

5222 CONGRESSIONAL RECORD-SENATE APRIL 9 H. R. 5753. A bill for the relief of Edith H. Miller <Rept.

No. 1761); H. R. 6669. A bill for the relief of Mrs. Earl Poynor <Rept.

No. 1762) ; and H. R. 8094. A bill for the relief of Dr. J. C. Blalock <Rept.

No. 1763). Mr. SCHWELLENBACH, from the Committee on Claims,

to which were referred the following bills, reported them each without amendment and submitted reports thereon:

s. 3080. A bill conferring jurisdiction upon the Court of Claims to hear, determine, and render judgment upon the claim of John W. Hubbard <Rept. No. 1764); and

H. R.ll231. A bill for the relief of Rasmus Bech <Rept. No. 1765).

Mr. BAILEY, from the Committee on Claims, to which were referred the following bills, reported them severally without amendment and submitted reports thereon:

s. 3907. A bill for the relief of the State of Nevada <Rept. No. 1766);

H. R. 7963. A bill for the relief of J. Edwin Hemphill <Rept. No. 1767) ; and

H. R. 10521. A bill for the relief of Joseph Mossew (Rept. No. 1768).

Mr. BAIT..EY also, from the Committee on Claims, to which was referred the bill (S. 3241) authorizing adjustment of the claims of F. L. Forbes, John L. Abbot, and the Ralph Sollitt & Sons Construction Co., reported it with an amend­ment and submitted a report (No. 1769) thereon.

Mr. BENSON, from the Committee on Claims, to which were referred the following bills, reported them each with­out amendment and submitted reports thereon:

s. 3839. A bill granting a pension to Randall Krauss (Rept. No. 1770); and

H. R. 4660. A bill for the relief of Robert C. E. Hedley (Rept. No. 1771).

Mr. CAPPER, from the Committee on Claims, to which were referred the following bills, reported them eacC. with an amendment and submitted reports thereon:

H. R. 3823. A bill for the relief of Albert Thesing, Jr. (Rept. No. 1772); and

H. R. 5867. A bill for the relief of E. C. Willis, father of the late Charles R. Willis, a minor (Rept. No. 1773).

Mr. TOWNSEND, from the Committee on Claims, to which was referred the bill (H. R. 8089) for the relief of Joseph J. Baylin, reported it without amendment and sub­mitted a report (No. 1774) thereon.

He also, from the same committee, to which was referred the bill <S. 3932) for the relief of Ann Rakestraw, reported it with an amendment and submitted a report <No. 1775) thereon.

He also, from the same committee, to which were re­ferred the following bills, reported them each with amend­ments and submitted reports thereon:

S. 3652. A bill for the relief of George E. Wilson (Rept. No. 1776) ; and

H. R. 7253. A bill for the relief of James Murphy Morgan (Rept. No. 1777).

Mr. SHEPPARD, from the Committee on Commerce, to which was referred the bill (8. 4214) to authorize the prep­aration of a comprehensive plan for controlling the :floods, regulating the :flow of waters, land reclamation, and cQn­serving water for beneficial uses, in the basins of the Sabine and Neches Rivers, and for other purposes, reported it with amendments and submitted a repor.t <No. 1778) thereon.

He also, from the same committee to which was referred the bill (S. 4271) to extend the time for commencing and completing the construction of a bridge across the Wabash River at or near Merom, Sullivan County, Ind., reported it with an amendment, and submitted a report <No. 1809) thereon. ·

He also, from the same committee, to which were referred the following bills, reported them severally without' amend­ment and submitted reports thereon:

S. 4208. A bill to extend the times for commencing and completing the construction of a bridge across the Missis-

sippi River at or near Natchez, Miss., and for other purposes (Rept. No. 1779);

S. 4326. A bill granting the consent of Congress to the Department of Public Works of Massachusetts to construct, maintain, and operate a free highway bridge across the Connecticut River at or near Northampton, Mass. (Rept. No. 1780);

S. 4095. A bill granting the consent of Congress to the State Highway Commission of Mississippi to construct, main­tain, and operate a free highway bridge across Pearl River at or near Monticello, Miss. <Rept. No. 1797);

S. 4276. A bill to revive and reenact the act entitled "An act granting the consent of Congress to the Lamar Lumber Co. to construct, maintain, and operate a railroad bridge across the West Pearl River, at or near Talisheek, ·La.", approved June 17, 1930 <Rept. No. 1798);

S. 4355. A bill to authorize a preliminary examination of the Delaware River with a view to the control of its :floods (Rept. No. 1799);

H. R. 3383. A bill to provide a preliminary examination of the Greenbrier River and its tributarieS" in the State of West Virginia, with a view to the control of its :floods <Rept. No. 1800);

H. R. 3384. A bill to provide a preliminary examination of the Cheat River and its tributaries in the State of West Vir­ginia, with a view to the control of its :floods (Rept. No. 1801);

H. R. 3385. A bill to provide a preliminary examination of the Potomac River and its tributaries, with a view to the control of its :floods <Rept. No. 1802);

H. R. 8301. A bill to authorize a preliminary examination of the Marais des Cygnes River, in the State of Kansas, with a view to the control of its :floods (Rept. No. 1803) ;

H. R. 8414. A bill to provide a preliminary examination of the Yakima River and its tributaries and the Walla Walla River and its tributaries, in the State of Washington, with a view to the control of their floods (Rept. No. 1804) ;

H. R. 9273. A bill to extend the times for commencing and completing the construction of a bridge across the Missouri River at or near Weldon Spring, Mo. <Rept. No. 1805) ;

H. R. 10487. A bill to authorize a survey of Lowell Creek, Alaska, to determine what, if any, modification should be made in the existing project for the control of its :floods <Rept. No. 1806);

H. R. 10631. A bill to extend the times for commencing and completing the construction of a bridge across the St. Law­rence River at or near Alexandria Bay, N. Y. (Rept. No. 1781);

H. R. 11042. A bill authorizing a preliminary examination of the Matanuska River in the vicinity of Matanuska, Alaska <Rept. No. 1807);

H. R. 11043. A bill to extend the times for commencing and completing the construction of a bridge across the Wacca­maw River at or near Conway, S. C. (Rept. No. 1782);

H. R. 11073. A bill granting the consent of Congress to the State Highway Comm.ission of Missouri to construct, main­tain, and operate a free highway bridge across the Current River at or near Powder Mill Ford, on Route No. Missouri 106, Shannon County, Mo. <Rept. No. 1783) ;

H. R.11402. A bill authorizing the Delaware River Joint Toll Bridge Commission of the State of Pennsylvania and the State of New Jersey to construct, maintain, and operate a toll bridge across the Delaware River at a point near Dela­ware Water Gap <Rept. No. 1784) ;

H. R.l1478. A bill to extend the times for commencing and completing the construction of a bridge across the Mis­sissippi River between .st. Louis, Mo., and Stites, Dl. <Rept. No. 1785);

H. R. 11613. A bill to extend the times for commencing and completing the construction of a bridge across the Ten­nessee River between Colbert County and Lauderdale County, Ala. (Rept. No. 1786) ;

H. R. 11644. A bill to extend the times for commencing and completing the construction of a bridge across the Mis­sissippi River at or near a point between Morgan and Wash Streets in the city of St. Louis, Mo., and a point opposite thereto in the city of East St. Louis, Til. (Rept. No. 1787) ;

1936 CONGRESSIONAL RECORD-SENATE H. R. 11772. A bill to extend the times for commencing

and completing the construction of a bridge across the Ohio River at or near Sistersville, W. Va. <Rept. No. 1788) ; and

H. R.11806. A bill to authorize a preliminary examination of Passaic River, N. J., with a view to the control of its :floods (Rept. No. 1808).

Mr. SHEPPARD (for Mr. BILBo), from the Committee on Commerce, to which was referred the bill <H. R. 8694) to provide a preliminary examination of Chickasawha River and its tributaries in the State of Mississippi, with a view to the control of their :floods, reported it without amendment and submitted a report <No. 1795) thereon.

Mrs. CARAWAY, from the Committee on Commerce, to which were referred the following bills, reported them sev­erally without amendment and submitted reports thereon:

H. R. 9235. A bill to provide for a preliminary examination of the Cosatot River in Sevier County, Ark., to determine the feasibility of cleaning out the channel and leveeing the river and the cost of such improvements with a view to the con­trolling of floods <Rept. No. 1789);

H. R. 9236. A bill to authorize a preliminary examination of the Red and Little Rivers, Ark., insofar as Red River affects Little River County, Ark., and insofar as Little River affects Little River and Sevier Counties, Ark., to determine the feasibility of leveeing Little River and the cost of such improvement, and also the estimated cost of repairing and strengthening the levee on Red River in Little River County, with a view to the controlling of floods <Rept. No. 1790) ;

H. R. 9249. A bill to provide for a preliminary examination of the Little Missouri River in Pike County, Ark., to deter­mine the feasibility of cleaning out the channel and leveeing the river and the cost of such improvements with a view to the controlling of floods <Rept. No. 1791);

H. R. 9250. A bill to provide for a preliminary examination of the Petit Jean River in Scott and Logan Counties, ·Ark., to determine the feasibility of cleaning out the channel and leveeing the river and the cost of such improvements with a view to the controlling of floods <Rept. No. 1792);

H. R. 9267. A bill to provide for a preliminary examination of Big Mulberry Creek, in Crawford County, Ark., from the 'point where it empties into the Arkansas River up a distance ·of 8 miles, to determine the feasibility of cleaning out the channel and repairing the banks, and the cost of such im­provement, with a view to the controlling of floods (Rept. No. 1793); and

H. R. 9874. A bill authorizing a preliminary examination of Cadron Creek, Ark., a tributary of the Arkansas River <Rept. No. 1794).

Mr. OVERTON, from the Committee on Commerce, to which was referred the bill <S. 4002) to extend the times for commencing and completing the construction of a bridge across the Mississippi River between New Orleans and Gretna, La., reported it without amendment and submitted a report <No. 1796) thereon.

ENROLLED BILLS PRESENTED Mrs. CARAWAY, from the Committee on Enrolled Bills,

reported that on April 8, 1936, that committee presented to the President of the United States the following enrolled bills:

S. 2288. An act to provide for the measurement of vessels using the Panama Canal, and for other purposes;

S. 2496. An act to amend the Railway Labor Act; S. 3761. An act authorizing the Secretary of the Interior

to patent certain land to the town of Wamsutter, Wyo.; S. 3860. An act to amend section 2 of the act entitled "An

act to amend the National Defense Act", approved May 28, 1928; and

S. 3971. An act to extend the times for commencing and completing the construction of a bridge acro&,S the St. Law­rence River at or near Ogdensburg, N. Y.

BILLS INTRODUCED Bills were introduced, read the first time, and, by unani­

mous consent, the second time, and referred as follows:

By Mr. GUFFEY: A bill <S. 4457) authorizing the appointment of an addi­

tional circuit judge for the Third Circuit; to the Committee on the Judiciary.

By Mr. CONNALLY and Mr. SHEPPARD: A bill <S. 4458) to authorize a preliminary examination

of the Sabine and Neches Rivers and their tributaries in the Sabine-Neches Conservation District in the State of Texas with a view to the control of their floods; to the Com­mittee on Commerce.

By Mr. COPELAND: A bill (S. 4459) to amend section 603 of the Revenue Act

of 1934; to the Committee on Finance. <By request.> A bill <S. 4460) for the relief of the P. L.

Andrews Corporation; to the Committee on Claims. By Mr. BURKE: A bill <S. 4461> to extend the times for commencing and

completing the construction of a bridge across the Missouri River at or near Brownville, Nebr.;

A bill <S. 4462) to extend the times for commencing and completing the construction of a bridge across the Missouri River between the towns of Decatur, Nebr., and Onawa, Iowa; and

A bill <S. 4463) to extend the times for commencing and completing the construction of a bridge across the Missouri River at or near the cities of South Sioux City, Nebr., and Sioux City, Iowa; to the Committee on Commerce.

HOUSE BILLS REFERRED The following bills were each read twice by their titles

and referred as indicated below: H. R.11006. An act providing for the examination of the

Nueces River and its tributaries in the State of Texas for floor-control purposes; to the Committee on Commerce.

H. R. 11562. An act to renew Patent No. 25909, relating to the badge of the United States Daughters of 1812; to the Committee on Patents.

GRACE PARK The VICE PRESIDENT laid before the Senate the amend­

ment of the House of Representatives to the bill (S. 2042) for the relief of Grace Park, which was to amend the title so as to read: "An act for the relief of Grace Park, a minor, the Westerly Hospital, and Dr. H. M. Scanlon."

Mr. LONERGAN. I move that the Senate concur in the amendment of the House.

The moti<?n was agreed to. PLACE OF FILING CIVIL SUITS

The VICE PRESIDENT laid before the Senate the amend­ments of the House of Representatives to the bill (S. 2524) amending section 112 of the United States Code, Annotated (title 28, subtitle "Civil suits; where to be brought">, which were:

Page 1, strike out all after the enacting clal!Se down to and including "title" in line 6 and insert "That section 51 of the Judicial Code (U. S. C., title 58, sec. 112) is amended to read as follows:

"'SEC. 51. Civil suits; where to be brought: Except as provided in the five succeeding sections, no person shall be arrested in one district for trial in another, in any civil action before a dis­trict court; and, except as provided in the six succeeding sec­tions.'"

Page 2, line 1, strike out all after "the" where it occura the third time down to and including "found" in line 10, and insert "defendant; except that suit by a stockholder on behalf of a corporation may be brought in any district in which suit against the defendant or defendants in said stockholders' action, other than said corporation, might have been brought by such corporation ·and process in such cases may be served upon such corporation in any district wherein such corporation resides or may be found."

Amend the title so as to read: "An act to amend section 51 of the Judicial Code of the United States (U.S. C., title 28, sec.112) ."

Mr. TYDINGS. Mr. President, this bill has passed the Senate and the House. The House has adopted slight amendments clarifying the language but not changing the philosophy of the bill. I have taken the matter up with the chairman of the committee and I think there will be no objection. I was the author of the bill.

5224 CONGRESSIONAL· RECORD-SENATE APRIL 9 I move that the Senate concur in the House amendments. benefit payinents, I said, among other things, the following. The motion was agreed to. I quote from page 4150 of the RECORD:

COMMERCIAL AIRPORT FOR THE DISTRICT OF COLUMBIA--coNFER­ENCE REPORT

Mr. KING submitted the following report:

The committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H. R. 3806) to establish a commercial airport for the District of Columbia. having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate, and agree to the same with an amendment as follows: In lieu of the matter proposed to be Inserted by the amendment of the Senate Insert the following:

"That there is hereby created a commission to be known as the 'District of Columbia Airport Commission' (hereinafter referroo to as the 'Commission'), to be composed of three Members of the United States Senate, to oo appointed by the President of the Sen­ate, three Members of the House of Representatives, to be ap­pointed by the Speaker of the House of Representatives, and three persons to be appointed by the President of the United States, who because of their offi.cial positions are interested in the development of a commercial airport in the District of Columbia. No person shall serve on the Commission who has any financial interest direct or indirect in any site or sites for said airport which may be the sub­ject o! consideration. The Commission shall proceed immediately after its appointment and organization to examine all available data concerning potential sites for commercial airports and to inspect such potential sites, and shall select a site for such purpose with due regard to the cost of its acqu1sitlon and development, its safety, and its adaptability to the requirements of commercial avia­tion and national defense.

"SEC. 2. The Commlssion shall preserve lts decision and selection in confidence and shall make a confidential report thereon to the President of the Senate and the Speaker of the House of Repre­sentatives, or the Secretary of the Senate and the Clerk of the House of Representatives if Congress 1s not in session: Provided. however, That said report shall be made as soon as practicable.

"SEC. 3. The members of the Commission shall receive no salary as such, but shall be reimbursed for actual expenses incurred in the discharge of otncial duties as such commissioners. There 1s hereby authorized to be appropriated the sum of $10,000, to be charged one-half to the moneys in the Treasury to the credit of the District of Columbia and one-half to the moneys in the Treasury not otherwise appropriated, which shall be used for carrying out the purposes o! this Act, including the employment of such expert& and other assistants as the Commission may deem necessary."

And the Senate agree to the same. WILLIAM H. KING, MILLARD E. TYDINGS, WARREN R. AUSTIN,

Managers on the part of the Senate. VINCENT L. PALMISANO, JACK NICHOLS, EvERETT M. DIRKSEN,

Managers on the part of the HO'USe.

The report was agreed to. B.EHABILITATION LOANS TO STORM-STRICKEN AREAS

The Senate resumed the consideration of the bill (H. R. 11968) relating to the authority of the Reconstruction Fi­nance Corporation to make rehabilitation loans for the re­pair of damages caused by fioods or other catastrophes, and for other purposes.

Mr. FLETCHER. Mr. President, we were considering the amendments of the committee, and I ask that the next amendment be stated.

The VICE PRESIDENT. The clerk will state the next amendment of the committee. .

The next amendment of the committee was on page 4, line 8, after the word "exceed", to strike out "$25,000,000", and to insert in lieu thereof "$50,000,000", so as to read:

The aggregate of loans made under this act shall not exceed $50,000,000.

BENEFIT PAYMENTS UNDER A. A. A.

Mr. VANDENBERG. Mr. President, I desire to submit a correction in the RECORD in behalf of the distinguished Secretary of Agriculture, and a brief statement in connec­tion with it. It will take me only a moment, and I am sure it will not interfere with the consideration of the pending business.

On March 23, when I submitted my resolution asking the Secretary of Agriculture to report upon the larger A. A. A.

Again, I understand the average wheat contract in Kansas run in the neighborhood of $800. But I know, tor example, of one such contract--although in this Instance I know neither the State nor the acreage-which produced 65 checks for a total of $78,638 in 2 years.

In other words, I was undertaking to identify wheat bene­fit payments of $78,638.

At the end of about a week, after Mr. Secretary Wallace reluctantly yielded to the demand for some slight ventila­tion of the subject, in his letter to the distinguished Senator from South Carolina [Mr. SMITH] he said-and I quote from page 4999 of the RECORD:

The largest wheat payment tor & single year under the program totaled $29,398.32.

In other words, there seemed to be a discrepancy between my figures and the figures of the Secretary, mine showing at least one contract for $78,000---hls statement insisting that the largest contract was $29,000. Naturally, the dis­tinguished Secretary had better sources of information than I can hope to command; but I was chagrined to have seem­ingly erred, although all my other figures were vindicated.

Mr. President, I am happy to note in this morning's Wash­ington Post that even my wheat figures are now conceded and that the Secretary made a statement last evening, from which I quote as follows:

In his preliminary list, Wallace had recorded the largest wheat payment disbursed under A. A. A. as $29,938.32. In a correction letter sent Senator SMITH yesterday, Wallace said the actual figure should have been $78,634.32.

One interesting part about the matter is how the Secre­tary apparently happened to discover that he had made this mistake. When I presented my original statement I indi­cated that I did not know the name of this particular bene­ficiary, but that I had his check numbers. So I wrote the Secretary of the Treasury and I submitted this simple inquiry:

I want to know to whom check no. 9,502,291 was issued, prob­ably in January 1935.

Mr. President, I got no responsive answer from the Sec­retary of the Treasury. I got no information from him. But this morning I have an explanatory letter from Mr. Morgenthau, which says:

I learn that this is an Agricultural Adjustment check, and, since Secretary Wallace is now in correspondence with the Sen­ate Committee on Agriculture with respect to the identities and amounts paid to recipients of crop-benefit payments, it seems to me fitting that the inquiry should be addressed to the Secretary of Agriculture. .

In other words, when the Secretary of the Treasury dis­covered that I was asking about a wheat check, he hastened to notify Mr. Wallace instead of me.

Therefore, it appears that my letter to the Secretary of the Treasury is now answered through the Secretary of Agriculture, who, when put upon notice regarding check no. 9,502,291, discovers that he was mistaken in his figures and that my figures were correct. This is not a very satis­factory method of getting public information from the De­partments. Of course, I am not yet allowed to know the name of this particular beneficiary. That information is still held secret. But I am confident that whenever our governing authorities are willing to identify the payee on check no. 9,502,291, we shall know the answer to my ques­tion. It is beyond my comprehension why there should be so much mystery and indirection about a matter of the public business.

I am sorry that it is difficult for me to get direct informa­tion from the departments with reasonable promptness in respect to this problem.

Mr. :MURPHY. Mr. President--The VICE PRESIDENT. Does the Senator from Michi­

gan yield to the Senator from Iowa? Mr. VANDENBERG. I yield, except that I want to be

very sure I do not intrude on the time of the unfinished business.

. '

1936 _CONGRESSIONAL ~ECORD-SENATE 5225 Mr. MURPHY. May I ask the Senator what his original

inquiry to the Secretary of Agriculture covered? Am I cor­rect in understanding that it related to the wheat-benefit payments made?

Mr. VANDENBERG. That is correct, except that I never submitted any preliminary question to the Secretary himself.

Mr. MURPHY. Is it possible that the amount of $29,000, or whatever it is, would be the amount of the wheat benefit payments made, and that the larger amount might represent payments to cover other contracts than wheat?

Mr. VANDENBERG. Apparently not. The Secretary is quoted this morning as saying in a letter to the Senator from South Carolina [Mr. Smrn1 yesterday that the actual figure of the wheat payments should have been $78,634. The Senator should quiz the Secretary, not me.

Mr. MURPHY. Is that the amount of the specific checks concerning which the Senator addressed his inquiry to the Secretary of the Treasury?

Mr. VANDENBERG. No, Mr. President; there were 65 checks paid to this particular beneficiary, and the total of the checks is the figure indicated. My inquiry about one of these checks evidently put the Secretary on the trail of the balance.

Mr. MURPHY. Is the Senator advised as to whether or not this payment of $29,000 was for the crop year or was $78,000 for the crop year?

Mr. VANDENBERG. I am not advised, Mr. President. Mr. MURPHY. The Senator has no information as to

whether or not these payments were made under separate contracts covering each county?

Mr. VANDENBERG. I have no information, Mr. Presi­dent, except that which an outsider is enabled to dig out from a reluctant department. If the Senate had adopted the resolution to which I have been trying to get its consent, there would be less need for speculation on the subject. I know of no sound reason why we should encounter continu­ing delay in this connection.

Mr. ROBINSON. Mr. President, will the Senator yield? Mr. VANDENBERG. I yield, if the Senator from Iowa

has concluded. Mr. ROBINSON. With respect to the Senator's statement

that he does not wish to trespass-! think that is his exact language-on the time of the bill under consideration, I point out to him that the Senate met this morning at 11:30 to consider that bill, and that more than half the time available has already elapsed. The consent was for the con­sideration of the bill advanced by the Senator from Florida [Mr. FLETCHER].

I will say to the Senator that ample opportunity will be afforded, as soon as it can be secured, for the consideration of the resolution to which he has referred.

Mr. VANDENBERG. I thank the Senator for his assur­ance. I take it in the good faith in which I know the Sen­ator makes it. I will not yield for further interruption, and I will conclude simply by saying that in respect to this process which seems to be in vogue of answering my farm inquiries to the departments by rerouting them via the De­partment of Agriculture I hope the Commissicner of Indian Affairs will not have to wait more than 10 more days, the period which has already intervened, to send ine an answer, either direct or through the Secretary of Agriculture, to the following question:

I should like to know whether Mr. Thomas campbell or the Campbell Farming Corporation leases lands from the Govern­ment-lands belonging to the Indian Service. I! so, I should like to know the acreage and the annual rental.

I am seeking correction of the RECORD this morning, Mr. President, because I put in the RECORD the letter of the Sec­retary of Agriculture, and the Secretary's letter was incor­rect. I hope the Senate may have an early opportunity to facilitate the inquiry submitted by my resolution. We shall never know the whole truth until the whole facts are dis­closed. The country is entitled to know precisely what Sec­retary Wallace did with its money.

Several Senators addressed the Chair.

Mr. ROBINSON. Mr. President, I insist that in all good faith the Senate ought to be permitted to consider the bill we . met to consider.

REHABll.ITATION LOANS TO STORM-STRICKEN AREAS The Senate resumed the consideration of the bill <H. R.

11968) relating to the authority of the Reconstruction Finance Corporation to make rehabilitation loans for the repair of damages caused by floods or other catastrophes, and for other purposes.

The VICE PRESIDENT. The question is on a-greeing to the amendment on page 4, line 8, to strike out "$25,000,000" and insert "$50,000,000."

The amendment was agreed to. The VICE PRESIDENT. The clerk will state the next

amendment reported by the committee. The next amendment was, on page 4, line 9, to strike out

"That the" and to insert "Sec. 2. The", so as to make the section read:

SEc. 2. The title of the said act 1s amended to read as follows: "An act authorizing the Reconstruction Finance Corporation to· make loans for the repair of damages caused by floods or other catastrophes, and for other purposes."

The amendment was agreed to. The next amendment was, on page 4, after line 13, to insert

a new section, as follows: SEc. 3. Title .I of the National Housing Act, as amended, is

amended by inserting after section 5 thereof the following new section:

"SEc. 6. (a) The Administrator 1s authorized and empowered, upon such terms and conditions as he may prescribe, to insure banks, trust companies, personal finance companies, mortgage com­panies, bullding-and-Ioan associations, installment lending com­panies, and other such financial institutions, heretofore or here­after approved by the Administrator as eligible for credit insur­ance, against losses which they may sustain as a result of loans and advances of credit, and purchases of obligations representing loans and advances of credit, made by them subsequent to the date this section takes effect and prior to January 1, 1937, or such earlier date as the President may fix by proclamation upon his determination that the emergency no longer exists, for the pur­pose of financing, by the owners of real property or by lessees thereof under a lease for a period of not less than 1 year, the restoration, rehabilitation, rebuilding, and replacement of im­provements on real property and equipment and machinery thereon which were damaged or destroyed by earthquake, confla­gration, tornado, cyclone, hurricane, flood, or other catastrophe in the years 1935 or 1936, either on the same site or on a new site in the same locality where the damaged or destroyed property was located. The Administrator 1s authorized to grant insurance under this section to any such financial institution up to 20 percent of the total amount of loans, advances of credit, and pur­chases made by such financial institution for such purpose, and any insurance reserve accumulated by any such financial institu­tion under section 2 of this title prior to April 1, 1936, shall be applicable to the payment of any losses sustained by it as a result of loans, advances of credit, or purchases insured under this section.

"(b) No insurance shall be granted under this section to any such financial institution with respect to any obligation repre­senting any such loan, advance of credit, or purchase by it ( 1) unless the loan bears such interest, has such maturity, and con­tains such other terms, conditions, and restrictions, as the Admin­istrator shall prescribe in order to make credit available for the purposes of this section; and ( 2) unless the amount of such loan, advance of credit, or purchase is not in excess of $2,000, except that in the case of any such loan, advance of credit, or purchase made for the purpose of such financing with respect to apartment or multiple family houses, hotels, office, business, or other com­mercial buildings, hospitals, orphanages, colleges, schools, churches, or manufacturing or industrial plants, such insurance may be granted 1! the amount of the loan, advance of credit, or purchase is not in excess of $50,000."

·The amendment was agreed to. Mr. AUSTIN. Mr. President, when the committee amend­

ments have been completed I wish to offer an amendment to the bill.

The VICE PRESIDENT. All the committee amendments have not as yet been agreed to. The next amendment will be stated.

The next amendment was, on page 6, after line 13, to insert a new section, as follows:

SEC. 4. (a} The third sentence of subsection (a) of section 2 of the National Housing Act, as amended, is amended to read as fol­lows: "The total liability incurred by the Administrator for all insurance heretofore and hereafter granted under this section and section 6 shall not exceed in the aggregate $100,000,000; except that

5226 .CONGRESSIONAL R~CORD-S~NATE APRIL 9. 1f the President :finds at a.ny time that there exlsts a necessity for such insurance in order to make ample credit available he may authorize the Adminlstrator to incur additional liability for such insurance in an amount not in excess of the amount of the llabll1ty incurred under section 6."

(b) Section 2 of such act, as amended, 1s further amended by adding at the end thereof the following new subsection:

"(e) The Administrator is authorized to waive compliance with regulations heretofore or hereafter prescribed by him with respect to the interest and maturity of and the terms, conditions, and restrictions under which loans, advances of credit, and purchases may be insured under this section and section 6, if in his judg­ment the enforcement of such regulations would impose an in­Justice upon an insured institution which has substantially com­plied with such regulations in good faith and refunded or credited any excess charge made, and where such waiver does not involve an increase of the obligation of the Administrator beyond the obligation which would have been involved 1f the regulations had been fully complied with."

The amendment was agreed to. The VICE PRESIDENT. That completes the committee

amendments. Mr. AUSTIN. Mr. President, I offer an amendment, on

page 2, line 9, after the word "systems", to insert a comma and the words "highways and bridges."

Mr. FLETCHER. I think it is really included in the bill, but I have no objection.

The VICE PRESIDENT. The question is on agreeing to the amendment offered by the Senator from Vermont.

The amendment was agreed to. Mr. RUSSELL. I send to the desk an amendment, which I

ask to have read. The VICE PRESIDENT. The amendment will be stated. The CHIEF CLERK. On page 2, line 1, after the word "in­

dividuals", it is proposed to insert a comma and "munici­palities or political subdivisions of States or of their public agencies, including public-school boards and public-school districts, and water, irrigation, sewer, drainage, and flood­control districts."

Mr. WALSH. Mr. President, I should like to inquire if the present law does not permit loans by the Reconstruc­tion Finance Corporation for highways and bridges and for the purposes enumerated in the amendment proposed by the Senator from Georgia.

Mr. RUSSELL. I am not thoroughly familiar with all the provisions of the several acts relating to the Reconstruction Finance Corporation; but I might say to the Senator from Massachusetts that the proposed amendment was suggested by one of those who have to do with the administration of the act. He thought it might be necessary.

Mr. WALSH. I am not opposed to the amendment, but I am under the impression that the present law takes care of the loans that may be applied for by States, municipalities, or counties for public purposes.

Mr. RUSSELL. I think that is true as to all of the regular loans; but there possibly is some difference as to the degree of security required for general loans and those filed under the provisions of this bill-that is, for purposes of restoring places damaged by the various recent catastrophes.

Mr. FLETCHER. Mr. President, will the Senator yield? Mr. RUSSELL. I yield. Mr. FLETCHER. The effect of that amendment is to

transfer paragraph (c), on page 3, to page 2; is it not? Mr. RUSSELL. I may say to the Senator from Florida

that it does not transfer all of that language, as I understand the pw-pose of the amendment; and I freely confess that I am not thoroughly advised of the necessity for all this lan­guage, because the matter was just called to my attention since the Senate convened this morning, As I understand, the purpose of the amendment is to enable municipalities and political subdivisions to avail themselves of the loans of the character described in the first portion of the bill which are reasonably secured, as well as under paragraph (c), which are secured by taxation or by tax-anticipation warrants. The amendment amplifies the class of subjects which are eligible to avail themselves of loans. Subsection (c) deals with the kind and nature of collateral which will be accepted to secure loans.

Mr. FLETCHER. There is no objection to leaving para­graph (c) in?

Mr. RUSSELL. No; as I understand, paragraph (c) is also essential.

Mr. FLETCHER. I have no objection to the amendment. The VICE PRESIDENT. The question is on agreeing to

the amendment of the Senator from Georgia. The amendment was agreed to. Mr. DAVIS. I desire to make an inquiry of the Senator

from Florida. -Inasmuch as the amendment of the Senator from Vermont [Mr. AusTIN] has been adopted and the amendment proposed by the junior Senator from Georgia. [Mr. RussELL] has been adopted, does the Senator from Florida think that $50,000,000 is suffi.cient to carry on this work, when there are to be included bridges, highways, schoolhouses, and so forth?

Mr. FLETCHER. I think it is suffi.cient. It will probably take a year to utilize the $50,000,000. Congress will be back here again, I think, before that amount is exhausted.

Mr. DAVIS. The Senator from Florida is of the opinion that $50,000,000 will be sufficient until Congress reconvenes next year?

Mr. FLETCHER. The committee seemed to think so. The VICE PRESIDENT. The question is on the engross­

ment of ~he ·amendments and the third reading of the bill. The amendments were ordered to be engrossed and the bill

to be read a third time. The bill was read the third time. The VICE PRESIDENT. The question is, Shall the bill

pass? The bill was passed. Mr. FLETCHER. Mr. President, I ask to have printed in

the RECORD at this point the report of the Committee on Banking and CIDTency.

The VICE PRESIDENT. Without objection, it is so or­dered.

The report <No. 1747) is as follows: The Committee on Banking and Currency, to whom was referred

the bill (H. R. 11968) relating to the authority of the Reconstruc­tion Finance Corporation to make rehabilitation loans for the re· pair of damages caused by fioods or other catastrophes, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass.

The bill as reported, insofar as rehabll1tation loans by the Recon­struction Finance Corporation are concerned, is the same as the bill which passed the House, with the following exceptions:

First. The aggregate amount which may be loaned by the Cor­poration for such purposes has been increased from $25,000,000 to t50,000,000.

Second. Under the House bill the catastrophe with respect to which the loan 1s made must have occurred in the years "1933. 1934, 1935, 1936, and 1937", while under the bill as reported the catastrophe must have occurred in the years "1935 or 1936."

Third. Under the House bill there was a requirement that as a condition to obta1ning a loan the repair, construction, reconstruc­tion, rehabilitation, or acquisition be deemed by the Corporation to be "economically" useful or necessary, while under the bill as reported the word "economically" has been elim1nated.

The bill as reported also contains the substance o! S. 4396, in .. traduced by Senators WALSH and BULKLEY, which had the approval of the Federal Housing Adminlstration. It provides for adding a new section to title I of the National Housing Act, as amended, under which the Federal Housing Administrator 1s authorized to insure financial institutions heretofore or hereafter approved by him as qualified by experience and facilities as el1g1ble !or credit insurance, aga.inst losses which they may sustain as a result of loans, advances of credit, and purchases of obligations representing loans and advances of credit, made by them for financing the restoration, rehabilitation, rebuilding, and replacement of prop­erty damaged or destroyed by fiood or other catastrophe 1n 1935 or 1936. To be eligible for such insurance, the loans or advances must have been made subsequent to the date the new section takes effect and prior to January 1, 1937, or such earlier date as the President may fix by proclamation upon his determination that the emergency no longer exists, and no such loa.n or advance may be so insured unless it was made to an owner of real property or to a lessee thereof under a lease for a period of not less than 1 year.

The maximum amount of insurance which may be granted under the new section to any approved financial institution 1s fixed at 20 percent of the total amount of such loans, advances ot credit, and purchases made by it, and any insurance reserve which it may have accumulated under section 2 of the National Housing Act prior to April 1, 1936, is made applicable to the payment of any losses it sustains as a result of loans, advances of credit, or pur· chases insured under the new section. The provisions with respect to the maximum amount of individual loans a.nd advances which

1936 CONGRESSIONAL RECORD-SENATE 5227 may be insured, and those which relate to interest, maturity, etc., correspond to the provisions contained in such section 2.

The provision of existing law that the total liab111ty of the Administrator for all insurance under such section 2 shall not gxceed $100,000,000 1s made applicable not only to such section but also to the new section added by the bill as reported. However, 1f the President finds at any time that there exists a necessity for such insurance in order to make ample credit available, he may authorize the Administrator to incur additional liability for such insurance in an amount not in excess of the amount of the liabil­ity incurred under the new section.

A provision is also added authorizing the Administrator to waive compliance with his regulations in certain cases where the enforce­ment thereof would impose an injustice upon an insured Ipstitu­tion which has substantially complied with such regulations in good faith, and where such waiver would not increase the obliga­tion of the Administrator beyond that which would have been involved 1f the regulations had been fully complied with. The purpose of this provision 1s merely to remove certain technical difftculties that have arisen in connection with the administration of title I of the National Housing Act.

GREAT LAKES EXPOSITION, CLEVELAND, OHIO

Mr. BULKLEY. Mr. President, I ask unanimous consent for the immediate consideration of Senate Joint Resolu­tion 233.

There being no objection, the Senate proceeded to con­sider the joint resolution <S. J. Res. 233) providing for the ·participation of the United States in the Great Lakes Expo­sition, to be held in the State of Ohio during the year 1936, and authorizing the President to invite the Dominion of Canada to participate therein, and for other purposes, which had been reported from the Committee on Commerce with amendments.

Mr. BULKLEY. Mr. President, last night the question was asked as to how the money authorized by this resolution was to be expended. An appropriation of $275,000 is authorized by the resolution. Of that amount about $105,000 is to be paid as rental for the space of Government exhibits in the exposition. This is an item which is comparable to the erection of buildings which the Government has undertaken jn other similar expositions. The Government in this case will not construct a building but will pay a rental for the building erected by the exposition itself. The balance, $170,000, is for the purpose of preparing and managing the exhibits. The proposed expenditure is at as low a rate per square foot as has been expended in connection with similar expositions in other cities.

Mr. McNARY. Mr. President, because of the lateness of 1 he hour last evening and the general rush of business on the calendar and not knowing anything about the subject matter of the bill, I objected to its immediate consideration. Inasmuch as it involves the progress of the eight States sur­rounding the Great Lakes and authorizes the President to invite the Dominion of Canada to participate in the exposi­tion, I have no objection at this time to its consideration.

The VICE PRESIDENT. The clerk will state the com­mittee amendments.

The amendments of the Committee on Commerce were, on page 2, line 4, after the word "requested" and the comma, to strike out "by proclamation or in such manner as he may deem proper"; in line 5, before the word "such", to insert "participate in"; in line 6, after the word "exposition", to strike out "with a request that said Dominion participate therein"; in line 12, before the word "the", to strike out "and"; in the same line, after the name "Secretary of Com­merce", to insert "and such other persons as in their discre­tion they may add"; on page 3, line 5, after the words "rate of", to insert "not to exceed"; in the same line, after the word "exceed", to strike out "three assistant commissioners" and insert "one assistant commissioner"; in line 10, after the words "per annum", to strike out the comma and "respec­tively"; in line 13, after the word "for", to strike out "a period of time covering the duration of the exposition" and insert "such period prior to the opening of the exposition as the Commissioner may determine, for the duration of the ex­position"; on page 4, line 1, before the words "as illustrate", to strike out "as may relate to this period of our history and such"; on page 4, line 13, after the word "necessary", to in­sert "including the preparation of exhibit plans"; in line 18, after the word "to". to strike out "an" and insert "the"; on

page 5, line 5, after the word "science" to insert "exhibit"; on page 6, line 18, after the words "square feet" to insert "without regard to the provisions of section 322 of Public Act No. 212, approved June 30, 1932, 47 Stat. 412"; on page 7, line 5, after the word "Assistant", to strike out "Commis­sioners" and insert "Commissioner"; on page 8, line 5, before the word "in", to strike out "Commissioners" and insert "Commissioner"; and on page 10, after line 19, to strike out:

SEC. 10. All articles imported from the Dominion of Canada for the sole purpose of display at such exposition, and upon which there is at the time of importation a tariff duty, shall be admitted free of the payment of duty, customs fees, or charges, under such regulations as the Secretary of the Treasury shall prescribe; but it shall be lawful at any time during such exposition to sell or withdraw for consumption or use in the United States any articles imported for and actually on exhibition, subject to such regula­tions for the security of the revenue and for the collection of tariff duties as the Secretary of the Treasury may prescribe. All such articles when sold or withdrawn for consumption or use in the United States shall be subject to the duty, 1f any, imposed upon such articles by the revenue laws in force at the date of the sale or withdrawal; and on such articles that shall have suffered diminution or deterioration from incidental handling and exposure, the tariff duty, 1f payable, shall be assessed according to the weight, measure, or appraised value, as the case may be, at the time of sale or withdrawal. The penalties prescribed by law shall be enforced against any person guilty of any illegal sale or withdrawal of any article imported under this section.

So as to make the joint resolution read: Whereas there ls to be held in the city of Cleveland, State of

Ohio, during the year 1936 an exposition to be known as the Great Lakes Exposition, dealing with industrial, agricultural, commer­cial, educational, and cultural progress of the eight States border­ing upon the Great Lakes, namely, New York, Pennsylvania, Ohio, Michigan, Indiana, illinois, Wisconsin, and Minnesota; and

Whereas the city of Cleveland has made available 140 acres of land centrally located, its public hall, its lakeside exhibition hall, and its stadium, valued at more than $20,000,000, its adjacent streets and properties, its lake-front grounds, and ioo water-front privileges on Lake Erie; and

Whereas the exposition has been incorporated not for profit and has been amply underwritten; and

Whereas such exposition is worthy and deserving of the support and encouragement of the United States; and the United States has aided and encouraged such expositions in the past: Therefore be lt

Resolved, etc., That the President of the United States 1s au­thorized and requested to invite the Dominion of Canada to par­ticipate in such proposed exposition.

SEc. 2. There is hereby established a Commission, to be known as the United States Great Lakes Exposition Commission, and hereinafter referred to as the "Commission", and to be composed of the Secretary of State, the Secretary of Agriculture, the Secre­tary of Commerce, and such other. persons as in their discretion they may add, which Commission shall serve without additional compensa.tion and shall represent the United States in connection with the holding of the Great Lakes Exposition in the State of Ohio during the year 1936.

SEc. 3. There 1s hereby created a United States Commissioner General for the Great Lakes Exposition, to be appointed by the President with the advice and consent of the Senate, and to receive compensation at the rate of not to exceed $10,000 per annum, and not to exceed one assistant commissioner for said Great Lakes Exposition. to be appointed by the Commissioner General, with the approval of the Commission herein designated, and to receive compensation at the rate of not to exceed $7,500 per annum. The salary and expenses of the Commissioner Gen­eral and such staff as he may require shall be paid out of the funds authorized to be appropriated by this joint resolution for such period prior to the opening of the exposition as the Com­missioner may determine, for the duration of the exposition and not to exceed a 6 months' period following the closing thereof.

SEc. 4. The Commission shall prescribe the duties of the United States Commissioner General and shall delegate such powers and functions to him as it shall deem advisable, in order that there may be exhibited at the Great Lakes Exposition by the Govern­ment of the United States, its executive departments, independ­ent offices, and establishments such articles and materials and documents and papers as illustrate the function and administra­tive faculty of the Government in the advancement of industry, science, invention, agriculture, the arts, and peace, and demon­strating the nature of our institutions, particularly as regards their adaptation to the needs of the people.

SEc. 5. The Commission and the Commissioner General are authorized to appoint. without regard to the civil-service laws, such clerks, stenographers, and other assistants as may be neces­sary, and to fix their salaries in accordance with the Classification Act of 1923. as amended: purchase such materials, contract for such labor and other services as are necessary, including the prep­aration of exhibit plans. The Commissioner General may exer­cise such powers as are delegated to him by the Commission as hereinbefore provided, and in order to facilitate the functioning of his office may subdelegate such powers (authorized or dele­iated) to the Assistant Commissioner or others 1n the employ o!

5228 CONGRESSIONAL RECORD-SENATE APRIL 9. or detailed to the Commission as may be deemed advisable by the Commission.

SEc. 6. The heads of the various executive departments and in­dependent offices and establishments of the Government are au­th{)rized to cooperate with said Commissioner General in the procurement, installation, and display of exhibits, and to lend to the Commission and the Great Lakes Exposition, with the knowl­edge and consent of said Commissioner General such articles, specimens, and exhibits which said Commissioner General shall deem to be in the interest of the United States and in keeping with the purposes of such exposition, to be placed with the science exhibit or other exhibits to be shown under the auspices of such Commission or the Great Lakes Exposition, to contract for such labor or other services as shall be deemed necessary, and to designate officials or employees of their departments or branches to assist said Commissioner General. At the close of the exposition, or when the connection of the Government of the United States therewith ceases, said Commissioner General shall cause all such property to be returned to the respective depart­ments and branches from which taken, and any expenses incident to the restoration, modification, and revision of such property to a. condition which will permit its use at subsequent expositions, fairs, and other celebrations, and for the continued employment of personnel necessary to close out the fiscal and other records and prepare the required reports of the participating organiza­tions, may be paid from the appropriation authorized herein; and it the return of such property is not feasible, he may, with the consent of the department or branch from which it was taken, make such disposition thereof as he may deem advisable and account therefor.

