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1925 CONGR.ESSION AL RECORD-SEN ATE 973 ,, .

War and their widows be granted an increase in pension; to 158. Also, petition of sundry members of Dudley P. Chase the Committee on Invalid Pensions. Post, No. 22, Grand Army of the Republic, Minneapolis, Minn.,

142. Also, petition of sundry members of Custer Rea Circle, unanimously requesting that Union veterans of the Civil War No. 2, Ladies of the Grand Army of the Republic, unanimously and their widows be granted an increase in pension; to the requesting that Union War veterans be granted an increase in Committee on InYalid Pensions. pension to $72 per month, and that theit· widows be also granted 159. Also, petition of sundry members of the Fifth District an increaee; to the Committee on Invalid Pensions. Federation of Women's Clubs of Minnesota, indorsing the

143. Also, petition of sundry members of the Minnesota Re- Permanent Court of International Justice; to the Committee serve Officers' Association, urging that no further reduction be on Foreign Affairs. made in appropriation for training for any one of the com- 160. Also, petition of sundry members of Carleton Post, No. ponents of the Army of the United States; to the Committee on 5, Veterans of Foreign Wars, St. Paul, Minn., requesting that Appropriations. Congress enact legislation looking toward pensions, work, and

144. Also, petition of Julia E. F. Lobdell and 38 other mem- proper maintenance of hospitals or homes for deserving, hon­bers of Ida M. Everett Tent, No.8, National Alliance, Daughters orably discharged veterans of the United States military serv­of Union Civil War Veterans, unanimously and urgently re- ice; to the Committee on World War Veterans' Legislation. questing an increa e in pension for veterans of the Civil War 161. Also, petition of 600 residents of Balaton, Minn., and and their widows; to the Committee on Invalid Pensions. vicinity, urging the entrance of the United States into the

145. Also, petition of sundry members of LeYi Butler Post, Permanent Court of International Justice; to the Committee No. 73, Department of Minnesota, Grand Army of the Republic, on Foreign Affairs. unanimously reque ting that Congress provide for an increa~e 162. Also, petition of sundry members of Columbia Circle, in pensions to Civil War veterans and their widows; to the No. 7, Ladies of the Grand Army of the Republic, Minneapolis, Committee on Invalid Pensions. Minn., unanimously requesting that Union veterans of the

146. Also, petition of sundry members of James Bryant Post Citil War and their widows be granted an increase in pen­and Woman's Relief Corps, Minneapolis, Minn., in joint meeting sion; to the Committee on Invalid Pensions. a sembled, unanimously requesting Co~gress to enact legisla- 163. Also, petition of the Minneapolis Cine and Commerce tion providing for · an increase in pension to veterans of the Association, protesting against legislation providing for per Civil War and their widows; to the Committee on Invalid capita payments to Minnesota Indians from their tribal funds; Pensions. to the Committee on Indian Affairs.

147. Also, petition of sundry members of the Renville County 164. Also, petition of sundl·y members of Lizzie M. Rice Farm Bureau Association, Olivia, Minn., Ul'ging Members of Circle, No. 41, Ladies of the Grand Army of the Republic, Congress to re ist any reduction in the tariff on and affecting Minneapolis, Minn., unanimously requesting that Union veter­flax eed; to the Committee on Ways and Means. ans of the Civil War and their widows be granted an increase

148. Also, petition of Tent No. 4, Daughters of Civil War in pension; to the Committee on Invalid Pensions. Veterans, St. Paul, Minn., urging that Congress enact a law 165. By Mr. PHILLIPS: Affidavits to accompany H. R. 2488, providing for incl'eased pensions for Union veterans of the Civil granting a pension to James A. Holsinger; to the Committee War and their widows; to the Committee on Invalid Pensions. on Invalid Pensions.

149. Also, petition of the board of directors Minnesota Motor 166. Also, affidavits to accompany H. R. 2487, granting a Trades Association and 800 members, praying that Congress pension to Mary E. Rhodes; to the Committee on Invalid Pen­eliminate the manufactures excise tax on passenger automo- sions. biles, trucks, parts, and ·accessories; to the Committee on Ways 167. By Mr. SMITH: Papers in support of H. R. 2775, grant-and 1\Ieuns. ing an increase of pension to Ro.,e A. Strawman; to the Com-

150. Also, petition of sundry members of Carleton Post, No. 5, mittee on Invalid Pensions. Veterans of Foreign Wars, St. Paul, Minn., aski.ng congressional 168. Also, papers in support of H. R. 2771, granting a pen-enactment of measures concerning pensions,· work, and proper sion to Knute Westerheim; to the Committee on Pensions. maintenance of hospitals or homes for deserving honorably dis- 169. By Mr. SOMERS of New York: Petition of the New :charged veterans of the United States military service; to the York State Pharmaceutical Association, numbering 3,700, urg­Committee on World War Veterans' Legislation. ing the reduction of tax on medicinal alcohol; to the Com-

151. Also, petition of 160 members of Mary E. Starkweather mittee on ·ways and Means. 'l'ent, No. 1, Department of Minnesota, Daughters of the Union 170. Also, resolutions adopted by the Central Union Label Yeterans of the Civil War, unanimou ·ly requesting that Con- Council of Greater New York, requesting Federal investiga­gres provide for an increase in pension for Union veterans of tion of the proposed Bread Trust; ·to the Com.nllttee on the the <?ivil War and their widows; to the Committee on Invalid Judiciary. Pe~ons. . . 171. Also, petition of the American Automobile Association,

o · Also, petition of sundry ~embers of George N. Morgan uro-ing the removal of all war excise taxes on motorist · to Post, No. 4, Department of Minne ota, Grand Army of the I o . ' Republic, St. Paul, unanimously requesting that Congress enact the Committee on Ways and l\feans .. legislation providing for an increase in pensions for veterans ' 172: By Mr. ~EMPLE: ~apers rn .support of H. R. ~554, of the Civil war and their widows; to the Committee on grantmg. a pens~on to M~ggie EJ. Anderson; to the Committee Invalid Pensions. on Invalid PensiOns.

153. Also, petition of F. D. McMillen, commander, a~d 100 . 173. Also, evidence _in support of H. ~- 4372, gran~g a pen-members of Camp No. 8, Sons of Union Veterans of the Civil Slon to Lyman E. Smder; to the Committee on Pensions. War, Minneapolis, Minn., requesting for Union veterans of the 174. Also, evidence in support of H. R. 1555, granting a pen­Civil War and their widows an · increase in pension; to the sion to Laura Crawford; to the Committee on Invalid Pensions. Committee on Invalid Pensions._ 175. By Yr. WOODRUM: Petition of the Young Women's

154. Also, petition of sundry members of the Dudley · P. Christian Association, of Lynchburg, Va., petitioning Congress Chase Woman's Relief Cm·ps, No. 10, Grand Army of the Re- to enact the necessary legislation to enable the United States public, Minneapolis, Minn., unanimously requesting that Union to become a member of the World Court; to the Committee veteran of the Civil War and their widows be granted an in- on Foreign Affairs. crea ·e in pension ; to the Committee on Invalid Pensions.

155. Also, petition of sundry members of Jacob Schaefer Woman's Relief Corps, No. · 46, Grand Army of the Republic, Minneapolis, unanimously requesting that Union war veterans of the Civil War and their widows be g~·anted an increase in pension ; to the Committee on Invalid Pensions. .

156. Also, petition of sundry members of Appomattox Woman's Relief Corps, No. 33, Auxiliary to the Grand Army of the Republic, Minneapolis, unanimously requesting that Union veterans of the Civil War and their widows be granted an increase in pension ; to the Committee on Invalid Pensions.

157. Also, petition of sundry mem'Qers of auxiliary of Camp No. 8, Sons of Union Veterans pf the Civil War, Minneapolis, Minn., unanimously requesting that Union veterans of the Civil War and their widows be granted an increase in pen-sion; to the OomJ?ittee ~n Invalid Pensions. ·

SENATE THURSDAY, December 17, 1925

The Chaplain, Rev. J. J. l\Iuir, D. D., offered the following prayer:

0 Lord, our Gocl, who hast also been our fathers' God, and hast proved Thy graciousness in daily loading our lives with Thy benefits, help us to realize not only our dependence upon Thee but our obligatiO.IlB to our fellow men, so that in every possible way we may help to serve the welfare of mankind. Give us a keener appreciation of our obligations and enable us to be devoted to the interests closest to Thy heart. Hear us, help us, we ask in Jesus' name. Amen.

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974 COXGRESSIONAL RECORD-SE~.c\_TE D ECE:JillEU 17

THE WORLD COURT

The VICE PRESIDBXT. In accordance with the order of the Senate agreed to on March 13 la. t, the Chair lays befo~e the Senate, in open executiYe session, the special order for th1s llour, namely, Senate He:::olution No. 5, submitted by l\lr. , 'w.at\so , which the Secretary will read. .

'Ihe CHIEF CLERK. .A resolution (S. Ues. 5) submitted by ~Ir. Sw.aNso_- March 5, 1925, providing for adhesion on the part of the United States to the protocol of December 16, 1920, aud t1Je adjoined statute for the Permanent Court of Inter­national Ju -tice, with re ·enations, as follows:

Whereas the President, under date of February 23, 1923, transmitted a message to the Senate accompanied by a letter from the Secretary of state, dated February 17, Hl23, asking the favorable advice and consl:'nt of the Senate to the adhesion on the part of the United States to the protocol of December 16. 19:!0, of signature of the statute for the Permanent Court of International Justice, set out in the sald mes­sage of the President (without accepting or agreeing to the optional clause for compulsory juri diction contained therein), upon the condi­tion!'! and understandings hereafter stated, to be 1Dade a part of the In trument of adhesion : Therefore be lt

Resolrecl (ttco-tllirds of the Senators p1·esent cm~cttrring), That the Renate adn e and consent to the adhesion on the part of the United Stutes to the said protocol of December 16, 1920, and the adjoined statute for the Permanent Court of International Justice (without accepting or agreeing to tlle optional clause for compulsory jurisdic­tion contained in said statute), and that the signature of the United States be affix<>d to tile said protocol, subject to the following reserva· tions and understandings, 'vhich are hereby made a part and condition of thl resoluUon, namely :

1. 'l'ha.t such adhrsion hall not be taken to involve any legal rela­tion on the part of the United Stat.es to the League of Nations or the as umption of any obHgations by the United States under the covenant of the Ll:'ague of Nations con tltuting part 1 of the treaty of Versa1lles.

2. That the United States shall be permitted to participate through rt'prcs~ntati'l'es designated for the purpose and upon an equality with the other states, members, respectively, of the Council and Assembly of the League of Nations, in any and all proceedings of either the council or the as ~mbly for the election of judges or deputy judges of the Permanent Court of International Justice or for the filllng of vacaucies.

3. 'l'hat the United States "'ill pay a fair share of the expenses of the court as determined and appropriated from tlme to time by the Congress of the Unlted States.

4. That the statute for the PPrmanent Court of International Justice adjoined to the protocol shall not be amended without tbe consent of the United States.

5. That the United States shall be in n() manner bound ·by any advJsory opinion of the Permanent Court of International Justice not rendered pursuant to a request in which it, the United States, shall expressly join in accordance with the statute for the said court ad­joined to the pt·otocol of signature of the same to wh1ch the Cnited States shall become signatory.

The signature of the united States to the said protocol shall not be affixed until the powers signatory to such protocol shall have indicated, through an exchange of notes, their acceptance of the :foregoing reserva­tions and understandings as a part and a condition of adhesion by tke united States to the said protocol.

Mr. SWANSON obtained the floor. Mr. ROBINSON of Arkansas. Mr. President, I suggest the

absence of a quorum. The TICE PRESIDEXT. The clerk will call the roll. The legislative clerk called the roll, -and the following Sen­

ators answered to theh· names: A hurst Fess La Follette llavard Fletcher Lenroot Ringbum Frazier McKellar Rlease George McKinley Dorah Geny McLean nratton Gtllett Mc~Iaster Urool\IJart Glass Mc~ary Droussard Goff l\Iayfield Bruce Gooding ::\leans Dutler Greene Metcalf Cameron Hnle Neely Capper IIarreld Norris Copeland Harris Oddle Couzens Harrison Overman Cummins Hefiiu Pepper Curtis Howell Phipps Dale J obnson Pine Deneen Jones, N. :Mex. Pittman Edge Jones, Wa h. Ransdell Ern t Kendrick Reed, Mo. Fernald Keres Reed, Pa. Ferris King Robinson, Ark.

Robinson, Ind. Sackl'tt Schall Sheppard Shipstead Shortridg-e Simmons Smith Smoot Stanfield Swanson Trammell

~~3:worth Walsh Warren Watson Weller ·wheeler WitHams Willis

'l'he VICE PRESIDEXT. Eighty-seven Senators have an­swered to their names. A quorum is present. The Senator from Virginia will proceed.

Mr. SWANSON. Mr. President, the most important que tiou that could. enga,;e the efforts of the statesmen of the world i · to devise means to prevent the occurrence of war and to effect the settlement of international difference by the rule· of ju ·tiee and reason and not by force. Before this all other qu~ ·tions fade into insignificance.

War has become so far-reaching, so destructive of life, so devastating of property tllat there is a universal de ire to preyent its recurrence. Another war similar to the great '\Vorlll War, with a repetition of the horrible experiences we have just passed through, would abnost de troy the world's civilization. Kew inventions of destruction of every kind and chara<:ter make the thoughtful and patriotic view with the gran~:t ap­prehension the future of mankind, if another such friglltfnl war should occur. War is no longer limited to armies in the field, but it has become a contest of nations with all their population and industrial forces against other nation . Such war ends only after national exhaustion. When it is concluded it is difficult to determine whether the victors or the vanqu·~he<l are the great sUfferers. Both lay prostrate, and it tal-C'.' generations of effort to recover what was so recklessly aiHl ruthlessly sacrificed. Thu..,, the prevention of war is the mo::;t important of all problems.

War is largely occasioned by contact of nations. This con­tact frequently produces irritation, competition, and misumler­standings, and giles opportunity for passion and prejudice to have full play. The great improvement in facilities of trans­portation by steam, electricity, and air have brought closer the contact of nations and thus greatly increases the oppor­tunities for misunderstandings and conflict. When aviation is fully perfected, as it will be, the world will be almost a family of nations in daily contact, with innumerable differ­ences and misunderstandings continuously arising. Never be­fore in the history of the world has it become more paramOtmt that means should be devised by which international di!fer­ences can be amicably settled without resort to force. 'l'lle idealist, the philanthropist, the patriot, the statesman, and all the uplifting forces of the world are struggling for the accom­plishment of this great and noble purpose. All who are now engaged in this great work should be commended and not de­rided. If many of the plans proposed are impracticable and if many of them are so idealistic as to be very remote of ac­complishment, their agitation and discussion produce a sen­timent for peace which in the long run will be most potential. Those who ardently desire peace should cea e cont€'ntion~ among themselves as to the plans and cea. e severe critici ·m of those engaged in the work and try to obtain some colllillOll plan upon which they can reasonably unite.

The great philosopher and essayist, Emerson, well aid thnt the troubles of the world largely arise becam:;e t1Je better are ever waging war on the good while the evil are united. If t11e better and the good would cease con.tlict between themselve and unite, the triumph over evil could be easily secured.

The history of the world in all of its varied phases ha lamentably shown that this division between the better and the good has frequently resulted in the triumph of the evil. l!"'re­quently good and progressive plans for betterment are vigor­ously assailed by the better, so called, becau e in all respects these plans do not measure up to the full ideals and desires of those who wish to go further and seek perfection long before it is attainable. Frequently all is lost in this dissension between the better and the good. I hope the efforts in the world to-day directed for the preservation of peace and the creation of in­strumentalities, like the World Court, to aid will not furnish a repetition of this sad story.

:Mr. President, wars are occasioned by international differ­ences which have existed from the earliest recorded history of mankind and which will arise as long as mankind exi t.·. Treaties, parchments, and promises will not materially change human nature. Wars in the future will be more numerous lilld more frightful unless ways are devised to ettle international differences by peaceful means instead of force. The contact of nations is daily increasing and, as previou ly stated, will create increasing ip,ternational irritation and disputes. Steam, avia· tion, radio, and electric communications, foreign trade and commerce have so interwoven the nations of the world that war is no longer isolated as formerly, and when it comes it ultimately envelopes most of the nations of the world. This was forcibly illustrated in the recent World War. Who would have thought that when Austria issued her ultimatum to Serbia that in less than three years more than 2,000,000 of American soldiers would be engaged on the battle fields of Europe? War is no longer isolated, and when the conflagration starts it in­creases and increases until most of the world becomes included in the consuming flames.

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1925 CONGRESSIONAL RECORD-SENATE 975 No nation is more interested than the United States in the

prevention of war and in the settlement of international dif­ferences by peaceful means instead of by force. If any future world war should arise the United States would be the great­est loser and sufferer. We have become _ a great creditor nation, with vast sums of money due us and with large in­vestments scattered in every part of the world. We have the largest foreign commerce of any nation. Twenty per cent of our varied production must find access to foreign markets or else depression, los , and bankruptcy await our productive enterptises. No one is able to estimate what immense losses will accrue to the United States by another world war.

1\lr. President, however much any of us may desire national i olation the time is past when this can exist, and if possessed it can not continue. Our de\elopment bas been such that all which affects the world mu t inevitably affect us. Our national preeminence necessarily impels this. Thus, not only high motives of humanity, justice, and right but our material self­interests demand that the United States should make every effort to secure world peace and peaceful settlement of inter­national differences.

Who among u would have America retire, surrender her preeminence, and fail to discharge fully the duty and respon­sibility which comes from ner preeminent position? Are we to be timid, vacillatin(J', and frightened by our own prodigious shadow as it projects it elf athwart the world? Let our strength and greatness in the matetial world be measured by equal power for justice, truth, and world betterment.

Mr. President, since man organized political society many methods have been devised and utilized for the settlement of international disputes. The fir. t used was diplomacy and negotiation. This began when mankind consisted only of small tribe and clans. The person of an ambassador or negotiator traveling from clan to clan and tribe to tribe to make ·settle­ments was held sacred. Any nation that violated the sanctity of such a person was considered uncivilized. Diplomacy and negotiation have prevented many wars; and if properly con­ducted, they constitute one of the most potential factors in keeping the peace of the world. But diplomacy, with its secret treaties, with its false prorilises, and with its selfish motives, has occa ioned many war . and the many di creditable meth­ods frequently resorted to in its prosecution have often brought diplomacy into di repute. The provision of our Constitution requiring all treaties made by the United States to be ratified by the United States Senate compels our diplomacy to be open and direct and protects it from the secret, sinister methods which have prevailed in the diplomacy of so many nations. We can make no secret treaties ; hence the largest part of our diplomacy must necessarily be open to pitiless publicity. Our fathers were wise and far-seeing in providing this constitu­tional requirement. American diplomacy should move along these lines-be open, frank, and direct, and engaged in no transaction which will not bear the fullest public scrutiny.

The covenant of the League of Nations requires that all treaties made by its members shall be filed with the secretary of the league and thus full publicity be given to them. Now 55 nations of the 64 nations of the world have become members of the league, and these nations are bound by honorable promise to have no secret treaties or secret understandings. This will greatly improve the diplomacy of the world, avoid suspicion, and be a most potential factor in working for world peace. Over 900 treaties and engagements have been registered and published by the secretary of the League of Nations.

The second method that bas been utilized for the settlement of international disputes is arbitration and mediation. The United States was one of the earliest, and we have been one of the most earnest advocates of this method. Commencing in the Jay treaty with Great Britain in 1794, the United States has settled more than 70 irL.portant cases by arbitration and an innumerable number of pecuniary cases have been so settled. Since 1789 the world bas settled about 240 important cases by arbitration.

Arbitration had bee11 sv successful that the First Hague Con­ference in 1898 established a Permanent Court of Arbitration believing in so doing it had provided peaceful means for set~ tling all international disputes. This Court of Permanent Arbi­tration provided for the creation of a permanent panel of arbi­trators, four to be selected by each signatory to the convention and for the purpose of arbitration each party should select tw~ from this panel and these four should select a fifth. Forty­three nations, including the United States, became members of this Hague arbitration court and assented to its various pro­visions. This convention provided an amicable system of arbi­tration, and since the court's organization in 1899 it has dis­posed of 15 cases of international differences.

In addition to arbitration, The Hague convention provided for mediation between contending nations, permitting one or more friendly powers to intervene with suggestions as to settl&­ment, which advice should have no binding force and which should not be construed as an unfriendly act by any of the par­ties engaged in the controversy.

In 1908 Mr. Root, then Secretary of State, negotiated 22 arbi­tration treaties providing for the submission to The Hague court-of differences which might arise of a legal nature and relating to the interpretation of treaties between the contracting parties which it has not been possible to settle by diplomacy: Provided, howet:er, That the action do not affect the vital interest, independence, or honor of the two contracting parties and do not concern the interests of a thlrd party . •

The ratification of these treaties provided that the agreement for arbitration should be made by the President by and with the advice and consent of the Senate. From 1914 to 1916 l\Ir. Bryan, Secretary of State, negotiated treaties with 20· nations. These treaties were ratified and provided for the appointment of a commission to investigate and report within one year all disputes arising between the nations which could not be settled by. <!-lplomatic methods, the nations agreeing not to begin hos­tilities before the report was submitted. The nations reserved the right to act independently of the report when submitted. These treaties have been popularly known as "the treaties of ~quiry," and were negotiated in the hope that if a year should rntervene before beginning hostilities the controversies could in the meantime be composed. Such of the Root and Bryan treaties as have expired have been renewed.

All of these treaties, including The Hague arbitration treaties which embraced 43 nations, were in full force at the time and during the World War but were helpless to prevent or lessen that great catastrophe. 1\Iediatlon and arbitration were help­less in the presence of the terrible forces of war and destruc­

. tion then threatening the world. When the World War was concluded, statesmen and the peace-loving people of the world fully realized that some other methods than those then existing must be devised to avert war and its attendant disasters.

The Hague tribunal, with the splendid work of its confer­ences of 1889 and 1907, had not been able to keep the peace of the world and prevent the most frightful and extensive war that bas ever cursed mankind. Germany, Austria, France, England, Italy, and Japan were parties to The Hague arbitra­~on treaties, yet they were not restrained by these from engag­mg in a prolonged and bloody war. The inefficiency of these treaties to meet and solve an important and serious emer­gency was disclosed.

When the statesmen of the world met at Versailles to nego­tiate peace and end the war, they realized the necessity for uew machinery and created two additional methods to further peace and to restrain war. The world is indebted for the new methods to the vision, genius, persistency, and courage of Woodrow Wilson.

First. The covenant of the League of Nations was created. It contemplated that all of the nations of the world should meet annually and discuss their differences, seek to settle their dis­putes, and cooperate for their mutual advantage and unite as far. as possible to preserve the peace of mankind. Fifty-five nations have accepted the covenant of this league and are now in a uniQn under its terms. It is expected that Germany will soon join, and other nations are expected to follow later. When this has been done, the United States and Russia will be the only first-class powers outside of the covenant. I do uot at this time purpose to discuss the league, its work, its pro­visions, or whether it is wise or unwise for the United States to join. The United States bas determined not to unite with the league, and there is no proposition pending before the Sen­ate for this purpose, hence any discussion of that matter at this time would be ill-timed.

In passing I can not refrain from giving expression to my own individual views and say that the League of Nations to-day is the most potential factor in the world working for world peace and betterment; that it is gaining daily in influence and power; and that the day will ultimately come when the United States will desire and be compelled to become a member.

Mr. President, the second method devised to aid peace at the Versailles conference was to provide for the creation of a world court to hear and dispose of such international disputes as could be determined by a judicial tribunal. Article 14 of the league provided :

The council shall formulate and submit to the members of the league for adoption plans for the establishment of a Permanent Court for International Justice. The court shall be competent to hear and

-976 CONGRESSIONAL RECORD-SEN ltTE DEOE~IBER 1 7

determine any dispute of an international character which the parties thereto submit to it. The court may also give an advisory opinion upon anr dispute or action t·eferred to lt by the council or by the assembly.

In compliance with this direction the council invited a com­mitteP of jurists to prepare and submit to the council the ::::tatute of the court, to be submitted also to the assembly of the league. This ad\i~ory committee of jurists consisted of 11 of the ablest and most distinguished international lawyers that could be obtained from the -rarious nation .. ·, and included Elihu Root, who had had distinguished public sen·ice in the t:nited States as Secretary of War, Secretary of State, and Senator, and was acknowledged as one of our ablest jurists and statesmen.

This advisory committee met at The Hague in 1920 to ac­complish the work assigned. On the motion of Mr. ~toot it accepted as the basis for its di;~cussion the plan of a c~urt fc:ubmitted by the delegatE's from America to The llague con­ference in 1907. The American plan of 1907 thus became the foundation upon which the existing World Court was con­F;tructed. There were modifications, but that plan is largely the plan finally adopted, reported, and submitted by this com­mittee to the council of the league. '.rhe council considered the plan submitted at two sessions, made some amendments, and then referred it to the assembly of the league. In the assembly it was fully examined by a subcommittee of jm·ists, reported to the a ~ embly, where it was fully discussed, some amendments adopted, and the present plan unanimously ap­pro\ed for submission to the members of the league. The main structure of the plan reported by the advisory committee of jurists was retained in the plan appro-red.

1\Ir. President, when the assembly of the league was con­sidering the statute of the court, considerable di..;cussion arose and much difference of opinion existed upon the manner in which the statute should be adopted by the States concerned. Article 14 of the covenant provides:

The council shall formulate and submit to the members of the league for adoption plans for the establishment of a Permanent Court of International Justice.

One view which was strongly pressed was that the court could and should be constituted by the vote of the assembly alone. Those advocating this ~ourse insisted that the term "members of the league" meant the assembly of the league, composed of representati\es of the members. If this view had prevailed the court would have become a creature of the league, brought into existence by its will and subject to its control. The other view was that the term "members of the league" meant the separate states which had assented to the coven.ant of the league, and that it was both expedient and necessary that the statute of the court should be ratified by the individual states. If this course were pursued, then the court would be free and independent of the league and would be controlled by the statute bringing it into existence. The statute of the court would be-separate and distinct from the co-renant of the league and have no relation to it.

This latter view prevailed and the assembly directed that the statute of the court should be submitted to the members of the league for adoption in the form of a protocol, to be duly ratified and thus to express the assent of the members of the league to the statute of the court. Further to emphasize the independence of the court it was· provided that. the statute of the court should become operative as soon as the protocol had been ratified by a majority of the members of the league. Thus, no court could be created except by the favorable indlvidual action of a majority of the states which were members of the league. The separation of the court and the league is further emphasized by the fact that a nation can be a member of the league and not a party to the statute creating the court, and that it may be a party to the court statute and not a member of the league.

Forty-eight states, far more than a majority required, have assented to the protocol of the World Court statute. The court is an institution absolutely distinct from the league. It deri\es its power from its own statute and not the covenant of the league. The league enacts no law, no rule, no regula-tion governing the court. The league has no power whatso­ever to modify in any respect the statute of the court. It has no power to remove any of the judges, as .this can only be done by a unanimous vote of the members of the court. The authority for every act that the council and assembly of the league performs in connection with the Permanent Court of International Justice is derived from the statute of the court and not from the coyenant of the league.

The council and assembly have been selected by the statute of the court as agencies or instrumentalities to do certain specified acts as authorized and directed. This is the view entertained by eminent lawyers and jurists who have given the question full examination and consideration. To obnate any pos . .Jble doubt that may exist as regards the position of the United States in case of favorable action upon the pending resolution, it is specified in the resolution that-adhesJon shall not be taken to involve any legal relation on the part of the United States to the League of Nations or the assumption of any obligation by the United States under the covenant of the League of Nations.

Mr. President, we will next consider the organization of the court.

The court consi.As of 15 members-11 judges and 4 deputy judges. They are elected for a period of nine years by the Assembly and Council of the League of Nations acting inde­pendently. The judges must obtain an ab:-.;olute majority of votes of each body. The members are eligible for reelection, and when a vacancy occurs the person selected fills the un­expired term only. Every nine years there must be a new election of judges.

The members are elected regardless of their nationality ami mu t be persons of high moral character who 110sse. s the qualifications required in their respective countries for ap­pointment to the highest judicial offices or jurisconsults of recognized competence in international law. No member of the court can exerci e any political or administrative function nor act as agent, counsel, or advocate in any ca e of an inter­national nature. The judges are also prohibited from par­ticipating in any case in which they have previously taken any active part whatsoever.

The council and assembly are required to elect the members of the court from a list of persons nominated by the national groups in The Hague Court of Arbitration. All members of the court of arbitration at The Hague are permitted to make nominations. The United States as a member of the court of arbitration was permitted to make nominations. It made no nominations when the first selection of judges was made, although our Government was requested to do so, but subse­quently when a vacancy had to be filled our Government made nominations. Provision is made for nominations to be made by members of the league who are not members of the per­manent court of arbitration upon the same conditions as are prescribed for members of the court of arbitration.

Provision is also made, where no candidate receives a majority of both the council and assembly, for a conference between the two bodies which will insure an election and pre­vent a deadlock.

When the election of judges was first made there were 81 men nominated, and the council and assembly were able to select without much friction or delay the 15 members of the court. The method of election has proven satisfactory and has solved the difficulty which had heretofore always pre­vented the creation of a world court. A world court, a sug­gested by the American members to The Hague conference of 1907, would have been created, except for the impossibility of agreeing upon means of selecting the judges. The same difficulty arose iu the selection of judges for the prize court.

All nations being considered in international law as equal, regardless of their size, it was impossible to get the consent of the larger nations to leave the selection of judges to an assembly of all the nations. The smaller nations insisted on this right, and the larger nations refused to accede to it. Thus, no satisfactory method had heretofore been devised by which the court could secure the election of its members.

When the ad\isory committee of jurists met they were cou­fronted with this same difficulty, which had wrecked the world court at The Hague in 1907. 1\fr. Elihu Root uggl'sted that the council and assembly of the league could be employed by the statute creating the court as a satisfactory agency for the election of its judges. The council consists of repre ·enta­tives of Great Britain, France, Italy, Japan, and six other members, selected from time to time in its discretion by the assembly.

The assembly consists of the representatives of the 55 nations which have become members of the league, each nation h~ving an equal representation in this body. Thus, 1\Ir. Root ably argued that by requiring the judges to be elected by both the council and assembly acting as independent bodies the large and small nations would have their re pective rights relatively recognized, and he strongly presented that these bodies constituted the best agencies available fo1· the selection

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1925 CONGRESS! ON AL RECORD-SE]" ATE 977 of judges. He pointed out that the council and assembly of the league were largely similar to our House of Representa­tives and Senate; that States were represented in tile House of Representatives in the proportion of their •power c..:1d popu­lation; that in the Senate ea~ State, whether large or small, was given equal representation; that by this compromise the American Constitution was made possible, and that requiTing the joint action of both to effect legislation had worked splen­didly. ~fr. Root desenes great credit for his ability in solring this difficulty, which heretofore had always wrecked the crea­tion of a world court.

Mr. Pre ident, it is believed that if the United States ad­heres to this court she should be permitted to participate on an equality with other nations in the election of judges. This is made one of the ..:onditions of adherence, as recommended by Presidents Harding and Coolidge and Secretary Hughes, and contained in the pending resolution. .is the council and the assembly, in the election of judges, act entirely under the statute of the court and not under the covenant of the league, the United State can participate in , this election without involving itself in any way with the obligations of the cove­nant of the league. When it votes for the judges in the coun­cil and in the assembly, as it would have the rigp.t to do in each body under the rest..:vation, its power to vote is derived from the statute of the court and not from the covenant.

If the United States sits as a member of the council and the assembly, in electing judges it can not be the council and as­sembly under the league, but must and would be a different uody acting under the statute of the court. The United States being a member of each of these bodies for election of judges would necessarily make it a different body from the coven.ant, and a body under the statute of the court. As to whether the United States can do this or not is to be determined by the statute of the court, and not by the covenant of the league. If the members who have adhered to the coUTt assent to this it can be readily done without amendment either 8/. the covenant or the statute.

This is the view entertained by Secretary Hughes and other eminent lawyers and jurists who have thoroughly examined and considered the matter. Some opponents of the court in­sist that this can only be accomplished by an amendment of the statute of the court.- The statute makes no provision for its amendment. An amendment can only be effected by the same process which was employed in the original promulgation of the statute. This means a new protocol must be signed and ratified by 48 States. This means great delay, if not failure. It would reopen the controversies which were settled in the existing statute. It would put the United States in the em­barrassing attitude of proposing amendments to the statute to which it had never assented. It would flavor of international impudence. Eminent and able lawyers and jurists insist it can be accomplished as effectively by reservations as by amend­ments.

No objection could be urged to a participation by the United States in this election except by the people who are so antago­nistic to the league that they do not wish the United States to associate with it in any manner whatsoever, believing contact with it means contamination.

:Mr. President, the United States has officially cooperated with the league in 19 important matters which it was com­pelled to do in order to accomplish important international results. Unofficially the United States has cooperated with the league in innumerable matters which became necessary to en­able the United States to succeed in her undertakings. We already have had contact and cooperation; in the future it must and will increase, not decrease.

Mr. President, this system of electing judges has proven its success by tile ability and character of the men chosen. One of the ablest members of the court was selected from the United States without any nomination by his Government, the Hon. John Bassett Moore, one of the world's foremost inter­national lawyers and writers. I have not the time to discuss each individual member of this court, but shall print as a part of my remarks testimonials regarding each, which will prove that the court is constituted by men of the very highest character, capacity, and ability, and worthy in every respect to discharge the high and responsible duties that appertain to this great court.

The statute provides that the compensation of the judges and expenses of the coUTt hall be borne by the League of Nations in such manner as shall be decided by the assembly upon the proposal of the council. Again, the statute uses the assembly and council of the lengue as agencies for this. purpose.

LXVII--G2

The court is required to hold ses. ions every year, unless the :rules of the court provide otherwise, to commence June 15. The president may summon an extraoruinar~' . ·e~don of the court whenever necessary. The official languages are to be French and English, though the court may, at the request of the parties, order other languages. The court was located at The Hague to remove it from the political atmo~phere of Geneva.

The statute and rules of the court provide for an open and Lir trial of all cases pending in the court, for public rendition of judgments, the filing of the opinions of the court and dis­senting opinions of the other judges, for argument hoth oral and written, and both oral and written evidence. The pro­cedure described in the statute and the rules established by the court are all that could be desired for the proper protection of litigants and to give the comt the confidence and esteem of the world. Ample provi..jons are made for notice to be given to e7~..:ry nation affected by any matter pending before the court. Every safeguard and every precaution has been scrupulously taken to give ample bearing and opportunity to every state concerned. Every matter that has been considered by the court has been conducted in the strictest accord with the rule and rrocedUTe governing judicial bodies of the highest standing and reputation.

l\1r. President, before proceeding further I desire to consider some objections which have been persistently urgetl against the crganization of the court.

Some have insisted that as the judges of the court are elected by the council and assembly of the league, this make3 them creatures of the league and subject to its influence. As pre­viously stated, the assembly and council of the league in this respect derive all authority for their action from the statute creating the court and not from the covenant of the league. The election and the fixing of salaries of the judges of the 'Yorld Court by the cotmcil and assembly of the l~::ague are similar in many respects to the selection of our .Federal judges and the fixing of their salaries. The judges of our Supreme Court are named by the President and confirmed by the Senate. Under our Constitution we have three coordinate branches of government, each free and independent of the other-the judi­ciary free and independent, the legislative free and independ­ent, and the executive free and independent. Our Constitution, one of the wisest instruments ever constructed by the statesmen of the world, uses the President and Senate as agencies for the selection of our Supreme Court and other Federal judges. The makers of our Constitution did not think it necessary in order to provide for the complete independence of the li'ederal judici~ ary to provide for their election by an independent body separate from the President and the Senate, but it u ed the Exe<"utive and the Senate, the high branch of the legislative body, to accomplish this purpose, thinking it far preferable and that far better results would be obtained than by the creation of separate machinery to accomplish this purpose. The salaries of our Federal judges and the expenses of the courts are fixed by Congress instead of a separate body. The makers of our Constitution thought it wiser and far preferable to have sala­ries fixed by Congress. They did not seek to secure the inde­pendence of the judiciary by depriving Congress of this power.

How splendidly this system has worked from the beginning of our Government is disclosed by the high esteem and confi­dence entertained for our courts. Has the Supreme Cotut of the United State under the Constitution lacked any independ­ence in the discharge of its duties? Has the fact that the President nominates and the Senate confirms and Congress fixes their compensation made them subservient to the will of the President, the Senate, or Congress? No; far from this, the decisions of our courts have repeatedly nullified acts of Congress, expressing the judgment of the courts against Con­gress and against the Executive. One of the striking char­acteristics .of our Supreme Court is its independence in declar­ing null and void acts of Congress as contrary to the Constihl­tion. Instead of being derelict in establishing its independ­ence some people have thought it has gone too far in this respect.

Under our Constitution Congress has the power to prefer charges of impeachment against members of the Supreme Court and the Senate has the power to try and remove Fed­eral judges, yet this power has had no influence upon Federal judges either of our Supreme Court or lesser courts. No such power exists in the assembly or council of the League of Nations to remo\e the judges of the Permanent Court of In­ternational Justice.

Congress has the power to fix the jurisdiction, to modify and change, subject to the Constitution, the varioua laws

978 CONGRESSIONAL RECORD-SENATE DECEMBER 17

go\erning the Federal judicia1·y, yet this power on the part of Congress bus bad no influence on the independence of our judiciary. No such power whatever exists in the council or assembly in regard to the World Com·t.

The President and Senate baYe unlimited power of selection in naming the Federal judges. The council and the assembly can only select the judges from a li t of nominations made by the national groups that are members of the International Court of .Arbitration. Thic; is the method specified in the ta tute. Thus, Mr. Presideut, it seems to me that the method

of election and of fixing the salaries of the judges of the World Court are such as will not in any way impaiJ.· its inde­pendence or in any way make it subject to outside political in­fluences. It i less ·ubject to political influences, control, and temptation than are the judges of our Supreme Court, and the members of that cour t by their independence and freedom from political control ba Ye won not only the confidence of the country but of the world. I do not believe a better system that w:is po ible of adoption could have been devised than the one provided in the statute creatins the court.

~1r. President, we will next consider the jurisdiction pos­se"sed by this court under the statute. We will first deter­mine the partie who are competent suitors in the court.

Article 24 of the statute provides: Only states or members of the League of Nations can be parties in

cases before t he court.

The jurisdiction of the court i limited to state ; private per­sons nnd corporation can not pre ent themselves as parties to a . ui t. nut this does not preclude a state from appearing in behalf of a priva te pPrson, provided the . tate has the right of protection, according to international law, over such person. The court determines whether such relation exi ~ts between the state and Fuch person.

Article 35 of the statute provides: The court sball be open to the members of the league and also to

states mentioned in the annex to the covenant.

Fifty-five nations are at present members of the league; hence the court is open to all of these. The United States, Ecuador, and Hejaz are nations mentioned in the annex to the covenant who are not member of the league and are there­fore under this provision competent suitors in the court. Under this provision the United States is a competent suitor in the court.

As it was designed to make this court a world court in which all nations could litigate their disputes, provision was made for nations other than members of the league and tho e named ln the annex to the covenant to become suitors in the court. Article 35 of the statute contains the following provision:

The conditions upon which the court shall be open to other nations shall, subject to the special provisions contained in treaties in force, be laid down by the council, but in no case shall such provisions place parties in a position of inequality before the court.

This provision uses the Council of the League of Nations as an agency to fix the conditions ~upon which nations other than members of the league and those mentioned in the annex to the covenant should be permitted to become parties, if they so desire, to cases in the court. The council, in exercising the power conferred by this statute, is controlled, first, by the special provisions contained in treaties in force, and, second,

·that the parties permitted to use the court shall in no case be put in a position of inequality before the court. The council derives its power from the statute and is controlled in its exercise by the e provisions. The council can make no con­ditions which will violate these directions.

~'he council, on May 17, 1922, by resolution, provided that the court should be open to these states on condition that they deposit with the court a declaration accepting the juris­diction of the court and undertake to carry out its decision in full good faith and not to resort to war against a state complying therewith. The declaration provided for could be either, particularly-limited to ghen dispute , or general-appli­cable to all disputes. The resolution further provides for acceptance in the declaration of the compulsory jurisdiction of the court if desired, similar to the right posse sed by other nations. The resolution gives full effect to the principle laid down by article 35, that nonmember states must not be placed in a position of inequality before the court. The nonmember states are given access to the court upon the condition that they accept the same obligations as member states. Absolute equality is preserved.

Under this provision Afghani tan, Egypt, Germany, Mexico, Russia, and Turkey would be allowed to utilize the court for

the settlement of disputes. It should be noted that the United States is made a competent suitor in the court by the protocol of the statute and not by this resolution of the council. Tbu , provision has been made by which eYery state can become, upon equal and fair terms, a competent suitor in the court. The fair proportion of co ts of the court to be paid by such nations is assessed by the court. It should be noted the League of Nations is not a competent party to a case before the court. This court is indeed a world court and is open to all nations upon fa ir and equal terms.

l\1r. Pre ident, we will now discuss the subject matter which can properly come before the court for decision. This is one of the most important matters in connection with the court.

Nineteen states with conditions requiring mostly reciprocity have accepted the compulsory juri diction of the court in cer­tain specified classe of cases. The court al o has compulsory jurisdiction conferred upon it by many treaties. In ·a number of recent treaties provision bas been made for an obligatory reference of disputes to the World Court. The peace treaty with Germany, Austria, Hungary, and Bulgaria confer on the new court jurisdiction with reference to ports, waterways, and railways. It is pos essed of jmisdiction in certain inter­national labor matters. In the treaties of peace negotiated with Austria, Hungary, and Bulgaria, it is given jurisdiction for the protection of racial, religious, and lingui tic minorities. This jurisdiction is obligatory as to all the signatories to the peace treaties. The special treaties made with Czechoslovakia, Greece, Yugoslavia, Poland, and Rumania, for the protection of minorities confers jurisdiction upon this court. Thu. , the rights of more than fifty millions of minority people situated in the various European countries must be determined by this coui·t. The Lausanne treaties made with Turkey confer juris­diction upon the court. Time will not permit me to name the numerous conventions on the liquor u·affic, arms traffic, freedom of transit, air navigation, and navigation of waterways which confer obligaUiry jurisdiction on the court. The court has compulsory jurisdiction for the interpretation of the mandates recently approved by the council of the league. The covenant of the league has been amended providing that, except where the parties to a dispute have agreed on the tribunal without stipulating in any convention between them for a tribunal to which cases are to be referred, the court shall be the Perma­nent Court of International Justice. Article 27 of the tatute for the court provides that when a treaty or convention in force provides for the reference of a matter to a tribunal to be instituted by the League of Nations, the Permanent Com't of International Justice shall be such court. This will give it a very large obligatory juri diction. It will be called on to interpret the various clauses and provisions contained in the covenant of the league.

The recent Locarno conference, with its five important treaties, which constitutes a great landmark in the history of the world for peace, provided that all disputes of e\ery kind with regard to which the parties are in conflict as to their respectl\e rights, and which it may not be possible to settle amicably by the normal methods of diplomacy, shall be sub­mitted for decision either to an arbiu·al tribunal or to the Permanent Court for Internatioual Justice.

In the agreements made by the allied powers with Germany, which includes the so-called Dawes plan, eight possible appoint­ments were conferred on the permanent pre ident of the court, and these agreements give the court itself an important juris­diction in certain classes of cases or disputes. Time will not permit me to name the numerous agreements and treaties con­ferring either direct, conditional, or ultimate jurisdiction upon the Permanent Court of International Ju tice.

I will not further discuss the compulsory jurisdiction of the court. I have only mentioned it succinctly to impress upon the Senate the importance of this court and to indicate the many great international matters which must be brought be­fore it for decision.

If the pending resolution is ratified by the Senate, the United States will become only a voluntary suitor in the court and be governed by the provisions of the statute appertaining to voluntary jurisdiction. The voluntary jurisdiction of the court is contained in article 36, which is as follows :

The jurisdiction of the court comprises all cases which the parties refer to it and all matters specially provided for in treaties and con-ventions in force.

Therefore, if the United States should adopt the pending resolution of ratification the court would have jw·isdiction only in such matters as the United States should see proper to refer to lt, unless the United States in a treaty or convention had conferred jurisdiction on the court.

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1925 CONGRESSIONAL RECORD-SENATE 979 In order for the court to have jurisdiction of any matter

affecting the United States it would be necessary for the President of the United States to enter into an agreement with orne other nation to refer the matter to the court for decision. There would be no other way for the court to ob­tain jurisdiction in any matter binding the United States. This agreement by the President of the United States, when made, in order to give the court jurisdiction, would have_ to be done by and "ith the advice and consent of two-thirds of the Senate. There is no way in which agreements with for­eign nations can be made under our Constitution except by the President. by and with the advice and consent of the Senate. There are minor international matters absolutely within the competence of the President and upon which he can make an agreement, but under our Constitution no im­portant agreement can be made with a foreign nation except by the President, by and with the advice and consent of the ~enate. As article 3G heretofore quoted contemplates an agreement between the United States and some other nation to refer the matter to the court, it necessarily follows that the agreement must be made by the President, by and with the advice and con ·eut of the Senate. Therefore, all im­portant matters that go to this court for decision mu t be approved uy t'\YO-thirds of the Senate. I run satisfied that thi · must be done to comply -with our constitutional require­ments.

Pre ident Coolidge and Secretary Hug·he both appear to entertain the opinion that this is necessary and proper. On February 10 of this year the President transmitted to the Senate the international convention for the suppression of the circulation of and traffic in obscene publications and recom­mended that the Senate adhere to that convention. Article lG of the con•ention vrovided that if disputes arising under the convention could not be settled by direct negotiation, then they "hould be referred to the Permanent Court of Interna­tional Justice. In his message to the Senate and in the letter of Secretary Hughea to the President, urging adherence to the convention, both recommended that the resolution of ad.he.rence should contain the following reservation :

'!'bat recourse to the Permanent Court of International Justice or to arbitration provided for in article 15 of the convention can be had only by agreement thereto through general or special treaties here­tofore or hereafter concluded between the parties in dispute by and with the advice and consent of the Senate.

Thi~ indicates the view entertained upon _this matter by the President and Secretary ·Hughes.

This is the view entertained by Hon. George W. Wickersham, former Attoruey General of the United States, one of our ablest constitutional and international lawyers, who is one of the leading advocates of the adherence of the United States to the World Court. When before a subcommittee of the Com­mittee on Foreign Relations, .in discussing this court, he said:

So that in giving its adhesion to a court, 1.n accepting the provisions of the Permanent Court of International Justice on the Hughes­Harding plan, all that the United States does is to sav that if and when we shall agree to submit a particular controver~y to judicial determination we will seno it to this court.

But the lJnited States Senate stands as a bru·dle which must be got over before the controversy can go to any tribunal for arbitration or decision by judicial process.

Senator SwA~SO"-'. You mean if we adopt the voluntary feature of this Permanent Court of Justice, even if we adopt it according to the Hughes recommendation, if we ever utilize the court eventually it must be done with the consent of the Senate?

Mr. WICKEBSHAU. Exactly. I think there can be no question about that.

Senator Sw.axso)l'. There can be no question about that on a - specific case.

Mr: WICKERSHAM. On a specific case.

The question arose when the a1·bih·ation treaties of The Hague conference of 1907 were before the Senate as to how the reference under them should be made and by whom. The Senate in ratifying these conventions of arbitration provided:

The United States approves this convention with the understanding that recourse to the permanent court tor the settlement of differences can be bad only by agreement thereto through general or special treaties of arbitration heretofore or hereafter concluded between the parties in dispute.

This fully and satisfactorily clarified any contention as to the method to be pursued in the referring of matters to the court of arbitration. The provision stipulated that it could only be done by treaty and the Constitution cle~rly provides

that all treaties must be made by the President by and with the advice and consent of the Senate. '

~J1he Root arbitration treaties with Great Britain and other nations to make effective The Hague convention provided:

It is understood that such special agreements on the part of the Unite~ States will ~e made by the President of the United States, by and With the advice and consent of the Senate.

So,. in _this resolution of ratification the pro•isions of the ConstitutiOn were clearly complied with and a reference-in each case had to be made by the President of the United States by and with tl1e advice and consent of the Senate. . '

Mr. President, if the protocol of the statute of this court is ratified, as proposed, the people of the United States, in all matters referred to this court for decision, would have the full protection of their l'ights, as provided by the Constitution for foreign agreements and treaties.

I do not think it wise to deviate from our constitutional method of settling important international a:ffail·s. There has arisen among some executives a dinposition to io-nore the con~titution~l rights of the Senate in connection with foreign a:ffrurs. Th1s should not be encouraged. Unless the a~ee­ment to refer the matter to the court was mat!e accordh~g to our. constitutional methods by the President, by and with the advice and consent of the Senate, a question of jurisdiction mi.ght be raised in the court and, besides, the question might anse that the reference was not constitutional and thus create a less -willing and c:hlerful acquiescence in the decision when rendered.

The question of method of reference i:3 a domestic matter to be determined by us anti does not affect the court. ·with a resolution providing that reference to the 'court shall be by special or general treaties, ratified by the Senate-to which I personally have no objection, although I think it unnecessary, because the Constitution gives ample protection-all the false clamor that has been created about the emigration question and the Afonroe doctrine being put in jeopardy disappears in empty declamation and vain delusion.

Those who urge the jeopardy of the Morn·oe doctrine as a reason for opposing adherence to the court's statute admit that while the United States could not be bound legally in this ~a~ter except by a. submission to which it assented, yet they ms1st that tlJe Urntcd States might be greatly embarrassed moraUy i~ givin~ adherence to a court to which, by agreement, other nations nught refer a matter affecting the Morn·oe doc­trine. If adherence to the Permanent Cotrrt of International Justice would so embarrass us, we are ah·eady embarrassed to the fullest extent to which we could be embarrassed in this matter. The United States and 43 nations have agreed to The Hague convention of H)07 establishing a court of arbitra­tion to which nations can refer for decision any and all mat­ters that could be considered by the Permanent Court of Inter­national Justice. Any matter affecting the Monroe doctrine that could be considered by one court can be considered by the other without any greater embarrassment being incm-red. If adherence to this court embarrasses us, adherence to The Hague Arbitration Court has already equally embarrassed us. The United States would assume no new embarrassments, create no new conditions affecting the Mom·oe doctl'ine by ad­herence to the Permanent Court of International Justice. If those who make the contention are since1·e, they will strive as strongly to disconnect us fr<m1 the arbitration court of The Hague as they do to prevent adherence to the World Court. But, Mr. President, we witness the rema1·kable inconsistency that those who most strongly antagonize the World Court are the strongest advocates of the Arbitration Court.

The United States is not and can not have the slighte t em­barrassment affecting the Monroe doctiine either by adherence to the World Court or the Arbitration Court.

The declaration of policy in the resolution of ratification of The Hague com·ention contained the statement that nothing shall-be construed to imply a relinquishment by the United States of its traditional attitude toward purely American questions.

This was merely a declaration of policy on the part of the United States and did not in any way affect the convention. It did not in any way prohibit two states from agreeing to refer to The Hague court for settlement a matter affecting the .Monroe doctrine. It was only a notice that this political ques­tion could not be construed as having been abandoned in any way by the United States. Personally, I have no objectitnf to a similar declaration upon our traditional 1\Ionroe doctrine though it is unnecessary and would be of no value, if it wni bring relief and composure to t_roubled !Uinds and souls.

980 -coNGRESSIONAL RECORD-SENATE DECEl\IBER 17

Mr. President the next matter to be considered in connection with this court' after matters have been referred to it, is the principles wbidh shall govern the court in reaching its de­ci ions.

It should be noted that in article 36, fixing the voluntary jurisdiction of the court, it states that its jurisdiction shall comprise "all cases'' which the parties refer to it. The other jurisdiction is " all matters " speci::lly provided ~or . in. tr~ati~s ancl conventions in force. Where 1ts voluntary JUrisdiction IS

outside of treaties and conventions the term " all cases " is used. Now, the term " cases " in legal p1·oceedings imports a state of facts which furnishes occasion for the exercise of the jurisdiction of a court of justice. The word "cases" as used in section 2, Article III, of the Constitution of the United States ha been construed as a subject on which the judicial power is capable of acting and which has been submitted to it by a party in the forms required by law. It would therefore seem that the voluntary jurisdiction of the court upon cases referred to it should be those ·which consist of a state of facts upon which judicial opinion can be rendered. This would exclude political and indefinite questions not suitable for decision by a judicial tribunal. This fact seems to be further established by the directions-to the court contained in article 28, prescribing the four principles which must g-overn the court in reaching its decisions. These provisions are as follows:

First. The court shall apply-international conventions, whether general or particular, establishing rules expressly recognized by the contesting States.

This provision makes it imperative upon the court to recog­nize rules laid down by an instrument agreed to by both parties as binding upon them. The court's duty is limited to interpret­ing and applying the e rules agreed upon. This is in accord­ance with judicial procedure and with the most elementary 'principles of international law and justice.

Second. The court is directed to apply-lntemational eustom as evidence of a general practice accepted as law.

This must, of course, yield to the provisions of the first sec­tion when the parties have agreed. Where the parties have not agreed this is the principle to be applied in the decision of the case. The parties may agree to nullify a custom which has become general, and such ag1·eement must be interpreted to con­trol the decision. Custom is one of the great sources of inter­national law. Conventions, agreements, and practices assented to by a large number of States afford evidence of such general practice as to constitute custom. In each case it is for the court, by examination and argument, to determine whether there is an international custom of sufficient force to be considered ln the determination of the case. A court is the best body that could be utilized to settle international disputes the settlement of which must be determined by the existence of custom which amounts to international law.

The Anglo-Saxon Euglish-spe{lking people have had a most happy experience in their courts determining the customs which have existed among the Anglo-Saxon people for years and giv­ing them the force and effect of law in their decisions. The de­cisions of the courts preceded Parliament in fixing the rights of Englishmen and fixing their customs into law. Some of the greatest rights of liberty and property possessed by Englishmen and their descendants have been derived from their common­law courts in thus administering the law. The early acts of Parliament consisted mostly in declaring and making definite the decisions of wise and independent courts.

Third. The court shall apply-

the general principles of law recognized by civilized nations.

It should be noted that this provision provides for the prin­ciples of law recognized by civilized nations and does not limit it to international law recognized by civilized nations. It say "law" without restriction or qualification. The source of law here contemplated embraces those broad rules and ml.xims especially a sociated with the Roman und Anglo-Saxon systems of jurisprudence and which are common to the good sense, conscience, and judicial systems of the enlightened and civilized portions of mankind. As it is a world court and de­signed to administer international justice and law to all nations, it must necessarily embrace in its system the principles of law and justice that are world-wide. It must include the many systems of law recognized among the enlightened nations of the world. Until international law is codified and accepted by the various nations, a better method of prescribing the principles to gove1·n the court other than the two heretofore mentioned could not be given than that expressed in this paragraph. The deci-

- sions of this court will go far toward making more definite

international law und will be invaluable in assisting the codi­fication of international law, which I hope some day to see accomplished. Of course, the Ia w to be administered under this section will be most! inta-national law, as the disputes will be international. International law for more than two centuries has been growing in definiteness and in extent and has become to a large extent, like the English common law, sufficiently clear and definite to be admini tered by courts. There are some who contend there is no such thing as inter­national law, and hence it is impossible to administer it. The fathers of our Constitution thought otherwise. The Constitu­tion, Article I, section 8, enumerating- the powers conferred on Congress, specifically gives the following power:

To define and punish piracies and felonies committed on the high seas and offenses against the law of nations.

So, in 1787 the law of nations was definite and bad grown sufficiently stable for our fathers to empower Congress to pun­ish offenses against it. Against the contention of some in this country that there is no international law that can be admin­istered I point to the conclusion and action of the ablest body of men ever met and who included this provision in the Fed­eral Constitution.

The Supreme Court of the United States, commencing with Chief Justice Marshall, in some great decisions, has defined and decided matters upon international law. Since this time international law has grown gt·eatly in scope, in usefulness, and in definiteness. There can be no question but that the court has before it under this provi ion ample law to render just decisions in many disputes.

Fourth. The statute provides that the court shall apply-subject to the provisions of article 59, judicial decisions and the teachings of the most highly qualified publicists ot the various na­tions as subsidiary means for the determination of rules of law.

Article 59, which controls this paragraph of this section, is as follows:

The decision of the court has no binding force except between the parties and in respect of that particular case.

In adjudicating a case a previous decision of the court can be considered, but it is not conclusive except in that particu­lar case and can not dispose of any other case pending in the court. The court is directed to consider the judicial decisions of national courts, of other international, tribunals, and of its own in reaching its conclusion.

This is in accord with the universal custom of courts. The fact that the decisions of the court are not conclusive except in a particular case may to some extent prevent decisions of the court from giving definiteness to international law. 'Vhile it may to a limited degree retard this, yet it is better for this to occur than that nations should be precluded by a decision of the court in a case to which they were not parties and had no opportunity to present their views and contentions. I believe this provision is wise and ultimately will have very little, if any, deleterious effect in making the decisions of the court a great source of international law.

These are the four principles of the statute providing what the court shall apply in determining cases. These four prin­ciples are the ones which should govern judicial decisions of the court upon international matters. The principles to be applied are only those which can be used in the determination of judicial questions and are not applicable to political questions. Since the statute used the word "cases," which implies a state of facts to be decided by a judicial tribunal, and uses to settle these cases only methods which are applicable to judicial deci­sions, the conclusion is irresistible that the voluntary jurisdic­tion of the court, outside of matters of convention and treaty, is limited to questions permitting of judicial decision. It seems to me, therefore, that this tribunal, by its structure, by its jurisdiction, and by the method prescribed for deciding cases, is preeminently a judicial tribunal. It should be noted in this paragraph that there is a provision in article 38 as follows:

This provision shall not prejudice the power of the court to decide a case ex aequo et bono, if the parties agree thereto.