SEc. 7. The sum of $275,000 is hereby authorized to be appro­priated, out of any money in the Treasury not otherwise appro­priated, and shall remain available until expended for the purposes of this joint resolution and any unexpended balances shall be covered back into the Treasury of the United States. Subject to the provisions of this j.oint resolution and any subsequent act appropriating the money authorized herein, the Commission is authorized to make any expenditures or allotments deemed neces­sary by it to fulfill properly the purposes of this joint resolution and to allocate such sums to the Great Lakes Exposition for ex~ penditure by such body as the Commission deems necessary and proper in carrying out the purposes of this joint resolution. And, subject to the provisions of this joint resolution and any subse­quent act appropriating the money authorized herein, the Com­mission is authorized to rent such space, not to exceed 30,000 square feet, without regard to the provisions of section 322 of Public Act No. 212, approved June 30, 1932 (47 Stat. 412), as it may deem adequate to carry out effectively the provisions of this joint resolution during the period of the exposition. The appropriation authorized under this joint resolution shall be avail­able for the selection, purchase, preparation, assembling, trans­portation, installation, arrangement, safekeeping, exhibition. dem­onstration, and return of such articles and materials as the Com­mission may decide shall be included in such Government exhibit and in the exhibits of the Great Lakes Exposition; for the compen­sation of said Commissioner General, Assistant Commissioner, and other officers and employees of the Commission in the District of Columbia and elsewhere, for the payment of salaries of officers and employees of the Government employed by or detailed for duty with the Commission, and for actual traveling expenses, including travel by air, and for per diem in lieu of actual subsistence at not to exceed $5 per day: Provided, That no such Government official or employee so designated shall receive a salary in excess of the amount which he has been receiving in the department or branch where employed, plus such reasonable allowance for travel, includ­ing travel by air, and subsistence expenses as may be deemed proper by the Commissioner General; for telephone service, pur­chase or rental of furniture and equipment, stationery and sup­plies, typewriting, adding, duplicating, and computing machines, their accessories and repairs, · books of reference and periodicals, uniforms, maps, reports, documents, plans, specifications, manu­scripts, newspapers and all other appropriate publications, and ice and drinking water for office purposes: Provided further, That payment for telephone service, rents, subscriptions to newspapers and periodicals, and other similar purposes, may be made in ad­vance; for the purchase and hire of passenger-carrying automo­biles, their maintenance, repair, and operation, for the official use of said Commissioner General and Assistant Commissioner in the District of Columbia or elsewhere as required; for printing and binding; for entertainment of distinguished visitors; and for all other expenses as may be deemed necessary by the Commission to fulfill properly the purposes of this joint resolution. All pur­chases, expenditures, and disbursements of any moneys made avail­able by authority of this joint resolution shall be made under the direction of the Commission: Provided further, That the Com­mission, without release of responsibility as hereinbefore stipu­lated, may delegate these powers and functions to said Commis­sioner General, and said Commissioner General, with the consent of the Commission, may subdelegate them: Provided further, That the Commission or its delegated representative may allot funds authorized to be appropriated herein to any executive department, independent office, or establishment of the Government with the consent of the heads thereof, for direct expenditure by such execu­tive department, independent office, or establishment, for the pur­pose of defraying any expenditure which may be incurred by such executive department, independent office, or establishment in exe~ cuting the duties a.nd functions delegated by the Commission

All accounts and vouchers covering expenditures shall be 11.pproved by said Commissioner General or by such assistants as the Com­mission may designate except for such allotments as may be made to the various executive departments, independent offices, and establishments for direct expenditure; but these provisions shall not be construed to waive the submission of accounts and vouchers to the General Accounting Office for audit, or permit any obliga­tions to be incurred in excess of the amount authorized herein: And provided further, That in the construction of exhibits requir­ing skilled and unskilled labor, the prevailing rate of wages, as provided in the act of March 3, 1931, shall be paid.

SEC. 8. The Commissioner General, with the approval of the Commission, may receive contributions from any source to aid in carrying out the purposes of this joint resolution, but such con­tributions shall be expended and accounted for in the same man­ner as the funds authorized to be appropriated by this joint reso­lution. The Commissioner General ls also authorized to receive contributions of material, or to borrow material or exhibits, and to accept the services of any skilled and unskilled labor that may be available through State or Federa.I relief organizations, to aid in carrying out the general purposes of this joint resolution. At the close of the exposition or when the connection of the Government of the United States therewith ceases, the Com­missioner General shall dispose of any such portion of the material contributed as may be unused, and return such borrowed prop­erty; and, under the direction of the Commission, dispose of any structures which may have been constructed and account therefor: Provided, That all disposition of materials, property, and so forth, shall be at public sale to the highest bidder, and the proceeds thereof shall be covered into the Treasury of the United States.

SEc. 9. It shall be the duty of the Commission to transmit to Congress, within 6 months after the close of the exposition, a de­tailed statement of all expenditures, and such other reports a.s may be deemed proper, which reports shall be prepared and ar­ranged with a view to concise statement and convenient reference. Upon the transmission of such report to Congress the Commission established by and all appointments made under the authority o! this joint resolution shall terminate.

The VICE PRESIDENT. The question is on agreeing to the committee amendments.

The amendments were agreed to. The resolution was ordered to be engrossed for a third

reading, read the third time, and passed. The preamble was agreed to.

WHY KENTUCKY IS FOR THE NEW DEAL-ADDRESS BY SENATOR LOGAN

Mr. ROBINSON. Mr. President, I ask unanimous consent to have printed in the RECORD a speech delivered by the Senator from Kentucky [Mr. LoGAN] before the National Emergency Council at Louisville, Ky., April 8, 1936, on Why Kentucky Is for the New Deal.

There being no objection, the speech was ordered to be printed in the RECORD, as follows:

In the spring of 1933 Kentuckians, regardless of their business or profession, were in · the depths of despondency. The laboring man was without a job, and many were without food or shelter. The banks, and other financial institutions, had ceased to func­tion. Farmers were in hopeless despair, and there was no way for them to sell the products of their farms for enough to pay inter­est on their indebtedness, much less to support their families in reasonable comfort. The home owners saw their homes sold in foreclosure proceedings, or for taxes. The professional man might work but no one could pay him for his services. The mtnes were largely closed and the operators were confronted with bankruptcy and the miners hopeless and dumb in the face of the disaster that had overtaken them. Business had ceased. Even the wisest coUld find not a gleam of hope for the future. The high and low, the rich and the poor, the learned and the ignorant all suffered to­gether. These difiiculties had been approaching for 4 years and reached their cUlmination at the time mentioned. Then came the inauguration of a new President, and he delivered his inaugural address before the assembled multitudes, and the radio made it possible for him to speak to the Nation at large. When his voice was heard, hope was born. He promised to build again national affairs on a fair and just foundation. We Kentuckians have not been disappointed in the promises which he made. Instead of destitution and despair, Kentucky is prosperous and happy. Her people rejoice in what the present national administration has done for her. It is fitting that Kentuckians shoUld give their rea­sons why they have an abiding faith in the promises of President Roosevelt and the great leaders, who seek to solve the problems of the Nation, with whom he has surrounded himself. Speak:in.g for Kentucky, I shall briefiy summarize that which has been done for my State by the present administration in which the Senators and the Members of the House of Representatives have taken part.

I have said that at the beginning of this administration the farm­ers believed that they were without hope; but that belief was soon changed when the Farm Credit Ad.m.inistration, under the wise guidance of our national leaders, by the authority of Congress, commenced its efforts to relieve the distress of the farmers in Ken­tucky. Five thousand seven hundred farmers secured loans from

1936 _CONGRESSIONAL RECORD-SENATE 5229 the Federal lane:! banks tn the aggregate sum of $20.983,100 between May 1, 1933, and January 31, 1936, and 11,805 farmers secured loans through the Land Bank Commissioner 1n the same period of t1m.e aggregating $18,990,200. Thus 17,505 loans were made, aggregating $39,973,300, to help distressed fanners. In addition to this vast sum which the farmers secured, through the aid of the present admin­istration Production Credit Associations made loans to 5,122 fann­ers aggregating ~2,258,01.6. There were 12,602 emergency crop loans aggregating $611,861, and the Regional Agricultural Credit Corpora­tions made 1,141 loans aggregating $441,37L Whlle the Federal intermediate credit banks made loans to. a.nd discounts !or, private financing institutions aggregating $69,935. Therefore it 1s seen that beginning on May 1, less than SO days after the present admin­istration came into power, and continuing to January 31, 1936. the farmer has received help at the hands of the national. administra­tion aggregating $43,354,483. These advancements enabled the farmer to save his farm and to aid him in operating it. The prom­ise made by the President to aid fanners in the Nation has been abundantly carried out to the fanners in Kentucky.

I mentioned the distress ot the home owners. The President promised that they should have reltef, and between the date that promise was made and February 27, 1936. 9.158 loans h~ve been closed in the amount of $25,161.588. other applications are still under consideration. The promise made for the relief of h{)me owners has been kept insofar as Kentucky is concerned. That 1s not all that has been done by the administration for the home owners in Kentucky. Six thousand four hundred and fifty modern­ization and repair notes were insured for $2,213,001, under title I of the Federal Housing Adminlstratlon Act, and 522 mortgages have been accepted for insurance under title II, amounting to $2,373,870. This covers the period up to December 31, 1935. The Federal Housing Administration has enabled home owners in Kentucky to secure private loans at a low rate of interest for the modernization and repair of homes in the aggregate of $4,586.,871.

In order to provide work f{)r those who had no jobs, the Civil Works Administration spent in Kentucky $9,953,210 up to January 31, 1936.

The C1v11lan Conservation Corps camps located in Kentucky have received funds derived from the Emergency Relief Appro­priation Act of 1935 up to December 31, 1935. in the total sum o! $23,321,964.60.

The Public Works Ad:m.lnistration up to Deeember 31, 1935, had made allotments for non-Federal projects In the sum of '$15,082.015, of which swn $5,360,009 had been expended up to tha.t time, and had made allotments for Federal projects aggregating $14,967,519, of which sum $13,275,000 had actually been expended.

The Reconstruction Finance Co.rpora.tiQn made loans to Kentucky institutions up to December 31, 1935, a.s fellows: To t>anks and trust companies (including receivers, liquidating agents, and con­servators), $17,077,447.26, and of this sum $15,868,W0.14 had been repaid; to building-and-loan associations {including receivers), $1,395,011.61, all of which has been repaid; to mortgage loan com­panies, $50,000, all of which has been repaid; to processors or distributors who are subject to processing taxes, .$3,428, all of which has been repaid. These loans, made under section 5 of the Recon­strucUon Finance Corporation Act, aggregate $18.525,886.87~ .of which sum $17,316,479.75 has been repaid. In addition to the loans made under section 5 of the Reconstruction Finance Corporation Act as amended, under section .5 {d) lt made loans to industrial or commercial businesses of $92,500 and purchases of particlpat1ons in the sum of $268,333.33, making a total under section 5 (d) of $360,833.33, of whieh sum .$15,987.62 has been repaid. It has also made loans to self-liquidating projects 1n the sum of $948,000, of which sum $655,000 has been repaid; and loans for the .financing of agricultur.a.l commodities and livestock in the sum of $2,332,23.3.18, of which sum $389,382.52 has been repald; and has made available for relief and work relief $6,728,987, or a total !or emergency relief and construction of $10,009.220.18, of which sum $1.044,382.52 has been repaid. It has subscribed and purchased preferred stock tn banks and trust companl.e.s in Kentucky -.a,874,850. of which sum $468,500 has been redeemed. The grand total of loans and advances made by the Reconstruction Finance Corporation to Kentuckians to aid in the carrying on o! business up to December 31, 1935, 'Was $37,770,790.38, of which sum $18,845,349.89 has been repaid.

The Federal Emergency Relief Admlnlstra.tion, up to December 31, 1935, had made grants for general relief purposes 1n Kentucky in the sum of $30,198,151; for transient Telief, $1,086,856; for rural rehabilitation, $719,000; for education, '$1,1~4.167; 1or Federal Sur­plus Relief Corporation, $2,061,000; for miscellaneous purposes, $1,186,776. The total granted to Kentucky fm Federal emergency relief aggregates $36,385,956.

Rentals and benefit payments to farmers under the Agricultural Adjustment Administration up to J~nuary ~1. 1936, amounted to $20,670,971.7'7, distributed as follows: Cotton, $203,145.04; wheat, $651,648.60; tobacco, $14,346,111.58; corn and hogs, $5,47~.048.55; peanuts, $18.

The amount of grants, loans, and benefits which the present national administration has extended to Kentuckians in approxi­mately the last 3 years reaches the enormous total of $231,255,-368.75. These benefits were extemled by the following agen<:ies of Government: FaTm Credit Administration, $43,.354,483; Home Own­ers• Loan Corporation, $25,161,588; Federal Housing Administration, $4,586,871; Civil Works Administration, <$9,953,210; Emergency Con­servation Work (C. C. C. eamps), $23,321,964.00; Public Works Ad­ministration, $30,049,534; Reconstruction Ptnance Corporation, $37,770,790.38; Federal Emergency Relief Administration, $36.385.-956; Agricultural Adjustment Administration, $20,673,971.7'1. In addition to these sums, out of the Emergency Relief Appropriation

LXXX-331

Act there has been anoea.ted to Kentucky the sum. of $60,502,388.35, and on December 31, 1935, the sum actually expended out of this .allocation was $33,777,406.~5. The sums expended by the Agricul­tural Department for public roads aggregate $9,803,978.25; by the Commerce Department, $95,780; by the Interior Department, $20,-157.60; by the Labor Department, $140,546; by the Treasury Depart­ment, t186,859.98; by the War Department, •67,276; by the Re­settlement Administration. $1,129,970; by Rural Electrification Administration. $98,500; by Works Progress Admlnistration, $18,-184,090.50; by Employers' Compensation Board, $25,535.02; by Veterans• Administration, ~.050.

When these sums from the Emergency Appropriation Act of 1935 are added to the grand total above mentioned, Kentucky has shared in benefits conferred by the present national admin­lstratlon in the aggregate of nearly $300,000,000, exclusive of sums expended by the War Department on Army camps, locks and dams, and flood control.

These benefits which Kentucky has received from the national administration since the spring of 1933 have been refiected 1D. the improvement of business conditions along all lines. Con­tracts awarded for total construction 1n Kentucky in 1932 aggre­gated $20.651)500. In 1933 contracts awarded amounted to $27,-648,200. In 1934 contracts awarded amounted to $21,055,100, while tn 19.35 they amounted to $28,104,9.00. The percentage in­crease in contracts awarded for total .construction 1n Kentucky In 1935 over 1932 is 36.1 percent. The yearly average indexes of employees and pay rolls in all groups for Kentucky as reported by the Bureau {)f Labor Statistics. United states Department of Labor, show the following percentage Increases:

In 1932 employment was 94.2; in 1933, 100; in 1934, 107 .3; 1n 1935, 107 .2. While the pay Toll indexes were for 1932, 93.2; 1933, 100; 1934, 123.1; 1935, 135.1. The receipts by Kentuckians for the sale of principal farm products, including benefit payments, .as reported by the Burea.u of Agricultural Economics for the period 1932-35, inclusive, were: For 1932, $73,706,000; 1933, $66,-492,000; 1934, $95,218,000,; 1985, $183,325,000, or an increase for 1935 over 1932 of 80.9 percent. Contracts awarded for residential eonstruction in Kentucky for the period 1932-35 were: For 1932, $2,465.900; 1933, $3,390,200; 1934. $1,837,7.00; 1935, .$4,184,100, or an increase in 1985 over 1932 of 69.9 percent.

The .agencies of the Federal Government represented by those .1n attenda.nee today have been instrumental in carrying into effect the plans whereby nearly $30D.OOO,OOO has been expended in Ken­tucky. In the main the .affairs for the Government by those look­ing after them in Kentucky have been e1llciently managed. There has been no major scandal. gr.aft, or fraud. There has been some complaint 1n connection with the expenditure of relief funds. I have attempted to ascertain the proportion that the expenditure nf funds about which complaints have been made bears to the total expenditures in the State~ It is a liberal estimate to say that tbe complaints that bave been made relate to less than one­half of 1 percent of the total. Out of every dollar that has been expended there has been no complaint, so faT as I know. about the expenditure of 99 ¥:! cents and the complaints are confined to the expenditure of the other one-half cent out of every dollar. Considered as a whole this 1s a remai'kable record. It may be said that many of the complaints have not related to the method of handling the funds, but have been directed at those m charge of the handling of the fun-ds.

T.he good tb~t has come to business generally ln the ·State Is perhaps more correctly reflected by the Increase in income-tax collections than 1n any other way because it is only those who earn Incomes that pay tneome taxes. The amount of income taxes paid by Kentuckians for 1933 was $4,522,534; in 1934 the amount increased to '$6,325,332, and in 1935 there was a further increase to the sum of $9,455,697, or an increase for 1935 over 1933 of 109 percent. This would indicate that the people tn Kentucky in 1935 had an increase in business tneome of more than <louble what it was in 1933.

There has been much ~d about the new indebtedness created by the National Government to carry .out its program. It Is true that large sums hav-e been expended, but the .amounts are mnal.l compared to the total national assets, .and 1t the Nation could be saved only through the plans that have been followed, many per­sons well informed wcmld say that the price of salvation has been eheap. The result of the spending, how-ever, has been an asset, taken as a whole, rather than a Uablllty. The increase in the value of property attributable directly to the program of the Pecl­eral Government 1n the last .3 years has been many times the amount of money whlch has been expended. Tbe increase 1n the value of securities l!sted on Wall Street--and these securities are held by the people throughout the Nation-have increased in value by $30,000,000,000. Real-estate values have increased many bil­lions. The value of coal mines and th~ir output .has increased enormously. The value of coal produced in Kentucky has m­creased 1rom $4:0,000,000 in 1932 to $65,000J>OO 1n 1935 and wages of eoal miners have almost doubled. I think it might be well to refer to some of the large industrial concerns and make a com­parison .of their income in 1933 with their income in 1935. It seems to be big business that is complaining about the manner of ()J>erating the Federal Government. It is well, therefore, to call the attention of big business to the truth, which everyone should know, and that is that not only have they been protected but they have been placed 1n a position to convert deficits into large in­comes. In 1933 the United States Steel Corporation had a deficit of $36,501,123. In 1935 it had a net income of $1,084.917, a gain of more than $37,000,000 over 1933. In 1933 Bethlehem Steel had a deficit of $8.735,723, while illl935 it had a net income of $4,291,253,

5230 PONGRESSIONAL ~ECORD-SENATE_ APRIL 9 a gain of more than $13,000,000. In 1933 National Steel had a net income of $2,812,407, while in 1935 it had a net income of •11.-136,451, a gain of more than $8,000,000. In 1933 the American Rolling Mill Co. had a deficit of $673,109, while in 1935 it had a net income of $4,150,000, a gain of more than $4,700,000.

In 1933 the American Can Co. had a net income of $15.357,048, while in 1935 it had a net income of $17.730,319. a gain of $2,250.000. In 1933 Westinghouse Electric Co. had a deficit of $8,716,111, while in 1935 it had a net income of $12,000,000. In 1933 General Motors Corporation had a net income of $1.73 per share, while in 1935 it had a net income of $3.69 per share, a gain of more than $84,000,000. In 1933 the Commonwealth & Southern Co. had a net income of $8,496,822, while in 1935 it had a net income of $9,406,798, a gain of $1,000,000. In 1933 the Inter­national Nickle Co. had a net income of 53 cents per share, while in 1935 it had a net income o! $1.64 per share, a gain of more than $15,000,000. In 1933 the R. J. Reynolds Tobacco Co. had a net income of $1.65 per share, while in 1935 it had a net income of $2.39 per share, a gain of nearly $7,500,000. In 1933 the Libby, Owens & Ford Glass Co. had a net income of $1.65 per share, while in 1935 it had a net income of $3.26 per share, a ga.1n of more than $7,000,000. In 1933 the E. I. du Pont Co. had a net income of $2.93 per share, while in 1935 it had a net income of $6.34 per share, a gain o! more than $37,000,000. In 1933 the Commercial Investment Trust had a net income of $3.55 per share, while in 1935 it had a net income of $6.25 per share, a gain of $6,750,000. In 1933 Chrysler Corporation had a net in­come of $2.78 per share, while in 1935 it had a net income of $8.07 per share, a gain of more than $22,000,000. In 1933 Deere & Co. had a deficit o! $4,335,308, while in 1935 it had a net income of $6,105,452, a gain of more than $10,000,000. The figures that I have just given indicate how the policies o! the present adm1nls­tration have affected big business.

Let us consider !or a moment whether the money which has been expended in Kentucky represents money that must be repaid by taxation. Forty-three million three hundred and fifty-four thousand !our hundred and eighty-three dollars was loaned by the Farm Credit Administration to farmers and is secured by a first mortgage on farms. Twenty-five m1111on one hundred and sixty-one thousand five hundred and eighty:.eight dollars was loaned by the Home Owners' Loan Corporation and is secured by a first mortgage on homes. Four mill1on five hundred and eighty­six thousand eight hundred and seventy-one dollars was expended through the Federal Housing Administration, and the notes in­sured by the Federal Government, but they are all secured in a way satisfactory to the banks that advanced the money. The $37,-770,790.38 loaned by the Reconstruction Finance Corporation was ·all secured and $18,845,349.89 has already been repaid. The $20,-670,971.77, representing rental and benefit payments made by the Agricultural Adjustment Administration to farmers, was collected under the provisions of that act, but the decisions o! the Supreme Court nullifying that act will perhaps require a refund o! this sum that wlll have to be repaid out of the general funds of the Federal Government. Much of the $30,049,534 allocated to Kentucky by the P. w. A. was !or self-liquidating projects and for the erection of necessary buildings. An analysis o! the other expenditures will show that $9,953,210 was expended by the Civil Works Admin­istration as work relief. It may be admitted that this expenditure did not add value equal to the expenditure, but much of it was expended for permanent benefits to the public. The $23,321,-964.60 expended on the Civ111an Conservation Corps camps has re­sulted in increasing values to the amount of the expenditure or even more. The $36,385,956 expended for relief in Kentucky by the Federal Government will be paid through taxation. Perhaps one-fifth of the total expenditure in Kentucky, all !or relief, repre­sents the total burden that w1ll have to be borne by the taxpayers o! the Nation. and the balance will largely be paid by those who secured the money.

I did not come here today to deal in generalities or to entertain you with wild fancies or to spread propaganda. I have given you facts obtained !rom the records, as it is only through under­standing facts that the truth may be known.

THE GOLDEN RULE WAY TO UNEMPLOYMENT RELIEF

Mr. DAVIS. Mr. President, I ask unanimous consent to have printed in the RECORD an exceedingly interesting article by Mr. George A. Honnel, chairman of the board of George A. Harmel & Co., of Beverly Hills, Calif. The article is en­titled "The Golden Rule Way to Unemployment Relief."

There being no objection, the article was ordered to be printed in the RECORD, as follows:

THE GOLDEN RULE WAY TO UNEMPLOYMENT RELIEF We enjoy in America today benefits which are unparalleled in

any other section of the world. During the last three decades we have made strides in science, medicine, transportation, and in many other fields which have opened for the American people opportunities for self-expression, advancement, and happiness be­yond any dreams o! the last century. We are reputed to be in possession of nearly one-half the wealth of the world. We have what appears on the surface to be everything necessary to make our people content, happy, self-respecting, and creative.

However, although the ideal may be a state of happiness among our people, the facts are no longer consistent with that ideal. A nation cannot be happy when ten or more mlllions ot

its wage earners are out of employment and have no immediate hope o! being placed back in their jobs. This amazing unem­ployment load has brought perplexities and hardships to 30,000,000 of our people. It is most certainly inconsistent with the ideals of government as expressed by our forefathers, and reiterated by our present-day patriots.

The causes o! this unhappy condition do not rest in our philoso­phy o! government; wholesale unemployment is the direct oppo­site to its ideals. Nor can these causes be considered a part o! the physical structure of our Nation; there is enough wealth in America, 1! properly administered. to make this condition im­possible. Must we not recognize that the responsibility for finding the Ultimate solution o! the unemployment problem which has threatened the very security o! the Nation. rests upon employers in the field o! business and industry? A frank discussion of the fundamentals involved will, it is hoped, throw some light on this problem.

The arguments which follow and the conclusions which have been reached are based on a knowledge o! conditions in the busi­ness world ga.ined through many years o! experience in a com­pany which today employs approximately 4,000 men and women. The simple and direct steps herein indicated. to ll!t us out o! the depression into prosperity, are not new and untried. They are merely the present application of methods used so successfully in the past.

THE ECONOMIC SITUATION SEEN IN PERSPECTIVB

We can better understand our present plight and ferret out its causes through a brief SUilllllAij' o! recent trends.

Looking over the sociological movements o! the past 30 years, we become aware o! important major !actors. Until the amazing industrial advances made in America during the late decades o! the last century, most of the simple commodities which were available were made by hand. A wage of e1 to e1.25 for a 12- or 14-hour day purchased all that the world then afforded :tor the !a.mily o! a workingman.

Then came the great industrial development with new machines speeding up mass production. The results o! education and the development of inventive genius were being felt in American business and industry.

A wave of prosperity set in with feverish activity. When the war broke out this prosperity was definitely assured. It was then that a miracle took place which changed the whole basis o! Ameri­can life. After our own country entered the war, the Army took large numbers o! the best of our young men. This created a shortage o! labor, and the wage rate was correspondingly in­creased. Everyone was busy throughout the war period, and wages were the highest they had ever been in the history of the world.

What followed the close of the war should be a guide to indus­try in the future. We shortened the hours and maintained the pay, and that was the greatest contribution to our period of pros­perity.

At the end of the war the demand on American industry for war supplies was cut off, and the time for an economic readjust­ment had arrived. This was one of the most serious problems we ever faced, but a depression was prevented at that time by sup­plying a need. The need was employment for the men returning from overseas, and we supplied that need by reducing hours o! labor and substantially maintaining the pay.

At that time the railroads were operated by the Government and an 8-hour day, withou~ reduction in wages, was established. !But industry was reluctant to follow, claiming, as some claim today, that the increased cost o! living would reduce buying and retard industry, thus throwing labor out of work.

However, President Harding conferred with the leading business­men of the Nation, urging the adoption of the shorter-hour day without reducing pay. After several sessions with the heads o! the steel industry, the 10- and 12-hour day was reduced to an 8-hour day, and it was only a short time until 8 hours became the working schedule-!or nearly all lines of business throughout the Nation. It is stated that the late Judge Gary, then at the head of United States Steel, was strong in his contention that it was the best thing that ever happened for business.

The following years drew m1111on.s of people from the farm into town and city industries, and the ex-farmer became an industrial consumer. Increased efficiency in farming gave an increased sup­ply o! agricultural products, notwithstanding the decrea..~d num­ber of farmers. However, in the later twenties the Nation began to feel the effect of the many new labor-saving and automatic machines in industry. Usually when such a machine was invented one man operating it would do the work of 10 or 20, but industry !ailed to divide the work among all the w111ing workers. There­fore they must either remain idle or go back to the farm to crowd the ranks o! agricUlture.

Newer industries failed to spring up as :fast as labor-saving ma­chines were installed. The more we sent men back to the farm the more volume or· !arm products increased, until in 1929 and 1930 our elevators and warehouses were bulging with a surplus of foodstu1Is. The law of supply and demand lowered market prices o! farm products to a level which was under their cost of production.

The year 1929 brought our greatest crisis and found our people drunk with speculation. Then came the stock-market crash. 'I'h1.s was a tremendous shock to buying power. Many had been living by their wits. They had no special jobs. But when the crash came it precipitated this class down to earth. They mortgaged their homes, their ~. borrowed where they QOuld, lost it a.n.

1936. CONGRESSIONAL RECORD-SENATE 5231 and were 1n debt. Business was at -a standstill. Manufactured goods began to accumulate. Business America became panicky. We cut and slashed prices to make sales. Later we cut and slashed wages to reduce cost, and by so doing further curtailed buying power, and at this point we utterly destroyed the most perfect economic situation this country had ever enjoyed.

In other words, the reduced pay sapped the lifeblood from our business system, and within 6 months we were in the depths of depression. Withdraw one-third of the blood from the human system and we have a sick patient with m1l.D.y ailments. Likewise, if we reduce the pay check by one-third, we withdraw one-third of the money in actual c1rculation, and we have an anemic na­tion, with grave disorders in many of its economic departments.

Is it not reasonable, therefore, to conclude that a transfusion of money throughout the arteries of our national trade will revive our sick Nation and restore business to normal health?

Here, then, we find the solution to our problem, through short­ening the hours of labor and increasing the pay eheck of those now at work. The increased buying power thus establlshed will put into circulation biillons of dollars,. which w1ll revitalize mxr nat.tonal life.

This process 1s as natural as any law of nature. It is the in­evitable result of a theory which has long 'Since proved. sound. The idea of shorter hours and more pay 1s not new. We are not required to experiment. We applied this very remedy to a sick nation after the war. It resulted 1n prosperity. Is there any good reason why the same treatment will not be just a.s effective today?

Let us see how this remedy w1ll work. A 36-hour week with time and a half for overtime for all employees between the ages .of 18 and 60, a $4-per-day minimum baste wage for figuring hourly rates for common labor, with skilled workmen .higher 1n propor­tion, would mean an increase af $8 per week over the N. R. A. basis of $16 per week.

There are approximately 85,000;000 wag~ earners on our pay rolls. If each pay check 1s increased $8 per week, it would mean $280,-000,000 added money circulating through all avenues of trade each week.

For every added dollar that 1s spent, some one must work to make that which the extra dollar buys.

It is claimed that the extra spending of $280,000,000 weekly 'Will create enough jobs to put 10,000,{)00 o! the unemployed back to work within 6 months. The combined new buying power ($240,-000,000 per week} of the newly employed, and the increase of $280,000,000 of those a.t work. wt11 place more than '$500,000,000 of new money into circulation every week.

Is it not reasonable to conclude that the addition of $2,000,000,-000 a month to our buying power and the 36-hour workweek wm result in giving every willing worker a job and will restore pros­perity to every line of industry and business1

THE VERY Bl!'Sr BUSINESS INSURANCE 1S EMPLOYMENT ASSURANCE

The proposed plan will work for the mutual advantage of em­ployer and employee. It 1s a. natural solution of the problem written in the laws of the economic order rather than a temporary or artificial remedy. .

Let every industria.l leader ask himself the question: Is It more hazardous to add a trlfie to the selling price of his product in order to insure a.n increased pay check, 1md pass it on to the .consumer, than to pay the tremendous Federal, State, and municipal taxes which are unavoidable, and will continue to be so as long as we permit miillons to remain jobless? Is it as costly and ruinous as the income and inheritance ta.x? Can we reason­ably expect anything but destructive taxation if economic dis­orders are not corrected by our business leaders themselves?

We have reached the crisis. Something must be done. The longer we defer shortening hours and raising pay, .the more we are encouraging communism and socialism. Our rapidly mounting taxes w1ll eventually ruin us.

Furthermore, $500.000,000 added to our weekly circulation w1ll relleve the distress of the American farmer, since it will create enough new business to attract the ex-farmer back to the cities and towns where he will become a.n urban consumer. This in­creased buying power a.nd the removal o! the ex-fanner from the field of production will enable the legitimate fanner to operate at a profit once more.

THE .PRACl'ICABILr.l"Y OP '1'HE PLAN

It does not require a stroke {)f magic to increase the pay check in all lines of activity as some would have us believe. In the company in which the writer is Interested, for example, the statis­tieal report for the year ending October 26, 1935, shows an average of 2,925 people employed at the main plant in Austin, Minn. The total tonnage of packing-house products sold. during the year was 336,259,660 pounds. According to these figures it would require adding to the price o! the product sold three-tenths of a cent per pound in order to increase each pay check $8 per week over the N. R. A. basis of $16.

One of the leading milling companies in Amer-ica. advised that it would require adding 6 cents to the cost of a barrel of flour to increase each pay check on their pay roll $8 per week. A report !rom one of our leading chain bakeries advises that it would add approxim.a.tely three-fourths of a cent to the cost of a loaf of bread to do likewise for their employees. Would the aggregate 1ncrease 1n price make it a. hardship for the wage earner 1! he received an extra $8 per week?

Like a thunderclap out of a clear sky our Government demanded of the meat packer a processing tax of $2.25 per hundred on all

hogs slaughtered, or about $5 per hog. For the year ending Octo­ber 26, 1935, this tax ll.mounted to $4,325,017.39 for our com'})any at Austin, while our entire plant pay roll totalled $3,730,407.07 for the same period. In other words, the processing tax for the year amounted to $594,610.32 more than was paid in wages.

The Government at the same time demanded of the miller a processing tax of $1.38 per barrel of flour. This enormous tax of the packer and the miller was added to the cost of what they produced and it created no noticeable administrative problem. It required a. simple routine of business-a matter of bookkeeping. Like any other item, it was added to the cost of production and passed -on to the consumer.

Can it be consistently argued that the mlller can absorb a Gov­ernment processing tax of $1.38 per barrel but cannot add 6 cents a barrel !or the purpose of increasing the pay check? Is it fair reasoning to say the packer can pay a Government tax of $5 per hog but cannot add a fraction of a cent per pound to the cost of his product to increase the pay check?

The packing business and the milling business are fundamentally the same as any other line of business and will be equally a1fected by an increased pay check. Since the educated brain from our high schools and universities has entered your business and my business, it has developed efficiency methods and labor-saving machinery which has multiplied the production per man so enor­mously that a trl:fle added to that which 1s produced will make possible the increased. pay check and the 36-hour week.

Would it not be more reasonable to give money directly to the employee than to have it -collected by governmental agencies and redistributed with a high and necessary wastage? Diversified dis­tribution of wealth through industry would be much more eco­nomical ami satisfactory than centralized control.

APPLICATION OF THE PR~CIPLE OF GIVE AND 'lAKE

The Golden Rule will work 1n business. It 1s the solution of our unemployment problem. The fundamental law of human life is service, cooperation. All progress of our race must be measured In terms -of this law. Ameriea has excelled all other nations because it has recognized and put into pmcttce this principle to a higher degree than any other country. The employer, in helping the worker and the unemployed, will inevitably help himself.

TheW. K. Kellogg Co., of Battle Creek, Mich., has been operating on a 36-hour week and $4.50 per day minimum-wage basis, plus a bonus system, for nearly 5 years, and openly declared through the columns of the press that it is the only solution to the problem of unemployment relief and business recovery.

It is understood that the Ford Motor Co. is operating on a $6 minimum wage per day a.nd a Bhorter hour week. Should we not be encouraged to do likewise when eompanies of this character have set the example? If all employers 1n industrial, commercial, financial, and professional lines would unite in carrying out this policy, there would be no depression.

Obviously, public opinion among employers must be strong enough to insist on a universal adoption -of these higher standards to avoid malpractices. Why should workmen in one line of bust• ness be required to work longer hours than workmen in other lines? Why should we let unscrupulous employers who chisel for longer hours -and lower pay disrupt a uniform basic pollcy? Why .not discourage the demand for Government regimentation and regulation of business by a voluntary uniform basic work day and wage scale?

A VOLUN'UaY BATHER THAN A LEGISLATIVE SOLUTION

The business flurry we are having now is not enduring, when more than 10,000.000 remains unemployed. This activity 1s arti­ficial. Government spending 1s like a hypodermic; When the administration -of Government funds ceases, we will again have increased unemployment and business depression.

We reached the lowest depth .of -our depression within 6 months after we cut and slashed the pay in 1932.

Cut the pay check now $8 a week under theN. R. A. basis of •16 per week, and within 6 months halt of our present industries w111, for lack of buying, close up shop.

Increase the pay check $8 a week over the N. R. A. basis of *16 per week a.nd within 6 months, with .a. 36-hour week, every w1lling worker will have a job, and we will have renewed business activity in every line~

True, industry can take care of only part of the unemployed, but industry can take the Initiative 1n adopting a 86-hour week now, the same as it did following the wa.r when the working schedule was reduced .from a. 10- and 12-hour day to an 8-hour day. It set the example, and employers of labor throughout the Nation followed. It required no law to establish the B-hour day. It will require no law to establlsh a 36-hour week~

By what method can we -achieve the shorter hour day and higher pay? It is suggested that every local chamber of commerce throughout the country cooperate with the Chamber of Commerce of the United States and the National Association of Manufacturers of the Un1teq States, and sign up employers in establishing a readjustment of hours and wages, to become effective on a certain date. No employer will suffer because the relative level of compe­titive cost for each group will advance by the same amount for all. If industry and commerce take the lead, employers in miscel­laneous lines will be -obliged to follow.

Whatever plan is adopted, action must not be delayed. It should make no difference what administration 1s ln power. Our problem is one for American business to solve and must not be left for legislative solution.

Buying power is the paramount need. An increased pay check is no tax on business; it is .Pa.sse-:1 on to the consumer. We must

5232 CONGRESSIONAL RECORD-SENATE APRIL 9 either put the jobless to work with higher pay and stop the need of huge Government spending for relief purposes, or submit to continued "increases in taxes each year which are bound to ruin us.

Would not the universal adoption of the Golden Rule plan help to end our depression and reestablish prosperity? Our people would be lifted once more to a plane of selfrespecting citizenship through honest employment, so that it will again be true in fact that this is a nation "of the people, by the people, and for the people."

TAXES FOR EXTRAVAGANCE-ADDRESS BY SENATOR BARBOUR Mr. AUSTIN. Mr. President, I ask unanimous consent to

have inserted in the RECORD a speech delivered over the Na­tional Broadcasting System last night by the senior Senator from New Jersey [Mr. BARBOUR] on the subject Taxes for Extravagance.

There being no objection, the address was ordered to be printed in the RECORD, as follows:

Once again the tax collector comes knocking at the doors of the American people. This time he has in his hand an entirely new weapon which on first glance seems only to strike a small group of our citizens. Actually, it will hit everyone of us. It en­dangers those who have jobs, those who seek better ones, and those who want to find jobs.

Perhaps the tax man has never cllmbed your particular front steps. It may be that because you are exempted from income tax by reason of a family or dependents you believe that you will not feel the blows contained in these new tax laws. It may be that because you are not now employed you feel that a new tax bill does not concern you. _

The new tax bill, now being considered in Congress by request of the present administration, directly concerns corporations and

. stockholders. For that reason you may be inclined to pass it by with only a glance. If you will do me the kindness of listening for just a few minutes I believe I can show you that you are affected by the new bill, no matter what may be your income or whether you have any income at all.

Taken by itself, the new tax bill is a strange animal which, once unleashed, would gobble up the little businesses that are the back­bone of this country. On its heels, however, comes a message from

. the President suggesting that business begin to employ more men. This is only the latest attempt of the New Deal to exploit the unfortunate by subterfuge.

Probably you already know that every man, woman, and child in this country pays taxes. The little child with a nickel to spend for an ice cream cone unwittingly sends part of the nickel to the United States Treasury. The white-haired grandmother who buys a shawl to throw around her shoulders likewise enriches the Treas­ury in Washington to the extent of part of the purchase price._

Of course, we have always had to pay taxes to the Government so that it could continue its functions. In recent years, however, our taxes have piled up higher and higher. Now comes an entirely new proposal to add to the top of that pile so that the American people are asked to pay more taxes than ever before in their history.

Why are more taxes necessary at this time when all of us have diminished incomes? We can hardly complain when we are asked to pay taxes to the Federal Government to maintain our courts, our Department of Justice, our Agricultural Bureaus, our Weather Bureaus, our Lighthouse and Lifesaving Services, our Military and Naval Establishments, and all the other ordinary activities of gov­ernment that make for the safety, health, and well-being of our citiZens. For such ordinary activities, however, we need no new taxes. Were these activities alone drawing on the Federal Treas­ury, our taxes would be but a fraction of what they are now, and the child would be getting a bigger scoop of ice cream for a nickel, and the grandmother would be paying less for her shawl.

It is the out of the ordinary activities that the present admin­istration has added to the Government which make additional taxes necessary. You are now being asked to begin to pay for the helter-skelter collection of New Deal bureaus and alphabetical agencies that have been run on borrowed money.

For 3 years the New Deal has tumbled billions of dollars into a bottomless well. It has spent money that it did not possess, mortgaging the country in the sublime confidence that "every­thing will come out all right." With hardly a crumb to offer as evidence of all that has been squandered, the bill is now presented to you for payment.

Remember that the income tax is still in force and will continue to be. The new tax proposal is in addition, and has for its avowed purpose the taxing of the "rainy day" savings of corporations and dividends paid to stockholders.

Perhaps you are saying, "How does that affect me? I am not a corporation and I own no shares of stock."

The answer is this: If you or the breadwinner in your family works for a corporation-and most businesses are corporations­your future employment is in danger, because without these "rainy day" savings the corporation cannot employ you when earnings fall off.

If you are now unemployed, your chances of getting work are going to be poorer, for without such "rainy day" savings a cor­poration cannot expand and so employ more workers.

If you own shares of stock, of course, you are directly and im­mediately affected, as you are if your income comes from a trust fund or insurance policy, both of which depend for a portion of their earnings upon corporation dividends.

A corporation is a person, even though an artificial one. It is run by human beings, it employs human beings, it conducts its business just like the country storekeeper or the barber or the plumber. It has its good years and its bad, and it tries-if it is honestly and ably run-to save out of its current earnings a reserve to tide it over in evil times so that it may continue to employ its workers, produce its goods, and pay interest to those who have invested their savings in it.

The administration tax bill proposes to tax the reserves of a corporation thus putting a penalty upon its attempts to save for a "rainy day." If the corporation gets rid of its reserves by pay­ing them out in dividends to stockholders, the Government taxes the employees as well as the stockholders.

During the depression many of our factories and businesses­most of them corporations, of course--would have been unable to employ any workers at all had their reserves been destroyed by such a tax as is now proposed.

The great bulk of American business is done by small corpora­tions which must plow back their earnings into wages and equip­ment if they are to expand and prosper and so create more em­ployment. The large corporations in this country already have extensive plants and equipment, and most of them are probably not considering expansion. It is the small business which this proposed tax bill would cripple and through it any hope of in­creasing employment in America. I bluntly and confidently de­clare that the New Deal's tax bill will stifie small businesses, keep them small, and thus protect and enrich the bigger monopolies.

Remembering that the effects of this measure would be to re­strain businesses from expansion, I am trying in vain to reconcile · the tax proposal with the latest message from the White House urging American business to offer more jobs to the unemployed. I should like to see greater employment, of course, but we shall never have it by crippling business, which is the most abundant of all sources of jobs.

That the New Deal sorely needs money to pay for past extrava­gances no one denies. That a tax bill of some kind may be nec­essary is a matter we must face, without delay. We cannot help but remember the old maxim that "nothing is certain but death and taxes."

However, I very much regret that when the administration sent to Congress this present tax proposal it did not also send along a little note saying that 1t had learned a lesson in thrift and would hereafter mend its extravagant ways .

What is the use of ·passing a tax bill designed to draw from the pockets o! the American people all these millions when we are not told to what uses all that money will be put? Before we send the tax collector out after the American people armed with a larger net than ever before, let us have some assurance from the New Dealers that this money is not going for new extravagances nor even for a continuation of the old .ones. Let us hear the cheering news that the Government octopus is going to divest itself of some of its costly and useless tentacles. Let us hear that it will cut down its bulging pay rolls. Let us hear that it will pass no more fortunes out to people for making things that nobody wants, for tearing things down, for doing nothing at all.

There was a time when Congress itself determined how much money would be spent by the Government and for what purposes. It was the New Deal that inaugurated the system of sending down a blank check which Congress was asked to sign and return. It was the New Deal which began the expending of huge sums for projects never divulged to Congress nor to the people of the coun­try. The friends of the administration in Congress actually turned over many of their legislative powers to the New Dealers who used them to promote projects that would be merely funny if they were not so costly.

Those men whom all of you have seen dotting our city streets and countryside, leaning on shovels or pickaxes and giving the appearance of being almost ready to go to work, are a result of this New Deal innovation. Those men are not to be blamed. Most of them, I believe, would welcome a job where they would really be doing something useful in return for their pay. But they were assigned to projects so utterly trivial and useless under bosses so incompetent and dawdling that it is no wonder that they have little or nothing to show for a day's work.

It is this useless waste of money that I would like to see curbed before any such tax btU as is now proposed becomes law. I want to see Congress take back the powers and responsibll1ties it voted away. I want to see Congress decide where and how money shall be spent. I do not wish to take jobs away from men and women. I wish rather to see them engaged in something worth­whlle, but until we in Congress can again determine how public moneys shall be soent. that will never be.

I shall continue to oppose such tax measures as the one now proposed until I have the assurance that governmental extrava­gance is over and that Congress has taken back its traditional and constitutional right and duty of standing guard over the Treasury of the United States.

ADDRESS BY SECRETARY ICKES BEFORE COMMUNITY FORUM, PITTSBURGH

Mr. GUFFEY. Mr. President, I ask unanimous consent to have printed in the RECORD a very interesting and inform­ative address delivered by Bon. Harold L. Ickes, Secretary of the Interior and Administrator of Public Works, before the Community Forum, Pittsburgh, Pa., on the evening of Monday, April 6, 1936.

1936. ·coNGRESSIONAL RECORD-SENATE 5233

There being no objection, the address was ordered to be printed in the RECORD, as follows:

There could not be a more hopeful portent for the future of our country than such a gathering as this. You have come together to discuss politics. This is as tt should be and yet it is a far cry from the time, not so very long ago, when citizens generally considered politics to be beneath them; as something to be en­dured but not encouraged; a subject not fit for discussion in the presence of the immature. Those were the days when we brought up our children in the belief that storks were the common carriers who delivered babies with a c. o. d. tag attached to the customers who had placed orders for them. Public meetings, except religi­ous services, were for the purpose of "acquiring culture", or "im­proving the mind" and not by the widest possible stretch could it even be imagined that there could be either pleasure or profit, let alone a healthy stimulation of the mental processes, in listen­ing to or participating in a discussion of politics.

Citizens throughout the length and breadth of the land, whether they be rich or poor, native or foreign born; employers or employees, industrial worlters or f~ers; whether they boast Phi Beta Kappa keys and doctors• degrees, or are barely literate, are today interesting themselves in politics as they have not done for many years. Since governments are begotten of politics; since mayors, governors, legislators, Supreme Court Justices, and. Presi­dents are all more or less perfect ftowers of politics; and since our economic well-being and our social order depend upon politics, we have all come to rea.llze the importance of politics in even the most intimate details of our dally life. So groups of men and women, concerned about the fUture of their country, since with that future the well-being and happiness of themselves and their children are inextricably bound up. are not only willing, they are eager to seek Information that may help them to perform as intelligently as possible their full duty as those citizens upon whom, in the final analysis, rests the responsibility, not only for what America is but what America is to be.

No speaker can prom.lse his audience transcendent wisdom on any subject. In these days of great metropolitan newspapers, of magazines with national circulations, and radio programs devoted to public affairs, all anyone can hope to do is to add something to the store of current knowledge. As a member of the national adm1n.l.stration, my sympathy with its point of view and policies must, of course, be taken !or granted. As you listen you must decide for yourselves how greatly you should discount what may be said on account of the loyalty that is frankly avowed. There can be no assurance that every statement made will be uncolored by personal beliefs that are held or by the political allegiance that has been voluntarily and gladly assumed. It is only fair to warn you in advance that your guest is a man of strong convic­tions who lays no claim to being a disembodied spirit functioning in the sterilized tube of an immaculate laboratory. He does not pretend that he can look at a pressing political or social issue with complete detachment. All that he can and does claim for himself is that he will say nothing to you that he does not believe. He will in all matters try to be straightforward, leaving it to you, on the basis of your own prejudices and of whatever facts you may have, to a.gree with him, either in whole or in part, or to disagree with him with your whole heart.

Another thing may be said, and that is that I have never ap­proached a political question in -the spirit of a partisan. I have never believed that all the political wisdom, all the public zeal, all the disinterestedness, and all the patriotism lay in any political party. It may be charged that my political principles are colored by my prejudices, but it is honestly my belief that I cannot justly be accused of partisanship in the sense that my convictions have ever been surrendered into the keeping of any political party.

A son of your own great State, I can point to an ancestry in this country in both lines back to pre-Revolutionary War days. And there is not a drop of American blood in my veins that is not true Pennsylvania blood. In the oldest line that I have been able to trace I represent the tenth generation in this State, and I was the first one in my direct line to leave Pennsylvania. Politically, as might be expected, I was brought up in the Republican tradition. My mother, who was of full Scotch descent, clung to her politics almost as tenaciously as she held onto her hereditary Presbyterian­ism. In my direct line on both sides, from the time that the Republican Party was f()unded, there was never a break in alle­giance to that party until I discovered, to my great surprise, that there were occasions when candidates on the Republican ticket were less desirable than were their opponents on other tickets. I remember as a young boy that there was a black sheep in the fold. A cousin of my father's avowed himself to be a Democrat. Even his consa.nguinl.ty did not save him from the contempt that, in our belief, he so richly merited. So far as we were concerned, he was outside the pale, a skeleton in the family closet, one to be pitied because of his political aberration.

With such a political background and with such convictions, it was only to be expected that when the campaign of 1932 came around I should support that candidate for President whose char­acter, record, and public accomplishments seemed to promise most for the well-being of the people as a whole. I had closely followed the record that had been made by President Hoover. I had seen him go into office in 1929 generally acclaimed as the best-equipped man who had ever occupied the White House. America was alrea4y entering the last phase of the greatest era of prosperity that we had ever known. People were not much concerned about politics in those days. Economically, the country seemed to be solidly set on

foundations that no violent earthquake could shake. All we had to do was to devise new ways to spend the money that, almost with­out exertion on our part, was to come to us in ever-increasing quan­tities. We were, indeed, the chosen people temporarily residing in the promised land fiowing with milk and honey preparatory to being set down, each before his well-tuned harp, on the streets ot gold with which we had been taught to believe that heaven was paved.

How like a mighty and beneficent demigod Herbert Hoover ap­peared in those days. But when the acid test came we discovered to our consternation not only that we had been looking at him through the little end of a very large telescope, but that the big end was placed so close to him that he was magnified out of human seeming. Mr. Herbert Hoover had been able to lead when no leadership was necessary, when we were being rushed onward in the swirl of a highly stimulated but false enthusiasm, which had been engendered and kept going with shots in the arm under his own and preceding admin1st:rations.

The popular hero, the great engineer, the best equipped Presi­dent that the country had ever seen became a figure to be pitied after the crash of 1929. Where was his capacity for leadership then? What quality did he have to stand at the helm with clear eye and steady hand and bring the ship of state once more safely into harbor? What reserve of morale did he have to share with stricken men and women, who, bereft of their savings as well as of their jobs, had little hope for the future? Unable to stimulate convincingly a courage that he did not possess, incapable of supplying the leadership that the people so desperately needed, Mr. Hoover's statesmanship could rise no higher than a declara­tion of a moratorium on his pet forecasts of "a chicken in every pot" and "two cars in every garage." As a substitute, he under­took to whistle down the chilling winds that meant cold and hunger to despairing millions, by uttering in a doleful voice the prophecy that ''prosperity is just around the corner."

In order, so far as possible, to evade personal respons1bll1ty in case prosperity should forget the comer around which it was hiding, Mr. Hoover frantically began to organize committees; to call conferences; to request employers to share the work; to sug­gest studies of this or that or the other problem; to lecture local communities on their duty to support their citizens who might need help even although those cities had reached the end of their resources; to utter platitudes about the initiative, the enter­prise, and the inherent pride of American citizens, as if initiative or enterprise eould ave.ll any man at a time when the very founda­tions of our economic structure had been weakened, or as if inherent pride could stand at attention inde:fin1tely, unheeding of the pinched faces and the pitiful cries of hungry women and children. If America during those tragic days gradually pulled its belt tighter and tighter, the while holding its head high as it drew upon its reserves of pride and courage, it was not due in any degree to the inspirational leadership of him whose neglected responsibility it was to lead.

A do-nothing, but, on the surface, a highly successful adminis­tration prior to the crash of 1929, continued, after that catas­trophe, to be a do-nothing but an admitted failure - as an administration. In making this indictment I do not overlook the fact that under President Hoover rich treasure was siphoned out of the vaUlts of the United States into the banks and the great corporations of the country. Surely none of you have for­gotten the eighty-odd millions generously poured into the lap of Mr. Charles G. Dawes, of Chicago, in order to bail out his bank just after Mr. Dawes had resigned as President of the Reconstruc­tion Finance Corporation.

Mr. Hoover, whlle sternly denying Federal relief to starving men and women because he did not want to usurp the functions that local governments could no longer perform, or on the ground that he did not wish to wea-ken the moral fiber of American citizens who, notwithstanding that fiber, were nevertheless hungry and cold, did not hesitate to weaken the moral fiber of banks and insurance companies and manufacturing and industrial enterprises by generously handing over to them millions of dollars that you and I have had to pay in taxes, and the repayment of which by some of the beneficiaries is being resisted in the courts on the ground that in lending that money the Government exceeded its constitutional powers. Mr. Hoover made his choice in those days of catastrophe. He elected to help the bankers and the investing classes. They must have their property though the people starved.

When I was in Pittsburgh in October of 1934 I discussed the profound changes that were taking place in this country. I traced the story of the disappearing frontier, the dawn of the machine age with its subsequent industrial expansion, the era of immense fortunes and of political rule by the sheer power of big business. And then, as I recall, I said that it was with a feeling of regret that was akin to shame that truth forced me to assert that this State of my birth stood out among her sister Commonwealths as furnishing an unwholesome example of a heedlessly exploiting minority battening upon the miseries and profit ing from the op­pressions of a great but helpless people. As I warmed to my sub­ject I called a spade a spade-I even mentioned names--names which at one time were of great importance in Pennsylvania, names with which all of you are familiar.

I singled out Mr. Andrew W. Mellon, of your own city, once upon a time acclaimed as "the greatest Secretary of the .Treasury since Alexander Hamilton" whose most recent contribution to the cause of good government was to give $1,000 to a lobby organization in Washington to help to make the country "tax conscious." I mentioned also his fieet-footed messenger, the lugubrious David A.

5234 CONGRESSIONAL RECORD-SENATE APRIL 9 Reed, whose senatorial tenure was brought to an abrupt end by the voters of this State in 1934. Nor did I overlook that self­appointed defender of the constitutional rights of a liberty-loving people, that self-admittedly great and profound constitutional lawyer, Mr. James M. Beck, whose views on the constitutionality of the Tennessee Valley Authority Act were not shared by the United States Supreme Court. I have not noted whether Mr. Beck has exercised his judicial prerogative to dissent from the decision in that case.

These men and others of their ilk comprise a school of turtle­like statesmen who hastily withdraw their heads into their shells whenever anything new comes within the range of their limited vision. To them the status quo ante is the utopia of the future. The administration of Herbert Hoover represented to them the ' ne plus ultra in government. And now that the Nation is emerg­ing hopefully from the economic pit in which they left it in 1933, they deliberately blind themselves to the facts of actual recovery that are recognized by every honest-minded man and woman. They scream aloud their imprecations against the policies of the New Deal. Taking their cue from Mr. Hoover they go about the country spreading the same old gospel of fear; moaning the familiar dirge of despair.

Parrotlike, they nervously bustle about muttering "balance the Budget, balance the Budget", and this comprises ~he breadth, depth, and height of their economic, social, and political program. In­capable of offering anything themselves, they refuse to believe that another can serve the people. In order to make the country fomet their own dismal record of failure, they insist that whatever thi~ administration has done bas been wrong; that anything that it might, could, should, or would do, would equally be wrong. Lacking initiative, devoid of vision, they dread the uncertainties of a political future that must be courageously and intelligently faced if we are not to be overwhelmed by it. They are not even standpatters. They would turn tail and incontinently retrace their steps to the Hoover millenium.

The perfect flower of their statesmanship is the proposal that we discard the New Deal and reclaim the old deal from the junk shop. This is the issue with which we citizens of America are now face to face. This is the suggestion that is before us for consideration, and which I wish to discuss with you tonight. In order to come to grips with this issue, it will first be necessary to define the term "New Deal." As to the "old deal", we know from bitter experience what that is.

To me the New Deal means the greatest good for the greatest number ~f the people. And if this is what the New Deal is, then it is not really new because always it has been the aspiration of every enlightened government to achieve the greatest good for the greatest number of its people. That is what governments are for. I do not believe that there has ever been a political campaign since America became a free Nation in which what we today call the New Deal was not advocated by candidates for office from that of the Presidency down. What is really new about the New Deal of this administration is that it not only promised reforms in the interest of the people as a whole, it has actually been translating those promises into legislation. It bas not been content to build up hopes for the· future only to permit them to die away with the echoes of the campaign.

I venture the assertion that the man who insists that he will undo all that the New Deal bas done; that he will tear from the statute books every act carrying out New Deal policies; that be will turn the clock back to the period antedating 1933, is either doinoo some dishonest thinking or be is making reckless promises that •=he would not even attempt to carry out if given the chance. I venture the further assertion that there is not a candidate who hopes to become President on January 20 of next year who would dare to turn back the clock. After all, the American section of the human race is going forward and not backward.

It is a fair question to ask of those men who so vigorously con­demn the New Deal and who assure the people that if the present administration is defeated at the polls next November the first concern of those succeeding it will be to sink the New Deal with­out a trace, what they propose to substitute for the New Deal. It might also be suggested to them that they state specifically what they object to in the New Deal.

When this administration came into power private charitable resources bad been exhausted and cities, counties, and States in many parts of the land found themselves unequal to the task of providing food, clothing, and shelter for those who were out of work. Under the New Deal, Federal means have been used to sup­plement and to replenish inadequate local resources. Do the old dealers hold that the national administration should extend relief only to corporations, as was done under the preceding adminis­tration, leaving millions of American citizens to suffer hunger and privation?

The New Deal attempted to save what was left of the banks of the country by putting them on a firmer footing so that people could deposit their savings in them with reasonable certainty that they would not lose those savings. Was this improper conduct on the part of the New Deal and do the critics propose the abandon­ment of this policy in similar emergencies in the future?

The New Deal has increased tremendously the income of the farmers and has struggled unceasingly to provide work for the unemployed at decent wages. It has interested itself in the just cause of the man who works with his bands. Are these policies offensive to the old dealers?

The New Deal conceives it to be sound and humane statesman­ship to institute a system of social insurance so that people com-

tng into old age or thrown out of work through no fault of their own will not have to choose between unwelcome charity and actual starvation. It has sought to protect the victims of occupational accidents and diseases, to prevent· those additional agonies of childbirth which a mother suffers when she lacks the means to pay for proper medical care and fears the loss of her job. Is it such acts of simple humanity to which the old dealers object?

After the crash in the markets in the fall of 1929 it was dis­covered that thimble-rigging manipulators bad been enticing even fairly experienced people to buy securities that were worthless. The New Deal undertook to protect the innocent investor without injury to the legitimate business of the exchanges and the boards of trade. Do the old dealers advocate the dismantling of these defenses that have been erected for the protection of helpless victims of speculative greed?

The New Deal advocates the adoption of the pending constitu­tional amendment to prevent the continued exploitation of the immature bodies of little children who are kept at work for long hours at tasks beyond their strength for pitiful pay. Do the old dealers demand the defeat of this humane measure so that the children of the poor may continue to be chained to the oars of industrial galleys?

The New Deal has given a fresh start in life to thousands of young men whose bodies and souls were not having a fair chance. It bas concentrated them in C. C. C. camps where they are doing useful work in soil conservation, in reforestation, in the correction of stream pollution, and in numerous other lines. At the same time they are developing sound minds and sound bodies. Would the old dealers demobilize this shining army of fine young citi­zens and sentence its recruits to enforced idleness in demoralizing surroundings?

The New Deal bas undertaken the first serious and Nation-wide campaign against vicious city slums, wiping out many of these areas of social blight, and constructing in their stead decent, modern living quarters for citizens in the lowest income brackets. Do the old dealers insist that the United States abandon this en­lightened policy and cling to its dubious distinction of being the only one of the enlightened governments of the world to close its eyes to 'the menace of the slum?

Under the Presidency of Franklin D. Roosevelt not a single American soldier or marine has been landed 'on the shores of a foreign country, thus establishing a time record since the year 1892. Would the old dealers prefer to go back to the "good old days" in this respect also? ·

I do not pretend to say that under the New Deal no mistakes have been made or that performance of all of the hopeful at­tempts that have been made to solve our perplexing problems bas been 100 percent. Of course, we have made mistakes. But it must be remembered that no peace-time administration has ever carried such heavy burdens as has this one, and after all we are merely human beings. I do claim that we have honestly tried. Yet there are those who, vaunting their patriotism and pretending a sympathetic interest in the welfare of their fellow citizens, have attempted to block the march forward of this administration every step of the way since March 4, 1933. And this afte.r the adminis­tration bad pulled them out from under their beds or from their cyclone cellars where they were quaking with fear and had shaken some courage back into them.

I have said on several occasions that those who sweepingly con­demn the New Deal and glibly promise, if given power, to put an inglorious end to it are without an affirmative program. That was not quite a fair or accurate statement. They have a program, or at least they offer a cure-all nostrum. "Balance the Budget, bal­ance the Budget", they parrot, "and prosperity will soar to greater heights than ever before." Are we to understand that these poli­ticians advocate a general increase in taxation, or are we to believe that they propose to repudiate completely our obligation to care for those millions of Americans who without relief would be face to face with stark want? They do not explain why, if a balanced Budget is the only essential to prosperity, we ever came to be taken for the economic ride of which we were the victims in 1929.

But the old dealers, those who would force the return cxf the country to the principle of laissez faire, rise to their most im­passioned heights when, through shuddering microphones, they attack the President as a dictator, accusing him of deliberate mis­government, of attempting to destroy the liberty of the press, and of arrogating to himself the functions of the legislative and judi­cial branches of the Government. Students of American history know that the same charges have been made against every Presi­dent who bas sought to advance the welfare of the common man. As far back as 1907 those who in their unpatriotic selfishness re­sisted the social and economic reforms that were urged by the first great Roosevelt echoed the same hackneyed and threadbare accusations in their malicious attempt to calumniate a man who was making a brave stand against entrenched greed. I qnote from an article on Theodore Roosevelt by Frank Cobb, which appeared nearly 30 years ago in the New York World:

"Always more law, more law, like the daughters of the horse­leech crying, 'Give! Give!' When will the President's clamor for new legislation end? When will he give the legitimate business interests of the country a breathing spell? • • • The grave defect of Mr. Roosevelt's corporation policy is that he has no policy. • • • More legislation has been passed in a single year than the courts can dispose of in the next 3 years. • • • It is folly to invent new schemes of regulation and excite new unrest when acts already passed a.re yet to be worked out in the courts. • • •

1936 CONGRESSIONAL RECORD-SENATE 5235 "Nothing 1s settled. Nothing is certain. The demand for new

experimental legislation goes on before the older experimental leg­islation has been tried and tested. Confidence is shaken, and confidence is the mother of credit. Credit is weakened. and with­out credit the business of the Nation cannot be carried on. This is a simple fact which is worth a pound of all the theories that even so versatile a genius as President Roosevelt can invent. • • • It is time to call a halt. It is time to give legitima.te business a breathing spell and permit the· restoration o! confidence and credit.

"The country needs a rest from agitation.• Where have we heard similar words? Paragraph by pa.ragra.ph.

line for line, they are paraphrased in editorial attacks against Franklin D. Roosevelt that are appearing day after day in the Tory press. You will not miss the point that it is only when a. Presi­dent has interested himseH in the cause of the plain people, when he has a heart that pulses with sympathy for humanity, when he is determined to equa.lize economic opportunities so as to estab­lish a. better and a happier social order, when he bravely tilts his lance against special privilege and entrenched greed that the copperheads, their ancestors or their descendants, secrete an extra supply of venom with which .to strike him down.

'I'lle critics and traducers of Theodore Roosevelt also trembled for the safety of our institutions. They would prevent the Con­stitution from being undermined. They would preserve the Con­gress and the courts from the aggression of the Executive. They would defeat the cunning intention of a dictator to destroy our liberties and set up on free American soil an absolute and irre­sponsible Government. There are many such ''patriots" abroad in the land today.

Another complaint against the Administration ls that it has put the Government into business, thereby destroying private initiative. Big business in all parts of the country i.s being exhorted to "gang up" on President Roosevelt and it is gener­ously responding to the call, although small business men through­out the length and breadth of the land, as well they might, regard the President as a. friend who would save them from fur­ther encroachments and possible annihilation.

Big business has chosen for itself in this campaign an inter­esting alias--The American Liberty League. This offspring of a notorious political miscegenation held a banquet in Washington a short time ago, a banquet at whose board there were seated persons representing $1,000,000,000 in wealth. The controllers of this great aggregation of capital flocked into Washington in private cars or on special trains because their hearts were bleeding for the under-privileged and the oppressed among their less for­tunate fellow citizens. Among those present were: Felix A. du Pont, Jr., A. V. du Pont, Mrs. A. V. du Pont, Emil F. du Pont, Eugene E. duPont, Henry B. duPont, Mrs. H. B. duPont, !renee du Pont, Mrs. !renee du Pont, Miss Octavia du Pont, Pierre S. duPont, and Mrs. Pierre S. duPont. What a document of human Uberty our Federal Constitution would be 1! only it had been drafted by the liberty-loving du Pants, assisted by Messrs. Raskob, Shouse, John W. Davis, Beck, and Talmadge!

Speaking of the Du Pants and their sell-sacrificing efforts to preserve the constitutional liberties of us humbler Americans reminds me of Mr. Alfred P. Sloan, Jr., former Du Pont employee, but now, by their grace, president of the General Motors Corpora­tion, in which the Du Pont interests are paramount. As might be expected, Mr. Sloan is also a member of the Liberty League and, like others of his kind, he considers himself ipso facto qualified to speak with finality on any question, even though it is not remotely connected with the business of his corporation. He has even assumed the right to do the political thinking for his stock­holders, and to instruct them from the Olympian heights on which he dwells how they should exercise their rights of citizenship. Repeatedly he has gone on record as being in favor of keeping politics out of business, but as a Liberty Leaguer, he sees no impropriety in mixing up his business with politics. Conformably with the injunction of Mr. Edward F. Hutton, to "gang up" on President Roosevelt, he uses the annual reports of his corporation to its stockholders as a medium of disseminating political propa­ganda. The stockholders foot the bill for this publicizing of Liberty Leaguer Sloan's political views. It is even to be doubted that their consent is asked, although he presumes to speak not only for himself but for them. -

Mr. Sloan's latest literary effort along this line appears in the annual stockholders' report of his corporation recently issued. Taking h1s pen in hand, he writes:

"The corporation believes and has no hesitancy in taking the position that the present attitude of the Government and the results of its experiments in the realm of economics • • • have definltely postponed recovery."

Now, a corporation is supposed to be made up of its stock­holders, and it is not out o! place to wonder how Mr. Sloan found out that the views he so pontifically enunciates are in fact those of the stockholders of the General Motors Corporation. I doubt whether he took a vote on the subject. My guess is that, with the natural arrogance of men of his Uk, he was expressing, as the views of the corporation, the opinion that he personally shares with Mr. Shouse and the patriotic Du Pants. The surpassing wis­dom, the all-encompassing grasp on all subjects that one acqu.tres merely by joining the Liberty League 1s the political marvel of the age. _

But Mr. Sloan presents an Achllies heel in the form of the audited figures of the financial status of his corporation. The duly impressed reader of the language above quoted, if he delves further into Mr. Sloan's annual report, will discover facts and

figures therein that do not seem to StiPPort Mr. Sloan's eonclu­stons. It appears that the sales of General Motors last year showed a gain of 34 percent over 1934. which, in net profit per share; amounted to $3.69 as compared with $1.99 in the earlier year. It seems, also, that the pay rolls of the corporation in­creased 22.7 percent last year. As Mr. Raymond Clapper wrote in his column: "What does Sloan mean, postponed recovery?" All I can say 1s that 1! Mr. Roosevelt 1s responsible for this "post­poned recovery" I hope he will do a little more ''postponing."

The trouble with Mr. Sloan and other Liberty League oracles ls that they try to mix their hymns of hate of the administra­tion with their exultations about their business aChievements. "First they solemnly denounce the New DeaL Then they brag about how much money they are making." Knowing their type as I do, I anticipate that we will see within the next few months many corporation _reports written according to the Sloan formula.

Mr. Sloan wants Government to have less to do with business, although he 1s perfectly willing as a. side line to tell Government how it should conduct its a.11airs. On the other hand, it would appear from another recent report to stockholders of a great cor­poration that wise planning on the part of Government will help to bring about the economic recovery of the country. Mr. Clarence M. Woolley, chairman of the board of the American Radiator & Standard Sanitary Corporation, whose principal omce is the Besse­mer Building in this very city a! Pittsburgh, and the affairs of which, therefore, are of particular interest to the people of this area, in his current report to his stockholders said:

"The business o! foreign affiliated companies continues satisfac­tory. There has been no depression in the building industry abroad. While there have been declines in building in certain countries, increases have taken place elsewhere. The older countries have appreciated the steadying influence on the entire economic struc­ture of the wisely planned building programs to take up slack in times of unemployment. This understanding, coupled with an in­sistent demand for better housing conditions, has produced an extraordinary equilibrium in building conditions abroad over a long term of years. In our own country we have yet to real.ize the weight of these factors."

It appears that while Mr. Sloan views with alarm "the present attitude of Government and the results of its experiments in the realm of economics" Mr. Woolley demands more of such experi­ments, at least so far as "wisely planned building programs to take up slack in times of unemployment" are concerned. I wonder 1f Mr. Woolley, when he wrote those words, did not have in mind the Public Works program of this administration, which includes well­formulated plans for better housing in all parts of the country.

I have referred to the contribution by Mr. Mellon of $1,000 to assist in making the people "tax conscious." Probably President Roosevelt l.s attacked more bitterly and less understandingly on the subject of taxes than with respect to any other phase of his administration. It is a subject of intense concern to every one of us, and- a little discussion of the subject might not be out of place.

When I was an old-fashioned boy studying economics and his­tory as taught by old-fashioned teachers I learned that there were two fundamental principles of taxation, and they seemed to me to be so obvious that until recently I have taken them for granted. The first of these was that citizens should pay toward the sup­port of the Government in proportion to their ability to pay, and the second-if indeed lt is not the first principle dressed in a di1Ierent suit of clothes--was that payment should be in propor­tion to the benefits received from Government.

Now, to my utter distress and amazement, I read in certain newspapers that this is all wrong. Sitting humbly at the feet of such master economists and disinterested citizens as William Randolph Hearst and Col. Robert R. McCormick of the Chicago Tribune, both of them men of great wealth, I am doing my best to unlearn what I was taught in my impressionable youth, al­though I confess that at my age it is rather di.ffi.cult to uproot deeply embedded beliefs.

We are now asked to believe that the verities underlying tax­ation that have been accepted for a. thousand years are in fact fallacies. We must not expect the rich to pay in proportion to their ability to pay; we must not demand that citizens support the Government in the ratio in which they receive benefits from the Government. Such notions are old-fashioned, out-moded, passe. There is a new principle of taxation lately proclaimed by some of those in the highest income brackets. This new theory 1s "soak the poor''; make people pay ln proportion to their finan­cial disabillties; send the tax collector out among the under­incomed and humbler citizens who expect the least from Govern­ment and get even less than their modest expectations; make these people pay and pay and pay for the Government which the rlch and the prosperous have arrogantly come to regard as peculiarly their own.

Taxation is a beneficent institution when regarded through the eyes of the rich man, provided. of course, that 1ts heavy hand 1s removed from him and laid upon those least able to pay. For that reason, at least some of our mult1mffi1ona1res want the sur­taxes on great incomes reduced or even abolished and sales taxes imposed in their stead. Testimony to this efi'ect was given before the United States Senate committee investigating lobbying. The witness was one J. A. Arnold, who described himself as manager of the American Taxpayers' League. I read from the Baltimore Sun's account of the hearing:

"The clash grew out of Arnold's testimony about the annual mcome of his organization, which, he sald, was endeavoring 'to

5236 CONGRESSIONAL RECORD-SENATE APRIL 9 make the country tax conscious.' He said the revenues, contri­butions, and annual membership dues of $10 each amounted to $45,927 in 1935 and 'were about the same' in 1934. In former years the league received from $150,000 to $200,000 from the same sources, he testified.

"Despite his suggestion that 'everybody's broke nowadays', Arnold was able to get several large contributions last year, he testified, including one of $1,000 from Andrew W. Mellon, former Secretary of the Treasury, and one of $1,500 from E. Parmalee Prentice, who was identified by the committee as a son-in-law of John D. Rockefeller."

I continue to read from the Sun: "Arnold testified that the Taxpayers' League was interested in

promoting State sales taxes as substitutes for other levies and admitted it also favored reduction of Federal income taxes on individuals and corporations and reduction of Federal taxes on gifts and estates."

Arnold also was questioned about the connection of Mr. Bain­bridge Colby with his league. He said Mr. Colby bad "cooperated" with the league and had furnished "valuable advice." Arnold testified that Mr. Colby had helped the league get the use of radio stations controlled by William Randolph Hearst, the publisher, and also had participated in some negotiations to get Governor Talmadge of Georgia to speak at a meeting in New York.

Now, everyone who is capable of honest thinking knows that a sales tax is a graduated income tax in reverse. It bears most heavily upon those least able to pay. But when the sales tax is glorified by the man of large income and his little brothers of the rich it is not that sort of a fiscal instrumentality at all. The sales tax, according to these public-spirited gentlemen, is a bright sunbeam bursting through a heavy cloud; a welcome responsib1lity that every citizen ought gladly to assume. How wonderful it is, say they, for the cares and burdens of Government and its oppor­tunities and responsibilities to be brought home to all. And what better method to accomplish this result than to require every citizen to pay taxes?

More self -serving and dishonest thinking! As if everyone does not pay taxes. As If, generally speaking, under our system, those least able to afford it do not pay taxes in inverse ratio to their abilit y to pay.

Just why shouldn't taxes be paid In proportion to ability to pay and to benefits received from Government? The man who buys more food or more clothing or builds a bigger house than his neighbor without question pays in proportion to what he buys. The same rule ought to apply to the purchase of public benefits. The great industrialist who has hundreds of millions of dollars invested in plants and the products of those plants requires police and fire protection to a greater extent than the humbler citizen who brings home his modest weekly wages to spend on the family that he is rearing in a mortgaged bungalow. Those in­dividuals and business enterprises who have investments in for­eign lands or are engaged in international commerce are the ones that particularly need for their protection a great navy and a highly trained and efficient army. Yet, according to the theory of those who have the effrontery to demand that income taxes be abolished entirely, or at least be drastically reduced, the cost of maintaining such services should, in a larger measure, be borne by those who make the least use of them.

It is to be expected that every politician out of office is for economy and lower taxes. They are even for efficiency-when out of office. I do not believe that anyone has ever run for any office anywhere at any time who has not been for lower taxes. Yet our taxes continue to mount to meet the increasing cost of Govern­ment year after year, and, except for certain emergency expendi­tures which even the office-hungry critics would not dare to cut off, and which this administration is as anxious as anyone could possibly be to do away with, the regular expenses of Government, in the aggregate, will not decrease very much so long as the people demand from Government the services that they are insisting upon in increasing measure as year follows year.

There are other issues interesting to you and to me as citizens that I should like to discuss if time permitted. I should like par­ticularly to cast a little light upon the sayings and doings of cer­tain gentlemen who are going about the land arousing fears, in­stilling prejudices, making statements that cannot be supported by the facts and sounding taps to faith, hope, and charity. I have been especially intrigued lately by the interesting behavior of the man who is laboring with all his might to reestablish in the minds of the American people that state of apprehension in which he left them when President Roosevelt succeeded him in the White House. Three years ago Mr. Hoover's refrain was that "prosperity ls just around the corner." Now he is just as certain that "col­lapse is· just around the comer." It is permissible to doubt the essential statesmanship of any man who, considering what the country has passed through, would deliberately seek to build up a state of corroding and possibly catastrophic fear to serve a political end.

Not only Mr. Hoover, but others of lesser rank ought to measure their words more carefully before they insist that this administra­tion has retarded economic recovery; that if President Roosevelt had adopted the policy of his predecessor of taking to the cyclone cellar to sit trembling in fear and darkness while the economic winds howled overhead, we would have achieved a larger measure of recovery than we have. There is no warrant for such balder­dash. We know what the state of the country was when Presi­dent Roosevelt took It over and we know what It is now. Here are actual facts that cannot lightly be ignored. We know that

under President Hoover the country took a header into the lowest economic depths; we know that under President Roosevelt a large degree of recovery has already been achieved, while hope · is grow­ing everywhere that we are definitely on our way back to pros­perity.

Without any desire to tax your patience with figures I will point to the enviable position occupied by Pennsylvania in relation to the program of the Public Works Administration.

I do not know o:ffhand the benefits in dollars and reemploy­ment that this State has had from other agencies of the Federal Government, but I do know that from the Public Works Admin­istration Pennsylvania has received for Federal projects and in loans and grants for useful local improvements a sum in excess of $200,000,000.

This total includes allocatio~ for Federal projects; loans to railroads for steel rails and equipment and what we term non­Federal allotments which are loans and grants to cities, towns, and other local public bodies for desirable public-works projects of their own selection. The local communities of this State are carrying to completion a non-Federal P. w. A. building program of close to $100,000,000. To encourage this useful construction P. W. A. made grants that amount to $30,405,064. The applicants themselves raised $36,895,194 in addition to $28,804,150 borrowed from P. W. A.

An interesting public works undertaking was the Pennsylvania Railroad project. Here was a straight loan of approximately $70,000,000 at 4 percent (be it noted in passing that the major portion of the securities taken by the Government for this loan was subsequently sold by us at a profit of more than $2,000,000). This project consisted of finishing the electrification of the line from New York to Washington and of certain other portions of the road; of building new electric locomotives and freight cars; and of changing old locomotives from passenger to freight. The project was completed in about 22 months. The direct employ­ment numbered 15,000 men. The indirect employment probably ran to at least 30,000 men. The total employment, both direct and indirect, was scattered among 45 States.

Steel had to be fabricated, stone had to be quarried, concrete had to be manufactured, cars had to be built, trees had to be made into lumber, copper had to be melted into transmission lines, electric locomotives had to be built, and all of these materials and the final products into which they were transformed had to be moved from points of origin to final destinations.

Of the approximate $200,000,000 loaned by P. W. A. to the rail­roads of the country for steel rails, new rolling stock, and other equipment, nearly $82,000,000 have actually been expended within the boundaries of this State.

This is an instance of the vast indirect benefits that have accrued to Pennsylvania as a result of expenditures for public works. Such benefits percolate into many communities in widely separated States. That Pennsylvania leads all other States in this respect I have no doubt. Our own studies indicate this. A survey by the Construction League of the United States confirms it. Writing in the Engineering News Record, Mr. Lawrence Mehren, listed Pennsylvania as first with respect to indirect advantages in the construction industry, followed in order by Ohio, New York, and illinois.

Figures given to me by P. W. A. statisticians show that approxi­mately 37 percent of all the iron and steel in the United States is fabricated in Pennsylvania and that over 20 percent of all the cement and allied products are manufactured here. By virtue of its resources and its mines, mills, and factories your State stands first, with an index figure of 678, with 100 as the figure for an average State. These studies ·and calculations are based upon United States Census Bureau findings a.nd on statistics covering 33 basic materials that go · into general construction which, in a general way, would parallel the types of works financed by P. W. A.

Statistics are dull at best, but this group will be interested in certain Federal Reserve Board figures for the Pittsburgh section. In tracing recovery in this area, let us translate into percentages the increase in business. For the purpose of making comparisons of unquestioned fairness, let us select the months of December in 1932 and 193f>-not the best of months, but the most representative of the last days of the Hoover administration and of the present administration.

According to the record, the Pittsburgh district has fared well. Industrial production in the United States bas increased 56 percent, according to the statistics of the Federal Reserve, while industrial production in the Pittsburgh area has improved 97 percent. This comparison is based upon figures gathered by the Pittsburgh Busi­ness Review of February 27, a source which is accepted by the Federal Reserve as being authoritative.

Based upon the rate of steel operations, business in this district had improved 202 percent in December of 1935 over the same month in 1932. Your polished-plate-glass production is better by 299 per­cent; while your pig-iron production increased 330 percent. Elec­tric-power production for the Nation increased 36 percent; in Pittsburgh power sales increased 67 percent.

Factory pay rolls in the Nation increased 85 percent, but in the Pittsburgh district they increased 74 percent. Residential con­struction, based upon contracts awarded. went up 192 percent, while in 37 States east of the Rocky Mountains the increase was 246 percent. Your freight-car loadings are better otr by 51 percent, your retail sales by 34 percent, your wholesale sales by 70 percent, your total bank clearings by 50 percent.

And Mr. Hoover's contribution to this indisputable and re­markable advance toward. economic recovery is to insist that if

1936. PONGRESSIONAL ~ECORD-.SENAT~ 5237. he were stlll President, carrying out the policies that he inau­gurated, business would be better stlll. On the face of the record this is a foolish . claim that is not capable of substantiation. It is like the man who missed the boat telling the crew how much better he would have navigated than had the capitain who brought the ship safely through the hurricane.

All the cries of "wolf" to the contrary notwithstanding, as com­pared with the end of the Hoover era, tremendous and substan­tial business gains have already been made. And they have been made under the administration of President Roosevelt. "They say" that if Mr. Hoover had continued as our President since March 4, 1933, we would have had a larger share of recovery. "They say" that if Mr. Hoover, or an alias Mr. Hoover, should be elected President next November, recovery would come more surely and with greater speed. "They say" all sorts of things that are neither justified by the facts nor capable of proof in the future even ~ the best of circumstances. Well, let them say. Attempted alibis for past failures and irresponsible claims for the future will not stand up in the face of concrete facts. And such facts there are in plenty for the careful pondering of intelligent citizens.

TOBACCO COMPACTS-LETTER OF JOHN W. HESTER Mr. REYNOLDS. Mr. President, I ask unanimous con­

sent to have printed in the RECORD a letter written by John W. Hester~ dated Washington. D. c .. February 27, 1936, per­taining to State compacts for the control of tobacco.

There being no objection, the letter was ordered to be printed in the REcoRD, as follows:

STILL BELIEVES IN STATE COMPACT IDEA

To the EDITOR: As one who had pinned much faith to this method of produc­

tion control and had given the subject much thought, I offered three ways to overcome the handicap inherent in the State com­pact system, which are as follows:

( 1) That the Congress, as in the case of the oil compacting States, enact supplementary legislation forbidding the shipment in interstate commerce of tobacco 1n excess of the quota allowed the producing 13tate. .

(2) That the compacting States be protected against the ship­ment therein of tobacco grown in free, o~ noncompact, territory, as was done in the case of dry territory under the Webb-Kenyon Act.

(3) That the Congress change its bounty basis from that of the States to that of the commodity basis and make the bounty for tobacco available only to those growers who are within the com­pact-covered production area.

As to the first . suggestion, I was forced by the North Carolina Governor to admit that I did not think Congress could extend much protection to the compact-covered area, for that Congress could not allot any quota nor could it exclude from the channels of interstate commerce tobacco produced in free, or noncompact­cQvered, areas. The oil limitation statute has not been chal­lenged yet.

But I do have consider~ble faith in the second suggestion, and so asserted at the conference. Later Governor Peery expressed considerable interest in this plan and intimated that I should follow it through in my thoughts and investigation.

Now, bright flue-cured tobacco is grown in Virginia, North and South Carolina, Georgia, and Florida, with a little in Alabama; but the bulk of this type of tobacco is manufactured in North Carolina and Virginia. If Congress can do for North Carolina and Virginia as production-controlled areas what it did under the Webb-Kenyon statute for "dry" territory, there is a way of afford­ing substantial protection to the grower in the compact-covered area. Of course, in our thinking of the way to obtain the desired protection we must remember that tobacco is not thought of as being quite in the class with intoxicating liquors, ·though it is a luxury and usually kicked and cuffed around by the taxing and police powers of the States about as are intoxicating liquors.

This question, however, may soon be cleared up by the United States Supreme Court. It now has under advisement, the case having been argued. the question o! the validity of a Federal statute protecting States which have banned prison-~ade goods from their territory. In this instance, there is nothing inherently obnoxious about the quality of the commodity barred. The ques­tion is, What protection may be accorded the trade and com­merce policies of the respective States? The child-labor case 1s not quite 1n point, though it has considerable persuasive force. In that case the commodities made with child labor were barred from interstate commerce, not merely from certain States.

But the question is of tremendous import. The Court has thrown this agricultural-production-control problem squarely into the laps of the States, where, I think, under the Federal Consti­tution it belongs. Can the States control production as distin­guished from the mere conditions of production? Without help from the General Government, as indicated, they cannot do tt. and I would not ltke to be advised by the final authority that production control cannot be had. Surely, I would acquiesce therein, but I would be awfully sick.

Even though the second suggestion should be found defective from a constitutional point of view, I would not give up the prob­lem as incapable of solution. In the third suggestion there 1s a way that would work itself out automatically. Put the bounty on the commodity basis and limit the availability of the bounty to

the States within the compact, and they would get 1n all right. There is no constitutional objection to the bounty system. Ham­ilton advocated that system for industry instead of the protective system. But the protective system 1s not subject to such visi­bility as the bounty system and therefore less objectionable, though equally vicious in principle, I prefer the second sugges­tion to the third, because I am fundamentally opposed to taxing all the people for the benefit of the few or pressure-producing minorities.

This further suggestion and I am through: Many farmers are clamoring for the limitation of production not only to the pres­ent production area, but to the producers therein. I am a farm­er's son and have all my property in tobacco-producing land, but I am frank to say that the thoughtless selfishness of the farmer himself is llkely to negative the efforts of his real friends. Lead­ership of the dependable kind does not consist in facing the fol­lowers and getting their wishes as to the course to be taken, but in looking ahead at the terrain to be traversed. at its ups and downs, its limitations and handicaps. When I was a boy it was said that the South had a natural monopoly on the production of ' cotton. Now half of the cotton produced 1s grown outside of the South. The United States Supreme Court sustained the New York milk-control statute. It later sustained a price differential, but when it came to limiting that protective feature to those producing milk on January 1, 1933, the Court balked, and properly so, on the ground that such was arbitrary and unreasonable. Let the tobacco grower take a hint and not try to freeze the pro­duction to 1;\ny area or to any group of producers. Make the control plan :flexible enough to take care of normal growth and expansion. Reasonable as opposed to complete protection 1s all that is possible. Anything else will discredit the whole control program. ·

JNO. W. HEsTER. WASHINGTON; D. C., February 27, 1936.

STATE TOBACCO CONTROL COMPACTS Mr. ROBINSON obtained the floor. Mr. REYNOLDS. Mr. President, will the Senator yield?

- Mr. ROBINSON. I yield. Mr. REYNOLDS. Yesterday afternoon, according to my

information, by vote of 190 to 116, the House passed House bill12037, relating to compacts and agreements among States in which tobacco is produced, providing for the control of production of, or commerce in, tobacco in such States, and for other purposes. I understand that the Senate Commit­tee on Agriculture and Forestry has favorably reported a similar bill, a sister bill, being Senate bill 4430.

Mr. ROBINSON. Mr. President, I am informed ·as to the bill to which the Senator is referring, and I anticipate that the Senator desires to ask for its immediate consideration. There is not time now to consider the bill. I wish to add to this statement that I am constantly being pressed by Sena­tors to assist in arranging for the consideration of legisla­tive business. I am doing the best that can be done, and will continue to do so, but i hope Senators will possess them­selves in peace, in ·view of the fact that the Senate is pro­ceeding under an order which requires practically all the time during our sessions for the consideration of the im-· peachment case.