It should be noted in this paragraph that the jurisdiction of the court is still confined to " cases " with all the import that the term implies. This means that the parties. may agree to let the court determine the " case " submitted according to the broad principles of justice and right, unrestricted by narrow legal rules and principles. In order to do this the par­ties must have clearly and specifically so agreed when the case is submitted, otherwise in deciding the case the court will be controlled by the provisions previously enumerated in thi.ll paragraph.

i I

1925 CO ... TGRES8IO_._~_._<\_L RECORD-SEX.A.TE 981 Mr. President, I have fully discussed this feature of the state the exact question upon which the advisory opinion is

court becau ·e some of its opponent$ have · insisted that the asked. Notice of the request must be given to the members court, as con tituted, has no law to administer except its own of the court. members of the league, nations mentioned in the will and that it is thus a lawmaking and not a law-judging body. 1 annex to the coyeuant, and any internat ional organization It is insisted that the creation of a ·world Court should be po se:sed of information upon the matter. Public bearings are delayed until international law lms been codified, so that the ' held and full argument permitted by attorneys for parties comt would have a definite code or definite law t o administer. affec-ted.

1\lr. Pre:::;iclent, if we are to wait until international law is The court reaches its conclusions by a majority vote and the codifi~l and l>e~ome. · l>indlng on a sufficient number of nations opinion is read in open court. The requests for and the ad­of the world to make it operative before we have a Worl•l vlsory opinioM are printed and publh;hed in a special col­Court, I am afraiu we would llaye to wait for centuries, anu lection. In rendering advisory opinions the court conforms as that neither you nor I not~ the next generation will witness near as possible to judicial procedure. The rules and action the cr£>ation of u world court. International law can only l>e of the court exclude any proposition that advisory opinions codified and made operuti\e by treaties and ~ternational may be rendered in an advisory sense or us advi&ing counsel agreements and conYentions. To get 48 nations of the world, for the council alHl assembly of the league. the number no\Y adherin6 to the World Court, to agree to this "'ben the court was preparing its rules one of the deputy codification would be .m undertaking requiring years for its . judges propo.:ed that the proceedings on request for an advi::;ory a rcomplh;hment. Intcrnatioaal bodies have met and tried to opinion be ecret and that the opinion be communicated only codify e\·eu the law of prizes an<l the administration of inter- to the body, council, or as:embly, that a ·ked for it. ThL<:; nationa l prize courts, lmt hare found it impossible to do so. proposition was promptly rejected on the ground that it woult.l The condition of adherence by the rnited States to tlle World make the court a secret consulting agency of the league and Court upon the codification of international law is to postpone its co1msel rather than a court. In all matters coming before the matter indefinitely, and would properly be considered a it it acts as a court. refusal. Mr. President, the giving of advisory opinions by courts is

Mr. President, it is not true that this court is left to its no new matter. A numl>er of Canadian courts possess juris­own will to administer law. I have fully argued the prin- diction to gi-re a(l'\'isory opinions. In England the judges ba ve ciple.-; whi<:h mu t go,·ern tl1e comt in rendering its decisions. at times given Oilinions to the Go-rernment, and the Hou. e of I ba-re <.llscu:;sed the provisions contained in article 36, which Lords sitting as a court may still request judges to give such the court must apply in reaching its decisions. It states that opinions. The constitutions of Colombia and Panama confer the court must first apply conventions and rules expressly juri:·diction on the cow'ts of their respective countries to give recognized by tlte contesting states; second, international cus- advi. o-:.-y opinions. Since 1780 the con .. titution of ~lassacltu­tom as evidenced by general practice accepted as law; third, setts has proyided for advisory opinions to be given by the the general principles· of law recognized by ciyillze(l nations; justices of its supreme court "upon important questions of and, founh, the judidal decisions and the teachings of the law and upon solemn occasions" at the request of eith~r most highly qualified publicists of the various nations, as branch of the legislature, also the governor and counciL sul>sidinry means for the determination of rules of luw. I do These opinions are construed pos ibly as opinions of the not know how a court could have the principles governing justices and not as a decision of the court, though they are its derisions better or more clearly expressed. Impro-rements published in the :\1assacbusetts Law Reports as tile opinions of might l>e made. but the directions given the court in the statute the court. As they are not binding a· decisions of the court are sufficiently clear and posithe to make it a judieial tribunal upon any question arising in the future, they may be con­to ~Hlmiuh;ter la\\' and not make law. sidered more as the opinions of the justices than as decisions

1\lr. President, thi · Yoluntary juri ·diction which I have been of the court. These opinions possess a judirial character. dLcu:sing is the only jurisdiction the court would possess Similarly, the opinions given by the World Court are not respecting the t'nited States under the pending proposal for binding upon any case which might in the future arise. The adherence but there is another jurisdiction belonging to the giving of advisory opinions by the Supreme Court of 1\Iassa­court whi'ch it is now exercising and which I desire to dis- chusetts has IJ.9t in any way detracted from its dignity, cuss, although it would not affect us, as it bas been the occa- influence,. or ability. The derisions of this court have long sion of oppo~ition to and criticL:m of this court by those un- l>een considered preeminently able among the decisions of our friendly. I allude to the advisory opinions delivered by the State courts. The constitution of Xew Hampshire has pro­court. -ricled for such advisory opinions since 1784. the constitution of

The court may give advisory opinions when requested by the Maine since 1820, and the constitution of Rhode Island sinee cotmcil and assembly of the covenant of the league. The plan 1842. In Tennessee the governor has been a utborize<l to re­as originally recomuended to the council l>y the committee quil·~ the opinion of justices on certain que.;;;tions since 1868, of jurists included this pronsion: and m South Dakota since 1884. The constitution of Colorado

The court shall give an advisot·y opinion upon any question or dispute I since 18~6 ha~ ~mpo ·ed t~e du~y. o.f ginng advisory o.~inions of an international nature referred to it by the council or assembly. 011 the c~ur~ ~tself, and Its opllliOllS ha-re aU the ~orce and

. . . . . . . . effect of JUdicial precedents. Delaware by statute srnce 1. [j2 This. pronsi?n m~de the g1n~g of .adviSory opmwns by the I bas impo '"'d on the chancellor and judges the duty of giviug

court Imperatlre; It had no diScretion. ~he statute of the j opinions to the Government in certain case· and on certain court as. finally reco~nmende<:~ by the coun~ll to .th~ asseml>ly questions. Alabama recently passed a statute providing that and ~~ It to the varwus nations for adoption elmunated this the governor or either house of the legi. lature may petition tile pronswn. justires of the supreme court on constitutional qneatlons. The

'!~us, the statute of the court does ~ot m~ntion advisory statute provides that the opinions ·hall not be binding, and tlte opllliOn:', but the court after careful consulerabon reached the validity of the act bas recently been confirmed by the eourt. co~cluswn that th~re we:e c~rtain c~auses of the statute. ~re- In Oklalloma where the death sentence is impo ·ed in a criminal atmg t.he court which by rmpllcation mcorporated the provisiOn case and no ap11eal from the .·entence has been taken, judge·· of. a~·tlcle 14 of the co"':'enant of the league on that subject of the criminal court of appeals are compelled by the statute Withm the statute. Article 14 of the covenant is as follows: to give an opinion to the go•ernor whether the sentence has

The court may also give an advisory opinion upon any dispute or been imposed aud whether the trial, cou-riction, and sentence of question referred to it by the council or by the assembly. death haTe l>een in accordauce with the law of tbe land. - 1-'he court therefore decided that it would not be justified in While the practice of giving ad\isory opinions is not foil wed tah.ing the position that it would not in any case give an by our Federal Government or by a majority of ouT ;:)tate advisory opinion, !Jut that it remainetl for the court to deter- courts, ret it is not new and has many advocates for its ex-

tension a. a means of preventing litigation and of creating mine whether it would or would not in any particular case, cooperation and uniformity withln the different branclied of after consideration of the nature of the question, give an the GoYernment. advisory opinion. Iu 1793 .President Washington and hi · Cabinet snl>mitteu 29

The incorporation of this provis~on in the statute by impll- important que~tions to the Justke~ of the ~uprerne Court for cation left the matter of advisory opinions within the discre- llil opinion tb reon. Tile justices declined to give the opinion tion of the court. on the que8tion. submitted. as they could see strong arguments

The court adopted rigid rules governing the rendering of again.st the propriety of deciding ca. ·e~· e ·trajudicially, and advisory opinions. Tlle rules pro-ride that the opinion shall be especially refused on the ground that tile power given by u 1e given by the full court after deliberation and permits the dis- Uon::>titution to the President ill calling ou lwads of depart­senting judges to attach their opinions to that of the court. ments for opinions seem. · to Ila ve bee.n expressly confined to the The request for the advisory opinion :ffiUSt be in writing and executive departments. The fact that Pre::;iJent \Vashlngton

982 CONGRESSIONAL RECORD-SENATE DECE~IBER 1 7

called 011 the Supreme Court for such opinions clearly shows the assumption of any obligations by the United States under that at that time it was not considered as unusual or revolu- the covenant of the league. tionary. .Mr. President, I have discussed the statute that controls the

There can be no reason why the United States should refuse court, the court's origin a11d orga11ization, its rules, its pro­to adhere to the statute creating the World Court for the cedure, the competence of its suitors, the subject matter of its reason that it may, when it sees proper, give an opinion when jurisdiction, and its sanctions. I have answered satisfactorily, requested to do so by the council and assembly of the league. I hope, the objections that have been urged and the critici ms As previously stated, these opinions are not binding when that have been directed against the court in these respects. We gi"ren, and they could not affect the United States under the will next examine the actual work of the court. terms proposed for ratification unless the United States was a The most important of all things in connection with the party to the request for such an opinion. Much of the important court is how well, how successfully, how efficiently, how \YOrk of the court will be in rendering these advisory opinions. wisely, how justly has it disposed. of the disputes that have There had. been registered with the secretary of the league on come to it for decision and settlement. The judgments ren­the 1 t of August, 192:5, more than 900 treaties, many pro- dered, the opinions given, must and should be the measure vi:-:ions of which the council and assembly must administer. In of its worth. These, more than exaggerated oratory for or on1er to justly and legally administer some of the provisions against it, disclose what the court is and what it offers in the of those tTeaties it is necessary that there should be legal future for the settlement of international differences. Judge in terpretations and decisions as to their import. When a the court by achievement, not by either fulsome compliment treaty has been legally and properly interpreted the council or partisan criticism. and a sembly can then properly act in the matter. There are :Mr. President, I hope the Senate will bear with me while facts in these trentie which must be determined definitely I describe as succinctly as possible the decisions and opinions before the council or assembly of the league can proceed to of the Permanent Court of International Justice, believing act or make settlements. There are definite questions of that they furnish the best refutation of the unjust attacks and law which must be fixed before dlsputes can be determined charges that have been directed against this court. by the council or the as. embly. There are many judicial mat- Since its organization in 1922 the court has rendered 18 ter . necessary to be justly and legally determined before the judgments and opinions. I shall discuss them in the order in council or assembly can act in matters conferred upon them by 1 which they have been rendered. tJ1e co1enant and the h·eaties. The first advisory opinion of the court was rendered u110n

The Permanent Court of International Justice is a tribunal the request of the Council of the League of Nations in regard to which all these judicial matters can be properly referred, to the selection of two delegates by the Government of the and thus enable the cotmcil and assembly to proceed in dis- Netherlands to the third session of the International Labor charging their duties with legal precision and justice. Conference.

It is impossible to overstate the ·rast and varied matters of Under the Versailles treaty members ef the labor organiza-world-wide im110rtance and significance that have been reposed tions were authorized to send to the International Labor Con­by the many treaties in the League of Nations for settlement. ference four delegates, two to be government delegates and Each year ib: power. it influence, and its great value increase. ·two to be nongovernment delegates. In the selection of non­Scarcely a tt·entr is made now in which orne di puted matter government delegates section 389 provides that they would be-- · is not either referred to the league or to the court for settle- chosen in agreement with the Industrial organizations, if such organl­ment. It is imperative that there should exist a legal tribunal zatious exist, which are most representative of employers or work of high character, ability. and possessed of confidence to which people, as the ca.,e may be, 1n tlleir respective countries. these len·al and judidnl matters ran properly be referred. It , . i" far better for pence nnd ju. tice that such questions should The two _nongovernment d~lega~s had been named. m be ·ettlecl by a court than by political bodies. To deprive it 0f ~greement With three trade-umons m the Netherlands which, this field specially uitable for judicial determination would 1 m the aggregate, had 282,00~ memb~rs, but not in agreement be to destroy more than half of its usefulness. I with a Netherla~ds trad~-umon which had 218,000 members.

Mr. President, before I conclude I shall discuss the advisory As the trade-umon not m agref:me~t bad more membership opinions rendered by the court, and I hope to convince the than any one of the o!h~r ~ree umons, and almost as much Sf'nate that the:e opinions have been wise, just, judicial, only as the three combined, It rns1sted that the ~o delegates nn~ed upon questions admitting of judicial determination, and that a nongoy~rnment h~d not been sel~cted m accordance w1th they have contrllmted to th~ reputation of the court and estab- the prov.IsiOn~ previou-.~y stated, .srnce they had not been Jished it in the confidence and esteem of the world. I shall selrected m agree~ent With this umon. . show that no political opinion has ever been rendered. I shall The court unanimou~ ~Y c~ncluded that m a country where show that the.:;e opinions when rendered have been acquiesced there are several ?rg~mzations of emplo~ers and .work}?eop~e, in and have settled many acute and prolonged disputes. The I all of t~ese. orgamzatwns may be taken mto con. Ideration m d8{:i::;ion of the court succeeded where all other efforts and the nommation of ~he employer and workpeopl<=: delegate , not method, of settlement have failed. merely that one which has the largest ~emberslnp, even though

Mr. President we will next examine and ascertain what that one may be the most repre..,entative. 'l~he action of the sanctions are pr~vhled in the statute of the court to enforce its , Neth~rlands. Government was sustained, and ~he op~n.ion was deci:-;ions. The statute creating the court is silPnt in this a~qmesced J? .by all ~f th?se concerned .. ~lns dec1s~on con­re ·peer, and the court's situation is not unlike that of the shtuted a. d1strnc~ clarification of the pron~10n an.d Will be of Supreme Court of the United ~tates. It depends largely, like great assistance m the futur~ to go-yern m nommating non­our Supreme Court in its decisions between 1tate. of this government dele!?a~es to the mte~·natlonal labor ~onference. 'Pnion, upon the compelling pbwer of public opinion. No pro- The second opmwn of ~e court was re~dered m pm· u~ce vi~ion is made in our Constitution for tl1e enforcement of a of a request of the council on the question whether the m­d<>cree against a State, yet the States have invariably accepted ternati~nal labor orga~i~ation extended to the international the deci:-;ions of the Supreme Court. reg?latwn of the conditions of labor of persons employed in

The protocol to the statute contains no suggestion of force agriculture. m· compulsion to be used in enforcing its judgments. The court Proper notice was given to all concerned, and after full ba no ·heriff, no armie , no navies to execute it· will. It is argument and consideration the court decided that the powerless to invoke force. The court renders its judgment and language of the treaty of Yersailles was free of any am­must rely upon the moral sanction of public opinion or infln- biguity on the point and the labor of persons engaged in agri­ences entirely out ide of the court for enforcement. It is culture were included under the competence of the interna­belleved that the inherent authority derived from a judgment tional labor organization. rendered by a court of such high character and independent The third opinion rendered by the court in pursuance of a po ition will be accE>pted and carried into effect. It is believed request of the council was for the court to give a supple­that moral pressure will constitute an effective guaranty for mentary opinion on the following que tion: Doe. examination the execution of the court's decrees. or proposals for the organization and development of methods

The only sanctions that exist for the enforcement of the of agricultural production, and all other que::-tions of like judgment of the court are to be found in the covenant of the character, fall within the competence of labor organizations? league. and these are only binding upon its own members. The court expre~sed the unanimous opinion that while the They do not affect the state not members of the league. In order organizations and development of "means of production" are to relieve any apprehen ion that may exist in this respect the not committed to the international labor organizations it i pendin~ resolution specifically provides that adhesion by the not necessary for the o1·ganization to exclude totally from its l nlted States to the protocol shall not be taken to involve any 1 consideration the effect upon production of measures which legal relation on the part of the United States to the league o~ it might seek to promote for the benefit of workers. The court

1925 CONGRESSIONAL RECORD-SENATE 983 found it impossible to pass upon the labor organization's com­petence as to "other questions of like character " ; that this was entirely too indefinite and not a specific matter for de­cision or.opinion. The court thus clearly mdicated that it was not an advisory body but a deciding body.

The fourth opinion of the court was rendered in what is popularly known as the Tunis-Morocco nationality question.

:France had issued decrees applicable to the French zone in Tunis and Morocco, which decrees in their application affected British subjects residing in this zone. Great Britain insisted that these decrees should not be operative against British sub­jects residing in the zone on account of existing treaties with France and the fact that France exercised a protectorate over Tunis and l\Iorocco which were held under treaties with Great Britain and other nations. France insisted she had a right to issue decrees governing Tunis and Morocco as a sovereign in its own territory, and her decrees being limited in application to this territory was entirely of a domestic character and presented no question of international character whatsoever. The issue between England and France upon these decrees be­came very acute, produced much irritation, and was fast drift­ing into a most unfortunate situation.

The council of the league took cognizance of the matter and at the solicitation of Great Britain and France requested the Permanent Court of International Justice to express an opinion upon the following question : Whether the dispute referred to above is .or is not by international law solely a matter of do­mestic jurisdiction. The dispute had become so acute and im­portant that an extraordinary session of the court was called to consider the matter.

Although the matter was before the court for an advisory opinion, it was dealt with as if it had been a contested case between Great Britain and France, and it was elaborately presented by both Governments. The arguments before the court consumed five days and 20 meetings were held during the session of the court.

The court concluded that while a state possessed an exclusive jurisdiction in regard to nationality questions in its own terri­tory, the question whether this extends to protected territo-ry is a question of international law and that the situation in Tunis and Morocco being controlled by many treaties between France and Great Britain and other nations, that the dispute was not, by international law, solely a matter of domestic jurisdiction.

It should be noted that this opinion of the court was unani­mous and was concurred in by the French member of the court. It should also be noted that though the decision was ad1erse to France, France had it entered of record that the Fl·ench Gov­ernment proposed to the British Government that the case be submitted on its merits to the Permanent Court of International Justice, indicating France's complete confidence in the integrity and ability of the court. After this opinion the dispute was promptly settled by Great Britain and France and the matter removed as a disturbing factor in international affairs. The question submitted to the court was strictly a matter for judicial decision and the conclusions reached, and the settle­ment afterwards made, evinces the competency of this court as a means of disposing of international differences. No one can tell how long the matter would have been prob·acted nor e timate the extent of the irritation which would have been engendered between Great Britain and France, if this court had not existed and pronounced the law covering the case, which finally settled it and was acquiesced in by all. Wars have been · engendered by issues far less important than this one.

The fifth opinion given by the court was upon what is known as tile Eastern Karelian question.

A treaty of peace was concluded between Finland and nussia. Articles 10 an5} 11 of this treaty referred to " the autonomous territory of Eastern Karelia " and confers certain rights on the Karelian population of the " Governments of Archangel and Olonetz," "which shall enjoy the national right of self­determination." At the general meeting of the peace delegates a declaration was inserted in the proc~s-verbal on behalf of the Russian delegation by which certain rights were guaranteed to the Karelian population of the Governments of Archangel and Olonetz.

On December 31, 1920, rtl tifica tions of the treaty were exchanged at Moscow, but the proces-verbal of the exchange does not mention the declaration made by the Russin.n dele­gation at the general meeting. The Karelian population arose in insurrection, complaining of the nonexecution of the guar­anue~ and the Finnish Go-.;·ernment addressed a letter to the Council of the League of Nations complaining of the failure of

the Russian Government to execute its guaranties and agree­ments and asked the council of the league to consider the question with a view to arriving at a satisfactory solution to the two parties concerned, and also to ascertain if one of the members of the league which is in diplomatic relations with the Go1ernment at .Moscow might not ascertain that Govern­ment's intentions in that respect. The Esthonian Government exchanged notes with the Russian Government and invited the latter to submit the matter to the council. The Russian Government replied that the Eastern Karelian question was to be regarded as one of a purely domestic character and insisted that the provisions of the treaty and declarations were only intended as information regarding a situation already existing.

The Finnish Government later addressed a letter to the council of the league expre ·sing a desire that the council request the Permanent Court of International Justice to adju­dicate not only upon the legal a·spect of the question but also upon the other differences of opinion as to which this question had gir-en rise. On April 21, 1923, the council decided to ask the court for an advisory opinion on the following question:

Do articles 10 and 11 of the treaty of pl'a ce between Finland and Russia, signed at Dorpat on October 14, 1920, and the annexed decla· ration of the Russian -delegation rl'garding the autonomy of Eastern Karelia, constitute engagements of an interlh'ltional character which place Russia under an obligation to Finland as to the canying out or the provisions contained therein?

The question thus submitted was the interpretation of a treaty and the declarations accompanying it between two gov­ernments and was clearly a matter permitting of a judicial conclusion. Notice was given to all the members of the league, the nations mentioned in the annex to the covenant, including the United States. Kotice was also given to the Russian Gov­ernment. To this notice :M. Chicherin, the Commissary for Foreign Affairs of the Russian Government, replied stating that the Russian Government found it impossible to take any part in the proceedings, which were without legal value, resuming the position previously taken, and repudiated the claim of the right of the League of Nations to intervene in the question of the internal situation in Karelia.

The court heard the representatives of Finland on the com­pet<mce of the court to consider the matter in this situation. On July 23, 1923, the com't handed down the conclusions of a majority of the court of seven judges-four dissenting. The court concluded that as it was requested to gir-e an opinion on an existing dispute between Finland and Russia, and as Russia had never consented to any submission of the dispute, it was impossible for the court to give the opinion requested.

The court in this case very properly acted within the limita­tions ~mrrounding judicial action. Its conclusions in thh; mat­te; give force and dignity to its advisory opinions. In this opinion it is declared :

The co01·t, being a court of justice, can not, e>en in giving advisory opinions, depart from the essential rules guiding their activity as a court.

This opinion was not acquiesced in by the council; but it did not affect the court.

This decision clearly established that the com·t is oot subject to the council or the assembly, but is an independent body, uncontrolled by the council or the assembly of the league, and exercises the right to give advisory opinions, and that in giving advisory opinions it will be controlled by judicial procedure and principles. This position has enhanced the reputation of the court and increased the confidence and esteem held for it as a world tribunal, free and independent.

The sixth action of the court was in a decision in the Kiel Canal case. This case arose as follows : A British steamship had been chartered by the French armament concern, loaded with war material and sought to go through the Kiel Canal to Poland in orcler to furnish war supplies to the Polish Govern­ment, which was then at war with Russia. Germany refused permission for the vessel to go through the Kiel Canal on the ground that it violated the neub·ality which it had declared in the existing war between Russia and Poland. France and Great Britain insisted that under article 380 of the Versailles treaty the Ye sel was clearly entitled to have pas age through the canal. Article 380 is as follows :

The Kiel Cnnal and its approaches shall be maintained free and open to the vessels of commerce and of war of all nations at peace witb Germany on terms of entire equality.

Under the treaty of Ve1-sailles jurisdiction in this matter was conferred on the court. The Council of Ambassadors had sought to take jurisdiction of the matter, but Germany pointed

984 CONGRESSIONAL 1\EOORD-SENATE D ECEMBER. 1 7 I

out that the treaty gave jUI'isdiction to the court, and hence hould decide that the matter wa within the competence of on J anuary 16, 1923, application was made to the court by the the council, to decide whether Poland had acted in these mat­Briti h , French, Italian, and J apanese Governments to give ten; in accordance with her int~rnational obligations. Notice judgment whether the German author ities reasonably refu e<l was given to all the partie· concerned in the matter and it free access to the Klel Canal for this yessel. Notice was given wa. fully argued and conside-red by the eourt. ' to all the parties concerned, ineluding Germany. As no cit izen On • 'cptem!Jer 10, 1923, the tourt handed down an unani­of Germany was a member of the court, Germany was entitletl mons opinion, fu·st, holding that the connell wa competent to to name a national judge to sit in the ca ·e, and named Pro- deal with the matter unuer paragraph 2 of article 12 of the fessor Schucking. Poland was permitted to intenene in the Poli ·h minoritie · treaty. and had properly exercised its com­case. petence in reque.~ ting the ad1i~ory opinion. Second, it helu

The case wa ~ fully argued. The facts in the <:a ·e were not in that the holder::; of the lem:el-l. while they bad not gotten deeds dispute, and the only question before the court \Yas the inter- and legal ownership, had Yalid an<l enforceable contracts for pretation of article 380 of the Versailles treaty. Germany con- "hich con~itlerntion had been vaid. , uch holders were there­tended that that provision only applied in time of peace and not fore, said to be pur ehasers, and had a right to the Janel which in war, and that her neutrality obligations to Rus ·ia had not und.er German law eould be eufor<:ed in the courts; that the been affected by the treaty of Versailles, and a. the Yessel eon- fact that there \Vas a political pnrpo ·e behind the coloniza­taiJJecl war material it was her duty to Ru .. .::ia, as a neutral, to tiou could uot affect the rights acquireu under the law· that prohibit its passage through her telTitory. these private rights were not affected by chan~e of ~oYer-

A majotity of the coUI't decided. that the dear effeet of eignty; and that they were further protected again-st the annul­article 380 was to make the Kiel Canal an international water- ruent of them attempted by the Polish law of July 14., 1920, way, open equally to \essels of commerce and \e::> els of war by the equality pro1isions of the minorities treaty, and that the belonging to nations at peace with Germany. The eonduct of tr<'a ty of Yersaille · did not diminish thi protection, and that the Suez and Panama Canal. were reviewed and demonstrated neither it nor the armistice hall forbidden the Prussian state that the pas age of ves:els of this character in time of war was to proceed to confirm the acquired rights with the deed issued not regarded as incompatible wi th the neuh·ality of a 1·iparian after XoYember 11, 1918, and that the leases concluded prior sovereign. Germany was held to ha1e no duty to Rus~ia to to No•ember 11, 1918. were not affected by the transfc1· of refu. e access to this vessel but a definite treaty duty to permit so1ereignty and remained in force. passage through the canal. This question had been one of The court fully sustained the rights of these Ger.ma.n holders prolonged diplomatic di cus::,;ion and agitation, but wa · and eonclulletl that the position taken by the Polish Govern­promptly di po ed of when presented to the court. Tl1e ded- ment was ' not in conformity with its international obliga­sion has been acquiesced in by all. It furnishes another tions.'' This opinion was acquie. ced in by Poland and. she illustration of the efficiency of the World Court in dispo~ing made her policy conform with the law enunciated by the court of international disputes. the evictions ceased, and the ver ons who had been evicted

The seventh opinion gi•en by the court i::; known as that of were <:Oinpensated. Thus. by the decision of this court a most the German settler in Poland. The opinion was occasioned delicate and difficult international matter was disposed of by the following facts: amirably.

While Poland wa. a part of Germany, German colonists had .Ur. President, it should be noted that this opinion and all entered Poland anu made contracts with the German Go-.ern- previous ones were based on the interpretation of treaties ment for public lant.ls in Poland owned by the German Gov- aml laws and were in thorough aecord with judicia1 proceed­ernment. By the treaty of Yer~ailles, which became operative ing. and decisions. The court again pro1ed iLelf a most June 10, 1920, the right of the German Government to the e important and efficient tribunal for the settlement of large and lands were transferred to Poland. The Polish authoritie irritating international differences. It should also be noted refu:::ed to recognize the leases to the.:;e Gf'rman colonists, al- that this decision was made in fa,or of Germany's contention, though made prior to November 11, 1918, the date of the although she was not a member of the league, and in oppo ·ition armistice. and although payment had been made upon the to Poland, a member of the league. 'l'his indicates clearly lease~ and the parties were entitled to deeds but had not that membership in the league can in no way affect. the deci­acquired the deeds from the German Go•ernment. Under the sion of this high court. Germun law these eolonists could ba\e ued the German Gov- The eighth action of the court was an opinion upon the ernment and obtained deed . Poland conten<led that a tl1e que::;tion of the acquisition of Poli._h nationality by former Ger­title to the land had not been perfected by deed that the man citizens under article 4 of the minoritie treatv. rndrr Polish GoYernment had the right to cancel the lease-s and thi.· article Poland agrE'ed to make Poli h nationals ·ipso facto eon tracts. The Polish authorities further refused to recog- of ''persons of German nationality" born in her territory-nize any lease·, deeds, or agreements rega1:ding th~:-e ~ tate of parents habitually re. ident there, even if at the date of the coming lands made by the German Gove~·nment. prwr to ~ovember into forre of the present treaty they arc not themselves habitually 11, 1918, unle-·s the German rolorusts, w1th whom the agree- ~ resident there. ments were made, had then become Polish f:lnbjects.

Poland further insisted that Germany had no authority to The Poli~~ Go1ern.ment con~ended t_hat of the individual of de-al with their lands in any way after November 11, 1918, German or1grn horn m the Polish territory­the elate of the armistiee. Polaud pa ·sed a statute June 20, 1920. to make ft'ectlre 1he.~e cuntention . Numerou.<; eviction.· were made by the Polish · Gon~rnme!1t of German colonist"' from these land~ uncler thi ' . tatute. The right of a Yery large population were im·ol•e<l and · great distl·es engendered hy the. e proceedin~ . The ended persons nece sarily went to Ge1·ma.ny.

The matter was producing great friction between Poland and Germany, and the gravest apprehensio.ns were felt. As Poland had made certain agreement~ under the so-called minorities treaty of June 28. 1919, for the prote<:tion of German coloni ~ tR, and had con .. ente<l that the matters should be under the juris­diction of the league, Germany brought the question to the att<'ntiou of the council of the league for action and settle­ment. Poland insisted on its rights, as preYiously tnted, and the matter became one of dPep comern, not only as affecting the relations between Germany and Poland but as the right of minorities generally which the council of the league was under obligations to protect under treatie . A settlement of the question was dependent upon an interpretation of the provisions contained in the minorities treaty. Poland con­tended that it was not a matter within the com11etence of the council, and further insisted upon her rights of cancellation, as previously ta ted.

The council referred the matter to the court for de{"ision, first, as to the competence of the council to <leal with the matter under the minorities treaty, and, econd, if the court

only tho e can claim Poll ·h nationality whose parents were haLitually re::>ident there both on NovemlJ€r 10, 19:!0, when the treaty became l:'ffective, and on the date of birth of the individual.

Germany contended that tmdcr the clause of the treaty those German citizens ip..-o facto b~came Polish l:>Ubject whose par­ent· were habitual residents of Poland !lt the date of birth of the per on cone rued. It was an important matter to the persons concerned in the dispute. If they were Polish sub­jects they ''ere entitled to certain rights under the minorities treaty. If they were German ~ubjects tlley were not entitled to these rights. There were large interest· involved aucl there was much irritation between Germauy and Poland on this question.

Thi. matter came before the council of the league and. was hotly contested there. It seemed impo._ :~ilJle to reach a ~ettle­ment. Poland in~isted that the coundl and the league had· no juri:diction in the matter. The council of thP league finally decided to refe1· the que tion to the Permanent Court of Inter­national Justice for determinatlo~ on tile que ·tions, first, did the league under the treatie: ha\e jnri-=dirtion of the matter, and, second, if the court decided it had juri::;cliction, what was the proper interpr£-tation o.f arti ·le 4 of the minorltie~ treaty 'f

After argument and full comilleration, on September 2:5, 1923, the court handed down a unanimons opinion hollling that tlle league tmdel' the treaty bad juri · Uetion of the matter, and that article 4 of the Polisb minoritie · treaty refers " only to the

J·

1925 CONGRESSION.A_L RECORD-SE:NA_TE 985 habitual residence of the parents at the date of the birth of persons concerned," and that to allow the Polish contention that the parents of the individual must ha\e been habitual residents not only at tile birth but also on JanuJ.ry 10, 1920, would amount to an addition to the text of the treaty, and that it would have the effect of depri\ing Poli b nationality to the persons born in Poland of parents habitually resident there at the time simply becau ·e the parents were. dead on January 10, 1U20. It decided that the clause was clear and explicit and that the additional conditiolis contended for by Poland would require a reconstruction of the text of the treaty. This opinion establi bed permanent nationality to Germans born there, was acquiesced in, and settled this difficult and delicate matter.

Again, in giving its opinion the court confined itself to an interpretation of the treaty, followed judicial procedure, and gave an opinion on the judicial question submitted.

The next opinion given by the court was upon what is known as the Jaworzina question, being a complicated and protracted controversy between Poland and Czechoslovakia as to the rights in that part of the territory of Spll:z, where the Jaworzina district is situated. This dispute had been before the confer­ence of ambassadors and the council of the league long and continuously and seemed impossible of settlement; finally the council, at the request of representatives of the two Govern­ments, referred the matter to the court for an advisory opinion on the following question :

Is the question of the delimination of the frontier between Poland and Czechoslovakia still open; and if so, to what extent; or should it be considered as already settled by a definite decision subject to the customary procedure of marking boundaries locally, with any modifications of detail which that procedure may entail?

In the settlement of thi dispute between Poland and Czecho­slovakia it had been decided in 1919 that a plebiscite should be held in the Spisz district which was to determine the owner­ship between the two nations. At the Spa conference in July, 1920, this arrangement was suspended. On July 28, 1920, a frontier line dividing the district between Poland and Czecho­slovakia was decided upon by the conference of ambassadors, subject to such modifications as might later be made on the I'ecommendation of the delimitation commission which was created, and this decision was accepted by both Poland and Czechosloyakia. On November 6, 1921, Poland and Czecho­slovakia agreed to t3ettle the question on the commune of Jaworzina within a period of six months by means of a direct and friendly agreement between the two Governments. On December 2, 1921, the conference of ambassadors directed that the Polish and Czechoslovakian Governments reach a decision by January 15, 1922, authorizing the delimitation commission to carry out the decision of July 28, 1U20.

The Polish Government contended that the agreement be­tween Poland and Czechoslovakia of N OYember 6, 1U21, and the subsequent action of the conference of ambassadors of December 2, 1921, directing that Poland and CzecbosloYakia to settle, had changed the situation and destroyed the action of the ambassa­dors' conference of July 20, 1920, and that the matter was still open for settlement. Czechslovakia insisted that as nothing had been done under this agreement or this order and that the decision made on July 28, 1920, concurred in by Poland, was final and all that was left to effect settlement of the matter was for the delimitation commission to proceed to carry out its order. These contentions, as previously stated, were submitted by the council to the court for decision under the questions as previously stated.

After notice to all parties concerned and full argument, the court reaclled the unanimous conclusion that the decision of the conference of ambassadors of July, 1920, was of a final character and the agreements of Poland and Czechoslovakia were of such character as to give the decision of the conference of ambassadors the force of a contractual obligation entered into by these two Governments. The court denied the Polish contention that the decision was of a partial character, and pro­ceeded to construe the effect of the dec~ion. It denied the right of the conference of ambassadors, two years after the date of the formulation of its decision, to give interpretations upon the derision. It held that the undertakings of Poland and Czecboslo\akia of November 6, 1921, and the action of the conference of ambassadors of December 2, 1U21, did not reopen the question nor in any way affect the decision rendered in July, 1920, as nothing had been · concluded under these. The court held . that only the delimitation commission created by the decision of July, 1U20, had been given power to \ary the decision and that this powet' was still preserved to this com­mission.

The decision was acquiesced in and settled a matter which had been disturbing the relations between Poland and Czecho­slovakia since the peace conference at Versailles. This opinion was upon strictly legal matters-the interpretation of treaties, agreements, and assurances li;sued by governmental bodies. Again the court showed its independence in denying to the con­ference of ambassadors, one of the most potential political bodies in the world, being the successors of the supreme coun­cil of the allied and associated powers, the right to change its final decision in an important matter.

The next matter determined by the court was a judgment in reference to concessions made in Palestine.

A Greek had obtained concessions from the Turkish Govern­ment prior to October 29, 1914, the date of the outbreak of the war between Turkey and the Allies, relating to the construction of an electric tramway and the supply of electric light and power and of drinking water in Jerusalem. On January 28, 191G, the same Greek had obtained concessions for similar undertakings at Jaffa. As a result of war, Palestine passed. under the control of Great Britain. Great Britain subsequently made the treaty of Lausanne with Turkey, and on July 2-t, 1922, accepted a mandate for Palestine under the League of 1\ations.

The Greek Government made representations to the British Government, insisting that the concessions to the Greek sub­ject should be recognized by Great Britain under the treaty of Lausanne, and under the mandate for Pale~tine conferred upon and accepted by Great Britain. Upon the refusal of the British Government to accede to the request made by the Greek Govern­ment, the Greek Government made application to the Per­manent Court of International Justice to consider the matter, stating in its application the grounds upon which it based the claims for its citizens.

The court gave notice to the British Government and pro­ceeded to hear the case presented. The court was composed of 11 judges, with the addition of a Greek national judge because of the fact that the permanent membership of the court did not include a Greek citizen. The question came before the court first upon the demurrer on the part of Great Britain to the application filed before -the court, on the ground that the court bad no jurisdiction to entertain the proceedings, first, because Great Britain had not given her consent to the jurisdiction of the court, and, econd, because it was not a dispute between two states, but one between a state and a citizen of another state, and that it had not yet sufficiently developed that the dispute could not be settled by negotiation.

The matter was fully argued and considered and the judg­ment of the court was delivered August 30, 1U24, by a ma­jority of the court, and it was held that under article 36 of the statute the court had jurisdiction to hear and determine-

all casf's which the parties referred to it, and all matters specially provided for in treaties and conventions in force--

and that article 26 of the mandate conferred upon and acce-pted by Great Britain provided that-

the mandatory agrees that if any dispute whatever shall arise be­tween the mandatory and other member of the League of Nations relating to the interpretation or the application of the provisions ot the mandate, such dispute, if it can not be settled by negotiation, shall be submitted to the Permanent Court of International Arbitration.

The court held that this mandate constituted a convention under the statute of the court, and that under it a dispute had arisen between Great Britain and Greece, a member of the league, which it had been impossible to settle, and that the dispute related to the interpretation of the application of the provisions of the mandate, and that while the dispute was originally between Great Britain and a citizen of Greece when the Greek Government took up the ca e of one of its s~bjects and resorted to international judicial procedure in its behalf, the state was in reality asserting its own rights and thus it became a dispute between the two states, giving jurisdiction to the court in this respect.

The court considered protocol 12, annexed to the treaty of Lausanne, between Great Britain and Turkey, in which all concessions that had been granted by the Turki h authorities prior to October 29, 1914, were fully recognized. This pro­\ision was sufficient to bring the Jerusalem concessions under article 11 of the mandate so as to confer jurisdiction upon the court, since these concessions were negotiated prior to that date, but it <lid not similarly place the se~ond group of con­cessions under article 11 for they were made subsequent to that date. So the court dismissed its jurisdiction as to the

986 CONGRESSIONAL RECORD-SEN ATE DECEl\ffiER 17

Jaffa concessions and retained jurisdiction as to the Jerusalem concessions, which was to be tried later upon its merits.

This was a very important decision, as there are 11 man­dates which have been given by the League of Nations in Asia, Africa, and the Pacific Ocean, and all of these man­dates have practically the same provision , gi'ring jurisdiction to the court. We can readily see the importance of this de­cision, and it is of special impor tance to the United States :tince we have entered into agreements with most of these man­da tory powers, conferring upon us imilar r ights posse sed by the members of the league. The deci ions of the court must neces ·a1ily in these mandates be of great importance to us in the fu ture. It should be noted that this decision was against Great Britain, the mo. t influential member of the league. The ded. ion furnishe proof of the court's independence.

The eleventh matter decided by the court was an advisory opinion on the que. t ion of the Monastery of St. Naoun, re­garding the fixing of the frontier between Albania and the Yuaoslavian State.

Albania was created an independent state by the great pow­ers in J913, and the powers were engaged in fixing the boun­daries of Albania when the war broke out and the work cea ed. In 1919 the peace conference resumed the responsi­bility. After admission as a member of the League of Na­tions in 1919, Albania sought the assistance of the council of the league to fix and define her boundaries.

The league sent a. commi 8ion of inquiry to Albania, and the conference of ambassadors at Paris, which had succeeded the supreme council of the Allie.g in power for settlement of peace conditions, sent a delimitation commis ion to consider the boundaries. Both of these commis ions encountered difficul­ties in fixing the boundary between Albania and Yugoslavia in the region of the Monastery of St. Naoun. These disputes came before the conference of amba ssadors at Paris as a body, which, as previously stated, succeeded the supreme council of the Allies in the determination of such matters. The confer­ence of ambassadors had before it the report of the commis­sion of inquiry of the league and the delimitation commission sent by itself. It proceeded to come to a decision after full argument and consideration of the claims of both Albania and Yugos1avia, and on December 6, 1919, allocated the Monastery of St. Naoun to Albania.

Five months later the Yugoslavian Government sought a revision of this decision and submitted the matter to the Council of the League of Nations for guidance, the conference of ambassadors being unable to agree upon a solution. Al­bania resisted any further interference with the settlement that had been made by the confe1·ence of ambassadors, claim­ing that it was final. Yugo lavia in i ted that it was not final and that there should be a revision of the decision, as many pertinent facts had not been fully considered when the matter was so determined. At the request of the Yugoslayia.n Government the council was asked to submit to the Permanent Court of International Justice the question as to whether the decision of the conference of ambassadors of December 6, 1922, was final in fixing the frontiers between Albania and Yugo­slavia.

After full argument and consideration the court handed down a unanimous opinion that the conference of ambassadors was the authorized agent of the principal allied powers, whose competence in these premises had been recognized by Albania, by Greece, and by Yugoslavia. The conference of ambassa­dors was therefore compelled to decide the que tion ; and the conference having awarded the monastm·y to .Albania by its decision of December 6, 1922, the decision was definite and final.

This opinion was adopted by the council of the league at its meeting in September, 1924, and transmitted to the conference of ambassadors. Thus this disturbing matter was promptly settled when submitted to the court for decision. Again, in this decision, as in its prior decisions, the rights of the smaller state were sustained against the larger and more powerful.

The twelfth action of the court was a decision interpreting the reparation clause in the treaty of Neuilly.

The treaty of peace between the allied powers and Bulgaria provided that all property possessed by Bulgarian nationals within the territory of the allied powers could be used to dis­charge the claims of any nationals of the allied powers against the nationals of Bulgaria, and in addition contained the provi­sion that this property may also be charged "with payment of claims growing out of acts committed by the Bulgarian Govern­ment or by any Bulgarian authorities since October 11, 1915, and before the allied or associated powers entered into the war." The treaty provided for arbitrators to be appointed to

settle these claims. A contention arose between Bulgaria and Gre~ce befor~ . the arbitrators as to the terms of the treaty making proVIsion for acts committed by the Bulgarian Gov­ernment. The question aro e as to whether the text of the treaty authorized claims for damage for acts committed outside the l!ulg~riU? territory before October 11, 1915, and in partic­ular lil districts occupied by Bulgaria after her entry into the war; and also whether the text of the treaty authorized claims for. damages incurred by allied claimants not only as regards their property but also as regards their person arising out of ill-~eatment, deportation, internment, or other similar acts. Bemg unable to reach an agreement, the Bulgarian and Greek Governments decided to submit the matter for judgment of the Permanent Court of International Justice. After argument and ~onsideration the court decided that the treaty should be mterpreted as authorizing claims in respect of acts committed outside the Bulgarian territory as constituted before October 11, 1915, and that damages incurred by claims should be a warded not only as regards their property but also as reo-ards their persons, and that reparation due on these grounds should be included in the total capital sum due from Bulgaria to Greece.

The thirteenth action of the court was the rendering of an advisory opinion upon the exchange of Greek and Turkish populations.

The peace settlement with Turkey, which was made at Lau­sanne in 1923, was composed of many treaties, covenants, and protocols. On January 30, 1923, Greece and Turkey entered into a convention providing for the compulsory ex­change of Turkish nationals of the Greek orthodox: religion e tabli bed in Turkey, and of Greek nationals of the Moslem faith e tablished in Greek ten:itory. Article 2 of the Lausanne convention contained an exception to this compulsory ex­change of nationals, which reads as follows :

The following persons shall not be included in the exchange pro­vided for in article 1: (a) .All Gre€k inhabitants of Constantinople; (b) all Moslem inhabitants of western Thrace. .All Greeks who were already established before October 30, 1918, within the areas under the p1·efecture of the city of Constantinople as defined by the law of 1912 shall be considered as Gre€k inhabitants of Constanti­nople. .All Moslems! established in the region east of the frontier line laid down in 1913 by the treaty of Bucharest shall be considered as Moslem inhabitants of western Thrace.

To effect the exchange a mixed commission was provideu to supervise and facilitate the immigration of persons who were included, to consist of four members repre enting each of the parties to the treaty, and three members chosen by the Council of the League of Nations. This mixed commission was duly constituted, and in the course of its work a very seiious difficulty arose because of contentions made by the Turkish Government. It should be noted that in the treaty all Greek inhabitants of Constantinople who were already established there before October 30, 1918, were excluded from the compulsory exchange. Hence, in determining whether a Greek should be compelled to be exchanged or not, the que tion arose as to whether a Greek was established in Constanti­nople prior to October 80, 1918, which was the day of the armistice with ·Turkey.

The Turks insisted that the word "established" in the treaty meant as established under the national law of Turkey. They further insisted, that the interpretation of the word "estab­lished," and who was a Greek subject, was a domestic question and to be determined by the courts of Turkey. This conten­tion produced a very acute situation, as many thousands of people and their entire future was involYed in the determination of the question.

The mixed commission, being unable to settle the matter, appealed to the Council of the League of Nations to do so. On December 13, 1924, the council of the league a ked the court to give an advisory opinion on the following question:

What meaning and scope should be attributed to the word "estab­lished" in artiCle 2 of the conyention of Lausanne of January 31, 1923, reo-arding the exchange of Greek and Turkjsh populations in regard to which discussions have been put forward which are contained in the documents communicated by the mixed commission? .And what condi· tions must the persons who are de. cribed in article 2 of the conven­tion of Lausanne under the nam e of " Greek inhabitants of Constan· tinople " fulfill in order that they may be considered a· "e. tablished " under the terms of the convention and exempt from compul ory exchange? ·

Notice of the request wa ent to all members of the league, to the United States and other nonmembers named in the annex to the covenant, and to Turkey and the mixed commission. The

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1925 CONGRESSIO:NAL RECORD- SE:NATE 987 matter was so urgent, the situation was becoming o acute be­tween Greece and Turkey, that an extraordinary ession of the court was con"fened on January 12, Hl25. The case was ably and fully argued by representatives of the Govemments of Greece and Turkey and wa fully considered by the court.

On February 21, 1923, the court delivered a unanimous opinion holding that the meaning of the word "established" was to be determined not in the ab ·h·act but as the word has been used in article 2 of the con\ention. This was held to be a question of international law and not a question of domestic concern between the Turkish administration and the inhabitants; that article 2 of the convention operated to witltdra w pertions coTered by article 1 and the word " estab­lLlu•<l " embraces both residence and stability, and that the term " e. ·tabli:-hed " had much in common with the concep­tion of domicile in . ·everal modern languages ; that the term " established " a u ed in the con\ention referred to a question of fact rather than to the legal sense of the term according to national legislation; that there is no indication that the autllors of tlle con,ention had in mind any national legisla­tion when using the term. As the word " established " was u. Nl both as applying to the Moslems in western Thrace and to the Greeks in Con. tantinople, it could not be consh·ued as ha,ing reference to legi ~Jation of the Turkish Government dt>tining the term "e;~ tablished." The legislation of the Tm·k­i:-:h Government did not exist in 'l'hrace, and hence the term

ablished" nml't IJc consh·ued il'l'espective of any national legi. ·lation of the Turkish Government.

The court therefore did not approve the Turkh;h contention that the con\ention required a Greek to be established accord­ing to the Turkish legislation. The court held that this wa no derogation to 'l'urkish authority, as Turkey had entered into a treaty, which ti·eaty must be interpreted. The court fur ther dedded against the Turkish contention that the Turk­i. h municipal courts should be left to decide the que tion, since tile convention entered into with Greece conferred that func­tion on a mixed commis ion, which wa · alone competent to :-:ay whether any Greek inhabitant was " established." The eourt wa unwilling to go beyond the actual controversy in jnterpreting article 2 of the convention, not being in possession of sufficient facts and information. .

This deci ion has enabled the mixed commi.~sion to pro­ceea to di. ·charge its dutie ·, and settled a mo t complex and disturbing dispute.

The fourteenth ~H:tion of the court was rendered on March 2G, 1925, in ghing a judgment upon the request of Greece to give authoritative and detailed interpretation of tbe judgment it hau previously rendered on September 12, 1924, upon the reparations clau:-:e in the peace treaty between Greece and Bulgaria.

Article GO of the tatute of the cotut provitle :

In the event of digpute as to the meaning or scope of the judgment the eourt shall construe it upon the request of any party.

Bulgarhl made no objection to the application of Greece, and hence ga-re as. ent to the matter being considered by the court, anti it compileti and submitted a memorandum commenting on the Greek contention. It de-reloped that the contention between Bulgaria and Gteeee did not relate to an interpretation of the c.lec;sion rendered on September 12, 192-!, nor the pronsion of the treaty ,-.,-hiell wa . · submitted to the court for decision by thnt agreement upon whic:h that decree had been ba~e<l, but upon other provision of the treaty not included in the agree­ment or decree, and the court disml~sed the application, stat­ing it had no power to go beyond the judgment rendered in the case, which judgment was limited IJy the agreement.

The fifteenth action of the court, 1\larch 26, 1D25, was a judgment rendered in the case which has been previously men­tloued regarding concessions made by the Turkish Government to a Greek citizen, wlli<:h Greece had brought to the- court for a decision.

As previou ·ly stated, the court O\erruled the objection of Great Britain as to the jurisdiction of the court, and held that it had jurisdiction ami would try the case on its merits. The claim was for damage· against the British Goyernruent for lla ving granted a concession to ano ther party, which oYer lapped the concession which the Turkish GoYernment had granted the Greek citizen in whose behalf Greece was acting.

It developed in the case that the party to whom Great Britain had granted the coucession had undertaken to respect the rights of the Greek citizen. and had renounced the privilege of demanding the expropriation of the Greek concession. :Xo dnmages were proYen a . ha\ing been incurred l.Jy the Greek subject. The court rendered its opinion and held that the conce sions granted the Greek subject were -ralid, but as he

had sustained no loss by the granting of the second concession by the British Government, since the party was willing to relinquish all rights under it where it oyerlapped the Greek concession. The court held also that the British Government in granting the econd concession overlapping the Greek con­ces ion had violated an international obligation.

The last action of the court was rendered recently in an opinion at the request of the council upon the boundary dis­pute between Turkey on one side and Great Britain on the other, acting for Iraq, over which nation Great Britain holds a mandate under the league. The dispute was regarding the Pro\ince of Mosul, which was claimed by both Turkey and Iraq. When Great Britain and Turkey made peace at Lau­sanne July 24, 1923, it was impossible for them to reach an understanding for the final disposition of the disputed terri­tory of Mosul. The contention on this question was bitter and long protracted, and at one time it eemed as if this dispute would wreck the conference and prevent a n·eaty of peace. Finally Great Britain and Turkey, in article 3 of the treaty of Lausanne, reached the following agreement for the settlement of this dispute :

The frontier between Turkey and Iraq shall be laid down in friendly arrangement to be concluded between Turkey and Great Britain within nine months.

In the e·n !nt of no agreement being reached between the two Gov­ernments within the time mentioned, the dl:;pute shall be refen-ed to the Council of the League of Nations.

The Turkish and British Governments reciprocally undertake that, pending the decision to be reached on the subject of the frontier, no mUltary or other movement shall take place which might modify in any way the present state o.f the territories of which the final fate wlll depend upon that decision.

Great Britain and Turkey were unaule to reach any friendly arrangement to settle this dispute, as provided in this article, and hence under its prodsions the matter went to tile Council of the League of Nations for settlement. The council was unable to effect a satisfactory settlement between the disputing States. Turkey insisted that the matter was simply referred to the council as a mediatory or conciliatory body, and not as a deciding body; that if the council was a deciding body it must act by a unanimous vote, and that the representatire of Turkey must sit and vote as a member of the council on this question. Under article 4 of the co\enant, as Turkey had no representative in the council and Great Britain bad one, Turkey had been invited to name one and had done so. Great Britain insisted that under the treaty the council was authorized to make a final decision in the matter, and that its decision should be by a majority and not a unani­mou vote. The council requested the Permanent Court of International Justice to render an opinion as to the powers given the council under the Lausanne treaty, and if i t was giwn the power to decide whether the representatives of Great Britain and Turkey are entitled to vote or not in the matter. When notified of the request for the opinion, Turkey telegraphed to the registrar of the court that the questions on whit h-

an ad vi ·ory opinion is asked are of a distinctly political character, and in the 'furkish Governmenfs opinion can not form ihe subject of a legal interpretation and • * * there is .no need for it to be repre en ted at extraordinary session of court.

After mature consideration, the court rendered an opmwn holding that under the Lausanne treaty Great Britain and T1ukey had agreed, in ca ·e they could not in nine months conclude a fl'iendly arrangement fixing the frontier between Tul'key and Iraq, that then the dispute should be referred to the council of the league; that the time indicated in the treaty for a friendly arrangement had expired without such an arrangement being concluded; hence the matter was properly before the council for settlement under the treaty.

The colU't, interpreting the last paragraph of article 3 o! the treaty, held that it provides for a decision by the council on the frontier between Turkey and Iraq, and that it distinctly proYides that the final fate of the territories shall depend upon the decision of the council.

Answering the inquiry as to the method of voting that should govern the council in rendering its deci. ·ion, the court lleld that considering the various provisions of the covenant of the league governing the council the council should reach its de­cision by a unanimous vote, excluding from voting the repre­sentati\es of both Turkey and Great Britain.

It llould be noted tllat this opinion was confined to the in­terpretation of a treaty and the co,enant of the league, which are proper ubjects of judicial determination. It should also

988 CONGR.ESSIONAL RECORD-SENATE DECE~fBER 1 7

be noted that it rejected the contention of Great Britain that the decision should be by a majority vote of the council, altliough Great Britain is one of the most influential members of the -league. The court again exhibited its independence and fairness.

Mr. President, these are all the opinions and decisions of the court rendered up to this time that I ha--re been able to obtain. I submit to the Senate that an examination of them disclo ... es that the court is able, independent, painstaking, and governed by wisdom and conscientiousness. The court is pre­eminently posses ed of character, capacity, courage--these are the qualitie that make for greatness alike of individuals and of institutions. These decisions have confined themselves to matters that permit of judicial determination. These opinions and decisions have been mo 't effective in settling acute, im­portant, and dangerou international disputes. Most of the disputes settled by these opinions and decisions would have continued open to-day except for the existence of this court. The results of these opinions and decisions disclose how poten­tial a world court is for the peace of mankind and for the settlement of international differences. We must all com­mend the ·wisdom and the state"'manship of the men who created this court and the peace-loving forethought of the 48 ·nations which have attached their signatures to the protocol of the statute creating the court.

It would be a deplorable day for the world if this court 'should be destroyed, its u.'efulness lessened, or confidence in it impaired. It stands as one of the shining landmarks of re­cent years, promotive of world peace and betterment. It dis­do. es that in the international :field the great principle of courts can be effective and can be instrumental in displacing war and settling disputes which otherwise would continue.

Private wars, feudal wars, conflict of clans, and the bloody ·revenge of family feuds in nations have disappeared by the creation of the courts, thus enabling law and reason to control where once force and hatred held full sway. The civilization of nations is measured by the extent that courts have super­seded force and violence.

There are many who believe that courts in the international :field can be made effective in abolishing war and can be as p9tential in the settlement of international differences as State and national courts have become in the settlement of domestic disputes.

The e:risting World Court is the effort of 48 nations to ac­complish this. It is the first court that has ever been organized world-\vide in its scope and in its aspirations. The question is submitted to us to determine whether we shall be one of the nations aiding the· peace and progress of the world by adhering to this court, and thus give it our moral support and countenance, or whether we shall stand aloof and refuse to aid the world in its efforts for the settlement of international disputes by justice and law and not by force. I submit that the court in its structure, in the character of the able judges who are its members, in its provisions and its opinions and decisions, has proven itself worthy of the world's confidence and deserves the aid and maintenance of all peace-loving people.

Let us adhere and conform our practices to our preachments. For more than half a century we have been the le.ading advo­cates of a world court, and to its creation our ablest states­men and jurists have devoted their best efforts. Are our efforts in this direction earnest and sincere, or do they consist of mere empty lip ervice? Is the Senate to reject a world court, a sentecl to by 48 nations, which court has been sub­stantially constructed on the plan of the court which at The Hague conference of 1907 the United States offered to the world? Have we no pride in establishing a reputation for consistency and sincerity? Are we to confine our efforts for a world court to pleasing platitudes in its behalf as a means for peace and the outlawry of war and to be induced by fervid eloquence to consume years and years in the fruitless chase of the will-o'-the-wisp of an ideal court through the marshes of a wrangling and contentious world? Are our fears to be appealed to and the whispering dangers to frighten us to re­ject adherence when the pending resolution, with its reserva­tions, is sufficient to silence every fear, relieve every appre­hension, and protect every possible right? Are we not sa tis­tied that our President and two-thirds of the Senate are suffi­cient in every case to protect us from every possible danger and from the perpetration of any possible wrong? Are we to

. be induced to reject this court in pursuit of a court which has no existence except in the imagination of some fervid minds? Are we to abandon a substance in a wild adventure for a shadow? Are we to be misled by the flattering appeal for an American court, when reflection would convince us

that if such a court was constituted it would have only one litigant, and that would be ourselves? Are we to be deceived by the opponents of this court, who purpose, if possible, to encumber the resolution of ratification with amendments which would either diminish the court's usefulness or else compel the rejection of the reservations by other a senting nations, and thus prevent our adherence?

The issue can not be evaded. It is either this court or none other. The nations which enjoy its benefits are plea ed with it beyond measure and contemplate making to it no amendments, no modifications.