IMPEAC~MENT OF HALSTED L. Rl.TTER The VICE PRESIDENT. The hour of 12 o'clock having

arrived, under the order prescribing the hours of the daily sessions, the Senate now resolves. itself _ into a court for the trial of the articles of impeachment against Halsted L. Ritter, United States district judge for the southern district of Florida.

The managers on the part of the House, Hon.· HATTON W. SUMNERS, of Texas; Hon. RANDOLPH PERKINS, of New Jersey, and Hon. SAM HoBBS, of Alabama, accompanied by the clerk of the Committee on the Judiciary of the House of Repre­sentatives, Elmore Whitehurst, and by Thomas M. Mulherin, special agent, Federal Bureau of Investigation, Department of Justice, appeared in the seats provided for them.

The respondent, Halsted L. Ritter, with his counsel, Frank P. Walsh, Esq., and Carl T. Hoffman, Esq., and R. 0. Cullen, Esq., of Miami, Fla., associated with Mr. Hoffman, appeared in the seats assigned them.

The VICE PRESIDENT. The Sergeant at Arms by procla­mation will open the proceedings of the Senate sitting as a Court of Impeachment.

The Ser,geant at Arms made the usual proclamation. On request of Mr. AsHURST, and by unanimous consent, the

reading of the Journal of the proceedings of the Senate,

5238 CONGRESSIONAL ;RECORD-SENATE APRIL 9

sitting as a. Court of Impeachment, for Wednesday, Aprll 8, 1936, was dispensed with, and the Journal was approved.

Mr, ASHURST. I suggest the absence of a quorum. The VICE PRESIDENT. The clerk will call the roll. The Chief Clerk called the roll, and the following Senators

answered to their names: Adams Coolidge Keyes Pittman Ashurst Copeland King Pope Austin Couzens La Follette Radcl11fe Bachman Davis Lewts Reynolds

· Batley Donahey Logan Robinson · Barbour Du1fy Lonergan Russell

Barkley Fletcher McGUl Schwellenbach Benson Frazier McKellar Sheppard Black George McNary Sh1pstead Bone Gerry Maloney Smith Brown Gibson Metcalf Stetwer Bulkley Glass Minton Thomas, Okla. Bulow Gu1fey Moore Thomas, Utah Burke Hale Murph}' Townsend Byrnes Harrison Murray Truman Capper Hastings Neely · Vandenberg Caraway Hatch Norris Van Nuya Carey H3.yden Nye Wagner Clark Holt O'Mahoney Walsh Connally Johnson Overton White

The VICE PRESIDENT. Eighty Senators have answered to their names. A quorum is present.

Do the managers on the part of the House desire to offer another witness?

FURTHER CROSS-EXAMINATION OP .JUDG11: ALEXANDER AKERMAN

Mr. WALSH (of counsel>. If the President please, I should like to recall Judge Akerman for one or two other questions on cross-examination.

The VICE PRESIDENT. The witness is available and has heretofore been sworn.

By Mr. WALSH <of counsel> : . Q. Judge Akerman, you testified in this case, did you not,

in November 1933 at Miami?-A. Before the investigating committee.

Q. I will ask you whether or not at that time you offered to make a voluntary statement?-A. I did.

Q. Was it as follows-! am reading from the record?-I did not know Judge Ritter at the time he was appointed judge.

but I met him, my recollection is, on the 21st of February 1929. From that time up to the present time I have been rather closely associated with him. I have presided for him, and he has pre­sided for me. We have occupied the same chambers, and I have heard Judge Ritter's reputation discussed by numerous people, and I think I am thoroughly fam111a.r with his reputation for honesty and integrity, and I believe it to be the highest. I just wanted. to make that statement, gentlemen.

Did you make that statement at that time?-A. I did. Q. Is that still your opinion ?-A. It is. Mr. WALSH (of counsel> . That is all. Mr. Manager SUMNERS. The managers on the part of

the House have no further questions to ask. The VICE PRESIDENT. The . managers on the part of

the House may call their next witness. DIRECT EXAMINATION OP FRED H. DAVIS

Fred H. Davis, having been duly sworn, was examined and testified as follows:

By Mr. Manager HOBBS: Q. Your name, please?-A. Fred H. Davis. Q. Judge Davis, what position do you occupy in the State

of Florida at the present time?-A. Justice of the supreme court.

Q. Are you or not chief justice of the Supreme Court of Florida?-A. I have just finished a term as chief justice.

Q. You are now justice, and you have just finished a term as chief justice?-A. Yes, sir.

Q. Judge Davis, are you familiar with the practice in the State of Florida in allowance of fees in mortgage foreclosure cases?-A. I am, sir; according to the state law.

Q. Judge Davis, I will ask you whether or not in fore­closure practice there is or is not any such thing as a con­servation fee?-A. I have never heard of it.

Q. Judge Davis, in the event that the evidence showed that the attorney or attorneys filing a bill for the foreclo­sure of a mortgage knew that another attorney or citizen was soliciting a client or clients to enable them to have the

requisite amount of bonds necessary to file their bill or the bill which they contemplated filing for the foreclosure of a mortgage, would, or not, in your opinion, any fee be prop­erly allowable under the laws of Florida to an attorney filing a bill under those circumstances?-A. I will answer that in this way: That is a point that has never been directly ad­judicated by any past decision of the Florida courts, but that is generally considered to be the law by the members of the profession, though, of course, it is an unsettled prop­osition so far as any adjudicated case is concerned.

Q. In other words, for the inception of any case of cham­pertous character no fee would be allowable to any attorney who, with knowledge of the solicitation of a client, after­wards filed a bill?-A.· No, Sir.

Q. I will ask you if in the foreclosure case of the White­hall Hotel properties-this particular case-where the amount of the first mortgage bond issue was $2,500,000-­tha.t was the issue on which the foreclosure was sought­where the services performed consisted of the routine han­dling of that case, where a fee of $15,000 was allowed and paid, where the total services rendered and the total time of the litigation was from the inception of the original bill on October 11, 1929, to the final decree on December 24, 1930, and where the upset price was fixed at $1,500,000, to be paid either by the surrender of the bonds, or in cash, what, 1n your opinion, would have been a. reasonable, full and fair fee to be allowed the attorneys representing the petitioning creditors seeking foreclosure?-A. Of course, that involves a matter of judgment, and there would probably be a dif­ference in the allowance in the Federal court and the State court. The maximum amount that I feel sure the state court sustains in a foreclosure of that kind would be not exceeding $50,000.

Q. That would be the outside limit, in your judgment?­A. Yes, sir.

Q. Would you, or not, say in any court, Federal or State, that $75,000 would be a reasonable fee?-A. Well, it would seem to me to be unreasonable. I could only give my judg­ment about it. There have been fees allowed within the range of fifty or sixty thousand dollars in corresponding foreclosures;

Q. Would you or not say, in your opinion, in the Federal court of the southern district of Florida in this forecl~ure case that the total allowance of $75,000 would be excessive?­A. It would seem to me that it would be out of line.

Mr. Manager HOBBS. Counsel may take the witness. Mr. WALSH (of counsel). If there be no objection, I

should like to have my colleague examine the witness on the Florida law, but first I should like to ask a few questions.

Mr. Manager HOBBS. That is perfectly agreeable to us if it is to the Court.

The PRESIDING OFFICER (Mr. AUSTIN in the chair). Counsel may proceed.

CROSS-EXAMINATION

By Mr. WALSH (of counsel): Q. Judge, a champertous proceeding, as I understand, is

one where a stranger to the litigation goes into the litiga­tion with an understanding to support it financially for an allowance or division of fruits of the litigation, whether in land, property, or money. Is not that true?-A. Generally so; yes.

Q. Is not that the textbook definition and the definition in all the decisions?-A. I should say so.

Q. If a champertous proceeding were brought, you stated that no fee should be allowed. Is that correct?-A. Yes, sir.

Q. I agree with that. If a champertous proceeding were brought, you would go further, would you not, and say it ought not to be permitted to be maintained at all ?-A. Absolutely, if it was known to the court.

Q. If an officer of the court-and by that I mean an om.cer in the ordinary sense or an attorney who is an officer of the court-had such knowledge, would it not be his duty to bring it up on an appropriate motion to the court and have the person removed and disciplined ?-A. I should think it would.

Q. You think that a reasonable fee, as explained to you, in this case would be $50,000. Is that correct?-A. I woul"

1936 (JONGRESSIONAL ~ECORD-SENATE 5239 . say~ from the standpoint of our allowances in the State court proceedings; yes.

Q. The state court allows fees in large cases approxi­mately amounting to 5 percent, does it not, frequently?-A. I am speaking now from the standpoint of what would- be sustained in the Supreme Court if somebody paid and they brought it up there.

Q. But they do make the allowance, and it is a matter, is it not, largely of judgment or entirely of judgment with the court in the first instance?-A. Absolutely, and som.etimes influenced by agreements and stipulations. and so forth ..

Q. Suppose we had a case where the laywers were men of repute, well known at the bar, and that all the lawyers agreed on the fee that should be paid; that it was proposed to be put in the order to be made by the judge, and the judge made inquiry to find out if every person. including the bond­holders represented by attorneys of their own, were satisfied with that; would that not have an influence upon you .as judge?-A. Undoubtedly.

Mr. WALSH (of counsel) . May it please you. Mr. Presi­dent, and gentlemen, Mr. Hoffman wishes to ask a question or two on the Florida law with which I am not as familiar as he is.

By Mr. HOFFMAN: · Q. Judge Davis, do you know the law firm or members of

the law firm of Loftin., stokes & Calkins and of Shutts & Bowen ?-A. 1 do.

Q. Do you know Attorney E. P. Donnell; Bert Winters; H. W. Johnson, of West Palm Beach; and H. C. Fisher, of West Palm Beach?-A. I do know them all.

Q. If a final decree of foreclosme -were presented to the court, foreclosing a mortgage <lf principal of .$2.,500,000, with accumulated interest running the mortgage debt to approxi­mately $3.,000,000, providing for an upset price of $1,500,000 in the decree, and with this decree were presented the af­fidavits of such gentlemen as I have mentioned, and if the firms involved in the litigation, .of the type .and repute of the :firms I have mentioned, stated that the decree was the result

·.of an amicable adjustment and settlement of an matters in · dispute, that the cal~on had been agreed upon as accu­rate, that the decree and settlement were satisfactory to every party to the cause, that the bondholders' committee, who were not parties to the .cause, had seen the decree and had been consulted and had agreed to and were satisfied with the decree, thus ending the litigation, and a.fild.avits of men of the type 1 have spoken .of were presented in support of the reasonableness of the fee of .$75,000 to be allowed, would not all those circumstances have been considered by the judge in awarding the fee requested uDder those cir­cumstances?-A. Undoubtedly.

Q. Would not the judge have been inclined to all<>w the fee .agreed upon under those drcumstances, even though he may not have allowed that particular .amount had there been a contest <lr disagreement among the parties and not an amicable settlement?-A. That would depend <ln the in­dividual judge.

Q. What would be your view of that?-A. Under our rule in the State oourt, it has been very definitely held that the question of attorney's fees is a matter of indemnity invo1ving

· the actual output on the part of the eomp1ainant in a fore­closure case, and tt is a responsibility of the judge to ascer­tain and investigate the reasonableness of that fee irrespec­tive of what may have been agreed on by the parties. That was the effeet of the holding in the First National Bank case, the case of Brett against Yll'St National Bank and

· others. Q. If there was a .cross bill in the case on behalf of the

trustee under the bond issue providing for payment of eounsel fees of the trustee for defense of the suit, or in a

. suit to foreclose that particular trust deed by the trustee, that counsel would also be entitled to compensation, would he not?-A. I did not follow the question all the way through.

Q. If, In the ca.se in question, there was a cross bill on behalf of one of the defendants, the trustee, his .counsel would be entitled to compensation, would he not?-A. He

might be entitled to compensation dependent on the .circum­stances.

Q. Coming to the conservation fee-A. The idea under our ruie is that the· person who is collecting the money is to be able to collect his money through decree of the .court without .suffering any loss of his principal and interest, which means the attorney's fee is fixed as an indemnity proposition.

Q. Coming to the conservation fee. you recognize of course the principal of the allowance of a fee as a conserva­tion fee to the a.ttorn~y fox the plaintiff who brings into court and subjects to the trust. in cases of trust, the subject matter of the trust .as being entitled to a fee for conservation and preservation?-A. Yes, sir. .

Q. That principle is recognized and decided by the court of which you are a member in the case of Amos against Taylor and Railey, was it not?-A. Yes, sir.

Q. In that case the eonservation fee was paid out of the .assets brought into the court by the attorneys. even though your court held that the lower court had no jurisdiction to appoint the receiver in that case. Is not that true?-A. Not altogether.

Q. Because they held it during the pendency of the ap­peal?-A. The situation in that case was that there were confiieting interests between the two parties, that both would be benefited by the banking department 'Of the State, and th~ court held the complainant in that partieular case, who invoked the jurisdiction of the court of equity, should have the right to administer its estate determined, and they per­formed services for the general trust estate, and we approved an allowance of $10,il00 attorney's fee for bringing in the assets of half a million dollars, as I recall.

Q. The point is in that case and in another ease growing out of the same suit that you recognized the principle of a conservation fee in a proper case?-A. In general trust mat­ters, but not in foreclosure cases.

Q. But I do not undel:stand you to say that where a bond­holder brings a .suit charging fraud, maladministration, a.nd dereliction of duty on the part of a trustee under a bond issue, and waste a dissipation of the .assets of the trust, and, urging those grounds, brings the subject matter of the trust into court and asks to foreclose the bond is...~e. it would not be proper to allow a conservation fee. As I understand, your testimooy is that you never heard of that occurring?-A. I have n-ever he.ard of a conservation fee. as such, allowed in a foreclosure case~ ·

Q. You are speaking of a straight foreclosure case?-A. As a m-atter of foreclooure. Whatever conservation fee would be allowed .in a foreclosure ease would be a part of the gen­eral fee that went to the attorney who W11.S doing the fore­closing; and, of course, he might split it up into its constitu­ent elements, and call a part of that total for a conservation fee~ I have never heard it done, but it might be done.

Mr. HOF.F.MAN. That is all. .BEDIEECT UAMINATIOW

By Mr. Manager HOBBS: . Q. Judge, where the foreclosure final decree acquits the

trustee under the bond issue of a.l1 fraud or chicanery, and specifically holds that that allegation in the original bill is not true, what, in YDlll' opinion, would be the right of the judge under the Florida law to .allow any conservation fee in such a case?-A. Under this principle in the case which has just been referred to, this bank case, if there had been services rendered that were ()f value in fixing the status and legal rights with reference to that trust estate, it would be a matter of discretion with the court to allow a fee., even though there nrlght be no fraud or breach of trust proven. It would all depend on whether or not the resulting litiga­tion had fixed the status of the trust in such a way as to benefit the estate itself.

Q. But your testimony is that in a foreclosure suit you never heard of a conservation fee being allowed?-A. No, sir; as :such.

Q. Where there was no agreement between the attorney or attorneys filing the bill and the client as to any fee what­soever, is it or not competent and permissible, under Florida

5240 ·.CONGRESSIONAL RECORD-SENATE APRIL 9. law, to allow a fee?-A. Under Florida law, if the mort­gage provides for the payment of a reasonable attorney's fee or a fixed attorney's fee by foreclosure, before any attor­ney's fee can be allowed or recovered in .the case, it must be both alleged and proved that the complaining party has incurred an obligation to his attorney for some fee. He may incur an obligation to pay whatever is a reasonable fee, in which case that would be an unliquidated amount until it was so ascertained by the court. But speculation in the matter of recovering the attorney's fee, without any under­standing that if the case fails there will be no attorney's fee paid, is not considered the basis tinder Jnorida law for recovery of an attorney's fee in a foreclosure suit, because it is considered an indemnity for the mortgagee to recoup a loss that he is out of pocket in employing attorneys to get his money; and if he suffers no loss, either through incurring obligation or otherwise, then he is not entitled to an attor­ney's fee just as a sort of commission.

Q. Judge, is it or not a sufficient predicate for the allow­ance of a fee to an attorney in a foreclosure case that the law creates a mere presumption that a reasonable fee will be allowed; or, to the contrary, is the law of Florida such

· that there must be an agreement of some kind between at­torney and client?-A. There must be an agreement, but it may be express or implied. The court has recently ·held that where a mortgagee takes a mortgage to a lawyer's office and says, "I want you to foreclose this for me", he knows that that lawyer is not doing business for his health, and that the law will raise the presumption that he intended to pay him for it, and therefore that it will be recoverable on that sort of an understanding as an implied contract to pay for services . .

Q. You mean when the client voluntarily takes the mort­gage?-A. Yes.

Mr. WALSH (of counseD. One minute; I object to that as leading and suggestive.

The PRESIDING OFFICER. The question has been answered. The Chair thinks the answer may stand.

Mr. WALSH (of counsel> . Very good. By Mr. Manager HOBBS: Q. One other question, Judge·. Where the trial judge,

before fixing the fee of counsel in a foreclosure case, knew that there had been an agreement entered into between counsel in the case for a division of that fee, whereby some $40,000 of the fee allowed was to be distributed to other counsel in the case not representing the complainants but representing other parties, would or not that of itself evi­dence to your mind that the allowance was not for the services of counsel for the complainants, and therefore was, by the amount to be distributed and split, unreasonable?­A. Well, that would all depend on the circumstances under which such an arrangement as that was proposed. As I said awhile ago, the question of stipulations and agree­ments as to fees would enter into a proposition of that kind, and the judge does not concern himself with how the fee is going to be divided in a case of the character you have just mentioned, if nobody is there objecting to it, so far as the mere splitting of fees is concerned.

Q. But if the judge knew that there was to be a split of some $40,000 in the fee, and that that amount of a $90,000 allowance was to be distributed to other counsel, in your opinion would he be authorized to award a $90,000 total fee for the services of the attorney for the complainant?

Mr. WALSH (of counsel>. I object to that for the rea­son, first, that it is leading; second, it is argumentative; third, insofar as it has the quality of a hypothetical ques­tion, it is not based on the hypothesis of any testimony which has been introduced here.

The PRESIDING OFFICER. The present occupant of the chair understands that the law of Florida has been put in issue by both parties; and, as the present occupant of the chair understands the question, it is an appropriate question to understand what the law of Florida is upon the point in­volved. Therefore, the ruling is thg,t the objection is over­ruled, and the question is admissible.

A. Do you mean, by the question, whether or not the judge would be authorized to enlarge the fee because there

was going to be a split of the fee, so that each one would get a liberal allowance?

Mr. Manager HOBBS. I will ask the reporter to read the question.

The Official Reporter read the question, as follows: But 1! the judge knew that there was to be a split of some

$40,000 1n the fee, and that that amount of a $90,000 allowance was to be distributed to other counsel, 1n your opinion would he be authorized to award a $90,000 total fee for the services of the attorney for the complainant?

A. I do not think he would be authorized to allow $90,000 at all. That is my individual opinion.

Mr. Manager HOBBS. I have no further questions. · Mr. KING. Mr. President, I send to the desk a question which I desire to propound.

The PRESIDING OFFICER. The clerk will read the interrogatory propounded by the Senator from Utah.

The legislative clerk read the question propounded by Mr. KING, as follows:

Does the Florida law provide any sum or amount or percent to be paid upon foreclosure proceedings?

A. It is ·not fixed by statute. It is entirely a matter of contract.

The PRESIDING OFFICER. Call your next witness, please.

Mr. Manager HOBBS. Mr. Martin Sweeny. DIRECT EXAMINATION OF .MARTIN SWEENY

Martin Sweeny, having been duly sworn, was examined and testified as follows:

By Mr. Manager HOBBS: Q. State your name, please, sir.-A. Martin Sweeny. Q. Mr. Sweeny, were you connected with the Whitehall

Hotel operation?-A. I was. Q. What connection did you have with it?-A. Manager. Q. Mr. Sweeny, please explain to the Members of this

honorable Court how the bookings for that hotel are made, where, and by whom.-A. The bookings are made from the hotel in New York, at my office.

Q. Is that hotel, in its operation, dependent upon casual comers to the hotel?-A. No. There is a good deal of book­ing that we do, and publicity work involved, to get our clientele.

Q. Is it or not a fact that the clientele of that hotel has been worked up through the years and is definitely known and nursed ?-A. That is true.

Q. Mr. Sweeny, you and Mr. Bemis and your brother bought that hotel originally, did you not?-A. We did.

Q. It was the Henry M. Flagler private home; and you bought it, with the land on which it was situated, and paid how much for it?-A. $437,000.

Q. Then, afterward, you were induced to build an addition to it in the form of a modern hotel at the rear, leaving the residence standing intact at the front?-A. Yes, sir.

Q. Mr. Sweeny, do you know Mr. WalterS. Richardson?-A. Yes, sir. ·

Q. Do you remember the two seasons during which he was receiver of this Whitehall Hotel property?-A. Yes, sir.

Q. What two seasons were they?-A. 1928 and 1929, I believe.

Q. I am not speaking of the seasons in which he oper­ated it as trustee in bankruptcy.-A. When he operated it as receiver?

Q. Yes, sir.-A. 1929 and 1930. Q. What are the seasons of that hotel ?-A. We open

about the 1st of January and close April I. Q. In other words, you have a total gross season of 3

months, beginning January 1 ?-A. Yes, sir. Q. For the purpose of refreshing your recollection, Mr.

Sweeny, I believe the bill for the appointment of a re­ceiver in this case was filed October 11, 1929?-A. Yes, sir.

Q. Therefore, it would be the season of 1930 and 1931 ?­A. 1930 and 1931.

· Q. Mr. Sweeny, please state to the members of tbis hon­orable Court what services Mr. Walter S. Richardson per­formed with reference to bookings or securing the people coming to that hotel as guests?-A. He did not perform any ~rvices.

1936 CONGRESSIONAL RECORD-SENATE 5241 · Q. Who ·did that work?-A. I did. ·

Q. Mr. Sweeny, please detail to the members of this honorable Court what services Mr. Richardson performed while he was receiver of this property.-A. Well, he had charge of the property under a · court order.

Q. Who ran it?-A. Who ran the hotel? Q. Yes.-A. I ran the hotel · Q. What did Mr. Richardson do? Just describe his daily

activities.-A. Well, he would come to the hotel every morn­ing, see if there was any mail for him, see what cash was in the bank, what deposits had been made, stay there for an hour or two.

Q. What would he do after that?-A. That I could not tell you. · ·

Q. I mea~ would he leave the hotel?-A. Yes; sometimes he came back in the afternoon about 4 or 5 o'clock for awhile.

Q. Did he have anything 'to do with the handling of the cash?-A. No, sir.

Q. Did he have anything to · do with the keeping of the rooms?-A. No, sir.

Q. Did he have anything to do with the registrations or the running of the clerk's desk?-A. No, sir.

Q. Did he have anything to do with the keeping of the books?-A. No, sir.

Q. Did he have anything to do with giving directions to you as to how to operate the hotel?-A. No, sir.

Q. So his total services, then, according to your testimony, consisted of coming there once or twice a day for a short period of time and getting whatever mail might have come in for him and seeing what money had been deposited in the bank?-A. That is true. ·

Q. And that is all the services he performed?-A. During the operating period.

Q. What services did he perform after the operating period each year?-A. That I could not say. I left there each year after the close of operations.

Q. The hotel was closed, was it not?-A. Yes; the hotel had to carry on. ·

Q. I recognize that, and it carried on through whose man­agement?-A. H. E. Bemis.

Q. If I understand your testimony, you handled the New York and booking end during the closed season of 9 months, and Mr. Bemis supervised the keeping of the rooms aired and moth-prevention work down there?-A. Yes, sir.

Q. Do you know whether or not Mr. Richardson did any­thing whatsoever during that 9 ·months?-A. I do not.

Q. What is your best judgment as to whether there was anything for him to do?-A. I think, very little.

Q. Mr. Sweeny, what was .the scale of prices in vogue for the Whitehall Hotel to be paid for the naked rooms? I mean by that, without valet service, without meals, without any­thing but the occupancy of the rooms. What was your scale of prices for the rooms during the seasons 1930 and 1931?­A. Twenty-five and thirty dollars a day.

Q. Were there any rooms there cheaper than that?-A. We had one room to a fioor, a single room, that we rented for $10 or $12 a day.

Q. But the suites were all $25 to $30 a day per room ?-A. Yes, sir.

Q. Do you know whether Judge Halsted L. Ritter occupied any of those rooms during those two seasons?-A. Yes, sir.

Q. Did he occupy the $10 or $12 room, or what?-A. No; he occupied a. suite.

Q. A suite of how many rooms?-A. I believe two rooms. Q. Two rooms; a -sitting room?-A. A sitting room and

bedroom. Q. And the price of those rooms which he occupied was

$25 or $30 a day per room ?-A. The two rooms were $50 a day.

Q. Mr. Sweeny, do you know whether or not the room ac­commodation was paid for by Judge Ritter?-A. I believe not.

Q. Do you remember how often he occupied rooms in that hotel ?-A. To the best of my knowledge, I believe he was there twice. ·

Q. And for how long each time?-A. Overnight.

Q. Mr. Sweeny, was he charged anything for the room accommodation or for the valet services and meals?-A. I do not believe so.

Q. For the purpose ot refreshing yom recollection, I should like to show you this [handing witness paper]. Upon the occasion shown in account sheet 7700, for how long did he stay there?__..:A, Two days.

Q. Two days?-A. Yes, sir. Q. Mr. Sweeny, during the period of your connection with

Whitehall, either before you bullt any annex to it or after­ward, I will ask you to tell the Court, in a concise way, how your business ran and when it fell o:ff.-A. During each year?

Q. Yes.-A. We would open up about the 1st of January each year, and we would become 100 percent filled by the 1st of February. By that 100 percent I mean around 90 to 95 percent we considered a hundred percent; and would continue that way until about the end of March.

Q. I beg your pardon; I was not particularly asking that. What I am trying to get at is what you call your room ac­count. In other words, I will ask you if the season of 1929, which began on January 1, 1929, and ran to April 1, was not your peak, your banner year?-A. It was one of our best years.

Q. That was the height of the prosperity before the crash of the fall of 1929?-A. Yes, sir.

Q. Who did the booking for that year?-A. I did. Q. Did :Mr. WalterS. Richardson have anything to do with

it?-A. No, sir. Q. During the 1929 season-that is, beginning January 1,

1929, and ending Aprill, 1929-he was trustee in bankruptcy, was he not?-A. Yes, sir.

Q. Did he have anything to do with the management of the hotel during that period except such as you have de­scribed?-A. No, sir.

Q. Did he . give you any orders or directions about the running of the hotel, or anything of that sort?-A. No, sir.

Q. The same class of service to which you have testified obtained with respect to Mr. Richardson during that period also ?-A. Yes, sir.

Q. During the 1930 season and 1931 you continued to have fairly good business, though diminishing?-A. Yes, sir.

Q. And the bottom did not drop out, so to speak, until 1932?-A. That is right.

Q. Do you know whether or not Mrs. Ritter, the wife of the judge, stopped there at any time when she was not with the judge?-A. I do not recollect; no, sir.

Q. Do you know whether or not Mrs. Merle R. Walker stopped there?

Mr. WALSH (of counsel). One minute. I object to that unless some evidence is produced as to the knowledge of th(;) judge with respect to the matter.

The PRESIDING OFFICER. The reporter will read the question.

The Official Reporter read the question, as follows: Do you know whether or not Mrs. Merle R. Walker stopped there?

The PRESIDING OFFICER. The question 1s admitted; the objection is overruled. The assumption is that counsel is leading up to something else by that question.

Mr. Manager HOBBS. We hope to connect it, may it please the Court. If we should not do so, we are perfectly willing to have it go out.

By Mr. Manager HOBBS: Q. Do you know?-A. No; I do not. Q. Do you know the relationship between Mrs. Walker and

Judge Ritter?-A. No, sir. Q. Do you know whether or not Mr. and Mrs. lloyd Hooks

stopped there? Mr. WALSH (of counsel>. Mr. President-­A. No. By Mr. Manager HOBBS: Q. I will ask you to look at these sheets and to see if they

are the sheets regularly and properly kept in the operation of that hotel business? [Several papers were handed to tha witness.l-A. Yes; .they are.

5242 CONGRESSIONAL RECORD-SENATE APRIL 9 The PRESIDING OFFICER. Mr. HOBBS, the present

occupant of the chair thinks that when a question of that character is ·asked the sheets should be identified in some manner.

Mr. Manager HOBBS. May it please the Court, we would like at this time to have the reporter mark separately and severally our exhibits which we have already identified. We offer them severally and separately in evidence and ask that they be marked "Exhibits A, B, C, D", and so on, including the ones we are now offering.

· Mr. WALSH <of counsel). Mr. President, might we not look at those before they are admitted? A great many matters were referred to and offered which were given no exhibit numbers and we would like to go over them and recall, if we can, whether they were so offered-! know the gentlemen here intend to do that-and determine whether or not they are competent and relevant to the matter.

The PRESIDING OFFICER. The present occupant of the chair considers that there is nothing to rule upon at the present time and feels sure that the learned counsel on both sides would follow the general practice in that regard.

Mr. Manager HOBBS. I will withdraw that question, if it be considered a question, and simply introduce these docu­ments and ask that they be marked.

The PRESIDING OFFICER. Will the manager on the part of the House please have the documents last handed to the witness given some identification?

Mr. Manager HOBBS. Yes sir; that is what I am now asking. I am offering those documents in evidence and ask­ing that they be marked "Seriatim Exhibits", we will say,

· "F, G, H", and so on. · The PRESIDING OFFICER. Have counsel for the re­spondent any objection to that procedure?

Mr. WALSH (of counsel>. May I ask a question? Do I understand that you have offered these documents, among others?

Mr. Manager HOBBS. I have offered the documents re­ferred to, without the others.

Mr. WALSH (of counsel). I object to all of these docu­ments except those relating to Judge Ritter and Mrs. Ritter, because no connection has been shown with Judge Ritter as to the other documents and as being irrelevant and imma­terial. As to the other documents, I decidedly do object to them unless we can go over them first, because I cannot com-

. prebend, and doubt whether the Court can, what they are. I think some sort of identification should be given to them as they are offered.

The PRESIDING OFFICER. .Is there anything further on the part of the managers?

Mr. Manager HOBBS. No, sir. The PRESIDING . OFFICER. The Chair rules that the

part of the offer calling for marking the papers for identifi­cation is granted and that they should be marked.

With respect to the papers that are assented to on the part of the re~pondent, they are admitted. With respect to those which aTe objected to, they are excluded until they are connected either with the respondent or with the issue. There is nothing before the Court at the present moment wbtch indicates that they are relevant.

By Mr. Manager HOBBS: Q. Mr. Sweeny, I now show you a telegram, which I ask

you to look at and identify, if you can [handing telegram to ·witness]. Mr. Sweeny, did you see this telegram from Walter Richardson?-A. I do not know.

Q. You do not know?-A. It may have been received by Mr. Bemis.

Q. Did you see it? It is addressed to you or your attorney.-A. Yes, sir.

Q. Have you it with you?-A. I have not. All the papers I have here were taken out of my files.

Q. Did you receive or see this telegram; and the "Walter" by whom it is signed is who?-A. Walter Richardson.

Mr. Manager HOBBS. We offer this telegram in evidence, and ask that it be marked by the appropriate letter. It is dated October 16, 1929, and, eliminating the hieroglyphics, is directed to H. E. Bemis or Martin Sweeny.

Mr. WALS~ .<of counsel>. I should like to see that, if you please [exammmg telegram]. We have no objection.

The PRESIDING OFFICER. It is admitted. Will the managers please have the paper marked?

Mr. Manager HOBBS. I ask that it be marked in proper order according to our letters.

(The telegram was marked "Managers' Exhibit C.") Mr. Manager HOBBS (reading): Holland's refusal to permit application for receiver necessitates

filing separate b111 for interveners, which w111 be done Thursday and motion for appointment receiver will probably be heard Satur~ day morning; otherwise everything apparently well set to go.

By Mr. Manager HOBBS: Q. Mr. Sweeny,' this letter of August 30, 1929 signed

"Walter" and directed to you, I will ask you .to look at and say if you received that, and identify it.

(The witness examihed the letter.> A. Yes.

. Mr. Manager HOBBS. We offer this letter in evidence, may 1t please the· Court, and ask that it be marked "Exhibit D." This is the letter which was identified yesterday. I also ask that the sheets from the records of the hotel company be marked "Managers' Exhibits A and B."

The PRESIDING OFFICER. That may be done. Mr. Manager HOBBS. And that the telegram I have just

read immediately follow that. The letter I have just referred was marked "Exhibit D." It was, according to my recollec­tion, the first exhibit to be identified by the witness Fordham.

(Statement of account dated Feb. 20, 1931, Whitehall, Palm Beach, to Mr. H. L. Ritter and Mrs. Ritter, was marked "Managers' Exhibit A.")

<Statement of account dated Mar. 3, 1931, Whitehall, Palm Beach, to Mr. H. L. Ritter and Mrs. M. R. Walker was marked "Managers' Exhibit B.")

<The telegram was marked "Managers' Exhibit C.") Mr. Manager HOBBS. This letter has already been read

having been read yesterday; so I shall not read it again. ' ·Mr. WALSH <of counsel>. Let me see that letter. I do

not recall it. [Mter examining letter.] We have no objec­tion.

The PRESIDING OFFICER. Then the letter may be admitted.

(The letter was marked "Managers' Exhibit D.") By Mr. Manager HOBBS: Q. In connection with this letter which you have seen,

I ask you if you had any connection in Boston "that could reach Mr. Bert E. Holland, an attorney, whose address is Tremont Building, Boston? Mr. Holland is a cotrustee and, as such, is the holder of $50,000 of the first-mortgage bonds." I ask you if you had any connection that could get in touch with him and reach him and get him to put up his bonds, or authorize the employment of attorney to foreclose. Did you do so ?-A. Yes, sir.

Mr. WALSH (of counsel). One minute! I object to that. The letter is the best evidence. I do not recall that that is what it says in the letter. I do not say that it does not, Mr. Manager, but the letter is in evidence.

Mr. Manager HOBBS. I beg your pardon. It says "Mr. Holland's full cooperation with us. would solve our problem", after he had stated what he wanted with him.

Mr. WALSH (of counsel>. Yes. That is the reason I object to it.

Mr. Manager HOBBS. I withdraw the question. By Mr. Manager HOBBS: Q. Mr. Sweeny, in this letter, I will ask you if, in response

to his suggestion stated in this letter-r am spending much time 1n working out a plan whereby the

bondholders can take it away from them . just as quickly as they get throu?h with the bankruptcy proceedings; but, for the Lord's sake, don t breathe this, as I am again attempting to match wits with old man Moore, and I believe I have about solved his line of procedure.

Just as soon as my final report ls approved and out of the way, I expect to go to New York, and go into the matter in det ail, and formulate a definite plan of procedure. I have already gone int o this matter very thoroughly with Mr. Bemis, and immediately upon his return I expect to take action and shoot as fast as a machine gun in order to have things in shape for mother season's operation.

1936. -CONGRESSIONAL RECORD--:-SENATE _5243 I wish you would get ln touch with as many first-mortgage bOnd~

holders as possible in order that we may take up with them our plan and have their cooper~tton. Now, don't argue the question with me, for I have gone into the matter thoroughly and have been watching and planning for some 6 months, and the plan of pro~ cedure is the correct one, and you leave this part of it to me, as I am more anxious than ever to thoroughly demonstrate to Mr. Moore that he is not so wise, after all, and that this "fathead" that he has down here is a "pluperfect boob."

Wonder if you have any connection in Boston that could reach Mr. Bert E. Holland, an attorney, whose address is Tremont Build~ ing, Boston? Mr. Holland is a cotrustee and, as such, 1s the holder of $50,000 of the first-mortgage bonds. Mr. Holland's full coopera­tion with us would solve our problem.

In response to that, did you follow the suggestion made in this letter by Mr. Walter S. Richardson, then trustee In bankruptcy of the Whitehall Hotel, and contact Mr. Bert E. Holland ?-A. I did.

Q. Did you, or not, have a conference with Mr. Holland in New York?-A. I did.

Q. Did you, or not, gain his consent that his name and bonds be used in the filing of this suit?-A. Yes, sir. ·

Q. At your instance and in your office letters were written by him to Mr. A. L. Rankin and Mr. Metcalf, his partner. authorizing them to proceed in his name, were they not?­A. Yes, sir.

Q. One other question, Mr. Sweeny. I notice no. 7700 and 7540 and 7975, and so on, in the upper lefthand comer of these sheets [handing sheets to witness]. The question I wish to ask is what those numbers mean ?-A. Those are the account numbers.

Q. There are the account numbers of what files?-A. They correspond to the registration cards.

Q. In what files?-A. That number there is the same num­ber as is on the card of registration when entering the hotel.

Q. The Whitehall Hotel?-A. Yes. Q. I thank you, sir. Now, Mr. Sweeny, I want to ask you

about this letter which I now show you a copy of. [Handing letter to witness.] Is this the copy from your files of the letter you wrote to Judge A. L. Rankin?-A. (After examin­ing letter.) Yes, sir.

Q. You signed this letter and mailed it to him?-A. Yes, sir.

Mr. Manager HOBBS. We introduce this letter in evi­dence and ask that it be marked for identification. It is dated November 22, 1930, and is directed to Judge A. L. Rankin, West Palm Beach, Fla.

Mr. WALSH (of counsel>. I know the manager is not noticing it, but I should like to look at anything that is offered on the part of the managers, if you please. I did not hear the manager,s statement, but my colleague ad­vises me that that was only offered for identification. We have no objection to it going in, but I do not think the record ought to be confused in that way. Are you offering the letter?

Mr. Manager HOBBS. Yes, sir. Mr. WALSH (of counsel). You are offering it in evidence? Mr. Manager HOBBS. Yes, sir. Mr. WALSH (of counsel). All right. The PRESIDING OFFICER (Mr. GEORGE in the chair).

Is there objection? Mr. WALSH (of counsel). No, sir. The PRESIDING OFFICER. The document will be ad­

mitted and appropriately marked. (The document was marked "Managers, Exhibit E/') Mr. Manager HOBBS. The letter reads:

Judge A. L. RANKIN,

MANAGERS' ExHIBIT E WHITEHALL,

Palm Beach, Fla., November 22, 1930.

West Palm Beach, Fla. DEAR JUDGE RANKIN: Mr. Bemis loaned me last night the copy

of the final decree of which you so kindly sent him. From a lay­man's standpoint it looks as though you have covered every point.

I note that in the sale of this property you ask for a minimum price of $1,500,000, either in bonds or cash, and. as I understand this, it will be necessary for the bondholders' committee to put up two and a half million dollars in bonds of the old issue. In case they only control 93 percent of the bonds, for the balance, or 7 percent of the entire issue, they would put up 60 cents on the dollar.

Furthermore, I believe it was our understanding that the bonds held by W. J. Moore, which he bought in after he knew the prop-

erty was bankrupt, could not be used. Th1s would be another $300,000 of bonds, or the equivalent of 60 cents on the dollar 1n cash, would have to be put up.

In other words, whoever bought the property would have to deposit 1n round figures about $300,000. I am Just reciting these facts to see if they are correct, in case someone does bid upon the property. For I believe it is your Intention eventually to put this 1n the hands of three trustees, for, truthfully speaking between friends, I do not believe the property 1n the long run would pa.y out at this figure.

Naturally I am anxious to get to Palm Beach, so that you, Mr. Bemis, and I can go over all these various points brought up in the final decree, so as to be able, when the property is finally offered for sale, to be in a position to make a legitimate bid with a company that will have the backing of several Palm Beach men on our board, that would guarantee the bonds at a fair price. I believe this can only be accomplished by the property being put 1n the hands of three competent trustees who would look at it for a long pull and not from one season's extraordinary earnings.

It is not only so of Florida property but of all real-estate prop­erty throughout the United States today, that on bonds of going concerns that are earning money, would not carry the price that you have asked in this final decree. As an 1llustration, the first­mortgage bonds on the Berkshire. corner ~f Fifty-second Street and Madison Avenue, the total issue o! which was only $1,350,000, are today offered to us at 60. The property has been built and in operation for 5 years and each and every year has made more than its interest and amortization. In other words, the ground rent on this property is $75,000 a yea.r, the interest and amortization is $120,000, making a total of $190,000. In the last fiscal yea.r we made over •290,000.

As another 1llustratlon, the first-mortgage bonds on the Florida East Coast entire properties a.re today selling at 35.

I am just giving you these figures and facts so that you can see the future o! Whitehall in the final accounting, instead of the earnings of 2 years ago.

We have a moral obligation to the first bondholders who in­vested their money in this property. Naturally we would like to see them get some of their capital with a guaranteed return of it. I believe we can earn as much on the property for the first-mort~ gage bondholders, if not more. than any other group.

I believe I am speaking for Mr. Bemis, as well as myself, when I say that I would hate to see th1s property get into some hands that in the final outcome would in any way refiect upon Judge Ritter's court.

I saw Judge Harris the other day, and I wish you would send me the letters that you had from the Governor of Alabama, as it is just possible before I leave for Palm Beach I might see the Honorable James Francis Burke, of Pittsburgh, and, as you know, he has a big infiuence at Washington. It is just possible I might get a word in to your advantage.

With kindest regards, believe me, I am, Sincerely yours,

By Mr. Manager HOBBS: Q. Then you testified you signed this letter?-A. Yes, sir. Q. And sent it to Mr. Rankin?-A. Yes, sir. Mr. Manager HOBBS. The letter which I now have, dated

October 3, 1929, was shown to counsel for the respondent yesterday.

Mr. WALSH <of counsel). I should like to look at it if you are going to offer It. I cannot carry it in my mind.

Mr. Manager HOBBS. Very well. The PRESIDING OFFICER. If the manager on the part

of the House, as well as counsel for the respondent will show to the other side documents which they offer it will probably make for the conservation of time.

Mr. Manager HOBBS. Counsel was shown that letter yesterday, may it please the Court.

Mr. WALSH <of counsel>. If I saw it, I am sure I do not remember it. I have no objection to it, however. Is it offered in evidence as an exhibit?

By Mr. Manager HOBBS: Q. Mr. Sweeny, did you write this letter of October 3,

19:&'9, to Mr. Bert E. Holland?-A. Yes, sir. Mr. Manager HOBBS. We offer this letter in evidence

and ask that it be given an appropriate letter of identifica-tion. ·

The PRESIDING OFFICER. Without objection, it will be admitted and given an appropriate number as an exhibit.

(The letter was marked "Managers' Exhibit F.") Mr. Manager HOBBS. The letter reads:

Mr. BERT E. HoLLAND,

WHITEHALL, Palm Beach, Fla., October 3, 1929.

73 Tremont Street, Boston, Mass. DEAR MR. HoLLAND: Confirming our conversation this morning,

we are planning to apply to the Federal court for a receivership under the first-mortgage bonds and ask the court to appoint the following committee as a sell-constituted bondholders' committee

5244 CONGRESSIONAL RECORD-SENATE APRIL 9 representing the 7,000 bondholders o! the first mortgage on White­hall, Palm Beach, Fla.

The court will in return appoint Mr. Bemis and me as managers of the property, and as we have always made more than the inter­est on the first mortgage you can rest assured that your interest payments will be met. Furthermore, the committee after secur­ing this property will work out a plan for the future, and as president of this company since it has been incorporated I can assure you that your bonds will become of real value.

Very truly yours, (Signed) MARTIN SWEENY.

MS:BT.

By Mr. Manager HOBBS: Q. You signed that and mailed it?-A. Yes, sir. Mr. Manager HOBBS (reading): Whitehall, Palm Beach, October 3, 1929-

Mr. WALSH (of counsel). Is that another letter? Mr. Manager HOBBS. No, sir; it is a part of the same

letter. WmTEHALL,

Palm Beach, Fla., October 3, 1929. Mr. G. B. Romph. First National Bank of Miami, Fla. Mr. Charles H. Gilman, president, Bank of Bay Biscayne. Mr. Frank A. Shaughnessy, p:J;esident, First National Bank, of

Palm Beach. Mr. Franklin P. Smith, Lake Forrest, Til. Mr. E. F. Hutton, chairman of the Board of General Foods Co.,

New York City. Mr. Bert E. Holland, attorney, 73 Tremont St., Boston. Mass.