Mr. President, I am strongly persuaded from every moral consideration, from every material consideration, and from every political consideration of duty and responsibility, not only to ourselves but to the world, that we should adhere to this World Court, with the reservations suggested, and be one of the potential factors in shaping its destiny, in extending its usefulness, in giving wisdom to its decisions, and in making it a world temple of justice and law, where all nations can go to have their international differences and diRputes decided.

Mr. WALSH. Ur. President, I desire to inquire if, :in accordance with the practice rather extensively ob~rved, the Chair has been advised that any other Senator desires to addre s the Senate on this subject?

Mr. CURTIS. M.r. President, if the Chair will permit me, I have made some inquiry, and I understand there is no one else who desires to address the Senate this afternoon. I had intended to ask that the pending resolution be temporarily laid aside, and that the Senate proceed to the conside1·ation of legislative business, o Members may introduce bills, sub­mit resolutions, and so forth.

Mr. WALSH. I did not desire to inquire particularly about this afternoon, but whether any other Senator desires to address the body on rea. embling to-morrow.

Mr. BORAH. Mr. President, if the Senator desires to address the Senate to-morrow, I shall be very glad to have him do so. Otherwise, if I am in a condition to do so, though I am now suffering with a cold, I shall speak myself. It would be very agreeable to me to have the Senator speak to-morrow if he desires to do so.

Mr. WALSH. I have no desire to speak to-morrow if the Senator wishes to speak. It would be Yery satisfactory to me to have him address the Senate to-morrow if he is prepared to do so.

Mr. BORAH. I would prefer, if the Senator fs ready, that he proceed, because it is doubtful whether I can speak to· morrow. I had intended to speak to-morrow, but am suf­fering somewhat from a cold; and if the Senator wishes to go ahead, he can do so.

Mr. WALSH. It will be entirely agreooble to me to leave it that way. If the Senator desires to speak to-morrow, I shall ·be quite agreeable to that course. I merely desire to give notice that if no one else wishes to speak on the subject to-morrow I shall ask to be heard. I feel that I hould state in this connection that; for the relief of the Members of the Senate as well as myself, I have planned to divide my address into three parts and deliver only one part on one day. I shall seek a later opportunity to continue my remarks. I hope not to be obliged to detain the Senate on any one day more than an hour or an hour and a half.

Mr. BORAH. I shall follow the example of the Senator from Montana and divide my speech into several parts.

Mr. CURTIS. I move that the Senate proceed to the con· sideration of legislative business.

1\fr. FLETCHER. Mr. President, before that is done I would like to have inserted in the RECORD a brief statement by Edward W. Bok, published in Collier's Weekly, November 28, 1925, on the ubject of the World Court, and also a hort letter from Mr. Myrick.

The PRESIDING OFFICER (Mr. GLASS in the chair). Without objection, it is so ordered.

Tbe matter referred to is as follows: Jl'ST A BIT CUTIIOUS, ISX1T ITf

(By Edward W. Bok) It is now 18 rears ago that a company of distinguished Americnns

went to 'l'he Hague and said to a group of nations assembled there: "We have an idea for you. You may have heard of a court that

we have in America called the Supreme Court of the United States." The nations all nodded. One nation commented: "The greatest

tribunal ever set up in the world." ·' Well," said the United States, " why not have a world court

like it and all the nations join it; a permanent court to whlch a nation can go if it has a difference, just as an individual or a cor­poration can go to our Supreme Court i "

t

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1925 CONGRESSIO:N AL RECORD-SEN .A.TE 989 The nations were impressed. But the idea was too new and a bit

too large. "Let's try another kind or a court first," they said. So The Hague

came to be. • ".All right,'' said the United States, "better that than nothing.

Let's all join." And everybody did, including the United States. The Ha.gue court didn't work out, just as the United States knew

it wouldn't. So eight years aften1ards the United States tried its original idea on the world once more. This time the nations saw more cleady, and the plan was accepted. But agreement on how the judges were to be selected could not be reached. So once more the world court came nlmost into being, but not quite.

The di:;:;puted point was referred to Elihu Root to work out. He did. So, once mor· , 13 years afterwards, America went back to The Ilague--r·emember, please, for the third time. Th1s tim~in 1920-the war· had been fought and the world bad begun to see the greater need for sucl1 a court. Mr. Root's statute was adopted, and, with a ft:.>w Eght change , the plan was accepted. The Wotld Court came into lJeing.

"i!Ir. Root's World Court;• some called it. Aruel'ican to tht> ~ot·e. Now, mark this well: And, incidentally, don't think this an allegory or a parable. It i3

a r·ecitul of actual facts. For 31 years the United States worked, off and on, to get over to the nations of the world its idea of a great permanent court.

Finall~·. wllen it did, the world said: ".A. great idea," and 48 nations in all joined it. Tlle big nations, too-Great Britain, France, Italy, Japan, the 1

1etberlands-all of them. "Great," Theodore Roosevelt said when he was President. " Splendid," said William Howard Taft when he was President. "Fine," said Woodrow ·wilson when be was President. "Wonderful,'' said Warren G. Harding when he was Pr·esident. " Ver~· needful," said Calvin Coolidge. Five Presidents of the United States indorsed it. Naturally; why

shouldn't they? It was an American idea, and three of them had bad a band in it.

Then, what? The r;nited States didn't join the court. It never bas. Mind you, after all the work of its own leading men whose con­

ct>ption it was, wllo outlined its plan, who suggested the court's jurisdiction, who advocated, pressed, and urged it for ~6 years-ever since 1898!

And America not a member ! Disowning its own court-it~ own child r The world stood amazed. Do ~·on wonder? It is just a bit eurions, isn't it? There is also another word for it.

8PRIXGFIEL01 MASS., December 5, 19!5. Hon, Dl:XCAX U. FLETCHER,

The Senate, n-ashington, D. C. MY DF:.u: SE:SATOR: You will be intensely inte1·e.sted to know that by

a vote of ::!,089 in favor to only 1 against that number of citizens of thls city, representing all phases of its life, after a public forum on the subject in our noble auditorium, under the auspices of the Young Men's Christian .\.ssociation, by the above practically unanimous vote re ·pect­fully petition your good self and the whole body of Senators -to put the 'United States into the World Court forthwith.

Personally I will add that, in my judgment, the voting men and women throughout the country favor with equal unanimity United States membership in World Court.

\'ery sincerely yours, HEUBERT I\IYniCK, ~

President and EdUor in Chief.

Mr. SWAN SOX. Before we go into legislative session I want to ha>e it understood, so there will be no questiOll -abont it, that the World Court resolution continues the unfinished busine ·s in open executive session.

:Mr. LE~""ROOT and others. That is under tood. Mt·. BORAH. Of course, it is understood, becam~e that is the

p1rliamentary re~ult. Mr. SW.A...~SON. Yery well.

LEGISLATIVE BCSINESS

1\Ir. CURTIS. I renew my motion that the Senate proceed to the con ideration of legiRlative business. I do this because a number of Senators haYe bills and joint resolutions which they destre to introduce, and the Senator from Louisiana [l\Ir. RANSDELL] advi. ed me that he wishes to make some remarks for a few moments on the deyelopment of waterways.

The PRESIDING OFFICER. The Senator from Kansas moves that the Senate proceed to the consideration of legis­lative business.

The motio.n was agreed to, and the Senate resumed its legis­lative session.

CLAIMS OX ACCO~T OF COLLISIOXS WITH ~ITED STATES VESSELS (S. DOC. XO. 24)

The YICE PRESIDE~T laid before the Senate the following message from the President of the "Lnlted States, which was read and, with the accompanying papers, referred to the Com­mittee on Foreign Relation and ordered to be printed: To the Congress of the United States:

I tranf-:mit herewith a report from the Sec.retary of State in relation to the following claims presented by the GoYernments of Denmark, Sweden, and Norway against the Government of the United States on account of damages sustained by vessels owned by their nationals in collisions with vessels in the public service of the United States:

1. The claim presented by the Government of Denmark on account of losses sustained by the owners of the Dani ·h steam­F:hip Jia~anedsnnd as a re ·ult of collisions between it and the U. S. S. Siboney and the U. S. Army tug Ko. 21 at St. Nazaire, France.

2. The claim presented by the Government of Sweden on ac­count of the losses sustained by the owners of the Swedish steamship Olivia as a result of a colli. ion between it and the U. S. S. Lak-e Sa.in,t Clai1-.

3. The claim presented by the Government of Norway on ac­count of the losses sustained by the owners of the Norwegian steam hip John Blumer as a result of a collision between it and a barge in tow of the U. S. Army tug Britannia.

4. The claim presented by the GoYernment of Norway on account of the losses sustained by the owners of the Norwegian bark Janna as a result of a collision between it and the U. S. S. Westwood.

I recommend that appropriations be authorized to effect a settlement of the ·e claim~ in accordance with the recommE>nda­tion of the Secretary of State.

CALVI~ COOLIDGE. THE ·WHITE Hou-sE, Decembe-r 1"1, 1925.

PETITIOXS

~Ir. CAPPER presented a petition, numerously signed, by sundry citizens of Rice County, Kans., praying for tile par­ticipation of the United States in the Permanent Court of International Justice under the terms of the so--called Harding­Hughes-Coolidge plan, which was referred to the Committee on Foreign Relations.

Mr. WILLIS pre. ·en ted a petition of sundry citizens of Cleve­land, Ohio, praying for the participation of the United States in the Permanent Court of International Justice, which wa::J referred to the Committee on Foreign Relations.

Mr. BIXGH.A..l\1 presented a petition of 95 citizens of Yales­ville, Conn., praying for the ' immediate participation of the United States in the Permanent Court of International Jus­tice, which was referred to the Committee on Foreign Rela­tions.

He also presented resolutions adopted by the Temple Sister­hood of the Congregation of Beth Israel, of Hartford; the Woman's Club of New HaYen; the Sisterhood of Temple Israel, of Waterbury; a mass meeting of citizens of Bridge­port; a mass meeting of citizens of 1\liddletown, and of mem­bers of the congregation of the Blue Hills Baptist Church, of Hartford, all in the State of Connecticut, favoring the partici­pation of the United States in the Permanent Court of Inter­national .Justice, which were referred to the Committee on l!'oreign Relations.

l\lr. ROBINSON of Arkansas presented a resolution adopted by students of Henderson-Brown College, of Arkadelphia, Ark., favoring the partidpation of the United States in the Permanent Court of International Justice, which was referred to the Committee on Foreign Relations.

He also presented a resolution adopted by the Arkansas De­partment of the American Legion, fayoring the passage of legislation establishing a military air service . eparate and independent from the Army and Navy, which was referred to the Committee on 1\Iilitary Affairs.

He also presented a resolution ado[lted by the Arkansas De­partment of the American Legion, faT"oring the passage of legislation providing for universal draft and training, and also the draft of capital and material in war, whick was refened to the Committee on Military Affairs.

990 CONGRESSIONAL RECORD-SENATE DECEl\IBER 17 .

lie also presented n letter and brief in the nature of a petition from F. H. l\litcheU, of Wa<.::hington, D. C., praying for the passage of legislation amending the war minerals re­lief act, which was referreu to the Committee on Mines and Mining.

He also presented a petition of the Drekolins-.A.Tythistos Shipbuilding Co., of New York, N. Y., praying for an investi­~ation by a committee of experts, before whom demonstra­tions may be given by means of a working model, of the prac­ticability of an inTention known as the "ATythistos," being a deTice to preTent ships from sinking, which was referred to the Commiftee on Naval Affairs.

He also pre:-;ented the }Jetition of 1\fark L. Jacobs, of Vista Height·, Hot Springs, Ark., praying for the passage of legisla­tion to 1Jlace retired enlisted men, who were called to active serdee and commissioned during the Worl<l War, and who were again retired after the war on pay and allowances of warrant officers, under the act of June 4, 1920, in the same status as though the:r had heen retired from active service on . July 1, 1922, which was referred to the Committee on Military .Affair .

He also pre~ented n re olntion adopted by Little Rock (Ark.) l\Iailers Union, No. 64, favoring the pa. sage of legislation to reduce the postal rates which became effectiTe in April, 1925, on newspaper , magazines, and other postal matter, which was ref~Ted to the Committee on Po~t Offices and Post Roads.

He also pre ented a re ·olution adopted by the Arkansas Department of the American Legion, praying for the passage of legislation to e ~tablish a United State Veterans' Bureau g-eneral hospital at Hot Springs National Park, Ark., which wa" referred to the Committee on Finance.

Mr. PHIPPS presented petitions and telegrams and papers in the nature of petitions from L. Ward Bannister, chairman of an organized committee and sundry other citizens of Denver and Colorado; the Denver Chamber of Commerce ; f'undry citizen ~ and organizations of Colorado Springs ; the legislative council of the Colorado Federation of Women's Club·; the Colorado Education Association; The Saguache Woman' -. Club, of Saguache; the Denver section, Council of Jewish Women; the Current Events Club, of Fort Lupton; the congregation of the First Baptist Church of Greeley; the Korth Side Woman's Club, of Denver; the Woman's Feder­ated Club of Fountain Yalley; the Woman's Club of Colorado Springs; llis. Ruth H. Spray, . uperintcndent of peace and arbitration of the Colorado Woman's Christian Temperance Union ; the brotherhood class of the City Park Baptist Church, of DenTer: the bonrd of director._ of the Woman's Club of DenTer; members of the Denver quarterly meeting of the Society of Friends; the DenTer Association of Congregational Churehe ; the Republican rederation of Colorado Women, of DenTer; the Lamar Busines and Profcs~ional Women's Club, of Lamar; the Windsor Community Club, of Windsor; the Rocky Ford Bm.ine~s and Professional ·women's Club, of Rocky Ford; the faculty and student body of Colorado Col· lege; the ._,oeiety of Colorado Pioneers; the board of directors of the Young Women's Christian Assodation, of Denver; the Lions Club, of Boulder; and sundry citizens of Prowers County, all in the State of Colorado, praying for the participation of the rnited States in the Permanent Court of International Justi<'e, which were referred to the Committee on Foreign Uclations.

He also pre~ented the petition of the League of Nations Nonpartisan As::.ociation (Inc.), of New York, N. Y., praying for the participation of the United States in the Permanent Court of International Justice, whi<:h was refelTecl to the Committee on Foreign Relations.

He al o presented a re-'olntion adopted by members of the Church of the Brethren, of Haxtun, Colo., favoring the estab· lishment of national peac·e day, which was referred to the Committee on Foreign Relations.

He also presented resolutions adopted by the Pueblo district conference of the Methouist Episcopal Church, in the State o:t Colorado, opposing every policy of the Government of a mill· taristic nature and favoring the outlawry of war, which were referred to the Committee on Foreign Relations.

He al o presented a resolution adopted at a regular meet· ing of the legislative council of the Colorado Federation of Women's Clubs, favoring the making of an appropriation of $98,396 for the venereal di eases division of the Public Health Service, which was referred to the Committee on Appro­priations.

He al o pre. ented the following joint resolution of the Leg­islature of the State of Colorado, which was referred to the Committee on Foreign Relations:

Senate Joint Resolution 11 (by Senators Toll, Warren, Dannister, Elliott, Fairfield, Hunter, McFadeean, Coltman, and W. W. King, and Messrs. Mobley, Tempel, Bigelow, Johnson, and Moffatt) concerning the Permanent Court of International Justice

Whereas the people of the United States, by a large majority voto. have indorsed a platform advocating the participation of the United States ~n the Permanent Court of International Justice, and have elected a President who has declared for such participation; and

Wher·eas President Coolidge has defined peace as a reign of law, and ha expressed his approY"al of the participation of the nited States in the Permanent Court of International Justice as a step in the ad­vancement of world peace: Therefore be it

Resolved. by tlle Senate of the Twenty-fifth Ge'llet·az Assembly of tl!e State of Colot'(ldo (the House of Repn~senta.tives concurring)-

!. This legislature commend~ and indorses the position of Pre ·ident Coolidge in supporting this policy and in advocating the fulfillment of the pledge of the platform upon which he was elected, which provides that the United States shall participate in the Permanent Court of International Justice, subject to the so-called Harding-Hughes terms .

2. The Senate of the United States is hereby urged to act promptly and favorably upon the proposal for American a<lherence to the Per· manent Court of International Justice.

3. One copy of this resolution shall oo forwarded by the clerk of the senate to the President of the United States, one to Senatol' WILLIAM E. BORAH, chairman of the Foreign Relations Committee of the United States Senate, and one to each Member of Congress from Colorado.

REPORT OF THE DISTRICT COMMITTEE

Mr. CAPPER, from the Committee on the District of Colum­bia, to which was referred the joint resolution ( S. J. Res. 28) to declare Saturday, December 26, 1925, a legal holiday in the District of Columbia, reported it without amendment and submitted a report (No. 4) thereon.

BILLS .AND .A JOINT RESOLUTION INTRODUCED

Bills and a joint resolution were introduced, read the first time, and, by unanimous consent, the econd time, and re­ferred as follows :

By Mr. McKINLEY: A bill ( S. 1770) providing for the erection of a public build­

ing at Spring Valley, Ill.; to the Committee on Public Buildings and Grotmds.

A bill ( S. 1771) for the relief of Ben D. Showalter ; and A bill (S. 1772) for the relief of Francis J. Young; to the

Committee on Claims. A bill (S. 1773) granting an increase of pension to August

Bell (with an accompanying paper) ; A bill (S. 1774) granting a pension to George W. Wolf (with

accompanying papers) ; A bill (S: 1775) granting a pension to Christopher Smith

(with accompanying papers) ; and A bill (S. 1776) granting an increase of pension to John W.

Ferris (with accompanying papers); to the Committee on Pensions.

By Mr. ERNST : A bill (S. 1777) granting an increase of pension to Mar­

garet M. Baxter; to the Committee on Pensions. By Mr. l\IcNARY: A bill ( S. 1778) granting a pension to William Bahr; to the

Committee on Pensions. By Mr. STANFIELD: A bill (S. 1779) granting the consent of Congress to the

States of Oregon and Idaho to consti·uct, maintain, and oper­ate a bridge and approaches across the Snake River at a point known as Ballards Landing; to the Committee on Com­merce.

A bill ( S. 1780) to authorize the sale of all or part of the old Federal building and site, and to acquire a new site and construct a new building in the city of Portland, Oreg. ; to the Committee on Public Buildings and Grounds.

By Mr. GREENE: A bill ( S. 1781) granting an increase of pension to Mary A.

Clarke ; to the CoiDJD.ittee on Pensions. By .Mr. PEPPER: A bill ( S. 1782) to amend an act entitled "An act to provide

for the consolidation of national banking associations," ap­proved November 7, 1918; to amend section 5136 as amended, section 5137, section 6138 as amended, section 5142, section 6150, section 5155, section 5190, section 5200 as amended, sec­tion 5202 as amended, section 5211 as amendeu, of the Re...-ised Statutes of the United States; and to amend section 9, section 13, section 22, and section 2-! of the Federal reserve act, and for other purposes; to the Committee on Banking and Currency.

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1925 CONGRESSIONAL RECOR.D-SEN ATE 991 .

A bill ( S. 1783) granting an increase of pension to Antoinette A. Darnell;

A bill ( S. 1784) granting an increase of pension to George Rexford ; and

A bill (S. 1785) granting a pension to :Madeliene Brokaw; to the Committee on Pensions.

By :Mr. WADSWORTH: A bill ( S. 1786) to equalize the pay of retired officers of the

Army, 1\avy, Marine Corps, Coast Guard, Coast and Geodetic Sur\ey, and Public Health Senice; to the Committee on Mili­tary Affairs.

A bill ( S. 1787) for the return of $5,000 to the New Amster­dam Casualty Co. ; and

A bill ( S. 1788) for the relief of Gertrude Lustig ; to the Committee on Claims.

A bill ( S. 1789) granting an increase of pension to Virginia F. Stickney; and

A bill (S. 1790) granting an increase of pension to Eugene Lynch ; to the Committee on Pensions.

By Mr. HALE: A bill ( S. 179'1) for the relief of the State of !\Iaine (with

accompanying papers) ; to the Committee on Claims. By .ir. COPELAl\"'D: A bill ( S. 1792) for the relief of Chris A. Chulufas, William

Alexander, Frank M. Clark, George V. Welch, Grant W. New­ton, Wm. T. Hughes, Nellie L. Tandy, Lucy Y. Nelson, Frank A Gummer, Charles E. Mulliken, Leo M. Rusk, Fred Falken­burg, Meary E. Kelly, 'Vm. C. Hall, Rufus L. Stewart, Hugo H. Ahlff, Paul J. Linster, Ruida Daniel, Faye F: 1.\litchell, Dollie lliiler, Alfred Anderson, Gusta\us U. Rhoden, Marie L. Dumuauld, estate of Fred Moody (deceased) ; and

A bill ( S. 1793) for the relief of William J. Grea\es; to the Committee on Claims.

By Mr. BRUCE: A bill (S. 1794) to extend the benefits of the employers'

liability act of September 7, 1916, to Gladys L. Brown, a former employee of the Bureau of Engraving and Printing, Washing­ton, D. C.; to the Committee on Claims.

By Mr. HEFLIN: A bill (S. 1795) to provide for the prevention of duplica­

tion in reporting the number of bales of cotton on hand at the manufacturing establishments in the United States;

A bill ( S. 1796) to provide a method for gathering and transmitting reports of cotton ginned and other reports re­garding cotton;

A bill ( S. 1797) to proYide for monthly estimates of the numoer of bales '<>f cotton that \Till be consumed in the United States and the number that wlll be exported; and

A bill ( S. 1798) to provide for the collection of corr~t and reliable information on cotton acreage; to the Committee on Agriculture and Forestry.

By 1\Ir. CAPPER: A bill (S. 1799) to enable persons in the United States to

engage in cooperative purchasing, for importation - into the United States of raw commodities, which are produced prin­cipally in foreign countries ; to the Committee on Commerce.

By M1·. SHORTRIDGE: A bill ( S. 1800) to provide for cooperation with the seYeral

States in the prevention and conh·ol of drug addiction, and the care, treatment, and rehabilitation of drug addicts, and for other purposes ; to the Committee on Finance.

By Mr. OVERMAN: A bill ( S. 1801) granting a pension to Sallie Radford; to

the Committee on Pensions. By Mr. ROBINSON of Arkansas: A bill (S. 1802) to amend the act approved March 4, 192.3,

entitled "An act to continue the improvement of the Missis­sippi RiYer and for the control of its floods " {Public, No. 528, 67th Cong.) ; to the Committee on Commerce.

By Mr. McKELLAR: A bill (S. 1803) for the relief of Walter W. Price; to the

Committee on Claims. A bill ( S. 1804) for the purchase of a post-office site and the

erection thereon of a suitable public building at Dickson, Tenn.; to the Committee on Public Buildings and Grounds.

A bill (S. 1805) authorizing the acquisition of land and suit­ably marking the site of the battle of F1·anklin, Tenn.; to the Committee on Military Affairs.

By :Mr. LENROOT: A bill ( S. 1806) granting a pension to Lee A. Scalf ; to the

Committee on Pensions. By l\Ir. McKINLEY: A. bill (S. 1807) granting the consent of Congress to the

State of Illinois ·to construct, maintain, and operate a bridge and approaches thereto across the Fox River in the county

of McHenry, State of Illinois, in section 26. township 45 north, range 8 east, of the third principal meridian ;

A bill ( S. 1808) granting the consent of Congress to the State of Illinois to construct, maintain. and operate a bridge and approaches thereto across the Fox River in the county of McHenry, State of Illinois, in section 18, township 43 north, range 9 east, of the third principal meridian ;

A bill ( S. 1809) granting the consent of Congress to the State of Illinois and the State of Indiana to construct, main­tain, and operate a bridge and approache thereto across the Wabash River on the State line between Illinois and Indiana, in section 21, township 3 north, range 10 west, of the second principal meridian;

A bill ( S. 1810) granting the consent of Congress to the State of Illinois to construct, maintain. and operate a bridge and approaches thereto across tbe Fox Ri\er in the county of La Salle, State of Illinois, in section 1, township 33 north, range 3 east, of the third principal meridian ; and

A bill ( S. 1811) granting the consent of Congress to the State of Illinois to construct, maintain. and operate a bridge and approaches thereto across the Fox River, in the county of Kendall, State of Illinois, in section 32, township 37 north, range 7 east, of the third principal meridian ; to the Committee on Commerce.

By Mr. PEPPER: A joint resolution ( S. J. Res. 32) authorizing the erection

of a flagstaff at Fort Sumter, and for other purposes ; to the Committee on the Library.

AMEXD:MENT TO COTTO~ CROP REPORT BILL

Mr. HARRIS submitted an amendment intended to be pro­posed by him to the bill ( S. 956) to provide for the issuance of cotton-crop reports and ginning statistics. in order to prevent speculation in cotton and fluctuations in the price thereof, anrl for other purposes, which was referred to the Committee on Agriculture and Forestry and ordered to be printed.

STRE~GTH AND COST OF THE NATIOXAL GUARD

Mr. McKELLAR. Mr. President, I send to the desk a resolu­tion for which I ask immediate consideration. The resolution seeks information from the War Department. I ask that it may be read.

The PRESIDING OFFICER (Mr. GLASS in the chair). Tll0 clerk will read the resolution.

The Chief Clerk read the resolution ( S. Ile.s. 94), as follows: Resol-retl, That the Secretary of War be, and is hereby, directed to

report to the Senate at as early date as may be practicable t11e fol­lowing information:

First. The total number of the National Guard, and how divided in the various military branches, namely, how many in the Infantry, Cavalry, Air Service, and other serTices.

Second. How the National Guard troops are allotted with respect to States, namely, the number of National Guard soldiers, enlisted m~'u

and officers, in each State. Thira. What States are maintaining their allotments in whole or in

part. Fourth. The several amounts of money expended in each State f<>r

its National Guard. Fifth. How many air squadron· in the National Guard, and where

located, and the numerical strength of each, officers and men. Sixth. The total amount of money authorized by law for the National

Guard during the year closing June 30, 19~5, and the total amount spent during that year.

Seventh. The total amount of money spent for the Air Service in the National Guard for the rear ending June 30, 1925, and the amount contemplated for the National Guard Air Service during the present fiscal year.

The PRESIDING OFFICER. The Senator from Tennessee asks unanimous consent for the present consideration of the resolution just read. Is there objection? . · Mr. CURTIS. :Mr. President, I want to ask the Senator from Tennessee a question. Has the Senator included in th resolution the amendment suggested by the chairman of the Committee on Military Affairs (Mr. ''ADS WORTH]?

1\lr. McKELLAR. I have. 1\Ir. CURTIS. Then I hav-e no objection to it. The resolution was considered by unanimous consent and

agreed to. USE OF WHISKY, ETC., BY llEPRESEXTA.TH'ES OF FOREIGN COU~TUIE3

l\Ir. BLE.ASE. Mr. President, I submit a resolution and ask unanimous consent for its immediate com~ideration.

The PRESIDING OFFICER. The clerk \\ill read the reso­lution.

992 CONGR.ESSION.A.L RECORD- SENATE DECE~ffiER 17

The Chief Clerk rE:'ad Lhe resolution ( S. Res. 93), as foHows : Resolrcd, That the Assistant Secretary of the Treasury, Ron. Lincoln

C. Andrews, who is in charge of the enforcement of the Volstead Act, uc requested to investigate immediately and inform the Senate whether Ot' not whisky, wine, or beer has ~n served by any of the foreign ambassaclors, ministers, consuls, or other agents of any other countries in \\'a hington, D. C., since the passage of the Volstead Act; and if it is now being done; and if so, with the appro-val of the President of the United States, or any other official who~e duty it is to enforce the ::;aid law; a11d, further, if it is true that the recent representatives of the Italian delegation to this country in reference to the settlement of it;· debt to the United States were permitted to bring into this coun­try ehampagne, whh;ky and beer, or either of them ; and if so, by whose permission ; and if they did, why were they not promptly arrested, as American citizens would ha-ve been?

Second. That a similar request be made of Hon. James E. Jones, Director of Prohibition.

Third. That a ..,imilar request be made of the Secretary of the Treasury.

:Mr. CURTIS. I ask that the resolution may go over under the rule.

The VICE PRESIDE~TT. The resolution will go over under the rule.

1\Ir. BLEASE. ·l\Ir. Pre ident, I would like to ask the Senator from Kansas if he objects to the resolution?

l\Ir. CURTIS. I merely ask that it may go over under the rule until I can consider it.

:iUr. BLEASE. I would like to know. I inh·oduced the reso­lution for a purpose, and I want to know if the Senator ob­ject'S; and if there is objection, from which party that objec­tion comes.

The YICE PRESIDENT. The immediate consideration of the resolution is objected to, and the resolution goes over for a day.

Mr. BLEASE. The Senator has not objected, I submit. Ilis request is not an objection under the rule.

The VICE PRESIDENT. Does the Senator from Kansas object to the present con ideration of the resolution?

1\Ir. CURTIS. I asked that it might go over under the rule. That is all that is required.

The VICE PRESIDENT. The resolution goes over under the rule.

BOARD OF REGENTS, SMITHSONIAN INSTITUTION

Mr. FESS. Mr. Pre .. Jdent, I ask unanimous consent for the immediate consideration of the joint resolution (S. J. Res. 20) reported back 9Y me yesterday from the Committee on the Library, without amendment, providing for the filling of a va­cancy on the Board of Regents of the Smithsonian Institution of the class other than Members of Congre s.

The VICE PRESIDENT. Is there objection to the present consideration of the joint resolution?

Mr. KING. For information, I would like to ask the Senator whosE' appointment this is. Have the present members of the board . uggested the name of Mr. Morrow?

Mr. FESS. Yes. Mr. KING. I have no objection to the passage of the joint

resolution. There being no objection, the joint resolution was consid­

ered as in Committee of the Whole and wa read, as follows : Resolved, etc., That the vacancy in the Board of Regents of the

Smithsonian Institution of the class other than Members o! Congress, which now exists be filed by the appointment of Dwight W. Morrow, of New York.

The joint resolution was reported to the Senate without amendment, ordered to be engrossed for a third reading, read the third time, and passed.

THE JOUR~AL

Mr. CURTIS. I a k unanimous consent that the Journal of yesterday's proceedings may stand approved without reading.

The YICE PRESIDENT. Is there objection to the request of the Senator from Kansas? Without objection the Journal will stand approved.

GBOWL G SENTIME T FOR DEVELOPMENT OF WATERWAYS

Mr. RANSDELL. Mr. President, I wish to addre s the Sen­ate for a few moments in order to call the attention of this body and the country to the very rapid growth of sentiment throughout the Nation in favor of river and harbor legislation. I shall speak briefly, and during the course of my remarks shall ask to have printed in the RECORD some strong waterway utterances delivered by men very high in the councils of the dominant party.

Mr. President, in the transportation act of 1920 Congress made this broad declaration of policy :

It is hereby declared to be the policy of Congress to promote, en­courage, and develop water transportation, service, and facilities in connection with tlle commerce of the L'nited States, and to foster aml presene in full vigor both rail and water transportation.

This paragraph may well be called the Magna Charta of interior '""aterways. It lifts water transportation on our ca­na:s, rivers, and lakes to the high level so long enjoyed by railways, and solE:'mnly declare. to all our o:fficiat~ charged with duties in connection with transportation that hereafter water and rail mu. t receive the same treatment, and both mu~ t be preserved in full vigor.

I wish to call attention to the great convention of the Na­tional Rivers and Harbors Congress which was held in the city last week, and adopted far-reaching resolutions on the sub­ject of water transportation that will be forcibly brought before the Senate.

When this organization had its rebirth-and for all practical purpo es its birth-at the old Arlington Hotel in thi city in Janu~y, 1906, nearly 20 year ago, there was very little gen­eral mterest in Federal appropriationR for improving the in­ternal waterways of the Nation. River and harbor bills were enacted at long intervals, usually at lE:'ast two years apart and sometimes more than that, and the appropriations for rivers which competed with railroads were entiTely inade­quate to sE:'Cure beneficial results.

Railroads were then in their heyday; the rivers hatl fallen into almost universal disuse; highways had not been im­proved and motor transportation over roads was in its infancy. Railroads were practically the only transportatiov agents in the interior parts of the Union, though there was a magnificent water-borne commerce then as now on the Great Lakes and the seaboard.

Few public men in that day were bold enough to raise thei~ voices in advocacy of improved waterway and the press of the Nation slurred viciously and continuou ly about the so-called "pork barrel" river and harbor bill-•. The im­pro~ment of harbors received liberal treatment, as they were railroad terminals at which the Nation's powerful railroads discharged and received freight to and from ocean carriers. But when efforts were made to improve canals and river · and establish boat lines in competition with railroads a par imo­nious policy was pur ued.

The National Rivers and Harbors Congress made a gallant fight under exh·emely difficult conditions. From the very first it advocated a broad constructive policy for the irnpro"t"ement of all worthy rivers and harbors that were approved by the Engineer Corps of the Army and whose improvement was justified by the needs of commerce. It stood for an annual ri"t"er and harbor bill carrying at least fifty mlllions a year in tead of biennial bills aggregating very much smaller amotmts. Its voice was raised, not alone in Washington but throughout the Nation, calling in clarion tones to all friends of ~aterways and urging them to do battle for the cause. It was almost as the Yoice of one crying in the wilderness. Yery few heard the call, and harkened to it. But the good fight was kept up persistently and forcibly.

The organization met in annual convention at the Nation's Capital and sent forth its message to the people of America, in. i ·ting that the waterways should be improved, stres ing the fact that water transportation is very much cheaper than that by rail or highway, emphasizing the point that waterways were used by mankind for thousands of years before anyone dreamed of a railroad, and that nearly all the great citie of the world where large bodies of human beings congregate were built on waterways and recelYed the benefits of cheap water transporta tlon.

The work of the National Rivers and Harbors Congre was supplemented by the efforts of many powerful water asso­ciations scattered throughout the Nation, each advocating loeal projects of great importance to thcir sections. Many of these local a ociations covered a wide area, enjoyed a large mem­bership, and carried on a fine educational campaign in aid of improved waterways.

The battle was a long, hard one, anu it seemed for yea1·s that little impression was being made. The World War demon­strated how impossible it was for the railroads to sern' the Nation's need , and but for the general use of improved high­ways which had rapidly sprung into existence and the quid· movement of power-driven vehicles over these highways there JVOUld have been awful congestion and suffering.

It 'Was realized then what a fatal mistake the Nation hncl made in not using its waterways, and people began to see

.·

1925 CONGRESSIONAL RECORD-SENATE 993 how necessary it was to do so. From that time. a gradually growing public sentiment in favor of waterw:ay rmprovement has gained momentum from year to year, until now the coun­try seems ready to demand what the friends of waterways were insisting upon 20 years ago.

At a Missouri River improvement conference held in Kansas City on October 19 last, the extremely able head of the Dep-artment of Commerce, Secretary Hoover, deliver~d a strong address upon waterway improvements and com~It· ted himself unqualifiedly to the necessity of fully impro':ffig and using these great natural channels of transpo.rtation. Mr. Hoover is head . of the department charged w1th the special duty of promoting commerce between the States and with foreign lands. It is the duty of his department. to assist commerce in every possible way, and he emphasiZed correctly in that great speech-and I use the word "great" advisedly; I may even call it a waterway classic-the neces­sity of thoroughly improving ·and utilizing our three methods of transportation-highways, railways, and waterways. He made a powerful plea in favor of cheap transportation for the vast farming region of the Middle West, and insisted that only by properly improved waterways can the best re­sults be obtained.

Mr. President I ask that the speech of Secretary Hoover to which I hav~ ju§!t referred may be printed in the RECORD, in full, as a part of my remarks.

The VICE PRESIDENT. Is the-re objection? If not, it is so ordered.

The speech referred to is as follows : THE NEED OF INLAND WATEllWAYS FOR AGRICULTURE A..."'fD INDCSTRY

{An address by Herbert Hoover, Secretary of Commerce, delivered before Missouri River Improvement Conference, Kansas City, Mo., October 19, 1925) I have been invited by your agricultural and civic organizations to

address you on the de-velopment of our inland waterways. I am glad to do so, for the subject Is one in which I am deeply interested and it is one in which the Department of Commerce is enjoined in its organic act to assist and promote. I join with your advocacy of the improvement of these great rivers. I should like, however, to empha· lze that our problem is not only one of a great and important Missouri

segment of these rivers, but it is an even greater question, indeed one of supreme national importance and it is upon t.be more inclusive i ·sue that I should like to address you to-day.

If we were to make a survey of the many great problems of progress that lie before us, the development of the wl1ole of our internal water­ways would stand at the forefront. And we have reached an entirely new era in this development. "\\e need to take a reinventory of these resources in the light of new economic necessities, new "facts, and the older forces that have been slowly crystallizing over recent years. And from them we ha-.e need to adopt an entirely new and enlarged conception of these questions.

A survey of the forces with which we have to deal to-day will assure us that if we guide our national policies rightly this decade will mark a rebirth of our inland waterways.

But their planning and construction will test our vision and our statesmanship, for we must consider their development not alone in the light of the needs of to-day but of those beyond our time and our generation.

The new setting, the new departure, in which we find ourselves develops from many caus~s.

Of these the most vital are the competitive difficulties in which our Middle West agriculture has been thrown by the shifting economic cur­rents resulting from the war, and a great measure of permanent · relief can be given to it through cheaper transportation. But there are in~­

volved in this question also other great national problems. There is high need of better distribution of our population in relief of the increasing congestion &f our seaboard States. We must plan and pro­vide greatly increased transportation facilities for the 40,000,000 or added population that we must serve within the next quarter of n cen­tury. And if our conceptions be broad enough and big enough we shall find in our inland waterways a measure of forward action to the solu­tion of all these problems. Such solutions are now made possible by the development in the art of engineering our waterway improvement and the great improvement in navigation craft, and by the recovered economic strength of our country, which now permits us unhesitatingly to compass any vital reproductive enterprise.

But first and foremost, we must en>isage our inland waterways as ~reat unified transportation systems, not as isolated units. We must conceive and attack their construction as a connected whole, not as a collection of disconnected lake and river projects, which has been our habit in the past. The success and usefulness of any transportation system, whether rail or water or highway, will depend upon a broad interconnection of numbers of great cities and their agricultural and

LXYII--63

industrial hinterlands not only between themselves, but with the sea­board. Kor are the economic prolJlems of the Midille West, such a our agricultural problems, limited to the valley of one river or tributary. They are vivid in ev<:'ry State and we must march to their relief as a whole, with a broad TI.sion of their needs and the full utilization of our resources.

The topography of our country, the present and future necessities of our population, the development we bave already accomplished, and above all the goodness of Providence in our natural water channels clearly define for us two uch major inland waterways systems~the Mississippi system and the Great Lakes system. The completion of each of these systems within itself and their complementary completion with each other are necessary to-day in the relief of our agriculture through the cheaper tnnsportation which tbey will atiord and in the solution of many other national problems.

THE 1HSSISSIPPI SYSTE~I

The Mississippi system and its tributaries form the great serie of north and south and east and west arteries through 18 of our Statrs. They are declared by our engineers to be fea~ible of improvement for modern water transportation for a total of !>,000 miles. There lies within these 9,000 miles two of the great trade routes of our l\'ation. Oll.e o! them north to south across the enjJ.re Nation, the other east and west across nearly half the continent. ~'herefore, I visualize a great trunk waterway 1,500 miles in length up the Mississippi and Illinois from New Orleans to Chic.:'lgo, and extending thence by the lakes to Duluth. I visualize an east and west waterway from above Pittsburgh to Kansas City, 1,600 miles along the Allegheny, the Ohio, the ~Ii . is­sippi, and the 1\Iissouri. 'l'hese great trunks can ultimately be decpeneu to 9 feet, although your sector from St. Louis to Kansas City will need first be established at 6 feet of depth~ And in addition to theM main stems of 3,100 miles we need diligently complete the improvement to lesser but workable depths the 6,000 miles of tributary waterways which lie in the Tenn~:> ee, the Arkansns, the upper Missouri, the upper Mio;sissippi, the Allegheny, the intercoastal canals, and tlle other tribu­taries. We will then have a transportation system of 9,000 miles of trunk lines and feeders complete and unified within itself.

'l'his transportation system will greatly serve the vast heart of American agriculture. It will provide tor cheaper transportation. of agricultnral and other bulk commodities from a great hinterland of States to the sea. It will place great commer·cial and industrial towns with upwards of 7,000,000 of people in the cheapest of com­munication with each other and with the agriculture of many States. In this conception your project for the further improvement of the Missouri between St. Louis and Kansas City has a most importantt ~tting. Of like urgent importance is the completed improvement of the Ohio from Cincinnati to Cairo and of the Mississippi and Illinois from Cairo to Chicago. r ~or is this any day dream. We aim, merely, to restore what once exi ted. In the days of the glory of Mississippi commerce, the river was one vast system of main channel and tri~utaries. It was the artery of the great valley. VesselE from the upper reaches of the Ohio voyaged uninteuuptedly down to New Orleans. Louisville is as old a port of entry as New York or Philadelphi!J.. The first customhouse returns to the Dnited States Trea ury came from Palmyra, Tenn., on the Cumberland River. St. Louis and Kan as City were great points of departure in tbe inva ion of the West. Westem rivers alone once carried a tonnage larger than was then carried along the entire Ameri­can seaboard.

Then came the vast improvement in transportation through the rail­ways, and the rfvers fell Into disuse, because their 3-foot craft could not compete with the iron horse. But, with deepened channeis and improved equipment that we now have made feasible, our waterways can be recreated to again serve the Nation.

THE SYSTEM TWO-THIRDS COMPLETE

Our engineers advise me that of the 3,100 miles of cross-shaped main trunk system, with its four points resting on Pittsbmgh, Cbi­eago, Kansas City, and New Orleans, there are segment of less than 1,100 miles uncompleted. They advise me that of the 6,000 miles of feasiblc> tributaries there are segments of only 1,000 miles yet to be improved. But, as the system lies to-day, many vital links are broken. Yet two-thirds of the job is already done-it awaits completion.

THE COST OF CO~PLETIO~

Our engineers assure me that we could complete the main trunk lines for about 65 m!llions, the urgent work on the tributaries could be accomplished for another 35 millJons, or a total of about 100 millions of dollars for this renewed, vitalized trap.sportation system.

THE RE.o\.SO~S WHY WATERWAY TRAFFIC HA.S BECOUE CHJ1APER THAN RAIL

If we give study to the situation of 1\Iid-West agriculture, we quickly discover that the necessary increase in rail rates imposed by shift in economic values bas adve1·sely affected the farmer 1n his com-

994 CONGR.ESSION AL RECORD-SEN ATE DECEl\IBER 17

petition against the lower standards of living and cheaper costs abroad. It has no less shifted the relations of indu try and commerce in these gt·eat valleys.

There at·e many fot·ces and facts, which now cumulate to render the transportation of many farm products cheaper by watet• than by rail and thus afford relief and stimulus to both agriculture and in­dustry. Among them we would find that, while the advance in cost of labor and materials has necessitated great increases in our railway rates. yet the increased costs are less in the case of water-borne traffic tban in rail tnufic, because labor and material are employed in less ratio to the tonnage carried.

I.MPRO\ED COXSTRUCTIO~ OF WATERWAYS

But other factors have contributed even more importantly to assure reduction in the cost of water transportation to less than by rail. We have proved our abillty to construct deeper channels for larger craft than of old. We have passed through the pioneer stage of engineering experiment in the construction of waterways. Our engineers have attained the highest of skill that exists in the world. We apply new labor-saving devices to the excavation of large quantities of materials and to the replacement of great works. We have developed new methods and gt·eat e<'onomies in constructlon of dams and canals. No experience in the outside world could ft)rnish us with a guide to proj­ects of the magnitude which we most undertake. But we have de­veloped that experience and skill by which we now assuredly control the floods, equalize the stream flow, curb the currents and channels, build great dams and reservoirs. We can proceed with a certainty of step which has not hitherto been possible. To-day we are sure of our results.

IMPROYE~fENTS ON CRAFT

With the deepening of channels there has been a coordinate improve­ment in craft. Great barges, specialized to differt'nt types of traffic, convey ten times the volume of their shallow predecessors. Diesel engines, improved steam appliances, and better loading and discharging dt'Yices have all advanced us a long distance from the old canal boats and the packet boat. But the fundanrental for use of these appliances is that we shall have sufficient and rt'liable depths of water to make tlwm possible of use. Without such depths our rivers are not water­way::;, they are drainage channels.

COMPARATIIE COST OF WATER-BORXE WHEAT

And all these forces and inventions have restort'd our water carriage to the cheapest of all forms of transportation for many types of goods. Broadly, if we have back loading, 1.000 bushels of wheat can be trans­ported 1,000 miles on the Great Lakes or on the sea for $20 to $30; it can be uone on a modern-equipped Mississippi barge for $GO to $70, and it costs by rail from $130 to 200. These estimates are not based upon hypothetical calculations but on the actual going freight rates. The indirect benefits of the cheaper water transportation to the former are of far wider importance than the savings on individual shipments might indicate. In those commodities where we are dependent upon exports for a market (and upon some domestic markets) the price level wm be determined at the point where the world streams or that commodity join together in the great markets. Thus the price of wheat is made at LiYerpool, and anything that we can save on trans­portation to Li'lerpool is in the long run that much in addition to the farmer's price. And it is not an addition solely to the actual goods which he may have shipped to that market, but it lifts the price level in our domestic market on the whole commodity in this same ratio. Thus, if we can save from 5 to 7 cents a bushel additional by t he completion of the Mississippi and Great Lakes s~rstems, we will have added a substantial amount to the income of every fru:mer in the Middle West.

CO:HPLETION OF WHOLE MISSISSIPPI SYSTEY !'\ECESS.\llY FOR LOWEST

lUTES

But there is one vital factor which must be made effective before these services can bring their t·esults both in rates and in sen·ice to an illl'portant part of our Middle We t agriculture and industry. That is, we must make these waterways into a full and comrpleted transportation systt>m by joining up their brok('n links.

I can not insi t too strongly upon the necessity of this full comple­tlon of the whole system, for enry part bears a relation to every other part, no matter how remote. You in the Missouri Valley are lntt'rested in the completion of the great route up the Ohio to Pitts­burgh, for you will find large traffic both ea t and west over this great

i

trade route. fYou a1·e interested in the improvement of every tributary, for it is in some degree a market or a source of supplies to you. For a less dil·ect reason you are al o interested in even the completion of the route from St. Louis to Chicago, for we mm~t not underestimate the great factor in water transport of the b.'llanced load. Without this balance ~·our transportntion cost-s on agricultural produce will be doubled from St. Louis and New Orleans. The completion of the seg­ment from St. Louis to Chicago, for instance, will increase the back load of South American imports up the Mississippi and directly affect

your costs of transportation downward from St. Louis to New Orleans. In other words, we can have little hope for st'curing the cheapest costs for our agricultural produce and your industri£>s until we have com­plett'd this transpot·tation system with its larger population and more diversified industry in reach. ~urthermore, we must have the com­·plf:>ted system in order to serur~ that volume of tonnage and variety of craft which is necessary to most economically cs.rrl' the varied products and to care for the seasonal ebb and flow of goods.

There is another reason why we must have a. completed Mississippi system if we would gain the cheapest transportation for our agricultur and industry. The development of our waterways obviously is of direct assistance to those producers immediately along the wat£>rside. and incidentally the improvement in our highway transport has enlarged this zone of direct water traffic. When we were dependent on thP horse and wagon for collection and distribution from the water, the region served was limited to a belt perhaps 5 or 10 miles wide. But with the new highways and the motor truck this belt bas been witlened many miles and has increased the populatlon which can benefit by direct transportatlon.

But our object is of wider importance than the solely waterside transport. We aim to carry the benefits of cheaper transportation back into the hinterland, where goods must be gathered and distributed by rail and in which the rivers will form a connecting link of cheaper tt·ansportatlon, but before this can be effective the waterway link must be long enough to overcome the extra cost of load~ng from cars; that is, the cheaper rates of the water section must more than offset the cost of additional loading and reloading. And this only becomes possible when there are long water hauls. And we shall not have arrived 'at these long stretches of water in full measure until we have completed the whole Mississippi system of interconnected segments.

FUTCRE NEED OF MORE TRA~SPORTATlO~

I have said that one of the reasons which should impel us to now \lgorously undertake the completion of our Inland waterways is tht> nect'!'lsity to proviue more transportation facilities for the future of our country as a whole. Already om· great railway gateways and ter­minals nre showing signs of congestion. Our traffic in 25 years has grown from 114,000,000,000 ton-miles to 338,000,000,000 ton-miles, or it has nearly tripled. At a much less rate of increase we must within another quarter of a century provide for expanRion in facilities to handle at least double what we are moving to-day. Our present rail­ways will obviously be inadequate to meet that tnsk. The expansion of railway terminals to accommodate the growth of the next quarter of a centut·y will be accomplished at enormously increasing costs be­cause of the increase of land values in our cities, and the waterways, because they furnish continuous terminals spr£>ad along tbc whole water _ fronts of our towns, go far to solve the proiJlem of increased terminals and .crowded streets.

Furthermore, it we would provide for the 40,000,000 of increast!tl population that this quarter of a century will IJring us, we must either build more trunk line of railways in the States which can be sened by these waterway systems or we must improve our waterways to tat{P. part of the burdt'n. I believe any study of the comparative caplta1 outlay will show that to duplicate this completed ~ississlppi system by rails would cost three times as much as to complete the waterway::.. And they will move many goods more cheaply. Nor is this in anywiac a statement that our railways must not be under constant develop­m£>nt, for they obviously reach scores of millions of people that nrc untouched by the waterways, and they perform many senices that our waterways can not undertake. And I may add that their improvement can only be accomplished by safeguarding to them such earnings as will enable them to pr,ovide increasing facilities and increasing P.ffi­ciency.

BETTER DlSTlliBUTIO~ OF POPL'LATIO~

But there is another great problem in our national de,·elopmcnt for which we can find at least some relief if we would complete our great inland waterways systems. Industry in its et;orts to find loca tJon where there is that balance between transportation of raw materials and distribution of the finished product together with the availability of labor is greatly congested in our Atlantic seaboard States. One or our great social problems to-day is this overgrowth of cities. Through the improvement of our interior waterways it will be possible to better distribute industry and population, because tht'se waterways will makP. it advantag£>ous to IDO\'e much production nt'arer to the area of con­sumption. And by bringing industry nearer to the farmer we wtll pro\ide a clo er market to agriculture; it will stimulate a diversifica· tion of his production and create a greater diversification of occupation between the agriculture and indush·y to the mutual benefit of bot.h.

CRITICIS::'-1 OF THE W A'l'Ell.W AY PROJECTS

should like to digress for a moment to give some answl..'r to those who oppose the further d('velopment of our inland waterwa~· . They have claimed that our past experimentation, even where we have com­pleted development, bas demonstrated the purposelt'ssness of tlle~c

efforts. They point to some segments of these waterways which carry

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1925 CO~GRESSIONAL RECORD-SENATE 995

but a microscopic portion of the transportation e>en in their regions. It Is a favorite assertion, for instance, that the 1,100-mile trunk line from St. Louis to New Orleans has proved a failure after deepening it to 9 feet, because it carries only 16 per cent as much traffic as Is carried by the Illinois Central Railway alone. It is, of course, a dirc~t answer that that route is t(}-day carrying traffic for 20 per cent less than the railways can afford to carry it. There is also a further answer. Before we can reap the full benefit of deepened waterways we must give time not only for the creation of modern equipment but for the shift of the grooYes of trade and for the pressure of increasing ti"aftic a~ a whole. But a far more important answer to this general criticism of our inland waterways is that these waterways are not yet completed into real tran portation systems. And they will not be nntH tbe whole of the trunk lines are completed and the tributaries mad~ available to feed them.

I ba>e aid that our proposed Mississippi system upon its trunk line alone has town populations along the bank of over 7,000,000 people. But these towns and their great agricultural hiDterlands are not to-day conneeted. They are separated by the shall~w sec­tions. If we were to work out the mathematical combinations of interconnection we would find that less than 15 per cent of these people now have the full water-borne communication with each other, which is possible in this system. In other words, from an economic point of view, the system is but 15 per cent complete, while from a phy ical point of view it is two-thirds complete.

I can not in&ist too strongly upon the necessity of this full connec­tion and its a.na.logy to integrated railways. If we were to break an important rallway system into segments with intermediate stretches of, say narrow-gauge track at points between Chicago and St. Louis, between Kansas City and New Orleans, between Pittsburgh and St. Loui , and so on, that system would make a very poor showing-yet the Mississippi system is to-day broken into just this sort of segments. Despite all this, if at this moment we add up the total annual ton­nage moving on the 2,000 miles of separate main trunk segments of the proposed Mississippi system, so far as it is completed, and compare it with the Southern Railway of 7,000 miles all connected, we find that th~se waterways segments carry annually 41,000,000 tons, as compared with 45,000,000 tons by this railway. If a waterway sys­tem of stretches and patches can make such a showing as thi!l, we need summon no special courage to complete it.

RELATION OF INCREASED WATERWAYS TO THE RAILWAYS

THE GREAT LAKES SYSTElf

In discussion of our inland waterways I should not omit a reference to the great coordinate part of this problem; that is, the Great Lakes system. Whlle it is of less direet interest to those of you in the Southern Mi sourt Valley, it will, however, form an indirect contribu· tlon to even your economic life and it is of the most vital and direct importance to your neighbors to the north and to the east and to the whole agricultural problem of the Middle West. The Great Lakes are to-day the greatest system of inland water transportation in the world. Their depths bear ships of ocean size. They have de>elop~d a vast :fleet whose traffic is over 23 per cent of the ton-miles of all our railways. They are connected with the sea and the 12-foot E r ie and the 14-foot St. Lawrence Canals. Ocean vessels can not move through these depths. These incomplete links to the sen require that exports and imports shall be reloaded twice and that a part of the journey shall be made in more expensively operated craft. There 1s thus a definite handicap on goods that would move to export and im· port from the Middle West to foreign countries and to the Atlantic seaboard points. All that I have said of the economic effects of {lis­connected or partly connected segments in the Mississippi system applies equally to our Great Lakes system. That the Great Lakes shall be opened to the sea and their ports take a direct part in the ocean trade of the world is absolutely inevitable. It is demanded by 35,000,000 people in the tributary region and can not be resisted.

Our engineers have long since demonstrated that 30-foot canats are feasible from the Lakes to the ocean. There are two possible alternative routes-the St. Lawrence and the Erie Canals. The St. Lawrence is an international route; we can only engage in it wilh the cooperation of Canada. Before any right conclusions can he reached as to which of these routes should be undertaken we must know the attitude of Canada, and we must determine all of the engi­neering and economic factors. Upon my recommendation exhaustive investigation is t(}-day in progress by our Government departn:ents, with a view to determining the facts as to both routes, and we have a national commi sion awaiting any expression from Canada of bP.r views. When we have the facts and conditions in hand we shall thea need hammer out conclusions on the anvil of debate. But 1t is not my ~urpose to take your time discussing these alternative hypothe. es based on a thousand uncertainties. One thing we do know already is that a shipway can be built. And I can ay emphatically that the needs of our farmers, our manufacturers, and, indeed, the whole of the people in 18 of our States adjacent to the Lakes to-day urgently re-

I should like to trespass upon your time further in discussion of quire that we provide an outlet for their deep-sea vessels to the ports the relation of this problem of water transportation and that of rail- of the world. And I may add that what benefits 18 States benefit~ way transportation. Broadly, we are seeking to secure some relief all the States. to midwest agriculture by readjusting its setting in the economic There is a further problem in our Lakes system that demands im­worlu which h.as been up.set through the necessary increase of railway mediate solution, no matter which route we may take to the sea. Both rates from th1s great Mtddle West to the seaboard. It is lm~ossible Canada and ourselves are in urgent need that we regulate the le>els for us to call upon the railways for deep reductions of therr agri- of the Lakes by works at the lower end of Lake Erie. During thP past ) cultural. rates in view of their increased costs of operation. We seek ~ree years the lowered lake levels have greatly handicapped our to provide it by a new form of transportation, and we are confident shipping and our Lake port . This decreased le>el has been due iar that the growth of transportation as a whole will maintain ample ore to diminished rainfall than to the much-blamed Chicago di> i n occupation for the railways. During these many years passed. there er .

0 •

has been an unceasing battle between the proponents of rail and O DELA.:r NEEDED I - COXSTUUCTION OF THE MISSISSIPPI SYSTBM

water-borne traffic. No one can read the debates over the last hnlf On the Mississippi system the e engineering questious are behind us. century without feeling that the dominant argument for improve- We know what we should do. We know tts vast benefits; we know ment of •Jur waterways has. been to club the railways in the matter of it can be accomplished by a comparatively trivial cost compared to rates. On the other side, no one can study the competitive tactics these benefits. We should go to it anu have it completed within the of the railways against the waterways without conviction that at next decade. times they throttled water transportation by reducing railway rates There is one great obstacle in the path of the completion of these below what they themselves could in honesty maintain. Regardless great projeets which is now happily removed. We have been engaged of the merits or demerits of tlle contentions, there is to-day no excuse for the last 12 years in fighting a great wat• and in reconstruction of for continuing this battle. We are faced with a period when both are the damage to economic life that sprang from it. That period of needed. We ha>e also bad much emotion over joint rates, but if we reeonstruction is practically over. ·we have emerged with an economic ha>e a real conneeted system of internal waterway , this problem strength as a nation which enables us to enter upon great undertakings will settle Itself, tor the day will come when the railways themselves which will not only provide for our needs to-day but lay the foundation will be seeking joint rates to meet competition with each other. for progress for the next generation. Despite our lo. s~s, we rejoice

... Tor do we need overstate the importance of water-borne facilities in a national wealth the greatest in our history anu in the history or in relation to our other transportation sy tems--Qur railways and the world. We have learned that expenditm·es on great t•eproductive highways. Let us get into the proper setting. Taking the country works are neither a waste nor a burden upon the community. 'l'hey as a whole the railways and highways must ever bear the major bring a rich harrest in increasing wealth and greater happiness. They b'urden of our internal traffic. And there are many classes of goods tend directly to strengthen the foundations of agriculture a.ud industry. which will always go by rail even parallel with the waterways. But Even from the narrower point of view of taxation, they are an economy, equally wrong are those who do not accord internal waterways a great for it is by such works that we increase the income available to taxa-and increasing future in transportation. tion and thus reduce individual burdens.

And here is an old saying that is true: N'ew transportation facill· IN co~cLOSIO~

ties create business. It is well proved by our new highways. At one I have referred from time to time to the dominating importance of time in our hlstory we practically abandoned the highways and water- these matters to the welfare of our great Middle Wei'!t agiiculture. I ways for railways. The invention of the gas engine has restor"!d can not give too much emphasis to its necessity. As I have said, some our highways and mnltlplied their traffic ten thousand fold. Yet the part of the difficulties of our great Middle West agriculture has ::trisen total >olnme of passengers and goods on our railways has never bet>n from the nece sary increases in freight rates to domestic and foreign so great a. now. In the same way, with greater d~pths and with the markets brought about in our economic adjustments since the war. irnpro>ements in craft, it is possible to restore our waterways. Nor Tl1ese waterways penetrate the heart of American agriculture_ Water­will this jeopardize the prosperity of our railways, as some predict. borne traffic 1s peculiarly adapted to the dominant agricultural prod·

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996 CONGRESSIONAL RECORD-SENATE DECE?\IBER 1 7

ucts of these regions. Our agriculture is based upon higher standards of J1.ving than those of our foreign competitors. If we would maintain these stand:ll'ds, we must omit nothing in the economies we can bring in transportation. EYery cent we can save in transportation to market is an addition to the income of the farmer and an assurance that we can maintain these standards in ngriculture. No one can contemplate the pa~ t and the future of our country "itbout an earnest prayer that we sllall maintain at all times the refreshing force of a strong farm population in our national life. Nor does this problem extend to agri­culture alone. For if we would provide our manufacturers and our workmen with the most economic a sembly of their raw materials, whi<·h they must receive from all parts of the world, and if we would prodde fot· them the cheapest acce ·s to the world for their finished goods, we must also secure to them the cheapest transportation. .

Tile providential pos e. sion of a network of great natural waterways, the adnwce of engineering science which renders feasillle their com· pletiou to the cheapest form of transportation for primary goods, the modet"ate capital outlay t·equit·ed for so reproductive a work, the re­coYer~d economic strength of our Nation places us in a new era in this grf'at project, and it bids that we provide for the increasing traffic of our country; that we set in motion the economic forces that will tend to a IJettPr distribution or our increasing population and the wider tli ret·sification of our indu ·t.Nes, and, above all, that will contribute so gt·t·utly to overcome the difficultit•s of our farmers. Thus only will wJ:lat God has given us become a blessing to every cottage. And God has given to us greater resources in waterways than to any other people of the earth.

l\Ir. RAl"SDELL. Mr. President, a few days later Mr. Davis, Secretary of ·war, deliYered an excellent speech before a con­vention of the l\IissLsippi Yalley Improvement Association at St. Louis on the 23d of November, and he, too, dwelt upon the·nece ·sity of improving and using waterways. l\Ir. Davis emphasized the wisdom of friendly cooperation between rail­ways and waterways instead of competitive rivalry. He in­sisted that the Nation needs all our means of transportation and called attention to the fact that Congre. s ·makes it a duty of the Interstate Commerce Commission to foster and preserve iD full vigor both rail and water transportation. Mr. Davis said that in order to obtain-the gt·eatest good to the greatest number we must utilize our great artel'ial waterways and their feeders, om· coastal streams and onr eanals, as they are completed ; our lakes and our coastal rivers In cooperation with and not opposition to our railroads-

And that-our policy should be coopel'ation, not competition.

1\lr. President, as a waterway man whm;e whole congres­sional life of nearly 27 years has been devoted largely to flood control and waterway improvemeuts to assist nav-igation, I gladly say "Amen " to Mr. Davis's suggestion of cooperation, not competition, between railways and waterways. I hope the rail\Yays will follow the advice of Mr. Davi in this respect, and as they are o much more powerful, so infinitely stronger Uwn the waterways, I can safely promise that the water car­rier will gladly cooperate wlth them on the basis suggested by Secretary Davis-cooperation and not competition.

That speech delivered by Mr. Davis is an excellent one, and I a.-k that it may be printed in the RECOIID as a part of my remarks. I regard it as a real contribution to the very impor­tant subject of transportation now so interesting to the whole country ..

The YICE PRESIDEXT. Without objection, the speech "ill be printed in tbe RECORD.

The speech referred to is as follows : COOPERATION, NOT CO:I!PETITIO~

(.Address of the Hon. Dwight F. Davis, Secretary of War, before the sl'venth annual convention of the Mississippi Valley Association at St. Louis, Mo., N'o>ember 23, 1925)

St. Louis is at the heart of the greatest navigable river system in North America and at tl:te heart also of a net of great railroad lines. Its past history, its present situation, show the necessity for coopera­tion, not competition, between railways and watet·ways. Your associa­tion is committed to a constructive and statesmanlike attitude on the que ·tion or waterway development. No question is more important for this future de>elopment than cooperation, uot competition, between railways and watj!rways.

This problem is one that we have not yet satisfactorily solved. Thet·e are three parties to its solution: The railt·oalls, the water car­riers, and the shippers, which means the general public. Each party has a tendency to blame one or both for whatever is wrong. In my opinion, none of the three is blameless. Their mistake has been in their fundamental idea or the situation.

I

You know better than I can tell sou the early history of our wat r· ways. They were the pt·iucipal mciNls, iu some cases almost the only means, by which the American people worked their way from the Appalachians to the Rockies, building a nation u they came. Th winning of the West was made possible by the waterways of the West. As the Mis issippi Valley was occupied its rivers developed a great and pro perous commerce. But about the middle of the last centut·y, when the valley bega.n to change from a frontier or plains and wilder­ness into an empire of Industry and agriculture, the railroads crossed the eastern mountains and spread over it. They found enrywhere th established rivet· carders. There ensued a strug"'le betweep thc~ e transportation agencies. The end of that stJ·uggle was defeat for the waterways, and it is only iu the last decade tbat they h:n-e begun their inevitable recovery.

The root of the trouble in the past was primarily not malice but ignorance, the most common source o! human ill -ignorance of funda­mentals. The railroad men of those days felt that they must, with their then greater efficiency, destroy the competition of the rivers. The old river men felt that, with the greater inherent cheapness of water movement, they should be permitted and encouraged to make headway against the competition of the railroads. The public wu sometimes on one side and sometimes on the other, but always with the feeling that it was involved in a struggle between natural competitors, ond often trying to use one competitor to obtain unfair concessions from the other.

None of them realized the fundamental fact that rail and water transportation were not competitive but complementary; that thPir pt·oper relation was not combat but cooperation; and that any other relation was abnormal, wasteful, and against the best intere3ts of all the parties co.ncerned.

Competition is a curious thing. A century and a half ago the industrial revolution was brought about in England by a few simple inventions, notably machines for weaving cotton cloth. Until then wea\'ing had been done by hand. With the new machines one man could do the work that many had done before. The weavers promptly rioted, invaded factories, and destroyed the machines. They felt that if this new process were established most of them would be thrown out of work and would starve. Those rioters were not movl'd by evil intentions. They simply did not understand. They could see one day into the future and imagine themselns out of a particular j ob in n. particular mill. They could not see a little further and understand that in an industrialized nation every man would still have a job, but that every man couhl produce many times more goods and get as his hare more real wealth. The macltines that they thought were their deadly competitors have become the servants of their prosperity.

The man who talks of natural competition and a finish fight between ri\·er and rail is as shortsighted as those Lanca hil'e weayer . He sees a railroad between two cities carrying a certain amount of freight; he see3 a rl\'er connecting them; he sees the po. sibility of the river taking the freight that now moves by rail. Then be thinks he see the ruin of the railroad. Such a man does not ee rea1lties. He does not see that if the rh·er cau carry any particular kind of freight more cheaply than the railroad the community will ave money; that this money is new capital which will produce more prosperity and more production and more goods to be transported by both the river and the railroad. In other words, he does not under tand the basic law of economics, that whate1er inct·eases the wealth, pt·osperity. and efficiency of a community benefits all the important elements of the community.

What are the facts of the tran~portation situation to-day? The railroads ha\·e passed from the nineteenth century era of expansion to the twentieth century era of efficiency. They are not building new lines at the speed they did after the Ch'U War. Between 1910 and 1920 their total tra<!kage increased only 5 pet· cent, but not all of this trackage was in use. They are seeking to do more with what uu~y have, and in such items as miles per car per day, train-miles per locomoth·e are making splc>odid progress. Of the unfavorable factors which they must combat I take two at random-unbalanced hauls and peak loads. Suppose a road has a long, heavy eastbound movement. say, of grain, and a light return mo,·ement. At a de3.d loss lt must haul a great number of empty curs west. Suppo.se it could haul Its grain east part of the way and deliver it to a rh'er carrier ; suppose this meant a sa,·ing to the shippers, and therefore more purchasing power ; suppose they used this purcha~ing power, as they would, t uuy more merchandise, which would fill the curs that formerly went west empty. Would not the railroad be bettet· off? Again, consider the peak-load problem. We all know in the past a bumper ct·op of Northwestern wheat or Califomia fruit or Flot·ida truck bus taxed the railroads to their capacity and beyond. The CI'OP is moved eventu­ally after part of it has rotted, and farmers llan lwd to borr w money to tide them through, and a blow hn been dPalt to prosperity and to purchasing power which is at once reflected in a ~mallet·

demand fot· gl'neral merchandise and therefore a smallet· revenue tor

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1925 CONGRESSIONAL RECORD-SENATE 997 the railroads. Would not an intelligent rail executi're be glad if some ! agency would step in at such a moment and lift the burden of the peak mo.vement from his overtaxed organization?

There is not the remotest danger that the river carrier will drive the rail carrier from the field. As an example, I need only point to our most extensively developed river, the Monongahela. It carries 25,000,000 tons a year, and its locks are worked to about two-thirds capacity ; yet a prosperous railroad line runs on each bank. It either rail or river traffic were destroyed, there would be no benefit to the other, bot only a serious loss to Pittsburgh industry and the Nation. Can anyone doubt that the same situation will exist when the com· merce of the Mississippi, the Missouri, the Ohio, and their tributaries is similarly developed?

Successful river traffic is dependent on railroads. A. railroad can go anywhere; it can run a spur to a factory door. But a boat can only go on the river. Except for a movement which begins and ends within trucking distance of the river bank, part of the haul must be by rail. The other part, for economy, should and will be by water only when the water movement is, proportionally, long enough so that its cheap. ness in line-haul outweighs the cost of transshipment. And besides this there are a multitude of cases where, by ability to grant certain privileges to give express service, to avoid rehandling, and so on, the railroad has natural advantages that neither can nor should be denied.

Railroads are and will remain the backbone of inland transporta­tion. Efficient waterway traffic can not in most ·cases flourish with· out them. And we are coming to realize the converse, that efficient rail traffic depends on using to the limit the waterways. By reducing peak load, by balancing rail hauls, by taking the burden of low-grade traffic, by preventing car .shortages, rivers ca.n be and are becoming an essential element in the railroad·s fight for efficiency. And most important, the rivers ean save money ·to the Nation as a whole, and neither the railroads nor anyone else can avoid sharing in the resulting increased prosperity. Each should carry traffic for which, under the given conditions, it is economically best fitted ; both carry jointly that for which joint carriage is most economicaL

Even if such cooperation were not otherwise sound economically con· ditions would force its adoption. I have said that the present railroad trend is toward intensifying the traffic possibilities of existing lines rather than buildlng new ones. But this proeess can not continue in­definitely. When, in the coming generation, our internal commerce shall have increased 50 per cent or 100 per cent it Is evident that the present rail installations, no matter how efficiently operated, could not handle it. Before long in congested sections of the country we must face · the alternative either of intensive use · of our waterways or of enormous investments in new railway lines. It Is a question how far and on what terms the railways could · borrow the sums needed. But more important than this is the waste involved in spending billions of dollars to make a path over which commerce can move by rail when nature has given us in our great rivers natural paths which can be · made ready for commerce for a few million dollars. The Mississippi, the Missouri, the Ohio, and others are equivalent as possible commerce carriers to scores of parallel rail lines. To neglect their possibilities is to throw away a gift of nature and impose on the Nation huge addi­tional expenditures which will benefit no one.

The provision of adequate channels for the future commerce of our waterway systems-notably, those of the Mississippi Valley-is weU advanced toward completion, thanks to the recent liberal policy of Congress and the activities of the Army engineers. What remains to be done is at once quite limited as to cost and extremely urgent as to its effect on commerce. The incompleted gaps in the Mississippi sys­tem, which we are closing as rapidly as funds permit, have thus far retarded the growth of traffic tar out of proportion to their actual mileage, for they are weak links in wh~t should be a continuous chaln. The Ohio, for example, is, in terms of money, about 85 per cent com­plete. · But its commerce is not 85 per cent nor 25 per cent of what lt will become; for the unfinished part separates the canalized upper and middle stretches from the main Mississippi. It 1s like a railroad, mostly standard gauge, which ha-s a narrow-gauge connection with other railroad systems. The same remark applies in varying degree to the Mississippi, the Missouri, and other rivers of the V·alley. Eliminate these narrow-gauge gaps and the system tor the first time in history is ready to take its rightful place in our national economy as a great, complete, cooperative transportation facility.

It is in this way that I view the future of our internal commerce. Railways, waterviays, highways--all have their sphere. All are neces­sary to the public, and each is necessary to the moat efficient and profit· able devel(}pment (}f the others.

But how can this cooperation be attained? The best efforts of the best minds of both rail and water executives are bent toward this accomplishment, and much has been attained through the operation of he Inland Waterways Corporation, which has definitely proven that, given an equitable division of revenue to both rail and water

curriers for a joint haul, the combined service will D"ot only furnish the shipper a lower freight rate but will afi'ord a living revenue to each catTier.

One of the most important new developments in transportation in this country is the reYival of common carriage on our inland water­ways. The thing which makes this significant is the tendency to­closely correlate these common carriers by water with the railroads to form through routes which the public may use with the same free­dom as they ha>e heretofore used the railroads alone.

In the transportation act of Ul20 Congress made this broad declara­tion of policy :

" It is hereby decla.red to be the policy of Congress to promote, encourage, and develop water transportation, service, and facilities in connection with the commerce of the United States, and to foster and preserve in full vigor both rail and water transportation."

At the same time Congress directed its agent, the Interstate Com­merce Commission, to so prescribe and adjust rates that the railroads may "earn an aggregate annual net .railway operating income equal as nearly as may be to a fair return upon the aggregate value of the railway property of such carriers held for and used in the service of transportation."

This same agent, the Interstate Commerce Commission, is also charged to so administer the whole body of the transportation law as to " foster and preserve in full vigor both rail and water transporta­tion."

In doing this it may order rail rates up or down. It may . order joint rail-and-water rates down but not up. It may require the railroads to join in thJ;ough rates with water lines, even though the individual railroad may protest that such route dept'ives it of some particular haul it may otherwise receive.

It may order the division of joint rall-and:water rates on bases which please neither the rail nor the water carrier.

The commission may, and does effectUally, deny railroads the right to enter into any form .of unbridled competiti(}D with water carriers which alms at or might. conceivably cause .the destruction of .valuable water service. Here there woqld seem to be an adequate ground­work of law which should cause common carders by water again to occupy the field as soon as the waterways are completed and capital is assured that its investments in this field will be adequateli pr'otected. All that the railroads need to be shown is that they will profit by cooperation, not suffer by competition, and they will coop­erate. All that private capital needs to be shown is that such coop­eration results in profitable investments in common carriers, and capital will embark upon the enterprise.

If we are ever, then, to succeed in our broad national po1icy of coordinating rail and water transportation for the present, adding motor and ai.r transportation. ill the future, we must facP. the con­ditions as they exist, built broadly for the greatest good of the greatest number, utilize our great arterial waterways and their feeders, our coastal streams, and our canals, as they are completed, our lakes and our coastal waters, in cooperation with and not oppo­sition to our railways, which must always be the backbone of our tmified transportation system that is to give us as nearly an ideal transportation system as the mind of thinking man can conceive. Our policy should be cooperation. not competition.

Mr. RANSDELL. Now, sir, I come to a more important indi· vidual than either the Secretary of War or of Commerce. In addition to the very favorable expressions of Secretaries Hoover and Davis, we have the views of President Coolidge. They are quite as emphatic as those of the other gentlemen. In his letter of Nol"ember 13, 1925, to Hon. J. Hampton Moore, president of the Atlantic Deeper Waterways Association, Presi­dent Coolidge said :

In the United States we have a natural scheme of waterways, SU·

perior to that of any other country, which when improved and con­nected up to serve the remote as well as the populous areas, will, it is said, justify in reduced rates and increased commerce the exvenditurgs made upon tllem. The economic value of these streams has long been recognized, but their development has proceeded slowly. To rend~r

the highest service as carriers and distributors they should be joined to· gether and standardized as to dimensions for traffic, so that the ship­per would have confidence in them. When they are finally brought to­gether in a workable system, the benefits in rates and values will be lncalculable.

Mr. President and Senators, can you imagine the President of the United States making a statement like that? That sounds like the statement of my friend the senior Senator from Florida [Mr. FLETCHER], or yom· humble servant, or some other enthusiastic waterway man. That is what we have been say­ing for years: "Improve these watercourses; join them all together ; give the shipper confidence in them by showing him that they are a complete, standardized, workable system, and the benefits thereof will be incalculable." I thank the Presi·

998 CONGRESSION..:\_1 l{ECORD-SE:N.A_TE DEOEl\IBER 17

dent for thol'-:e'wi ·e trne wort::':, "·oro which mauy of u. baYe l1een uttering many years, but to which scant attention w~. paid. I hope, sirs, that Congress and the American people w1ll take heed. now that om· Chief Executi-re ha · begun to u ·e the same language, and that his wise words are backed up by his Secretary of Commerce and Secretary of War. .

The Pre._-ident then refee in cletail to se-reral of the leadmg waterway project·· of the country, and conclude· in this fine language:

'le ha>e the streams, and ultimately they can be impro>ed for service. Th<'y can dc>elop both transportation and power. 'They will be completed for longer haul · and intersecting routes. 'I' hey will be

. standanllzed so that all sections of the country would derive advantage from them.

Thev are not lo al. ~Ir. President. President Coolidge shows here that tlH:'Y will be standardized o that e-rery portion of thi great Republic will deri-re benefit from tllem; and he concludes:

It 1 gratifying to note a growth in sentiment fa•orlng coordination of val'ious means of transportation, the railway, the highway, and the waterway. Each of the e bas t·endered dlstinct ser;ice. They can render a greater service, more gratifying to the producer and con· sumer·, as well as to the shipper, if made to assist rather than to oppo e each other.

Those are wonderful and most friendly words, and again I thank the Pre.:ident for them.

At this point I ask that the entire letter of the President to Mr. nloore may be printed in the RECORD as part of my remarks. It is not very long nnd is worthy of our best attention.

The YICE PRESIDENT. Without objection, it is so ordered. The letter i ~ as follows :

W A.SHINGTOX, D. C., }."orcmber 1S, 19~5.

To Ron. J. HA.llPTO~ MOORFJ,

President Atlantio DeeJ)et' Watencavs Associatioll, Philadelphia, l'a.

Dun ~fn. MoonE: It will not be po. sible !or me to att('nd the Miami convention of the Atlantic Deeper Waterways .As ociation, to wllich you in•He me for No>ember 23-26.

I realize, however, that the purpose for "·hich you a semble bas a national interest, and that there is a peculiar significance in your meeting in Florida at this time when transpoliatlon is a matter of serious concern.

In the United States we have a natural schrme of waterways, superior to that of any other country, which, when improved and con· nected up to serve the remote, as well as the populous areas, will, it is said, justify, in reduced rates and increased commerce, the ex· penditnres made upon them.

The economic value of the. e streams ha long been recognized, but their development has proceeded slowly. To render tlle highest ser·v· ice, as carriers and dlstri!Ju tors, they should be joined together and standardized as to dimensions for traffic, so that the shipper would 11ave confidence in them. When they are finally brought together in a wot·kable system, the benefits in rates and values will be incalculable.

At the present time the War Department, under authority of Con­gres ·, is engaging its engineers upon port, canal, and waterway im­provements in all parts of the country. On the Ohio River, locks and dams are being erected to assure a 9-foot channel to the :Mis is· sippl This great work is pt·oceeding steadily with a view to com­pletion in five ye11rs. The Government is also at work upon the Mississippi and :Mi souri, and to emphasize to commerce the value of dependable waterways is operating experimental barge lines upon tbP Mississippi, and the Warrior in .Alabama.

Improvement works are also under way along the Atlantic sea­board, notably the new canal bisecting Delaware and .Maryland, connecting up the Chesapeake Bay and waters south with the Dela· ware River and waters running north to New England. This great channel, free of locks wlll be thrown open to the public, with a 12-!oot depth, early next year.

These are some of the major improvements which eYince the Fed­eral intere t in waterways.

We have the strt>ams, and ultimately they will be improved for service. They can develop bnth transportation anu power. They will be complet d for longer hauls and inter.,ecting routes; they will be standardized, so that all sections of tbe country would derive ad­vantage from them.

It is gratifying to note a growth of sentiment favoring the co­orllination of various means of tr:rn ··portation-the rail, the highway, and tbe waterway. Each of these bas rendered a dlstinct service. 'They can render a greater ~ervice, more satisfying to the producer and to the con. umcr, as well as to the shipper, if made t(} assist rather than oppose each other.

I wi b yon would extend my greetings to the convention. Very truly yours,

C.!LyiN COOLlDGJ'J.

:Mr. RAi\SDEI..L. TlH'n in his mes ·age to Congress on the 8th of thi · month Pre ident Coolitlg ~ mntle a troug tatemrnt iu regard to waterway develOllment. He called pecial atteu­tion to the necessity of connecting-the Great Lakes with the ocean via the St. Lawrence or the Et·le Canal and also to the Mi. sissippi River sy tern, Including connecting channels between the Great Lakes and the "Father of the Waters."

.Among many other things he said: A mo<lern channel connecting Chicago, Xe v Orlean , Kan as City,

and Pitt burgh should be laid out and work on the tribntaril's pt·ose­cuted.

President Coolidge and two members of his Cabinet, Secre· taries Hoover and Davis, have heard the db;tant but distinct hum of the American people voicing their belief in waterway improvement and demanding of the lawmakers wise provisiou for the best impro-rement and coordinated u!':e of highway::, railways, and waterway.. . They realize thnt the time has come to cease the halting, par. imonious policy which utterly fail•.'!l to make adequate provision for our great interior river and lake systems, and o far a lie in their power they are attempt­in;:r to persuade Congre s to do its duty.

The Constitution directs the President to adnse Congress from time to time regarding measures of public policy. From his vantage point in the T\.hite House, 'Yith the eyes of the whole ~atlon upon him, what he say· i bound to carry tbe greatest weigllt. What his coun elors and ::tdYisors in the Cabinet say is also entitled to great consi<Jeration. The tim?. is opportune for inaugurating and pushing an effective water­way program with a view to the speedy completion of the important projects.

Waterway sentiment is more favorable now than at any time during the past 20 years-aye, than at any time during tbc past :50 years. Waterway men should raise their voices lou(l and strong. They should renew their activities and work more earne. tly than eyer before. They should hold up the hands of Pre ident Coolidge and Secretaries IIoo-rer and Davis in their earnest appeals on this most important topic.

Under the Constitution Congress is the only body which can provide the ways and means, the money, for carrying out the plans of the Engineer Corps and bringing to speedy completion the waterway projects needed by the Republic. Congre::1s is willing and anxious to do what is right in this matter; but the demands upon it in other directions are so great and so loud· voiced that it must be made to understand beyond question that such is the de ire of the American people. Whatever the majority of the citizen of this Republic wish will be grauteti by Congress, provided it becomes sure that the people are in earne ·t, that they know what they want, and that genuin~ benefits to the Nation will result therefrom.

If the waterways people throughout the land, the local a so­ciations of every kind and sort, will join hands with tlle National RiYers and Harbors Congress and make a long, strong pull toward the end they have desired and fought for for so many years, their goal will soon have been reached.

THE COAL SIT"t".ATIO~

l\Ir. COPELAND. Mr. President, I have been very much interested ill the eloquent remarks of tl1e Senator from Louisiana [Mr. RAXSDELL]. I know how interested he is in this great waterway development. I, too, am interested, be­cau e I ha-re a feeling that if these canal and waterways are developed, the e sential foo<ls and products which are so necessary for the maintenance of the health and happiness of the people will be delivered at lower prices.

I ob ·erve, Mr. President, that the Senator referred to the President's message and his ringing appeal for waterway de­velopment. I was very much disappointed, sir, that the Pre .. i­dent did not make some suggestion to Congress about the solution of the coal problem. That is one of the matters which must be dealt with by this Congress.

In New York City three-quarters · of the population li-re in tenements, with no facilities for the storage of coal. They go out every morning, Mr. President, with a bucket to get coal, just as they go out every morning to get a bottle of milk or a loaf of bread. Unless there is an unceasing flow of coal, so that the people may be supplied every day, it is only a matter of a few weeks when there will be suffering and death as a result of failure of the fuel supply.

I hope, :Mr. President, that Congress will not adjoum for the holidays until it has taken some constructive step looking to­ward the solution of this important problem. I want to _im­pre s upon my colleagues that it is important. Some of you who come from the balmy South, where the sun furnishes the heat, have no reali~tion of the ~ecessity of the people living

I

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{

u

1925 CONGRESSIONAL RECORD-SENATE 999 " - - -

in the North; and there is a crisis which must be met. There is a situation, by reason of the strike in Pennsylvania, which makes it impossible for the people to obtain coal. Substitutes are being used, but they are being rapidly exhausted. Not for long can the people afford to pay at the rate of forty or fifty dollars a ton, which the tenement dweller must do under pre­vailing conditions; but even this makeshift will fail unless the strike i settled.

In thhi brief way, Mr. President, I desire to call the atten­tion of my colleagues to this matter. I hope they- will give thought to it, in order that, if possible, there may be worked out some plan by which relief can be given to the people, who will suffer and die if that relief is not given and given speedily.

P URPORTED RESOLUTION OF ARIZONA LEGISLATURE ON COLORADO RIVER COliPAC'f; ERRO~EOUSLY PRINTED I:N THE RECORD

The VICE PRESIDENT. The Chair lays before the Senate a telegram from the Go\ernor of Arizona which should accom­pany the resolutions passed by the Legislature of Arizona and referred to the Committee on Irrigation and Reclamation on December 10. Without objection, it will be so referred.

Mr. A. HURST. Let the telegram be read. The VICE PRESIDENT. The Clerk will read the telegram. The Chief Clerk read as follows :

PHOE~IX, ARIZ., Decembe1· 11, 19f-5. Hon. HENRY F. ASHURST,

United States Senate, Washi11gton, D. 0.: I am sending following telegram to "Vice President Dawes: "My attention is directed to page 587, CONGRESSIONAL RECORD. De­

cember 10, in which you laid before Senate what purports to be official action of the State of Arizona on House Concurrent Resolution No. 1 on Colorado River compact.

"Record on the resolution incomplete, in that it does not show that the resolution was vetoed by the Governor of Arizona, and that the RECORD does not contain such veto message. I also direct your atten­tion to the fact that the constitution and laws of the State of Arizona make the Governor of .Arizona the sole means of official communication between this State and other States and this State and the "United States. Parties sending resolution to you acted in an illegal and un­warranted manner. I respectfully request you lay this telegram before the Senate."

I respectfully request this matter be laid before the Senate. GEo. W. P. HUNT, Go!;ernor.

Mr. ASHURST. Mr. President, the Vice President has acted ju tly in laying this telegram from the Go\ernor of Arizona before the Senate. Upon an examination of the Co~GRESSIONAL RECORD of the proceedings of the Senate on Thursday, the lOth of December of this year, it will be disclosed that the Vice President, in compliance with long-established custom, handed down to the Secretary's desk a large number of reso­lutions and memorials adopted by various State legislatures. Amongst the >arious memorials and re.·olutions thus banded down was a document which I assume came to the Vice Presi.­dent by regular course of mail, which same purported to be a resolution adopted by the Legislature of Arizona; but inas­much as that resolution was vetoed by the governor and was never passed notwithstanding such \eto, the resolution of course bad no proper pla~e in the RECORD.

EXECUTIVE SESSION

Mr. CURTIS. I mo>e that the Senate proceed to the con­sideration of executive business.

The motion was agreed to, and the Senate proceeded to the consideration of executive business. After 10 minutes spent in executive session the doors were reopened, and (at 3 o'clock and 55 minute p. m.) the Senate adjourned until to-morrow, Friday, December 18, 1925, at 12 o'clock meridian.

NOMINATIO~S

Executive 11.01nin.ations recei.oved by the Senate December 1"/, 1925

COMMISSIONER OF LABOR STATISTICS

Ethelbert Stewart, of Illinois, Commissioner of Labor Sta­tics, Department of Labor.

COMMISSIONER GENERAL OF IMMIGRATION

Harry E. Hull, of Iowa, Commi sioner General of Immigra­tion, Department of Labor.

CoLLECTOR OF CusToMs

Thomas L. Walker, of Lexington, Ky., to be collector of cus­toms for customs collection district No. 42, with headquarters at Louisville, Ky. Reappointment.

UNITED STATES MARSHAL

Richard A. Harvin, of Texas, to be United States marshal, southern di trict of Texas. A reappointment, his term having expired.

APPOIXTMENTS, BY TRANSFER, IN THE REGULAR ARYY

FIELD ARTILLERY

Second Lieut. Thomas Elton Smith, Air Service, with rank from June 12, 1925.

INFANTRY

Second Lieut. Judson Macivor Smith, Air Service, with rank from June 12, 1925.

.AIR SERVICE

First Lieut. James Milligan Gillespie, Ordnance Department (detailed in Air Service), with rahk from September 13, 1919.

PROMOTION IN THE REGULAR ARMY

VETERI:.~ARY CORPS

First Lieut. James Lew Barringer, Veterinary Corps, to be captain from December 16, 1925.

PosTMASTERS

.ALABAMA

Charles 0. J obnson to be postmaster at Ensley, Ala., in place of R. S. Hickman. Incumbent commission expired June 4, 1924.

Thomas A. Carter to be postmaster at Grove Hill, Ala., in place of T. A. Oarter. Incumbent's commission expired No­vember 15, 1925.

Charles w. Chambers to be postmaster at Cherokee, Ala., in place of P. L. Kirsch, l'esigned.

.ARIZONA

Charles L. Beatty to be postmaster at Nogales, Ariz., in place of C. L. Beatty. Incumbent's commission expired October 22, 1925.

Walter J. Kowalski to be postmaster at Springerville, Ariz., in place of W. J. Kowalski. Incumbent's commission expired October 25, 1925.

Katherine Upton to be postmaster at Wickenburg, Ariz., in place of M. J. HowelL Incumbent's commission expired March 3, 1924.

.ARKANSAS

Garrett C. Chitwood to be postmaster at Scranton, Ark., in place of G. C. Chitwood. Incumbent's commission expired No­'\ember 17, 1925.

:Mary L. Beeson to be postmaster at Waldo, Ark., in place of M. L. Beeson. Incumbent's commi ion expired November 17, 1925.

William D. Eakes to be postmaster at Dover, Ark. Office be­came presidential April 1, 1924.

C..ALIFOR~IA

Alpheus G. Sawin to be postmaster at Loyalton, Calif. , in place of A. G. Sawin. Incumbent's commission expired Sep­tember 5, 1922.

Uriah S. Bock to be postmaster at Maricopa, Calif., in place of F. L. Bigelow. Incumbent's commission expired May 13, 1925.

Genevieve Frahm to be postmaster · at Palmdale, Calif., in place of Genevieve Frahm. Incumbent's commission expired October 3, 1925.

C. Lester Co'\alt to be postmaster at San Anselmo, Calif., in place of C. I.... Covalt. Incumbent's commission expired Novem­ber 8, 1925.

Hamilton G. Merrill to be postmaster at Paso Robles, Calif., in place ofT. W. Henry, deceased.

Louis Cademartori to be postmaster at San Andreas, Calif., in place of E. S. Stroup, remo>ed.

COLORADO

John W. Emmerson to be postmaster at Canon City, Colo., in place of J. W. Emmerson. Incumbent's commission expired August 24, 1925.

George W. Karn to be postmaster at Granada, Colo., in place of G. W. Karn. Incumbent's commission expired August 20, 1925.

Darlie R. Greigg to be postma ter at Greeley, Colo., in place of D. R. Greigg. Incumbent's commission expired December 15, 1925.

Lewis lL Markham to be postmaster at Lamar, Colo., in place of L. 1\1. Markham. Incumbent's commission expired November 2, 1925.

John H. Kincaid to be postmaster at La Veta, Colo., in place of J. H. Kincaid. Incumbent's commission expired October 6, 1925.

1000 OONGRESSION.A.L RECORD-SENATE DECEl\IBER. 17

James S. Grisham to be postmaster at Trinidad, Colo., in place of J. S. Gri ·ham. Incumbent's commission expired Ko­vember 2, 1925.

CO~~ECTIC"C"T

Levi C. Frost to be postmaster at Milldale, Conn., in place of L. C. Frost. Incumbent's commission expired December 14, 1925.

Florence G. Perry to be po tmaster at Montville, Conn., in place of F. G. Perry. Incumbent's commission expired Novem­ber 15, 1925.

Nellie A. Byrnes to be postmaster at Pomfret, Conn., in place of N. A. Byrnes. Incumbent's commi ion expired November 15, 1925.

Robert A. Dunning to be postmaster at Thompson, Conn., in place of R. A. Dunning. Ineumbent's commission expired Oc­tober 11, 1925.

Lincoln Taylor to be po 'truaster at Stamford, Conn., in place of Robert Whittaker, deceased.

FLORIDA

Daniel C. Smith to be postmaster at Center Hill, Fla., in place of D. C. Smith. Incumbent's commission expii·ed Decem­ber 14, 1925.

Henry C. Reynold to be postmaster at Littleriler, Fla., in place of E. L. Raby, resigned.

Clyde Bland to be po tmaster at Pompano, Fla., in place of R. L. 'Valdron, re~· igned.

CEORGll

Leila W. :Maxwell to be po~·hna. ter at Danville, Ga., in place of L. W. l\Iaxwell. Incumbent's commission expired Novem­ber 21, 1925.

John H. Hendrix to be postmaster at Hawkinsville, Ga., in place of J. P. l\IcGriff. Incmnbent's commi ion expired June 4, H)24.

William N. Casey to be postmaster at Kingsland, Ga., in place of W. N. Casey. Incum!Jent's commission expired Novem­ber 23, 1925.

Benjamin N. Walters to be postmaste.r at Martin, Ga .. in place of B. N. Walter. . Incumbent's commi sion e2...--pired November 21, 1925.

John T. Bird to be po:-;hnaster at Oxford, Ga., in place of J. T. Bird. Incumbent's commission expired February 4, 1924.

Mary E. E"rerett to be postmaster at St. Simon Island, Ga., in place of l\1. E. Everett. Incumbent's commission e~--pired September 30, 102:).

William H. Flanders to be postmaster at Swainsboro, Ga., in place of W. H. Flander . Incumbent's commi sion expired De-cember 14, 1925. ·

IDAHO

Louis E. Diehl to be postmaster at Eagle, Idaho, in place of L. E. Diehl. Incumbent's commission expired August 2-!, 1925.

ILLL"OIS

William J. Hamilton to be postmaster at Evanston, Ill., in place of W. J. Hamilton. Incumbent's commission expired November 17, 1925.

Tena S. Ecklund to be po ·tmaster at Lamoille, Ill., in p1ace ofT. S. Ecklund. Incumbent's commission expired October 20, 1D25.

Harrison T. Berry to be postmaster at Morrison, Ill., in place of H. T. Berry. Incumbent's commission expired December 14, H.l25.

Orth B. Sanders to be po tmaster at Roberts, Ill., in place of 0. B. Sanders. Incumbent's commission expired Nowm­lJer 8, 1025.

Frank Gandy to be postmaster at Ullin, Ill., in place of Frank Gandy. Incumbent's commission expired October ll1 1025.

Anna C. Krans to be postmaster at Altona, Ill., in place of F. C. Krans, deceased.

·william H. Ste-inke to be postmaster at Des Plaines, Ill., in place of William Lewerenz, resigned.

INDIA~ .A

McKinley Ayer to be po tmaster at Chrisney, Ind., in place of McKinley Ayer. Jncumbent's commission expired No•em­ber 17, 1925.

IOWA

William H. Hall to be postmaster at Allerton, Io-wa, in place of W. H. Hall Incumbent's commission expired De­cember 14, 1925.

Frederick W. Werner to be postmaster at Amana, Iowa, in place of F. W. Werner. Incumbent's commission expired Oc­tober 20, 1925.

James F. Temple to be poshnaster at Bode, Iowa in place of J. F. Temple. Incumbent's commission expired December 14, 1925. . Albert H. Dohrmann to be postma ter at Charlotte, Iowa. lll place of A. II. Dohrmann. Incumbent's commission expiretl October 24, 1923.

Earl M. Skinner to be }Jostma ter at Farnhamville, Iowa. in place of E. M. Skinner. Incumbent's commiss:on expired De­cember 14, 1923.

Emil C. \'i~eisurod to be postmaster at Fenton, Iowa, in place of E. C. Weisbrod. Incumbent's commission expired Decembet· 14, 1023.

Raymond F. Sargent to be postmaster at Fonda, I owa, in place of R. F. Sargent. Incumbent's commi ·ion expired De­cember 14, 1925. W~li~m Foer tner to be postmaster at High, Iowa, in plac~

of Wilham Foerstner. Incumbent's commission expired Octo­ber 24, 1925.

John F. Cagley to be postmaster at Ionia, Iowa, in place of J. F. Cagley. Incumbent's commission expired December 14 1923. I

Martin A. Sandstrom to be postmaster at Kiron, Iowa, in place of M. A. Sandstrom. Incumbent's commission expired December H. 1925.

l\lartin A. Aasgaard to be po tmaster at Lake :Mills, Iowa, in place of ~f. A. Aasgaard. Incumbent's ·commission expirerl December 14:, 1925.

Carl_~ielsen to be posh~a ter at Moorhead, Iowa, in place of Carl ::\Ielsen. Incumbents commission exr)ired December 14: 19~). '

l":ysses G. Hunt to be po. tmaster at Plymouth, Iowa, in place of "C. G. Hunt. Incumbent's commi "ion expired December 14 1V25. '

KANSAS

Claude C. Wheat to be postmaster at Augn ta, Kam~.. in place of C. C. ·wheat. Incumbent's commi sion expired Ko· vember 17, 1925.

Peter H. A.?rian to be postma ter at Buhler, Kans., in place of P. H. Adnan. Incumbent's commission expired Au"'ust 1!.1 1925. ~ '

::\linnie B. Fretz to be postmaster at Canton, Kans., in plnce of :\1. B. Fretz. lncumbe11t' · commi sion expired Decem!Jer 13 1925. '

Nathan W. Huston to be postmaster at Columbus, Kamt. in place of N. W. Huston. Incumbent's commission eAl)ired l\·o­vember 23, 1925.

John \'i~. Baker to be postmaster at De Soto, Kans., in place of J. W. Baker. Incumbent's commission expired December lG 1925. '

Ro e B. Stapleton to be postmaster at Fulton, Kans .. in ph.1r•~ of R. B. Stapleton. Incumbent's commis ion expired December 15, 1925.

Fred L. l\IcDo-well to be po tmaster at Garfield, Kans., in place of F. L. l\IcDowell. Incumbent's commLsion e~--pired .August 19, 1925.

Porter Young to be po tmaster at Great Bend, Kans., il) place of Porter Young. Incumbent's commission eA1)ired September 27, 1925.

Xellie I. :Morley to be postmaster at Highland, Kans., in place of N. I. l\Iorley. Incumbent's commission expired November D 1925. '

Lida Zimmerman to be postmaster at Otis, Kans., in place of Lida Zimmermal). Incumbent's commission expired August 24 1925. ,

Es;-;ie ~I. Ho man to be postmaster at Potwin, Kans., in place of E. ni. Hosman. Incumbent's commission expired December 15, 1925.

John H. Sm1ley to be postmaster at Ransom, Kan . . , in plarc of J. H. Sunley. Incumbent's commission expired Augn t HI, 1925.

Fred D. Bush to be postmaster at Copeland, Kans., in place of J e ·se Rayl, resigned.

E:E~TUCKY

Walter L. Prince to be postmaster at Benton, Ky .. in place of W. L. Prince. Incumbent's comml ·sion expired December H, 1925.

Ella Chelf to be postmaster at Bradfords'Ville, Ky., in place of D. 0. Burke, resigned.

Luther G. Bernard to be postmaster at Jamestown, Ky., in place of Z. R. Hill. remo'Ve<.l.

l\laude E. Gan·ell to be postmaster at :Midway, Ky., in place of C. "\V. Parrish, re ·igned. ·

/

1925 CONGR.ESSIONAL RECORD-SENATE 1001

LOUISIA:V" A

Elias 0. Leone to be postmaster at Zwolle, La., in place of E. C. Leone. Incumbent's commission expired August 24, 1925.

Esther B. Dunn to be postmaster at Slaughter, La. Office became presidential July 1, 1922.

MAIXE

Ella M. McKenney to be postmaster at Jackman Station, l\le., in place of E. J. McKenney, removed.

MABYLA...."'D

Lillie M. Pierce to be postmaster at Glyndon, Md., in place of L. S. Wheeler, re igned.

MASSACHUSETTS

Archibald B. McDaniels to be postmaster at Enfield, Mass., in place of A. B. McDaniels. Incumbent's commission expired August 24, 1925.

George T. McLaughlin to be postmaster at Sandwich, Mass., in place of G. T. McLaughlin. Incumbent's commission expired November 19, 1925.

Richard Lyon to be postmaster at Hubbardston, Mass., in place of H. L. Claflin, deceased.

MICHIGAN

Patrick H. S hannenk to be postma ter at Chassell, Mich., in place of P. H. Schannenk. Incumbent's commission eA-plred July 2-8, 1923.

Charles Hallman to be postmaster at Iron Mountain, 1\Iich., in place of Hugh McLaughlin. Incumbent's commission expired September 13, 1922.

George E. Meredith to be postmaster at Minden City, 1\Iich., in place of G. El ~leredith. Incumbent's commis don expired December 15, 1925. .

Yolney R. Reynolds to be postmaster at 'Yaldron, Mich., in place of V. R. Reynolds. Incumbent's commission · expired December 15, 1925.

John F. Krumbeck to be postmaster at Williamston, 1\Iich., in place of J. F. Krumbeck. Incumbent's commission expired December 14, 1925.

Fred A. Shipman to be postmaster at Chokio Minn., in place of F. A. Shipman. Incumbent's commission expired November 23, 1925.

Mary J. Anderson to be postmaster at Cyru , Minn. in place of M. J. Anderson. Incumbent's commis ion expired October 6, 1925.

Chris N. Kesscth to be postmaster at Deer River, :\linn., in place of C. N. Nesseth. Incumbent's commis ion expired November 17, 1025.

Elmer C. Hutchin.son to be postmaster at Eagle Bend, Minn., in place of E. C. Hutchinson. Incumbent's commission expired November 22, 1925.

James C. Wilson to be po tma ter at Grygla, Minn., in place of J. C. Wilson. Incumbent's commission expired .r{ovember 17, 1925. .

Stanley A. Torgerson to be postmaster at Hawley, Minn., in place of S. A. Torger on. Incumbent's commission expired De­cember 14, 1925.

August 0. Lysen to be postmaster at Lowry, Minn., in place of A. 0. Lysen. Incumbent's commission expired October 3, 1925.

William R. Gates to be postmaster at North St. Paul, Minn., in place of W. R. Gates. Incumbent's commission expired An­gust 24, 1925.

Anton Levandosky to be postmaster at Williams, Minn., in place of Anton J .. evandosky. Incumbent's commission expired November 22, 1925.

John A. Oberg to be postmaster at Deer Wood, Minn., in place of 0. C. Coffin, resigned.

MISSOURI

Joseph Volle to be postmaster at Harrisonville, Mo., in place of Joseph Volle. Incumbent's commission expired November 9, 1925.

Chester D. Green to be postmaster at Hume, Mo., in place of C. D. Green. Incumbent's commission expired November 19, 1925.

James A. Coder to be postmaster at Lewistown, 1\Io., in place of J. A. Coder. Incumbents commission expired November 14, 1925.

Aaron D. Peterson to be postmaster at Bro"-ning, l\Io., in place of J. W. Smith, resigned.

MONTANA

George S. Haynes to be postmaster at Judith Gap, Mont., in place of G. S. Haynes. Incumbent's commission expired De­cembel' 14, 1925.

Harry H. Goble to be po tmaster at St. Ignatiu , 1\Iont., in place of H. H. Goble. Incumbent's commission exl}ired De-­cember 14, 1925.

NEBRASKA

Francis W. Purdy to be postmaster at Hildreth, Nebr., in place of F. W. Purdy. Incumbent's commLsion expired No,-em-ber 21, 1925. •

Fred C. Armitage to be postmaster at Kenesaw. Nebr., in place of F. C. Armitage. Incumbent's commission expired Oc­tober 25, 1925.

Walter Plybon to be postmaster at Salem, Nebr., in place of :i\1. M. Mason. Incumbent's commission expired August 20, 1025.

Willard Stong to be po tmaster at Syracu e, Nebr., in place of Willard Stong. Incumbent's commission expired December 14, 1925.

NEVADA

Walter S. Norris to be postmaster at Winnemucca, Nev., in place of W. H. Ayres, resigned.

NEW HAMPSHIRE

James A. Re(>d to be postmaster at Union, N. H., in place of J. A. Reed. Incumbent's commission expired November 19, 1925.

NEW JERSEY

Charles R. Bassett to be postmaster at Bloomsbury, N. J., in place of C. R. Bassett. Incumbent's commission expired De­cember 14, 1925.

David Hastings to be postmaster at Boundbrook, N. J., in place of David Hastings. Incumbent's commission expired July 27, 1925.

James E. \anderhoof to be po tmaster at Denville, N. J., in place of J. E. Vanderhoof. Incumbent's commission expired November 15, 1925.

Edith D. Wikoff to be postmaster at Fanwood, N. J., in place of E. D. Wikoff. Incumbent's commission expired November 15, 1925.

William Hockenjos, jr., to be postmaster at Lake Hopatcong, N. J., in place of William Ilockenjos, jr. Incumbent's com­mi.~~ion expired Decembe1· 14, 1925.

Elias H. Bird to be postmaster at Plainfield, N. J., in place of E. H. Bird. Incumbent's commi ~sion. expired October 4, 1925.

Richard .J. Rogers to be postmaster at Rumson, N. J., in place of R. J. Rogers. Incumbent's commission expired No­vember 23, 1925.

William A. Cullen to be postmaster at Waldwick, N. J., in place of W. A. Cullen. Incumbent's commission expired August 5, 1925.

David C. R. Hoff to be po tmaster at Neshanic Station, N. J., in place of R. E. Amerman, resigned.

Frank R. Parry to be postmaster at Wanaque, N. J. Office became presidential July 1, 1925.

~"'EW MEXICO

John H. Evans to be postma.::ter at State College, N. Me:x., in place of C. L. Vaughan, resigned.

NEW YORK

Stanley D. Corni~h to be postma ter at Carmel, N. Y., in place of S. D. Cornish. Incumbent's commission expired De­cember 14, 1925.

Frederick Traudt to be postmaster at Hyde Park, N. Y., in place of Frederick Traudt. Incumbent's commission expired December 14, 1925.

William A. Henderson to be postmaster at Manhasset, N. Y., in place of C. A. Hamilton. Incumbent's commi sion expired August 24., ).925.

Owen W. House to be postmaster at Parish, N. Y., in place of 0. W. House. Incumbent's commission expired December 14, 1925.

Edward T. Sheffer to be postmaster at Shortsville, N. Y., in place of E. T. Sheffer. Incumbent's commission eXIJired Ko-vember 9, 1925. .

Norman L. Bedle to be postmaster at Spring Valley, N. Y., in plaee of N. L. Bedle. Incumbent's commi sion e:x:pired No­Yember 23, 1925.

George M. Watson to be po~tmaster at Scio, N. Y. Office became presidential January 1, 1925.

1002 OONGRESSIOX.AL RECORD-SENATE DECE-IBER 17

NORTH CAROLI"S A

Ollie C. McGuire to be postmaster at Zebulon, N. C., in place of L. L. 1\Iassey. Incumbent's commission expired September 5, 1922.

NORTH DAKOTA

'\"illiam A. Borderud to be postmaster at Davenport, N. Dak. Office became presidential July 1, 1925.

Josephine J. Luther to be }Jostmaster at Monango, N. Dak., in place of J. J. Luther. Incumbent's commission expired October 7, 1925.

OHIO

Fred C. Troxel to be po tmaster ·at Apple Creek, Ohio, in place of F. C. Troxel. Incumbent's commission expired De­cembE>r 15, 1925.

John R. Williams to be postmaster at College Corner, Ohio, in place of J. R. " Tilliams. Incumbent's commission expired Dec·ember 14, 1925.

William S. Barbite to be postmaster at Hamler, Ohio, in place of w. S. Barbite. Incumbent's commission expired De­cember 14, 1925.

Ed,,in D. Cox to be postmaster at Leesburg, Ohio, in place of E. D. Cox. Incumbent's commission expired December 15, 1925.

Bolivar C. Reher to be po ·tma ter at Loveland, Ohio, in place of B. C. Reber. Incumbent's commission expired De­cember 15, 1925.

William E. Lehman to be postmaster at Payne, Ohio, in place of W. E. Lehman. Incumbent's commission e~'"J)ired Decem­ber 15. 1925.

William Schnoor to be postmaster at Put in Bay, Ohio, in place of William Schnoor. Incumbent's commission e:A'"J)ired De('em ber 14, H>25.

Jesse Gamble to be postmaster at Shadyside, Ohio, in place of Jesse Gamble. Incumbent's commission expired December 13. 1925.

Wilbur D. Schuder to be postmaster at West Carrollton, Ohio. in place of W. D. Sclmdcr. Incumbent's commission ex­pired December 15, 192G.

Frank F. Perringer to be postmaster at Woodville, Ohio, in place of F. F. PerrinO'er. Incumbent's commission expired Dercmber 15, 1925.

OKLAHOYA

Ode ·~a H. "'\Yillis to be postmaster at Pittsburg, Okla., in place of 0. H. 'Willis. Incumbent's commission expired Sep­teru ber 27, 1925.

Charles W. Youngblood to be postmaster at Hanna, OkJa., in place of J. D. Powell, resigned.

PEXNSYLVANU

Katherine .M. Dom to be postmaster at Dawson, Pa., in place of K. :£\1. Dom. Incumbent's commis ·ion expired August 24, 1n25.

James C. Bovard to be postmaster at Marion Center, Pa., in IJlace of J. C. Bovard. Incumbent's commission expired Novem­ber 23, 1925.

Richard U. Dodson to be postmaster at Rochester 1\Iills, Pa., in place of A. W. Richardson. Incumbent's commission expired August 24, 1925.

:\fargaret Patterson to be IJOStmaster at Langeloth, Pa, in place of Roberta Beaumont, resigued.

Edwin W. James to be postmaster at Newville, Pa., in place of G. D. Frey, decea ed.

l\Iartin H. Thomas to be postmastet at Smock, Pa. Office be­came pre idential October 1. Ul23.

RHODE ISLAND

"Tilliam H. Follett to be postmaster at Howard, R. I.. in place of W. H. Follett. Inctimbent's commission expired December 14, 1925.

SOUTH CAROL!~ A

"William H. Lott to be postmaster at St. George, S. C., in place of S. L. Johnston. Incumbent's commission expir3d September 19, 1922.

Robert L. Ginn to be posbnaster at Brownsville, Tex., in place of R. L. Ginn. Incumbent's commission expired July 21, 1925.

Elmer Carlton to be postmaster at Carlton, Tex., in place of R. A. Smith. Incumbent's commission expired July 28, 1923.

Newell S. Hanna to be postmaster at Crandall, Tex., in place of A. P. Hanna. Incumbent's commission expired January 31, 1924.

"'\\,.ill!e P. Hallmark to be postma ter at Dublin, Tex .. in place of W. P. Hallmark. Incumbent's commission expired Septem­ber 27, 1925.

Arthur N. Richardson to be posbnaster at Electra, Tex., in place of A. N. Richardson. Incumbent's commission expil·ed September 27, 1925.

Walter S. Yates to be postmaster at Forney, Tex., in placE: of W. S. Yates. Incumbent's commission expired November 18, 1925.

William C. Young to be postmaster at Garrison, Tex .. in place of W. C. Young. Incumbent's commission expired November 18, 1925.

Larkin B. Richardson to be postmaster at Groe beck, Tex., in place of J. T. Cox. Incumbent's commission expired July 28, 1923. .

Matilda .Akeson to be postmaster at Hale Center, Tex., in place of Matilda Akeson. Incumbent's commission expired November 18, 1925.

George W. L. Smith to be postmaster at Henderson, Tex., in place of G. "T· L. Smith. Incumbent's commission expired October 17, 1925.

Charlie B. Starke to be po. tmaster at Holland, Tex., in place of C. B. Starke. Incumbent's commission expired November 18, 1925.

Edmond W. Corley to be postmaster at Humble, Tex., in place of D. L. Lunn. Incumbent's commh;sion expired July 28, 1923.

Albert L. Jenning · to be postmaster at Kosse, Tex., in place of E. B. Bryant. Incumbent's commission expired April 5, 1924.

Audry R. Redden to be postmaster at Ponta, Tex., in place of Robert l\Iontgomery, resigned.

Henry B. Harrison to be postma. -ter at La Porte, Tex., in place of H. B. Harrison. Incumbent's commis ·ion expired August 24, 1925.

Alide Schneider to be postmaster at Marion, Tex., in place of Alide Schneider. Incumbent's commission expired August 17, 1925.

l\Iae Sheen to be postmaster at Mertzon, Tex., in place of I\lae Sheen. Incumbent's commission expired August 20, 192u.

Lucy Breen to be postmaster at Mineola, Tex., in place of Lucy Breen. Incumbent's commis ion expired November 18, 1925.

l\Iary L. Hardy to be postmaster at Newcastle, Tex., in place of B. B. "yard. Incumbent's commission expired March 8, 1922.

W A.SHINGTON

Elijah H. Nash to be po tmaster at Friday Harbor, Wash., in place of E. H. Nash. Incumbent's commission expired De­cember 14, 1925.

WEST VIRGIXU

Fanny Murray to be postmaster at Sandyville, "'\V. Ya. Office became presidential July 1, 1924.

WISCONSI::'i

Stanley R. Morse to be postmaster at River Falls, Wis., in place of J. A. Haddow, deceased.

George E. Alderson to be postmaster at Benton, Wis., in place of G. E. Alderson. Incumbent's commission expired December 15, 1925.

l\Iay I. Kinsey to be postmaster at Fish Creek, Wis., in place of 1\I. I. Kin~ey. Incumbent's commi sion expit·ecl Augu~t 2-1, 1925.

Wallace H. Pierce to be postmaster at Menasha, WiH., in place of W. H. Pierce. Incumbent's commission expired Octo4

ber 25, 1n25. WYOMIXG

TEXNESSEE Prince A. Gatchell, jr., to be postmaster at Buffalo, Wyo., in Allison z. Hodges to be postmaster at Bethpage, Tenn., in place of P. A. Gatchell, jr. Incumbent's comrnis ion expired

place of A. Z. Hodges. Incumbent's commission expired Octo- l\Iay 4, 1925. bN' 25, 1925.

TE~AS

Manley J. Holme to be postmaster at Baird, Tex., in place of l\L J. Holmes. Incumbent's commission expired November 18, 1925.

1\Iark A. Taylor to be postmaster at Bonham, Tex., in· place ot 1\I. A. Taylor. Incumbent's commission expired October 17, 1925.

CONFIRUATIONS Executive nominations con{irniea by the Senate December 1"1,

1925 SECOXD ASSISTA.'T POSTMASTER GE~ERAL

Warren Irving Glo\er to be Second A sistant Postmaster General.

\

)

. 1925 OONGRESSION AL RECORD-SEN ATE 1003 THIRD AssrsTANT PosTMASTER GEl\'"ERAL

Robert S. Regar to be Thii·d Assistant Postmaster GeneraL AssiSTANT SECRL'TARY oF STATE

Robert E. Olds to be Assistant Secretary of State. AMBASSADOR EXTRAORDINARY AKD PLENIPOTENTIARY

Charles MacVeagh to be ambassador extraordinary and pleni­potentiary to Japan.

EiVOYS EXTRAORDINARY Ar.-n MilHSTERS PLENIPOTENTIARY

Charles C. Hart ro be envoy extraordinary and minister plenipotentiary to Albania.

John Van A. l\lacl\1urray to be envoy extraordinary and mini ter plenipotentiary to China.

E\an E. Young to be envoy extraordinary and minister pleni­potentiary to the Dominican Republic.

Alfred J. Pearson to be envoy extraordinary and minister plenipotentiary to Finland.

John B. Stetson, jr., to be envoy extraordinary and minister plenipotentiary to Poland.

William S. Culbertson to be envoy extraordinary and minster plenipotentiary to Rnmania. .

William W. Ru. sell to be envoy extraordinary and minister l)lenipotentiary to Siam. •

DIPLOMATIC AGENT AND CONSUL GENERAL

:\Iaxwell Blake to be diplomatic agent and consul general at Tangier, Morocco.

FOREIGN SE:RTICE

TO BE SECRETA.RIES, DIPLOMATIC SERVICE

Dana G. Munro. Hamilton C. Claiborne. Rudolf E. Sehoenfeld.. Ernest L. Ives. Clifton R. Wharton. R. A. Wallace Treat.