Mr. Manager HOBBS. May it please the Court, that is all.

Mr. WALSH <of counsel> . I should like to know whether this letter of October 3, 1929, was not written from New York although it has a Palm Beach, Fla., letterhead. I ask that question of the manager.

Mr. Manager HOBBS. I beg pardon. Mr. WALSH (of counsel>. I say is it a fact that that

letter was written from New York although it has a Palm Beach letterhead?

Mr. Manager HOBBS. I do not know, sir. Mr. WALSH (of counsel). Maybe the witness will know. The WITNESS. It was written from New York. Mr. Manager HOBBS. That answers it. Mr. WALSH (of counsel). I have a few questions I

should like to ask the witness.

Q. What was the estimated cost of that hotel when you concluded to build the addition to it that made it of the present size?-A. Do you mean what was our valuation?

Q. What was the estimated cost of building the hotel?­A. Oh, the estimated cost was $3,000,000.

Q. And it was a company of their own. How much did it cost, as a matter of fact, to build it?-A. Well, when we got through we were about seven or eight hundred thousand dollars short.

Q. Was a mortgage given for it?-A. No, sir. Q. That shortage was to unsecured creditors?-A. Yes, sir. Q. And subsequently these mortgages were put upon the

hotel-two more?-A. No; one more. Mr. Manager SUMNERS. Mr. President, we desire to

suggest the apparent irrelevancy of the testimony. ·The PRESIDING OFFICER. Is there an objection on

that ground? Mr. Manager SUMNERS. Yes; we object. Mr. WALSH <of counsel). We think it is not irrelevant. The PRESIDING OFFICER. The Chair overrules the

objection. By Mr. WALSH (of counsel) : Q. But the building operation wound up with three mort­

gages on the ·hotel, and a large amount due to unsecured creditors? Is that true or not?-A. Yes, sir. ·

Q. You put some money in that hotel yourself, did you not?-A. Yes, sir.

Q. How much did you lose in it before the foreclosure proceeding was brought ?-A. I think my brother and myself lost about $140,000 in· it altogether.

Q. You were the manager .of that hotel, were you not, from the time it started until the present day?-A. Yes, sir.

Q. You are still the manager of it?-A. Yes, sir. Q. I call your attention to one other matter, because I

am going to try to get through with you very quickly. After the receivership of 1929, was that the year that you had a big hurricane there?-A. We had a hurricane in the fall of 1929.

Q. Was that the one that required the extensive repairs to be made?-A. Yes, sir.

Q. Who put up the money for that?-A. Well, the court cRoss-EXAMINATioN allowed $100,000 worth ·of receivers' certificates to be sold;

By Mr. WALSH (of counsel): but when we got ready to sell the certi.ficates of the re-Q. Mr. Sweeny, you have been in the hotel business down ceiver the banks would not take them, so Mr. H. E. Bemis,

on the Florida coast for 31 years?-A. Yes, sir. . Ed Sweeny, and myself guaranteed $50,000 worth of those Q. What hotels have you been connected with ?-A. From certificates.

1906 to 1920 I was connected with the Royal Poinciana Q. Ed Sweeny is your brother, I believe?-A. Yes, sir. Breakers Hotel. Q. These letters that have been read to you, four or five

Q. Who owned that hotel?-A. The Florida East Coast of them, are letters out of an extensive correspondence, are Hotel Co. From 1920 to 1925 I was connected with the they not, that you had with Mr. Bemis, with Mr. Richard­Everglades Club in Palm Beach, Fla. From 1926 until the son, and with other persons interested in the preservation present day I have been connected with Whitehall. of that hotel property?-A. Yes, sir.

Q. You have been connected with Whitehall ever since it Q. And you turned over your entire files to the House was a hotel?-A. Yes, sir. managers, did you not?-A. Yes, sir.

Q. What was Mr. Bemis' connection with those hotels?.- Q. How long ago was that?-A. Well, part of my files A. With the Royal Poinciana Hotel; Mr. Bemis was vice were taken over a year ago. president and general manager. Q. Yes; and when were the last turned over to them?-

Q. Was that a part of this same hotel chain?-A. Well, the A. Yesterday. Royal Poinciana is part of the Florida East Coast Hotel chain. Q. And the part that was turned over a year ago, you

Q. You stated that you were one of the persons who turned took their receipt for, did you not?-A. I did not, but my the Flagler residence into a hotel or club. That was when?- caretaker did. A. We bought it in the spring of 1924. Q. Your caretaker did; and you asked for the return of

Q. You were asked whether or not you were induced to them?-A. No; I never asked for the return of them. build a hotel behind the original residence, and you answered Q. Did you get them back?-A. No, sir. "yes:• When was that?-A. We opened the hotel in the Q. You have not seen them since?-A. No, sir. winter of 1926. Mr. vV ALSH (of counsel). May I see them please? I

Q. Who induced you to build the hotel?-A. Well, W. J. really did not know; I thought we had them all. Moore. Mr. Manager SUMNERS. I am afraid we did not un-

Q. Did W. J. Moore and the Moore interests finance that derstand the question. . hotel?-A. I did not understand the question. Mr. WALSH (of counsel). The witness says that his care-

Q. Did w. J. Moore and the Moore interests finance that taker turned over a number of letters, correspondence, to the hotel?-A. Yes, sir. committee over a year ago, and that they have not been

Q. There were three mortgages on the hotel, were there returned. If you have them handily, I should like to see not?-A. Yes, sir. them.

Q. It was built by a building company owned and con- Mr. Manager SUMNERS. I do not believe we have them trolled by the Moore interests, was it not?-A. Yes, sir. a.t the moment; and Mr. Mulherin, the young man who is

1936 CONGRESSIONAL- RECORD-SENATE 5245 most familiar with the records, is out of the Chamber just now. -

Mr. WALSH (of counsel). Very good. I wish to get through with this just as quickly as I can, and you can give them to me later, or let me look over them, anYWay.

Mr. Manager SUMNERS. Yes. By Mr. WALSH (of counsel): Q. The files you retained, after they were returned by the

House managers, you allowed us to go over, did you not?­A. Yes, sir.

Q. That is, the counsel for Judge Ritter?-A. Yes, sir. Mr. WALSH (of counsel). Have you the files here now? Mr. MULHERIN. Here is everything except those intro-

duced in evidence. The originals are not here of all of them, but I have copies of them.

Mr. WALSH (of counsel). If you are sure that the orig­inals are all here, we accept the copies.

Mr. MULHERIN. I say the originals are not all there. Mr. WALSH (of counsel). I say if you are sure these are

copies of the originals--Mr. MULHERIN. I am certain of that. Mr. WALSH (of counsel) . We will accept them. Mr. Manager SUMNERS. I would like to have the record

show at this point that the managers on the part of the House have complied with the request of counsel for the respondent with reference to the records just referred to.

By Mr. WALSH (of counsel> : Q. Before I get to the main body of the correspondence,

there was a letter introduced here yesterday-and I think you have testified about it this morning-which was written from your office by Mr. Holland, addressed to Mr. Rankin. Why did you recommend Mr. Rankin to Mr. Holland?­A. Mr. Bemis recommended him to me.

Q. Mr. Bemis was your associate?-A. Yes, sir. Q. And he has been your associate during all these years,

has he not?-A. Yes, sir. · Q. You began life down there, I believe, as a bookkeeper at one of those East Coast Railway hotels?-A. Yes, sir.

Q. That was 30 years ago. Just another question or two. You were asked about Judge Ritter stopping at your hotel on these two occasions. Is it customary in first-class hotels for the manager to have a list or to make complimentary space at the hotel for individuals?-A. Yes, sir.

Q. Explain the practice briefly, very briefiy.-A. Well, it is in the discretion of the manager. If he wants to entertain any guests, friends, people he wants to take care of overnight, he generally gives them the privileges of the hotel.

Q. There were two occasions during the years the judge had to do with this hotel that the records showed he stopped there; he stopped there with his wife. Did you give authority for that?-A. I believe Mr. Bemis asked me to take care of Judge Ritter.

Q. Was it in the way that it is usually done?-A. Ye.S, sir. Q. Under those circumstances?-A. Yes, sir. Q. And one occasion was a sort of gala occasion, being

Washington's Birthday, I notice by the date.-A. Yes, sir. Q. Is that correct?-A. Yes, sir. Q. Did you have other complimentary guests there at that

time?-A. That I could not say. Mr. WAlSH (of counsel). For the sake of saving time,

we have these letters which have gotten into our possession, which have been given to us, and I suggest to the House

·managers that we have copies of this entire correspondence, a continuous list of them chronologically copied. We are going to ask you, if you will agree, that instead of reading these letters to Mr. Sweeny we be permitted to offer them all in evidence and give you copies of them.

Mr. Manager PERKINS. Mr. President, the managers on the part of the House object to that procedure. These letters are incompetent, immaterial, and irrelevant, and will only encumber the record.

Mr. WALSH (of counsel). I desire to say that these letters predate and antedate this transaction. They show the effort that was being made, and they throw a strong light upon the

. proposition that this was not a champertous proceeding, but that it was a proceeding started by these men who had in-

LXXX--332

vested their money, and upon whose names and credit these bonds were sold. It is in answer to that.

The PRESIDING OFFICER. It is the ruling of the Chair that the letters shall be exhibited to the managers on the part of the House, and that the managers on the part of the House may make specific objections to each document to which they wish to lodge objection. There can be no ruling with respect to a large number of documents without spe­cific objection.

Mr. WALSH (of counsel) . Will you take that suggestion of the Presiding Officer and go through these documents?

Mr. Manager PERKINS. Mr. President, we understand that these letters are to be offered, and objection made as they are offered; or are we to examine the file and find out what documents we object to?

The PRESIDING OFFICER. The ruling of the Chair was that the letters shall be exhibited to the managers on the part of the House, and that specific objection shall be lodged to documents to which the managers wish to lodge objec­tions.

Mr. Manager PERKINS. Mr. President, we will examine them during the recess and be prepared to follow that procedure.

The PRESIDING OFFICER. Very well. Are there any other questions?

Mr. WALSH (of counsel). Yes; I have some very vital questions.

By Mr. WALSH (of counsel) : Q. During the time that this correspondence was going

on, did you know Judge Halsted L. Ritter?-A. No, sir. Q. When did you first get acquainted with him, if you

ever did?-A. I met him for the first time when he came to Whitehall.

Q. Did you ever at any time have a conversation with him bearing upon the Whitehall situation?-A. No, sir.

Q. Did you ever at any time hear anyone else having a conversation with him bearing on the Whitehall situation?­A. No, sir.

Q. So far as you know, none of the negotiations that you had with Mr. Richardson or with your associate, Mr. Bemis, or any other person, was ever in any way brought to the attention of Judge Halsted L. Ritter?-A. No, sir.

Q. You have no information that he ever had any knowl­edge of any kind of any of these letters or any of these negotiations?-A. Not to my knowledge.

Q. When did you first meet Mr. Rankin ?-A. I first met Mr. Rankin in New York in 1929.

Q. And you were introduced by whom?-A. By Mr. Rich­ardson.

Q. Did Mr. Bemis have anything to do with the actual management of the hotel?-A. Yes; he did.

Q. With the Whitehall Hotel?-A. Yes. We talked the matters over always.

Mr. WALSH (of counsel). Let me look at that "Attaboy" letter; will you, please? [After examining letter.] I want to hand this letter, marked "Managers' Exhibit AA", to Mr. Sweeny and ask him whether or not he has the letter in his file which he wrote to W. J. Moore, referred to in this ex­hibit, and the Moore letter to him, that being the letter dated March 10. If you do not remember it, Mr. Sweeny, you can examine the letter.

(The witness examined the letter.) The WITNESS. What is it you want to know, Mr. Walsh? By Mr. WALSH (of counsel>: Q. I want to know if you have in your files the letter that

you wrote to Mr. Moore, referred to in that letter.-A. I think I have a copy of it; something like that.

Q. And Mr. Moore's letter to you?-A. Yes; I probably have a copy.

Q. Will you please bring that in?-A. Now? Mr. WALSH (of counsel). Yes. I will get through with the

witness in 1 minute. That is all I have to ask him. RECESS

The PRESIDING OFFICER. The hour of 1:30 having ar­rived, in accordance with the order heretofore entered, the Senate will stand in recess until the hour of 2: 15 p. m.

5246 CONGRESSIONAL RECORD-SENATE APRIL 9 Thereupon <at 1 o'clock and 30 minutes p. m.> the Senate,

sitting as a Court of Impeachment, took a recess until 2 o'clock and 15 minutes p. m., at which time it reassembled.

The VICE PRESIDENT. Are the managers on the part of the House ready to proceed?

Mr. Manager HOBBS. Counsel for the respondent was in charge of the witness at the time of the recess.

Mr. ROBINSON. I suggest the absence of a quorum. The VICE PRESIDENT. The clerk will call the roll The Chief Clerk called the roll, and the following Senators

answered to their names: Adams Coolidge Keyes Ashurst Copeland King Austin Couzens La Follette Bachman Davis Lewis Batley Donahey Logan Barbour Duffy Lonergan Barkley Fletcher McGill Benson Fra.zier McKellar Black George McNary Bone Gerry Maloney Brown Gibson Metcalf Bulkley Glass Minton Bulow Gutrey Moore Burke Hale M.urphy Byrnes Harrison Murray Capper Hastings Neely Caraway Hatch Norris Carey Hayden O'Mahoney Clark Holt Overton Connally Johnson Pittman

Pope Radclitre Reynolds Robinson Russell Schwellenbach Sheppard Shipstead Smith Stetwer Thomas, Okla. Thomas, Utah Townsend Truman Vandenberg VanNuys Wagner Walsh White

The VICE PRESIDENT. Seventy-nine Senators have an­swered to their names. A quorum is present.

CROSS-EXAMINATION OF MARTIN SWEENY (CONTINUED)

By Mr. WALSH (of counsel) : Q. Mr. Sweeny, are the two letters which I hand you

the letters which I asked you before the luncheon recess to produce?-A. Yes, sir.

Mr. WALSH (of counsel). I ask that these two letters, one being a carbon copy dated September 15, 1929, with the initials at the bottom "MS-cS", and one dated September 24, being an original letter, written to Mr. Martin Sweeny by Mr. William J. Moore, be marked for identi~cation.

(The letters were marked, respectively, for identification, "Respondent's Exhibits 15 and 16.")

Mr. WALSH (of counseD. That is all, thank you, Mr. Sweeny.

The VICE PRESIDENT. Are there any further questions on the part of the managers?

Mr. Manager HOBBS. No other questions. The VICE PRESIDENT. The witness may stand aside. Mr. WALSH (of counsel). The correspondence is still in

the possession of the gentlemen upon the other side, and they have not had time to read it. Mr. Sweeny wishes to get away. If I may have a stipulation with the managers to the effect that those are letters that came from Mr. Sweeny's file, and they are authentic copies and original letters, we can let him go.

Mr. Manager PERKINS. You need not hold Mr. Sweeny here to prove the letters, but we object to them on the ground of their relevancy and materiality.

Mr. WALSH <of counsel). I understand, but that iS not the question.

Mr. Manager PERKINS. We will, at the proper time when you wish to offer them, admit. Many of them are not letters addressed to Mr. Sweeny. There are some 200 letters, and we have not had a chance to examine them since you offered them.

Mr. WALSH (of counsel). I understand that perfectly. I am afraid you will have to remain awhile, Mr. Sweeny.

Mr. Manager PERKINS. Here is a letter dated Decem­ber 18, 1928, addressed to Mr. Bemis, which has no signa­ture. We cannot admit that.

Mr. WALSH (of counsel) . Then I shall have to prove them. I am doing my best. That is all I can do. You had better wait awhile.

The VICE PRESIDENT <to the witness) . Stand aside. [To the managers on the part of the House: J Call the next Witness.

Mr. Manager PERKINS. Mr. President,_ under stipulation )VU;b counsel for the ,respondent I am about to offer two

letters and a check in evidence, and I ask that they be marked as exhibits.

The VICE PRESIDENT. The clerk will mark them as ex­hibits with the next numbers.

Mr. WALSH (of counsel). I stated at the time of this stipulation that the witness, Mr. Brodek, was to be called.

Mr. Manager PERKINS. I did not understand that. Mr. WALSH (of counsel). Oh, yes! Mr. Manager PERKINS. I will call Judge Ritter, then,

and prove the letters by him. If you wish to admit them, I will read them. Otherwise I will prove them by Judge Ritter.

Mr. WALSH <of counsel). Let me see the letters, please. Meantime, do not excuse Mr. Brodek.

<The letters were exhibited to Mr. Walsh.> The VICE PRESIDENT. The Chair understands that the

letters and check are introduced, and will be marked "Ex­hibits H-1, H-2, and H-3."

(The documents were marked "Managers' Exhibits H-1, H-2, and H-3.")

Mr. Manager PERKINS. I desire to read the exhibits just offered.

The first is as follows: MANAGERS' ExmBIT H-1

UNITED STAn:s DisTRICT JUDGE's C'HAMlJERS, SoUTHERN DISTRICT OF FLoRIDA,

Mr. CHARLES A. BRODEK, Miami, Fla., March 11, 1929.

67 Wall Street, New Yark, N. Y. DEAR MR. BRODEK: The Mulford Realty Co. foreclosure case on

the Braz1lian Court Hotel was decided in our favor in every par­ticular. This case certainly has been long-drawn out and has been. far more of a fight than anyone anticipated when my firm took it over. Of course, now that I am on the Federal bench, I cannot practice any further, and my partner, A. L. Rankin, will carry through the further proceedings in that case. I wm, however. be consulted about matters by him until it is all closed up.

I enclose a statement of the account to date, showing a. balance of $1,945.23 due on the agreed fee of $4,000, a. check for which was given me by Mr. Mulford on the 9th. He asked me to notify Mr. Cooper of the drawing of this check. Will you please telephone him?

I think you will appreciate that we have done an enormotis amount of work in this case, which has been pending for con­siderable over a year. In the first place, we did not know of the foreclosure suit which D'&terre had brought to foreclose his sec­ond mortgage prior to the bringing of our suit. Th1s necessitated our entering that suit, and by demurrers and motions to dismiss, finally getting rid of it. In that case some of the law questions were decided which became avallable 1n our foreclosure. Every possible block was interposed by the defendant, D'Esterre, and by E. C. Hilker, Inc., whiCh claimed a. retention title contract on the plumbing. Also, I had continually on my hands the Paschals, advised the receiver, had three changes of receivers, as you know, and there were continual questions arising between the receivers and the Paschals in reference to the management and accounts o! the hotel.

I could send you a complete statement of the situation, but you will readily understand the amount of work involved. I am saying all this for the reason that I think $2,000 more by way of attorneys' fees should be allowed. The receiver now has on hand something over $16,000. We proved up attorneys• fees of $16,000. I think the court w1ll ~ow us $10,000. Th.is will be paid to us by order of court by the receiver, and, as I understand it, this money will be turned over to Mulford to reimburse him for expenses which he has paid and for the payment of attorneys' fees. This amount, of course, wUl more than do this. I talked with Mr. Mulford about this matter on last Saturday, and he said he realized we should have more money, but desired the matter taken up through you. I was glad he did so, because he will then feel satisfied if you approve.

I do not know whether any appeal will be taken 1n the case or not; but if so, we .hope to get Mr. Howard Paschal or some other person as receiver who w1ll be amenable to our directions, and the hotel can be operated at a profit, of course, pending the appeal. We shall demand a very heavy supersedeas bond, which I doubt whether D'Esterre can give.

I w1ll appreciate your com.mun1cattng with me direct about this matter, as I had the matter up with Mr. Mulford, and am, of course, primarily interested in getting some money out of this case, as the shift from the practice to the bench shuts off my activity 1n collections from my old firm, and this matter is one among very few which I am assuming to continue my interest in until finally closed up.

Appreciating your consideration of this matter, I am, with best regards,

Very truly yours,

P. 0. box 880, M:aml. HLR:ALH Enc.

!Lu.STED L. Rrrnm.

1936 CONGRESSIONAL RECORD-SENATE 5247

The next exhibit is the following letter: MANAGERS' EXHmiT H-2

UNITED STATES DISTRICT JUDGE'S CHAMBERS, SOUTHERN DISTRICT OF FLORIDA.

Mr, CHARLES A. BRODEK, Miami, Fla., April 1, 1929.

72 Wall Street, New York, N. Y. DEAR MR. BRODEK: Many thanks for yours of March 30, enclos­

ing check for $2,000 additional fee in the Brazilian Court Hotel matter. I greatly appreciate your and Mr. Mulford's attitude in the matter, and assure you that I will keep in touch, in an ad­visory way, with the progress of the case. I feel sure my partner, Judge Rankin, will handle the matter very carefully and efficiently.

Very truly yours, . HALSTED L. RITTER. HLR:ALH.

The third exhibit is a check, as follows: MANAGERS' EXHmiT H-3

Brodek, Raphael & Eisner.

No. 4771 $2,000

NEW YoRK, March 30, 1929. The Equitable Trust Co. of New York 1-217

Pay to the order of Hon. Halsted L. Ritter Two thousand 00/x:x Dollars. Payable through the New York Clearing House.

BRODEK, RAPHAEL & ElSNER, (Signed) RALPH H. RAPHAEL.

Endorsed "Hon. Halsted L. Ritter, H. L. Ritter", and paid through the Bankers Trust Co. of New York.

Mr. WALSH (of counsel) . Have you the letter of trans­mittal that came with that check from Brodek, please?

Mr. Manager PERKINS. We have what purports to be a copy of a letter of March 3"0, 1929, addressed to Hon. Halsted L. Ritter and signed "Chas. A. Brodek.''

Mr. WALSH (of counsel) . For the purpose of conserving time, would you mind reading that, to obviate the necessity of my having it marked for identification?

Mr. Manager PERKINS. No. Mr. WALSH (of counsel). Thank you. Mr. Manager PERKINS. It is as follows:

Re: Brazilian Court Hotel. Hon. HALSTED L. RITTER,

United States District Judge, Miami, Fla.

MARCH 30, 1929.

DEAR JUDGE RITTER: Mr. Mulford came back last week, but his engagements and then my engagements prevented meeting on the subject of your recent letter until yesterday.

As I intimated in my March 13 letter, I encountered no dl.ftl­culty on Mr. Mulford's part in accepting my suggestion that you were entitled to the additional fee, and I am therefore enclosing my firm's check for $2,000.

I told Mr. Mulford that insofar as your judicial duties would permit, you would, in the event of an appeal, give the benefit of your intimate knowledge of the facts and law of the case to Mr. Rankin. I also told Mr. Mulford that in the event of an appeal an additional fee would have to be paid, but that I felt certain that in fixing the amount of that fee, the payments in connection with the case to date would be taken into con­sideration.

Mr. Mulford wants me to express to you his deep appreciation of your interest in the case and his gratification at the satisfac­tory outcome of tb.e exrellent work you did.

With best regards, I remain, Sincerely yours,

B/ W: Encl. CHAS. A. BRODEK.

Mr. Manager PERKINS. Call Jerome D. Gedney. DIRECT EXAMINATION OF JEROME D. GEDNEY

Jerome D. Gedney, having been duly sworn, was examined and testified as follows:

Mr. Manager PERKINS. Mr. President, this witness is suffering from lameness and requests that he be permitted to sit as he testifies.

The VICE PRESIDENT. The Chair will be prepared to use his discretion. The witness may take the chair back of the desk.

By Mr. Manager PERKINS: Q. Where do you live, Mr. Gedney?-A. I live in the sma-ll

town of Manalpan, in Palm Beach County, Fla. Q. What is your business?-A. Lawyer. Q. Do you know the respondent, Halsted L. Ritter?-A.

I do. Q. Did you or did you not represent a corporation in the

matter of Francis?-A. I represented the Spanish River Land Co.

Q. Who was Mr. Francis?-A. Well, I do not know who he is, other than he was purchaser of land from the Spanish River Land Co.

Q. Did you meet Judge Ritter with reference to some law business in which he represented Mr. Francis?-A. I did not quite hear the question.

Mr. Manager PERKINS. I will ask the reporter to read the question.

The Official Reporter read the question. A. I suppose you mean did I meet with Judge Ritter? I

did. By Mr. Manager PERKINS: Q. What was your first connection with that matter?­

A. My first connection with that matter was when a receipt for an amount of money that had been paid by Mr. Francis· on account of the purchase of property was sent to me, together with some correspondence.

Q. Do you know Judge Ritter's signature?-A. I do not know that I could qualify as an expert. I believe I know his . signature. ·

Q. I show you a letter bearing date February 3, 1930, addressed to Mr. c. H. Geist, Boca Raton, Fla., and ask if that is Judge Ritter's signature?-A. (After examination.) I believe it to be.

Mr. Manager PERKINS. Will counsel admit this is the signature of Judge Ritter?

Mr. WALSH <of counsel). I have not seen the letter. Mr. Manager PERKINS. I will hand it to you. Mr. WALSH (of counsel, after examining letter). That

appears to be his signature. I will agree that it is. Mr. Manager PERKINS. Mr. President, I offer this letter

in evidence and ask that it be marked "Managers' Exhibit I." (The document was marked "Managers' Exhibit I.") Mr. Manager PERKINS. Managers' exhibit I is a letter

written on the letterhead of Halsted L. Ritter, and is as follows:

MANAGERS' ExHmiT I

Mr. c. H. GEIST, Boca Raton, Florida.

HALSTED L. RrrTER, UNITED STATES DISTRICT JUDGE, Miami, Flarida, February 3, 1930.

DEAR MR. GEIST: In March 1928, while I was practicing law in West Palm Beach, I had two or three conferences with you concern­ing the property which Mr. J. R. Francis, of Flint, Michigan, had purchased in Boca Raton prior to the bankruptcy proceedings. These lots were as follows:

Lots 1, 2, 3, and 4, 42-A; lots 10 and 11, block 126, plat 4, desig­nated as the Cloister Inn golf course addition of Boca Raton.

On the purchase price of $83,500.00, Mr. Francis paid $59,850.00 on these lots.

Paid $54,200 on a/ c principal. You told me at the time that you would have to clear up the

title to the lands through foreclosure and arrange your plans, after which you intended to adjust with creditable people their purchase contract agreements, and for me to take the matter up with you .again after you had progressed farther in your matters. I take it that by this time you are ready to consider the proposition.

Mr. Francis is a man of the highest standing in the manufactur­ing world. He has a beautiful home on the ocean front in ·Miami Beach, where he spends a little time now and then. He is a man of considerable wealth and, I am sure, is the type of man you would want interested in your plans. He desires to acquire the property which he contracted !or and, I am sure, would cooperate with you in the improvement of the same satisfactorily. He has asked me to take the matter up with you again. He intended to be down here at this tlme but is delayed, but will be here, I think, in a week or ten days. Mr. Francis is more than a mere client of mine; he is one of my intimate friends, and naturally I would like very much to get the situation adjusted to the satisfaction of you both.

Would you please let me know what your ideas about this matter are?

I hear a great many laudatory things about your Boca Raton Club. Yours very truly, HALSTED L. RrrTER.

By Mr. Manager PERKINS: Q. Mr. Gedney, did you receive this letter from Mr.

Geist?-A. Yes. Q. What, if anything, did you do with reference to the

matter referred to in the letter?-A. Well, I prepared the necessary deeds that were to be given. I arranged to have the title guaranteed. I procured a title search and made the tax certificate. I mean I prepared the tax certificate; I did not sign it. Then there was a certificate of the engineer required as to a certain portion of the title. That certificate was made by the engineer of the land company.

Q. Did you communicate with anyone representing Mr. Francis?-A. I communicated with Judge Ritter.

5248 _CONGRESSIONAL ~ECORD-SENAT~ APRIL 9_ Q. What did you do with reference to that?-A. When I

procured the title certificate from the title company, which was to insure the title, I sent those preliminary certificates to Judge Ritter with a letter, registered, in the fall of 1930.

Q. I show you what purports to be copy of a letter dated November 19, 1930, and ask if this is a copy of the letter you sent to Judge Ritter.-A. (After examining letter.> That is the carbon copy of the original from my file.

Mr. Manager PERKINS. Mr. President, I offer that in evidence.

The PRESIDING OFFICER (Mr. STEIWER in the chair). It will be admitted.

Mr. WALSH (of counsel). We have no objection. Mr. Manager PERKINS. I ask that it be" marked in evi­

dence as an exhibit. (The document was marked "Managers' Exhibit J.'') Mr. Manager PERKINS. The exhibit just marked in evi­

dence bears date November 19, 1930, and reads as follows: MANAGERS' Ex.HIBI'l' J

Hon. lLu.sTJ!:D L. Rl'ITER, NovEMBER 19, 1930. United States District Judge,

Post Office Building, Miami, Floricla. _ MY DEAR JunGE RrrrER: Herewith I am sending you preliniinary

certificates issued by Atlantic Title Company. as a.gent of the New York Title & Mortgage Company, which are known as re-issue certificates nps. 4 a.lid 5 of pollcy no. 6985. These certificates are issued to Mr. J. R. Francis. of Flint, Michigan, to cover the prop­erty which through you he arranged to purchase from Spanish River Land Company in February last.

Upon the closing we w1ll furnish a certificate of ~e collector of taxes o! the town o! Boca Raton, to the effect that there are no municipal assessments against the properties in question, and a certificate of our engineer, who is a registered civil engineer, that there are no easements !or sewers, water pipes, roads, alleys, tele­graph, telephone. electric light or power lines, ~r other public utilities established on the premises in question.

Please indicate when and where you wish to have the clOSing in this matter. I can arrange to come to Miami for the purpose if you wish to attend to the closing yourself, but otherwise I would prefer to have the closing at my omce, Harvey Building, West Palm Beach, Florida.

Awaiting your advices in the matter, I am, Very truly yours, SPANISH RIVER LAND COMPANY,

JDG:RW REG. By ----, Vice-President.

By Mr. Manager PERKINS: Q. Who signed this letter?-A. I did. Q. Did you receive a responSe to that letter from Judge

Ritter?-A. I believe I did. You have the file. Q. I show you a letter bearing date November 21, 1930, and

ask you if that is a response to the letter just read?­A. (After examining letter.> It is.

Mr. Manager PERKINS. I offer this letter in evidence and ask that it be marked as an exhibit.

(The document was marked "Managers' Exhibit K.") Mr. Manager PERKINS. The letter just marked as an

exhibit is on the letterhead of Halsted L. Ritter, dated No­vember 21, 1930, and reads as follows:

MANAGERS' ExHIBIT K

SPANISH RIVER LAND Co.,

HALsTED L. RITTER, UNITED STATES DISTRICT JUDGE,

MIAMI, FLA., November 21, 1930.

P. 0. box 58, West Palm Beach Fla. GENTLEMEN: I beg to acknowledge receipt o! yours o! Novem­

ber 19 containing preliminary certificates issued by Atlantic Title Co. as agent of the New York Title & Mortgage Co., which are known as reissue certificates nos. ~ and 5 of policy no. 6985, which certificates are issued to J. R. Francis, of Flint, Mich.

I w1ll this day send these certificates on to Mr. Francis. I expect him to be in Miami around the first of the year. I hope it wm be convenient !or you to wait until Mr. Francis comes down here this winter to finally close up the matter, unless Mr. Francis should write to me, authorizing me to close the matter up for him, in which event I will communicate with you.

Yours very truly, HALsTED L. RITTER.

Did you make a response to that letter, Mr. Gedney?­A. I believe I did.

Q. I show you what purports to be a letter from the Florida River Land Co. dated November 26, 1930, and ask you if that is a copy of your response?-A. (After examining letter.) That is the answer.

Mr. Manager PERKINS. I offer this in evidence and ask that it be marked as an exhibit.

('11\e document was marked "Managers' Exhibit L.")

Mr. Manager PERKINS. The exhibit just marked is as follows:

MANAGERS' ExHmrr L 701 HARVEY BUILDING,

West Palm Beach, Fla., November 26, 1930. Hon. HAl..sTEn L. RIT'I'ER,

United States District Judge, Miamf, Fla. DEAR Sm: This is to acknowledge the receipt of your letter of

November 21, 1930, re Spanish River Land Company-J. R. Francis. The long delay which has ensued in this matter is chargeable to us and not to Mr. Francis.

We would very much like to close the title during the current year, and 1! it can be so arranged we would appreciate your ar­ranging to have it done, but if this w1ll seriously inconvenience either Mr. Francis or yourself, we w1ll defer the closing of the title, provided there be an understanding between us that unless an earlier date and place be set for the closing mutually con­venient, it will be closed at this omce, 701 Harvey Building, West Palm Beach, Florida, on Thursday, January -15, 1931, between the hours of 10:00 o'clock in the forenoon and 12 :00 o'clock noon.

Please advise us as to the permanent post office address of Mr. Francis, in order that the same may be inserted in the proposed deed of conveyance.

Yours very truly, SPANISH RIVER LAND COMPANY,

JDG:RW. By------, Vice President.

By Mr. Manager PERKINS: Q. Who signed the letter?-A. I did. Q. Did you receive a response from Judge Ritter to that

letter?-A. I believe I did. Q. I show you a letter dated December 29, 1930, and ask

if that is a reply you received.-A. (After examining letter.) This letter dOes not refer to the earlier letter, but it was re­ceived at a later date.

Q. Is that a letter you received from Judge Ritter with reference to the Francis matter?-A. Yes. This letter is dated December 29, 1930.

Mr. Manager PERKINS. I offer the letter in evidence and ask that it be marked as an exhibit.

(The document was marked "Managers' Exhibit M.") Mr. Manager PERKINS. The letter just marked as an

exhibit is on the letterhad of Halsted L. Ritter, and is as follows:

MANAGERS' ExHmiT M

SPANISH RIVER LAND Co., DECEMBER 29, 1930.

Harvey Building, West Palm Beach, Fla.. GENTLEMEN: In the matter of closing up the contract arrange­

ments with Mr. J. R. Francis concerning which you wrote me some time ago, and fixed the 15th day of January as the date, I beg to say that Mr. Francis is very sick in the Battle Creek Sani­torium at Battle Creek, Mich., but is , recovering. He cannot ar­rive in Miami, however, until about the 1st of February. I there­fore request you to change the date for closing up this matter until his a.rriVa.l. in Miami along about the 1st of February, and he and I will get in touch with you at that time.

Yours very truly, HALsTED L. RIT'I'ER.

By Mr. Manager PERKINS: Q. Did you respond to that letter of · Judge Ritter's?-A. I

believe I did. Q. I show you a copy of what purports to be a letter dated

January 6, 1931, and ask you if that is the copy of the letter you wrote to Judge Ritter on that date respecting that par­ticular matter?-A This is the reply I made to the letter of December 29.

Mr. Manager PERKINS. Mr. President, I offer the letter in evidence, and ask that it be marked as an exhibit.

(The document was marked "Managers' Exhibit N.") Mr. Manager PERKINS. The exhihit just marked in evi­

dence is as follows: MANAGERS' ExHmiT N

Re J. R. Francis.

701 HARVEY BUILDING, West Palm Beach, Fla., January 6, 1931.

Hon. HALsTEAD L. Rrrrmt, United States District Judge,

· Federal Building, Miami, Fla. DEAR Sm: Your letter of December 29, 1930, in the above matter

was duly received. We were sorry to hear of the illness of Mr. Francis and will, of course, be willing to grant the request that the closing be deferred until after his arrival in Miami about February 1, at which time I understand you or he will com­municate with me and arrange for a convenient time and place for the closing.

Very truly yours.

JDG: RvB. SPANISH RIVER LAND Co.,

By----, Vice President.

1936 _CONGRESSIONAL ~ECORD-SENATE .5249

By Mr. Manager PERKINS: Q. Who signed the letter, Mr. Gedney?-A. I signed it. Q. Did you receive a response to that letter from Judge

Ritter?-A. I do not recall whether I received a response to the letter or not.

Q. Do you know whether or not, on or about February 3, you wrote Judge Ritter a letter with respect to the transfer of the property from Spanish River Land Co. to J. R. Francis? I send you what purports to be a copy of a letter and ask you if you recognize that to be a copy of a letter which was sent by you to Judge Ritter respecting the matter just described.-A. I am referring now to the letter of De­cember 29 written to me by Judge Ritter.

Q. Did you write the letter a copy of which you have in . your hand?-A. Yes; I wrote a letter of which this is a copy.

Mr. Manager PERKINS. I offer it in evidence, Mr. Presi­dent, and ask that it be marked as an exhibit.

<The d~ument was marked ~'Managers' Exhibit 0.") Mr. Mana~er PERKINS. The exhibit which has just been

marked reads ~ follows: MANAGERS' ExHIBIT 0

FEBRUARY 3, 1931. Re: Spanish River Land Company-J. R. Francis. Han. HALSTED L. RITTER, ·

United States District Judge, . · . Federal Building, Miami, Florida.

DEAR Sm: You will recall that under date of December 29th, 1930, you requested that the date tor closing title in the above matter be deferred until after Mr. Francis' arrival, which you expected would be about February 1st. I am writing simply to ask whether Mr. Francis has arrived in Florida; and 11 so, that a day be set tor the closing.

Very truly yours, SPANISH RIVER LAND COMPANY, JDG:RvB By -- --, Vice President.

By Mr. Manager PERKINS: Q. I show you a letter from Judge Ritter dated February

5, 1931, and ask you if you received that letter from him respecting the matter just described.-A. This letter of Feb­ruary 5 refers to the previous letter, of February 3, written by me to Judge Ritter.

Mr. Manager PERKINS. Mr. President, I ask that the letter be marked as an exhibit, and I offer it in evidence.

<The document was marked "Managers' Exhibit P.") Mr. Manager PERKINS. The exhibit just marked reads

as follows: MANAGERS' ExHmiT P

FEBRUARY 5, 1931. SPANISH RIVER LAND COMPANY,

P. 0. Box 58, West Palm Beach, Florida. GENTLEMEN: I have your letter or February 3rd in regard to the

date for closing title in the matter with Mr. J. R. Francis. I am informed that Mr. J. R. Francis is expected to arrive in Miami about February 9th, and just as soon thereafter as he is physically able the matter will be taken up.

Yours very truly, HALsTED L. RITrER.

By Mr. Manager PERKINS: Q. I show you another letter, dated March 27, 1931, and

ask you if that is a letter received by you from Judge Ritter respecting the transfer of this property.-A. No; it is a let­ter written to Gordon B. Anderson.

Q. Did you actually receive it?-A. I beg your pardon? Q. Do you know that that letter is a letter received by

you from Mr. Anderson?-A. I received the letter from Mr. Anderson. I did not receive it from Judge Ritter.

Q. That has the signature of Judge Ritter to it?-A. I be­lieve so.

Mr. WALSH (of counsel>. Is that the one exhibited to counsel just now?

Mr. Manager PERKINS. That is the one exhibited to counsel just now.

Mr. WALSH <of counsel>. That is the signature of Judge Ritter.

Mr. Manager PERKINS. I offer the letter in eviden~ Mr. President, and ask that it be admitted and marked as an exhibit.

<The document was marked "Managers' Exhibit Q.") Mr. Manager PERKINS. The exhibit just offered is on

the letterhead of Halsted L. Ritter, United States district ~udge, Miami, Fla., and reads as follows:

MANAGERS' ExHIBIT Q HALsTED L. RI'I'TEll,

UNITED STATES DISTRICT JUDGE, Miami, Fla., March 27, 1931.

Mr. GORDON B. ANDERSON, Spanish River Land Co., Boca Raton Club, Boca Raton, Fla.

DEAR Sm: I acknowledge receipt of yours of the 24th in refer­ence to lot 1n Boca Raton to be conveyed to Mr. J. R. Francis. I have examined the deed, and it appears to be a special warranty deed by and through the Spanish River Land Co. I understood there was to be a general warranty deed, and that a policy of title insurance would be issued in conformity therewith. The deed can readily be interlined to carry out this purpose.

I presume you have abstracts of title to the property to be con­veyed, as well as to lots 1, 2, 3, and 4 of block 42-A, plat no. 2, of which Mr. Francis is the owner, or have a general abstract from which abstracts could be readily made to these specific pieces of property .

Mr .. Francis tells me that he has the preliminary certificates of title insurance on the lots in block 42-A. I presume you have the policies ready to deliver upon closing up the matter. I have given Mr. Francis a copy of this letter, and he w1ll get in touch with you very shortly.

I herewith enclose the deed sent me to the property on El Camino Real.

Yours very truly, En c. HALsTED L. RIT'l'ER.

By Mr. Manager PERKINS: Q. Mr. Gedney, when did you go to Judge Ritter's office

about th~ transfer of this property from the Spanish River Land Co. to J. R. Francis?-A. I cannot hear your question.

Q. When did you go to see Judge Ritter with reference to the transfer of the property from the Spanish River Land Co. to Francis?-A. When?

Q. Yes; to Judge ~Utter's office.-A. I saw Judge Ritter regarding this matter twice; once at his chambers early in 1931, and again when the matter was closed. I looked up the date from the memorandum in my file, and know that the first occasion was on Thursday, the 19th of February. I do not recall it, but I looked it up from a memorandum in my files.

Q. What year was that?-A. 1931. Q. Where did you see him ?-A. At his chambers. Q. What did you discuss with him?-A. This closure. I do

not remember it specifically, but probably it was in relat~on to the statement of his in a letter that Mr. Francis was to get a warranty deed, and my belief is that that was the real occasion of my calling upon him.

Q. Did you discuss with him the transfer of this property from the Spanish River Land Co. to Francis?-A. Yes. That was the reason I went to see him.

Q. When did you see him the second time?-A. I saw him the second time at Boca Raton.

Q. Did you meet him first at Miami and go to Boca Raton from Miami ?-A. On the second occasion?

Q. Yes.-A. No. Q. Where at Boca Raton did you see him?-A. Where is it? Q. Where at that place did you see Judge Ritter and Mr.

Francis?-A. At the clubhouse. Q. What was the purpose of your meeting with Judge

Ritter?-A. Well, I was asked to come down to attend the closing of the Francis matter, and I brought my file.

Q. Whom were you representing?-A. I was representing the Spanish River Land Co.

Q. Who was representing Francis?-A. Well, Judge Rit­ter was there with Mr. Francis.

Q. Did he participate in the discussion of the matter?­A. My recollection is that when I got there at the Boca Raton clubhouse that I was told that they were not pre­pared to pay the balance of $14,000, which was due in cash, and I was asked what could be done about it.

Q. Who were present at that meeting?-A. Well, we were all there, quite a crowd.

Q. Name the persons, please.-A. Mr. Geist, Mr. Ander­son, Judge Ritter, Mr. Francis, and myself.

Q. State generally to this honorable Court what tran­spired there.-A. Well, I have already told that when I first went there I was told that they were not prepared to pay the balance in cash, but wanted to pay half in cash and the balance in note, and I was asked what could be done about it.

Q. What was arranged there with reference to that sit­uation?-A. I then suggested that we could close the mat­ter-it had been dragging · a long time, and I thought it

5250 .CONGRESSIONAL RECORD-SENATE_ APRIL 9 would be a great deal better to make a delivery of the deeds in escrow, take the $7,000 and the note and deposit the deeds subject to be delivered to Mr. Francis if he paid the note, and to us if he did not pay it at maturity.

Q. Who participated in th.at conversation ?-A. It was participated in by all. I was then asked to prepare such an escrow agreement, and the escrow agreement was prepared.

Q. Signed by whom?-A. Signed by Mr. Geist, I believe, president of the Spanish River La.nd Co.

Q. And delivered to whom ?-A. Either to Mr. Francis or to Judge Ritter; I cannot say which.

Q. Was the matter subsequently closed entirely by pay­ment?-A. The matter was closed that day, and I took the deed and delivered it to the Atlantic Title Co., and took their receipt in accordance with the terms of the escrow agreement, and at a later date the note was sent to me, and I deposited tha.t note .in the Central Fanners' Trust Co. At a still later date, after the due date of the note had arrived, I received a letter from a lawyer 1n Miami asking about the delivery of the deed, and I replied to him that instead of having it delivered to me and then redelivered to him, I would instruct the Atlantic Title Co. to send it direct.