TO BE CON ULS GENERAL

Charles B. Curtis. FranJ.: P. Lockhart. TO BE CO~SULS

Walter C. Thurston. Harold l\L Deane. James E. McKenna. Conger Reynolds. Thomas H. Robin. on. Leslie E. Wood .

Gilson G. Blake, jr. Jame Hugh Keeley, jr. Carl D. Meinhardt. Hugh S. Miller. Sydney B. Redecker. Harry L. Troutman.

CLASS 1

Euwin S. Cunningham. Leo J. Kenna.

Ferdinand L. :\layer. Arthur Garrels. Douglas Jenkins.

R. Henry l\orweb. George A. Gordon. L. Lanier Winslow. Calvin :M. Hitch.

Frank C. Lee. James B. Stewart. Edwin C. Wilson. Alan F. Win. ·low. J o ·eph W. Ball an tine.

Wainwright Abbott. J O.'eph Flac:I·. Frederic D. K. Le Clercq. "William C. Buruett. H. Merle Co<:hran. John P. Hurley. Jo::-eph E. Jacobs. George A. Makin. on.

Charles E. Allen. llarry F. Hawley. Richard L. Sprague. Dana C. Syck~. Harold l\1. Deane.

William W. Heard. John J. Melly. .Tames J. Murphy, jr. Rudolf E. Schoenfeld. Albert M. Doyle.

Alexander W. Weddell.

CLASS 2

Ransford S. Miller. John Campbell White.

CLASS 3

John F. Jewell. Benjamin Thaw, jr. North Winship.

CLASS 4

Pierre de L. Boal. J o eph E. Haven. William L. Jenkins. Hugh H. Watson. Frank P. Lockhart.

CLASS 5

Benjamin Reath Riggs. Merritt Swift. llarold H. Tittmann, jr. Henry C. A. Damm. .lohn D. Johnson. Dayle C. McDonough. Edward I. Nathan. Elbridge D. Rand.

CLA S 6

Edward M. Groth. Edmund B. Montgomery. John F. Simons. Clarence J. Spiker. R. A. 'Vallace Treat.

CLASS 7

Loy W. Henderson. Thomas S. Horn. Alfred T. Nester . S. Bertran(] Jacobson. Samuel H. Wiley.

Robert S. Burgher. Leon H. Ellis. Waldemar J. Gallman. Donald F. Bigelow. Edward S. Crocker, 2d. Nathaniel P. Da\is.

Donald R. Heath. Jack Dewey Hicket·son. Robert D. Murphy. George P. Shaw. John Stambaugh, 2d.

CLASS 8

Conger Reynolds. Thomas H. Robin on. Leslie E. "'T oods. Gilson G. Blake, jr. James Hugh Keeley, jr.

Carl D. Meinhardt. Hugh S. Miller. Sydney B. Redecker. Hany L. Troutman. James E. l\IcKenna.

UNCLASSIFIED

Clayson W. Aldridge. Robert L. Buell. Selden Chapin. Charles Henry Coster. Miss Pattie H. Field. Franklin B. Fro t. Harvey S. Gerry. Durward Grinstead. Julius C. Holmes. Royal R. Jordan. David McK. Key. J. Hall Paxton. Angus I. Ward. Clifton R. Wharton. David Williamson. Stanley Woodward. Roy W. Baker. Allan Dawson.

John Carter Vincent. John W. Bailey, jr. William E. Beitz. Julian F. Harrington. Ellis 0. Briggs. Dand K. E. Bruce. Augustus S. Chase. Early B. Chri tian. Lewis Clark. llarry L. Franklin. Eugene M. Hinkle . . Edward P. La\vton, jr. John H. Lord. · William H. T. Mackie. John H. Morgan. W. :Mayo Newhall, jr. Lloyd D. Yate . . McCeney Werlicb.

TO BE VICE CO~SUL OF CAREER

J. Holbrook Chapman. David William on. Clayson W. Aldridge. Stanley Woodwnrd. Robert L. Buell. Roy W. Baker. Selden Chapin. Allan Dawson. Charles Henry Coster. John Carter Vincent. Miss Pattie H. Field. George R. Paschal, jr. Franklin B. Fro t. John W. Bailey, jr. Har\ey S. Gerry. William E. Beitz. Durward Grinstead. Julian F. Harrington. Julius C. Holmes. John H. Lord. Royal R. Jordan. Albert M. Doyle. David l\IcK. Key. Loy W. Henderson. J. Hall Paxton. Thomas S. Horn. Angus I. Ward. Alfred T. Nester.

UNITED STATES DISTRICT JUDGES William Clark to be United States district judge, New Jersey. Albert W. Johnson to be United State district judge, middle

district of Pennsylvania. :MEMBER UNITED STATES SHIPPI~G BOARD

John Henry Wall h to be a member of the United States Shipping Board for the unexpired term of six years from June 9, 1923. ·

POSTMASTERS

ARKA~SAS

Louella Boswell, Almyra. Willie C. Allen, Amity. Edwin E. Blackmon, Augusta. Adine Dimm!g, Bauxite. Wendell W. Watkins, Belle\ille. Fairy K. Reynolds, Bradley. Horace C. Hiatt Charleston. Marie 0. Pitts, Cherry VaHey. :Milton T. Knight, Chidester. Harriet M. Shrigley, Coal Hill . Floyd l\I. Carter, De Queen. Ree e D. Henry, Dierks. Jesse F. Booth, Elnine. Jonnie Hood, Emmet. Thomas W. Good:son, Fouke. George H. Mills, Garfield. James G. Place, Gillett. George H. Joslyn, jr., Gould. John W. Bell, Greenwood. Charles n. French, Harrisburg. William J. Martin, Humphrey. John L. Collett, Huttig. Frederick B. Leach, Jerome. Flavel G. Briggs, "'Judsonia. Della E. Penick, Lake City. Grant B. Sparks, Lamar.

1004 CONGRESSIONAL RECOR.D-SEXATE

Samuel D. Thomasson, Leachville. li'r euerick W. Youmans, Lewisville. Walter S. Edsall, Louann. Cha rle A. Roberts, McNeil. E ·ton G. Berry, Magazine. Andrew I. Roland, Malvern. Thomas D. Peck. Mammoth Spring. Addison ~1. Hall. Marmaduke. Jp, . e H. Shaw, Midland. Dell W: Lee, Uinern.l Springs. J ohn W. Webb, l\Iounta in View. Cla r ence l\1. Fink, Newa t·k. Belle Armour, N'cwport. Willard L. Brennan, Parh"in. CRr1 P.rady, Peach Orchard. J oseph S. Ottinger, Pea Hidge. Rob<'rt Dail, R:n·enden. Claude M. Williams. Rogers. ""iley C. King, Salem. Chnrles A. Kelley. Searcy. O!{<.>flr L. West, Shirley. Therese N'. Seott. South :?ort Smith. William R. Blakely, Sparkman. R obert W. Barton, jr., Turrell. Selvin '1!. Butler, Warren. William T. McKinnon, Wes ·on. Ed C. Sample. West Fork. Florence F. McKinzie, Wilson. Ho\.·cll A. Burne ·, Yellville.

COLORADO

l\1. Gladys Quinn, Stratton. GEORGIA

Laura A. Hooks, For~yth. L\"ORTH CA.ROLINA

James L. Talbert. Advance. Raymond B. Wheatly, Be~mfort. Justus E. Arm 'trong. Belmont. . Baxter Biggerstaff, Bo tic. James B. Houser, CherrS'ille. John H. HobLon, Cleveland. Noall J. Grime ·. Cooleemee. Norman Y. Johnson, Denton. Edward A. Simkin:, Gold boro. Edgar E. Lady, Kannapolis. Laura ~1. Gavin, Kenansville. Carl 1\IcLean. Laurinl..mrg. William l\1. Liles, Lile ville. 'Yillinm J. Flowers, ::uount Olive. Edith V. l\loose, l\Iount Pleasant. Raphael 1\1. Rice. Oteen. :Millard P1·itchard, Pineola. Clarence L. Fi her, Ro··eboro. Hester L. D01· ~ett, Spencer. Asa C. Par ems, Star. Samuel F. Davidson, Swannanoa. J esse T. Price, Williamstou.

OHIO

Charles N. Sparks, Akron. Everett W. White, Albany. William E. Bowers, Amauda. Harry E. Kearns, Amelia. Le ·sa B. Ma ter , Antwerp. Varnum C. Collins. Barnes\"Ule. Emma E. Thorne, Berea. Lm\'eli E. Blakeley, Botkins. James P. Evans, Bradner. Ora A. Ridilter, Brunswick. William H. Neiberg, Buckeye Lake. Horace B. Ramey, Centerburg. Stuart N. Austin, Chardon. Robert H. Brown, Clyde. John W. Shisler. Dalton. Edward E. TrueSdale, Delphos. James 0. Miller. Dexter City. James A. Barr, Dover. l\larvin P. Devore, East Columbus. l\larie Thompson, East Fultonham. Lee Heckman, Edon. Nelle Snediker, Fairfield. Charles A. Saunders, Findlay. Ellen l\1. Cumming. Fort Jennings. l\1Jl·on C. Cox, J4~remont. Orin Breckenridge, Grove City.

Oscar G. Cross, Hamden. Orville R. Wiley, llat·tvme. George A. Vincent, Hiram. Charles V\•. Evans, Huntsville. Robert S. Nichols, Jackson Center. Olive B. Reed, Jacksonville. Frank J. Reinheimer, Kelleys Island. George H. Meek, Lakeside. Guy El Matthews, Liberty Center. Stella M. Brogan, Lodi. Carl W. Appel, Lucasville. Sanford E. Goodell. Luckey. Godfrer Gesen, Massillon. Emma Fenstermaker, McClure. Samuel F. Darts, Mendon. Elvey E. El~T. Motmt Orab. Frank R. Jackson, Nelsonrule. John S. De Jean. Nevada. Elizabeth L. D. Tritt, N'orth Lewisburg. Hattie S. Sell, North Lima. John P. Lauer, Ottoville. ~rlYie E. SoYacool, Penin ula. William A. Cooper, Piketon. Lncina Byers, Poland. Kelson P. Swank, Quincy. Crayton E. Womer, Republic. Owen Livingston, Richwood. Henry F. Longenecker, Rittman. Harry B. 1\liller, Rockford. Mary B. Craig, Ru elli; Point. Lida R. "·uuamson, Seaman. Howard H. Collins, South Zanesville. Charles E. Kimmel, Struther . Howard Arnsbarg-er, Swanton. l\Iary C. Lauer. Tiltonsville. Hugh C. Bell, Utica. Frank A. Gamble, Yan Wert. C'hnrles B. Saxby, "·e ton. J ohn D. Kramer, West Alexandria. Peter Mallendick, Whitehouse. Frank B. Jame.~ . Willard. Edson C. N'ichols, Willoughby. Cyrus S. Daulton, "·inehe~ter.

BO'LTH CAROLINA

William B. Blakeley, Andrews. William R. Rozier, Bethune. Irene Stuckey. Bi ·hopville. Tnlly A. Sawyer. Chec;;nee. Lida E. Setsler. Co\\·pen . John B. O"Xeal, F a irfax. Je t;e B. Bird, Inman. Susie J. :Miller, Jeffer~on. Erne.-t L. Isenhower, Lake City. Joi;eph G. Brabham, Olar. John W. Quick. Pageland. Hohert L. Plexico, ~harou. William C. Stepp, Taylors. Hattie J. Peeples, Varuville.

TEXAS

Marion C. Lucky, Balmorhea. W"illiam H. Seidel. Baytown. Leslie L. Cates, Ben Wheeler. Joseph l\. Taylor. Be. t. Alois J. Skards, Bloomington ... Kaney Saunders, Boerne. John C. Gee, Call. James T. Gray, Camp Wood. Robert H. Stone, Canadian. " .,.alter W. Broadhurst, Canutillo. Herbert L. Barker. Cumby. Sidney A. James, Encinal. V\'alter T. McCarty, Enloe. John A. Guyer, Fliona. Keziah Shield~ , Glen Ro e. Eva H. McCown, Grandview. Olemons E. Littlefield, Harwood. "'illiam M. Huddleston, Hubbard. Arthur Treadaway, Lindale. Fay F. Spragins, Martindale. Mary F. Wakefield, Midway. John E. McAllister, l\liramlo City. Lola Marsh, Navarro. Arthur C. Wahl, Odem. Maude A. Price, Peh·olia.

DECE~IBER 1 7

f

t

1925 CONGRESSIONAL RECORD-HOUSE 1005 Edward E. Alexander, Pioneer. Janie M. McAlpin, Port Neches. "Wilson P. Hardwick, Pottsboro. John H. Wilson, Quanah. James A. Carter, Ri<:hland Springs. Denison P. Greenwade, Rochester. Theodore Miller, Rusk. Edmund R. Gallagher, San Diego. Marjorie C. Ware, Seagraves. George H. Draeger, Seguin. James S. Bate Slaton. Oscar C. Lowry, South Bend. William P. Harris, Sulphur Springs, Morus B. Howard, Sweetwater. Joseph W. Davis, Tearrue. Thomas J. Darling, Temple. Albert W. Henderson, Tenell. George W. Vaughn, Texline. Robert L. Parker, Toyah. Landon M. Hatcher, Troy, J e.ti Potter, Tulia. Arthur E. Fo::;ter, Venus. Kit C. Stinebaugh, Walnut Springs. Uargaret E. Hodges, Westbrook. Ruby E. Ambler, Ysleta.

UTAH

Roland A. Madsen, Brigham. Anthony W. Thorn on, Ephraim. John W. Guild, Kamas. Etta Moffitt, Kenilworth. Leland Powell, Lehi. Charles E. Walton, jr., Monticello. Rufus A. Garner, Ogden. Agnes Harrison, Standardville. John A. Hatch, Woods Cross.

WEST VIRGI:J\TJ.A

Russell B. Gibson, Albright. Charles L. Baker, Amherstdale. Jes e D. Day, Ashland. James H. McComas, Barboursville. Freda W. 1\!ason, Bayard. Oma E. Kimes, Belleville. Samuel L. Clark, Cass. John J. Denham, Clarksburg. Leander A. Lynch, Cowen. Florence Musick, Delbarton. Eulalia B. Wheeler, EUrhorn. Homer C. Tennant, Fairview. Walter B. Beale, Fireco. George W. Sites, Jj'reeman. John E. Pierson, Gassam1y. Laura Y. Conner, Harper:-; :?erry. Robert K. Pearrell, Hedgesville. Rufus B. Scott, Hemphill. Chester L. Blevin , Herndon. George L. Carlisle, Hillsboro. John A. Ferguson, Hollidays Cove. Roy E. Curtis, Hundred. Lida Steinke, Iaeger. Ila Lawson, Jane Lew. Columbus A. Murphy, Jenkinjones. Juniata Amo, Leon. William P. Jett, Lost Creek. William M. Chambers, Maben. James P. Peck, Mabscott. Frederick E. Bletner, Mason. Mary Wbite, Matewan. Walter B. Crickmer, McAlpin. Calvin Shockey, McComas. Roscoe Wilcox, McDowell. Elmer E. Snellenberger, Panther. l\lary I. .Casey, Ranson. Kenna W. Snedegar, Renick. Marshall C. Archer, Ripley. Ira ,V. Folden, Ronceverte. Ulysses S. Jarrett, St. Albans. William C. Bishop, Scarbro. Ralph C. Morton, Sharples. Homer H. Roberts, Smithfield. Beverley N. Burruss, Spring Hill. Joseph C. Turley, Switchback. Harry R. Tribou, Tams. William H. Young, Union.

•

'•

WYOMI~G

James J. :UcDermott, Arvada. Oscar W. Stringer, Dubois. Minnie C. Corum, Encampment. James E. Patterson, Gebo. William E. Lloyd, Jackson. George R. Bringhurst, Lovell. Frances P. Youngberg, Lyman. Annetta V. Welsh, Midwest. Peter B. Petrie, Opal. Ardery Leo McFarland, Salt Creek. Clara Wilcox, Saratoga. Lizzie R. Moore, South Superior. Catherine McCabe, Van Tassell.

WITHDRAWAL

Executive nomination withdrawn fro-m the Senate Decem1Jer 11, 1925

Cadet Edgar William Garbisch to be· second lieutenant in the Corps of Engineers, with rank from June 12, 1925, which was submitted to tl1e Senate December 8, 1925. (The resigna­iion of Cadet Edgar William Garbisch, December 14, 1923. necessitates tile removal of his name from the nomination list.)

HOUSE OF REPRESENTATIVES THURSDAY, Decembe1· 17,1925

The House met at 12 o'clock noon. The Chaplain, Rev. James Shera Montgomery, D. D., offered

the following prayer :

"They that wait upon the Lord, shall renew their strength." We praise Thee, our heavenly Father, that in Thee we have

. such a refuge. By all that is tenderest in Thy promises and wisest in Thy teaching, do Thou encourage us to come to Thee. As Thy pardoning grace is like the fullness of the sea, do Thou forgive us. For the blessings of the past we thank 'l'hee, and continue, 0 Lord, to reveal Thyself unto us in wisdom and in truth. l\Iay we have large conceptions of duty and a growing sense of responsibility. The Lord help us in all things to be true, ho.norable, and upright; the Lord set His seal upon us and keep us evermore, through Christ, our bles~ed Sanour. Amen.

The Journal of the proceedings of ye terday was read and approved.

SWE.A.RING IN OF MEMBER

Mr. WILSON of l\fi sissippi appeared at the bar of the Hou e and took the oath of office prescribed by law.

COMMITTEE ON E~OLLED BILLS

Mr. CAMPBELL, from the Committee on Enrolled Bills . reported that December 16 they pre en ted to the President of the United States for his approval the following joint resolu­tion of the following title :

H. J. Res. 67. Joint re olution authorizing payment of salaries of the officers and employees of Congress for December, 1925, on the 19th day of that month.

THE REVE~UE BILL

Mr. GREEN of Iowa. Mr. Speaker, I move that the House resolve itself into Committee of the Whole House on the state of the Union for the further consideration of the bill (H. R. 1) to reduce and equalize taxation, to provide revenue, and for other purposes.

The motion was agreed to. Accordingly the House resolved it elf into Committee of the

Whole House on the state· of the Union, with Mr. MADDE~ in the chair. ·

The CHAIRMAN. The House is in Committee of the Whole House on the state of the Union for the consideration of H. R. 1, which the Clerk will report by title.

The Clerk read the title of the bill. The CHAIRMAN. The Clerk will read. The Clerk read as follows : (b) Whoever fails to comply with any duty imposed upon him by

section 304, or, having in his possession or control any record, file, or paper, containing or supposed to contain :my information concerning the estate of the decedent, or, having in his possession or control any property comprised in the gross estate of the decedent, falls to exhibit

. the same upon requPst to the commission~r or any collector or law officer of tbe United States or his duly authorized deputy or agent, who

1006 CO~ GRESSIOX AL RECORD-HOUSE DECE:JIBER 1 7

de:ire to examine the same in the performance of his duties under this title, shall be liaiJle to a penalty of not exceeding $500, to be recov­ereu. with co.· ts of suit, in a cidl action in the name of the United Sta tl'S.

1Ir. GREI1J~ of Iowa. Mr. Chairman, a typograpllical error ha~ jul't bE>en disco\ered on page 103, line 18, of the bill. I a:k unanimous consent that the figures "27-:1:," at the close uf line 18. ou page 163, be chang·ed to the figurrs " 308."

The CHAIR.\IAN. Unle ·s there is olJjecUou, tlle correction will IJe made.

TliNe wa. · no objection . The Clerk read a follows : (u) For the purpose of this section the clerk of tlJe United States 1

Court for China shall be a collector for the tt-rritorial juris<liction of such court, and t axe shall be col lected by and paicl to him in the ,;:arn e manner and :;;ubjec t to the same pro\isions of law, inclut1iug I>enalties. as tlle taxes collecteu by a11d paid to a collector in the t r nit ell States.

1Ir. FRF~AR. Mr. Chairman, I bt:>lic\e thi · to lJe tbe proper 11la<:e to offer an amendment, whicll I now pre~cnt, providing for a gift tax; and let me say in explanation that section 319, wh icll avpears in the !Jill, while referring to China, also refers to tile . case of decedents, Ro it · seems this is the. proper plac-e, eomin~ right after that se<:tion, as a . imilar prod.:;ion did in tho original bill.

'l'he 'HAIIUlA.N. Tbe gentleman from Wisconsin offers an nmendment. 'Yhich the Clerk will report.

The Clerk read as follows : Am eullment by ::.Ur. FrtE_-\R: Page 176, after line 22, in:-;f'l't:

GIFT 'FAX

For the calendar year 19::!4 and ea ch calendar year ther~tfter, a tax equal to the sum o! the following is hereby imposed upon the transfer by a resident by gift during such calendar yern· of any prop­ert.Y wheren~r situated, whether made directly or indirectly, and upon tlle t r an fer by a nonresident by gift during each calendal' year of any proper ty si tun ted within the United States, whether made directly or indirectly:

(ln f' per centum of the amount of the net estate not 1n exce- s of ~:10.000;

Two per centum or the amonnt by which the net estate exceeds ~.JO.OOO and does not exceed $100,000;

Three per centum of the amount by which tile net estate exceeds !j:1v0.000 and does not exceed $200,000;

Four per centum of the amount by 1rh:ich the net estate exceeds ~::!00,000 and does not exceed $400,000 ;

Five per centmn of the amount by which the net estate exceeds $400,000 and does not exceed ~600,000 ;

Six per centum of the amount by which the net estate exceeds ~GOO,OOO and does not exceed 800,000 ;

Sewn pet· centum of the amount by which the net estate exceeds , " 00,000 and does not exceed $1,000,000 ;

Eight pet· centum of the amount by which the net estate exceeds !!il,OOO.OOO and does not exceed $1 ,500,000;

Xine per centum of the amount by which the net estate exceeds U,:.JOO,OOO and does not exceed $2,000,000;

Ten per centum of the amount by which the net estate exceeds $:?,000,000 and does not exceed $2,500,000 ;

Eleven per centum of the amount by which the net esta te exceeds $2,500,000 and does not exceed . 3,000,000 ;

Twelve per centum of the amount by which the net estate exceeds $3,000,000 and does not exceed $3.500,000 ;

Thirteen per centum of the amount by whlch the net estate exceeds ~3 ,:300 ,000 and does not exceed ~-!,000,000;

Fourteen per centum, or the amount by which the net estate exceeds $4.000,000 and does not exceed $5,000,000 ;

F ifteen per centum of the amount by which the net e tate exceeds $3 ,000,000 and does not exceed $0,000,000 ;

.SLd een pe" centum of the amount by which the net estate exceeds ~G.OOO,OOO and does not exceed $7,000,000;

Seventeen per centum of the amount by which the net estate exceeds $7,000,000 and does not exceed $8,000,000;

Eighteen per centum of the amount by whlch the net estate exceeds $8,000,000 and does not exceed $9,000,000 ;

:Kinteen per centum o! the amount by which the net estate l!xceeds $9,000,000 nnd does not exceed $10,000,000;

Twcuty per centum of the amount by which the net estate exceeds $10,000,000;

SEc. 320. It tbe gift is made in property, the fair market value thereof ut the date of the gift shall be considered the amount of the g:ift. Wnere property is sold or exchanged for less than a fair con­sideration in money or money':> worth, then the amount by which the fair market value of the property exceeded the consideration received

shall, for the purpose of the tax imposed by section 319, be de<'med a gift, and sh::t.ll be iu clll\led in computing the amount of gifts made during the calendar sear.

SEc. 321. In computing the amount of the giftl subject to the ta:< imposed by section 319, there shall be allowed as deductions:

(a) In the ca ·e of a r e.:;illent-(1) .Au exemption of :tO,OOU; (:..!) The amount or all girts or contribut ions · made wilhin the

calendar yea r to or for the use of the lJnited l::itate , any State, Terri­tory, any political ubdi>i~ion thereor, or the District of Columuia, for <•xclusiHly pul.Jli c purpo::.«' ., or to or for the use of any corporatiou organized and operated exclu:s irely for rl'li»ious charitable scientific literary, or educationnl purpo . .,.-., including ,., t il~ 'encouragem'ent of ar; and the preYentiou of cruelly to children or animals, no part of the net earning. of whi ch inures to the uene11t of any private stockholder or indiddual, or to a trustee or trustees, or fraterua l society, order. 'lt'

associa tion, operatillg under the lod:;e sys tem, bot only if such o-ifts or contrilmtiuu · are to I.Je used lJy uch tro tee or tru. tee or by snch fr<.tternal society, o1·der, or a~:>:;ociaUou , exclnsl>cly for religiou~S, charlt· able, scientific, literary, or cdueat.ional purpo. cs, or fur the p1·ev-f' ntiuu of cruelty to chiluren or aniutals, and rhc amount of all gifb:; or coutri· bution · made within the calendar :rear by corporation, trustee or fraternal society, o1·uer, or association fur a religious, charitallle, scientific, literary, or educational purpose, or for the prc\cntion of cruelty to chiltlt·cn Oi' animals, and the amount of all gifts or contrihn· tions made within the cakndar yenr to the ~pecial fuud for vocational rehabilitatlon authorized by sec tion 7 of the ,·ocational rehabilitation act;

(3) Gifts the aggregate amount of which to any one person doe:-: not exceed $GOO;

(4) An amount equal to the Yalue of any property transferred by gift wii.hiu the cnlcmlar year. which can be identified (A) a ~ having been received by the donor within five :rears prior to the time of his making such gift, either from another per ·o n by gift or from a decedent I.Jy gift, bequest, devise. or iuhcrita uce, or (B ) a · having been acquired in f'Xthange for property ·o rec<'ind . This deduction shall be allowed only wllere a gift tax or an estate tax under this or any prior act ot Con gress was paid DY or on behalf of the donor or tile e ·tate of such decedent, ns t he case may be, and only in the amount of the value placed by the commissioner on such property in determining the valuo of the gift or the gross estate of uch decPfleHt, and only to the extent that the mlue of ·uch property is included in the tot al amount of gifts made within the calendar year and not ~edu c t o..'d uncler paragraph ( :!) or (3) of this ubdi>ision.

(IJ) In the case or a nonre:sident-(1) The amount of all gifts or contribntions m11cle within the calen·

dar year to or for the use of the United States, any State, 'ferritor:r , any political subdi>ision thereof, or the District or Columbia, for ex· dusive1y public purposes, or to or for the use of any domestic cor· pora tion organized and opera ted exclush-cly for religious, charita l.Jle, scientific, literary, or educational pnrpoS<'S, including the enconr::t;!c­ment of art and the pre\' ention of cruelty to children or animal ~ , no part of the net eamings of which inures to the l.Jenelit of any p1·hate stockholder or indiYidual, or to a trustee or trustees, or fraternal society, order, or association, operating under the lodge system, but ouly if such gifts or contributions are to be used within the nltecl States by such trnstee or trustees or by such fmtcrnal society, order, or as ociation, exclusiYely for religious, charitable, scientific, litcr11ry, or educational purposf' , or for the preYention of cruelty to children or animals, and the amount of all gifts or contributions made within the calendar year by such corporat ion, trustee, or fraternal society, order, or association for a religious, charitable, scientific, literary, or educational purpose, or for the prevention o.f cruelty to children or animals, and the amount of all gifts or contributions made within the calendar year to the special funu for vocational r ehabilitation author· ized by section 7 of the vocational rehabilitation a ct;

(2) Gifts the aggregate amount of which to any one person does not exceed $500 ;

(3) An amount equal to the value ot any prope1·ty situated in the United States transfened by gift within the calendar year, which can be identified (A) as having been received by the donor within five years prior to the time ot his mnking such gift, either from another person by gift or from a decedent by glft, beque t, devise, or inheritance, or ~B) as having been acquired in exchange for prop­erty so received. ~'his deduction shall be allowed only where a gift tax or an estate tax under this or any prior act of Congress was paid by or on behalf of the donor <lr the e tate of such decedent, as the ca e may be, and only in the amount of the value placed by the commissioner on such property in determining the value of the gift or the gross estate of such decedent, and only to the extent that tha value of such property is included within the total amount of gifts made within the calendar year of property situated in the United States and not deducted under paragraph (1) or (2) of this subdivision.

1925 CONGRESS! ON 1\.L RECORD--HOUSE 1007 __ SEc. 322. In case a tax has been imposed under section 819 upon

any gift, and thereafter upon the death of the donor the amount thereof is require(} by any provision of Part I of. this title to be included in the gross estate oi' the decedent, then there shall be credited again t and applied in reduction of the estate tax, which would otherwise be chargeable against the estate of the decedent under the provisions of section 301, an amount equal to the tax paid wltb respect to such gift; and in the event the donor bas in any year paid the tax imposed by section 319 with respect to a gift or gifts which upon the rleath ot the donor must be included in his gross estate and a gift or gifts not · required to be so included, then the amount of the tax which shall be deemed to have been paid with respect to the gift or gif ts required to be so included shall -be that proportion of the entire tax paid on account of all such gifts which the amount of the gift or gifts required to be so included bears to the total amolmt of gifts in that year.

SEC. 323 . .Any person who within the year 1924 or any calendar Yetl.l' thereafter makes any gift or gifts in excess of. the deductions allowed by ection 321 shall, on or before the 15th day ot March, file with the collector a return under oath, in duplicate, listing and setting forth therein all gifts and contributions made by him during such calendar year (other than the gifts specified in paragraph (3) of subdivision (a) and in paragraph (2) of subdivision (b) of section 321), and the fair market value thereof when made, and also all sales and exchanges of property owned by biro mn.de within such year for less than a fair consideration in money or money's worth, stating therein the fair market value of the property so sold or exchanged and that of the con­sideration received by him, both as of the date of such sale or exchange.

SEc. 324. The tax imposed by section 319 shall be paid by the donor on Ol' before the 15th day of March, and shall be assessed, collected, and paid in the same manner and subject, in so far as applicable, to the same pro vi ions of law as the tax imposed by section 301.

1\lr. FREAR. Mr. Chairman, I ask unanimous consent that if this amendment should be adopted by tbe House, the Clerk may be permitted to change to the proper letters or numerals for the separate provisions, because I have simply offered as an amendment the old law, sub tituting, however, the rates that were adopted in the inheritance tax by the committee yes­tei·day in the proposed law. This is to make them conform to the proposed law. ·

l\Ir. CHINDBLOM. If it passes, of course, the gentleman would have no trouble about that.

Mr. FREAR. It is very considerate of a member of the committee to yield that permis~ion with the uncertainty as to the adoption of the amendment, although I was assm·ed in a letter I received from the State of New York this morning that by no possibility would any single vote be pried away from those who had agreed to support the report of the com­mittee.

1\lr. CHINDBLOl\1. Let me- say that, as the gentleman from Wisconsin well knows, it is customary at the conclusion of the passage of a bill of this nature for the Clerk to be instructed to make all necessary changes of this character.

Mr. FREAR. Then I trust the members of tbe committee will aid me, provided this amendment should be adopted as a part of the bill. ·

I only wish to present this one fact: A gift tax is · now law. It was offered in the last se sion of Congress and over $7,000,000 was collected last year under such a gift tax. The purpose is not, of course, primarily to collect money, but the gift tax is to support the estate tax, so that if a man gives his estate away in large portions two or three years prior to his death, as did 1\Ir. Rockefeller, his estate will be obliged to pay some tax to the Government, because be bas depended upon the Government in the accumulation of his wealth. In other words, it protects the estate tax, and that is its main purpose. .

As I have said, $7,000,000 was collected last year, and what it would amount to in the coming years I do not know, but that is immaterial, providing it does protect the estate tax.

The committee, as I understand it, bas put in a provision for gifts made two years prlor to death, but you will notice that would not affect anything regarding, for instance, the Ford estate; it would not affect anything regarding the Mor­gan estate or regarding the estate of Rockefeller, because those estates have been given away largely long prior to death.

There is the usual exemption of $50,000 from any tax, which is provided also in the estate tax. Such gifts can be made without any tax whatsoever.

I am simply referring to the e:f'J:'ect. of the law without any argument upon it, because it bas been so frequently presented to the House, and you are familiar with its purpose.

The CHAIRMAN. The question is on the amendment offered by the gentleman from 'Visconsin [Mr. FREAB].

The amendment was rejected.

Mr. GREEN of Florida. Mr. Chairman, I offer an amend­ment.

The CHAIRMAN. The gentleman from Florida offers an amendment, which the Clerk will report.

The Clerk read as follows: Amendment by Mr. GREEN of Florida : Strike from bill title 8 and

all pertaining e tate tax.

Mr. GREEN of Iowa. 1\Ir. Chairman, I make the point of order that the amendment is not in order. Having passed these provisions, and having read them paragraph by paragraph without any amendment being offered, this amendment is not now in order.

The CHAIRMAN. The point of order is sustained, and the Clerk will read.

The Clerk read as follows : SEC. 400. (a) Upon cigars and cigarettes manufactured in or im­

ported into the United States, and hereafter sold by the manufacturer or importer, or removed for consumption or sale, there shall be levied, collected, and paid under the provisions of existing law, in lieu of the internal-revenue taxes now imposed thereon by section 400 of the reYe­nue act of 1924, the following taxes, to be paid by the manufacturer or importer tbereof-

1\Ir. HAWLEY. Mr. Chairman, I offer the following amend­ment.

The Clerk read as follows : Page 176, line ~6, strike out the words " and hereafter" and lnBert

" which on or after the expiration of 30 days after the enactment ot this act are."

Mr. HAWLEY. Mr. Chairman, this is a committee amend­ment. The committee in preparing this bill has incorporated in it all revenue law, so that anyone receiving a copy of the new law, when enacted, will not be compelled to search through previous acts to find what existing law is.

.The CHAIRMAN. 'l'he question is on the amendment. The committee amendment was agreed to. 1\lr. GREEN of Iowa. Mr. Chairman, I ask that the gentle­

man from Pennsylvania [1\lr. ME~GES] may extend his remarks in the RECoRD on the tobacco tax.

The CHAIRMAN. The gentleman from Iowa asks unanimous con ent that the gentleman from Penn ·ylvania [Mr. MENGES] may extend his remarks in the RECORD on the tobacco tax. Is there objection?

There was no objection. _ l\Ir. MFJXGES. 1\lr. Chairman, I represent a district, the

twenty-second of Pennsylvania, in which the sale of cigar stamps in 1923 amounted to $2,655,009.14 and in 1924 to $2,844,-249.02, and from present indications the sale in 1925 will amount to over $3,000,000. In this district 630,000,000 cigars are manufactured, or appro:rimately one-tenth of all the cigars consumed in the United States; more than are manufactured in any other single district. Five hundred million of the 630,-000,000 are 5-cent cigars and amount to more than one-sixth of all the 5-cent cigars consumed in the United States.

The manufacturers of these cigars have requested me to appeal to Congress to retain the $4 per thou and tax on the class A, or the 5-cent cigars, instead of reducing it to $2.50 per thousand. The reasons advanced by those who have asked for this reduction are, first, that because of the high price of cigars consumption has been decreasing at an unprecedented rate and that it is threatening the indu try. This is not the case with the 5-cent hand-made cigar of my district. The consumption of this 5-cent hand-made cigar from the twenty- econd district of Pennsylvania has· during the past two years increased over 10 per cent above the consumption of the previous two ypars, showing that what seems to be true of the cigar industry gen­erally is not true of the hand-made cigars manufactured in my district.

Therefore, if under present revenue rates the consumption bas increased and, as is evident by this increase, the quality of the product has been maintained-and the fact is the qual­ity has been improved-then why reduce the revenue when those who pay more than one-sixth of it say they are willing to pay it, and that they have increa ed the consumption of their product and at the same time improved its quality.

Another reason advanced for asking for this reduction is that the manufacturers may be able to pay higher wages for labor. We think in my ~]strict that the real reason is the introduction of a machine-made cigar in place of the superior hand-made cigar. This will need and, with the saving that is made by the tax reduction, will get enormous advertising which the small manufacturer who makes a few hundred thousand cigars will not be able to give bis product. In this way. the hand-made product of the small manufacturer wilJ

--.1008 CONGRESSION1\..L RECORD-HOUSE DECE:JIDER 17

be drowned out of the mal'ket and the machine-made article introduced. My people say that they are willing to pay the present rate of tax, namely, .'-! per 1,000, and that they can afford to do it, while they can not afford to install expensive machinery and manufactm·e machine-made cigars.

Another thing, if thi. reduction is made, the hand-made cigar maker in my disU'ict -will be again.t the wall. More than 20,000 poople. directly or indirectly, derive their daily bread from this inuustry. They liYe in their own comfortable homes. Some of them own some land, on which they raise the vegetables and mucll of the food consumed by the family. They are a contented, hap11y people, and make up a thrifty and progressive community. Are these people to be backed up against the wall by a machine?

It is true it co ts less to manufacture cigars by machine th:.m by hand. 'l'lle machine-made cigar costs about $4 a thousand, while the hand-made cigar costs about $ll.50 or more per 1,000. but tllese manufacturers are willing to pay this extra cost as well as the $4 per 1,000 revenue to presene their induJ3try.

But not only will it throw out of employment these thou­sands of cigar makers, or compel them to make a cheaper cigar, but the tobacco usecl in these cigars i~ domestic tobacco, and, as these manufactm·ers can not afford to install machinery and consume the tobacco locally, the cigar industry would certainly be moved from this district. The domestm. market for the ·farmers' product would be movec~ out of the producing territory, where it is now consumed, to some distant exchange. Thus the profit now receiYed by the farmer by selling locally and directly would be reaped by selling agencies.

Another thing, if this reduction is retained, and if it should not have the effect of completely destroying the indus­tr~-. it will compel the manufacturer to make a "2-for-5" and a "3-for-10" cigar, reduce the wages of the laborer, and also the price of tobacco to the farmer.

This industry is financed by the earnings of the manufac­turers and employees. 1'heir investments are in their own control, and whatever is ea1·ned by the increase of this indus­try can be re:inYested locally.

MESSAGE FflOM THE SE~ATE

The committee informally rose; and the Speaker having re­sumed the chair, a message from the Senate, by ~Ir. Craven, one of its clerks, announced that the Senate had passed Senate bill 41, to encourage and regulate the use of aircraft in com­merce, and for other pm·poses.

THE REVENUE BILL

The committee resumed its session. The Clerk read as follows: SEc. 401. (a) Upon all tobacco and snuff manufactured in or im­

ported into the United States, and hereafter sold by the manufacturer or importer, or removed for consumption or sale, there shall be levied, collected, and paid, in lieu of the internal-revenue tax~s now imposed thereon by section 401 of the revenue act of 1924, a tax of 18 cents per pound, to be paid by the ml!nufacturer or importer thereof.

:Mr. FREAR. Mr. Chairman, I move to strike out the last word. I ask unanimous consent that I may proceed for 10 minutes.

The CHAIRMAN. 1'he gentleman from Wisconsin asks unanimous consent to proceed for 10 minutes. Is there ob­jection?

There was no objection. Mr. FREAR. 1\11'. Chairman, on yesterday those who be­

lie,·e as I do, and are rather independent Republican M.em­uers of the House, were treated to a very questionable com­pliment by the lea<ler on the Democratic side of the House [Mr. GARRETT]. At the proper time we shall discuss ques­tions between ourselves and those on this, the Republican, side.

I wish briefly to make a statement. The gentleman from Tennessee read an extract from the Bible and told about the punishment that was to be received by those of us who had been independent and voted our convictions at this time. I regret that the gentleman did not do the same. Last year I recall his action on this bill, and this year there has been a complete somersault by many of the gentlemen on his side of the House. I do not want my words to be accepted, I do not want my position to be considered as authority, and so I shall take the highest authority that can be found, the highest authority on the Democratic side of the House in the United States to-day, and let that judgment be read into the RECORD. The New York World, one of the great Demo­cratic papers, speaking fo~ the Democratic Party, has this

to say in its issue of December 14, 1025. It is headed " Me, too, Democracy."

Tlle Democratic Party in the House of lleprcseutu tives ha. done everything that any party anywhere could do in one sllort week lo efface itself and approximate zero in impor tance. It hns abtlica ted what influence it bad in the first t,.;·o i:::sues of a week-old se Sion. • • • On Tuesday things slid further. Debate then began on the new tax bill, which borrows its surtax logic from Mr. Mellon. The Democratic Party in the Honse, it is only fair to say, has not entirely substituted i\11·. Mellon's surtax logic for its own. Indi­vL.:.ua1 crHics like Representative H uLL and TI<:>pre eutative RAIX1> Y have refused to abdicate their own judgment. But on the whole the Democratic Party jn the House seems to date so spellbound b.v the idea of a precious tax cut-anybody's ta:>: cut so long as it happens to be made before the next congressional elections-that tbe party has lost all desire to n:al>e the cut as fair an!l as statesru9.nlik e as possible. It has become a "me too" party on taxation, taking small pains to inquire of Mr. Mellon why, if the :\lellon schedule of luwel' surtax rates will really bl'ing in more revenue to the Uo>ernment, as Mr. Mellon says it will, it has been necel'lsary to set aside the sum of $98,6!H,720 as the amount which the Govermnent wil~ ther<:> by lo ·e.

The closing paragraph of this editorial is as follows: ~'here is a role for an opposition party in every scheme or gover n­

ment. This rOle does not require on the part of the opposition carping criticism of everything which the party ln power happens to propose. But it does require s.>mething more than a sbeeplikc dash ac1·oss the pasture. It does require that on major issues the opposition party has a mind of its own and courage enough to use it. When the Democratic Party in the House lies low on the two issues of gag rule and surtax rates it does little to win popular re pect ot· to restore itself to power.

:Mr. GARRETT of Tennessee. Will the gentleman yield? l.Ir. FREAR. Certainly. 1\Jr. GARRETT of Tennessee. On the gag-rule phase of it,

does not the gentleman think that everytbing was done by the Democrats and gentlemen affiliated with them that could pos­sibly be done?

.l\lr. FRE~R. I do not want to exceed my 10 minutes' time, and I leave it to the principal mentor of the Democratic Party, the World, to speak for itself.

:Mr. GARRETT of Tennessee. The author of that editorial was not here and the gentleman from Wisconsin was here. Does not he think that everything was done that could pos­sibly be done?

1\Ir. FREAR. Let me say that in yesterday's RECORD is an interesting discussion which we all heard, ancl let me reacl that, because the gentleman took us to task. I am reading from page 939 of yesterday's RECORD: ,

l\fr. ll.liXEY. And now may. I mention the names of some other leaders on this side? You will recognize them as I mention them-Clark, DeArmond, James, Kitchin, Padgett, Moon, Flood, who died, all or them, at 1heir posts of duty, fighting, all of them, during their lives, and their deaths seem untimely against the principles for which you gentlemen stand. Oh, other leaders will rise. These puny and little leaders who control now will not control always. I apologize. I had almost violated the rules and traditions of this House. I do not want to do that. I have been here too long to do that, and I apologjze for calling them puny and little leaders. I apologize for that, and now, having done that, as I ought to do with my long service in this Ilouse, I apologize to the country for calling them puny and llttle leaders. ~'hey do not even rise to that standard.

Mr. GREE~ of Iowa. Does not the gentleman think it is enough to have that in th~ REconn once, without having it in twice? [Laughter.]

Mr. FREAR. I am afraid that the leader on the Democratic side did not hear it on the other occasion.

I realize the position of the distinguished gentleman who leads the minority, and his ability, and all that, but I do say that when he criticizes us, comes before the House, as he uid yesterday, in the way that he did, it is unfair, because we hare little voice here.

Mr. GARRE'.rT of Tennessee. Oh, I want to correct what is evidently a misapprehension on the part of the gentleman.

Mr. FREA.R. Later on, if the gentleman please. Mr. GARRETT of Tennessee. I did not criticize tbe gen­

tleman. Mr. FREA.n.. It was so assumed by those of us on tbi~ ide

who were listening. I haYe talked with some distinguished gentlemen on the Democratic side, and I have said, """'bat does Democracy to-day mean with you?" One of them said the other day, "l\ly God, I admit that we have no issues and no leaders to-day." Then I said, ":Why is it?" And he re·

, I '\

\

l

1925 CONGRESSIONAL RECORD-HOUSE 1009

plied, "We ha1e sold ourselres for a mess of pottage." I and my associates ha1e stood for things which we believe to l>e right, and we expect to stand for them. 'Ve are not afraid of our position, either here or hereafter. We will take care of ourselves, as I said yesterday, with our own colleagues on this side, when the time comes, without any difficulty. We do not care anything about the attempt to place us in a humiliating position by putting us at the bottom of various committees. That to us only looks small and cheap, particularly when we think of it with respect to such a distinguished gentleman as my colleague, the dean of the House, the gentleman from Wis­con in [l\lr. CooPER]. It does not hurt him, but it cheapens those who placed him at the bottom of his committee. I do not care what you do '\lith me, l>ut I assure you gentlemen that we will be found here in our places, if not in committee rooms. I say again to gentlemen on both sides that we will be here, and we will discu ' matters on the floor of the House. One thing you ha1e compelled us to do, and that is to stay here in Committee of the Whole most of the time, and we shall try to ha1e a fair representation here a portion of the time on both sides of the aisle.

Mr. GREEN of Io'\\a rose. Mr. FREAR. Does the gentleman ask me to yield to him? Mr. GREEN of Iowa. No; I simply wanted to say that I

can not longer permit this political discussion to go on. Mr. FREAR. But the gentleman did yesterday, and I

a~sumed in the interest of fair play and good sportsmanship that he would to-day, and I thank him kindly for doing so.

Mr. GARRETT of Tennessee. Mr. Chairman, I rise in oppo­sition to the pro fcrma amendment.

1'he CHAIRMAN. There is nothing before the committee at the present time.

l\Ir. GARRETT of Tennessee. Then, I move to strike out the last two words.

1\Ir. GREEN of Iowa. If the gentleman will kindly yield to me for a moment, of course, I would not object to my dis­tinguished friend from Tennessee occupying the floor--

:Mr. GARRETT of Tennessee. I yield to the gentleman. Ur. GREEN of Iowa. I simply rise to say that when the

gentleman gets through I shall insist that this di cussion stop and we proceed with the consideration of the bill.

Mr. GARRETT of Tennessee. Mr. Chairman, I am rather surprised that my friend from 'Visconsin [Mr. FREAR] has not a better sense of humor than he appears to have. Evidently my friend from Wisconsin does not appreciate fine irony. I really thought that I was paying the gentleman a compliment ~·e terday by leveling something of criticism, if it migfit be so called, at those who treated the gentleman so badly. I made no criticism of the gentleman and his colleague for the stand that they took. I am glad they took it. I admire their inde­pendence and courage. [Applause.]

The Clerk read as follows :

(e) Section 3392 of the Re>ised Statutes, as amended, is reenacted without change, as follow :

" SEC. 3392. All cigars Wf'ighing more than 3 pounds per thousand shall be packed in boxes not before u ed for that purpose containing, respectively, 3, 5, 7, 10, 12, 13, 25, 50, 100, 200, 250, or 500 cigars each; and e>ery person who sells, or offers for sale, or delivers, or offers to deliver, any cigars in any other form than in new boxes as above described, or who packs in any box any cigars in excess of or less than the number provided by law to be put in each box, respec­tinly, or who falsely brands any box, or affixes a stamp on any box denoting a less amount of tax than that required by law, shall be fined for each offense not more than $1,000 and be irnprisonPd not more than two years: Pro1:ided, Tllat nothing in this section shall be construed as preventing the sale of cigars at retail by retail deal­ers from boxes packed, stamped, and branded in the manner pre­scribed by law: Pro,;ided ju,.ther, That each employee of a manu­facturer of cigars shall be permitted to u e, for personal consump­tion and for experimental purposes, not to exceed 21 cigars per week without the manufacturer of cigars being required to pack the same in boxes or to stamp or pay any internal-revenue tax thereon, such exemption to be :Ulowed under such rules and regulations as the Secretary of the Treasury may prescribe."

l\lr. IIA WLEY. Mr. Chairman, I offer the following com­mittee amendment, '\\hich I send to the desk.

The Clerk read as follo'\\s :

Committee amendment offered by Mr. IIAWLEY: On page 180, after line 9, insert a new subdi\"ision to read as follows:

"(f) This section shall take effect on the expiration of - 30 days after the enactment of this act."

L:A'"YII-64

The CHAIRMAN. The question is on agreeing to the amendment.

The amendment was agreed to. The Clerk read as follows :

SEc. 401. (a) "Cpon all tobacco and snul! manufactured in or im­ported into the United States, and hereafter sold by the manufacturer or impo.rter, or removed for consumption or sale, there shall be levied, collected, and paid, in lieu of the internal-revenue taxes now imposed thereon by section 401 of the revenue act of 1924, a tax of 18 cents per pound, to be paid by the manufacturer or importer thereof.

1\lr. liA WLE-Y. l\Ir. Chairman, I offer the following com­mittee amendment.

The Clerk read as follow :

Committee amendment offered by Mr. HAWL.Er: On page 180, after line 17, insert a new subdivision, as follows:

"(b) "Cpon all unmanufactured lea! tobacco produced in the United States and hereafter sold or l'emoved for sale to the consumer, there shall be levied, collected, and paid a tax of 8 cents per pound, to be paid by the person so selling or remo>ing such leaf tobacco. This subdivision shall not apply to leaf tobacco sold or removed for sale to the consumer by {1) a farmer or grower of tobacco, or (2) a tobacco growers' cooperative association as defined in subdivision (f) of section 3360 of the Revised Statutes as amended."

On page 180, line 18, strike out "(b)" and insert "(c)."

1\lr. HAWLEY. 1\lr. Chairman, the effect of this amendment on eXisting law is to give relief to growers of tobacco and to enlarge the market for their product in its unmanufactured form. It reduces the tax from 18 to 8 cents, as expressly stated. in the amendment. It does not change existing law in any other particular, nor does it add to a tax or impose a new tax. The growers and cooperative organizations will re­main untaxed, as provided in e:Aisting law.

Mr. GARRETT of Tennessee. 1\lr. Chairman, I ask for recognition in fa-vor of the amendment. I was not quite able to catch what the gentleman from Oregon [Mr. HAWLEY] said, but I understood him to say that this would make some change in respect to the grower. That is not the case, and I may hale misunderstood him. Under the law as it now exists, any gro"er of tobacco can sell the product of his own growth in whatever way he chooses, to whomsoever he pleases, in bulk or by parcel post in any quantity without the payment of any tax what oe-ver. This proposed amendment makes no <.:hange whate1er in that privilege, which is now enjoyed by the tobacco producer. Furthermore, under the Kincheloe amendment, adopted in the act of 1924, tobacco cooperati1e associations may sell in any quantity to a consumer direct, or to '\\homsoever choo es to buy, without the payment of any tax what oever.

The theory justifying the Kincheloe amendment, o! course, was that the tobacco of the farmer passing into the hands of a cooperative association generally remained the property of the farmer, and therefore it was perfectly right and legiti­mate and proper for it to be sold by the cooperative organiza­tion without the payment of any tax. This proposed amend­ment makes no change whatsoeTer in that. What this amend­ment does, to make it clear, Is, it will permit any person who purcha es tobacco from a producer or elsewhere to resell that tobacco in its natural state to consumers in certain quantities the size of the packages to be determined by the Treasury Department under an amendment which will be presented later by the gentleman from Oregon [1\lr. HAWLEY] upon the pay­ment of an S-cent tax.

Mr. BA WLEY. Unmanufactured tobacco. 1\Ir. GARRETT of Tennessee. Unmanufactured tobacco;

that is, in the natural leaf, unstemmed. Mr. HUDDLESTON. Is that the pre-war rate? Mr. GARRETT of Tenne see. No. Let me gi1e some his·

tory which I think is rather interesting. Up until the tariff act of 1909, the Payne Act, there was no pro1ision under which any person except the grower could retail leaf tobacco or tobacco in its natural state to the consumer without the pay­ment of the same tax that was imposed upon manufactured tobacco. In the revenue act of 1909, commonly referred to as the Payne-Aldrich tariff bill, there was inserted a provision which would enable any person to buy from a farmer and resell it in retail without payment of any tax whatsoever. That continued to be the law until the revenue act of 1918, and under that a considerable retail parcel-post business, of course on a relatively small scale, was built up throughout what is known as the Black Patch--

The CHAIRMAN. The time of the gentleman has expired.

1010 CONGRESSIONAL RECORD-HOT SE DEOEl\IBER 17

Mr. GARRETT of Tennessee. I will ask for 1h·e additional minutes.

The CHAIRMAN. The gentleman from Tennessee asks unanimous consent to proceed for five minutes. Is there ob­jection? [After a pause.] The Chairs hears none.

Mr. GARRETT of Tennessee. Throughout what is known as the Dlack Patch, consisting of about 25 counties in southern Kentucky and northern Tennessee, a good-sized business grew np. But then the revenue act of 1918 came along-this proposi­tion was not acted upon in the House. The House, when it firHt considered the bill, made no change in the law, but the Senate put some sort of an amendment in-I do not remember it in detail-and finally they worked out in conference a propo ition and brought it back as part of the conference re­port, and we had no opportunity to amend it, as it had to be yoted up or down as a whole, and it was the great war revenue act, providing orne $4,000,000,000 of revenue. This provision I'O brought in as part of the conference report not only went to the extent of stopping the sale without payment of tax but it actually went to the extent of preventing a person, except the farmer himself, from selling thi tobacco at retail e"en upon the payment of the 18-cent tax in quantities greater than 1 pound. Now, I recognize the justice of having some tax-rai. ing re"enue on manufactured tobacco and I recog­nize the justice of having a tax on dealing in the loose leaf, which, to a certain extent, will come in competition with the manufactured product after this loose leaf pa es out of the bands of the producer, and so I am agreeable to this proposi­tion about the 8-cent tax.

Mr. ABERNETHY. Will the gentleman yield? :Mr. GARRETT of Tennessee. I will. :Mr . .A.BER:\l"ETHY. Does the gentleman think it is hardly

fair that the committee should come in this House at this late hour without notice to anybody on the floor of the House and put a tax in here nobody has had any notice of, no hearings on the matter, not considered by the committee, or anything of that kind? Doe the gentleman think it is fair to the tobacco States, one of which I in part represent, that he, as leader of tbi side, should get up an<.l favor a tax that has not had any consideration, nobody knows anything about it, and have it just past-led here witboul any consideration at all? The gentle· man knows as a practical proposition that Members of this House who are not on the committee have absolutely no chance even to make a dent in this bill much les to prevent an amend­ment here from passing through that is far-reaching in its effect and mean millions and millions of dollars to the tobacco­growing States. Does the gentleman think that is fair?

).lr. GARRETT of Tennessee. Yes; I think this amendment is fair. Let me say this to the gentleman: Before the gentle­man came to Congress the House of Representatives passed precisely thi same proposition except it then provided a ta:x: of 7 cents a pound, passed it in 1920, but it did not receive consideration in the Senate. Understanding this proposition as I do, coming from a tobacco section, my own State and county producing much tobacco, it is because of my knowledge of the situation that I have arranged for this amendment to be offered. This can not injm·e the tobaccO' grower in any way, on the contrary the principal purpose behind it-a purpose which I hope shall be realized-is to enlarge the market of the producer and obtain for him a better price without in any way increasing the cost to the consumer. Now, there is very little competition for the purchase of tobacco, and knowing the amendment, understanding it as I do, I do think it is fair. I will say to my friend from North Carolina.

Mr. BROWNING. Without this amendment would loca1 dealers have the right to sell tobacco even with the payme-nt of the tax?

Mr. GARRETT of Tennessee. Not except in this way: The farmers now, I will say to my colleague, can pool their crops and hire an agent to sell for the pool; any individual farmer can hire you or me or anyone to sell his product, but the poo1 or the individual has to pay such an agent a salary. He can not work on a commission basis.

This makes no change in that law. A dealer can still work by being paid a salary, but there has been a very small busi· ness done under that privilege so far. If there is any perma· nence to the law which this amendment will make I look for a considerable increase in the sale of tobacco in its natural state throughout the country by parcel post through mail orders.

Mr. BROWNING. It reduces the amount of the tax from 18 cents to 8 cents?

~fr. GARRETT of Tennessee. Yes. I doubt very much whether any person other than the grower or the cooperatives, even by the payment of 18 cents, has been able to do anything under existing law. That law was so drawn in 1918 that it

eliminated, even with the payment of the full tax this com· petition, with foreign and domestic wholesale buye~s.

The CHAIRMAN. The time of the gentleman from Ten· nes ee bas expired.

Mr. ABERl\TETHY. Mr. Chairman, I rise in opposition to the amendment.

The CHAIRMAN. The gentleman from North Carolina is recognized in opposition to the amendment.

Mr. ABER~ETHY. Mr. Chairman and gentlemen of the committee, I bad hoped and tlwught that when the Committee on Ways and Means met here before the convening of the Con­gress and framed a bill and introduced it 'here on the first day of the session of the House; and proceeded to rush it through before the Christmas holidays, would not now under­take to come in at this time, without any notice to anybooy who is affected by this provision, and undertake to add an additional tax here. It is done without the slightest notice to a large number of Members from States concerned.

Mr. BROWNING. The gentleman understands that under the law as it now is, without this amendment, the local dealer can not buy from the farmer without paying a tax.

Mr. ABERNETHY. I under tand this, that the matter here offered involves millions of dollars and affects every tobacco grower in all the tobacco States; and I think lts introduction now is not fair to the House, or to the interests involved, or to the country, or to the Members here_

It seems to me that the Committee on Wa:vs and Means should give a hearing in this matter. It eem15. to me that it should go over, or something should be done so that we would have a chance to study this question to see how far-reaching it is. I do not know just what it means without careful study of the amendment. I am willing to haye you pass a tax bill that is a reduction. But when you come in here to strut with a propo al of a new tax on tobacco, which pays more than any other one thing in the country, now that liquor is out of the way, I must protest. It used to be whisky and tobacco. Now you propose to put an extra tax on tobacco, an extra tax which nobody understands except a few gentlemen behind the measure. [Applause.] I do hope, gentlemen, you will not put this thing through in any such manner as that. I do not think it is fair to the House.

The CHAIRMAl~. The time of the gentleman from North Cru·olina has expired.

l\Ir. BROWNING rose. The CHAIRMAN. The gentleman from Tennessee is rec­

ognized. Mr. BROWNING. l\lr. Chairman and gentlemen of the com­

mittee, I think my good friend who has just spoken to this proposition is unduly alarmed. I have two or three tobacco counties in my district, and I believe that this amendment ought to be adopted. I do not understand that it is a new tax at all. If I understand the situation, under the Jaw without this amendment no local dealer can buy from the farmer and build up a mall-order business and sell at all. I doubt if be has the right to sell even upon the payment of 18 cents on the pound tax which the other tobacco bears; but, on the other hand, this permits him to do that by the payment of 8 cents instead of 18 cents. It is not a tax that is going to burden the gentleman's constituents, and it is a tax that per­mits them to have another outlet for the sale of their products. In other words, they can sell to the local dealers, and they in turn can build up their mail-order business without the bur­densome 18-cent tax, but with a burden of only 8 cents. At present they do not have that outlet for their tobacco at all.

.Mr. ABER~"'ETHY. At present they do not pay any ta.x at all.

Mr. BROWNING. They can not sell it. The local dealer who wants to buy from the farmer can not sell it at all to the consumer.

Mr. ABERNETHY. Is not this an extra tax of 8 cents a pound?

Mr. BROWNING. No. It permits the local dealers to buy from the farmer, and if they resell to the consumer then they have to pay B cents a pound.

l\Ir. MILLS. 1\Ir. Chairman, will the gentleman yield there? Mr. BROWNING. Yes. Mr. MILLS. And if they sell to a manufacturer, then they

do not pay the 8 cents a pound; only to the ultimate con­sumer.

Mr. BROWNING. That is true. The amendment provides the amounts and to whom they sell. They will have the privilege of selling at 8 cents a pound instead of 18 cent to the consumer.

Mr. l\lONTAGUEJ. Mr. Chairman, will the gentleman yield? Mr. BROWNING. Yes.

I (

1925 'coNGR.ESSION AL RECORD-HOUSE 1011 1\Ir. l\10:\T.AGUE. Does this ap11ly only to unmanufactured much interested in, and I want to get some information not

tobacco? only from the cilairman but from the expert of the Treasury Mr. BROW1'-.J:NG. Yes. in order to . ee its effect if adopted. Mr. 1\lON'rAGUE. Tile dealer has· no right, then, after pur- .Mr. GREE~ of Iowa. Does the gentleman want to see the

c:hasing from the farmer, to put this tobacco through any amendment defeatell? manipulation or anything that tends to manufacture? Mr. KIKCHELOE. That bas nothing to do with my being

:Ur. BROWNING. No, sir; he does nof; he sells it to the recognized. I move to sh·ike out the last two words, and I con.·urner ill the amounts stipulated ill the amendment. So I do am standing on my own right.· in demanding recognition. not think that my friend from No1·th Carolina [lllr. A.BER- 'l'he CHAIRMAN. Tile gentleman is entitled to recognition. NETHY] should object to this 8 cents when the others haYe to . Mr. KINCHELOE. l\lr. Chairman, I have risen here to bear 18 cents. I procure some iuforrnation from the Ways and Means Com-

Mr. IIUDDLE.'TON. l\lr. Chairman, I mo\e to strike out the mittee and the expert of tbe Treasury I see sitting here. l:t. t \\'Ord. I am surprised the committee have a heart after I happen to be the author of tile existing law, which i, all. All of the aspersions which have been cast upon them ~re subsection (f) on page 187. refuted by their action in proposing this amendment wbicll As the geutlemRn from Tennes .. ee [~Jr. GARRETT] bas said, reduces the tax on tlle tobacco "chawer." · Heretofore he has any farmer has. a right to ·ell his tobacco in the natural leaf had to pay a tax of 18 cent. a pound; hereafter, if be is willing direct to the consumer without paying any tax. My amend­to chew "long green," be willlla-ve to pay only 8 cents a pound. meut, which was adopted as a part of the law during the la~t

Mr. KING~~~LOE. 1Yill tlle gentleman yield'? session of Congre:s and is now sub ·ection (f) on page 187 ~Ir. HUDDLESTON. Not now. I made a very tearful plea enlarges that right, gi,ing the cooperatiYe-ruarketing a soda­

the other clay in behalf of the kind of people who chew tobacco tions the right to do the same tiling, n:tmely, to sell tobacco and dip snuff. I got no encouragement and my heart was low in tlle natural leaf direct to the consumer without paying a in my breast, but now. behold, the committee comes and says tax. that after all they did not know everything when fuey were The tobacco ·• cha,Ters" of the gentleman from Alabama [:Ur. writing this bill and that there is something which should be IIuoDLESTOX] can get all the tobacco they want now without added to it. Whether they were convinced by my speecll or not, paying a tax if they will buy it from the farmer and not from I do not know, although I imagine they were not, but, rather, the dealer. ~ tllat they were convillced by tlleir sense of justice and propriety. Mr. ABERXETHY. Will the gentleman yield?

They propose now to make a reduction on tobacco. The fault :Mr. KIXCHELOE. I yield to the gentleman. I find witil t11e committee is in confining the reduction only to Mr. ABERKETHY. The gentleman and I have alway been those who chew the ":long green." If a man is of a. type that together on this tobacco bu~ine~s and I would like tile gentle­he can chew tobacco right off the ~ta~k [lan~hte:], without any man to explain to me whether this proposed amendment raises treatment what oever, and can twist It to smt himself, the corn- a tax that does not now exist. I would like to hear the gentle­mittee has a heart for him an<l reuuce the t~x to. 8 cent·, but man on that proposition, because I like to follow the farmer if he prefers that the manufacturer make up his twist and put a from Kentucky when I can, but it seems to me this is putting little licorice and a little flavoring in it, then he bas to pay the a tax of 8 cent· a pound on tobacco which does not now bear tax of 18 cents a pound. But they do not have any thougllt at any tax. all for the old woman who dips snuff; they have no heart for ~Ir. KI~CHELOE. I think under the same circum~tances it her a'ffaii·s. .'he still will have to pay 18 cents a pound as a '"onld now bear a tax of 18 cents. tax, for you can not take the long green an_d m.ake horne-made But I want to develop further what I started out to fJre~ent. ·nuff. 1\'bat these gentlemen are really domg IS ~hey are .try- I wa an:xiou to get for llie tobacco cooperative associations

ing to convert our good old women wllo now. dip snuff mto the ri..,.ht under the law to handle this tobacco in the natural tobacco "chawers." That is what they are trymg to do. And leaf t~ the con ' tmler without paying a tax for two reasons. they do not want them to chew fine cut and ~ancy bra.nds, but Under the old law, before my amendment was aclopteu, tobacco they wan~ them t? go t? ~e stalk and. take It off leaf by leaf cooperati\e organizations were tobacco dealers. Many people and stow It away m thell' JUWS as a qmd. . ha\e an idea that tobacco dealers pay a tax to the Govern-

Now, I appeal to the g~ntlemen. They .are gomg back to ment. They do not pay any tax at all except they are penalized pre-war taxes on many thmgs; they. are gomg back to I'ea~on if they \iolate the rulings of the department or the Commis­and common sen ·e; they are respond~g to ~h_e great ur~e that sioner of Internal Revenue. common folks ought to have some consideration. That bemg .so, The second reason I wanted tile ·e cooperatiTes exempt wa. why not reduce the tax to the pr~-war rate on manufactur e:<l because it would obviate their having to "'iYe annual report:3 tobacco? The t~x on tob.a~co origmate? as a war measure; It or semiannual re:ports to the Commi sioner ~f Internal Revenue w.as put on .durmg the Civil War and It}as come clo~n t? us at any time l.te requested them. · fiom that tlme. It was found to be a l:>ood way to oet some Further I had this matter up with the Treasury six years money with which to carry on the 'Yar ; it was put on tllen, .and ago and the question that arose in the tobacco section o'f ~:v afterwards the users of tobacco, bemg a weak a.nd unorgamzed di-strict was whether an aO'greO'ation of farmers would have a ~la s of people, were not ~trong enough to have It removed, and right to employ an aO'ent t~ ha~dle their tobacco in the natural It has been left on e\er fmce. li C1' •t 1· tl:> t ui . 'th t . · C1' t -

L t ·k th mmlttee in all seriousne s do you propose leaf, sel n., I c Irec o e consumer, "\Yl ou payrnl:> a ax. to teak:ea~~anta~~o o1' the World War and i~crease this tax This is the que. t~on I want to. addr.ess to the Treas~rry Depart­from 12 cents to 18 cents and leave the 18 cents on perma- ment. ~he Solicitor ?~ tl!e Treasury ~-':d at that time tha~ an

tl ? Th tl f . 0. "'O [1\Ir· HAWLEY] good- aggregation. of farmers did hav-e the nl:>ht to employ an al:>ent nen y . e gen em an rom r el:> n .u • , th 1 tob · th t . 1 1 f di · t tb hearted man that he is, shake his bead, but tile chairman of to handle e r }cco m e J;!_a ~ua ea r~ct 0 :; con-th co ittee I'emains discreetly silent and noncommittal. sumer without paJmg ~ t!lx, provided .tile~ prud the al:>ent a

e mm . . · . _ . ., salarv aud not a commissiOn, and the mqmry I want to pro­But I 'Yan~ to say thiS to hrm: Whil~ ~ou are takml:> th.e ta.x po~nd to the Treasury Department now, or to the gentleman off o~ lipstick~, soda water, and chewml:> gu~, and reducmg ~t who knows sometlling about it, is whether llie farmers would on Cigars, which common men do not smoke--when you are t'll h that r'ooht if this amendment were adopted. If there do!ng dthat, t~hyt 1n th~bname ~f c~mm~n s~~e c:~ yodu ;;: ~8

1

any~~: on tbi~b side of the Hou e who can give me the infor-b~·mg own e a~ on e peop e w 0 c. ew 0 a an . mation, I would like \ery much to have it. dip snu~? There 1s not ~ ~ember on t~Is floor who can offer M HAWLEY. There is no question but what they would a word m defense of retammg the war-time tax on tobacco. h f r.th t .· ht

The CIIAI~l\1AN. The time of the gentleman from Ala- a;t ~~~HELOE Does the gentleman O'et that opinion bama bas expued ~ r. · . 1:> . •

Mt>. HOV{ ARD ~nd 1\Ir. KINCHELOE rose. from the expert of tlle Treasury or from his own observat10n Mr. GREEN of Iowa. Mr. Chairman, I make the point of of the law?

order tllat all debate is exhausted on the amendment. l\Ir. HAWLEY. From the. expert of the Treasury. l\lr. KINCHELOE. Mr. Chairman, I move to strike out the Mr. KINCHELOE. That 1s what I wanted to know.

last two words. 1\Ir. HAWLEY. The Assis.tant Secretary of the Tre~sury. 1\!r. GREEN of Iowa. l\1r. Chairman, I ba-ve been, it seems 1\~r. KINCHELOE. Then It does not change subsec~wn. (f),

to me, extremely indulgent to gentlemen on the other side in which happens t~ be my amendment, at a.ll, and the farm<;r Wl!l the course of debate on this bill, but we really must get have the same right as he would have m that respect If this tlu:ough the reading of the bill. amendment were not ~dopted. . .

1\.Ir. KINCHELOE. I will say to the ge·ntleman that I have Mr. IL\. WLEY .. ThiS amendme~t was drafted by t?e Treas-hacl nothing to say upon this bill at all, and I do not expect ury Department m cooperation with tile gent!eman mter<:sted _ to take but very little time now. This is a matte~ I am very jn this matter, for the express purpose of keepmg all the nghts

1012 CONGRESS! ON AL RECORD-HOUSE DECEl\fBER 17

you now have in the law and granting further relief 1D the sale of leaf tobacco.

:Mr. KINCHELOE. And the gentleman says, then, upon the re~ponsibility of the experts of the Treasury, that it does not impair any right that the tobacco farmer has now under the existing law, if this amendment is adopted?

Mr. HAWLEY. It does not impair any of his rights. The CHAIR~IAN. The question is on the amendment offered

by the gentleman from Oregon [Mr. HAWLEY]. The amendment was adopted. l\Ir. HUDDLESTON. Mr. Chairman, I offer an amendment. The CHAIRMAN. The gentleman from Alabama offers an

amendment, which the Clel'k will report. The Clerk read as follows: Amendment proposed by Mr. HUDDLESTON: On page 180, line 16, at

the beginning of the line, strike out the figures "18" and insert in lieu thereof the figures " 12."

Mr. HUDDLESTON. Mr. Chairman, my amendment re­duces the tax on manufactured tobacco to what it was before the war.

In principle the tax ought to be abolished. It is a tax on the poor. It is a consumption tax. It is a tax on those least able to pay it. It is a tax which enhances the cost of living. It is a tax which increases the cost of the necessaries of life.· It is a tax on a necessary article. It can not be defended except with the excuse, u we need the money." Nobody has ever said anything else in behalf of it. Nobody can ever say anything else in behalf of it.

I had hoped the committee would do something for the people who use manufactured tobacco, but they take the position if you are not a: "chawer" of "long green" you are not entitled to any consideration. 'Vhat is the logic of that position? It I buy. a twist of tobacco with a little licorice and flavoring in it, does that make me a worse man than if I took a hand of tobacco and twisted it myself? Many men are not trained to chew tobacco straight and undefiled with sugar, licorice, or other flavor. Many men can not send away to places where they deal in leaf tobacco and buy a package. They do not kni>w where it may be had.

I insist that we ought to go back to the pre-war tax on tobacco. I llav~ no tobacco growers in my district. I have no manufacturers; 1 have no more tobacco chewers than has the average district represented on the floor. There is no political equation in this matter to me. Nobody has spoken to me about it or written me about it. Those who suffer from this oppressive tax-the great unorganized mass-are never heard from, never write to their Congressman, and never pass on to him any canned propaganda. But, gentlemen, it ought not to be necessary that the masses clamor for their rights under the penalty of being unrecognized and ignored.

The committee heard no arguments from the tobacco users. But they were pulled and hauled by a thousand selfish inter­ests, each seeking 'to get theirs. And they got it. The great, unknown multitude was not represented and was not heard. The cigar manufacturer felt that the tax on cigars was hurt­ing the sale, and so they got theirs. But the tobacco users, being mere consumers, were not considered. They were not before the committee, but their Representatives are here, and we ought to represent them. [Applause.]

The CHAIRMAN. The question is on the amendment offered by the gentleman from Alabama. .

The question was taken ; and on a division (demanded by :M.r. HuooLESTON) there were 43 ayes and 90 noes.

So the amendment was lost. The Clerk read as follows : • All smoking t()bacco, snuJf, fine-cut chewing tobacco, all cut and

granulated tobacco, all ~horts, the refuse of fine cut chewing, which has passed thr<Jugh a riddle of 36 meshes to the square inch, and all refuse scraps, clippings, cuttings, and sweepings of tobacco, and all other kinds of tobacco not otherwise provided for, in packages contain­ing one-eighth of an ounce, three-eighths of an ounce, and further packages with a difference between each pa-ckage and the one ne:rt smaller of ()De-eighth of an ounce up to and including 2 ounces, and further packages with a difference between each package and the one next smaller of one-fourth of an ounce up to and including 4 ounces, and packages of li ounces, 6 ounces, 7 ounces, 8 ounces, 10 ounces, 12 ounces, 14 ounces, and 16 ounces: Provided, That snuff may, at the option of the manufacturer, be put up in bladders and in jars contain­ing not exceeding 20 pounds.

Mr. HAWLEY. Mr. Chairman, I offer the following com­mittee amendment.

The Clerk read as follows: On page 181, after line 17, insert a new paragraph, as follows:

"All unm.anufactured leaf tobacco sold or removed for sale or con· s?mption (except by the grower thereof, or a tobacco growers' coopera· hve association as defined in subdivision (f) of section 3360 of the Revised Statutes, as amended) shall be put up in such packages (not exceeding six in number) as the Commissioner of Internal Revenue, with the approval of the Seeretary of the Treasury, shall prescribe."

Mr. ~ WLIDY .. The purpose of this is to give the Treasury aut~onty to supermtend packages suitable for the market and limit the number.

Mr. GRIFFIN. If the gentleman will yield, should not his amendment come at the end of paragraph on page 182 instead of page 181?

Mr. HAWLEY. No; it comes at the end of line 17 page 181 as it applies to the preceding matter. ' '

The CHAIRMAN. The question is on the amendment offered by the gentleman from Oregon.

The question was ta~en, and the amendment was agreed to. >

Mr. SEARS of Florida. Mr. Chairman I move to trike ont !Jle last word. During my 11 years in Congress I have never mdulged in personalities or criticized my colleagues. To each of them I accord the same privilege I demand for myself and I b~lieve t;hat you are just as honest as I am, even though you differ With me.

I tried yesterday, without going out of the RECORD to discuoss the ~onstitutionality of the paragraph refunding 80 per cent of the mheritance tax. In yesterday's REcoRD-and I thought I caugl!t his :vords and would have answered then, but I was not sure and did not want to do the gentleman an injustice-:Mr. GREEN of Iowa, the great chairman of this committee a gentle­man. I hold i? the highest esteem, saw fit to take ~ fling at Florida, and m one of the Washington newspapers of to-da:v on the front page in glaring headlines, they were reproduced: I shall not read you aU that he said about the wonderful State of Florida, but just this:

" Your delightful climate and your natural resources are a sufiicient attraction if you do not otrset them by filling up your community with members of that ancient and dishonorable order of tax dodgers who ot all citizens, a.re the most narrow, the most selfish, and the ~ost 'uu· patriotic. I congratulate those States whose patriotic citizens have not yielded to the alluring but improper inducements offered by the State of Florida."

Further in his remarks he said that we were filling up the State with land grabbers and bootleg runners.

.Mr. Chairman, my humble little home in the land of flowers is situate<;! on the Dixie Highway, and as I sat on my front porch durmg the recess watching the cars with their occupants go by hailing from the great State of Iowa, those wonderful people of intelligence, far-seeing people, going by my house to invest in my State, I knew that they were not land grabbers; I knew they were not tax dodgers ; I knew they were not boot­leggers or bootleg runners. Perhaps out in the State of Iowa which I have never had the J)leasure of visiting, though which I hope to visit some time, the rest of the gentleman's colleagues who have remained out there may be of the class that he describes, because he is better acquainted with the good citizen­ship of the State of Iowa than I. But I rise to defend those citizens from his wonderful State who have migrated to Florida. I rise to defend those intelligent people from every· State who are moving to my State, and I say to the House and to the country that you can knock us as much as you please but you can not stop them from coming. I say to you, as I sa.'id to the chambers of commerce, that I would offer a prize for the man who would write the biggest knock, because the more you knock the more they will come. Little did I dream when I marte those remarks that in the Halls of Congress the same knocks and the same propaganda would be resorted to. I trust that all of the people of Iowa will not come and that orne of my colleague's friends will remain out there, even though they may be bootleggers, even though they may be tax dodgers or rum runners. If any of these should come, we will try to convert them and make of them better citizens than they are. [Ap· plause and laughter.]

The Clerk read as follows : (f) For the purpose of this section a farmer or grower of tobacco

or a tobacco growers' cooperative association · shall not be regarded as a dealer in leaf tobacco in respect to the leaf tobacco produce<} by him or handled by such association : Provided, That such cooperative associations shall be required to keep available records of all purchases and sales of tobacco, such records to be open to inspection by the agents of the Government. A.s used in this section the term "tobacco growers' cooperative association" means an association of farmers or growers of tobacco organized and operated as sales agent for the pur-

(

i

1925 CONGR.ESSIOX AL R.ECORD-HOUSE , 1013 pose of marketing the tobacco produced by its members and turning back to them the proceeds of sales, Jess the necessary selling expenses, on the basis of the quantity and quality of tobacco furnished by tbem.

1\Ir.' GARRETT of Tennessee. l\lr. Chairman, if I may have the attention of the gentleman from Iowa, I had an agreement with the gentleman a few moments ago, made prtrately, that he "\Yould not object to a unanimous-consent request that the com­ruittee return for a few moments to page 177, line 13,. ;for the purpose of permitting the gentleman from Florida C\Ir. DRA~E], who was unaV"oidably detained in a department when we were pa~dng on that portion of the bill, to offer an amendment and <'On~ume five minute in the discussion of it.

:\Ir. HAWLEY. There is no objection to that on this side, Mr. Chairman.

~lr. GARRETT of Tenne see. Then, ~lr. Chairman, I make that request.

The CHA1RMAX. The gentleman from Tennessee asks unanimous com;ent to return to page 171 to permit the gentle­man from Florida to offer an amendment. Is there objection?

There was no objection. ~Ir. DRANE. Mr. Chairman, I offer the following amend-

ment, which I send to the desk. Tlle Clerk read as follows :

of Tampa is unique in this, that it stands seventh on the Treasury l'Oll, so far as its production of revenue is concerned. New York_is first, and I think Baltimore is the sixth. In the year 1924 the city of Tampa paid internal-revenue duties of $3,856,766. It paid import duties of $1,857,977. It is a city of about 140,000 people. It produced last year 450,000,000 cle&r llabana cigars, handmade, by the Cuban method. You see very few of them in Washington. The price of them has been forced up uy taxation so high that the average man can not afford to smoke them here. In that city there are 13,000 men, women, and children who are connected directly with this industry, working from day to day. There are more than 50,000 people who are dependent upon the industry, in what it brings to tllem in the form of wages. The amendments which I offer. are for the purpose of securing a reduction in the tax, if po ·sible, and I am going to give you a brief resume, if I may, of what the tax history has been.

Iu 1865 as a war measure the tax on manufactured cigars was placed at $6 per thousand. In 1882 it was reduced to $3 per thousand. The · cigar industry throughout the "Cnited States has been built up ori the rate of $3 per thousand, ' re­garilless of the quality or the price of the cigar. In 1898, for war purposes only, the rate was raised temporarily to $3.60 per thousand. Almost immediately after the Spanish-Ameri-

Mr. DuANE offers the following amendment;, Tind~r Title IY, "Tax can War it was again reduced to $3 per thousand, which is on cigars, tobacco, and manufactures thereof, section. -!00 (a) • page I the normal and proper rate, and there it remained untll about 1 ii : In line 13, trike out the figures" $2.50" and substitute the figures October, 1917, when for war purposes, it was increased about " 2.00"; in line 15, strike out the figures "$4.50" and substitute 300 per cent. The people who are engaaed in this industry did therefor the figures "$3.00"; in line 18. strike out the figures "$7.0°" not object at that time as a war m:asure to the increase and ubstitute therefor the figures "$4.50"; in line 21· stl"ike ~ut !he but here, seven or eight' years after the war' is over, the com~ figme. " $10.50" and sub ·titute therefor the figures "$6.00"; m line mittee in its wisdom reduces the 300 per cent by only about 24, ~trike out the figures "$13.fi0" and substitute therefor the figures 20 per cent. That is a mere bagatelle and does not even take "$7.50." care of increase in the wages given in 1924, and again in 1!>25.

Mr. DRA.!\"'E. 1\Ir. Chairman, there is no use, apparently, The CHAIRMAN. The . time of_ the gentleman from Florida after watching the unanimity of the Committee on Ways and llas expired. . l\Ieans and the apparent decision of a very large majority of l\lr. DRANE. Mr. Chairman, I ask unanimous consent to the Committee of the Whole House to adopt tlle inheritance- proceed for three minutes. tax feature of the pending bill, for me to discuss it at length. · 'l'he CHAIRMAN. Is there objection? There is nothing which could be added to tlle argument, from Mr. GREEN of Iowa. l\lr. Chairman, I suggest to the gen­the viewpoint of my State, which was not covered by my dis- tleman that he can extend his remarks in the RECORD. I have tinguished colleague [1\Ir. SEARS] in his masterly address upon tried to be very liberal with the gentleman. the subject, and I will therefore content myself with saying Mr. DRA!\"'E. Then, l\lr. Chairman, I ask unanimous con- · that with all the sincerity of my nature I protest against this sent to extend my remarks in the RECORD. inju:;;tice which is about to be done to my State and to indorse The CHAIRMAN. The gentleman has that permission al-in tlle most earne t way the remarks he has made upon tlle ready. subject. M.r. DRANE. Very well, Mr. Chairman, under leave to ex-

I am in entire sympathy with the amendments offered by my tend my remarks, I am printing a petition I received from colleague [l\lr. GnEE~ of Florida] touching upon the same sub- Cigar Manufacturers' Association of Tampa, Fla.: ject. This being done, I now crave your indulgence in the time The cigar manufacturing industry of Tampa, Fla., through its gen­allotted me to speak on the paragraph affecting manufactured eral association, places before you its plea for survival. We use the cigars. term " urvival" advisedly, for in our endeavor to uphold the stand-

In addition to the observations which I shall make in con- ard of Tampa cigars we have ai.Jsorbed taxes and incL"eased cost ot nection with the ubject in hand I shall include as a part of my manufacture until at the present time our indu!try, as herewith repre­own remarks tlle brief prepared and submitted by the Cigar sen ted, is pushed perilously near the chasm of disruption. l\lanufacturers' Association of Tampa, my principal city. It The cigar industry supports an immense colony of experienced cigar­\Vas 11repared by the leading factors in the cigar industry, men factory workers in Tampa. Our actual employees exceed 13,000 men who \\·ould not mislead or mbrepresent conditions, and who, e and women, and it is estimated that the number of Tampa citizens truthful and very thoughtful treatment of the subject is en- directly dependent upon the local cigar industry is fully 35,000 men, titled to every con ·ideration at yom· hands. women, and children. These men and women emplo~red in the fac-

A.nalyzing this brief, we _find that the proposition I now tories have spent years-practically their lifetime-In the indust1·y; make in the form of an amendment is not with tlle view to a they are, for the most part, wholly dependent upon the operation of ~E.'lfii'h, profit-malting move on tlle part of my constituents- our factories for their livelihood. The industry itself bas millions they willingly and gladly paid the tax when the tax was a of dollars invested in plants, equipment, and material, and the cigar demand upon their patriotism-this is a proposition to so re- factories form the very backbone of Tampa's industrial program and duc-e tlle tax that they may continue in busine-·s. Unless prosperity. they are given proper relief, far in excess of that propo ed in Tampa has for almost half a century produced cigars of a very dis­the pending measure, the time will soon come when tbey will tinct high quality; the manufacturers have dc.-eloped to a fl.ne point be forced out of the business of making the finest cigars pro- the production of clear Havana cigars by the same method of manu­duced in the world and nave to content themselves with mak- facture as used by the leading factories of Cuba, and we have, through ing such character of cigars as are manufactured in other our standard of workmanship and selection of material, increased and centers, thereby becoming commonplace. maintained the demand for cigars manufactured in this country as

It will be observed that by reason of the exorbitant taxes compared with cigars imported from foreign soil. levied by the Federal Government, while between the years of Our industry deserves Federal recognition, as it has received city HilT and 1925, both inclusive, the population of the country and State recognition, in its relation to the development and stability · increased 11% per cent, there was a decrease in total con· of an ente1·prise bringing re>enue to our Federal Government and em­sumption of 16.~ per cent. ployment to thousands of factory workers. We ask not .for special

That during the same period tllere was a decrease in per privileges but for recognition in eliminating excessive and burdensome capita consumption amounting to 24.6 per cent. That during Federal taxes imposed upon our industry during the late World War, the .same period there was a decrea e in tlle number of factories which is throttling our expansion and making difficult our relation amounting to 27 per cent. 'l'his means that the Government in with the consumer through the maintenance of our bigll standard of its greeo. for more and more taxes, has drh·en nearly 4,000 quality. factories out of bu,·iness ; it is gradually, but surely " killing

· the ;:roose which lays the golden egg." I represent the largest industry in my State-the cigar in­

dustry. It is located mostly in the city of Tampa. The city

TOBACCO NO LO. "(JER A LCXL"UY

While it is admitted that tobacco is often thought of and, indeed, at times, has been classed by our Government as a "luxury;• there is no doubt but that the consumption of tobacco iu its vat·ious formr

1014 CONGRESSIONAL RECORD-HOUSE DECE~illER 17

actually occupies the more common classification of "necessity." The cigar has proven it s worth and has taken its place in the lives of those directing st atesmanship, industry, and commerce; it has proven a distinct benefit to those absorbed in solving the problems of the world. Therefore its taxation should be based on its common use by the mas es, rather than as a ''luxury" for those of unlimited means or of pendthrift habits.

Statistics show that the main consumption of cigars comes under the exis ting classifications of class A and class C grades, representing pr·incipally 5 and 10 cent cigars. Smokers of these grades are forced, under existing Federal taxes, to bear an excessive tax out of all pro­portion of the sales value of the article.

TAXATION

The cigar industry has, through the decades, pro"ren a. most lucrative mE-ans of support for the Federal Government ; we acknowledge our obligation to our Government and are willing and anxious to bear our full share of its support, but we are unable to longer carry the supertax Imposed on cigars as a war measure and which, to-day, continues­eight years after conclusion of hostilities.

Following the ending of the Civil War, in 1865, a stamp tax of S6 per thousand cigars was established on the industry. This was .effective until 1882, at which time it was reduced to $3 per thousand cigars. Again, in 1898, on account of the Spanish-American War, toxes on cigars wer·e increased to $3.60 per thousand. This tax re­mained in effect until 1901, when, following the precedent previously established, it was decreased to 3 per thousand. This rate of $3 was then maintained until October, 1917, when, as a war measure, the tax was increa'sed. Tbe said internal-revenue tax now in effect is as follows: Pe1· 1,000 cigars

Class A (to retail at 5 cents each)----------------------------- $4 Cia s B (mot·e than 5 cents, not over 8 cents)------------------- 6 Class C (more than g rents, not over 15 cents)------------------ 9 C'lass D (more than 15 cents, not o>er 20 cents)---------------- 12 Class E (over 20 cents each>---------------------------------- 15

The war-revenue measur·e resulted in an increased taxation of 33% per cent on 5-cent cigars to 400 per cent increase on sizes retailing at more than 20 cents each. Figures are herewith given from three repre ~entative Tampa factories, reflecting .the following facts in com­paring the present internal-revenue stamp tax with the internal­revenue tax paid prior to October, 1917 :

At present rate: Pe1· 1,000 cf,gars

Factory A-------------------------------------------- ~9. 85 Factory B-------------------------------------------- 10. 10 Factory C-------------------------------------------- 9.97

At former ($3) rate: Factory A-------------------------------------------- 3.00 Factory B-------------------------------------------- 3.00 Factory C------------------------------------ __ ___ 3.00

The last fiscal year shows an average of $6.27 internal-r '>enue stamp tax paid on each 1,000 cigars manufactured and sold in the United Stutes. Tampa's average, by reason of. its higher type and standard of merchandise, shows an average of $8.H internal-revenue tax per 1,000 cigars during 1924, and this ratio has, with slight variations, been maintained since 1917. In the last E.everal years the main items of cost of production, namely, Government taxes, raw material, and labor, have advanced greatly over the pre-war period. Internal­revenue taxes paid the Government have increased approximately 200 per cent. Tobacco imported from Cuba, and which has been the foundation of. the popularity of. Tampa-made cigars, has steadily ad­vanced ln price. Labor wage adjustments were made from time to time to conform with living costs, of which recent examples are the in­creases paid our labor in October, 1924, and again in September, 1925. THE CIGAR INDUSTRY IN ITS RELATIO~ TO THE OOVER~ME~T AS A SOURCE

OF REVENUE

In addition to the revenue stamp tax, it must be remembered that our Government further taxes the manufacture of cigars by reason of the duty imposed on the importation of tobacco from Cuba and other countries. Tampa uses a very large percentage of Cuban tobacco ln the manufacture of its product; and we herewith present a schedule of Government income from Us two major taxes on the industry in the Tampa district : .

Year

191Q_------------------.-------------------------·----------91L _____ --··--··-- ----·. __ ------ -·- --- -·--- ···----- -------912 __ ----. -· ------.----------. ------ ·---·-. ---·--·- --.--- --913_ ------------------ --· -·-- ----------------- --·. ---------

1914 ___ - --------------------------- --·- ·--- ------ ------·- ---1915_ ------------- - -----------------------------------------916 ______________________________________________________ _

917------------------- --·- --------- -·--- --· --- ----·- ·-- ----1918_ ------------------------------------ ·- ·------- ·--- -----1919 ___ -----------------------------------------------------920_ --------------------- ::---------------------------------192~ - --------------------------------------·-·-------------922~ ----------------------------------------- -·---·- ----·--923_-- --- -------------------------------------- ---------·--924_ ------------------------------------------- -·----- -----

Internal revenue

$638,535 910,439 854,726 894,879 856,565 939,223

1, Oll, 988 1,3H,076 1, 9 4, 856 3, 408, 821 2,023, 469 2, 934,733 3, 46 ,840 4, 014, 501 3, 856,766

Duties

$1,377,262 2, 299,472 1, 859,038 1, 810,159 1, 780,515 1, 801,086 1, 887,946 1, 959,663 1, 582,770 1, 800, 870

957, 071 1,4.25, 487 1, 933,565 2, 111, 853 1, 857,977

Tbe Gov('rnm('nt also imposes a special excise tax of 10 cents per thousand cigars on the production of cigars. This tax is burdensome and entirely tmcalled for-yet it results in additional taxa tion on Tampa manufacturers alone of approximately $50,000 a year.

GOTERNMEXT TAXES IX RELATION TO THE COST OF PRODUCTION

It is evident that the importance of the cigar and tobacco industry is frequently overlooked and, in fact, little thought is given to Federal protection. and upbuilding of the manufacture of cigars. The branches of our industry covers not only the investment of millions of dollars in plants and equipment and the employment of thousands of skilled craftsmen in the trade, but the industry, as a whole, reflects into the important agricultural fields of Connecticut, Wisconsin, Georgia, and a number of other States and, in addition, supports extensive box-manu­factming plants, lithographing houses, and sundry manufacturing and supply stations furnishing the many articles needed ln the proper pro­duction of cigars.

We are an important factor not only in the daily comfort and well being of the business and social life of the United State , but in the industrial field of our country, yet we are oppressed by exorbitant Fed­eral taxation on a war-time basis which, coupled with the necessity of increasing wages and thereby the cost of. production, forces Tampa manufacturers to either very materially increase prices to the con­sumer or to lower the quality of our product below the standard set and accepted for Tampa merchandise.

The assessment of duties on imported material, plus the existing war-time internal-revenue supertax, actually places an unbearable burden upon our industry and the consumer, for we point out the fact that the combined Federal taxes amount to approximately 20 per cent of the sales value of clear Havana cigars manufactured in Tampa. Is it humanly possible for any industry to shoulder taxes of which only the two major ones-duties and internal-revenue stamps-represents one­fifth of the total manufacturers' gross income on the article produce(} 'i Yet, the following specific figures are presented (based on the manu· facture of clear IIavana cigars in Tampa) :

Factory A. __ -·-. ___ ----••••••• --· ________ -_ ••• __ Factory B _______ : ____ ---- -·-········-·---·----Factory 0 ___ -·-------·- ·-··-··---·---••• --- __ _

1924 duties per 1,000

cigars

$10.70 8.36 9. 53

1924 fntemal revenue per 1,000

cigars

$9.86 10.10 9. 97

Percentage of im-olce

value

Per cent 20)t 17 19~

Undoubtedly the high and ex:ce sive Government taxes, which are, of course, reflected in our sizes, quality, and prices• to the con. uming public, is gradually undermining the entire structure of the cign.r industry in the United States, as is shown by the following tables of statistics:

Oo118!1111ption of cigars tor the United States

Fiscal year Population Total consump- Per capita

tion co~~~p-

1917 --··--··---·····----------------- 10'2, 172, 845 8, 266,770,593 1925_________________________________ 113,493,720 6, 917,333,803

Increase or decrease____________ +u, 320,875 -1, 34!l, 436,790 Increase or decrease_ percent__ +lL 1 -16. 3

80. 90 60.95

-19.95 -24.6

Unfavorable manufacturing conditions has resulted in the closing of 27 per cent of the cigar-manufacturing concerns during the seyen­year period, as is shown below:

Oi.gar factori es in operat ion i1' United States

1917: Number of cigar factories--------------------------- 14, :376 1924 : Number of cigar factories--------------------------- 10, G~8

Decrease, or 27 per cent ___________________________ 3,948

Cigars are manufactured upon an extremely close margin of profit­an unsafe margin from an industrial standpoint-for in times of enn slight depression there are unusually heavy trade losses through the forced closing of manufacturing plants.

It is true that our industry needs the stimulus of new life; we must give the consumer an article of merit within the bounds of expenditure permitted of the masses ; we must pay our workmen a moderate, com­mensurate wage in return for their labor; we must meet market con­ditions in relation to the growing of tobacco for our product; yet we are bound by clefinite units of sale, namely, 6 cents, 10 cents, 2 for 25 cents, 15 cents, and 3 for 50 cents, with a relatively small pro­portion of sizes retailing at 20 cents and over. The consumer will not accept, with any degree of satisfaction, the policy of odd-cent price , which necessitates that the manufacturer must continually absorb minol' manufacturing cost increa es until the breaking point is reached and a complete revision of sale values constructed.

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1925 CONGRESSIONAL REOOR.D-HOUSE 1015 The two major Fede1·a1 t axes are exorbitant in that no industry can

prosper or survive under the burden of Government taxes to the ex· tent of 20 per cent of the value or the factory's output. We plead tlla t the status of our indu try be recognized by Congress and that sui table and deserved relief be granted through the elimination of a ve1·y substantial portion of tlle war-time tax. Our obligation to our Government calls for an equitable tax for our share of the support of our Federal body, but beyond this point we ask that the burden be dist ributed in such a way as to vermit our survival as a factor 1n the indus tria l life of our Nation.

Tb)3 body therefore peti t iona for a 50 per cent reduction in the present rate of internal-revenue tax. While such reduction would upon the face of it be likely to result in a loss of revenue appro:timat· ing one-half of the present $44,000,000 collected, it is our belief that t1·aue and the consuming public, stimulated under the relief given, would. rebound with a greater production and consumption, thus serv­ing to make up a substantial portion of the loss of internal revenue and a t the same time, no doubt, increasing the revenue from duties on imported raw material.

In petitioning for this 50 per cent reduction in taxes we are no.t selfishly asking this for om·selves, but do so to continue to give our consuming public cigars of high quality, to meet the increased and j u otified demands of our labor, and to cover the added costs of our raw material. We ask this in view of the fact that the World War emergency, which prompted the present tax on cigars, has passed, and fet>l that we are ju •tified in our request, not alone due to our need but based on the precedent established by the cigar tax reductions following the conclusiM of the Civil and the Spanish-American Wars.

Re pectfully submitted. CIGAR l\fA~UFACTUREJRS A.sSOClAl'lON OJI' TAMPA,

By A. L. CUESTA,

EXRIQUE PENDaS,

J AS. J. FRE~CH,

F. WID~lEU BOBS,

A. SANTAELLA,

Comm ittee. TAMPA, Fr.A., October 26, 1925.

The CHAIRMAN. The question ls on the amendment offered by the gentleman from Florida.

The question was taken; and ou a division (demanded by 1\lr. DRA.-E) there were-ayes 47, noes 89.

So the amendment wa rejected. The Clerk read as follows :

TITLE V.-'l'AX O:s- ADMISSlO:s-S A~D DUES

SEc. 500. (a) On an<l after the date this title takes effect, there shall be levied, assessed, collected, and pahl, in lieu of the taxes im­po ed by section 500 of the revenue act of 1924-

( 1) A tax of 1 cent for each 10 cents or fraction thereof of the amount paid for admission to any place on or aftt>r such date, includ­ing admission by season ticket or subscription, to be paid by the pet· on paying for such admission; but where the amount paid for adml ··ion i 50 cents or le s, no tax shall be imposed;

(2) Upon tickets or cards of admission to theaters, operas, and othPr places of amusement, sold at news stands, hotels, and places other than the ticket offices of such theaters, operas, or other places of amu ' ement, at not to exceed GO cents in exce3s of the sum of the established price therefor at such ticket offices plus the amount of any tax imposed under paragraph (1), a tax equivalent to 5 per cent of the amount of such excess; and if sold for more than 50 cents 1n excess of the sum of such established price plus the amount of any tax imposed under paragraph ( 1), a t ax equivalent to 50 per cent of t11e whole amount of such excess, such taxes to be returned and paid, in the manner and subject to the interest provided in section 602, by the person selling such tickets.

Mr. GRIFFIN. Mr. Chairman, I desire to offer the following amendment.

The CHAIRMAN. The Clerk will report the amendment. The Clerk read as follows : Amendment offered by Mr. GRIFFIN: Page 187, line 23, str ike out

all of lines 23, 24, and 25 ; and, on page 188, strike out all of linea 1. 2, and 3. On page 188, s t rike out the entire figures, beginning line 4, down to and including line 17.

Mr. GRIFFIN. 1\lr. Chairman, my first amendment proposes to strike out the paragraph continuing the admission tax. Kow, I sincerely hope, if this amendment passes, that it will not disturb the harmony and consistency of the bill as pre­sented. It would be a shame to ruin the splendid edifice whereby the excess-profit profiteers are remitted millions of dollars while continuing the miserable picayune taxes on the movie houses patronized by the women and school children. If yon feel that you should retain the admission taxes, retain them upon those bigger houses that charge an extravagant

rate of admission and let the poor people go into the movie houses without imposing any tax.

Mr. GREEN of Iowa. Will the gentleman yield? Mr. GRIFFIN. I will. Mr. GREEN of . Iowa. Does the gentleman know of any

movie show that a poor man can not see, unless he goes the first time it is produced, for 50 cents or less?

Mr. GRIFFIN. There are thousands and thousands of such places.

Mr. GREEN of Iowa. The first time they are produced; but if you wait until the second or third time you can.

Mr. GRIFFIN. Why be so solicitous about drawing a fine hair upon the cheaper amusement places? ·why not let them all be completely free of taxation?

Now, what does this mean? The tax collected from amuse­ment admissions in 1924: was $85,722,385. and in the fiscal year 1925 the admissions had dropped to $39,598,397. There is a drop of $46,000,000.

:Mr. BACHARACH. Does the gentleman understand, becan=-e prior to the enactment of this law people going to the movies had to pay a tax? It was reduced, and in consequence the Government has less.

Mr. GRIFFIN. That is one reason; yes. But I wish the gentleman would not take this out of my time ; there will IJe time to argue it afterwards. But there is another reason why this miserable picayune tax is sought to be retained, and that is found in the figures of the Treasury Department as to their army of employees required to be kept employed to collect these vicious nuisance ta:xes. The personnel of the revenue bureau in the fiscal year ending June 30, 1924:, was 19,203, and in the fiscal year ending June 30, 1925, the personnel was 19,333, an increase of 130. Why do they not make an effort to reduce the number of employees?

The CHAIRMAN. The time of the gentleman has expired. Mr. GRIFFIN. 1\Ir. Chairman, I ask permission to procet-d

for five minutes ; I have two amendments here which are inter­related.

The CHAIRMAN. Does the gentleman wish to talk on both amendments now?

Mr. GRIF:E'IN. I have another amendment pending, and I wish to discuss both.

Mr. GREEN of Iowa. I have no objection if the gentleman will not ask for time on the other amendment.

The CHAIRMAN. Both of these amendments, the Chair understands, are classed as one ; they are on the same page of the bill, are they not?

1\lr. GRIFFIN. No. They are different One relates to paragraph a (1), the other to a (2).

The CHAIRMAN. The gentleman from New York asks tmanimous consent that he may proceed for fi\e minutes. Is there objection? [After a pause.] The Chair hears none.

Mr. GRU..,FIN. You can not collect nuisance taxes with facility. It involves a large retinue and a large clerical staff and a large army of agents. You are dependent upon the sworn statements of the parties turning o-rer the tax, and I know there is no way of guarding against deliberate frauds in making such returns. In other words, to beat the Go-rern· ment out of the tax, false representation as to the attendance is frequently made.

1\Ir. BLOOM. Will the gentleman yield there for just one question? Who makes the false returns, the theater manager?

Mr. GRIFFIN. In a case I have in mind, it was the ticket agent who was an employee of the company.

Mr. BLOOM. The gentleman does not want the committee to understand it is the manager of the theater who makes the false return?

Mr. GRIFFIN. No; and I am glad the gentleman gave me an opporttmity to correct that misapprehension. It was the case of a ticket agent, who had embezzled the collections and made false returns ; and where it occurs in one case, it is likely to occur in others. The Government should not be put at the mercy of false accountings-and that seems to be ine\itable, so long as we continue to impose these cheap and inconvenient nuisance taxes. The only excuse for their exi tence, I insist, is to keep up a powerful army of political retainers.

1\Iy second amendment relates to subdivision 2 of paragraph (a) on page 188. It continues the tax upon the profits made by scalpers.

Now, I a8k you, gentlemen, what is the sense of retaining and trying to enforce a tax on the profits made from the sale of theater tickets by scalpers, stationers, and hotel clerks? Is it not small and picayune for this mighty Government to go into that sort of traffic? " 7e might as well impose a tax on the vendors of newspapers on the street corners. There is no

1016 CONGRESSION.A~L RECORD-HOUSE DEOE)ffiER 17

income to any considerable extent to be derired from those transaction·; and if you are con:idering the relative income from the different method· of taxation, ~by not raise the re­quired revenue by sllooting at the big prey-big taxpayers­-who are worthy of your ammunition?

Mr. BLOO:U. :\Ir. Chairman, will my colleague yield? :\Ir. GRIFFIX Certainly. lfr. BLOOM. In that arne paragraph tlle Government adds

50 per cent to what t11e la~ of the Sttlte of ... ·e~ York makes a felnny for doint:!. If anybody charge 50 cent · extra for the lll'i<:e of 11. ticket, it is a <'rime in tbe State of Xew York; but if that man can get away with that extra money the Govern­ment get<; 50 per cPnt of the spoils. Is not that the effect?

:\Ir. GRIFFIX. Yef';. It encourages brigandage and prac­iitally im·ite. violation of our State lawR. I hope that both of thPse ~·ection ~ill e ·h·icken out. [.dpplau,e.]

The CIU..IR~L<\. T. 'l'he time of the gentleman from New Ynrk has expired.

Mr. R.diXEY. 1\lr. Chairman, there is no chance for the g-entleman's amendment to be adopted, of cour e; but in this connection I ,.,.-ant to . ay that, from my viewpoint, the tax on tickets of admis~ion to places of amusement is economically wrong. I haYe opposed it, always; even in ~ar times I op­poserl the imposition of thi tax.

If burdens are placed on the population of auy conntry. e ·pecially tax burden and burueu · which interfere with per­sonal liberty, they bear them better and with lei'· re~istance if their amusements are as free as they po. sibly can be made. All nations in the ~orld from remote nntiquity ha-re recognized thi~ funda.mental principle, and the nations of antiquity made their amusement frE>e to the people; and, then, they bore un­complainingly the tremendous burdens imposed upon them by war.

I recall in this connection that when Queen Victoria died­and this illustrates the idea I haye in mind-in London they proclaimed a period of mourning, to last for two weeks of time, to be evidenced, principally, by the closing of all places of amusement; and for 48 hours all places of amusement were ab olutely clo, ed. The people of that great city were deprived of that particular emotional outlet, and the disturbances throughout the city occasioned by the as embling of people outside of places of amusement was so great, there was so nmcu disorder, mobs forming so rapidly in certain sections, that, after the expiration of 48 hom·s, they were compelled to lift the ban on amusements and open them all again.

And o I am supporting this amendment, in harmony with the po.,ition I haye always taken, although I know it can not now be adopted. But the more burdens had better, in this bill, have been put upon the rich. It would have been better to haYe made them heavier and greater even upon the poor, proYided this tax were removed. [Applau e.]

Mr. SCHAFER. Mr. Chairman, gentlewomen, and gentle­men, I shall ··upport this amendment, and I hope that it will pas . The Republican voters in my congressional district have repeatedly iisued a mandate by extraordinarily large ma­jorities in fa-ror of the abolition of the excise or nuisance taxes put upon the statute books, as war measures, and have gone on record against the extraordinary reduction in the high surtax bracket and in the inheritance taxes.

We are told that this is a nonpartisan tax bill. Then, some of our good, regular Republicans from the Northwest should not hesitate about differing with the admin1stration on the bill. They want to tax the amusements of the poor people, eT"en moving pictures, if the rate of admi~sion is more than 50 cents; but they carry an exemption from this tax on the le~itimate, spoken drama.

It is remarkable that this exemption should be written into this so-called scientific tax bill. In my humble judgment it is n: great a piece of class legislation as can be written on the ·tatute books.

Perhap you regular Republicans of the great Northwest, wllen you go back to your farmer constituents and explain to them why you wanted to continue the tax on their amusements, enn explain and ay, "Tfell, my dear friends, we gave the theater-goer some benefit. We ha'""e removed this tax on the spoken drama."

I hope this amendment will pass. [Applau e.] ~11'. MOORE of Virginia. 1\lr. Chairman, in addition to the

e<:onomic view ju ·t presented by my friend, the gentleman from Illinois [Mr. RA.INEY], in reference to this particular matter, I venture to submit one other view. In the very able debate which has been had upon this bill some gentlemen who have given it the most careful study have urged upon our attention the fact that the tax systems in many of the States are very un atisfactory and must have revision in order that the !leeds

of the States may be more fully and fairly met. I I'ecall that one gentleman said that the land tax has become most ob· nox:iow and incapable ot sati. factory administration, and that the State.· haYe got to find their re\enue from other sourc·es.

The view that I Yenture to offer is that such taxe as thest~ admi , ion taxes can be conYeniently applied by the States ·honld tlley belie\e it expedient, and that we ought not to retain taxes of this t:haracter, imposed simply for war pur· po~e. , at this time when o many of the tates are in\olve<l in a struggle in order to raise the re\enue which they sorely need and to raise it in an equitable manner. [Appian ·e.]

Personally I can not think of any tax: tllat can be more readily leyied by a State seeking new aYenues from which thev may escape from present methods, which naturally invite hos· tility, than such taxes a we are no~ eli cu "ing.

I, of cour. e, like other gentlemen, under the obligation which rests upon us, mu t look at this bill from the Federal vie~· point.

But ~e are compelled. at the same time to look at it from the tate point of Yiew. Whate,er ~ e can rea onably do I think

we should do to release to the State ubject of taxation whi<'h can be easily made u:-<e of by the States and whicll the Federal Government would not ha\e thought of adopting or maintaining except under the pres ure of war necessity.

I hope vt>ry much that at some stage of the eonsideration of this bill-perhaps it i too much to expect that it will happen here--regard being had for the interests of the States, taxes of this character may be stricken out of the proposed legi. lation.

1\lr. GREE~ of Iowa. ~!r. Chairman, I would like to ee if ~e can not get an agreement as to time on this matter. I ask unanimous con. ent that all debate on this paragraph and all amendments thereto close in 12 minutes.

The CHAIRMAN (Mr. DoWELL in the chair). The gentle­man from Iowa asks unanimous consent that debate on this paragraph and all amendments thereto close in 12 minutes. Is there objection?

There was no objection. The CHAIRMAN. The gentleman from New York [Mr.

BLoo:Y] is recognized for five minutes. Mr. BLOOM. Mr. Chairman, ladies and gentlemen of tile

committee, at a different place in this bill I did intend to say something with reference to the amusement tax, but now that this amendment is before you I would like to call your attention to tllis one very important fact: This is a direct tax: ou the people. The other taxes which you propose to eliminate are taxes which, when they are removed, the public will not re­ceive any benefit. When you take the taxes off of a certain article that is sold and on which a merchant makes 1 or 2 per cent when it is retailed, he is not going to retail that article for 98 cents or 99 cent". He puts that tax in his pocket. This is a tax which the public must pay; the public must pay 10 per cent of the amount paid for such admis ion ticket above 50 cents.

Now, Mr. Chairman and member of the committee, this is a direct tax on education, and I would like to read to you a recent decision which applies directly to this matter:

The law provides that no speculator shall charge more than 50 cents over the price printed upon the ticket. It recently was upheld in a test case by a special c<>nstitutional court consisting of one Fed· eral court judge and two United States district judges. The test was brought by Tyson & Bro. united Theater Ticket Agencies on the ground that theater tickets were luxuries, not necessitil's. The court held, in efl'ect, that theaters are both an educational and au amusement necessity.

This, 1\Ir. Chairman and gentlemen of the committee, is a direct tax on education, antl I will bring to your notice some oilier facts on another amendment which I am going to inb:o­duce.

1\Ir. GREEN of Iowa. 'Vill the gentleman yield? Mr. BLOOM. Yes. Mr. GREEN of Iowa. I hope my friend does not con ider

prize :fights educational? l\1r. BLOOM. No; and I will answer that later on. Mr. GREEN of Iowa. The gentleman is right in part of

what he "aid about ihe reduction in taxes, because we took off the tax on moving-picture theaters up to 50 cent..

Mr. BLOOM. 1\lr. Chairman, I decline to yield furtller. I will answer the question about prize :fights. Prize :fights are illegal and the committee was told that prize :fi.,.hts were illegal when Mr. Brady appeared before the committee. Let me say that this is a matter which does not concern the theater manager as much as you gentlemen think; it concerns the pub· lie ; the public is paying this tax, ancl the theater business l:i being ruined., but do not think tllat ls true only as to New York.

·,

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f i J

1925 CONGRESSIONAL RECORD-HOUSE 11017 Do not think we are worrying in New York. I have heard gentlemen talk about Kew York City. Well, New York City is paying the bill, but you are not getting the drama, the pic­ture , the vaudeville, and operas you are supposed to have throughout the United States.

Mr. GREEN of Iowa. The gentleman knows we have taken the tax off of the drama?

~rr. BLOOM. I am not objecting to that. Yes; you are tak­ing the tax off of the drama and that is very nice and we thank you for it, but you should go further. Why stop at the ili·ama? Why uot take it off the moving pictures, lectureq, concerts, ba eball, and all amusements so as to give the public a chance? Take it off of everything.

~Ir. GREEN of Iowa. Why not take off the whole $SOO,OOO,­OOO in taxes which was asked for?

Mr. BLOOM. I was sent here to reduce_ taxes and that i" what I am trying to do; I am only trying to reduce taxes where I know and believe they should be reduced.

The CIIAIRMAN. The time of the gentleman from Kew York has expired.

1\lr. LOZIER. 1\lr. Chairman, I fear that in our eagerness to reduce taxation we do not always give all subjects and objects of taxation equitable. treatment and consideration. I favor the repeal of all taxes on automobiles and on admis­sions to motion-picture shows and similar places of amusement. These are war taxes, and, like most other war taxes, should not be retained in peace times, but should be wiped out; not next rear, but now.

A tax on admissions is a tax on the public, a direct tax levied on the mas es and largely a tax on the poor and middle cla es who can not ordinarily afford other amusement. The vre ent tax on admissions and dues produces about $33,000,000 annually. The bill we are now considering will produce np­proximately $29,000,000 from admissions. The proposed bill makes only a very slight reduction in the tax on admissions. Under the general scheme to reduce taxes the great mass of commou people who attend motion-picture shows and similar amusements are not getting their just part of tax reduction.

J\"ow, what is the attitude of the majority party and its Committee on Ways and Means with reference to reduction of taxes? They have made enormous reductions in income taxes, e~pecially on incomes in the higher brackets. Wealth has been given preferential treatment. The surtax on great incomes has been cut in two-reduced one-half. Seemingly the "powers that be" have been very solicitous for the welfare of those who have great incomes and have been anxious to reduce the surtax rates on the owners of swollen fortunes, many of which were accumulated as a result of war-time profiteering or unethical industrial or commercial practices. The pending l>ill practically eliminates Federal inhet'itance Qr Federal es­tate taxes, and as a result many great fortunes invested in tax-free bonds will be handed down to the next generation practically free from transmission or succession taxes.

Income taxes in the higher brackets have been tremendously reduced. I make no war on wealth if honestly accumulated and decently utilized by its owners. But I do think that wealth should bear its just proportion of the public burdens.

It is ju t as important to equalize taxes as to reduce them, and any reduction should be distributed among all subjects and objects of taxation and not largely confined to one favored group. While I shall vote for the pending bill, because I be­lieye it is the best measure that we can hope to get during the present ses ion of Congress, nevertheless candor compels me to state that many of its provisions are manifestly inequitable and discriminatory. In order to make a tremendous reduction in income taxes, many other taxes have been retained or, at least, not proportionately reduced. Then, again, some taxes which have either been reduced or abolished entirely might well have been retained, at least in part. The proposed bill abol­ishes taxes on cameras and lenses, which .are not necessities of life, and which last year yielded $700,000 in revenue. It also omits taxes on firearms (except pistols) and ammunition that amounted last rear to $3,850,000, and taxes on photographic films and plates which last year aggregated $750,000. The bill omits taxes on automatic slot machines, which under the pres­ent law yields a re\enue of $650,000. l\fah-jongg sets are made tax free by the proposed bill. Works of art that last year were taxed $650,000 are tax free under the pending bill. Under the revenue act of 1924, the tax on brokers amounted to $2,000,000. The pending bill eliminates this tax, and if enacted the brokers in the great stock exchange~, who handle and gamble in stocks amounting annually in value to billions of dollars, will be relieved from the payment of even a nominal tax. It seems that tbe committee bas not been willing to main­tain the present low l>roker's tax of $50. Tlle pending bill

takes all taxes off of bowling alleys, pool and billiard tables, which last rear produced a reveuue of $2,100,000. Shooting galleries and riding academies are granted immunity from tax­ation by the pending bill. Under the present law the tax on yachts and pleasure sailing vessels yielded last year $300,000 in revenue. This tax has also been entirely eliminated.

Now, those in charge of this bill demand that we not only make enormous and disproportionate reductions in income taxes on swollen fortunes, but that we retain the tax on ad­mi sions to picture shows, and at the same time they wipe out all taxes on cameras, lenses, firearms (except pistols), ammunition, pl10tographic films and plates, slot machines, mah-jongg sets, works of art, stockbrokers, bowling alleys, pool and billiard tables, shooting galleries, riding academies, and last but not least, yachts. And they tell us that this is a scientific tax bill. If giving the privileged classes pref­erential treatment makes a revenue mea m·e scientific, then this is a scientific tax bill. If giving one class large bounties in the form of immunities from taxation while withholding corresponding benefits from other classes is a scientific exer­cise of the taxing power, then this bill is certainly a scientific measure. But the bill is not scientific or equitable in its pro­visions. It is a lopsided, jug handled, discriminatory, and grossly partial and inequitable bill in many particulars.