Q. What relation did Mr. Geist bear to the Spanlsh River Land Co.?-A. Mr. Geist was the president of the company.

Q. Is he an attorney at law?-A. Mr. Geist? Q. Yes.-A. No. Q. Is Mr. Anderson ?-A. No. Q. Through this tr~nsaction, did Mr. Francis receive more

land in the final deed than was originally designed in the first deed ?-A. In order to give you an understanding of that, you will have to know that the Boca 'Raton Club was formed out of the wreck, so to speak, of the Mizner Develop­ment Corporation. The Mizner Development Corporation was a company which had considerable success for a time in the development of Boca Raton. It built a hotel and built two golf courses, and what not. After selling $31,000,-000 worth of property ~n contracts, on which they collected $11,000,000, they Sold 5;000,0{)0 of stock. With the collapse of the boom, they collapsed and went into bankruptcy, and afterward it was sold, in the late summer or early fall of 1927.

Q. Mr. Gedney, make it brief. What I want to know is whether, through the transaction, Mr. Francis a.t this time received more land than the original contract called for?­A. I wanted to explain how that was. I will make tt as brief as possible. He ha.d arranged to buy certain lands which are described -in various letters and in the deeds, which were finally given to him from the Mizner Development Corpora­tion, and had paid _the full amount, and the la.nds were fore­closed, and he was out so far as his property was concerned.

Mr. O'MAHONEY. Mr. President, I send three questions to the desk and ask that they be put to the witness.

The PRESIDING OFFICER. The clerk will read the in­terrogatories submitted by the Senator from Wyoming.

The legislative clerk read the first question propounded by Mr. O''MAHONEY, as follows:

At the Boca Raton conference who told you that Mr. Francis was unable to pay the balance at that time?

A. I do not recall exactly who told me. I believe it was Mr. Anderson.

The legislative clerk read the next question propounded by Mr. O'M.AHoNEY, as follows:

Who instructed you to draw the deed? A. W-ell, I was the attorney of the company, and I presume

that I did it as a matter of course. The legislative clerk read the third questi(}n propounded by

Mr. O'MAHoNEY, as follows: What part, 1! any, did Judge Ritter take 1n this conference?

A. Judge Ritter was present with Mr. Francis when this matter was discussed, and I believe was present when the receipt, the escrow receipt, was signed and delivered to Mr. Francis. I also believe he discussed the propriety of carry­ing out the matter in the way that I had suggested.

By Mr. Manager PERKINS: Q. On whose behalf did he discuss the propriety? Mr. WALSH (of counsel> . I object to that as calling for

a conclusion of the witness. Anything that was said there that the witness can recall will~ all right.

The PRESIDING OFFICER. The Chair suggests that the witness may recite the conversation if he remembers it.

Mr. Manager PERKINS. I produce, having exhibited it to counsel for the respondent, a certified copy of deeds from the Spanish River Land Co. to J. R. Francis, one dated the 31st of March 1931, the other dated the 16th of February 1931. I desire to offer these in evidence and have them marked as exhibits.

The PRESIDING OFFICER. Without objection, the docu­ments will be received and appropriately marked.

<The documents were marked, respectively, "Managers' Exhibit R" and "Managers' Exhibit S .. ")

By Mr. Manager PERKINS: Q. Mr. Gedney, had it not been for the conference and

the arrangements at the time they were made, would Mr. Francis ever have received a.ny land from the Boca Raton Co.?

Mr. WALSH (of counsel>. I objret to that as calling for an improper conclusion.

The PRESIDING OFFICER. Do the managers on the part of the House insist upon the question?

Mr. Manager PERKINS. No; I will put the question a little differently.

By Mr. Manager PERKINS: Q. At the time of the bankruptcy was or was not Mr.

Francis' interest in the Boca Raton property entirely sepa­rate?-A. I understand the question to be at the time of the bankruptcy.

Q. At the time of the bankruptcy or by reason of any other legal proceeding.-A. That Is what I was about to explain. The property of the Mizner Development Corporation was all heavily mortgage~ and this very property which Mizner had sold to Mr. Francis under a contract of sale was foreclosed at a later day and had nothing to do with the bankruptcy.

Q. At the inception of the transaction with reference to the title that you described to this honorable Court, did Mr. Francis have any legal title to any of that land which he afterward received under the deed?-A. None whatever.

Q. Did he have any equity or interest in that property whatever?-A. No.

Mr. Manager PERKINS. I desire to show eounsel for .re­spondent a cheek. I understand that the check has been submitted, and I offer it in evidence and ask that it be marked as an exhibit.

Mr. HOFFMAN. Does this witness know anything about it?

Mr. Manager PERKINS. I am not asking the witness any­thing about it.

Mr. HOFFMAN. We object to its introduction at this point because of the purpose in offering it at this time. If this witness knows nothing about it, the examination of the wit­ness should proceed before the check is offered.

Mr. Manager PERKINS. Will you let me have the check back?

Mr. HOFFMAN. Yes; you can have it back; it has been through the bank, so I will let it go back to you.

Mr. Manager PERKINS. Counsel for the respondent may take the witness.

The PRESIDING OFFICER. .Are there further interroga­tories?

CB.OSS-EXAMINATION

By Mr. HOFFMAN: Q. Mr. Gedney, it is true, Is it not, that Mr. Francis, prior

to the collapse of the Mizner Development Co. at Boca Raton, was a purchaser under a land contract of some property in the original development of the Boca Raton?-A. I have explained that he had a contract at the time of the collapse of Mizner Development Co. to purchase from the Mizner Go. sOlll€ property which he afterward received by deed from the Spanish River Land Co.

Q. The story is, in fact, that what you did was a ccnclu­sion of an .arrangement made by J'udge Ritter with your client with respect to that old Francis purchase made by Judge Ritter before he went on the bench?-A. No; it had nothing to do with anything that happened before the in­corporation of the Spanish River Land Co.

Q. I understand that~ but Mr. Francis was trying, was he not, to have your company sell to him property in the

1936 PONGRESSIONAL RECORD-SENAT:m 5251 Mizner Development· Co. area owned by your client at the time, in view of the fact that he was formerly a purchaser, and that that was mentioned?-A. I do not know what Mr. Francis' purchase was, but I know it is a fact that he bought from the Spanish River Land Co. the same property that he had been under contract to buy from the Mizner Co., with the exception that -the· Spanish River Land Co. con­veyed additional deeds.

Q. Your client took into consideration or you knew at the time he had formerly been one of the original buyers in Boca Raton and then had no interest in it because of the crisis?-A. I say again~ that is true.

Q. He then became a purchaser by purchasing from the new owners that you represented land in the same area. Did he also become a member of the Boca Raton Club?-A. I believe he did.

Q. On that occasion at Boca Raton do you recall seeing Mrs. Francis and Mrs. Ritter there also?-A. No; I do not. I do not think I have ever met Mrs. Ritter . . Q. Were they not there at dinner in the club on that occasion?-A. They may have been; I do not recall it.

Q. You did not see them?-A. I remember that we had luncheon together; a crowd of us were there. Other than those I talked to in the business conference, I do not recall who were there when we had luncheon and were socially engageci . Q. All the papers in this matter were drawn by you, were they not? I mean the escrow agreement and the· deed?-A. All the papers were not drawn by me; no. - Q. Let us say that the conveyances, to get them singled out, were drawn by you?-A. Yes; they were. There were two deeds. ·

Q. Those are the two we just had here?-A. That is right. Q. The escrow agreement that deposited the deeds subject

to the balance being paid was drawn by you ?-A. That is right; yes.

Q. Judge Ritter did not draw any of the title papers, did he, that you know of?-A. No; he did not draw any of them.

Q. Do I understand that, so far as you know, Judge Ritter was gratuitously serving Francis in the matter?-A. I know nothing about Judge Ritter's relations with Mr. Francis ex­cept what is contained in his ·own letter.

" Q. That original letter mentions an understanding or, rather, a discussion with your client prior to the time of this first letter, does it not?-A. Yes.

Q. You do not know when that discussion was had, how long prior to the first letter of this series of letters?-A. I cannot hear you when you speak directly behind the micro­phone. I am doing my best. · · The PRESIDENT pro tempore. Let the Chair state that the microphones are so arranged that we can hear less at this point in the Chamber than any place else. I have called the attention of the Sergeant at Arms to that fact.

The WITNESS. If you will speak a little to one side of the microphone perhaps I can hear you.

By Mr. HOFFMAN: Q. You cannot tell us how long prior to the first communi­

cation introduced here,_ from the standpoint of the dates, it was that Judge Ritter discussed with your client this mat­ter?-A. Show me the first communication and I will tell you. If you will tell me what you mean by the communica­tion, perhaps I can answer.

Q. The first one, from the standpoint of date, that first came to your attention. I am trying to find out if you know how long before that it was discussed with your client.-A. I . want to see the first receipt that came from my files.

Mr. McKELLAR. Mr. President, may I ask the witness to sit a little closer to the microphone, so we can hear him a little better, perhaps.

The WITNESS. I am glad to do so. By Mr. HOFFMAN (of counsel): Q. Perhaps we can save a little time. Judge Ritter talked

this matter over with your client, Mr. Geist, long before he went on the bench, did he not?-A. I don't know. He said so in the letter that was introduced. I believe he did.

Q. That is what I wanted the letter for-A. Yes; certa.inly. Q. All that happened was the cl~g up of that trans-

action?-A. No; it was decidedly not. It was an entirely new transaction because in between the time the title had been foreclosed out of the old Mizner Development Co. and the Francis sale was made, the title was in the land company.

Q. Originally, one company owned it, and Mr. Francis contracted and yoUl' clients thereafter became the owner, and Mr. Geist was interested in the Spanish Land Co. The discussion that Mr. Geist mentioned in the first letter we have here--A. Now you are talking something about why• a letter was written.

Q. No; there was only one transaction, the Francis trans­action. It is the same matter, is it not?-A. No; there were two transactions, one the purchase under a coRtract with Mizner, which was absolutely settled by the foreclosure of the mortgage.

Q. You had nothing to do with that in this transaction?­A. What do you mean?

Q. This was just one transaction of Francis with the Spalili;b River Land Co. ?-A. One transaction with the Spanish River Land Co.; yes.

Q. There is no misunderstanding about that. This first letter is dated February 3, 1930, addressed to Mr. Gei~t and commences:

In March 1928 whlle I was practicing law in Palm Beach, I had two or three conferences with you concerning the property which Mr. J. R. Francis, of Flint, Mich., had purchased in Boca Raton prior to the bankruptcy proceedings.

That is where be first comes to your attention, is it not, as a result of this first letter?-A. No; it was not.

Q. That is, Mr. Geist sent this letter to you?-A. That was not the first. The first thing I got was a copy of a receipt given by the Spanish River Land Co. to Mr. Francis for pay­ment of $15,000, and afterward I got that letter.

Q. The culmination and finality of it was the delivery of these deeds we have in evidence?-A. They were to be de­livered afterward, yes, April1, in escrow. They were delivered on the 2d of April 1931; and they were delivered on payment of the notes I described on my direct examination. -

Q. That final thing was the delivery of the two deeds we have in evidence?-A. Yes.

Mr. HOFFMAN. That is all. REDIRECT EXAMINATION

By Mr. Manager PERKINS: Q. You sent the deeds described to Judge Ritter, did you?­

A. I never sent the deeds to Judge Ritter. They were present in the meeting of April1 at Boca Raton, which I. have testified about.

Q. Do you know whether in the final closing of the matter Mr. Francis received credit for any of the money he had paid to the Mizner people that he had lost by reason of the fore­closure?-A. I think the purchase price was arrived at by giving him credit for all that he paid to the Mizner Co. and deducting that sum from the amount that he had agreed to pay the Mizner Co. In other words, he paid the Spanish River Land Co. $29,000 for all these lots, and they as a matter of fact represented the difference between what he had paid and what he had agreed to pay to the Mizners.

Q. I show you a memorandum on the back of the letter of February 3, 1930, and ask you if that refreshes your memory as to the amount of the payment?-A. No; it does not, be­cause the amount of the dit!erence here is shown to be $29,300. The receipt which is in my file and which was sent to me fixed the amount at $29,000.

Q. Did I offer that receipt to you?-A. No; you did not . Q. Will you please examine your file which appears to be

before you and see if you can find that receipt?-A. (After examjnjng papers.) Yes; I find it.

Mr. WALSH (of counsel). I did not hear what the witness said.

Mr. Manager PERKINS. He said he found the receipt. Mr. WALSH (o! counsel>. Have we seen the receipt? Mr. Manager PERKINS. I do not know. Mr. WALSH (of counsel). May we see it before it is offered

in evidence? Mr. Manager PERKINS. You may [handing paper to Mr.

Walsh (of counseD L

5252 .CONGR~SSIONAL ~ECORD-SENATm APRIL ~-

By Mr. Manager PERKINS: Q. Mr. Gedney, I show you the paper just referred to and

just submitted to counsel for the respondent and ask if this is a copy of the receipt to which you referred in your testi­mony?-A. This is the original paper which I received from the Spanish River Land Co. as the basis for proceeding with the matter and it purports to be a copy of the receipt issued to Mr. Francis.

• Mr. Manager PERKINS. I offer it in evidence and ask that it be marked as an exhibit.

(The receipt was marked "Managers' Exhibit T.") Mr. WALSH (of counsel). May I see that again when

you are through with it? Mr. KING. Mr. President, may I be permitted to inquire

whether counsel desire or intend to have printed in the RECORD of today's proceeding these deeds respecting the Spanish River transaction? It seems to me that the mere identification, and the fact that they are presented, would preclude the necessity of having them printed in the REcoRD.

The RECORD is already getting voluminous. Mr. Manager PERKINS. Mr. President, in response to

the honorable Senator, · the managers on the part of the House will say that they expect to do just what the Senator has suggested-merely to offer them and give them exhibit numbers, but not to print them.

The receipt just offered in evidence is as follows: MANAGERS' ExmBIT T

FEBRUARY 15, 1930. Received of J. Richard Francis, •15,000.00 to apply on the pur­

chase of lots nos. 1, 2, 3, and 4, block no. 42-A. and lots nos. 10 and 11, block no. 126, plat no. 4, designated as "The Cloister Inn Golf Course Addition o! Boca Raton."

Mr. J. Richard Francis agrees to pa.y $14,000.00 more when deed is delivered, With guarantee title 1nsur1ng title to these lots.

Mr. Francis also agrees to having inserted 1n the deed the regular restrictions of the Spanish River Land Company to lot purchasers.

SPANISH RivEa LAND CoMPANY, ----,President.

By Mr. Manager PERKINS: Q. Mr. Gedney, what was the total purchase price of

those lots ?-A. $29,000. Q. Do you know how much Mr. Francis ~ had previouslY

paid to the Meizner interest ?-A. He had paid something around $53,000.

Q. So that the total amount that be had disbursed alto-gether was something like $83,000?-A. That is mathematical.

Mr. Manager PERKINS. That is all. Mr. WALSH (of counsel) . That is all. Mr. Manager PERKINS. Mr. President, I now desire to

offer in evidence a check which has been exhibited to coun­sel for respondent, and which is admitted to be genuine, and ask that it be given an exhibit number.

The PRESIDENT pro tempore. It is so ordered. <The document was marked "Managers' Exhibit U."> Mr. Manager PERKINS. The exhibit jusf offered reads

as follows: · MANAGERS' ExHIBIT U

INDUSTRIAL SAVINGS BANK-MAIN OFFICE

FLINT, MicH., ApriZ 18, 1929. No. 20 Pay to the order of H. L. Ritter $7,500.00/xx Seven thousand five hundred 00/100 dollars.

(Signed) J. R. FKANCIS. (Chg. Savings a./c.)

. . . Endorsed "H. L. Ritter" and cleared through the banks

shown by the endorsement. . . ~ Mr. McKELLAR. Mr. President, what is the date of the

check? Mr. Manager PERKINS. Mr. President, in response to

the inquiry, I will state that the date of the check is April 18, 1929.

Mr. Manager HOBBS. Call Judge Chillingworth. please. DIRECT EXAMINATION OF C. E. CHILLINGWORTH

C. E. Chillingworth, having been duly sworn, was examined and testified as follows:

By Mr. Manager HOBBS: Q. State your name, please.-A. C. E. Chillingworth. Q. What office do you occupy, if any, Judge?-A. I am a

judge of the Circuit Court of the Fifteenth Judicial Circuit of Florida.

Q. How long have you been so?-A. I have been a circuit judge for something over 12 years.

Q. Judge, you were the presiding judge in the case of Trust Co. of Georgia, Robert G. Stephens, as trustee, against Brazilian Court Building & Operating Co., were you ?~A. I was.

Q. Do you remember the number of that case?-A. I do not. The records are here. I think it is 5704. I am not certain.

Q. That is right. That case was pending regularly in your court-that is, o! the fifteenth judicial circuit of Florida?­A. Yes, sir.

Q. Judge, I will ask you if that was the case in which Mulford Realty Co. was the owner of the bonds?-A. Yes.

Q. During the pendency of that case, who was counsel for the complainant and who for the defendant, if you remember?-A. The firm of Ritter & Rankin represented the plaintiff trustees. The firm of Winters & Foskett---perhaps it was then Winters, Foskett & Wilcox-represented some of the defendants. I think Mr. Salisbury represented one of the defendants, and there were perhaps some other law­yers representing some lienors.

Q. Was a man by the name of D'Esteree one of the in­terveners?-A. He was a party in the suit. I am not certain now just how he came in the suit.

Q. All right, Judge. Now we ha..ve the suit identified. A8 judge of that court, do you, for your own private informa­tion, keep a record book in which you yourself enter engage­ments?-A. I do . .

Q. Have you your book for 1929?-A. I have it. Q. I will ask you, Judge, to turn to the page which indi­

cates the date of May 3, 1929. Did you yourself make that entry?-A. All the entries on that page in wrtting are made in my own handwriting.

Q. What entries do you make when an attorney or any­one else makes an engagement with you as judge of that court ?-A. My practice with reference to engagements is to make a notation of the lawyer who seeks the engagement and the approximate amount of time that he feels he needs.

Q. You mean his name?-A. His name. Q. When a lawyer gives you a citation of authority, do

you note that?-A. Quite often. Q. I will ask you to look at May 3 and see if you have a

notation there of an engagement with Rankin.-A. I do. • Q. Read that notation, if you please, Judge. Mr. WALSH (of counsel) . I should like to see that,

please-any document that goes in. .Mr. Manager HOBBS. I shall be so glad to have you see

it, sir .. (Th-e document was exhibited to Mr. Walsh, of counsel.) Mr. Manager HOBBS. With the Court's permission and

the kind attention of opposing counsel, I should like to sug­gest that counsel also look at May 4, because I am going to examine him on that in a moment.

By Mr. Manager HOBBS: Q. Will you please read that, Judge?.:.._A, On Friday, May

3, in my own writing, there appears the following: 3 00 Rankin.

Q. Turn over, please, to May 4, 1929, Judge. Do you see an entry there of an engagement made by Judge Ritter?­A. There is this in my own handwriting.

Q. Please read it.-A. <Readi~:) 111 So. 626 Ritter supersedeas bond.

Q. Judge, that "111 So. 626" refers to the Southern Re­porter, does it not?-A. It does.

Q. Is that or not the common and accepted way that law­yers in our part of the country refer to the West Publishing Co.'s national reporter system Southern Reporter?-A. It is.

Q. And you say that that engagement is noted by you in your own handwriting?-A. These words appear here in my own handwriting.

Q. I will ask you, Judge, if at that time you had notified counsel in that case of the rendition or mind of the court with respect to the final decree in the Brazilian Court case?-A. On March 2, 1929, I wrote counsel a letter advis­ing them o! the way that I intended to dispose of that case and sent them a copy of the findings tha.t I desired incor-

1936 CONGRESSIONAL RECORD-SENATE 5253 porated in the decree, with the request that they prepare the formal decree and present it to me on notice.

Q. So, then, from March 2 on there was only pending the question of the value of the bonds?

Mr. WALSH <of counsel). I object to that, may it please the President, as leading. Let him say what it was.

Mr. Manager HOBBS. All right; I beg your pardon. I was trying to save time.

By Mr. Manager HOBBS: Q. Judge, I shall appreciate it if you would tell us what

remained to be done in that case.-A. I should like to have a. copy of that letter, which I do not have. I did not keep any copy of it. I was furnished a copy of it last week. I do not have it now. Mr. Rankin exhibited to me a copy over my signature that I sent out to the lawyers in the case. Now, if I had that copy that he exhibited to me, I could probably tell you the matters undisposed of. My recollection is that the precise amount to be included in the final decree ' had not yet been settled by the proof, nor had the amount of attorneys' fees and perhaps some costs. The equities had been established; at least I told them what I would do.

Q. Judge, I will ask you if the matter of the requirement of a supersedeas bond, and fixing the amount thereof, was one of the questions which would probably come up imme­diately after the final decree was rendered.

Mr. WALSH <of counsel). I wish to object to that ques­tion for the reason that the· record in the case and the pa­pers in the case are the best evidence. I shot:.ld like to have them here. I should like to have them identified, so that, if we thought -it necessary, we could interrogate the witness on cross-examination.

The PRESIDENT pro tempore. The Presiding Officer thinks, if the witness knows matters that he himself at­tended to, the original documents not being in question, he has a right to answer the question.

A. I have no independent recollection of the matter at all. The official court records or this memorandum would have

· to control. By Mr. Manager HOBBS: Q. Your decree was not rendered until June 8, was it?­

A. The decree was not rendered until June 1929. Q. I am not asking whether or not th~re was in fact filed

a motion for a supersedeas bond to be given, or whether or not the aggrieved party, or the party feeling himself ag­grieved, had taken an appeal and given in aid thereof a supersedeas bond, but I am asking you, as the judge of that court, if there was to be an appeal taken, that would be one of the steps in the perfection of that appeal, would it not?­A. Yes, sir; it might be a step, and it was a step in this suit. A supersedeas bond is not essential to the appeal.

Q. Of course not; but it frequently is?-A. Yes, sir. Q. And there was a supersedeas bond in this case?-A.

Yes, sir. Q. And you fixed the amount thereof at $7,500, did you

not?-A. I did. Q. Judge, there was an appeal taken and prosecuted to

termination, was there not?-A. Yes, sir. Q. Who gave the supersedeas bond in this case?-A.

D'Esterre, I think. Q. I will ask you if that notation which you have in your

docket, your engagement docket there, under date of May 4, 1929, referred when you wrote it, and now refers, to this book which I now show you [exhibiting book to witness] ?-A. Yes.

Q. I will ask you if you read this decision ?-A. I read part of it.

Q. It deals with supersedeas bonds, does it not?-A. I read that headnote, in connection with the supersedeas bond in this case.

Q. I will ask you to read this fourth headnote, which you say you read.

Mr. WALSH (of counsel). It seems to me that it is not material, Mr. President, and I therefore object to it.

The PRESIDENT pro tempore. The Chair is unable to tell whether it is material or not at the present time. They are dealing with the situation at the time of the original trial, and the judge's remembrance of it 3/nd certain notes he made at the time, I think can be shown and that he can

read the notes. There can be no harm to respondent from his reading them.

The WITNESS. This is 31 proceeding in the Supreme Court of the State of Florida. [Reading: 1

Where a foreclosure decree is for $108,656.25 and $6,000 solici­tor's fees, an order of the circuit judge fixing the amount of a supersedeas bond at $25,000 is not an abuse of discretion.

Mr. Manager HOBBS. That is all. Thank you, Judge. CROSS-EXAMINATION

By Mr. WALSH <of counsel) : Q. Judge, will you be kind enough to let me look at your

memorandum book or diary?-A. Yes. I am not sure you can read all of it.

Mr. WALSH (of counsel) . I will do my best. <The book was handed to Mr. Walsh.) By Mr. WALSH (of counsel) : Q. Judge, you have many other memoranda here which

do not refer to engagements with lawyers or others, have you not ?-A. That is con-ect.

Q. You make memoranda of various kinds, I notice.-A. Personal and official both.

Q. Have you the letter to which you were referring here, which you wrote to Judge Rankin, in which you gave the substance of your findings of fact?-A. I have not. Mr. Rankin exhibited to me an original duplicate which I signed.

Mr. WALSH (of counsel). I am going to ask the man­agers whether they have this letter to which the witness referred.

Mr. Manager HOBBS. We never saw it or heard of it. He says he was furnished with it by Judge Rankin. We would be so glad to have it exhibited.

Mr. WALSH <of counsel) . I would like to see this letter, Mr. President, if I can get it readily. I understand Mr. Rankin is still in attendance here. I would also like to have the original bill of complaint in this case.

<Several packages of papers were handed to Mr. Wa.lsh.) By Mr. WALSH (of counsel): Q. Is that the record in this case [indicating] ?-A. Not

that I know of. This is some suit in the Federal court. Q. I am going to send up these boxes of records which you

have intr.oduced here, Judge, and ask you to be good enough to pick out the bill of complaint, the intervention of d'Esterre, and the answers filed in the case.-A. If you would state all you want, and let me retire, I could probably save the time of the court and find those documents.

Q. I just want those pleadings I have mentioned, the orig­inal bill of complaint, the interposition of d'Esterre, and the answers filed in the case, the answers of all the defendants.

<The papers referred to were aanded to the witness.) A. <After examining papers.) I have delivered to counsel

the papers requested so far as I could find them from this casual examination. Parts of those answers might have been stricken before the case went to final hearing. I would have to examine all of these orders to state accurately what was left.

Mr. WALSH (of counsel). I offer in evidence at this point, without reading them, the bill of complaint in case no. 5704, Trust Co. of Georgia, and another against Brazilian Court Building Corporation, and others, and ask that it be marked an exhibit with the next number of the respondent's exhibits.

The PRESIDENT pro tempore. It will be received and marked as an exhibit.

<The document was marked "Respondent's Exhibit 14.") By Mr. WALSH (of counsel): Q. Judge, I do not see here the interposing complaint of

D'Esterre. Perhaps one of those answers contains it. I do not know.-A. This answer of D'Esterre, filed February 11, 1928, apparently presents his claim.

Q. His intervention ?-A. His answer. I do not think there was any intervention as such.

Q. He was made a party defendant?-A. Yes, sir. Mr. WALSH (of counsel). I now offer in evidence the

following papers and ask that they be given the proper number as respondent's exhibits:

Answer of the defendant, Joseph D'Esterre, filed February 11, 1928.

5254 CONGRESSIONAL RECORD-SENATE APRIL 9

By Mr. WALSH (of counsel): Q. The date of the filing, Judge, I believe, of the original

complaint is some time in 1927. Have you the original com­plaint there?-A. I think that is correct.

Mr. WALSH <of counsel). Also the answer of E. C. Hilker, Inc., and other defendants, filed December 5, 1927.

Also, answer of Brazilian Court Building Corporation, Sep­tember 27, 1927.

Also, amended answer of E. C. Hilker, filed March 5, 1928. Also, plea in abatement of the defendant, Joseph D'Esterre,

filed December 5, 1927. Also, amendment to answer of the defendant, Joseph

D'Esterre, filed April 10, 1928. Also, amendment to the answer of the defendant, Joseph

D'Esterre, filed June 4, 1928. Also, secorid amended answer of E. C. Hilker, Inc., June 9,

1928. And the final decree, filed the 8th day of June 1928. I ask that they be given their appropriate numbers as

respondent's exhibits. Mr. KING. Mr. President, I request the Presiding Officer

to inquire of counsel whether it is his desire to have all the exhibits just identified printed in the RECORD, or merely offered and marked for identification and left with the clerk.

Mr. WALSH (of counseD. I desire to have them regularly put into the evidence. For the purpose of conserving time and space, I think they might be put together with a band, as they often are, and given one exhibit number. I do not ask that they be printed in full, but merely that memoranda be made just as I have dictated them here.

.Mr. Manager SUMNERS. Mr. President, with the con­sent of counsel for the respondent in this connection, to save time, suppose the entire record be offered-we join in offering the rest of it at this time-merely for the purpose of making the papers available for examination or argu­ment, as may be required.

The PRESIDENT pro tempore. Is that stipulation agree­able to counsel for respondent?

Mr. WALSH (of counsel). I do not see any objection to it. The PRESIDENT pro tempore. It is so ordered, and it is

so stipulated. Mr. WALSH <of counseD. I should like to have an agree- .

ment with the managers, if they wish to do so, to the effect that we may get the letter referred to, which contained the judge's findings of f~ct, and have the judge approve it or 0. K. it after we get it this evening, or some other time, and therefore not keep him over just for that purpose.

Mr. Manager SUMNERS. That is all right. Mr. WALSH (of counseD. With that understanding, that

is all we have to ask you, Judge Chillingworth. The PRESIDENT pro tempore. Under the stipulation in

the record in this case, the entire record or file in the case just enumerated will be admitted in evidence and receive one identification number.

Mr. WALSH (of counsel). Yes; the papers will go under one identification number.

(The documents were marked "Respondent's Exhibit 15.") The PRESIDENT pro tempore. Call the next witness. Mr. Manager PERKINS. Mr. President, I have submitted

to counsel for respondent three letters which they have agreed may go in evidence; and I now offer a letter written by A. L. Rankin, dated May 29, 1929, to Charles A. Brodek, and ask that it be given an exhibit number.

(The document was marked "Managers' Exhibit V.") Mr. WALSH (of counsel). I have not had a chance to see

that, Judge. Mr. Manager PERKINS. Mr. Hoffman read all these let­

ters. I submitted all of them to him. Mr. WALSH (of counsel). I should like to look at it. Mr. Manager PERKINS. While counsel is reading that

letter, I have two other letters written by Mr. A. L. Rankin, dated October 31, 1929, and August 26, 1931, which, under an agreement with counsel, after being admitted in evidence, I ask to have marked as exhibits.

Mr. W .AI.BH (of counsel). I do not object to those, but I should like to read them beforehand.

The PRESIDENT pro tempore. - The letters will be ad­mitted and marked.

Mr. Manager PERKINS. I am . merely trying to conserve time.

Mr. WALSH (of counsel). I am trying to do that, but I cannot do it at the expense of not reading what you are putting in.

<The two documents were marked, respectively, "Managers' Exhibit W" and "Managers' Exhibit X.")

Mr. Manager PERKINS. Mr. President, the exhibits which have just been offered in evidence, and which have been shown to counsel for the respondent, are as follows:

MANAGERS' ExHIBIT V A. L. RANKIN, A'ITORNEY AT LAw,

COMEAU BUILDING, · West Palm Beach, Florida, May 29th, 1929.

In re Brazilian court foreclosure. Mr. CHARLES A. BRODEK, .

cj o Brodek, Baphael & Eimer, 67 Wall Street, New York City, N. Y.

DEAR MR. BxooEK: Upon returning to the office this morning from a ten days' business trip to Alabama I found your letter of May 20th, and also your night letter of the 28th, pertaining to the above matter. I wired you today, confirmation of which I am herewith enclosing. _ .

We have had the matter of entering the final decree up with the court on several occasions, trying to arrange to have him enter the final decree without reopening the case for the taking of fur­ther testimony as to the amount Mr. Mulford has invested in the bonds, interest, and other carrying charges or expenses. The posi­tion that the court has taken in this matter in refusing to enter a final decree for the full amount of the bonds was so unexpected and unreasonable that I have been- at a loss as to how the court could arrive at fixing the proper amount, there being no evidence before the court as to the amount paid for a number of the bonds and as to the interest and expenses of Mr. Mulford pertaining to the holding of the bonds since his purchase. The court has finally agreed that if the lawyers would stipulate and file the stipulation in the cause, consenting to the various items outlined in your telegram to me sometime back, that he would enter the final decree according to the stipulation. The attorneys have finally agreed to stipulate. The stipulation has been drafted, bas been signed by myself, and 1s in their hands for signature. Mr. Foskett, of Winters, Foskett & Wilcox, attorneys for D'Esterre, promised to sign the stipulation more than ten days ago, but he left the city before doing so, and w1ll not return until June 1st. The court 1s ready to enter the final decree immediately upon the stipulation being signed and filed.

The court has set the amount of the supersedeas bond at $7,500.00, which the defendant, D'Esterre, will have to execute upon nts appeal, which they say will be taken as soon as the final decree 1s entered. I think the court should have fixed this bond at not less than $35,000.00, and so insisted, but he says that he thinks the bondholders would be fully protected with a $7,500 bond. Under separate cover I am mailing you my memorandum brief submitted to the court on the question of the amount of the supersedeas bond. I am also sending a copy of the letter received from the judge, indicating that he would fix the amount of the bond at $7,500.00.

I have received today from the Central Farmers• Trust Company receiver's report covering the period. from November 10, 1928, up to and including April 30, 1929, which I am also sending to you for your inspection. I would thank you to return the report to me as soon as you have looked it over, as it 1s my office copy.

If D'Esterre appeals from the final decree, we will file cross­assignments of error and feel that we w1ll have no trouble In reversing Judge Chillingworth and get a final decree for the full amount of the bonds, plus the interest.

Will advise immediately when final decree is signed and the date of sale fixed.

Yours very truly. ALR:c A. L. RANKIN.

The next exhibit marked in evidence is a letter from A. L. Rankin to Mr. Charles A. Brodek, dated August 26, 1931, as follows:

MANAGERS' ExHIBIT X A. L. RANKIN, ATToRNEY AT LAw,

COMEAU BUILDING, West Palm Beach, Florida, August 26, 1931.

Mr. CHARLES A. BRODEK, ' Care Brodek, Raphael & Eisner,

· 72 Wall Street, New York. Re: Brazilian Court foreclosure.

DEAR MR. BRODEK: I have heard nothing further from the su­preme court as to when the appeal o! D'Esterre in the above case will be heard. I have no doubt that it wlll go over into the fall or winter.

The plan of Winters & Foskett, attorneys for D'Esterre, 1s to hold this ca.se in court until they can build up a very large fund in the hands of the receiver, hoping by that to prevall upon the court to allot them a substantial sum upon a final order dis­tributing the funds held by the receiver.

If the appeal 1s affirmed by the supreme court, their plan 1s to file a motion or petition praying the court to order the funds in the hands of the receiver paid over to them in satisfaction of their

1936 CONGRESSIONAL RECORD-- SENATE 5255 claim, and 1n the event this motion or petition is denied, to again ­appeal to the supreme court from the court's order. There 1s nothing in the Florida law that would prevent them from taking this second appeal. . They are very hopeful of persuading the supreme court on the present appeal to reverse the judgment of the lower court on the authority principally of Houston vs. Forman ((Fla.) , 109 South­ern Reporter, p . 297); Houston vs. Adams ((Fla.), 95 Southern Re­porter, p . 859 ) ; Coram vs. Palmer ((Fla.), 58 Southern Reporter, p. 721); and Hogan vs. Ellis ( (Fla.), 22 Southern Reporter, p. 727). In the case of Houston vs. Forman above cited, the question of equitable estoppel was involved, and they rely principally upon this case on their appeal. I feel and contend that the facts in our case are entirely different from the fact s set forth in the case of Houston vs. Forman. They have, - however, a very fine talking point in the fact that D'Esterre owned the property and only received a small proportion of the original price, and that they have lost title to the property ·by virtue of scheming and .manipulation on the part of the Pascbals and G. L. Willler, the trustee, at the time the deed was delivered out of escrow. This argument might appeal to some of the judges of the supreme court, notwithstanding the doctrine of equitable estoppel and ratification of delivery out of escrow upon which we won the decision in the lower court. _ . In view of the prospect of long drawn out and continued liti­gation, it strikes me that it would be advantageous in the long run for Mr. Mulford to offer D'Esterre a substantial amount of the present moneys in the bands of the receiver in settlement of the D'Esterre claim in consideration of the withdrawal of their ap­

_peal and permitting us to proceed to sale under foreclosure decree. As Judge Ritter assisted in handling this case and is very fa­

miliar with all the details, I talked this settlement over with him a few days ago before be left for New York. He agrees with me that under the circumstances a settlement is advisable. Judge Ritter is at present in New York stopping with his son-in-law, Merle R. Walker, at No. 6 River Road, Scarsdale, New York. After September first he will be holding court during the month of September for Judge Mack in New York. I suggest you get in touch with Judge Ritter and talk this matter over with him and with Mr. Mulford. If you should want me to come to New York and discuss a plan of settlement, I could run up there for a day or two during September.

With kindest regards and best wishes, Yours very truly,

ALR/ P . A. L. RANKIN.

The other exhibit is a letter from A. L. Rankin to Charles A. Brodek, dated October 31, 1929, as follows:

MANAGERS' ExHIBIT W A. L. RANKIN, A'I"l'ORNEY AT LAw,

COMEAU Bun.DING, West Palm Beach, Fla., October 31, 1929.

In re Brazilian Court Hotel. Mr. CHARLES A. BRODEK,

cj o Brodek, Raphael & Eisner, 67 Wall Street, New York City, N. Y.

DEAR MR. BRODEK: Mr. Foskett, of Winters, Foskett & Wilcox, at­torneys for D'Esterre, has approached me on several occasions lately with reference to a settlement of the Brazilian Court matter and the D'Esterre claim. I have refused to discuss settlement with him seriously, but while Judge Ritter was in the otHce here Saturday, Mr. Foskett came in and again brought up the subject of settlement, suggesting that they would take 50 cents on the dollar for their claim, including principal and interest, which would approximate the sum of $45,000. We merely smiled and gave him no satisfaction whatever. However, after he left, Mr. Paschal came in and talked over a proposition of settlement which we might submit to Foskett, subject to the approval of you and Mr. Mulford. This proposition is as follows:

That we pay him $15,000.00 out of the monies now in the hands of the receiver, $15,000.00 in April 1930 out of next season's income and $10,000.00 out of the income of the following season, which would total $40,000.00, if we cannot settle with him for any less amount.

Judge Ritter and I recommend that if a settlement on approxi­mately this basis can be worked out, and the receiver dismissed, and the property turned over to us for operation, that it would no doubt be beneficial in the long run, even though we have no fear of the :final result in the Supreme Court.

On account of the congested docket in the Supreme Court it is probably that unless settlement is made that we will be unable to get a decision before the season of 193Q-31, and it might be that the property would have to be operated under a receivership the coming season and the next. We might, however, be able by staying close in behind the appeal to get it out of the Supreme Court by next fall.

We do not know that this proposition will be acceptable to D'Est erre, but we are inclined to think that we will be able to effect a nettlement with them on the basis outlined above.

You will find enclosed a letter from Mr. Paschal to Mr. Mulford explaining his views on the situation. You will please get ~ touch with Mr. Mulford, deliver the enclosed letter to him, and advise me what you think of the proposition outlined.

Yours very truly, ALR/ c .A. L. RANKIN.

MRS. BLANCHE BROOKS

Mr. HOBBS. Call Mrs. Blanche Brooks, please. Mrs. Blanche Brooks entered the Chamber.

Mr. WALSH (of counsel). I understand that we can stip­ulate about Mrs. Brooks' testimony. My colleague inquired of the young lady what she wa.s doing here and, in view of her statement to him, we may avoid putting her on the stand.

Mr. Manager HOBBS. May it please the Court, we wel­come that suggestion. Mrs. Brooks was secretary to the late Judge Lake Jones, judge of the southern district of Florida, with headquarters in Jacksonville, and the purpose of this witness's testimony is only to show that Judge Lake Jones was at his office in Jacksonville attending to business during the months of September and October 1929.

Mr. WALSH (of counsel). We know nothing about that. If the young lady says he was. there we will agree that he was there.

Mr. Manager HOBBS. Well, she so says. Mr. WALSH (of counsel). Very well, we will not have to

go through that. Mr. Manager HOBBS. Then it is stipulated that that is

the fact. That is all, thank you, Mrs. Brooks. You are not excused

from attendance, but you are to be excused from the stand. Mr. WALSH <of counsel). Would you be kind enough to

give me that letter that you read from that contained the statement of Mr. Rankin that it presented a certain brief to Judge Chillingworth?

Mr. Manager PERKINS. It is now in the possession of the clerk, I believe.

Mr. WALSH (of counsel). I am going to recall Judge Chillingworth, and just ask him a couple of questions.

FURTHER CROSS-EXAMINATION OF C. E. CHILLINGWORTH

By Mr. WALSH (of counsel) : Q. Judge Chillingworth, have you any independent recol­

lection of seeing Judge Halsted L. Ritter in your court or in your chambers after he went on the bench as a Federal judge?-A. I have no independent recollection. My book will have to speak for itself.

Q. So unless it is in the book you have no recollection of it?-A. I have no independent recollection of the appear­ance of any particular lawyer before me at that time.

Q. I am not asking you about any other lawyer; I am asking you about Judge Ritter.-A. Or of him. My book will have to speak for itself.

· Mr. Manager HOBBS. May it please the Court, the checks about which we have examined the witness and which I now hold in my hand and have_ just shown to opposing counsel are to be introduced in evidence. I understand it is agreed they may be introduced in evidence seriatim according to their date and given appropriate exhibit numbers.

Mr. WALSH (of counsel). That is correct. Mr. Manager HOBBS. I offer them in evidence in ac­

cordance with that understanding. The PRESIDENT pro tempore. The checks will be re-

ceived in evidence and appropriately numbered. Mr. JOHNSON. Mr. President, a parliamentary inquiry. The PRESIDENT pro tempore. The Senator will state it. Mr. JOHNSON. These checks, I assume, are those to

which testimony has been directed in the past couple of days and relate to transactions concerning which t.he evi­dence has referred. These, I hope, will be printed in the RECORD rather than merely designated in such fashion as has been heretofore indicated concerning certain of the files of various sorts?

Mr. Manager HOBBS. I ask that these checks be intro­duced in evidence, given appropriate numbers, and that they may be printed in the RECORD.

The PRESIDENT pro tempore. The checks will be re­ceived in evidence, appropriately marked, and will be printed in the RECORD.

(The checks were marked respectively "Managers' Ex­hibits Y, Z, A-1, A-2, A-3, A-4, A-5, and A-6", and are as follows:)

EXHIBIT Y No.- WEST PALM BEACH, FLA., December 5, 1929.

Central Farmers' Trust Co. 63-443 Pay to the order of H. L. Ritter $100 (one hundred dollars).

A. L. RANKIN. [Endorsed by H. L. Ritter and cleared through banks.}

525~ CONGRESSIONAL RECORD-SENATE APRIL 9. ExHIBIT Z

No. 93. WEST PALM BEACH, FLA., March 20, 1930. Central Farmers' Trust Co. West Pa.lm. Beach. Fla.

Pay to the order of H. L. Ritter $2,590.90 (twenty-five hundred and ninety dollars and ninety cents).

A. L. RANKIN. A. L. RANKIN, Lawyer,

812 Comeau Building. . [Endorsed "H. L. Ritter'' and cleared through the banks named

1n the endorsement.]

ExHmiT A-1 No. WEST PALM BEACH, FLA., May 1, 1930.

Central Farmers' Trust Co. 63--443 West Pa.lm. Beach, Fla.

Pay to the order of H. L. Ritter. $209.00 ~o hundred nine & 00/100 _____________________________ dollars

A. L. RANKIN. [Endorsed "H. L. Ritter'' and cleared through the banks shown

1n endorsement.)

ExmBrr A-2 The First N?-tional Bank

:MLuu, FLA., December 24, 1930. Pay to the order of cash. · $3,000.00

Mr. WALSH (of counsel). Very good. Mr. ~tanager HOBBS. So it is stipulated that the initials

"N. I." on this card for 1929 and 1930 mean "nontaxable individual." We ask that it be given an appropriate num­ber and that it be printed in the RECORD with the stipulation that the letters "N. I." mean a nontaxable individual income­tax return on which no income tax was paid.

The PRESIDENT pro tempore. The card will be received in evidence appropriately marked and printed in the REcoRD.

The card was marked "Managers' Exhibit A-7", and is as follows:

MANAGERS' ExHIBIT A-7 Form 649-A, Treasury Department, Internal Revenue Service.

INCOME TAX Individuals.

Name: Halsted L. Ritter. Address: Brazilian Court Hotel, w. Palm Beach, Fla. Address: 1926-1009 Comeau Bldg., W. Palm Beach, Fla. Address: 1929--U. S. District Court, Miami, Fla.

193~769 Leafy Way, " "

Year Account no. Year Account no. Year Account no.