Now, in all seriousness, is not the poor man, woman, or child who attends a motion-picture show-and which, as a matter of fact, is about the only amusement they have-en­titled to just as much consideration as these other classes? [Applause.]

While you are reducing taxes, why not reduce them on all classes and vocational groups equitably and fairly?

l\fr. GREEN of Iowa. Does the gentleman know of any o:t those taxes, of which he reads a long list, which do not affect the poor man? Not more than one or two.

l\ir. LOZIER. But how about riding academies, slot ma­chines, and Mab-jongg sets? How about works of art, tack­brokers, bowling alleys, pool and billiard tables, shooting gal­leries, and palatial yachts? How do you help the poor man by taking taxes off of riding academies, works of art, slot ma­chines, Mah-jongg sets, stock brokers, bowling allies, pool and billiard tables, shooting galleries and yachts? Is it your con­tention that the poor man is vitally interested in or will be sul>stantially benefited by the removal of these taxes? Do you tell me that you are helping the poor man when you take off all these taxes that I have enumerated and retain the tax on automobiles and admissions to picture shows? How have you helped the ordinary nian or woman by abolishing these taxes I have referred to, while imposing a tax on the poor man who, on Saturday night, after a week of toil, takes his little family to a picture show for an hour's amusement and relaxation? Oh, yes, you are very solicitous for the welfare of the poor man when you abolish taxes on many things which contribute to the pleasure of the rich, but retain taxes on the amusement of the humble classes. Then, again, neither in the rev-enue bill of 1924 nor in the pending bill have you made any reduction in tariff taxes-the greatest of all tax burdens that the common people have to bear.

These tariff taxes last year amounted to over $500,000,000 and will probably approximate that amount this year. But the millions that are taxed by high tariff duties were given no relief or reduction in the reyenue act of 192-!, and they have no reduction or relief in the pending bill. In the increased cost of their supplies, resulting from the present excessi\e tariff duties, the farmers and wage earners of the Nation are sub­jected to an exceedingly heavy burden, and it seems to me to be only just and fair that while we are reducing taxes that we reduce tariff taxes as well as taxes on great incomes.

Your bill still retains a ta:x: on automobiles that will cost those who buy automobiles annually at least $70,000,000. Automobiles are no longer luA-uries, but a necessity incident to our complex social, cine, and indu triar life. Approximately 17,000,000 automobiles and 2,000,000 trucks are now in use in the United States. They are factors in the business affairs of this Nation. Farmers use 5,000,000 automobiles and trucks; 90 per cent of the physicians use automobiles in making pro­fessional calls. Up to June 30, 1925, $862,000,000 had been collected by the Federal Government in Federal taxes on auto­mobiles. Why do you not help wipe out the automobile war tax entirely before you take the tax off of yachts, riding academies, stock brokers, slot'machines, works of art, pool and billiard tables, shooting galleries and 1\lah-jongg sets?

The revenue bill of 1924 contained a provision granting a 25 per cent reduction on income taxes for 1924, but those who had paid tariff taxes, automobile taxes, excise taxes, occupa­tion taxes, and admission taxes received no reduction or rebate.

1018 CONGRESSIONAL RECORD-HOUSE DECEl\IBER 1 7

Was this fair or just? Tho e who belonged to the income-tax paying class in 1924 received preferential treatment and got a 25 per cent reduction in their income taxes, but those who paid all other kinds of taxes secured no rebate or reduction. This is the embodiment of favoritism and the essence of special privilege. I can not understand how anyone can justify this di. crimination. No doubt you will try before the present Con­gress adjourns to give certain classes of taxpayers-that ilil, the income-tax payers-an additional 25 per cent reduction 1n income taxes without giving to the other taxpaying classes who pay indirect taxes, tariff taxes, and excise taxes any reduc­tion or rebate upon their taxes.

Mr. GREEN o~ Iowa. Has not my friend waked up to the fact that this is not a tariff bill?

Mr. LOZIER. Yes; I know it is not a tariff bill, but I also know that your Ways and Means Committee seemingly had lit· tie interest in the great mas es of the American people, the common people of this country who pay taxes other than income taxes. The main purpose of the pending bill is to reduce sur­taxes, especially in the high brackets, so as to relieve those who have great incomes from a just and fair proportion of the expenses of our Government. You are not rebating one single dollar of the $150,000,000 taxes that were paid by the auto­mobile buyers and users in 1924:. You will not rebate any part of the $150,000,000 paid by automobile buyers and users in 1925. You are not rebating a single dollar of the hundreds of millions of dollars paid by the masses in the form of excise taxes, tariff taxes, occupational taxes, or miscellaneous taxes; but by the act of 1924: you did rebate, to the extent of 25 per cent, the taxes paid by one class of taxpayers, namely, the in­come-tax payers.

I want to reduce taxes upon all subject and objects of taxa­tion and on all vocational group , fairly and equitably. You have given and will give 1·ebates to one class of taxpayers only, the income-tax paying class. You have withheld and will withhold this rebate from all other classes of taxpayers. I now yield to my friend, the distinguished gentleman from Iowa.

l\Ir. GREEN of Iowa. We are doing away with the taxes of 2,300,000 small taxpayers. That is my answer to the gentle­man.

Mr. LOZIER. Oh, in a way, by increasing the amount al­lowed as exemptions, but in the aggregate that reduction is in­igni:ficant when compared with the tremendous reduction in

surtaxes carried by the pending bill. Four million two hundred thousand people in the United

States had taxable incomes in 1924, but the 2,300,000 persons to whom you refer paid in the aggregate only $23,000,000, or an average tax of $10 per person. According to the records of the Treasury Department, in 1924, three men had incomes of over $5,000,000. The combined income of these three men aggre­gated $28,000,000, on which they paid income taxes amounting to $11,000,000. Under the proposed bill, the taxes of these three men will be reduced over $5,000,000, or an average reduc­tion of one and two-thirds million dollars each. The records al o show that three other men reported incomes in 1924 of between $4,000,000 and $5,000,000. The total income of these three men was over $13,000,000, on which they paid an income tax of $4,000,000. Under the pending bill you are reducing the taxes on these three men more than $2,600,000. In other words, these six men will, under the pending bill, get a reduc­tion in their taxes of approximately $8,000,000, or about $1,300,000 each.

These same records show that in 1924 74 persons had in­comes of over $1,000,000. Of these, 36 had incomes from

1,000,000 to $1,500,000, 13 from , 1,500,000 to $2,000,000, 15 from $2,000,000 to $3,000,000, 4 from $3,000,000 to $4,000,000, 3 from $4,000,000 to $5,000,000, and 3 with incomes over $5,000,000. There are 213 persons in the United States with incomes of $500,000 or more. This bill reduces the taxes of 42 men over $20 000,000, and the taxes of 213 persons $98,000,-000, while it reduces' the taxes of 2,300,000 small income tax­payers only $23,000,000. In other words, 213 men of great wealth get in the aggregate practically four times as much reduction as 2,300,000 average citizens.

And under your bill a person whose income is anywhere between $11,000 and $44,000 gets no reduction whatsoever in his surtaxes, but will pay the same under the proposed law as under the present law. You propose to grant a reduction in surtaxes only to those whose anl\.ual income is $44,000 or more. Is this fair? Why grant such tremendous reductions in sur-

. taxes to those whose incomes are $44,000 or more and refuse any reduction in surtaxes to those whose annual incomes are under $44,000, especially in view of the indisputable fact that the great bulk of the Nation's business is done by men whose net annual income is less than $44,000.

The 2,300,000 small taxpayers, mentioned by the gentleman from Iowa, are persons who have incomes sufficient to place them in the class of income taxpayers. No one but persons who have taxable incomes are included in that group, but this reduction only averages about $10 for each of these 2,300,000 persons, a mere bagatelle as compared with the great reduc­tions in the surtax of those whose annual incomes are in excess of $500,000. I am glad "Mr. Average Man" is getting even this small reduction in his income taxes. But what about the llO,OOO,OOO people in the United States who do not belong to the income taxpaying class and who do not earn sufficient income to call for the payment of an income tax? What do you do for them? As I have already stated, of the l15,000.000 people in the United States, only about 4,200,000 have taxable incomes under the present law. Why not gi\'e some substanti:1l reduction to the remaining 110,800,000 people in the United States?

This is not a measure to reconstruct or reform our entire tax structure or to reduce taxes on all the people, but it is obviously a bill to reduce the taxes on a compar·atively small part of our population. On ita fac·e, it is primarily a bill to reduce income tax or taxes on a relatively small part of the people. It gives no substantial relief to the 110,000,000 com­mon people who are taxed every time they turn around, and on practically everything they buy from the cradle to the grave. The bill on its face purports to be a measure designed very largely to reduce taxes on those who are fortunate enough to belong to the income-tax paying class. This purpose stands out on almost every page of the bill. It goes a long ways in reducing taxes on big incomes and luxuries, but it does little for the tens of millions of common people who earn and eat their bread in the sweat of their face, and whose incomes are never, or rarely, sufficient to make both ends meet or bring them within the class of income-tax payers. The bill does not go far enough. Many of the things it does should be done, but other things hould have been done which you have left un­done ; and you should provide some substantial relief for those who are burdened with taxes other than on great incomes. Notwithstanding many commendable features, in the last analysis, this is a rich man's tax-reduction bill. [Applause.]

But just what has the administration and Congress done to­ward relieving agriculture from the economic vassalage to which it has been subjected for years by the special privileged classes? What do you propose to do to rehabilitate agricul­ture, the outstanding basic industry of this Nation? What legislative relief do you offer for an intolerable situation that is largely the result of discriminatory laws and which is rapidly driving the American farmers into bankruptcy? The President and Congress seem but little concerned over the farmers' plight. The·leaders in this Oongress on the first day of the session introduced this revenue bill making a tremendous reduction in the taxes of those who have great income , and this bill will be rushed through the House in record-breaking time. But no bill has been passed or even considered that will materially improve the conditions of the agricultural clas es, give them equality of opportunity with other vocational g~·oup , or reduce the un1·easonable spread between the cost of the farmer's supplies and the price at which he sells his com­modities. The President and Congress are seemingly indiffer­ent to the fact that the farmer is compelled to sell his com­modities at prices that will not return the cost of production, much less yield a profit. The President has ceaselessly advo­cated a reduction of the surtaxes of the comparatively small class of people whose wealth and prosperity place them in the income-tax-paying class, but he bas said little and done noth­ing in the way of aiding the farmer and average citizen, who, under exi ting conditions, can not make both ends meet. In­stead of doing so much to reduce taxes of those who ha\e great incomes, why not enact some legislation that will help the American farmer balance his budget and earn a little urplus income on which to pay taxes. The farmers are interested not so much in reducing taxes on large incomes, as they are in earning for them elves a living income. The President, in sub­stance, tells the farmers to work out their own salvation with fear and trembling, and the leaders in this Congress are seem­ingly unconcerned over the economic tension and rapidly in­creasing distress among the agricultural classes. The Pre i­dent continues to reiterate his opposition to any farm-relief legislation of a "price-fixing" character, but he is not opposed to "price-fixing " legislation applicable to other occupations. Nearly all other vocational groups have been the beneficiaries of " price-fixing " legislation that has increased their earnings and stabilized their industries. The tariff laws arc .. price­fixillg" laws and designed to enable the manUfacturer to sell his commodities at higher prices than would prevail in the ab-

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1925 CONGRESSION-AL RECORD-HOUSE ·1019 sence of these tariff laws. The act creating the Federal re­serve system, as to interest rates, is a "price-fixing" measure. The transportation act is a "price-fixing" law which authorizes railroads to fix freight and passenger rates on a basis that will afford a net return of 5%, per cent on the capital investment. The several States have created public-service boards which are "fixing" the price for telephone, telegraph, electric light, ga ·, and other forms of public service, and every few weeks a Federal judge bands down a "price-fixing" decision. In prin­ciple and as a matter of public policy, I am opposed to "price­fixing" legislation, but inasmuch as organized business and organized labor, manufacturing concerns, railroads, banks, tele­phone and telegraph companies have long been enjoying the benefit of "price-fixing" legislation I do not consider it im­proper ·or uneconomic to enact legislation along safe and sane line that will restore agriculture to the list of profitable oc­cupations, eyen 1f the effort of such legi lation is to increase and stabilize the price of farm commodities. [Applause.]

The OIIAIR.MAN. The time of the gentleman from :Mis­souri has expired.

l\Ir. McKEOWN. Mr. Chairman, I offer a substitute amend­ment.

The CHAIRMAN. The gentleman from Oklahoma offers a sufi titute, which the Clerk will report.

The Clerk read as follows : Substitute offered by Mr. McKEowN: Page 181, line 23, after the

word "of," strike out "1 cent" and insert 11 2 cents" ; and on page 188, line 2, after tbe word 11 is," strike out ":50 cents" and insert "$1.50."

Mr . .McKEOWN. Mr. Chairman, the purpose of this amend­ment is to raise the amount from 50 cents to $1.50. A. man ougl!t to be able to go to a theater or show tax-free where the admission is from $1.50 down. If be wants to go to a more expensive show, let him pay an additional 1 cent on each addi­tiondl 10 cents charged. That would be a fair proposition. It would probably take out most of the tax, I have no doubt, but it would be fairer to let the people who want to go to shows that charge over $1.50 pay this small additional tax; and they certainly ought to be able to go tax-free to shows that charge le s than $1.50.

The CHAIRMAN. The question is on the substitute offered by the gentleman from Oklahoma.

The substitute was rejected. The CHAIRMAN. The question now recurs on the amend-

ment. Mr. GRIFFIN. 1\Ir. Chairman, there are two amendments. Tile CHAIRMAN. It ls all one amendment. Mr. GRIFFIN. Then, I ask, Mr. Chairman, that the \ote be

divided, because they relate to two numbered paragraphs. The CHAIRMAN. It is all in the same paragraph. Mr. GRIFFIN. Yes; as the chairman has ruled, but they

relate to two different things, and I ask that the vote may be divided.

The CHAIR!\IAN. The vote upon the amendment will be divided.

1\Ir. GRIFFIN. I ask, Mr. Chairman, that the first part of the amendment be again reported.

The amendment was again reported by the Clerk. The question was taken ; and on a division (demanded by

1\Ir. GRIFFI~) there were-ayes 42, noes 106. So the amendment was rejected . l\Ir. GRIFFIN. Mr. Chairman, I ask that the other

amendment be reported. The Clerk again reported the amendment. The question was taken, and the amendment was rejected. The Clerk read as follows ; (3) Admissions to any place of amusement, 1f, during tbe time

for which the charge for admission entitles the person admitted to remain in such place, there is produced in such place exclusively a legitimate spoken drama. As used in this subdivision the term "legitimate spoken drama" means a spoken play, whether or not set to music or with musical parts or accompaniments, which is a con­secutive narrative interpreted by a single set of characters all neces· sary to the development of the plot, in two or more acts, the per­formance consuming more than 1 hour and 45 minutes ot time; but such term does not include a revue, burlesque, or extravaganza.

Mr. BLOOM. 1\lr. Chairman, I offer an amendment. The CllAIRMA..~. The gentleman from New York offers an

amendment; which the Clerk will report. The Clerk read as follows: Mr. BLoo::u offers the follcwlng amendment: Page 191, line 16,

insert " ( 4) Adm.lssions to any concert or lecture where not more than four persons perform an~ where no scenery or curtain is used."

Mr. BLOOM. 1\Ir. Chairman and ladies and gentlemen of the committee, I want to call your special .3.ttention to the amendment you have just heard read, because this is entir!31y apart from anything dramatic or theatrical. This amendment calls for the elimination of the tax on anything that is musical or a lecture where no costumes are used and where no scenery or cm·tain is used.

I would like to call the attention of the committee to an advertisement taken from the Washington Post this morn­ing to show how th1s acts against education in music in this country. Cbaliapin appears to-morrow night at the \\a hinO'­t.on Audito~ium, and the prices of admission are $1, $1.50, a;d $2, up to $o, and the ad states specifically "no tax.!' We al;·o ha-re Paderewski appearing here on :Uonday December 21 prices $3, $4, $5, and no tax. We have he1:e an .America~ Indian program at the Wardman Park Theater where the top price is $1.50 plu ~ tax.

This is the reason for the amendment I ha\e presented to the House. I do not want, of course, to deceive the committee Ol'. have you think there is anything Thm·stonlike al>out this thmg. The other people are appearing for a charity. It is somethi~g for whi<:h the public are paying a big price and the artist gets the money. In the case of the little arth;t who is trying to get up to the top, he has to pay the tax.

All your Philadelphia Symphony concerts, your Boston Symphony concerts, do not pay any tax, but let a little orchestra or band come in and play for $1 or $2 or $2.50, and they have to pay .this tax.

Therefore, I hope you will adopt this amendment. It doe not amount to a great deal of money. The whole thing prob· ably would not amount to o--rer $100,000, if that much. Per· haps the committee knows· exactly what it would amount to· but I do lrnow it will gi\e the young, struggling arti t a~ opportunity of coming to the front the same as Chaliapin and Paderewski.

If you will adopt this amendment you will see that it does not apply to anything theatrical; only to platform concerts and lectures. I would like to ask the cllairman of the committee whether or not this pro\ision in regard to the legitimate spoken drama has reference to grand opera, because there is not a single word spoken in grand opera, e\erything is sung.

Mr. MILLS. I would say to the gentleman that the para­graph was intended to include grand opera and does apply to grand opera, becall"e grand opera falls within the definition of spoken drama set to mu ic.

1\Ir. GREEN of Iowa. If the gentleman will permit the gentleman thinks his amendment would not cost the Go~eru­ment much, but I want to say it would cost ten or twel'e mil­lion dollars, for it would open an easy way of e-vading the law.

Mr. BLOOM: This only applies to the indhidual who goes on the stage m a dress sutt, without scenery, without cur­tain, without any co tume, and sings or talks or plays and that does not amount to anything. You give to Chaliapi~ and Paderewski the opportunity to go out and give performances at $5, but the others can not secure it.

The CHAIRMAN. The question is on the amendment of­fered by the gentleman from New York.

The question was taken, and the amendment was lost. Mr. BLOOM. Under the privilege of extending my remarks I

wish to add the following: MUSIC

This is for the great army of struggling musical artists, hal! of whom are women, and many of whom are still in the forma­tive period of their careers as regards their means of liveli­hood.

I urge that music be encouraged rather than restricted. Music means much to the people of our country . .A.s education and science are not taxed and should not be

taxed, then music should not be taxed. 1\Iusic is the only universal language and knows no country and its cultivation should be as free as it can possibly be made.

l\Iusic should not be for the few any more than education or liberty should be for the few.

The idea of a tax on music is based upon the assumption that education should be penalized. In all matters of taxation the question should not be merely how many dollars are in­volved but the nature of the occupation proposed to be taxed.

All other countries have always encouraged and protected music and have always con idered such a tax hurtful, im­practicable, and not sufficiently productive of revenue. A tax upon music is a tax upon creati,eness, refinement, taste, and culture.

If the United States is to become as great in the musical world as it is in technical skill, in manufacture, and in com· merce she must encourage her musicians.

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10~0 CONGRESSION ... £\.L RECORD-_ HOlTSE DECEJ\fBER 17

America can be to her musicians a wise or a foolish mother. She will be wise if she leaves music free of tax, because the tax on music is a tax upon civilization and culture and because the revenue from it is somewhat uncertain.

Ninety per cPnt of the people of this country who attend concerts have very little money. The richest people in our cities attend the concerts given by the symphony orchestras, yet there is no tax on the latter. What a disgrace to abolish the tax for an audience that attends the Boston and Philadel­phia symphony orchestra concerts at Carnegie Hall, where mostly wealth is represented, and to insist upon the tax being paid by audiences that attend piano recitals, violin recitals, and song recitals of great artists, which are just as educational.

What greater proof need you have that music is a great educational force than that it is taught in our public schools, and witne~s also the growth of the annual music week, which has so rapidly spread among the middle and financially poor cla s throughout the counh·y.

Approximately 80 per cent of all public musical ev~ts in the United States are promoted and handled on an " art for art sakP" ba"is and is therefore nonspeculative in character. The great majority of concerts of all descriptions given all over the country are arranged by musical clubs or organizations whose only purpose is educational and cultural. Hence the tax on all concerts should be removed, as it, has already on symphony orchestra concerts.

This tax on concert tickets is a tremendous burden to the thou ands of concert goers, who comprise students and teacher of music principally; and I believe that music in the concert form is something so elevating to the mas es that everything should be done by Congress to bring concerts within the reach of their purse.

I believe that the tax hould be removed from concert tickets, becau ·e most concerts are ab olutely nonmoney-making, and the tax reduction would help to lessen the deficit of the a1·tist giving the concert and in many cases the public-spirited citizens \Vho underwrite them.

The concerts are educational in character and should be en­couraged in every way possible.

Music is the ole universal language of the world and has done more to bind together the different nationalities that make up our country than any other factor.

All scientists and doctors are agreed that the effect of music is always ben_eficial to human beings. The privilege of listening to good music hould be made possible to everyone, and the removal of the tax will accompli. h this object.

A musical concert has as its ideal the educational, artistic and spiritual unlift of its auditor. While pleasurable it i~ not intended for amu ement only nor for the sort of ent~rtain­ment that brings no lasting benefit.

There should be no tax on anything which tends to improve 1.he minds and piritual consciousness of a people in need of such cultm·al aids.

As music is now taught as one of the e sentials in the schools, no tax should be levied on the opportunities offered pupils to extend their musical knowledge by listening to con­certs in other halls than those maintained at the public cost.

As cultu1·al d_evelopment of a country depends upon that which appeals directly to the soul, and music needs no literate intermediary, therefore even the most uneducated should bear it, and they should not be taxed for the privilege.

In the smaller places an obstacle witb which the local man­ager bas to contend is the war tax. Many a contract is op­posed on the contention thJ!t "the last straw which breaks the camel's ~ac~" i the one imposed by the Government. Thus a commumty 1s often deprived of having a concert.

The large amount of money spent on productions and the great element and danger of loss involved.

_Let us make the theaters of the United States grow better, ~Ith no world. peers. We are taxing ourselves directly for the _ leasure of be1pg both instructed and entertained.

The actor and the theater manager have always contributed cheerfully to charity. The actor during the war and since the war bas furnished entertainment for the disabled soldiers Nobody is benefited by this act and the public pays. ·

GRAXD OPERA P.A~TOl!I.\fE

The New Yorl;;: laws do not allow the charge above 50 cents and yet the Government says that if you can get it we want GO per cent of what the law says you can not get.

This is a direct tax. Other taxes taken off go to the mer­chant, and the me1·cbant and the public do not receive the direct benefits because it can not be divided.

In all other countries the legitimate theater is subsidized · all other. countries support the legitimate theater, having ~

national theater. The theater is part of the great educational sys~em ~f o~ country, and it would be unjust to discriminate agamst It th1s proposed way.

Mr. BLA~K of Texas. Mr. Chairman, I move to strike out su!Jparagrapn 3, page 191.

The CHAIRMAN. The gentleman from Texas offers an amendment, which the Clerk will report.

The Clerk read as follows: Page 191, strike out all of the paragraph from line 5 to 16, in­

clusive.

Mr .. BLACK_ of Texas. Mr. Chairman, I have moved the adoption ?f th1s amendment upon the general principle that I do not thmk in passing a law of this kind we ought to under­take to raise exemptions among those who are similarly situ­ated to others who are covered by the bill. ~be only o~er exemptions granted in the bill from the tax

which is proy1ded are those performances given not for profit bu.t.for pub~c benefit, such as charitable benefits and. enter­tamments of that kind. I read the testimony of Mr. William A. Brady before the '\ays and .Means Committee who advoc>ated an exemption of this kind, and it seems to me' his whole testi­mony was contradictory. In one breath he argued that on account of the high railro·ad rates and traveling expenses the spoken drama has been eliminated from the theaters in many St~tes .. Then in anothe~ breath he said thnt great actors like Otis Skmner and Mrs. Fi ke had to ta~e to the field and go out to States like Arizona, Nevada, and California in order to make a living, because nobody would go to bear the classic drama which they presented in the big centers of population.

Now, that seems to me a wholly contradictory argument and simp!~ emphasizes that the exemptions tha·t paragraph 3 under­take to grant will have nothing at all to do with the success of the spoken drama.

If it is not a success, if the legitimate drama no longer ap-· peals to the taste of the American public it is not because of the small admis ion tax ; it is due to s~mething else be ides that. Perhaps we have lost our taste for the better things, or perhaps some of the actors think so, and are feeding us on the trashy husks when we have a capacity for far better food. At any rate, if we are to have an admis ion tax at all it seems to me that it oug~t to apply to all theaters alike, ex~ept where the performance Is for charitable purposes and the profit does not go to corporations or individuals.

In that event, the exemption is for a public purpose and can be defended on that ground.

The CHAIRMAN. The question is on the amendment offered by the gentleman from Texas.

The question was taken, and the amendment was rejected. The Clerk read as follows: SEC. 501. On and after the date this title takes etrect there shall

be levied, assessed, collected, and paid, in lieu of the taxes imposed by section 501 of the revenue act of 1924, a tax equivalent to 10 per cE:'nt of any amount paid on or after such date, for any period after such date, (a) as dues or membership fees (where the dues or fees of an active resident annual member are in excess of $10 per year) to any social, athletic, or sporting club or organization; or (b) as initia­tion fees to such a club or organization, if such fees amount to more than $10, or if the dues or membership fees (not including initiation fees} of an active resident annual member are in excess of 10 per year; such taxes to be paid by thE> person paying such dues or fees: Pt·ovided, That there shall be exempted from the provisions of this sec­tion all amounts paid as dues or fees to a fraternal society order or association, operating under the lodge system, or to any Iocai frate;nal organization among the students of a college or university, In the case of life memberships, a life member shall pay annually, at the time for the payment of dues by active re ident annual members, a tax equiva­lent to the tax upon the amount paid by such a member, but shall pay no tax upon the amount paid for life membership.

Mr. O'CONNOR of Louisiana. Mr. Chairman I offer the fol­lowing amendment, which I send to the desk. '

The Clerk read as follows: Amendment offered by .Mr. O'Co~xoa of Louisiana : Page 192, line

16, after the word " social," , strike out the words " athletic, or sport· ing."

Mr. O'CONNOR of Louisiana. Mr. Chairman and gentlemen of the committee, I think the purpose that I have in view is entirely obvious, but it may not be ami s to make a few ex­planatory re~arks. I desire to exempt from the payment of the tax here Imposed the members of athletic clubs and sporting clubs, and by that I mean yachting clubs. I do not know that the membership of our athletic clubs belong to the "idle rich" o~· the "very poor." I do know, however, that in the city of ~ew Orleans, and I suppose that is illustrative of all the cities

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1925 CONGRESSIONAL RECORD-HOUSE 1021 of the United States, there are probably 2,500 young men who belong to yacht clubs, and there are, I suppose, 1,500 young men who belong to our athletic clubs. Both the Southern Yacht Club and the Young Men's Gymnastic Club are very, very old insti.tutions and their membership responded magnificently to tlte call of the country when we entered the World War. I <lare ::;uy the Latin phrase mens sana in corpore sano is familiar to all of yon-a sound mind in a sound body. In my judg­ment the athletes of this country, the boys who belong to gym­nasiums and yachting dubs are closely related to our soldiers and sailors. The aying is attributed to the Duke of Welling­ton that the Battle of ·waterloo was won on the football fields of England, and another celebrated Englishman said that the 1Ie::;truction of the armada began with tlte early operations of Francis Drake and the other English privateers down on the Spanisb Main. The gt·eatness and the glory of England on land and sea is traceable in a "large way to the lo"\"e of her youth for athletic.· and the ad,enturer of the sea. In other words, en­eomage the youth of the country to appreciate the respon ibili­ties tltat devolve upon them and the neces ity for being prudent and taking care of their bodies, and when the Nation calls on them on some tremendous day they will respond and do their duty as soldiers and rider · of the seas. I do not know why e"\"en in war times the rapacity of the taxgatherer did not stop at athletic clubs and yacht club·. You may gather some money from that source, !Jut fundamentally it is unsound, it is unjust and unfair. A I ~aid before, the boys you propose to tax do not belong to the very rich or the "\"ery poor, but they do consti­tute the bone and sinew of the young manhood of 'America, and I think it is an impo ·ition to impose a tax on the dues that they pay into these clubs, wbich after all are for the benefit of the countQ·. I hope the proposed amendment will prevail. If it does, it will remo'e from the bill one of the many economic iniquities which the foes of the measure say it is curse-d with in major propositions.

The CHAIRl\IAN. The time of the gentleman from Loui­siana has expired. The question is on the amendment offered by the gentleman from Loui iana.

The question was taken, and the amendment wa rejected. The Clerk read as follows :

TITLE Vl.-EXCISiil TAXES

SEc. 600. There shall be lc>ied, assessed, collected, and paid upon the following articles sold OL' leasPd by the manufacturer, producer, Ol' im­porter a tax cquiYalent to the following percentage of the price for which so sold or Ieased-

(1) Automobile cha ' f.!is and bodies and motor cycles (including tires, inner tubes, parts, and accessories therefor sold on or in connection therewith or with the sale thereof), exc~pt automobile truck chassis and bodie , automobile wagon cha ·if: and bouies, und tractors, 3 per cent. A sale or lease of an automobile shall, for the purpo es of this subtlidslon, be considered to be a salP of the cbas>lis and of the body. Thi$ . ubdivi ion shall take effect on the expiration of 30 days after thE.' Pnactment of this act.

(2) Pistols, except those ~old for the use of the United States, any State, Territory, or pos ession of the Cnited State , any political sul>­divi. !ou the-reof, or the District of Columbia, 10 per cent.

If any manuf<lcturer, pwduct>r, or importer of any of the articles enumerated in thi . ection customarily sells such articles both at wholesale and at retail, the tax in the case of any article sold by him at r<'t!lil hall be computed on the pl'ice for which like articles are sold by him at wholesale.

'The taxes imposed by this ectlon shall, in the case of any article in respect of which a corresponding tax is imposed by section 600 of the re\'enue act of 1924, be in lieu of such ta:x.

Mr. RA.IKEY. l\Ir. Chairman, I move to strike out lihes 15 to 23. inclusive, on page 194. ·

']'he CHAIRMAN. The gentleman from Illinois offers an amendment, which the Clerk will report.

The Clerk read as follows : AJm>ndment by Mr. RAI:SE~: Page 19:l, strike out all of lines 15 to

23, inclusive.

Mr. HUDSPETII. Mr. Chairman, I offier the following amendment to the amendment as a sub titute:

The Clerk read as follows : .Amendment by Mr. HGDSPETH to the amendment offered by 1\lr.

RA!~EY: Page 194, line 19, after the word "tractors," strike out the figure " 3 " and insert the figm·e " 1."

Mr. McLEOD. 1\Ir. Chairman, I offer an amendment. Tile CHAIRl\IAN. The Clerk will report the amendment. The Clerk read as follows: Amendment by Mr. MCLEOD: Page 194, in paragraph 1, amend the

Hudspeth amendment by striking out the figure "1" and inserting in lieu thereof the figure " 2."

:Mr. BAl\TE:HEAD. · 1\Ir. Chairman, a parliamentary inquiry. The CHAIRMAN. The gentleman ""ill state it. l\Ir. BANKHEAD. As to the parliamentary situation. If

there is an ameRdment now pending offered by the gentleman from Illinois [1\Ir. RAIKEY] to which an amendment was of­fered by the gentleman from Texas [Mr. HuDSPETH].

The CHAIR::\lAK To correct the text. The gentleman's amendment was to correct the te.xt.

Mr. BANKHEA..D. And it would not be an amendment in the third degree'?

'l'he CHAJRl\IAN. No. :Mr. McLEOD. lUr. Chairman and gentlemen of the com­

mittE-e, I am offering this all-equitable amendment in order that the taxation of a free Nation will be collected only where it is justly due.

The special motor-vehicle taxes in 1925 for the fiscal year ending- June 30 totaled over $600,000,000. This includes Fed­eral, State, and municipal taxes, and 17,000,000 motor-vehicle owners are paying this $600,000,000.

My amendment, gentlemen, will give relief only to the extent of $23,000,000, and I ask you in all fairness, Is this lone-taxed transportation entitled to this slight relief? Will we heed the wishes of the millions wbo are hoping that this day will give congressional tax relief to the motor vehicle. This tax opposes the fundamental policy of Congress to avoid taxing one group for the benefit of all.

I am sometimes forced to wonder, gentlemen, if the age in which we live bas not developed more rapidly than some of our mental adaptations. And when I hear some of the lingering impressions, as reflected by the current discussions in this body \\ith reference to the automobile and the tax thereon I feel that surely this must be the case. '

Turn back, if you will, with me into yesterday 20 years and see again on the streets and highways of the country a picture of the sundry and varied types of horse-drawn vehicles jogging along on their different objecti,es. It is a picture . of the Nation in e"\"eryday work, the implements of trade and com­munication. I know that it would never have occurred to anyone of us to place a tax on that picture; and if in some time of stress such a tax had been placed, we would hasten to cltam­pion any movement to remove same at once.

Into that picture of yesterday has gradually projected the motor "\"ehicle. In its early stages it was new and novel and relati,ely slightly used. We styled it properly a luxury and a bauble. That impression of the earlier clays of the motor advent had apparently lingered when the present tax on the automobile was placed, and still lingers to cloud our viewpoint in dealing with the present situation.

Look again on these same streets and highways to-day and you see only the automobile serving the self arne purposes, objects, and ends of the horse-drawn vehicles they displaced. Sa 'e in campaign speeches, the adherents of the once famous mule are now en route to antiquity. The smell of gasoline and the profanity of the traffic cop now displace the song of the birds we once were able to hear as we jogged along. And were Lady Godi'a to make her famous ride again to-day she would no doubt of necessity be draped about the steering wheel of a motor.

It is a fact, gentlemen, sad though it may be to some of UR, and full of problems yet unsolved to all of us, the automobile is our horse and buggy of yesterday, and should and must be regarded and treated in the selfsame way.

-n e bear references to the motoring public as if it were a class apart. Gentlemen, there is no motoring public; it is all of us. Eighteen million of us own automobiles to-day and every one of us is served day in and day out in some way by these automobiles.

This 1s not a tax on the automobile industry; this excise tax is paid only in the first instance by the manufacturer. The automobile industry is one of om greatest industries and is worthy of our most lenient consideration, and yet it asks nothing. It has steadily turned out better cars for less, and can no doubt continue its road to prosperity unaided by Congress.

I am speaking here to-day actually for the public, for the user of the automobile, for the farmers, as well as for tha manufacturers. I have no doubt that many of the larger maJm­facturers of automobiles would be glad to have this matte1· hushed up, because the .uncertainties incident to changes in a business tax must be injurious to business. Its damage to the manufacturers is primarily in sales resistance and in increased cost of bookkeeping, and they greatly fear postponement of buy­ing because of the uncertainty as to what our action will b~. But this tax must and will come off, and they are faced with the question, Shall there be one or shall tl1ere be two of the:5e periods of uncertainty, of delayed sales? A sale of to-day's

1022 OO.LTGRESSIO.r AL RECORD-HOr-SE DECEl\fBER 1 7

output postponed until to-morrow is a sales cost, beca11.o;;e to­morrow they must sell to-morrow's production. But the users of the automobile demand that it be removed, and that body to-day is a much larger class than any other body of per. ous that this Congrt'ss has taxed or will ever tax.

If you would know the political significance of this matter, I need only remind you that it· remo\al ,-.,m relieve some 18,-000.000 persons of an amount of tax which i double the ayerage relief proposed in the income taxes. And I need not remind tbis bod.r that :five times a many people will receiYe such relief than can be expected u11der the income tax. [Applause.]

If you would ee and review the logic of the proposal, I need only recall to you the fact tllat this is a war ta...~. presumably a luxury ta:x, though actually a prejudice tax, against the most e ential factor in American life to-day-transportation.

It is but one of a great number of ta:xe stacked onto the automobile user in every State and county in the United States. It is a tax on an e\ery-day business Yehicle, and there is no more justification in such a tax than there would be in a tax on street ca1·s or railroad trains.

The anrage price of the automobile in the country to-day ranges around !1;800, and approximately 50 per cent of them are on the farm and in ' mall towns.

But, gentlemen, I want to come back to what I feel is the mo t important factor in this matter, and that is that this tax is a tax on tran portation.

Every possible means of tran~portation is peculiarly impor­hmt in this country: the cultivation and encouragement of all manner of transportation bas been one of the chief policies of the country, and it bas been re ponsible for the fact that we are one .:.. ,.ation to-day, tretching from coast to coast, instead of a serie of small nations, as would undoubtedly have been the case had our ections remained isolated from a lack of transportation.

The everyday facts before our eyes ofttimes escape our notice, yet it is a man-el to me that the gentleman from Oregon sits be ide the gentleman from Ma sachusetts making laws for the most varied and extensive territory that was e\er within the practical contemplation of man. Adams kneaded the Thirteen Colonies into a unit by building highways and en­couraging transportation, and Jefferson guaranteed the dreum of a single Nation from coast to coast when he built the Colum­bia Highway. And still within the memory of many Members of this body we were seeking each other's blood in the most repulsive war that one could conceive--a war between the North and the South-as it bas sometime been styled.

Some say that that awful carnage was the result of differ­ences over the slave question, but actually it was the outgrowth of ignorance of each other, the failure to know each other and the lmowledge of each other's problems and temperaments. And that ignorance ex:i ted because the North and the South were isolated for all practical purposes from each other, and, though a poet who e name I do not recall at the moment wrote--

No more shall the war cry ever, Nor the winding rivers run red;

They banished our anger forever When they laureled the graves of our dead-

there still exists some wounds, some rifts, some hurts, that have hindered the growth of the Nation whose progress we all de. ire.

But no more can ucb a conflict ari e, because to-day North aud South and East and West mingle on every highway and we know each other.

Gentlemen, the automobile has gone further toward healing our national wounds than any other factor could pos lbly have done.

Gentlemen, I ay again that to me it is incredible that we can tax transportation, essential as it is; it is incredible to me that we can longer retain this prejudice tax on everyday bu iness W"hen the emergency which brought it into being bas long passed.

The automobile is the guarantor of our future, and we can not, in my opinion, from either a standpoint of logic or good politics, continue to retain a tax on the automobile use1·, par­ticularly when he is already staggering under an enormous burden of taxes placed by every State and county in the same unthinking manner we in this body have heretofore followed.

We can not longer retain tbe tax on the buggy and wagons of yesterday, and I beg you, gentlemen, to face the facts and let us remove this last ve tige of this so-called war tax on the automobile regarc:pess of what other action we may take. [Applause.]

I will submit the following :figures in order that the reduc­tion I am asking for can be more clearly understood:

$5S1,5H,OOO special moto1·-t:cliiclc ta :res in . 1923, fiscal ycat· ending June 30