Three thousand & no/100 ___________ __..:-___________ dollars 1924 ________ --------------. A. L. RANKIN. 1925 ________ Colo, 801847.

1929_______ Nl-{i5UM-2. 193L _____ ----------1930------- NI-750!UH. 1935------- ----------

For payment on purchase of business, $2,500.00. For expense trip, $500.00. [Endorsed on the back "A. L. Rankin" and cleared through the

bank shown 1n the endorsement.]

ExmBrr A-S No. WEST PALM BEACH, FLA., April 14, 1931.

Central Farmers• Trust Co. West Palm Beach, Fla.

Pay to the order of cash. $1,000.00 One thousand & 00/100 ______________________________ dollars

A. L. RANKIN. [Endorsed "A. L. Rankin" and cleared through the banks shown

1n the endorsement.]

ExHmiT A-4 The First National Bank

MIA:Ml, FLoRIDA, April 14, 1931. Pay to the order of cash. $1,000 One thousand & 00/100----------------------------------dollars

· (Signed) A. L. RANKIN. [Endorsed "A. L. Rankin" and cleared through the banks shown

1n the endorsement.]

ExHmiT A-5 A. L. Ra.nk1n, lawyer, 812 Comeau Building. No. 186

WEST PALM BEACH, FLORIDA, Jan. 28, 1932. West Palm Beach Atlantic National Bank 63-491

Pay to the order of H. L. Ritter. $300 Three hundred & no/100---------------------------------dollars

A. L. RANKIN.

[Endorsed: "H. L. Ritter'' and cleared through the banks shown 1n the endorsement.]

ExHmiT A-6 No. WEST PALM BEACH, FLA., Sept. 23, 1931.

Central Farmers Trust Company West Palm Beach. Florida

Pay to the order of Halsted L. Ritter. $200.00 Two hundred 00/100 ____________ . ________________________ dollars A. L. RANKIN.

On acct. sale of business. [Endorsement:] 9/26/ 31. Pay to order of Nell R. Walker. Hal­

sted L. Ritter. Nell R. Walker. Earl E. Beyer, by Virginia Anne Lettz.

[Cleared through the banks shown 1n the endorsement.}

Mr. Manager HOBBS. The income-tax card, certified as being an original as entered on the records of the income-tax office in Jacksonville, Fla., is now offered in evidence, and we ask that it be given its appropriate exhibit number. May we, in order to save the time of calling the income-tax wit­ness, who is outside the Chamber, agree that the initials "N. I." in both instances where they are used mean "non­taxable individual."

Mr. WALSH (of counsel). If the managers have a state­ment from the witness to that effect and that is the fact, it is all right.

Mr. Manager HOBBS. Tbat is correct.

1925_- ------ 911904-4. 1927-------- 005042-4. 1928________ 903828-3.

1931__ _____ {t4-=.l}e::m~·. 1936 ____ ____ ________ _

1932_______ Exempt, not req. 1937------- ----------1933------- -------------------- 1938 _______ ----------

[Reverse side:] I hereby certify this to be a copy of the original entry as entered on the records of this otnce with reference to the income-tax accounts of Halsted L. Ritter.

J. EDWIN LARsoN, Collector. By LAURIE W. TOMLINSON,

Assistant Chief, Income Tax Division.

Mr. Manager HOBBS. Opposing counsel have seen the income-tax return of 1930 of Judge Ritter?

Mr. WALSH (of counsel). I think we have. Mr. Manager HOBBS. We offer in evidence a certified

copy of Judge Ritter's income-tax return for 1930, and ask that it be given an appropriate number.

The PRESIDENT pro tempore. It will be received in evi­dence and numbered as an exhibit.

(The certified copy of income-tax return for 1930 was marked "Managers'' Exhibit A-8.")

Mr. Manager HOBBS. May it please the Court, we offer in evidence a certified copy of the income-tax return of A. L. Rankin for the calendar year 1930, filed the 13th of March 1931, and ask that it be received in evidence and given an exhibit number.

The PRESIDENT pro tempore. It will be received and identified with the appropriate number.

(The certified copy of income-tax return was marked "Managers' Exhibit A-9.")

Mr. Manager HOBBS. I believe the House managers are about through. We should like a few moments recess to con­fer about the exhibits.

Mr. KING. Mr. President, I ask the indulgence of the Court and counsel for the respective parties to inquire if the check, one of the exhibits, dated March 20, 1930, "Pay to the order of H. L. Ritter, $2,590.90. Signed A. L. Rankin"--

Mr. Manager HOBBS. That is one of the checks for a division of fees collected on the partne~hip business after the dissolution.

Mr. KING. I inquire whether it is contended that that is a part of the $5,000 alleged to have been paid for the pur­chase of the business.

Mr. Manager HOBBS. No, sir. That was a distribution of an earned fee in another case.

Mr. ASHURST. Mr. President, am I correct in assuming that the income-tax returns for the years indicated will be printed in the RECORD? They should be so printed.

Mr. Manager HOBBS. We ask that that be done. The PRESIDENT pro tempore. The Presiding Officer was

not aware that such a request had been submitted. How­ever, it is now submitted and the income returns just offered in evidence will be printed in the RECORD.

(The income-tax returns heretofore marked "Managers' Exhibit A-8 and Managers' Exhibit A-9", are as follows:)

1936. :CONGRESSIONAL RECORD-SENAT~ 5257 MANAGERS' EDIIBIT A-8

UNITED STATES o:r AMERICA, TREASURY DEPARTMENT,

Washingt011, October !5, 1939. Pursuant to the provisions of section 661, chapter 17, title 28 of the United States Code (section 882 of the Revised Statutes of the United States), I hereby certify that the

annexed is a true copy of the individual income-tax return filed on Form 1040 for the year 1930 by Halsted L. Ritter, United States District Court, Miami, Florida, on file in this department.

In witness whereof I have hereunto set my hand, and caused the seal or the Treasury Department to be affixed, on the day and year first above written. By direction of the Secretary of the Treasury: (SEAL]

[Italics show answers by person filing return}

F. A. BmGFELD, Chief Clerk, Treawrv Department.

Form 1040 INDIVIDUAL INCOME TAX RETURN Do not write in these

TREASURY DEPART- FOR NET INCOMES FROM SALARIES OR WAGES OF MORE THAN $5,000 AND INCOMES FROM 1-------=sp~a.:..:.c.:...rs ___ _ MENT BUSINESS, PROFESSION, RENTS, OR SALE OF PROPERTY File code, 615.

INTER~~i~~NUB FoR CALENDAR YEAR 1930 File this return with the collector of internal revenue for your district on or before

March 15, 1931

Serial Number, 750816.

(Auditor's stamp) District, Florida.

Print name and address plainly below Name, Halsted L. Ritter.

(Cashier's stamp)

Street and number, or rural route, United States District Court. Post office, County, State, Miami, Florida.

Cash Check M. 0. Cert. of Ind.

l<'irst payment Occupation, U. S. District Judge. $ _______________ - ----------

1. Are you a citizen or resident of the United States? Yes. 2. If you filed a return for 1929, to what Collector's office was it sent?---------------3. Is this a joint return of husband and wife?---------------------------------------4. State name of husband or wife if a separate return was made and the Collector's

6. If not, were yon on the last day of your taxable year supporting in your household one or more persons closely related to you?-------------------------------------

7. If your status in respect to questions 5 and 6 changed during the year, state date and nature of change ___________________________________ ------------------------

office where it was sent._------------------------------------------------------5. Were yon married and living with husband or wife on the last day of your taxable

ye.lr?-- -- ----------------------------------------------------------------------

8. How many dependent persons (other than husband or wife) under 18 years of age or incapable of sell-support were receiving their chief support from you on the last day of your taxable year?·-------------------------------------------------

Expenses Item and INCOME paid

Instruction No. Amount (Explain in 1. Salaries, Wages, Commissions, etc. (State name and address of employer) received Schedule F)

Salarv as U. 8. District Judge ••• ------------------------------------------------------------------------------------- $__________ $ •• -------- $__________ $10,000 (Exempt)

2. income ·rrciili :Business-or I>ioreS'Sion:· ·cifioillsctieduiii I>~:::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ___ :::::::::: ___ :::::::::: :::::::::::: ~s 3. Interest on Bank Deposits, Notes, Corporation Bonds, etc. (except interest on tax-free covenant bonds>--------------------------------------- ------------ 4 4. Interest on Tax-free Covenant Bonds Upon Which a Tax was Paid at Source·---------------------------------------------~------------------- ------------5. Income from Partnerships. (State name and address>----------------------------------------------------------------------------------------- ------------

6. incoiiie-rroiliFi<iticiaiies:-·<siiit8-niiiiie-8iiCiaCi<ii:es5>"~=:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :::::::::::: 1. lient5rui<i-iio:Y8ifies~--<F!"Oilis<:iie<iilie-i3Y.-~:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :::::::::::: 8. Profit from Sale of Real Estate, Stocks, Bonds, etc. (From Schedule C>---------------------------------------------------------------------- ------------9. Taxable Interest on Liberty Bonds, etc. (From Schedule E)---------------------------------------------------------------------------------- ------------

10. Dividends on Stock of Domestic Corporations_----------- ____ .. _. __ --------------------------------------------------------------------------- ------------·u. Other Income (including dividends on stock of foreign corporations). (State nature of income) (a) ---- --------------------· ------------------------------------------------------------------------------------------------------------------ ---- -------­(b) --- ---------------------------------------------------------- ---------------------------------------------------------------------------- ------------

12. Total Income in Items 1 to lL.--------------------------------------------------------------------------------------------------------- ------------ $-----------DEDUCTIONS

13. Interest Paid ____ •. -------------.-----------------------------------.---------------------------------------------------------------------•••• - $1, 649. 08 14. Taxes Paid. (Explain in Schedule F)--------------------------------------------------------------------------------------------------------- 3, 435.13 15. Losses by Fire, Storm, etc. (Explain in Table at foot of page 2>------------------------------------------------------------------------------- ------------16. Bad Debts. (Explain in Schedule F) •• ------------------------------------------------------------------------------------------------------- ------------17. Contributions. (Explain in Schedule F)------------------------------------------------------------------------------------------------------ 4f)O. 00 18. Other Deductions Authorized by Law. (Explain in Schedule F) L08& on Real Eltate Sale----------------------------------------------------- 4, 87 + 40

19.

20.

Total Deductions in Items 13 to 18. --------------------------------------------------------------------------·--------------------------- 10, 358. 59

Net Income (Item 12 minus Item 19).------------------------------------------------------------------------------------------------- AU lost

EARNED INCOME CREDIT COMPUTATION OF TAX (Sn INsTRUCTION 23)

6,958.59

21. Earned Income (not over $30,000) _________ $-------- 33. Net Income (Item 20 above>------------- $________ 46. Normal Tax (5% of Item 43) _____________ ----------22. Less Personal Exemption and Credit for 47. Surtax on Item 20 (see Instruction 23) ___ --------·-

Dependents ____________________________ ---------- Less: 34. Liberty Bond Interest (Item 9) $ •••.•••••

23. Balance (Item 21 minus 22)--------------- $________ 35. Dividends (Item 10) __________ ------36. Credit for Dependents ______ ------

24. Amount taxable at 1~% (not over $4,000) _ $________ 37. Personal Exemption __________ ----------25. Amount taxable at 3% (not over $4,000) •• ---------- __ _ 26. Amount taxable at 5% (balance over 38. Total of Items 34 to 31----------------- ----------

$<3,000 of Item 23) ----------------------- ---------- 39. Balance (Item 33 minus 38)______________ $ •••••••• Zl. Normal Tax CHi% of Item 24)___________ $-------- 40. Amount taxable at 1~% (not over $4,000). ----------28. Normal Tax (3% of Item 25) _____________ ----------29. Normal Tax (5% of Item 26) ______________ ----------30. Surtax on Item 21. ••• -------------------- ----------31. Tax on Earned Net Income (total of Items

Zl to 30) -------------------------------- $ _______ _ 32. Credit of 25% of Tax (not over 25% of --­

Items 30, 44, 45, and 46)--------------- $ ••••••••

41. Balance (Item 39 minus 40)______________ $ _______ _ 42. Amount taxable at 3% (not over $4,000) •• ----------

43. Amount taxable at 5% (Item 41 minus 42) $ _______ _ 44. Normal Tax (1~% of Item 40)___________ $--------45. Normal Tax (3% of Item 42) _____________ ----------

AFFIDAVIT

48. Tax on Net Income (total of Items 44 to 47) ------------------------------------ $ _______ _

49. Tax on Capital Gain or Loss (12~% of Col. 8, Schad. D>---------------------- ----------

50. Total of or difference between Items 48 and 49--------------------------------- $-------·

51. Less Credit of 25% of Tax on Earned In-come (Item 32) ------------------------ ---------·

52. Total Tax atem 50 minns 51)____________ $ _______ _ 53. Less Income Tax Paid at Source _________ ---------· 54. Income Tax paid to a foreign country or

U. S. possession.---------------------- ----------

55. Balance of Tax (Item 52 minus Items 53 and 54)·------------------------------- $ _______ _

I swear (or affirm) that this return, including the accompanying schedules and statements, has been exrunined by me, and to the best of my knowledge and belief, is a true and complete return made in good faith for the taxable year stated, pursuant to the Revenue Act of 1928 and the Regulations issued thereunder.

------------------------------------------------<iire~iS'illAcie-by-ageni~-iliei-~zi-tiieiefoi--iiiilSi_b6_5iaied-on-ihfiliii&i"-----------------------------------------------

swom to and subscribed before me this JJ,th day of March 1931. Halsted L. Ritter (Signature of individual or agent)

[NOTARIAL SEAL] Palmer Roaenwold, Deputv Cllrk, U. S. DUct. Court. ------------------------------------(Signature of officer administering oath) (Title) (Address of agent}

An amended return must be marked "Amended" at top of return. Checks and drafts will be accepted only if payable at par. Notations stamped across f~ of blank: Received remittance 3/1601, D. E. Stanley, Depu~ Collector Revenue,. District of Florida. M. E. King, W. 8. Daley. (Stamped:) Closed; no additioual tax. Date of CR, 5-4--32. Auditor, S.C. Fogelgr&w. D1v. A.R. Sec. 0. Unit 6. Date, 5-18--30.

5258 CONGRESSIONAL RECORD-SENATE APRIL 9 [Page 2 of income-tax blank of Halsted L. Ritter}

SCHEDULE OF INCOME FROM BUSINESS OR PROFESSION (SEE INsTRUCTION 2)

I. Total receipts from business or profession (state kind of business>----------------------------------------------------------------------------------------- $10,000.00

CosT O.J Goons SoLD OTHER BUSINESS DEDUCTIONS

10. Salaries not includPd as "Labor", in Line 2. (Do not 2. Labor.-------------------------------------.:------ $ ________ ------ deduct compensation for your services) ________________ $ ________ ------

U. S. D~t. Judoe. 3. Material and supplies------------------------------------- ------- ------ ll. Interest on business indebtedness to others ______________ ---------- ------

4. Merchandise bought for sale_·------------------------------ ---------- ------ 12. Taxes on business and business property---------------- ---------- _____ _

5. Other costs (itemize below or on separate sheet) ___________ --------- ----- 13. Losses (explain in table at foot of page) ______________ ---------- _____ _

7. ToTAL (Lines 2 to 6)-------------------------------- $ ________ ------

6. Plus inventory at beginning of year _______________________ ---------------- 14. Bad debts arising from sales or servir,es __________________ ---------- ------15. Depreciation, obsolescence, and depletion (explain in

table provided at foot of page) ____________ ___ __________ ---------- ------

8. LeSs in>entory at end of year ______________________________ ---------- ------16. Rent, repairs, and other expenses (itemized below or on

separate sheet) .. _------------------------------------- ---------- _____ _ E:umpt ~r11 as 400Pt. ----- 10,000.00

9. Net Cost of Goods Sold (Line 7 minus Line 8)_____________ $ ________ ------ 17. Total (Lines 10 to 16)------------------------------ $ _____________ _

Enter "C", or uc or M", on Lines 6 and 8 to indicate whether inventories 18. Total eeductions (Line 9 plus Line 17)------------------------------ $ _________ _ are valued at cost, or cost or market, whichever is lower.

19. Net Profit (Line 1 minus Line 18). (Enter as Item 2>-------------------- $ _________ _

Explanation of deductions claimed on Lines 5 and 16.----------------------------------------------------------------------------------------------------------------------

. SCHEDULE B-IN COME FROM RENTS AND ROY .A.LTIES (SEE lNs-rRUCTION i)

'

2. .Amount re- 3. Cost or value as 4. Depreciation 6. Other expenses 7. Net profit (enter 1. Kind of property of Mar. 1, 1913, (explain in table 5. Repairs ceived whichever greater at foot or page) (itemize below) as item 7)

Apartment home, De11ver, Colo _______________ $4, soo I oo $.---------_J_ ---- lt,Boslts $650 I oo "'· 940 I oo $.----------J .. ---Explanation of deductions claimed in column 6; Imurance, Frigidaire equipment, paintino, renotJating apartment.!, janitor, coal, etc.

SCHEDULE C-PROFIT FROM SALE OF REAL ESTATE, STOCKS, BONDS, ETC. (SEE INsTRUCTION 8)

i. Depreciation 5. Cost or value as 6. Subsequent im- 7. Net loss (enter 1. Kind of property 2. Date acquired 3. Amount realized allowable since of Mar. 1, 1913, acquisition which~ver greater provements a· item 8)

Apartment house, Denver, Colo ______________ &pt. 19f3 __________ 139. ooo I ro $ __ ----------L----- us,so4l fO $ __________ __~ ------ $4,8741 fO State how property was acquired~ Purchue of tot.! and con8truction o.f buildino, completed in &pl. 19t3.

SCHEDULE D-C.A.PIT.A.L NET GAIN OR LOSS FROM SALE OF ASSETS HELD MORE THAN TWO YEARS. (SEE INsTRUCTION 8A)

5. Depreciation al- 6. Cost or value as 7. Subsequent im- 8. Net gain or loss 1. Kind of property 2. Date acquired 3. Datesold 4. Amount realized 1owable since of March 1, 1913, provements, and (Enter 12~% as

acquisition whichever great- capital deduc- Item 49) er tions

Mo. Day Year Mo.DayYear

$.--- --------'-- ---- $ ____ ------- -'------$ __________ _!_ _____ $ __________ __! ------ $ ______ ---- __ j ______ A& above ________________________ ---------------- 11/7130

State how property was seq uired ___ -------_______ . _____ . _________ . _____ ---- ---_ ----____________________________________ . ____ • _________________________________________ ---·

SCHEDULE E-INTEREST ON LIBERTY BONDS AND OTHER OBLIGATIONS OR SECURITIES (SEE INSTRUCTION 9)

L Obligations or Securities In n---' 4. Prii)cipal 5. Amount Owned 2. terest ~ved 3. Amount Owned Amount Exempt in Excess of Ex-

or Accrued From Taxation emptioo

6. Interest on Amount in Ex­cess of Exemp­tion (Enter as Item 9)

(a) 0 bligations of a State, Territory, or political subdivision thereof, or the District Of Columbia...-------------------------------- $------------ ------ $------------ ------ All-------------- X X X X X X X X X X X X X X X X

(b) Securities issued under Federal Farm Loan Act, Treasury Bills, and Certificates Of Indebtedness issued after June 17, 1929 _____ ------------- ------ ------------- ------ All-------------- X X X X X X X X X X X X X X X I

(c) Liberty 3~% Bonds and other obligations of United States issued on or before September 1, 1917, and obligations of U. S. possessionS------------------------------·-·········------------------------------------------------ AlL.------------ X X X X X X X I X X X X X X X X

(d) Liberty 4% and 434% Bonds, Certificates of Indebtedness issued before June 18, 1929, Treasury Bonds and Savings Certificates_ -------------- ------ -------------- ------ $5,000.---------- $----------- ------ $ ____________ ---·-·

(e) Treasury Notes .. ---------------------------------------------- -------------- ------ -------------- ------ None------------ -------------- ----- -------------- -----

SCHEDULE F-EXPL.A.NATION OF DEDUCTIONS CLAIMED IN ITEMS 1, 14, 16, 17, AND 18 Taxes paid in clearing titk em apartment home in Denver and on lot& in Miami Beach, Fla.

EXPLANATION OF DEDUCTION FOR DEPRECIATION CLAIMED IN SCHEDULES .A. AND B

1. Kind of property ar buildings, state material of which

constructed) 2. Date acquired 3. .A.ge when

acquired (. Probable llie

after acquirement

5. Cost or value as Amount of depreciation charged oti of Mar. 1, 1913, !--------,-------­whichever great­er (exclusive of land) 6. Previous years 7. This year

$ __ -----· ____ j ___ --- $ ...• ---· ____ j __ -- -- $ .• ------------- --·

EXPLANATION OF DEDUCTION FOR LOSSES BY FIRE, STORM, ETC., CLAIMED IN SCHEDULE .A., AND IN ITEM 15

1. Kind of property 3. Cost or value

2. Date acquired as of Mar. I. liH3, whichever greater

4. Subsequent improvements

5. Depreciation allowable since

acquisition

6. Insurance and salvage value 7. Deductible loss

$ ___________ J_____ $ ________ ----'------ $ .. _________ J_____ $------------'------ $ __ ------ ___ _L ___ -

1936_ ~CONGRESSIONAL RECORD-SENAT:m M.uuoos' EDIIBIT A-t

5259

UNITED Buns OJ' AMERICA. TREASURY DEPARTMENT,

Washington, October !1, 1933. Pursuant to the provisions of section 661, chapter 17, title 28 of the United States Code (section 882 of the Revised Statutes of the United States), I hereby certify that

the annexed is a true copy of the individual income tax return, with attached schedule, filed on form 1040 for the year 1930 by A. L. Rankin, Comeau Building, West Palm Beach, Florida, on file in this department.

In witness whereof I have hereunto set my hand, and caused the seal of the Treasury Department to be affued, on the day and year first above written. By direction of the Secretary of the Treasury: L. W. ROBERTS, Jr., {sEAL] Auistant Secretarv of the Trearuru.

[Italics show answers by person filing return]

Form 1040 TREASURY DEPART·

MENT

INDIVIDUAL INCOME TAX RETURN Do not write in these spaces

INTERNAL REVENUE SERVICE

FOR NET INCOMES FROM SALARIES OR WAGES 011' MORE THAN $.5,000 AND INCOMES FROM File code, 601 .

BUSINESS, PROFESSION, RENTS, OR SALE OF PROPERTY Serial number, 750770.

(Auditor's stamp) Sec. f7! (a), Rev. Act J9t8 FoR CALENDAR YEAR 1930

ASsESSMENT File this return with the collector of internal revenue for your district on or before Tax ____________ $!,~17.96 March 15, 1931 Penalty-------- $ _________ J---------------------------..:._ ____________ 1 Inter~ot8C::: f:::::::: Print name and address plainly below Parent Co _______________ _

BasiS &.i_:R_i.:£8.:isii -.A.udi­ted by AIH.

Unit no. AR-C-to Date 3/9/3~.

Name, A. L. Rankin.

District, Florida.

(Cashier's stamp)

Cash Check M. 0. Cert. of Ind.

First payment

List Computation prored.

Street and number, or rural route, Comeau Bldg. Post office, county, State, West Palm Beach, Fla. Occupation, attorney. $ _______________ -----------

1. Are you a citizen or resident of the Uruted States? Yu. 6. If not, were you on the last day of your taxable year supportmg m your household one or more persons closely related to you? _________ ___ _____ _______ __ ________ _ _ 2. If you filed a return for 1929, to what <?ollector's office was it sent? Jru.

3. Is this a joint return of husband and wife? Yu. ~- State name of husband or wife if a separate return was made and the Collector's

7. If your status in respect to questions 5 and 6 changed during the year, state date and nature of change----------------------------------- --- - -------------- - ----

office where it was sent------------------------ --------------------------------5. Were you married and living with husband or wife on the last day of your taxable

year? Yu.

8. How many dependent persons (other than husband or wife) under 18 years of age or incapable of self-support were receiving their chief support from you on the last day of your taxable year? 1.

Item and Instruction No.

INCOME Amount received

Expenses paid (Explain in Schedule F)

1. Salaries, Wages, Commissions, etc. (State name and address of employer). --------------------------------------------------------------------------------------------------------------- $_____________ $_ ---------.-- $_----------

2. Income from Business or Profession. (From Schedule A.) See Schedule--------------------------------------------------------------------- t, 103 3. Interest on Bank Deposits, Notes, Corporation Bonds, etc. (except interest on tax-free covenant bonds>--------------------------------------- - -----------4. Interest on Tax-free Covenant Bonds Upon Which a Tax was Paid at Source----------------------------------------------------------------- ---------- - -

~: ~~~= gg: ~rJ~C:f:.s· (S~~t~~:U'd<!J"fr~}::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :::::::::::: 7. Rents and Royalties. (From Schedule B) __ ------------------------------------------------------------------------------------------------__ _ __________ _ 8. Profit from Sale of Real Estate, Stocks, Bonds, etc. (From Schedule C)--------------------------------------------------------------------- ---------- - -

1g: ~fvf~;~~~~~io: ~~~~~~~r~i-atf::~-~~~~~~~-~!~-~~:::::~~::::::::::::~::::::::::::::::::::::::::::::::::::::::::::::~::::::::::: :::::::::::: 11. Other Income (including dividends on stock or foreign corporations). (State nature of income)

12.

(a) ------------------------------------------------------------------------------------------------------------------------------------------ - ---------- -­(b) ----------------------------------------------------------------------------------------------------------------------------------------- - ----------- -

TOTAL INCOME IN ITEMS 1 to 1L ________________________________________________________ ,.: _______________________________________________ ------------

DEDUCTIONS

! 1

18

$£,103

13. Interest Paid--------------------------------------------------------------------------------------------------------------------------------- ------------ ------------

!i: ~il~:1~S~il~~~~~~~~~~~;~~~;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~:~:::: :~:~:~~~:~:: :~:~:::~:~~~ 18. Other Deductions Authorized by Law. (Explain in Schedule F>--------------------------------------------·------------------------------- ------------ -·----------

19. TOTAL DEDUCTIONS IN ITEMS 13 TO 18------------------------------------------------------------------------------------------------- ------------ ------------

20. NET INCOME (Item 12 minus Item 19) --------------------------------------------------------------------------------------------------- ------------ £,103

EARNED INCOME CREDIT COMPUTATION OF TAX (SEE INSTRUCTION 23)

21. Earned Income (not over $30,000)_________ $-------- 33. Net Income (Item al above>------------ 47. Surtax on Item al (see Instruction 23) ___ $ _______ _ 22. Less Personal Exemption and Credit for

Dependents ___ _ ------------------------ ---------- 48. Tax on Net Income (total of Items 44 to 47)_________________________________ $ _______ _

49. Tax on Capital Gain or Loss (12}1;% of Col. 8, Sched. D>---------------- - ----- ----------

50. Total of or difference between Items 48 and 49--------------------------------- $-----·--

51. Less Credit of 25% of Tax on Earned Income (Item 32)---------------------- ----------

LEss: b :: ~r~:~~~~~~~=t==~~= _!======== 36. Credit for Dependents________ '00 37. Personal Exemption__________ 3,500

3S. Total of Itetns 34 to 37-------------------

23. Balanca (Item 21 minus 22)-------------- $ _______ _

24. Amount taxable at 1~% (not over $4,000)_ $--------25. Amount taxabla at 3% tnot over $4,000) __ ----------26. Amount taxable at 5% (balance over

$8,000 of Item 23) ----------------------- ----------

39. Balance (Item 33 minus 38) ______________ None 40. Amount taxable at 1).1;% (not over $4,000)_ ---------- 52. Total Tax (Item 50 minus 51)____________ $--------

53. Less Income Tax Paid at Source ___ ____ __ ----------41. Balance (Item 39 Ininus 40).·------------ $-------- M. Income Tax paid to a foreign country or

27. Normal Tax (1~% of Item 24)____________ $--------28. Normal Tax (3% of Item 25) _____________ ----------29. Normal Tax (5% of Item 26>-------------- ----------30. Surtax on Iteln2L.---------------------- ----------31. Tax on Earned Net Income (total of

42. Amount taxable at 3% (not over $4,000)-- ---------- U. 8. possession _______________________ ----------

Items 27 to 30>-------------------------- $-------- 43. Amount taxable at 5% (Item 41 minus 42)_ $________ 55. Balance of Tax (Item 52 minus Items 53 44. Normal Tax (1).1;% of Item 40) ___________ ---------- and 64)-------------------------------- S--------

32. Credit of 25% of Tax (not over 25% of 45. Normal Tax (3% of Item 42)------------- ----------Items 30, 44, 45, and 46)_________________ $-------- 46. Normal Tax (5% of Item 43) _____________ ----------

AFFIDAVIT

I swear (or affirm) that this return, including the accompanying schedules and statements, has been examined by me, and to the best of my knowledge and belief, is a true and complete return made in good faith for the taxable year stated, pursuant to tbP Revenue Act of 1928 and the Regulations issued thereunder. -----------------------------------------------mretw:iii5iiiade-1lY.-aieii·c£li6-reas_o_n_t_lieiefoi--DiiiSi-iie-5t-aie-<ion_t_liiS-lliiei------------------------------------------------sworn to and subscribed before me this 16 day of Mar., 1931. A. L. Rankin.

(Signature of 4tdividual or agent) (NOTARIAL SEAl] C. C. CaUowau, __ --------------------------------------------- ---------------------------------------------------------·--

(Signature of officer administering oath) (Title) (Address of agent) An amended return must be marked "Amended" at top of return Checks and drafts will be accepted only if payable at par

2-15411 Notations stamped across !ace of blank: Internal revenue agent in charge, received Aug. 6. 1931, Jacksonville. Fla. Internal Revenue, District of Florida, received Mar.

16, 1931; collector's office.

5260 CONGRESSIONAL RECORD-SENAT:& APRIL 9. {Page 2 ot income-tax blank of A.. L. Rankin]

SCHEDULE OF INCOME FROM BUSINESS OR PROFESSION (SEE INSTRUCTION 2)

1. Total receipts from business or profession (state kind of busineBS) •••••• :. ••• --------------------------------------------------------------------·- $ ••••••••••

COST or GOODS SOLD 0TJIER BUSTh"ESS DEDUCTIONS

2. Labor----------------------------------------------------- $ ________ ------ 10. Salaries not inclt1ded as "Labor," in line 2. (Do not 3. Material and supplies...-------·-------------------------- ---------- ------ deduct compensation for your services) ________________ $ ________ ------4. Merchandise bought for sale·------------------------------ ---------- ------5. Other costs (itemize below or on separate sheet) ___________ --------- ------

11. Interest on business indebtedness to others ______________ ---------- ------12. Taxes on b-:ISiness and business property---------------- ---------- ------

6. Plus inventory at beginning of year .• ------------------------------------- 13. Losses (explain in table at foot of page) __________________ ----------------14. Bad debts arising from sales or services.----------------- ---------- ------15. Depreciation, obsolescence, and depletion (explain in 7. Total (lines 2 to 6)----------------------------------- $ ________ ------

8. Less inv~ntory at end of year---------------------------------------- ------ table provided at foot of page) _________________________ ---------- ------

9. Net cost of goods sold (line 7 minus line 8)----------------- $ _____________ _ 16. Rent, repairs, and other expe.::J.Ses (itemized below or ()n

separate sheet)_--------------------------------------- ---------- _____ _

17. Total (lines 10 to 16)-------------------------·------ $ ____________ _ Enter "C", or "CorM", on lines 6 and 8 to indicate whether inventories

are valued at cost, or cost or market, whichever is lower. 18. Total deductions (line 9 plus line 17)______________________________________ $ _________ _

19. Net profit (line 1 minus line 18 (enter as item 2)--------------------------- $ _________ _

Explanation ol deductions claimed on Lines 5 and 16 .. _ ---------------------------------------------------------------------------------------------------------- ________ -·

l SCHEDULE B-INCOME FROM RENTS AND ROYALTIES (SEE INsTRUCTJO'N 7)

1. Kind of Property 2. Amount Received

3. Cost or Value, as of March l, 1913, (. Depreciation W h i c h e v e r {Explain in table Greater at foot of page)

6. Other Expenses 7. Net Profit (Itemize below) (Enter as Item 7)

5. Repairs

$ ____________ ,______ $ ____________ ,______ $ ____________ ,______ $ ____________ ,______ $ ____________ ,______ $------------1------

Explanation of deductions claimed in Column 6 •• ----------------------------------------------------------------------------------------------- __ ---------- ________ -·

SCHEDULE C-PROFIT FROM BALE OF REAL ESTATE, STOCKS, BONDS, ETC. (SEE INsTRUCTION 8)

1. Kind of property 2. Date acquired 4. Depreciation al-

3. Amount realized lowable since ac­quisition

5. Cost or value as of March 1, 1913, 6. Subsequent im- 7. Net profit (eater which e v e r provements as item 8) greater

$ ___________ _~______ $ ____________ L----- $ ___________ _! ------ $ __________ J ------ $ ___________ J ____ -· State how property was acquired. ___ ------------------------------------------------· •• __________________________ ----------------------------------- ___________________ _

SCHEDULED-CAPITAL NET GAIN OR LOSS FROM SALE OF ASSETS HELD MORE THAN 2 YEARS. (Sn INsTRUCTION 8A)

1. Kind of property 2. Date acquired 3. Date sold 5. Depreciation a1-

(. Amount realized~ lowable s in c e acquisition

8. Cost or value as of March 1, 1913, whichever great­er ·

7. Subsequent im- 8. Net gain or los:~ provements, and (Enter 12~% as :!stal dedue- item 49)

Mo. Day Year Mo. Day Year

*------------1------ 1---~-:------1-- ---- *------------j ------ 1------------1------ 1------------1------State bow property was acquired_---------------------------------------------- ____ --------------------------------------------------------- __________________________ -·

SCHEDULE E-INTEREST ON LIBERTY BONDS AND OTHER OBLIGATIONS OR SECURITIES (SKE IN!!TRUCTION1l)

1. Obligations or securities 2. Interest rooeiv~ 3. Amount owned or accrued

4. Principal amount exempt From Taxation

6. I n t e r e s t o n 5· Amount owned amount in excess in excess of ex- of exemptiJn emption (Enter as item 9)

(a) Obligations of a State, Territory, or political subdivision thereof, or the District of Columbia__________________________________ $.,.----·-·-- ------ $--------·--- ---·-· AlL............ X X X X J: X X X X X X X X X X X

(b) Securitles issued under Federal Farm Loan Act, Treasury Bills, and Certificates of Indebtedness issued ~fter June 17, 1929 ____ --··-······--- ------ ----------··-- ------ AlL............. X X X X X X X X X X X X X X X X

(c) Liberty 3~% Bonds and other obligations of United States issued on or before September 1, 1917, and obligations of U. 8. possessions __________________________________________________ -----·-··--·-- -~---- .............. ••••.• All X X X X X X X X X X X X X X X X

(d) Liberty 4% and H4% Bonds, Certificates of Indebtedness issued before June 18, 1929, Treasury Bonds and Savings Certificates. ------------- ------ -------------- ------ $5,000.---------- $ __________ ------ $----------- -----·

(e) Treasury Notes------------------------------------------------ -------------- ------ -------------- ------ None ____________ ------------- ------ -------------- -----·

SCHEDULE F-EXPLANATWN OF DEDUCTIONS CLAIMED IN ITEMS 1, 14, 16, 17, AND 18 -------------------------------------------------------------------------------·------------------------------------------------------------------------------------ ..

EXPLANATION OF DEDUCTION FOR DEPRECIATION CLAIMED IN SCHEDULES A .AND "B

1. Kind of property (If buildings, state material of which

constructed) 2. Date acquired .3. .Age when

acquired 4. Probable life

after acquirement

5. Cost or value as Amount of depreciation charged otf of Mar. I, 1913, !--------,-------­whichever great-er (exclusive of _ 6. Previous years 7. Th:s year land)

---------~--------------------------- ---------------- --------- -------------1------ $ ____________ , _____ $------------1----- $----------1--------EXPLANATION OF DEDUCTION FOR LOSSES BY FffiE, STORM, ETC., CLAIMED IN SCHEDULE A, AND IN ITEM 15

1. Kind of property 3. Cost or value

2. Date acquired as of Mar. 1, 1913, whichever greater

4.. Subsequent improvements

5. Depreciation allowable since

acquisition 6. Insurance and

salvage value 7. Deductible loss

·-:-·---------------------------------------- --------------1------ $ ____________ ,______ $ ____________ ,______ ·-----------1.------ $------------1------ $------------1------

.193& CONGRESSIONAL ~;ECORD-SENAT;E_ 526~ MANAGERS' ExHIBIT A-9--Contlnued.

A. L. RANKIN, ATTORNEY AT LAW Income:

F'ees-------------------------------------------- $20,000.00 Law expenses:

Rent------------------------------- $840.00 Books______________________________ 720.00 Stenographer _______________________ 2,000.00

ldghts------------------~----------· 36.00 Telephone__________________________ 360. 00 Telegraph__________________________ 181.00 1Tavel expense_____________________ 760.00 Auto gas and oll____________________ 360.00 Auto depreciation___________________ 175.00

14,568.00

Net income from law business______________ 14, 568.00 Losses on real estate:

Home in Alabama, abandoned in 1925 and moved to F1orida--sold !or cash _______ $7,000.00

Lot in trade, value _____________________ 1,600.00

8,500.00 Cost: Land _____________________ $2,500.00

House ____________________ 17,500.00

- 20,000.00 Depreciation__________________ 3, 500. 00

---- 16, 500.00

Loss on sale-------------------------- 8,000.00 Other expenses:

Fertilizer and supplies and labor paid out during year on farm in Alabama, re-ceived no returns-total expense______ 1, 500. 00

Commission paid on above sale__________ 500. 00 Abstract-------------------------------- 25.00 Interest paid-------------------------- 1, 680. 00 Taxes paid_____________________________ 760.00

---- 12.465.00

Net income subject to tax ___ ·---------------- 2, 103. 00

Mr. Manager HOBBS. Mr. President, we ask for a few minutes' recess to check up on our exhibits to be sure that we have introduced them all in evidence.

Mr. ROBINSON. Mr. President, I move that the Court stand in recess until called to order by the Presiding Officer.

The motion was agreed to; and (at 4 o'clock and 18 min­utes p. mJ the Senate, sitting for the trial of the articles of impeachment, took a recess, subject to the call of the Chair.

At 4 o'clock and 42 minutes, having been called to order by the Vice President, the Senate, sitting for the trial of the articles of impeachment, reassembled.

The VICE PRESIDENT. The Chair is advised by the managers on the part of the House, as well as the counsel for the respondent, that they are ready to proceed.

Mr. Manager HOBBS. May it please the Court, we have a stipulation. Counsel have entered into a stipulation to the effect that by an order of the Department of Internal Reve­nue the income-tax returns up to 1929 and including the year 1929 have been destroyed and are not available in this case.

We offer in evidence the telegram of October 10 to Bert E. Holland from A. L. Rankin, and ask that it be given the appropriate exhibit number.

(The telegram was marked "Managers' Exhibit A-10" and 1s as fallows:)

BERT E. HoLLAND, WEST PALM BEACH, FLA., October 10, 1929.

Attorney at Law, Boom 1104, Fremont Building, Boston, Mass.:

Have foreclosure bill prepared and ready to file. Will file to­morrow or next day. No need at present for bonds. Secured copy from trust deed. Will mail copy of bill and advise fully our pro­cedure.

A. L. RANKIN.

Mr. Manager HOBBS. We offer in evidence telegram from Bert E. Holland to A. L. Rankin of October 10. ·

<The telegram was marked "Managers' Exhibit A-ll" and is as follows:)

LXXX-333

73 TltEMoNT STREET, BosToN, MAss., October 10, 1929.

A. L. RANxm, Esq., 812 Comeau Building, West Pa,lm Beach, Fla.:

Please withhold fl.llng foreclosure bill until further advice. BERT E. HoLLAND.

Mr. Manager HOBBS. We offer in evidence telegram from A. L. Rankin to Bert E. Holland of October 11. We are ask­ing that each one of these be printed in the RECORD and be given an appropriate number.

The VICE PRESIDENT. Without objection, it is so ordered.

<The telegram was marked "Managers' Exhibit A-12", and is as follows:)

WEST PALM BEACH, FLA., October 11, 1929. BERT E. HOLLAND,

Tremont Building, Boston, Mass.: Telegram received last night. Foreclosure bill mailed clerk court

Miami yesterday afternoon. Richardson had advised imperative that we proceed at once, this necessary to preserve profits this sea­son operation for first-mortgage bondholders, otherwise antagonis­tic interests would procure lease and possession of mortgaged property and this season income. Bill seeks foreclosure appoint­ment of receiver instanter, injunction against leasing, and any dis­position of property pending proceedings. When you familiar facts and conditions confident you approve our quick action this regard. Mortgagor, by its president, Martin Sweeny, New York, filing answer admitting allegations of bill and consent to appointment of receiver. OUtstanding men of national reputation, including your­self, have been selected and consented to act as bondholders' com­mittee. Will apply for receiver TUesday. Should we be delayed adverse interests would proceed with foreclosure and thereby control litigation and ope~tion of hotel.

A. L. RANKIN.

Mr. Manager HOBBS. We offer in evidence telegram from Bert E. Holland to A. L. Rankin of October 14.

(The telegram was marked "Managers' Exhibit A-13", and is as follows:

A. L. RANKIN, OCTOBER 14, 1929.

Comeau Building, West Palm Beach, Fla.: After investigation, have decided to do nothing further in mat­

ter of receivership. I have no objection to court matter standing as it 1s for the present.

BERT E. HoLLAND.

Mr. Manager HOBBS. We offer in evidence telegram from Bert E. Holland to A. L. Rankin of October 16.

(The telegram was marked "Managers' Exhibit A-14", and is as follows:>

A. L. RANKIN, CWCAGO, October 16, 1929.

Comeau Building, West Palm Beach, Fla.: We wired you Monday instructing you to refrain !rom making

motion for receiver in Whitehall. Subsequent investigation leads us to again confirm these instructions and to insist that matters remain in present status until further instructions from us. Please acknowledge receipt of wire to us at Palmer House, Chicago.

BERT E. HOLLAND.

Mr. Manager HOBBS. We offer in evidence telegram from A. L. Rankin to Bert E. Holland of October 17.

<The telegram was marked "Managers' Exhibit A-15", and is as follows:)

WEST PALM BEACH, FLA., October 17. BERT E. HOLLAND,

Palmer House, Chicago, Ill.: As requested, will not make application !or you for receiver

Whitehall pending instructions. Suggest you call me long dis­tance • . as you losing strategic position by delay.

A. L. RANKIN,

Mr. Manager HOBBS. We offer in evidence telegram from A. L. Rankin to Bert E. Holland of October 17.

<The telegram was marked "Managers' Exhibit A-16", and is as follows:)

OCTOBER 17, 1929. Mr. A. L. RANKIN,

Comeau Building, West Palm Beach, Fla.: A bondholders' committee representing all the bonds in which

we are interested has been formed, and our interests are repre­sented on that committee. For this reason don't consider me a member of any bondholders' committee for Whitehall.

BERT E. HOLLAND.

Mr. Manager HOBBS. We offer in evidence telegram from A. L. Rankin to Bert E. Holland of October 18.

(The telegram was marked "Managers' Exhibit A-17", and is as follows:>

5262 _CONGRESSIONAL ~ECORD-SENATE APRIL 9 WEST PALM BEACH, FLA., October 18, 1929.

BERT E. HOLLAND, 387 Tremont Building, Boston, Ma.ss.:

Other first-mortgage bondholders, Whitehall, have intervened and will apply to court tomorrow, 10:30 a. m., for appointment receiver. If receiver appointed, this assures operation hotel coming season by Bemis & Sweeny, which w1ll be very advantageous to all first-mortgage bondholders.

A. L. RANKIN.

Mr. Manager HOBBS. We offer in evidence letter of A. L. Rankin to Hon. Palmer Rosemond, clerk, United States Court, Miami, Fla., and a copy of Mr. Rosemond's answer thereto. I will ask that they be given separate numbers and printed in the RECORD.

(The letter and copy of letter were marked "Managers' Exhibits A-18 and A-19", and are as follows:>

A. L. RAN.KlN, ATTORNEY AT LAw, COMEAU BUILDING,

We.?t Palm Beach, Florida, October 10th, 1929. Honorable PALMER RoSAMoND,

Clerk, United States District Court, Miami, Florida. DEAR MR. RosAMoND: Enclosed I am herewith sending you bill

of complaint for foreclosure of a mortgage on property in Palm Beach, which you wm please file.

It is very important that we have a receiver appointed for this · property immediately upon Judge Ritter's return next Tuesday. If you can possibly do so, it will be greatly appreciated by us 11 you will lock up this bill as soon as it is filed and hold it until .Judge Ritter's return, so that we w1ll have any newspaper pub­licity before our application is heard by the judge for the appoint­ment of a receiver.

Enclosed you will find check for $15.00 to cover filing fee. If you will prevent any publicity c-;mceming this bill before

Judge Ritter returns, it will be very greatly appreciated. Yours very truly.

A. L. RANKIN. ALR:c

MIAMI, FLORIDA, 0ctob6T 11, 1929. A. L. RANKIN,

Comeau Bldg., west Palm Beach, Fla. DEAR Sm: Receipt is acknowledged of yours of the lOth contain­

ing bill of complaint in re: Bert E. Holland et al. vs. Whitehall Building & Operating Company et al., together with your check in the sum of $15.00 to cover filing fee.

As requested, I w1ll file this bill and will see that publicity 1s avoided pending the arrival of Judge Ritter.

Yours very truly,

PR:f

PALMER RoSEMOND, Deputy Clerk in Charge.

Mr. Manager HOBBS. We offer in evidence letter from Halsted L. Ritter under date of July 2, 1930, to Hon. Alexan­der Akerman.

Mr. KING. Mr. President, may I propound an inquiry as to whether or not counsel desire that those of the exhibits which have just been offered for the RECORD, and which have heretofore been read into the REcoRD, be reprinted in the proceedings of the day? It seems to me that there is no necessity of having reprinted those which have been read into the RECORD.

Mr. Manager HOBBS. No, sir; we desire no duplication whatever. We appreciate the suggestion.

The letter was marked "Managers' Exhibit A-20", and is as follows:

UNrh:o STATrs DisTRICT JUDGE's CHAMBERS, SoUTHERN DISTRICT OF F'LoRmA.

Miamt, Florida, July 2, 1930. Honorable ALExANDER AKERMAN.

United States District Judge, Tampa, Florida. MY DEAR JUDGE: In the case of HoUand et al. vs. WhitehaU Build­

ing & Operating Company, No. 678--M-Eq., pending in my division, my former law partner, Judge A. L. Rankin, of West Palm Beach, has filed a petition for an order allowing compensation for his services on behalf of the plaintitr.

I do not feel that I should pass, under the circumstances, upon the total allowance to be made Judge Rankin in this matter. I did issue an order, which Judge Rankin will exhibit to you, ap­proving an advance of $2,500.00 on his claim, which was approved by all attorneys.

You w1ll appreciate my position in the matter, and I request you to pass upon the total allowance which should be made Judge Rankin in the premises, as an accommodation to me. This will relieve me from any embarrassment herea.fter, 11 the question should arise as to my favoring Judge Rankin in this matter by an exorbitant allowance.

Appreciating very much your kindness in this matter, I am, Yours sincerely,

HALsTED L. RIT'l'EB.

Mr. :Manager HOBBS. We would like to recall Mr. A. L. Rankin to the witness stand.

The VICE PRESIDENT. The Chair is advised by the Sergeant at Arms that the witness is in conference with members of the House managers.

Mr. Manager HOBBS. Do I understand it is all right to introduce this check which I have shown you?

Mr. WALSH (of counsel). We have no objection. Mr. Manager HOBBS. We offer in evidence a check under

date of March 9, 1929, drawn on the Park Bank of New York, payable to H. L. Ritter, for the sum of $1,945.23, signed by the Mulford Realty Co., by V. L. or V. S. Mulford, president, and ask that it be given an appropriate number.

<The check was marked "Managers' Exhibit A-21", and is as follows:) No. WEST PALM BEACH, FLA., March 9, 1929.

Park Bank N. Y. Pay to the order of H. L. Ritter $1,945.23, Nineteen hundred

forty-five & 23/ 100 ~Dollars. (Signed) MULFORD REALTY Co.,

V. S. MULFORD, Prest. [Endorsed "H. L. Ritter'' and cleared through the banks named

1n the endorsement.]

FURTHER REDIRECT EXAMINATION OF A. L. RANKIN

The VICE PRESIDENT. The witness is before the Sen­ate. Do the managers on the part of the House desire to ask any questions?

Mr. Manager SUMNERS. I desire to have Mr. Manager Hobbs ask one question, and then I shall proceed.

By Mr. Manager HOBBS: Q. Judge Rankin, I show you a copy of the letter signed

"Charles H. Brodek" under date of August 28, 1931, and ask you to look at it and see if you received the original. If you have the original we would be glad to have you pro­duce it.-A. Yes.

Q. You received the original signed by Mr. Brodek?-A. Yes.

Mr. Manager HOBBS. We offer this letter in evidence. Mr. WALSH (of counsel). We have no objection. Mr. Manager HOBBS. We offer this in evidence and ask

that it be given an appropriate exhibit number. (The letter was marked "Managers' Exhibit A-22.") Mr. Manager HOBBS. I am informed the letter has not

been read. I wish now to read it. MANAGERS' ExHIBIT A-22

Re: Brazilian Court foreclosure. Mr. A. L. RANKIN,

Comeau Building, West Palm Beach, Fla.

AUGUST 28TH, 1931.

DEAR M&. RANKIN: I have your letter of August 26th, which I have read with the deepest interest.

It happens that Mr. Mulford was compelled to take a rest by order of his physician. He left for a ranch in Wyoming about ten days ago, and I do not expect him back until the end of September.

I do not llke to interrupt his rest with matters apt to disturb him, and I should like to hold this question of settlement in abeyance until his return. In the meantime, I shall see Judge Ritter and go into the situation thoroughly with him.

I may consider it advisable for you to come to New York to dis­cuss this matter after Mr. Mulford returns. I do not think. it necessary for you to come here in his absence.

Before I see Judge Ritter I will !am11ia.rize mysel! with the authorities cited in your letter so as to be posted as to the strength of D'Esterres' legal position.

With best regards, sincerely yours, CHAS. A. BRODEK.

B/W

By Mr. Manager SUMNERS: Q. Mr. Rankin, I believe the interveners in the Whitehall

case were A. W. Kirkland, of New Hampshire; Eugenia J. Schopps, of Milwaukee; and A. H. Hill, of Alabama. Are you acquainted with either of those parties personally?­A. A. W. Kirkland and A. H. Hill

Q. Yes; either one of those persons?-A. Yes; I am ac­quainted with Mr. Hill personally.

Q. Is Mr. Hill related to you?-A. Yes; he is my brother­in-law.

Q. You filed for $3,800 of bonds in the name of Mr. Hill?­A. Repeat the question.

1936 CONGRESSIONAL RECORD-SENATE_ 5263 Q. You filed for $3.800 of bonds in the name of Mr. IDll

in your intervention suit?-A. Yes. Q. As a matter of fact did he own those bonds?-A. No.

Those bonds were turned over to him by Mr. Bemis. Q. How did Mr. Bemis happen to turn the bonds over to

him?-A. Why did he? Q. Yes.-A. He turned them over to him so he might

intervene in the suit in order to protect the first-mortgage bondholders.

Q. Is that the Mr. Bemis who has been mentioned fre­quently in this testimony?-A. Yes, sir.

Q. Why was it necessary to turn them over to Mr. Hill? Why was it necessary for Mr. Bemis to turn them over to Mr. Hill ?-A. Why was it necessary?

Q. Yes. Why did not Mr. Bemis intervene in his own behalf?-A. He was not a nonresident.

Q. Mr. Bemis lived in Florida, did he?-A. Yes, sir. Q. Mr. Hill lived in Alabama?-A. Yes, sir. Q. And in order to be certain you would be able to retain

jurisdiction in the event Holland went out of the suit you wanted another nonresident with $3,000 of bonds?-A. Yes, sir.

Q. Just how was that arranged?-A. I did not catch the question.

Q. How was it arranged for the suit to be brought in the name of Mr. Hill, when as a matter of fact Mr. Bemis owned the bonds?-A. It was arranged in this way. They were trying to dismiss the suit and he thought it was very essential and necessary to have an intervener in there in order to protect the first-mortgage bonds, and. he consulted with me and asked me about it, and asked me if I could get someone to take the bonds and use them, and I suggested Mr. Hill.

Q. Mr. Hill never paid anything for the bonds, did he?-A. No; he never paid anything.

Mr. Manager SUMNERS. That is all. Mr. WALSH (of counsel). That is all. The PRESIDENT pro tempore. The witness is excused. Mr. Manager HOBBS. May it please the Court, as I un-

derstand the entire file in the case of Holland against White­hall Building & Operating Co. has been by stipulation put in evidence, and counsel for either side may use any statements therefrom.

Mr. WALSH (of counsel). That is correct. Mr. Manager HOBBS. As I understand, the entire file

in · the Highland Glades Drainage case is similarly in evi­dence subject to the use of either side. Is that correct?

Mr. WALSH (of counsel). That is correct. Mr. Manager HOBBS. Neither is to be included in the

printing of the REcoRD? Mr. WALSH (of counsel>. That is correct. Mr. Manager HOBBR The same applies to the Trust Co.

of Florida and stephens, trustee, against Brazilian Court? Mr. WALSH (of counsel). That is correct. Mr. Manager HOBBS. Not to be printed, but to be avail­

able? Mr. WALSH (of counsel>. That is correct. Mr. Manager HOBBS. The House managers rest their

case. Mr. WALSH (of counsel). Just a moment! Before the

case is rested we have some further cross-examination, as the gentlemen know.

The PRESIDENT pro tempore. Counsel for the respond­ent may proceed.

Mr. WALSH (of counsel>. I offered in evidence the statement headed "List of clients of firm of Ritter & Rankin at the time of dissolution of partnership February 15, 1929", and attached thereto an inventory of library and other dis­tributable assets of the former firm. That was objected to on the ground that the amounts under "fees collected" could not be proven by the witness Rankin.

Proof can be made of all the rest of the data on the ex­hibit, and, of course, this is a vital part of it. I understand that many of these accounts are within the knowledge of the investigators of the honorable House managers.

I might say that these were gathered together by a.n ac­countant who resorted to any source from which he could

get the information. Part of it, of course, would be hear­say. For instance, he would call upon a certain client and find out a certain amount had been paid, as explained by the witness Rankin, he having kept no books. We will, of course, produce the accountant, a registered accountant, for cross-examination, and let him be subjected to cross-exam­ination. · If he should not be truthful about it he would be subject to the ordinary punishment for any departure there­from.

I desire to see if I cannot get a stipulation from the man­agers on this subject.

Mr. Manager SUMNERS. Mr. President, that list, as I understand, differs from two other lists which have been furnished by Mr. Rankin to the managers. The investiga­tor for the House of Representatives has not had an oppor­tunity to go over the list or the accounts or the statement, however counsel for the respondent may designate the docu­ment and, of course, we are not in a position to agree about it.

Mr. WALSH (of counsel). Of course, it has been pre­sented to th~ honorable managers heretofore; and I believe it is conceded that Mr. Mulherin has some of these items which he has already investigated.

The reason this statement is here, I may say, Mr. Presi­dent, and to the honorable Court, is that testimony hereto­fore has been given from hearsay or from incomplete rec­ords; and therefore we think it is of vital importance in proving the contract to show just what the subject matter of it was, so far as the cases on hand were concerned. Un­less we can do this, of course, we shall have to ask for sub­penas and subpenas duces tecum for the people who paid the money. There are quite a number of them.

Mr. Manager SUMNERS. I should like to avoid that, and my associates would; but we have this difficulty:

Mr. Rankin has furnished, on two different occasions, statements of the assets of the firm at the time of dissolu­tion and the collections to be made out of pending business. This is a statement not prepared by Mr. Rankin, as I under­stand. It is not one for which he is willing to vouch. It is not a statement based upon the books of the firm, but a statement based upon the explorations of somebody who has gone about over the country interviewing va..."ious clients, and, from the best information he can get, making up a statement which counsel now offers to present. Naturally, as much as we should like to oblige counsel for the respond­ent, we cannot agree that that sort of a statement shall be admitted in evidence as showing the facts of which it pur­ports to be evidence.

Mr. WALSH _ (of counsel). I concede, of course, that a part of this statement is based on hearsay testimony.

The PRESIDING OFFICER (Mr. BAILEY in the chair). And would not be admissible.

Mr. WALSH (of counsel). And would not ordinarily be adlhissible, without an agreement or stipulation. There­fore, if that is the determination, we shall have to ask, as we shall, for a subpena duces tecum on all of the items that we cannot agree upon with Mr. Mulherin, and pro­duce the witnesses.

Mr. Manager SUMNERS. We should be perfectly willing to accept either of the statements which Mr. Rankin, the surviving partner of the business, has made with regard to the assets of the concern at the time of dissolution, and the fees received from business that was pending at the time of dissolution. Our objection is that the statement now offered, as I understand, was prepared by someone else, and does not agree with the statements which have been made by the parner himself who was conducting the business.

The PRESIDING OFFICER. The Chair understands that counsel for respondent does not insist that the evidence pro­posed to be introduced is admissible in its present condition. The Chair understands from the manager on the part of the House that no objection will be taken to testimony from the surviving partner.

Mr. Manager SUMNERS. Not a bit. We should not like, of course, to have him refresh his memory from a statement prepared by somebody else.

5264 CONGRESSIONAL RECORD-SENATE APRIL 9

The PRESIDING OFFICER. The Chair takes it that the managers for the House and the counsel for the respondent may get together and devise some plan whereby time may be saved. The evidence is material, but it is not admissible in its present condition.

Mr. Manager SUMNERS. I suggest, Mr. President, that Mr. Mulherin, on behalf of the managers on the IYcirt of the House, and the gentleman who prepared the state~ent for the respondent ought to be able to make very defirute prog­ress toward agreement. There may be some items in regard to which they cannot agree. The difficulty about admitting a thing of this sort is, naturally, that there is nobody to cross-examine.

The PRESIDING OFFICER. The Chair is satisfied that ·the evidence is not admissible in its present shape; but the Chair thinks it may be put in proper condition, and he is hoping to avoid the necessity for issuing the subpenas and the further delay which would result.

Mr. Manager SUMNERS. We shall be glad to cooperate with counsel for the respondent in that regard.

Mr. WALSH (of counsel>. We shall cooperate with the managers on the part of the House; but, to be perfectly frank about the matter, the difficulty is that Mr. Rankin has been unable to give all the items from memory or from any .data that he has. When he sees them put down here now, there are items to which he cannot positively swear; so the person you would have to cross-examine, the safeguard you would have, would be the accountant who pursued these matters. He can be aided a good deal by Mr. Salisbury, who was in the office at the time.

Mr. Manager SUMNERS. Would it not be better to let the matter go over? We cannot agree for the moment any­how.

Mr. wALSH (of counsel) . No; I see that. The PRESIDING OFFICER. Since the managers on the

part of the House and counsel for the respondent cannot agree, and the evidence in its present condition is inadmissi­ble, let us move on to something else by way of cross­examination.

Mr. WALSH (of counsel) . I will ask the managers on the part of the House first if they have agreed that we may put in, without reading them at the present time. the. acco~t of expenditures of the moneys received by Mr. Rankin which he turned over to Mr. Mulherin?

Mr. HOFFMAN. That is in already. Mr. Manager SUM­NERS agreed with me on that.

Mr. wALSH (of counsel) . My colleague's recollection is that you have agreed on that. Is there in the REcoRD a stipulation to that effect?

Mr. Manager SUMNERS. I do not know, sir, whether there is or not; but we may make a stipulation now, if you desire. The statement went in. We have agreed that that statement shall go in, subject to any objections that may be raised on either side to any of the items in the statement ..

The PRESIDING OFFICER. Are you referring now to the statement of account just offered?

Mr. Manager SUMNERS. No, sir; the statement of ex­penditures by Mr. Rankin. How would you identify the state­ment?

Mr. WALSH (of counsel). The statements are in the printed document of the House investigation, and each state­ment has been given an exhibit numeral or letter. When I handed them to you I pointed that out, and I think it is in the RECORD.

Mr. Manager SUMNERS. What I am asking is, how is it designated, so that we may be sure that we are discussing a stipulation with regard to identically the same thing?

Mr. HOFFM...I\N. May I see the printed record of exhibits before the subcommittee?

Mr. Managers SUMNERS. I think there is no difiiculty about it.

The PRESIDING OFFICER. The Chair understands that a statement by stipulation is to be made and entered in the RECORD. All we wish to do is to identify the statement.

Mr. Manager SUMNERS. Mr. President, to save time, I think-perhaps it is a little indefinite-the stipulation we

have with counsel for the respondent is that the items in this statement may be admitted as evidence.

The PRESIDING OFFICER. In what statement? Mr. Manager SUMNERS. That is what I am trying to

clear up. I am sorry. How do you designate it? Mr. WALSH (of counsel> . Here is the way they are

designated. I think, if I may make a suggestion, it would be well to have the last number of the respondent's exhibits given to me, and I will mark the exhibits here, and strike out the alphabetical designations given in the record of the testimony of the investigating committee. Do you under­stand that, Mr. Manager HoBBs? Here it says "Exhibit E, A. L. Rankin, receipts and disursements of fees", and so forth. Instead of that, if they will give me the number, I will offer them now, and they will be original exhibits in this case. Is that satisfactory, Mr. President?

The PRESIDING OFFICER. Very well; if that is the stipulation, let the statement be entered in accordance with the terms of the stipulation.

Mr. WALSH (of counsel). We offer in evidence the exhibit marked "Exhibit E'', appearing on page 843 of the exhibits presented at the hearings before the subcommittee of the Committee on the Judiciary of the House of Representatives, pursuant to House Resolution 163. We offer this exhibit and ask that it be marked "Respondent's Exhibit 16." It is entitled "Receipts and disbursements of fees from White­hall Building & Operating Co."

(The exhibit was marked "Respondent's Exhibit 16", and is as follows:>

REsPONDENT'S ExHIBIT 16 A. L. RANKIN

Receipts and disbursements of fees from Whitehall Building & Operating Co.

May 22, 1930, by order of Halsted L. Ritter, advance on fee for creating assets Whitehall Building & Operating Co. Deposited in West Palm Beach Atlantic National Bank same date ____________________________________ $2, 500. 00

Actual balance at the time of depositing was___________ 43. 56

Distribution by check: Walter S. Richardson, legaL----------------------F1o Ca~ stenographer __________________________ _ C. F. Rankin, relative ____________________________ _ I. Berman & Son, personal ________ _: ______________ _ Taylor Auto Co., expense _________________________ _ Powell & Albritton, payment, Fox Henderson, Ala-bama _________________________________________ _

Andalusia Bank, transfer funds __________________ _ B. L. Timmerman, taxes, Alabama ________________ _ G. M. A. C., payment, auto _______________________ _ Powell & Albritton, Fox Henderson, payment, Ala-

bama------------------------------------------

250. 00 35.00 50.00 33.83 52.11

1,000.00 350.00

50.00 99.00

719. 13

2,639.07

Mr. WALSH (of counsel>. We also offer the exhibit ap­pearing on page 844, a further list of expenditures, and ask that it be marked "Respondent's Exhibit 17."

(The exhibit was marked "Respondent's Exhibit 17" and is as follows:)

RESPONDENT'S ExHIBIT 17 A. L. RANKIN

July 7, 1930, by order of Alexander Akerman, balance of fee for creating assets Whitehall Building & Operating Co. Deposited in West Palm Beach Atlantic National Bank sanne date------------------------------------$12,500.00

Balance in bank at time of deposit_____________________ 225. 59

Distribution by check: G. M. A. C., auto---------------------------------J. w. Salisbury, legal ____________________________ _ Cash:

Walter S. Richardson, legaL __________________ _ Travel expense to Alabama ___________________ _ Personal to wlie _____________________________ _

Gladys Schultz, stenographer----------------------J. B. Powell, Jr., repay loan _______________________ _ Bank charge, miscellaneous ______________________ _

F. E. Fenno, office---------------------------------Gladys Schultz, stenographer---------------------­Cash: Albert, Jr ___________________________________ _

Personal--------------------------------------Jennings Florida Co., remit to client ______________ _ Cash, Palm Beach Bus Service, Inc ________________ _

99.00 825.00

1,000.00 150.00 850.00

20.00 1,500.00

1. 13 5.10

20.00

150.00 50.00

200.00 99.00

1936 CONGRESSIONAL RECORD-SENATE 5265 A. L. RANKIN--continued

Distribution by check-Continued. R. c. Fleeman, Inc., personal Insurance ____________ _ J. M. Robinson, principal and Interest on mortgage on home, Alabama_ ____________________________ _ Southern Bell Telephone Co., office ________________ _ Cash:

Miscellaneous --------------------------------Do----------------------------------------­

G. M. A. C., auto---------------------------------A. W. Mutty, Inc., P. B. Bus Service _______________ _ Bank, note--------------------------------------­Cash, personal------------------------------------Tatom Motor Co., P. B. Bus Service _______________ _ Cash, personal------------------------------------George Dyer, treasurer, personaL------------------Gladys Schultz, stenographer _____________________ _ Cash, P. B. Bus Service ___________________________ _ Don Hillyer, for client __________________________ _ cash, personal ________________________ , ___________ _

J. C. Harris Co., personaL-------------------------Postal Telegraph, telegrams _______________________ _ Clerk of court, expenses __________________________ _

Southern Bell Telephone, telephones--------------­Auto license, auto---------------------------------East Coast Motors, auto __________________________ _

Central Farmers Trust Co., personal, draft, Brown & Broughton--------------------------------------P. B. Bus Service, advance _______________ _: ________ _

Church, contribution _____________________________ _ Cash:

Personal--------------------------------------Do-----------------------------------------

Water Co., personal_------------------------------Utilities Co., personal ____________________________ _ Gladys Schultz, stenographer----------------------Cash, personal------------------------------------Secretary of State, expense _______________________ _ Branch & Powell, life Insurance ___________________ _ W. w. Brugess, rent, residence ____________________ _

$17.00

5,505.00 65.59

5.00 10.00 99.00

103.00 500.00

15.00 125.00 45.00 25.00 20.00 24.00 35.00 20.00

4.50 14.60 2.00

15.35 12.50 3.50

250.00 40.00 25.00

40.00 12.00 6.66 7.60

20.00 15.00 1.00

496.36 100.00

----12,648.89

Mr. WALSH (of counsel). We also offer a further list, which appears on page 845, and ask that it be marked "Re­spondent's Exhibit 18."

(The exhibit was marked "Respondent's Exhibit 18" and is as follows:>

RESPONDENT'S EXHmiT 18 A. L. RANKIN

Dec. 24, 1930, by order Halsted L. Ritter, advance on fee for foreclosing mortgage on Whitehall Hotel. De­posited in First National Bank, Miami, Fla., Dec. 24, 1930------------------------------------------------

Distribution by check: East Coast Motors, auto payment _________________ _ Transfer to w. P. B. Atlantic National Bank _______ _ East Coast Motors, auto payment _________________ _ Central Farmers' Trust Co., transfer ______________ _ Shutts & Bowen, attorneys _______________________ _ Cash:

Halsted L. Ritter, first payment on purchase of one-half interest In Ritter & Rankin _______ _

A. L. Rankin, trip to Alabama ________________ _ W. P. B. Atlantic National Bank, payment draft pay­

Ing notes of Spear In Alabama, endorsed by A. L. Rankin, loss------------------------------------B. L. Timmerman, taxes, Alabama ________________ _

J. M. Robinson, mortgage on home, Alabama ______ _ O'Neal Lumber Co., old debt ____________________ _ G. L. Gresham, tax collector _____________________ _ City of Andalusia, paving ________________________ _ G. L. Gresham, tax collector ______________________ _ John B. Powell, loan payment __________________ _: __ Cash:

Personal-------------------------------------I>O---------------------------------------R. C. Prescott, stenographer ______________________ _

Flo Cann, stenographer __________________________ _ Interstate Credit Bureau.. ________________________ _ Florida Bank & Trust Co., legaL __________________ _ J. W. Salisbury, legal----------------------------­Morey Dunn, legal--------------------------------

$25,000

500.00 1,500.00

250.00 2,000.00

12,500.00

2,500.00 500.00

1,948.83 200.00

1,0~6.22 100.00 139.11 250.00 137.00

1,000.00

100.00 25.00 22.50 25.00 75.00 77.67 30.00

7.95

24,924.28

Mr. WALSH (of counsel). We offer also the exhibit ap­pearing at the bottom of page 845, and ask that it be marked "Respondent's Exhibit 19."

<The exhibit was marked "Respondent's Exhibit 19", and is as follows:)

RESPONDENT'S ExHIBIT 19 A.L.RANKIN

Dec. 24, 1930, order of H. L. Ritter, advance on Whitehall mortgage foreclosure fee. Deposited In West Palm Beach Atlantic National Bank Dec. 24, 1930 ___________ $5, 000. 00

Also deposit of $1,500 transferred from First National Bank of Miami Dec. 24, out of Whitehall fee__________ 1, 500. oo

Distribution by check: :Miss Sarah Hill, personal _________________________ _ Mrs. Rankin, personal ____________________________ _ General Motors Corporation, auto _________________ _ Gas Co., personal ________________________________ _

W. S. Richardson, legaL---------------------------Bank, note and interest __________________________ _ Do __________________________________________ _

Cashier's check, Bank of Andalusia, personal _______ _ Telegram, personaL-------------------------------

Do-------------------------------------------Check charged back, personaL ____________________ _ Flo Cann, stenographer __________________________ _ Flax Manufacturing Co., office ____________________ _ J. C. Hudson, taxes ______________________________ _ A. L. Jordan, personaL __________________________ ;.._

Telegram-----------------------------------------Western Union, telegram _________________________ _ Southern Bell, telephone _________________________ _ Palm Beach Times, personaL _____________________ _ R. C. Fleenor, personaL---------------------------W. N. Rushton, office _____________________________ _ J. L. Murphy, legaL-------------------------------Cash, personal ___________________________________ _

Flo Cann, stenographer--------------------------­Church, contribution -----------------------------J. B. Powell, loan payment _______________________ _ R. C. Prescott, stenographer_ _____________________ _ J. W. Salisbury, legaL-----------------------------F. E. C. Ry., ofilce ________________________________ _ U & Me Transfer, office ___________________________ _ F. E. Fenno, office---------------------------------Cash, personaL----------------------------------­Postal Telegraph, telegraiiL-----------------------Florida Power & Light, personaL __________________ _ Cash, personal------------------------------------Flo Cann, stenographer ___________________________ _ R. C. Prescott, stenographer _____________________ __ L. D. Spears, personaL ___________________________ _ Western Union, telegram _________________________ _

6,500.00

25.00 25.()(t 99.00 9.20

1,000.00 501.25 503.34

3,000.00 .60 .61

350.00 25.00 3.00

36.0() 15.30

. 60 1. 97

68.25 7.0()

17.00 48.25 25.00 10.00 25.00 25.00

250.00 35.00 10.00 23.78 3.50

15.00 10.00 10.15 8.31 5.00

25.00 22.50 20.00 11.60

6, 271.21

Mr. WALSH (of counsel). We also offer in evidence a list of expenditures appearing on page 846, and ask that it be marked "Respondent's Exhibit 20."

(The exhibit was marked "Respondent's Exhibit 20", and is as follows:>

RESPONDENT'S ExHIBIT 20 A.L.RANKIN

Distribution of check for transfer of funds from West Palm Beach Atlantic National Bank to the Andalusia National Bank of Anda­lusia, Ala.

Deposited In the Andalusia National Bank I>ec. 29, 1930 __ $3, 000. 00 Distribution:

First National Bank of Brantley, Ala., Jos. Dixon note---------------------------------------City of Andalusia, paving _______________________ _

B. L. Timmerman, taxes _________________________ _

Bank, old note--------------------------------Central Farmers Trust Co., personal_ ______________ _ Wilder Mercantile Co., expense ___________________ _ General Motors Acceptance Corporation, auto pay-

ment-------------------------------------------

1,957.50 500.00

15.88 169.49 200.00 200.00

99.00

17otal----------------------------------------- 3,141.87 Mr. WALSH (of counsel). We offer the list which fol­

lows the last-named exhibit, appearing at the bottom of page 846 and the top of page 847, and ask that it be marked "Respondent's Exhibit 21."

<The exhibit was marked "Respondent's Exhibit 21", and is as follows:>

RESPONDENT'S ExHIBIT 21 A. L. RANKIN

Distribution of check transfer of funds jrom First National Bank at Miami, Fla.~ to Central Farmers Trust Co. of West Palm Beach. Dec. 26, 1930

Deposited In Central Farmers Trust Co., Dec. 26, 1930 __ $2, 000. 00 Distribution:

J. VV. Salisbury, legal____________________________ 750.00 Cash, personal---------------------------------- 19. 00

5266 CONGRESSIONAL RECORD-SENATE APRIL 9 A. L. RANKIN-continued

Distribution of check transfer of funds from First National Bank at Miami, Fla., to Central Farmers Trust Co. of West Palm Beach, Dec. 26, 1930--Continued

Distribution-Continued. City of Andalusia, Ala., paving ___________________ _ Draft, books _____________________________________ _ J. B. Powell, Jr., insurance _______________________ _ Cash, personal __________________________________ _ C. F. Rankin, father _____________________________ _

Cash, personal------------------------------------Dry cleaners, personaL ___________________________ _ Cash, personal-------------~----------------------County judge, expense ___________________________ _ Palm Beach Mercantile, expense __________________ _ J. C. Harris Clothing, personaL __________________ _ East Coast Motors, auto __________________________ _ Hatch's Clothing, personaL _______________________ _ W. W. Burgess, rent------------------------------Cash, personal--------------------------------~---Church, dona tion ________________________________ _ J. B. Powell, pay loan ____________________________ _ Water Co., personaL _____________________________ _ Halsey & Griffit hs, expense _______________________ _ Church, donation ________________________________ _ Flo Cann, stenographer __________________________ _ Cash, personal ___________________________________ _ R. C. Prescott, stenographer _____________________ _ Pictorial News, expense __________________________ _ Public utilities, personaL _______________________ _ Cash, personal------------------------------------

$246.65 23.00 94.83 10.00 20.00

5.00 8.50

15.00 8.00 1. 50 7. 90 8. 60

127.67 100. 00 45.0()

4. 00 250.00

6.47 13.75 15. 00 25.00 40.00 22.50 20.00 7.80

25.00

Total------------------------------------------ 1,920.17

Mr. WALSH (of counsel). We also offer in evidence an additional list appearing upon pages 847 and 848, and ask that it be marked "Respondent's Exhibit 22."

(The exhibit was marked "Respondent's Exhibit 22", and is as follows:)

RESPONDENT'S EXHIBIT 22 A. L. RANKIN

Apr. 6, 1931, balance of $75,000 fee , foreclosure of White-hall, deposited in First National Bank of MiamL _____ $45, 000. 00

Distribution, by check: Central Farmers Trust Co., transfer_______________ 15, 000. 00

Distribution by check of above $15,000 through Central Farmers Trust Co., deposited Central Farm­ers Apr. 7, 1931:

Kiwanis Club, dues_____________ $5. 00 0. F. Dodd, legaL______________ 5. 00 Curtis Printing Co., office_______ 7. 18 R. C. Fleenor, insurance________ 17.00 Cash, personal_________________ 30.00 w. W. Burgess, house rent______ 100.00 Dry cleaners, personaL_________ 6. 75 R. C. Prescott, stenographer____ 22. 50 C. F. Rankin, personaL_________ 20. 00 Daily Democrat, personal_______ 1. 00 Flo Cann, stenographer_________ 25.00 L. D. Spears, personal__________ 20. 00 Bank, purchase of home in West

Palm Beach from Judge Rob­bins------------------------ 6,800.00

J. W. Salisbury, legaL__________ 500. 00 F. E. Fenno, legaL_____________ 8. 05 Hatch's, personal -------------- 16. 28 Mrs. Rankin, wife______________ 800. 00 General Motors Acceptance Cor-

poration, in full, Buick_______ 575. 11 Southern Bell, office____________ 25.45 Interstate Credit Bureau, inter·

est and mortgage, Alabama___ 425.15 Marsh Pastrotr, _personaL_______ 24. 78 Church, contribution---------- 10. 00 R. C. Prescott, stenographer____ 22.50 Flo Cann, stenographer_________ 25.00 Cash, personaL________________ 35. 00 Branch & Powell, insurance_____ 163.91 Cash, personal_________________ 15.00 F. E. Fenno, office______________ 3. 30 Bank, books___________________ 104.50 Cash, H. L. Ritter______________ 1, 000. 00 R. A. Gray, legaL______________ 112. 50 Water Co., personal____________ 6. 66 Electric Co., personaL_________ 10. 00 Office_________________________ 1. 25 Bar association, dues__________ 12. 00 F. E. Fenno, legaL_____________ 84. 75 Cash, personaL________________ 50. 00 R. C. Prescott, stenographer____ 22.50

- Flo Cann, stenographer________ 25.00 General Motors Acceptance Cor-

poration, interest____________ 4. 25 Anthony's personal ------------ 19. 75 J. W. Salisbury, legaL_________ 75. 00

A. L. RANKIN-continued Distribution, by check-Continued.

Central Farmers Trust Co., transfer-Continued. Distribution by check of above

$15,000 through Central Farmers Trust Co., deposited Central Farm­ers Apr. 7, 1931--Continued.

R. A. Gray, legaL _____________ _ R. C. Prescott, stenographer ___ _ Southern Bell, telephone ______ _ J. W. Salisbury, legaL _________ _ Flo Cann, stenographer--------Gas Co., personaL ____________ _ Susan, personaL ______________ _ R. C. Prescott, stenographer ___ _ Banks: Books ____________________ _

Charge ____________________ , Do ___________________ _ Do ____________________ _

Books ____________________ _ Cash, personal ____ ____________ _ Old Dominion: Interest, $388;

principal, $300; home West Palm Beach ________________ _

R. C. Prescott, stenographer ___ _ Flo Cann, stenographer _______ _ J. W. Salisbury, legaL ________ _ J. B. Powell, loan _____________ _ Mrs. A. L. Rankin, wife _______ _ Florida Power, personaL ______ _ Cash, personaL _______________ _ J. W. Salisbury, legaL ________ _ Cash, personaL _______________ _ W. W. Burgess, rent, residence __ Hatch's, personal --------------Cash, personaL _______________ _ Florida Power Co., personaL __ _ Cash, personaL _______________ _ Postal Telegraph, telegrams ____ _ Seaview Bath Club, personaL __ _ United Body Co., automobile __ _ Jessup, Inc., furniture ________ _ Western Union, telegrams _____ _ Cash, Palm Beach bus service __ Flo G. Cann, stenographer _____ _ R. C. Prescott, stenographer ___ _ Hershel Auxier, furniture _____ _ J. P. Cochrane, personaL ______ _

$198.00 22. 50 31.70

250.00 25.00

8. 40 5. 00 5.00

23.00 5.00 3.48 2.00

23. 00 40.00

688.00 22.50 25.00

250.00 500. 00 225. 00

10.00 15.00 37.50 20.00

100.00 98.97

105.00 6. 44

30.00 9. 65

15.00 35.00

369.40 1. 77

35.00 25.00 22.50

150.00 100.00

Total----------------------- 14,775.93 Cash, personal---------------------------------------J. B. Powell, loan ___________________________________ _ Henry A. Pohl, personaL ____________________________ _

Marsh & Marsh, attorneys _____ ~----------------------West Palm Beach Atlantic National Bank, note _______ _ Debit memorandum, service charge __________________ _ Shutts & Bowen, attorneys _____________________ ._ ____ _

Ernest Metcalf, attorney------------------------------VValter S. Richardson, attorney _________________ _____ _

Cash, H. L. Ritter------------------------------------

$25.00 3,000.00

75.00 300.00

1,000. 00 2. 00

12, 500.00 10,000.00

2,000.00 1, 000.00

Total------------------------------------------ 44,902.00

Mr. KING. Mr. President, will the President inquire of the managers on the part of the House whether the exhibits appearing on the pages referred to are accepted, and are to be incorporated in the RECORD?

The PRESIDING OFFICER. They were admitted upon stipulation.

Mr. Manager HOBBS. May I ask counsel whether he does not intend to put in what appears on page 849?

Mr. WALSH (of counsel). We put in all we wished to put in. If there is anything relevant, you can put it in.

Mr. Manager HOBBS. We understand it is a part of the same letter.

Mr. WALSH (of counsel). Then, of course, we want it in. [After consultation among counsel.] We have introduced from this record all that we wish to introduce.

Mr. Manager HOBBS. We wish it clearly understood that we are stipulating that these matters may be introduced in evidence without any a vouchment of variety.

The PRESIDING OFFICER. Let the stipulation appear in the RECORD.

Mr. Manager SUMNERS. I believe there is a stipulation in the RECORD to that effect.

The PRESIDING OFFICER. Very well. Mr. Manager SUMNERS. Each item is subject to chal­

lenge. The PRESIDING OFFICER. The stipulation will speak

for itself.

1936 CONGRESSIONAL RECORD-HOUSE 5267 Mr. WALSH (of counsel). We have the correspondence

from the Sweeny files. As I understand, we can stipulate this far. that the correspondence is the correspondence from the Sweeny files, that there will be no necessity for identify­ing it as such, and the direction of the letter and the signa­ture may be taken as true. Is that correct?

The PRESIDING OFFICER. What do the managers say to that? What is the designation of the correspondence?

Mr. WALSH (of counsel). The Sweeny correspondence. The PRESIDING OFFICER. It will be admitted. Mr. Manager HOBBS. I beg Your Honor's pardon. The PRESIDING OFFICER. I made inquiry, and I un-

derstood the managers agreed. What do the managers say?

Mr. Manager HOBBS. We agree that no proof need be made as to the identity of these letters, that copies may be exhibited from that file just as though they were the orig­inals, and that we will raise no point as to the identity; but we do not agree to the introduction of any one of the letters.

The PRESIDING OFFICER. You reserve your right to object to the admission of any particular letter?

Mr. Manager HOBBS. Yes. The PRESIDING OFFICER. That is the understandiilg

of counsel for the respondent? Mr. WALSH <of counsel). Yes. The managers have not

had a chance to look at them, and I will be glad to sit up with any of the gentlemen tonight and check over the cor­respondence, and I am hopeful that then we can agree on the full stipulation which we offered earlier in the day; namely, that they go in the record without being read.

The PRESIDING OFFICER. Then the order is made according to the statement just made by one of the man­agers and also by counsel for the respondent.

Is there further evidence? Mr. WALSH (of counsel). We have only 10 minutes left. Mr. ROBINSON. I assume that counsel for the respond-

ent would not desire to proceed this evening, and the managers have closed their case, so, unless there is objec­tion, I shall move that the Senate take a recess.

Mr. BARKLEY. Mr. President, would it be agreeable to the Senator from Arkansas for me to ask leave to have an article printed in the REcORD?

Mr. ROBINSON. I should prefer that the Senator wait until we have a legislative session.

lV....r. BARKLEY. Very well. ADJOURNMENT OF IMPEACH.MENT TRIAL

Mr. ROBINSON. Mr. President, I move that the Senate · sitting for the trial of the articles of impeachment stand in adjournment until the hour fixed in the order heretofore entered.

The motion was agreed to; and (at 5 o'clock and 18 min­utes, p. m.) the Senate, sitting for the trial of the articles of impeachment against Halsted L. Ritter, adjourned, the adjournment being under the order heretofore entered until tomorrow, Friday, April 10, 1936, at 12 o'clock meridian.

RECESS

Mr. ROBINSON. Mr. President, I move that the Senate take a recess.

The motion was agreed to; and (at 5 o'clock and 20 min­utes p. m.) the Senate took a recess, to meet for the trial of the articles of impeachment against Halsted L. Ritter to­morrow, Friday, April 10, 1936, at 12 o'clock meridian.

HOUSE OF REPRESENTATIVES THURSDAY, APRIL 9, 1936

The House met at 12 o'clock noon. The Chaplain, Rev. James Shera Montgomery, D. D., offered

the following prayer: The Lord our God is clothed with majesty and power!

Heavenly Father, take from us that which hinders the full disclosure of the sweetness, the sacrifice, and symmetry of the Lord of glory. Have mercy on our unworthiness and let us look through the darkness and behold the Light of the

coming morning. We would follow in His path with muffled tread and with sad and solemn thought. Teach us what it is that defeats our higher attainment; help us to break through the barriers, where we shall see Thee no more through a glass darkly. Bestow blessings of rest and comfort upon our President, the Speaker, and the entire Congress. Grant that the lowly life of the humble Galilean may inspire us and lift us out of our own. As we approach the tomb in the garden, we pray that more and more abundant Thy Holy Spirit may guide us in the ways of all truth. In the name of our glorified Redeemer. Amen.

The Journal of the proceedings of yesterday was read and approved.

MESSAGE FROM THE SENATE A message from the Senate, by Mr. Horne, its enrolling

clerk, announced that the Senate had passed, with amend­ments, in which the concurrence of the House is requested, bills of the House of the following titles:

H. R. 9997. An act granting a leave of absence to settlers of homestead lands during the year 1936; and

H. R. 11968. An act relating to the authority of the Recon­struction Finance Corporation to make rehabilitation loans for the repair of damages caused by :floods or other catas­trophes, and for other purposes.

The message also announced that the Senate had passed a joint resolution of the following title, in which the concur­rence of the House is requested:

s. J. Res. 248. Joint resolution to provide for participation by the United States in an inter-American conference to be held at Buenos · Aires, Argentina, or at the capital of another American republic, in 1936.

The message also announced that the Senate insists upon its amendments to the bill <H. R. 1362) entitled "An act for the relief of Ramey Bros., of El Paso, Tex., disagreed to by the House; agrees to the conference asked by the House on the disagreeing votes of the two Houses thereon, and ap­points Mr. BAILEY, Mr. LOGAN, and Mr. TOWNSEND to be the conferees on the part of the Senate.

The message also announced that the Senate agrees to the report of the committee of conference on the disagree~g votes of the two Houses on the amendments of the Senate to the bill <H. R. 3806) entitled "An act to establish a commer­cial airport for the District of Columbia."

The message also announced that the Senate agrees to tha amendments of the House to bills of the Senate of the follow­ing titles:

S.1824. An act for the relief of Abraham Green; S. 2042. An act for the relief of Grace Park; S. 2524. An act amending section 112 of the United States

Code, Annotated <title 28, subtitle "Civil suits; where to be brought");

S. 2697. An act for the relief of the United Pocahontas Coal Co., Crumpler, W. Va.;

S. 3777. An act to authorize the Secretary of the Treasury to execute an agreement of indemnity to the First Granite National Bank, Augusta, Maine; and

S. 4232. An act to create a commission and to extend fur­ther relief to water users on United States reclamation proj .. ects and on Indian irrigation projects.

AMENDMENT OF FEDERAL HIGHWAY ACT Mr. DRIVER, from the Committee on Rules, reported the

following resolution <Rept. No. 2389), which was referred to the House Calendar and ordered to be printed:

House Resolution 484 Resolved, That upon the adoption of this resolution it shall be in

order to move that the House resolve i~elf into the Committee of the Whole House on the state of the Union for the consideration of H. R. 11687, a bill to amend the Federal Highway Act, approved July 11, 1916, as amended and supplemented, and for other pur­poses. That after general debate, which shall be confined to the bill and continue not to exceed 2 hours, to be equally divided and controlled by the chairman and ranking minority member of the Committee on Roads, the bill shall be read for amendment under the 5-minute. At the conclusion of the reading of the bill for amendment the Committee shall rise and report the same to the House with such amendments as may have been adopted, and the previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion. except one motion to recommit, with or without instructions.