FFOERAT.

~~~~~~~Iafa:ettcie _______________ $04, 141,54o.~o

P ... t• --------------- 7,' 07 811 16 _a1~s, Ires, a~d acceb ories_______ 22, 7:H: 3 4.' 8;)

vehicles for hue_________________ 1, 865, 015. 43 ------- $1~6. 551, 8~0. 73

STATE

Re~strntion fees, including drivers' licenHe __ ___ ,ry~o 000

Ga~;oliue taxes _:::::::::::::::::: i4o; ooo: 888: gg AIC'XICIP..I.L

Municipal taxes on the motor vehicle _____________ _

390,000,000.00

15,000,000.00

531,551,820.73

The ~ali-billion motor tax bill ..;hown above do£-s not include an e. tlmated . 100,000.000 personal-property tax charge al 'O

nsse · ed on motor owner . Tile CHA..IR1IAN. The time of the gentleman from 'llichi­

gan ha expired. Mr. HAWLEY. Mr. Chairman, I oxpect to speak only on

one phase of this discussion, and that is what the proposed. amendments will cost the Trea. ury.

We ha\e pro\ided in the bill for a reduction in taxation of a little ove1· $325,726,000, or $25,000,000 in exce of tbe amount that the Treasury said was the limit of safety. It ~as been continually in isted that the war is over; but there Is. a mortgage on "Gncle Sam' farm of o\er 20,000,000,000, with an ann~al charge for interest and the sinking fund upon that mortgage of $1,275,000,000, which must be paid as a part of the cost of theo war ; and therefore we must neces­sarily continue,. for the time until that deht is materially reduced, a portion of the taxe that were lened during the war for purposes of war expenditure.

In the pre ent bill there is a direct reduction fn taxation of $80,400,000 on automobile , and with the refund provision that reduction is increased to $83,900,000, or 25.73 per cent of all the reduction in the bill, on that one single industry.

Mr. MORTON D. HULL. Mr. Chairman, will the gentle­man yield?

1\lr. HAWLEY. Yes. ::\lr. MORTON D. HULL. What is the reduction i:.l the cor­

re ponding tax in the law? ~'he re<.luction is to 3 per cent. What is the present rate?

l\lr. HAWLEY. The rate is 5 per cent in the present lnw. If the amendment of the gentleman from Michigan [Mr.

McLEOD] is adopted, it will increase the reductions for auto­mobiles to 10 ,825,000, or give automobiles 31 per cent of all the reductions in the bill, and it will increa e the amount of the total reductions to more than $350,000,000, or $50,000,000 in exce s of the amount tbat the Treasury thought was safe.

If we adopt the propo al of the gentleman from Texas [l\.Ir. HUDSPETH] that will increa e the amount of the total re­duction to $375,6.'36,000, and give automobiles $133,800,000 of that, or 35lh per cent of the total reduction. It will reduce the public revenue by more than $75,000,000 in exce s of the Treasury estimate.

If the proposal of the gentleman from illinois [Mr. RAINEY] is adopted, it will increase the total reduction to $400,586,000, or more than $100,000,000 beyond the limit of afety set by the Trea ury after long and careful examination.

:Mr. COLLIER. Mr. Chail·man, will the gentleman yield? Mr. HAWLEY. Yes. . Mr. COLLIER. You place the entire automobile tax at

$550,000,000? Mr. HAWLEY. 1'\ c place it at $150,000,000, ba ed on the

e timated revenue next year. Mr. COLLIER. Why do you increase those estimates about

$30,000,000 over last year's estimate? Mr. HAWLEY. I take the estimate of Mr. McCoy, of the

Treasury Department, for the year 1926. That is the year we are dealing with primarily.

Mr. COLLIER. In other words, $30,000,000 more would come in next year than under the present tax?

Mr. HAWLEY. I am using Mr. McCoy's e timate. If we increase this deduction for automobiles by st1iking out all of the tax, we strike out $69,600,000 of direct tax, and to that we mu t add $8,825,000 for the drawback, or make a total reduction under that propo al of $76,000,000, and give the auto­mobile indu try 39.53 per cent of ali the reduction in this bill. We have done nothing like that for any other indush·y in the country, although the nece itie and. de erts of many other are much the greater.

The CHAIRMAN. The time of the gentleman from Ore~on bas expired.

/

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(

1925 CONGRESSIONAL . RECORD-HOUSE 1023 :;\Ir. IIA WLEY. Mr. Chairman, may I have two minutes

more? The· CH.AJRMAX. The gentleman from Oregon asks unani­

mous consent to proceed for two minutes more. Is there ob­jection?

There was no objection. 1\lr. H.A WLEY. We have endeavored to balance the re­

ductions in this bill by apportioning them where most needed. so far as circumstances permitted. There ought to have been some reduction in the capital-stock tax, but ·that is now impossible at the present time. To give this automobile' industry this relief would leave the Treasury with a deficit of $100,000,000, and that is not sound legislation. If we give the automobile industry 40 per cent reduction, and thereby incur a great deficit in the Treasury, we shall have made a most abnormal bill. How can you defend such action when you go to the country? Other corporations paying over $1.006,000,000 in taxes during the last year will say, "Why did we not participate in this reduction, and why did you give 40 per cent of the whole reduction to one industry?"

Mr. SCHA.l!,ER. Mr. Chairman, will the gentleman yield? Mr. HAWLEY. If the gentleman will let me conclude my

statement I will yield. There are many other industries in this country more de­

!'erving of some relief at this time than the automobile in­du try is for thil:) additional relief. It is an ungrateful task to oppose any proposed reduction. We would all be glad to see all such taxes removed. But, having given the automobile induslry more than one-fourth of the total reduction proposed in the bill. it seems to me that we have gone as far as justice an<l equity require. [Applause.]

The CHAIRMA~ '. The time of the gentleman from Oregon has again expired. , 1\Ir. SOSNOWSKI rose.

The CH..liRMA~. The gentleman from Michigan is recog· nized.

1\lr. SOSNOWSKI. 1\Ir. Chairman and gentlemen of the committee. in submitting my arguments for the repeal of the excise tax on automobiles I beg to call your attention to the fact that the automobile industry of to-day i -. no longer an experiment. but is a permanent fixture. The automobile has become the poor man'. transportation. Three-fourths of all the cars in u ·e were sold under $800. For bu iness the auto­mobile is perhap the most important carrier of all now in existence. It reache. the most isolated parts of the country, heretofore almost inaccessible.

It has shortened delivery. not only to the city business man but to the farmer in the country. It has reduced the farmer 's time 80 per cent, enabling him to get hi ' goods to market more quiek1y and allowing him more time in the field. It ha.· cut clown approximately 40 per cent of farm labor, of which to-day there is sueh a shortage. Formerly there was a much labor for the farmer to get his crops to market as there was in rais­ing them.

Kot only the farmers but the children of those living in rural communities are directly benefited by the use of the automobile as a con\eyance to their schoolhouses. Consolida­tion of school districts has been made po sible, with the sub­stitution of bigger, more adequately staffed. graded schools fo:r half a dozen little one-teacher shacks accommodating 10 to 20 pupils. The number of schools in the country has grown rapidly less, while the number of pupils has enlarged, and the length of the term increased-thank to the automobile-thus E::'nhancing educational facilities in country eli h·icts.

To-day over 3,000,000 employees are directly or indirectly employed and about 14 per cent of the population, or every seventh citizen, is dependent on the automobile industry. The wages of automobile workers are equal to or above the average of skilled workers in other industries. The reason for prosperity in the automotive industry is that automobile manufacturers are continually cutting price. and giving the purchaser a greater value for the dollar than any ·other in­du!'try.

The pnblic, as well a the railroad and other interests generally, have found in the motor vehicle a more serviceable, efficient, and reliable means of transportation th~n any other yet de,·eloped. This method of transportation has become indispensable in the chain of rail, water, and other ~hipments, which to-day are largely dependent on delivery of the load by motor vehicles at terminal points.

For the Government to retain the tax on commercial ve­hicles that was imposed as a war m~asure i · as tmjust and unreasonable as it would be to levy a tax on Rhips. railroads, and other transportation agencies which to-day are not taxed.

It is a direct levy on the farmer who takes his crops to mm:­ket and uses a tractor for his fields, on the artisan or me­chanic who lives 20 miles from the city where he can have a garden and be a double producer but must have this means of transportation to take him to his daily work. Now, seven years after the war is over, he must pay a war levy on every new car he buys, while other agencies of transportation have been relieved from thi tax. And if he turns in an old car toward the purchase of a new one, no credit is allowed for the tax already paid on the old car turned in.

To say that the automobile tax is not assessed against the automobile owner is to deliver a half truth. The manufac­turers to-day are merely the collection agency for the Govern­ment, collecting from some 48,000 dealers and 17,500,000 motor­vehicle owners.

And lastly, the automobile industry is the barometer of business, and must be recognized as such. It is the leading industry in the country to-day, manufactured products rank· ing second and the packing industry third. Thirty days' de­pression in the automobile business will reflect almost im­mediately a resultant depression in every industry in the United States, from which recovery may not be expected in less than six months' time.

The CH.A1Rl\1AN. The time of the gentleman from Michigan has e~-pired.

1\Ir. MILLS. Mr. Chairman and gentlemen of the committee, in considering these various amendments, all of · which would operate either to further reduce the tax or completely take it off, it should be remembered that we have already granted a tax reduction of $80,000,000 to either the automobile industry or the purchasers of automobiles, as the case may be; and if we take it all off, we will take off an additional $60.000,000, and we may to that extent create a deficit in the Treasury next year or the following year.

Now, my contention is that on the whole the automobile tax is a pretty good tax, because it is levied on a semiluxury bO

largely used that it is not a class tax, at a very low rate. causing no particular burden either to the industry or to the purchaser, and yet yielding a great deal of money to the Gov­ernment. I contend that the number of cars sold and the uu­u, ual prosperity of the industry indicates that the tax is not a burden, and I shall submit figures to that effect. I contend that the tax is not the controlling factor in the fixing of the price. and I shall submit figures to that effect, though, of course, in some cases it is a factor. And, finally, I shall con­tend that in so far as the automobile most generally in use !s concerned-the Ford car-that inasmuch as Mr. Ford has a complete monopoly of the low-priced field, the inevitable rule which applies to all monopolies applies to Mr. Ford, and that the price of Ford car is fixed irrespective of the tax e\en though, as gentlemen will unquestionably answer, when the actual sale is consummated the tax is added to the bill in order to call the consumer's attention to the fact that there is a tax.

l\Ir. SCHAFER. Will the gentleman yield? l\Ir. :MILLS. Yes. 1\Ir. SCHAFER. Will the gentleman explain how they add

that to the sale cost of the car, when you appreciate the fact that they are quoted f. o. b. factory, plus freight and excise tax?

~Ir. MILLS. That is very simple. In every monopoly the price at which the monopoly article is sold is fixed by the eller at the point which will sell the greatest number of

articles and bring in the ma:rlmum revenue, and that priee is fixed irrespective of the tax. That is true of every monopoly. In the case of patent medicines, which are obviously monopo­lies, when the alcohol tax was involved the patent-medicine makers told us frankly that they absorbed the tax.

Now, let me call your futther attention to t11e fact-and I shall a little later submit figures-that the average profit on the Ford car i~ probably $50 a car, and wh~n you sell 2,000,000 cars at an average profit of $50 a car, and you have a monopoly, it is perfectly obvious that the selling price is not determined by the tax.

1\lr. WEFALD. Will the gentleman yield? 1\Ir. ~IILLS. I have a great deal of material to put into the

RECORD for the information of the House, and I therefore must decline to yield for the present. I want to inh·oduce this material in order to present to the Hou. e a picture of the most extraordinary industry that has en~r grown up in this coun­try-the automobile industry. In 1020 the number of cars ancl trucks sold was 2,205,000 ; in 1922, 2.659,000; in 1923, 4,086,000: in 1925, 4.120,000; and it is estimated that the capacity of American plants in 1!>26 will be 4,9!>0,000 cars per annum. The value of cars and h·ucks sold in the United State!=: amounted in 1920 to $2,230,000,000, in 1924 to $2,328,000,000, and it is

1024' CONGRESSIONAL RECORD-HOUSE DECE:\IBER 17

<'stimated tllat- tllat fignre will be largely increased in 1925. The average pri<-c of the car sold was, in 1020, $1,013.

The CHAIR::\L\.X. The time of the gentleman from New York has eA"Piretl.

:\Ir. :\!ILLS. Mr. Chairman, I ask unanimous consent to proceetl for a further fise minutes.

The CllAIRllAN. Tlw gentleman from Kew York asks unanimou: con::<ent to proceed for a further five minutes. Is there objection'?

l\Ir. n·EFALD. l\lr. Chairman, re. erring the right to ob· jed. I shall not ollject if the gentleman will answer the ques­tion I want to put to him.

The CH.AIRl!A~. The question i : Does the gentleman ohject?

Mr. ~llLL~. l\.lr. Chairman, I will an wer the gentleman's question, of cour e, if it can be an ·wered.

Tile CHAIRl\IA~. The Chair hears no ohjection. dr. ·wEFALD. The gentleman tated that in the malting of

Forcl car there i a monopoly? )Jr. MILL. . That i · my contention. :\Ir. 'YEFALD. I want to know if it is not a fact that this

re\enue bill is granting the g-reatest tax reduction to the man or to the family who are the owners of this monopoly?

:\lr. )!ILLS. I do not know that that is the case. l\Ir. "\YEFALD. Is it not a fact that it reduces Mr. Ford's

taxeR by GO per eent? ~r. MILLS: No; I do not know that that is the case. I

hare not examined ~Ir. Ford's tax return, and, a far as I am coHcerned, I con ider it perfectly ridiculous to attempt to build the revenue rstem of a great Government around the per onal fortune of a single individuaL [Applause.]

l\1r. WEFALD. Is it not a fact that this revenue bill will r<'duce the taxe of the Ford family to the extent of $6,000,000?

1\Ir. :MILLS. I do not know. I am not intere ·ted in the ta ·es of the Ford family .

.~.:Ir. WEFALD. The gentleman has drawn the tax bill and ought to know.

:Mr. ~fiLLS. I have not attempted, I will say to the gentle­man, to draw a tax bill with the view of taxing Mr. Ford or any other individual.

l\Ir. "'EFALD. The gentleman has been dominating the Ways and Means Committee, and to-day he is dominating this Hou e. [Laughter.]

~lr. MILLS. The gentleman doe me more than justice. Mr. WEF ALD. I always want to do justice. Mr. UILLS. Now, gentlemen, I have indicated the growth

of the industry. Let me indicate to yon the very remarkable fact that the average price of the car sold decreased from $1,013 in 1920 to $644 in 1924, yet during that entire period thi · tax was imp01:ed. In other words, the consumer has gotten the benefit of a reduction in the price of a car amounting al­most to $370 in spite of the tax, and the profits of the industry ha-re been sufficiently great to warrant a steady reduction. These circumstances make me wonder whether the tax has been, in all cases, passed on in this falling market.

Mr~. TREADWAY. Will the gentleman yield? 1\lr. MILLS. I wish I could complete this statement, which

is largely one of statistics, without interruption. I find that the price of the four largest makers decreased, from 1920 to 1924, by 43 per cent, and that the average price of cars during this period of war taxation decrea ed, for all cars sold in the United States, by over 40 per cent. I find that the capital invested in the motor industry in the United States had grown from $1,015,000,000 in 1919 to $1,691,000,000 in 192-1, and that in the comparative value of manufactures for the year 1923 the motor industry easily heads the list though it is a baby industry. I find that, when we compare 1925 with 192-1, the 12 largest companies during the first nine months of 1925 increased their earnings-get these figures, now-from $7 ,000,000 to $179,000,000.

The fir t nine months of 1925 bowed for the 12 large com­panies, exclusive of the Ford Co., an increase in earnings of $101,000,000. General l\Iotors alone showed an increase from $37,000,000 to $74,000,000 for the fir t nine months of 1925.

I find that the market value of the securities of these 12 companies increa ed from 1924 to 1925-

The CHAIRMAN. 'l'he time of the gentleman from New York has again expired.

Mr. MILL . Mr. Chairman, I ask unanimous consent for an ad(litional five minutes to complete this statement, if I may.

The CHAIRMAN. If there is no objection, the gentleman from New York is recognized for :fi\·e additional minutes.

There was no· objection. ~1r. MILLS. I find that the market value of these securi­

ties increa ed for the::;e 12 CO!llpanies from $897,000,000 to

$1,994;000,~, o~ an increase of over $1,100,000,000 in a renr; and that m spite of that fact, the earnings based on the market value of these securities increased from 8.7 per c·ent to 9 per cent during the year.

I find that whereas the Dodge Bros., when they originally left Mr. Ford and went into the busine of munufacturin" automobiles for - themselves, inve ted $5,000,000; that a fe\~ years later, in .April, 1925, they sold that original inveatment of $5,000,000 for $146,000,000.

Coming now to Mr. Ford, who seems to intere t gentlemen in this Hou e more than anyone else, I find that the surp1us of the Ford Co. had grown from $165,000,000 on June 30, 10:!0, to $542,000,000 on December ~1, 1924, and based on his bal­ance sheets it is estimated that the company earned $101-000,000 in 1923 and $100,000,000 in 1924. As I ay, if you a~­sume a sale of 2,000,000 cars, that show an average profit of $50 a car, which prove~. as far as I am concemed, the point that when you have a monopoly which yields you a profit of $50 a car on a car that ~ells for less than $300, the tax makes no difference what oever.

I ay that in the long run, and I pay all due respect to the promi e made by 1\lr. Ford, which I think he will faithfully keep for the next rear or two certainly, in • o far as reducing the price of the car by the amount of the tax is concerued-I say in the long run, as long as the Ford Co. has a complete monopoly of the low-priced car field, the price of Ford cars will be fixed at the point at which they can sell the maximum numl.Jer of cars at the maximum profit to the company, tax or no tax, and, therefore, I say that gentlemen are running off on a sidetrack when they think they are benefiting the farmer when they are taking off this tax.

Mr. SCHAFER. Will the gentleman yield? ~Ir. MILLS. No; I can not. Please let me complete this

statement. It is generally assumed that when we take the tax off the

consumer immediately gets the benefit. Well, we took the tax off on low-priced trucks two years ago, and I want to say for the credit of the Ford Co. that they at once gave the consumer the benefit of this reduction, along with other reductions they made on other cars at the same time; but what of the Dodge Co.? The act went into effect on June 2, 1924, taking the tax off of cheap truck , and Dodge truck selling for $960 were included. The tax was taken off of Dodge trucks in June, 1924, and the price of Dodge trucks was not lowered to $935 until August 17, 1925. The consumer did not get much benefit from that reduction, did he?

What is the conclusion to be drawn from all this? The con­clusion to be drawn is that you need not make the obvious and first-hand assumption, "We will take this tax off, and we will immediately wipe out $15 from the average farmer or pur­chaser of au automobile." There are many indications that the tax in many cao.oes has been absorbed by an enormously profit­able industry-from an economic standpoint this is certainly true when a monopoly exists-and even if the consumer has in part paid the tax, all the evidence justifie" the conclusion that it has not proved burdensome.

Mr. HUDSON. Mr. Chairman and gentlemen of the com­mittee, I do not care to di cu ·s this que ·tion relative to any one amendment. There are one or two matters in reference to this species of taxation I do clearly want to bring before you and get into the REcono.

When I think of automobile taxation and the committee placing a tax there, I am reminded of the incident of a gentle­man who had a friend operated upon very suddenly. The news came to him in the morning that his friend was in the hospital and had been subjected to a major operation. Going to lunch he met the surgeon who performed the operation, and, in con­cern, he said to the surgeon, " I hnderstand you operated on my friend So-and-So this mo1·ning." He said, "Yes; I did.'' "Well, what did you operate for?" "Five hundred dollars," he replied. "Yes; I know. but what did he have?" "'Vhy, he had 500." There is no other theory upon which this tax has been placed upon the automobile industry. The men seeking revenue says, "Here is a place where we can get the money ; let us get it."

You place the tax there as a war measure, and in my district alone-the sixth district of llithigan-in the year:s ince you enacted that war measm·e, we have been the tax collector for the Government to the tune of about $700,000,000, the easiest money the Government ever collected in revenue.

Every member of the committee who ha 'poken here has said they have reduced the taxes upon the indu. try iu thh; present bill by a ce1·tain amount. I think $70,000,000 in round numbers?

Mr. GREEN of Iowa. Eighty million dollars.

1925 CONGRESSIONAL RECORD-HOUSE 1025 Mr. n 1DSON. Eif!'hty million dollars in round numbers. car~ if this amendment i:· not adopted. You mn. t remember My friends, they ha\e not reduced the tax: to the indn. try that en~ry automobile manufacturer in America signed a \nit­

one dollar. Every dollar of that $80,000,000 bus been relief to ten statement pre ·ented to the Committee on Wars and Means the individual taxpayer in the Nation who buys an automobile. which is in the hearing , that if relieved of this tax the Let us not forget that. consumers or purchasers of automobileR woulrl get the benefit

'\Yllen I appeared before the committee in their h<'arings l 1 of it. In otller words, if we take off '69,000,000 in this bill, a:-:ked for the wiping out of the three paragraph~ of the auto- the people who purcha ·e automobiles are the ones who will mobile tax, the mi:fortune tax, and then the tax on trm:ks. 1 get the benefit of the tax reduction. I am standing up for

The automotire industry has brought the great modern means the people who purchase automobile:. I am not so much of transportation of the commoditic. of the country, whether interested in the automobile manufacturers, for they seem to they be from the farm or from the factory or from the store.

1

be able to take care of tilem~el\es. Wily should not we take The truck i the medium of their tran~portation, and e\ery care of tile purchagers of cars in America, three-quarters of tax that was placed upon the truck went back, as a matter of whom are in the rural districts'! This i a sales tax that comes taxation, upon e-rery article that that truck carried, whether largely out of the rna. ses of the people of the country. Vi.hy it be pa engerB or whether it be commoditie . I not gi\e them the benefit of it, especially in view of the fact

Then I said reduce the tax on the pag~enger cars as far as that tile automobile manufacturer ay they are going to gi\e you can, and I am not sure but what the committee ha · gone as them the benefit of the tax and are going to re<.luce the price far po. sibly in tax reduction as they can go at this time. I am of automobile . I repeat that they are the most sensible busi­f'limply here to register a protest again~ t thi~ ~pecies of taxation. I ne:-<s people in this cOlmtry. and we ought to pass the Rainey You have just as much right and it is just as much common amen<.lment be<:ause there are $77,000,000 that we ha-re taken sense to say to eyery purchaser that put a piano in his borne off that no one bas said anything about in this discus ion. that he ..:hall pay a Federal tax upon it or to say to anyone [Applause.] who goes out and buys an article of furniture for his home that l\Ir. McLAUGHLIN of Michigan. ~fr. Chairman, in speak­before. Ile places that in ~is hon~e he shall pay a Federal tax ing of the amendments before u I find it nece~ ary to speak upon It. Gentleme~, it Is not~mg but a sales ~x, and t~e of my connection with the automobile pro\ision. of the bill and reason I am speak111g here this afternoon on this matter Is to ay more along that line than under other circumstances because the chairman of the com~ttee, that mo~t capable gen- would be becoming. ' ' tleman [Mr. GnEE~ of Io":a], said we are. lookmg toward t~e I represent a Michigan district and am a member of the fnt.ure an? that tlns tax bill-a most admirable piece of legis- Committee on Ways and Means. ~Iichit)'an is very much inter­lation as It has come from the. committee; I co_ncede that-but e.:;ted in the portion of this bill relating to taxes u11on autorno­the gentleman from I?wa smd. we are lookmg toward the biles, auto trucks, accessories, and so forth. In our State a future and must get a bill that mil be noi·mal. . . . 1 large percentage of motor vehicles produced in the country are

The c.HAIRMAN. The time of the gentleman from Michigan I manufactured, and our people belie-\e Federal taxes upon them has expired. . . . should be repealed .

. Mr. HUDSON. Mr. Cbrurman, I ask for three additional While the Committee on Ways and 1\Iean was conductint)' mmutes h ·· d h'l 't · b'll b I!>

M G.REEN f I M I to th gentle an that I earmgs an w 1 e I was preparmg a l to e presented to r. o . owa. ay . ay e . · m the House, I made persistent effort to induce it to recommend

shall have great difficulty in. getting three mmutes for myself, repeal of all these automobile-tax provisions. The committe and can not the gentleman simply extend his remarks 7 d in d · f · · · . e

M · HUDSON Th' i th fir t ti I ha\e spoken on the eterm . e to p~onde or repeal of subdiVISion (1) of section bill r. • · IS s e s me 600, which ~o~. Imposes a tax of ~ per cent o~ truc~s; al o to

M GREEN f I Th gentleman has a large automobile repeal subdiVISIOn (3), under Which acce sortes, tires, parts, . d r.tr . h'

0 di ~~at nde Mr. Chairman I shall not object and so forth are now ~a~ed at the _I·at~ of 2¥.! per cent. It

~n : Y ~ \s 8 r c • a • • refused to repeal subdiviSIOn (2), which Imposes a tax of 5 per 0 Th re~:-~~~AN If there is no objection, the gentleman cent on automobiles. and motor cycles, but it did determine to

e · · recommend a reductwn of such tax to 3 per cent. maTyhproceed. bjection These provi ions for repeal of taxes on trucks and on tires

ere was no 0 · d · d f d ti f th ta t b'l M HUDSON In my district we will contribute the rev- an accessones an or re uc on ° e x on au omo I es :·in larue ~~asure raised under whate"Ver tax is placed in were the result of motions I made. in the co~ttee. I would

:u b'n 1:> ' have been pleased to have the entire automobile tax repealed, Is w~~t to bring back again this fact: That the reduction on but by the time the automobile s.ection of the bill was reached

this tax does not go to the benefit of the industry. My colleague I was confident that the. comlllittee would refuse to consent from Detroit asked for a tax of 2 per cent instead of 3 per cent, to the repeal of the entir~ tax; bene~ I moved for ·what I and that goes back to the benefit of the purchaser of the car. belleyed I could get i ~hat Is, a re~uctwn of the tax. .At the The entleman from New York [Mr. MILLs] brought the figures meetmg of the coirumttee at which my motions were con­showkg the wonderful growth of the automotive industry in 20 si~el·ed and pass~d upo~, as I have stated, anothe:. member, years. Has that great industry and its growth absorbed all the· evidently not satisfied mth what I. bad do~e. a.nd tneu to ~o, wealth thus created? It has from year to year and .year to I offer~d a motion to repeal the entire ·ubd1"_LS10n (~), wh~ch year, through wonderful economie in administration, standard- provides for the 5 per cent tax on automob~es. ~s motion ization of parts, reduced the price of the car to the consumer. was defeated by ~ la:ge vote. I \oted for his motion, but I Here in tbe papers of Wa hington of ye .. terday and to-day is a was one of t~e IDlDOrity. . full-page ad that the Dodge Bros., a great business concern, The committee ha"Ving determu:ed to reduce the tax from 5 has passed on to the consumer the benefits of that great orgapi- per cent to. 3 per cent, I rea~d, u; I ~ay be pardo.n~d for fur­zation by another great reduction in plice. In the other case ther speaking of my connection With It, that pronSion sho~d that has been alluded to not only do they do that, not only do be made for a refund to cover the amount o.f the reductwn they pass that down, but in some sections they have commented from 5 per cent ~o 3 p~r ~ent on cars on wh1ch the tax has on the automobile industry because it is the ip.dustry of the I been paid but which were. m the hand~ of tile dealer and u~­N'ation that raised the wage of the common and the skilled j sold 'Yhen the law went 1?-to effect. I sugge;;;ted tl1?-t to the laborer in all factories and made possible everywhere the oppor- , comnnttee, but my su~gest10n was n.ot favorably rece:ved. On tunity of laborers of the country to purchase a car with a small 1 mor~ than one occaswn the committee refused p~slti"Vely to amount of money. [Applause.] pronde for a refund, to make any further reduction or any

Mr. OLDFIELD. :Mr. Chairman, I rise to support the further consideration to automobile taxes. A majority of the amendment offered by the gentleman from Illinois [Mr. committee had gone- as far as they were willing to go. RAINEY], taking the 3 per cent tax off automobiles. The gen- The CHAIRMAN. The time of the gentleman from :Uir.bi-tleman from New York [Mr. MILLS] in a splendid speech I gan has expired. paid a trib_ute to the automobile industry in America. I want I Mr. McLAUGHLI~ of ~Iichigan. l\lr. Chairman, I ask to join with him in that tribute. I think the automobile men unanimous consent to proceed for 10 minutes._ have ju t a little bit more common sense and business ability 1 The CHAIRMAN. Is there objection 7 than mo t business men in this country. They have reduced There was no objection. · the price of cars, and I belie\e that industry is ghing more Mr. McLAUGHLIN of Michigan. Mr. Chairman, a large "Value for their product than any other industry in America. number of automobile manufacturers and other closely con­But that is no reason why we should not take care of the nected with the automobile industry came to Wa8hington. As purchasers of automobiles. Sixty-nine million dollars remain I am a member of tllP committee ha,·ing jurisdiction of the in the bill that will be collected from the people who purchase matters in which they are interested, they came to my office,

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came in a body. They are very fine gentlemen and I was pleased to meet thE'm. Let me giYe you their names, as many as I can remember. There was Mr. F. J. Haynes, president of the Dodge Co.: Mr. Waterfall, vice prt-sident of the Dodge Co., and president of the Michigan Manufacturers' Association, which includes 98 per cent of the automobile in<lustry of Michi­gan; John Lovett, gent-ral manager of the Manufacturers' A.s~ociation: H. H. Bassett. president of the Buick Co.; Law­rf'nce Fisher, president of the Cadillac ; B. E. Hutchin on, vice president of the Chrysler Co. ; S. E. Ackerman, sales manager, and H. H. Franklin, president, of the Franklin Manufacturing Co.: Alvan l\Iacauley, presidE.'nt of the Packard Co.

Then there was also the 8ecretary of the Manufacturers' Association of Flint and others who did not take active part-1\Ir. H. H. Rice, cllairman of the taxation committee of the Kational Automobile Chamber of CommE.'rce; l\Ir. Alfred Ree,·e.:, general manager of the chamber of commE:'l'ce; l\ir. Pyke Johnson, the "Tashington reprel'entative of that body. One of the gentlemen whose names appear on thi: llst said that he representee! not only his own company, one of the largest in the country, bnt was authorized alHo to represent the W'illys-Overland Co., the Nash ~lotorcar Co., the Stude­baker Co.; that he had communicated with th~se companies and a<lvi eel them fully of the compromi~e terms reached by the w·ays and l\Ieans Committee which provided for a reduction of the tax on automobiles from 5 per <>nt to 3 per cent, for the ex:ten~ion of the 5 per cent tax 30 day~ after the law otherwise beeomes effective, and for a refund of the amount of such re­duction on all cars on which taxes lla ve been paid but which were not sold, and so forth, and that he, in their behalf, ap­proYed that com1Womise. At my sugge.:-tion, these ~entlemen went to see the chairman and other members of the Committee on Ways and Means.

They inter¥icwed several members of the committee and when they returned to my office said they had l.Jeeu invited to appear before wh<lt might be called a ·ubcommittee of the Committee on w·ay · and Means that afternoon. They went tberc in a body. I nccompauied them. There were proposals and counterproposals. but finally an agreement was reached b3· which the payment of the full tax of 5 per cent should be continued for 30 day::; after the law would otherwise go into effect, and that the refund should be made on all taxes tJJa t lwd been paid on cars in the bands of the dealers at the time the law goes into effect.

Mr. SCH...,EIDER. Mr. Chairman. will the gentleman yield? :Mr. McLAUGHLIN of Michigan. Yes. .M:r. SOlL.~EIDEit. The names of rhe concerns whose repre­

sentati\es were instrumental in bringing about the compro­mise. whkh you baye told us oE and whose names you have given, were not the people who were pa~·ing this tax, were th('y?

1\Ir. l\IcLAUGHLIN of l\lichigan. They are the manufac­turers. I am glad the g·entleman spoke of that, I might ha¥e overlooked it. It has been ·aiel or intimated that these gentle­men who appeared in Washington, as I haYe saitl. did not repre­sent the entire automobile industry: did not represent the dealers or the purchasers of automobiles. They are the manu­facturers, or repre ·entlng the manufacturers, of more t.han 90 per cent of all automobiles made in the world. It is idle to say that they are not interested in their dealers. that they are not interested in prospective purchasers of automobile;;:. They do not sell their own cars, nor do they buy their own cars. There is not an automobile manufacturer in this country who could tore two days' out]_mt of his factory. lle mu~t get them out, and he must have ·ales agents, and there must be buyer . The manufacturer~ are direc-tly interested, and they a.ctually and in good faith re11re ent and are entitled to &peak fOl' deal­ers and purcha.:ers.

It i · impo sible that these men came here to represent their own .'elfish interests which might, under certain circum~tauces, run counter to the intere·ts of tlle ~ales ao-ents or tl!e pur­chasers. There is-tltere must be-a community of interest, and I regret the in inuation that the:-;e gentlemen did not fairly represent everybody in thi entire proposition. [A.p­plan:;e.] "~ell, as I have said, these gentlemen in a body renrhed an agreement with the chairman and a number of other members of the Way· and Meanf! Committee, and when that agreement was reached, they stated, in answer to a straightforwa1·d question put to t11em by the chairman of the committee, that they would not a:·k to have anything fm·iher done by the committee or by the Congress by way of repeal or reduction or refund of automolJile taxes; they f:;aid thE'y were entirely satiJ tied and would not assist or approve any

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movement to secure anything in this Congt·ess in addition fo what the committee had promised them.

A movement was started-it is here now-by gentlemen of t~e -?ouse who offer amendments, which we are now con­Sidermg-one to repeal, others to provide more reduction than agreed upon by our committee and the represeutatiYes of the automobile industrv.

Anticipating these motions, I aske<l a number of the gentle­men ';ho had agreed to the arrangement with our coomittee to wnte me of their intention to stand to and abide by that arrangement. I said that I felt I was bound by and mu t spe.ak and vote in keeping with that arrangement; and I believed. o~her Members of the House. particularly Memhers from Michigan, would wish to know-wt"re entitled to know­all about the compromise, as I callE'd it-how it was renc·he<l­also the present attitude of manufacturers and their repre­sentatives toward it. . Soon after these automobile manufacturers and repre. enta­

hves left our committee room they-many of them, at lea t­attended a meeting of the National Automobile Chambet· of Commerce in this city or in New York. After that meetln..,. a~d in r~sponse to my request for letters from them, I r~~ C'f'IYed this letter from Mr. H. H. Rice, chairman of the taxa­tion committee.

NATlONAL AUTOliOB!Ll!l CHAMBER OF CO~BIERC'E Washingto-n, Dcce.tnber 1G,' 192ii.

Hon. J .. UI ES McLAUGTILl:-i,

House Office Building. DEAR ~IR. Co~GRESS~IAN: The following is submitted in response to

your requ{'st for a statement of the position of the National Auto­mobile Chamber of Commerce with resp~ct to the mot or exrlse taxes.

'The original presentation lJy the ~ 'ational Automobile Charnl>t> r or Commerce and allied interests lJefore the Ways and ~leans Committee recorded emphatically the belief that all the war exclsl' motor-vellicle taxes should be eliminated.

Thi position is still maintained by the industry, which would w<' l­comc f ull relief at tbis time.

'l'he 'raj·s and l\leans Committee, l10wever, took the position tbnt passenger-ca r taxes could only be reduce!l, not eliminated, at the tn·c ·cot se. sion and further told manufacturers appt>aring l>efore them on DeceLn­ber 2 that not evt>n a protective floor plan could be pu sed for dealers' stock~ on hand when tbe bill became a law, unle s the wanufacturPI'S agreed to a 30-day extension of the act and to full approval of tile !Jlll as writtf'n.

In vit> w of the fact that failure to protect the dealers had resulted ln a slowing uown of production, whicil, if contint~ed, cou ld not bu t seri­ously al!€ct industry and tile country ns a whole, the manufacturers iu attendance, '~Pealdng for them E:'lves, agreed t o this snggE:' . tlon ano on the following day recommended it to directors of the Natloual A.utOf!IO­bile Cbambe;: of Commet'ce.

While holding that these taxes are a dlscriminatot·y levy on the buyers of automobiles whlch should be removed, the directot·s acct-pt.·tl the statemE'nt of the Ways and ~leans Committt>e that the relief gt·antl'll 1.n the pre.;ent blll Is the best possible at this time r.nd agreed to refrain from further efforts to secure further reduction or elimination nt this ses ion of CongrE:'ss.

Vel'J truly, H. H. Rrrr.,

CltaLt·num Ta:ration Comrnittee.

I recei vecl other quite ~imilar letters, each one stating that the writer was willing to abide l.Jy the compromise and would not make o1· approve further effort in · this Congress.

DODGE: Brr03. (l:sc.), D£~trott, Mioh., D ccembe1· 9, 192:i.

Congl'e·sman J. C. McLAUGHLlX,

Washinyto1,, .b. C.

MY DE.\ll CoxGR PJ SI';:U: .. L': Information bas rea ched me tllat th reo is a diffeTence of opinion relative to the automoutle tax-that v:Hious organizations have different views.

Mr opinion to-clay, as a m:umfnctnr('r, is no di.tft'rer1t thnn wht>n I lust talked with you. At that time I b4>liE've hery phase of tht> situ­ation was gone over, and tile L'esult which wa~ arri-ved at was. to w.v mind, the best ann.ngement possiule.

In reaching my conclusion I con~o~idere<l tl1e gt>uN·al good of thl' greatt>st number. Uy thought was that if the economic pro,·perity or the Dnitell States could be a sured, that wus of itself of grE>ater value to a greater number than the percentage of tux which mlght us removE.'<l.

In other words, what was needed was a definite tutl'm ent of po­sition.

U there ls one thing which blights uu~iness, it ·is uncet·taJn.ly.

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1925 CONGRESSIONAL RECORD- HOUSE

believe in removing the uncertainty the greatest good would be accomplisbed.

Personally, I stand in the same posltion as when we last talked. Yo'urs very truly,

F. J. H-UNES.

BuiCK Moron Co., DfVISl01i OF GENERAL MOTORS CORPORATION,

Flint, Mich., December 9, 19l5. Hon. J. C. MCLAUGHLIN, 1\I. C.,

Hottse Otflce Building, lVasMiliJton, D. C.

DEAR MR. McLAUGHLIN : I am writing this letter to you to confirm the verbal statements which we made to you and other members of the Wav and Means Committee last week to the effect that we accepted vo~· statements that this tax reduction of 2 per cent was all that ~ould possibly be hoped for at this time on account of the financial ·ituation and to say also that we accepted your statement as 100 per cent truthful.

Based on the above, I told you for the Buick Co. that we would accept this and not make any further efforts to gain the entire elimina­tion of the tax either in the House or the Senate at this time and would encleavor to get our dealers to do likewise. I want to assure you that this will be carried. out ns iar as the Buick is concerned.

We feel that the only way a terrible let down in the automobile­manufacturing business and the accessory plants can be avoided is for the present bill to be passed e-.ctly as proposed by the House Ways and Means Committee and at the earliest PCl ible moment. Any undue <1elay in either the Hou e or Senate will hamper the prosperity of the largest industry in this country, which, as you know, can not help but have a bad effect on general prosperity.

I certainly appreciate very much the courtesy and consideration shown us last week, especially in view of. the many weeks that you have worked so hard on the bill to get it to a final reading, and only the extreme emergency as presented to you by us caused us to ask for the rebate protection in the bill.

With kinde t regards, I remain, Very truly yours,

H. H. BASSETT, Pt·esiaent cmd General Manager.

From another gentleman who attended and took part in the meeting with members of the Committee on Ways and l\leans I received a letter in which he, like others of his associates, says he approves and stands by the arrangement effected by them. Later, however, he wired asking me to hold his letter confidential. In reply I sent this telegram:

Letter received, also telegram asking arne be confidential Your wishes as to your letter lOth instant will be observed, but full publicity in Congress and elsewhere will be given to statements made by and on behalf of manufacturers at their meeting with Ways and i\Ieans Committee when compromise relating to refund and 30-day extensi<m of law was reached. Michigan Members of House, including myself, made sincere and strenuous effort to induce committee to recom­mend entire repeal of all automobile taxes, but I feel bound, as manu­facturers are certainly bOund, to accept the compromise and to oppose efforts further to reduce or repeal these taxes or disregard compromise. I feel, as Michigan Members may feel, that Congress and the country, particularly Michigan, should know names of those attending the committee meeting and what they represented when compromise was madt'. There must be publicity, otherwise Members can _not justify their opposition to motions the etl'ect of which would be to repudiate the compromise. You know I auvised manufacturers to oppose 30-day or any other extens.lon of tax, believing their compliance with it un­nece sary, but everybody present at committee meeting finally agreed to it and I feel bound by it.

J. C. MCLAUGHLIN.

Now there is no question in the world but that men l'epre­senting more than 90 per cent of the automobile business of this country, so far as manufacture is concerned, agreerl to the compromise as it appears in the bill now being considered by the House. I make this statement in explanation of the auto­mobile provisions of the bill and of the manner in which they were finally agreed to by our committee. I am bound to sup­port the bill as it is, so shall vote against the pending amend­ments.

Mr. McLEOD. Will the gentleman yield for a question? Mr. GREEN of Iowa. If the gentleman has concluded, I

desire to make a motion. I move that all debate on this para­. graph· and all amendments thereto close in 30 minutes.

Mr. CONNALLY of Texas. l\lr. Chairman, a parliamentru.·y inquiry.

The CHAIRMAN. The gentleman will state it. l\lr. COJ\TNALLY of Te.x.as. How will the time be .controlled? Mr. GREEN of I owa. By the Chair.

The CHAJR~.IAN. The Chah· would like to say that he would like to have about five minutes, if he can. {Applau e.]

Mr. BARKLEY. Mr. Ohairman--Mr. GREEN of Iowa. In view of that, I will make my

motion 40 minutes. The CHAIRMAL'L The gentleman from Iowa moves that all

debate and all amendments thereto close in 40 minutes. The question was taken, arid the motion was agreed to. Mr. LA.GU.A.RDIA. But;· Mr: Chairman, I have an amend­

ment to the gentleman's amendment. The CHAIRMAN. That will not stop the offering of an

amendment. Mr. LAGUARDIA. C€rtainly it does. I am not going to l>e

taken off my feet in this way even by the chairman of tlle Committee on Ways and Means, and you might as well unde,r­stand it. A a Member of the Hou. e, I hould haw an oppor­tunity to offer an amendment to any amendment which is offered by the committee.

The CIIAIRMAN. The gentlE:'rnan need not get excited. Mr. LAGUARDIA. I am not excited. The CHAIR)!AN. The Chair recognized the gentleman from

Iowa [Mr. GREEN] to make a motion that all debate on this paragraph and all amendments thereto be closed in 30 minutes.

Tlle Chair then announced that the Chair, as an individual Member of the House, would like to proceed for five minutes. Then the gentleman from Iowa [!\lr. GREEN] amended his own motion and made it 40 minutes, and tlle Chair put that motion. The Chair did not see the gentleman from New York.

Mr. LAGUARDIA. '(The gentleman from New York ' was -on his feet. The gentleman from Iowa can not amend his own motion. I respectfully f'Ubmit, Mr. Chairman, that the gentleman from Iowa can not amend his own motion.

The CHAIRMAN. The gentleman did amend his own mo­tion and the House adopted it.

Mr. LAGuARDIA. The gentleman from New York pro­tests agajn t such procedure.

The CHAIRMAN. The question is on agreeing to the mo­tion as amended.

The motion as amended was agreed to. Mr. LAGUARDIA. 1\lr. Chah'man; I de ire to make a point

of or<ler. The gentleman from Iowa can not amend his own motion.

The CHAilll1AN. The question is disposed of. The gentle-man from New York is out of order.

Mr. LAGUARDIA. The RECOIID will show the facts. Ur. WINGO rose. The CHAIRMAN. The gentleman from Arkansas _is rec­

ognized. 1\Ir. WINGO. Mr. Chairman, I shall support and vote for

the amendment offered by the gentleman from Illinois [1\fl'. RAL'l'RY], which I understand will take off all of the tax on the finished automobiles.

I am not interested in the question whether or not the manufacturers are keeping faith. The statement made by a member of the committee "'ith reference to manufacturers keeping faith doe. not interest me at all . I think the manu­factru·ers ought to be satisfied with what they ha1e got, but those gentlemen who appeared representing the manufactqrers were taking care of their own end of the tax proposition, and I think they were very diligent and got very good results.

But what about the consumer of the finished car, who has to pay the tax on the finished car regardless of what the price is at the point of manufacture? They were not authorized to represent him or speak for him. Who speaks for these men Rrattered throughout the Nation? Not the gentleman from Michigan alone; not the manufacturers, not the committee alonf', but the Members of this House.

Now. I am in favor of the amendment for more than one reason. The fir t reason is this: I hope tho e who feel that they are bound only by the agreement 'With the mtlnufacturers and are satis:fie<l, and perhaps 1.mintentionally producing the <:onfu~ion that prevail" in this Chamber, will go out of the room. They frankly admit an interest in the manufacturer, nnd, true to Republican practice, are not interested in the consumer. I hope they will go out of the room until those of u who do think of the consumer can discuss this question.

I want to get rid of all the nuisance war taxe. ·. I want a s a sound proposition, to bring this Nation as quickly as I can back to the point where we shall have a imple but permauent tax system. The ultimate consumer is more interested in that than a.ny manufacturer, because there can be no doubt but that the great majority of taxes are ultimately paid by the con­suming public. I think that at least we Democrats should not hesitate to accept that doctrine. That is one of our theories.

1028 CONGRESSIONAL RECORD-HOUSE DECEl\IBER 17

We ought to get rid of these nuisance taxes, because we will not get a permanent tax system in this country until we do get rid of them. As to income, inheritance, and the other taxes, I want to see legislation enacted which shall be so reasonable and simple that business men and the public as a whole-at lea~t the great majority of the public-will regard our tax policy as a settled policy. Wnen that time comes, the manu­facturers and the business J)eople of the Nation will not be compelled, as they are now, to set aside an overlarge sum to meet tax exigencies. Then the retailer and the jobber and everybody else will be permitted to set aside a smaller amount for tax payments with a greater degree of certainty than it can be done now, and that will lower the cost of doing business and lower the cost of commodities and check the rise of prices and the increase in the cost of living. That is the reason why I want to get rid of all the nuisance taxes I can.

I dislike to disagree with the gentleman fi·om N'ew York f~lr. l\frr.Ls] ; but ill all fairness his argument was not ad­dres"ed to this proposition. He made the only real argument I eYer heard in favor of an excess-profits tax. If I had made his speech showing enormous profits of these industries as did 1\Ir. 1\liLLs, I should be denounced as a demagogue. I can not do tllat, but the gentleman from New York [Mr. M.rr.Ls] can ask ~·ou to " soak the rich " and accuse them of piling up great profits. He can do that and "get away with it," but I can not do it. [Applau ·e.l

The OHAIRMAX. The time of the gentleman from Arkansas has expired. The gentleman from l\Ias achusetts [Mr. TREAD· w .a Y] is recognized.

1\Ir. TREADW AI". :llr. Chairman, I wish only to supplement what other gentlemen have said by calling attention to the exact amount of tax paid upon the cheaper cars under the present law and under the suggested tax in the bill.

"\\"e have heard a great deal about the consumption of Furd cal"s and the profits which i\Ir. Ford has been making, and .·o forth. On the Ford roadster the tax now is $15.33. Under the bill as submitted the tax will be $6.14. On the Ford touring car the present tax 1 $16.55. Under the new law it will be $6.62. The pre ·ent tax on the Ford coupe is . $22.35. Under the new bill it will be $8.9:!.

Vi110 is going to be unduly taxed by paying a tax of $8.94 to ride in a Ford coupe?

On the Chevrolet and the Essex, of about the same type, the tax to-day is $21.05 and the new rate is $13.17. That is on the touring car. On the sedan the present tax is $31.8u, and under the bill now under consideration it has been reduced to $19.11.

"·e have beard a great deal about the injury that we are doing to the average man. That is the man that we are interested in. I do not care what the man pays on the higher­priced cars. It is the men of moderate means who buy the cheaper grade of cars that tllis question reaches, and certainly no one can claim that a man who purchases a Che·rrolet sedan is going to be overtaxed at $19.11.

The Dodge touring car we have heard about to-day. Here is a page advertisement announcing the reduction in the price of the Dodge car. '.rhat reduction will mean a proportionate reduction in the tax on the car. The touring car is now taxeu at $33.30. The special touring car, which is the mo:t popular, is taxed at $36.10, aud that tax is now reduced to S2l.66. l'he special sedan is reduced from $-12.56 to $25.53. In the same class with the Dodge are found the Huuson, the Nash, tbe OldNmobile, the Reo, and the Buick. They cume nearest to tl1('

Dodge car in cost price. Xow, this rate of 3 per cent is not on the price a man payl:l

who buys a car to-clay dol'i·n on Pennsylvauia Avenue; it is the cot at which the manufacturer sells that car in Detroit or other construction centers. It is not 3 per cent even on tile cost to the man buying the car to-day, but it iH 3 per cent of the manufacturer' ' wholesale price. So, as a matter of fact, you get right down to a very minimum of tax.

What do the ·e gentlemen who are advocating the entire withdrawal of this tax confront us with? A. further reduc­tion of over $60,000,000! Will any gentleman who is advocat­ing this reduction of ::i69,000,000 tell us where that $60,000,000 will be made up on the tax bill?

:\lr. SCHAFER. I '"ill tell tlle gentlt'man. :Ur. TREADWAY. I decline to yield. ~Ir. SCHAlf'ER. The gentleman asked a que ·tion and I am

l)repared to answer it. ::llr. TREADWAY. .All rig1.tt; let the gentleman an.·wer it. :Ur. SCIIA.FER. Raise your inheritance tax and the high

surtax rate. [Applause.] 1\Ir. WEFALD. And put on an excess-profits tax. Jlr. TRElADW AY. 011, that is fine, fine; but I am talking

about the extra expense you are suggesting should be put on the average consumer. I claim you can not find a place where

there will be less hardship than with this small tax on auto­mobiles.

Mr. SCHAFER. ·wm the gentleman yield further? Mr. TREADWAY. No; the gentleman can get his own time.

Therefore $69,000,000 must be found in some other way. 1 say that the men who are advocating thls tax reduction want to desh·oy the whole fi·amework of this tax bill. We have contributed to the automobile consumer to the extent of one­fom·th of the entire tax reduction, and when we have done that I say we have done all that should be asked of us.

The CHAIRMAN. The time of the gentleman from Massa­chusetts has expired.

Mr. HULL of Tennessee, 1\Ir. KETOILUI, and Mr. SCHA.FER rose.

The CHAIRMAN. The Ohair will recognize the gentleman from Tennes ee (Mr. HULL], a member of the committee.

Mr. HUIJL of IJ.'ennessce. 1\Ir. Chairman, it has been my view as one Member fi·om the beginning that all war taxes should be repealed during this session of Congress and tmder the provisions of the pending bill. [Applause.] Several alleged reasons are offered in support of the proposal to retain in chief part the present tax on admissions and autos. One rea­son is the usual reason that the revenue necessities do not permit tl1e reduction. Of course, we know that in the event we should strike out these tax provisions the Ways and Means Committee, within an hour, woul£P make some slight readjust­ments of the income-tax rates and take care of the situation. Certain other reasons are offered in support of these provi­sions in the bill. One :Is that during recent years the auto industry has greatly reduced the cost of autos to the American people purchasing them. I see no reason why they should be penalized by the indefinite retention of these automobile war taxes because during recent years the automobile indu try, by reason of the highest state of efficiency in industry in America, have been able and willing to greatly reduce t,he price of the autos to the American purchasers. .Another so-called rea on is-and one which, I believe, was stated by the gentleman from New York [Mr. MILLs]-that they have greatly developed and expanded their business and built up profits. That is a matter whir.h pertains to the income-tax situation rather than to the question of policy in permanently retaining these automobile war taxes. [Applause].

I reminded the committee some days ago, when they were so hastily slashing the income-tax system at both ends, that they would soon meet a situation where they would be voting to retain taxes far more burdensome than the ones they were remo\ing, and so that situation appears here to-day. So we see, for example, the gentleman from l\las achusetts [Mr. TuEADW.AY] after voting promptly to take $10 eaC"h off 2,300.-000 persons I.Jy increasing the income-tax exemption to $3,500, now coming along and saying it is splendid to vote to retain a tax of over $15, not only on every Ford car purchased in the United States, but a still larger tax on 2,000,000 other cars, probably 1,000,000 of which are purchased by persons of small incomes.

I insist, Mr. Chairman, that there is one other considera­tion that this committee should not overlook, and that was my principal purpose in rising. Secretary Hoover on last Mon­day, in a letter, I believe, to a Senator, stated that on account of the artifieial inflation of rubber prices, by a combi­nation between the British GO\·ernment and rubber producers, the American people next year will be penalized $666,000,000 in excess prices above a round profit of 36 cents a pound for the rubber. I ha,·e not seen a single editorial in t:qe papers of this country on that point. I baYe soen great headlines about the paltry reduction in taxes under this bill, of $325,-000,000, but not a word in the entire editorial departments of the press, und not a word in this House have I heard about that great burden of six htmdred and odd million dollars that will largely be placed upon the owners of autos in this counh·y during the next 12 months. And, by the way, if I may be permitted a moment, I introduced on last :Monday a re~olution providing, I think, a prompt and successful method of eliminating, by agreement. these harsh rubber and similar trade practkes which are now outraging the comity of all commercial countries. But I have thus far hnd no response fro!ll any of the gentlemen who claim to be much interested in relieving the American people of undne burdens. except the miserable suggestion of retaliation ancl a tmde war by Secretary Hoover. I urgently invite Congress to eon­sider the resolution I offered. The conditions are most pre.·s­ing. 'J~he people are being mulcted out _of more than $700,-000,000 on rubber and coffee. The administration owes it to the country to act at once, and the· resolution will be pressed until the administration does act.

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t1925 OONGRESSION AL RECORD-HOUSE 1029 Mr. COLLIER. Mr. Chairman and gentlemen of the com­

mittee I do not know whether I shall take up the five minutes allotted me because there is such demand for time. I rise for two reasons: First, to say I am in hearty sympathy with the amendment of the gentleman from Illinois ; and, second, I want to disabuse the mind of any Member here, if he has any such thought in his mind, that the statistics which have been given to you by the gentleman from Oregon amount to any­thing at all. They are nothing but guesses and guesses by people who three years ago guessed $500,000,000 wrong, and !! year and a half ago guessed $600,000,000 wrong on a proposi­tion involving $1,800,000,000. They now come here and say there will be not a $68,000,000 deficit, not a $70,000,000 deficit, but guess there will be a $69,000,000 deficit if we adopt . this amendment

I stated at the outset of the debate the other day I W!lS going to vote for the repeal of the automobile tax and other

. taxes because I believed from the testimony we had from the Treasury officials and others that every estimate of expendi­tures was overestimated and every estimate of taxes was under­estimated. The gentleman from Massachusetts [Mr. TREAD­WAY] asked where you would .get the 69,000,000 which would be lost as revenue in this way. I feel confident you would not have to increase any other tax because we will have that much money as a surplus in the T:teasury. I want to say to the gentleman on the other side--and I am saying !t honestly a~d sincerely-! believe if you take off the automobile tax you Will still be able next June to pass your usual little resolution and giye another rebate and send it back to the taxpayers next November.

I have been consistent in my opposition to this particular tax. Those of you who were here when the 1924 bill was under consideration, when the gentleman from Michigan, Mr. Clancy, made the fight, know I voted for all those reductions and would have gone further along that line.

There is one thing I feel I may have misunderstood in the remarks of my good friend, the gentleman from Michigan [1\Ir. 1\IcLAUGHLIN]. If I did misunderstand him it is all right, but if I understood him correctly I want to express it clearly, that as a member of the committee I was not bound by any agree­ment with the manufacturers as to what tax we would or would not put upon this item.

I believe we should take into consideration the people who . pay these taxes.

I would I had time to talk about one of the reasons the Secretary did not want this automobile tax taken off on ac­count of the roads. As the gentleman from Arkansas [Mr. OLDFIELD] said, the automobiles have paid nearly $900,000,000 in Federal taxes. They have paid more than that in State and county and municipal taxes, . and they should pay taxes in the State and county and municipality in the way of gasoline and other taxes because they are contributing factors in the destruction of the roads and should contribute to their main­tenance; but I think they have paid their part in Federal taxes and there is no reason why there should be specifically a tax placed upon them. [Applause.]

1\lr. RAINEY. Mr. Chairman, I shall endeavor not to take the five minutes in order that other gentlemen may speak who want to be heard on this amendment.

My amendment strikes out the entire tax. The position in which the committee finds itself now is not a position out of which it can not extricate itself if 1t wants to do so. It is perfectly apparent that the Members of this House want to take all this tax off, especially in view of the fact that the gentleman from Michigan has now read into the RECORD the statement of all the great automobile manufacturers in the country to the effect that as soon as this tax is taken off they will give every consumer the benefit of it Therefore we are not releasing a great industry from any burden at all.

Of course the automobile industry is our greatest industry. It is the greatest industry to-day in all the world. We arc producing in this country now 91 per cent of all the automobiles produced in all the world, and two years ago we were consum­ing 93 per cent of all the automobiles produced in all the world. At the present time we are not consuming quite as many as we produce, but almvst hu many. Therefore, when you vote to take· all these taxes off, you are not relieving these automobile companies which my friend and colleague, the gen­tleman from New York [Mr. MILLs], says are prospering so much that they can afford to pay this tax, but y_ou are reliev­ing the consumers, the purchasers of the automobiles, _and their number is legion in this country. At the present time there are in operation between 17,000,000 and 20,000,000 automobiles along' the roads of this country, and the automobile industry has not reached its saturation point. It will ~each its. satura-

tion point when we quit raising boys and when automobiles quit wearing out. It is going to go on, and we are going to keep on buying automobiles.

If you vote to take all these taxes off, in less than two min­-utes the Ways a;nd l\Ieans Committee can remedy that situation in this bill. Of course, tllis bill is incorrectly drawn and you all know it now. It started out first to relieve the rich, the large income-tax payers, ignoring the principles of income t..ua­tion, which should be apportioned according to ability to pay ; and after that was done then we attempted-! was not a party to it-then the committee attempted, and so have you, becau e you have approved so far what they have done-then they attempted to take off these nuisance taxes or these war taxes.

I remember when we put the tax on automobiles. I served on this committee at that time during the war. We put them on with the under tanding, and we told not only the manufac­turers and the consumers, but standing here on this floor we told the country that when the war was over we would take them off.

The war is over and has been over seven years, and if we keep faith now with the people of this country we.. will keep our promise and take these taxes off. [Applause.]

Mr. CHINDBLOM. 1\lr. Chairman, I want to state my gen­eral position on the que tion of special taxes. I am for tlle ultimate elimination of every one of them. I hope the time will come when our Federal revenues will be limited to the sources we had before the war-the income tax, the tariff duties, and the internal-revenue taxes, which then contributed to the Federal revenue. The other taxes-on occupations, sales, admission~ dues, and so forth-! hope will all ultimately be repealed, and I think we are working toward that end.

But I want to call attention to the trend of the argument of the gentleman from Illinois [Mr. RAL~EY], who haS' just taken his seat. He said if you do the things he wants, then the Committee on Ways and Means can go ahead-and do what? Provide other means of revenue. The committee has already approved of the bill so far ; you have fixed the basis of the income taxe , you have fixed the ba is of the estate taxes, and you have approved of everything else in the bill to tlris point. Now, are you going to wreck the structure? We. would all like to remove all of these automobile taxes. But there are other taxes besides tllese. There remains in force a stamp tax of $46,000,000, the admissions and dues taxes of $29,000,000, and other miscellaneous taxes of $10,000,000, and all of these are special taxes imposed by reason and on account of the war. We are not going to take them all off at this time; we can not possib1y remove them all. Something must be left to the future, but we have laid the basis, I believe, for the ultimate elimination of all these special taxes. Every one of the people who pay these special taxes pay them in addition to the income and estate taxes levied upon all the people of the country.

But we must maintain the structure of the bill ; we must pre erve the integrity of the bill. We must stay within the ·available surplus. You have approved everything that goes before. This is a part of the general plan. If you seek to increase by $50,000,000, $69,000,000, or $41,000,000, or even $20 000 000 the amount of reduction provided in the balance of fue bill, then, as the gentleman from Illinois says, you will have to go back and change the prior provisions of the bill, and you will find that you will have to support things that you do not like.

You will be in the same position as was the committee after sitting seven weeks and discussing all these things that this committee is now debating. This is no new proposition ; there has not been a proposition presented to the Committee of the Whole House that was not brought up before the Committee on Ways and Means. When you get through with all of them you will find that you have not improved very materially the pro­posal of the committee.

Why should you prefer one class of those yet remaining as against another class? Why should you prefer to remove the taxes on automobiles in preference to the admissions to enter­tainments or dues of members of clubs? Why should you prefer the automobile class to the people who are paying $46,000,000 for stamp taxes that will still remain after you have taken off the automobile tax?

1\Ir. BARKLEY. Will the gentleman yield? Mr. CHINDBLOl\I. Yes. Mr. BARKLEY. Do not the people who pay the automobile

tax also pay the stamp taxes? Mr. CH.Il'."'DBLO:M. What stamp taxes? Mr. BARKLEY. People in the automobile industry. Mr. Cilli'IDBLOl\1. Name them. M;r. BARKLEY. The ones who profit by this bill.

1030 CON GR.ESSION AL RECORD-HOUSE DECBl\IBER 1

1\Ir. CHI~l])BLOU. They are not necessarily the same who are paying the stamp taxes, but they are all paying the income and estate taxes.

l\!r. l\1ADDEN. Mr. Chairma)l, Tom Reed once said that every l\Iember of the House had a perfect revenue bill in his head, and that no l\Iember of the House, with few exceptions, ever tried to make a perfect bill for the general public; but that every Member of the House tried as much as be was able to pren,nt the taxation of the people of his own district. So that when you got a bill at all it was a lopsided one, almo t beyond recognition. ·

This bill provides for a $325,000,000 tax reduction. When that becomes a fact the Nation will have given tlle people through the action of its Gover,ument within the las-& three years tax reductions amounting to $1,600,000,000. [Applause.]

The automobile intere.·ts of .America, whose advocates on this ftoor are very numerous to-day, have been relieved to the extent of 26 per cent of all the reductions carried in this bill, and if yon give them the other $69,000,000 or $70,000,000, you will have created a defidt iu the Trea ury and you will have done an injustice to every intere t except the automobile in­terests in America. [Applause.] The question now arises here : Are we willing to go on record with a certain declaration that our action, if we take this additional $69,000,000 of tax off the automobile interest, is in favor of a deficiency in the revenues of the Government when we need those revenues to maintain the Government? If we feel that way about it, then we will vote for the amendment of the gentleman from lllinoi~, my colleague [1\fr. RAISEY]. If we believe in maintaining the integrity of the Government by its conduct under a systematic lmsine~s plan, we will vote to reject the amendment of the gentleman from Illinois, my colleague [Mr. RAINEY]. If we helieve that we should assure the American people that we mean to conduct the Government on a strictly straightforward, courageous busine s basis, we will reject the amendment of Mr. RAINEY or any other amendment upon this question. We haYe $330,000.000 reported now as the surplus in the Treasury. w·e are voting that surplus back to those who paid the taxes. If we vote that surplus and in addition thereto $70,000,000 more, or any other sum that you are voting back, a sum that does not exist a a surplu in the Treasury, we will be com­pelled later on to demand from the verr people to whom you are voting it increased taxes on something el ·e to make up this deficiency. (Applause.J

The CHAIRMAN. The time of the gentleman from Illinois has expired.

1\Ir. GREEN of Iowa. Mr. Chairman, I am not urprised that the gentleman from Illinois [Mr. RAINEY] wants to wreck this bill. That has been hi.' purpose·from the start. Nor am I snrprlsed that some othet· gentlemen on his side of the ai le, thinking they !4ee some political advantage, as they would, in wrecking the bill, have joined in this movement. My surpri e is that any gentleman on our side should be so misled as to follow the leadership of gentlemen who do not want to see thin bill succeed and who do not want this ad­ministration to prosper.

What do we have here as a 1·eason for offering this amend­ment? They tell us that the gentlemen who made tllis definite agreement with me, that they would not any longer raLe the que tion of further reductions on automobiles, were not author­ized to represent the con. umers. I say, with the gentleman from Michigan [Mr. 1\loL..iUGHLIN], how ab urd that state­ment is. They did send them here to repre ent them, and they ha<l the interest of the consumer at heart as much as anyone else.

Mr. SCHNEIDER. Mr. Chairman, 'W'ill the gentleman yield? Mr. GREEN of Iowa. I ('an not yield in five minutes. Who

is it here that pretends to rcpre~ent the con ·umer? Are they those who ha\e ~ ent in the ·e numerous telegrams, who have frightened some people by propaganda which has been in ·pired by dealers and salesmen'! 1\Ir. Chairman, I come from an agricultural district, where practically every farmer has an automobile. I have repre ·euted that district for some four­teen years. Dming most of that time this tax was on our statute books. Not one consumer, not one ru er of an auto­mobile not one w-ho expected to be a purchaser, has ever said a' word to me about repealing this tax. Yet some gentle­men talk here as though they represent the con~umer. They do not. They repre:;;ent tho. e who have organized this propa­ganda from selfish interest, who are perfectly \villing to see this Government deprived of the revenues that it ought to have, and are willing to take this great bill ·which is presented to you and see it wrecked, jn oruer that they may make a few more dollars.

:Ur. l\IcLEOD. Mr. Chairman, will the gentleman yield?

Mr. GREEN of Iowa. No; I can not ~·ield. It is not in the interest of those who use the automobile. The people of my dh;trict, the people of all that great West which is beyond the Allegheny Mountain:·, anti the people of the South, are va. tly more interested in the Federal road aid thnn they are in this paltry ta:x. They want it continued, and the mnn who Y'otes to cut this tax to nothing, as this amendmeut of the gentleman from Illinoi'; proposes, is in effect saying he is perfectly willing to throw awar the aid of the Government toward good road:::. There is a strong movement against it now. Do you ·want it'! The people of the We 't and the South want that far more than they want to be relieved from this petty tax on automo­biles. Every vote that is cast in that direction endangers the Federal road aid and makes it more likely to be taken away.

Gentlemen tell us that the automobile indu:;try has paitl in more to the Treasury than the Government has paid on on roads. Granted. Is there any other indu. try where WIU' taxeli were placed on it that has had the subsidy given it that the automobile industry has received through Federal Rid to road ? I s any other industry taken care of in a similar manner? "Xo other industry has been preferred ill the manner that the auto­mobile Industry has been. Now we are taking $80,000,000 off tlte automolJile consumers. They get the benefit of eYery dollar of reduction otherwise that is contained in the bill, and yet they a. ·k us for more. No: tlte automobile consumers are not aRking for it. It is only tho. e, as I haYe said, who seek to profit to their own selfi.·h lntere"ts. [.Applau e.]

The CHAIRMA.:\1'. All time ha~ expired. The que~tion i!-l on the amendment offered by the gentleman from Michigan [Mr. l\lcLEoo] to the amendment of the gentleman from Texas [Mt·. HrnsPETH].

The que tiou was taken ; and on a di'dsion (demanded by Mr. l\loLEOn) there were-ares 80, noe 168.

So the amendment to the amendment was rejected. The CHA.IRlL·L'I. The que..,tion now recur:· on the amend­

ment of the gentleman from Texas [Mr. HUDSPETH]. The question was taken ; and on a division (demanded by

Mr. HuDSPETH) there were-ayes 91, noes 192. • 'o the amendment was rejected. The OHAIRMA..'X. 'l'he que ·tion now is on the amendment

of the gentleman ft·om Illinois [Mr. RAI~EY]. The que tion was taken; and on a divi ·ion (demanded by

Mr. RA.I~EY) there were-ayes 95, noes 188. So tlle amendment was rejected. The Clerk read as follows : SEc. GOl. (a) U any person who manufactures, produces, or Im­

ports any article enumerated in section 600, sells or leases such article to a corporation affiliated with such person within the mean­ing of section 240 of this act, at less than the fnir market price obtainable thercfot·, the tax thereon shall be computed on the ba8iS of the price at which such artido is sold or leaset.l l.Jy such nfllliated corporation.

Mr. LAGUARDIA. Mr. Chairman, I move to strike ont the Ia t word. :Mr. Chairman and gentlemen, I made the pro forma amendment for an opportunity to state for the RECORD my pro­te~t a O'ainst the manner in which Members of this Hou::;e were de;Jrh?eu of an opportunity to voice their ~iews .on a yery i~­portant section of the bill now under con. rderntwn. I submtt that it i · bad taste, to put it mildly, for the <:hairman of the committee in charge of the bill to moye to limit deuate and then proceed to use nearly al~ of that .time ~Y m~mller~ of ~is own committee in favor of h1s ov.'ll ulll. 'Ihat I .' not ~ POits­manship; that is not playing straight; and I think it i~ highly unfair. Gentlemen, what we may ~:;ay here to-day will soou be forgotten, but what you do here to-day is a matter of per­manent record. Now, gentlemen, it is quite true that the party in control has a big working majority. They can ride ruth­lessly over the minority and the minor minority; but, after all, this is a parliamentary body, and there should be at least a semblance and color of fair play if nothing else.

l\Ir. TILSON. Will my friend yield? Mr. LAGUARDIA. Jnf'lt a moment. I trieLl to get time all

the afternoon, and now the gentleman a~ks--l\Ir. TILSON. I know the gentleman wishes to make an ac-

curate statement and put in the llEcono jut the facts with reference to the men 1·ecognized under the 40 minutes.

Mr. L.AGUARDI.A. I lmow; I wa.· here, Mr. Floor Leader; you can put it in the RECORD yourRelf. You can also put in the RECORD when the motion was made limiting time that tbc Member from New York tried to offer an amendment and '\Y'a · not recognized by the Cllairman.

Mr. TILSOX. ~lay I put in tbe REco.cD in the gentleman'il tillle t.he facts?

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1925 CO:N GRESSIONAL RECORD-HOUSE 1031 Mr. LAGUARDIA. I refuse to yield, Mr. Chairman. Two of

us can play the same game, you know. Now, gentlemen, this is the Yery start of the session, only the second week of the session, and if you are going to be arbitrary and cruel, let me remind the gentlemen on the majority side that after all we haYe some rights on the floor of this House. Now, we knew we could not pass this amendment, Mr. Chairman. Some of us were shocked when we beard a member of the committee stand up and talk about an agreement, a settlement which was made between the committee and a certain group of manufac­turers at a time when Congress was not in session. [Applause.] This responsibility is not ours ; but in the face of that you refused to permit Members to offer an amendment or to express their views. Now, gentlemen, I do not want to obstruct. I do not want to rai e technicalities every time I have an oppor­tunity, but other Members besides the majority know something about the rule , and I say now in the best of good humor and in all kindliness that if this condition continues-well, then, the fight is on. We will keep a quorum here and make objec­tion to eYery unanimous-consent reque t made. We can stand it if you can. All we ask is due recognition of our rights. [Apl1lau e.]

Mr. TILSON. 1\Ir. Chairman, in view of the fact that the gentleman from New York declined to allow me to put the facts in the RECoRD as to the division of time, I ask just one minute to tate the official record kept by the timekeeper at the chair­mans left in regard to the 40 minutes debate allowed after debate was clo ed on the automobile amendment. Those occu­pying the floor in favor of the amendment were Mr. WINGO, Mr. llm of Tennessee, Mr. CoLLIER, and Mr. R.AINEY, 5 minutes each, 20 minute in all. Those who opposed the amendment were l\lr. TR~DWAY, Mr. CHINDBLOM, Mr. MADDEN, and Mr. GREEN of Iowa, 5 minutes each, 20 minutes in all. How could it be fairer ? And this statement sufficiently refutes the state­ment of the gentleman from New York that the entire time wa given to the members of the committee opposed to the amendment. [Applause.]

The Clerk read as follows : · (b) If any such person sells or leases such article whether through

any agreement, arrangement, or understanding, or otherwise, at less than the fair market price obtainable therefor, either (1) 1n such manner as directly or indirectly to benefit such person or any person. <lirectly or indirectly interested in the business of such person, or (2) with intent to cause such benefit, the amount for which such article is sold or leased shall be taken to be the amount which wouJd have been received from the sale or lease of such article it sold or lease(] at the fair market price.

Mr. CONNERY. ~Ir. Chairman and gentlemen of the com­mittee, I can not sit here any longer and watch this iniquitous so-called nonpartisan tax bill being " railroaded " through Con­gre without raising my voice in vehement protest. I would be ashamed to go back and face the working men a;nd women of the seventh Massachusetts dish'ict if I did not stand up and fight for them, everr though I know that with your gag-rule and steam-roller tactics you have the majority to force through this beh·aral of the American people.

When amendments were offered in this House to raise the exemption of the single man from $1,500 to $2,000 and the mar­I'ied men from $2,500 to $5,000 these amendments, which would benefit the majority of the people of the United States-the ordinary, everyday man and woman, in other words the " little fellows "-were defeated.

W11en we fought to take all the taxes off automobiles, so that the people who ride in Fords could get some of their taxes reduced, these amendments also were defeated by a large mfl­jority. But when the big multimillionaires came in with their organized propaganda, with their trainloads of tax experts, and a~ked you to reduce their surtaxes from 40 per cent to 20 per cent, your well-oiled administration machine slid smoothly over the rails and you gave them what they asked with a shout and a cheer.

When you did this you aided 213 men whose incomes are over $500,000 and left millions of small business and working men and women to shift for them elves and struggle along with the sop which you threw to them in the form of a very small exemption.

'l'his has been called a nonpartisan bill. Gentlemen, when we soldiers went before the Ways and Means Committee two years ago and begged you in the name of justice to give the veterans of t!le United States their just deserts in the form of at least a fair adjusted compensation bill we asked for a non­partisan bill. Did we get it? Yes; we did-not! The best we could get was a take it or leave it proposition which gives the soldier at the utmost $1,500, and he has to wait 20 years

to get ft. But why should you worry about the soldier! He only fights for his country, while Wall Street comes across lav­ishly with campaign contributions. [Applause.]

Everybody in the United States wants taxes reduced. The newspapers of the United States, through their propaganda­because all the large newspapers of the United States are con­trolled by the big financial interests-have been sending forth throughout the land the demand that we must reduce the surtaxes.

I am not going to have my people who work in the shoe factories of Lynn and in the mills in Lawrence and the Jeather industry of Peabody in these days of so-called Republican pros· perity, when they are working but three days in the week, think that I am in accord with the provisions of this bill. In Lawrence they have worked so little in the mills that they do not know what a week's work looks like. When I see a provi­sion in this Mellon tax bill which is going to save 1\Ir. Melloli himself $800,000 on his income tax and his brother $600,000 on his I can not give it my support. I am not surprised at the Republican members of the committee, as I expect them tu favor the big interests. I am sorry to see some of the Demo­cratic members of the Ways and 1\Ieans Committee giving their support to what I regard as undemocratic portions of this bill.

l\1r. SCHAFER. They may have thought that they would need campaign contributions from these representatives of exempted wealth. [Laughter.]

l\1r. CONNERY. I would not say that of Members on the Democratic side. [Laughter.] From my experience I will saJT to the gentleman from Wisconsin that the large contributions from the big financial interests of the United States always go to the Republican Party. The Democratic Party had no funds for their campaign, but a fine, big slu h fund was raised for the Republicans.

Mr. SCHAFER. That might have been because they did not . cooperate with them before. Perhaps they thought they would get them if they voted for this bill. [Laughter.]

The CHAIRMAN. The time of the gentleman from Massa­chusetts has expired.

Mr. CONNERY .• Mr. Chairman, I ask for two minutes more. The CHAIRMAN. The gentleman from .Massachusetts asks

unanimous consent to proceed for two minutes more. Is there objection?

M.r. GREEN of Iowa. Mr. Chairman, I feel constrained to object.

The CHAIRMAN. The gentleman from Iowa objects. Mr. CONNERY. All right. I thank you, gentlemen, for

your courtesy. Mr. GREEN of Iowa. There is not a man in this House,

notwithstanding all this talk that bas been going on, who does not know that I have treated those in opposition to this bill with all liberality. I well remember the day when, if I under­took to make such a speech as that just delivered by the last speaker, I would have been interrupted by the Democratic leader and required to confine myself to the subject before us.

1\fr. CONNALLY of Texas. When did the gentleman make such a speech as that? [Laughter.]

Mr. GREEN of Iowa. I did not say I ever made such a speech ; I said,. if I eYer undertook to make such a speech.

The Clerk read as follows : SEc. 700. (a) On and after July 1, 1926, in lieu of the tax im­

posed by section 700 of the revenue act of 1924-(1) Every domestic corporation shall pay annually a special excise

tax with respect to carrying on or doing business, equivalent to 1 for each $1,000 of so much of the fair average value of its capital stock for the preeedlng year ending June 30 as in excess of $5,000. In estimating the value of capital stock, the surplus and undivided profits shall be included ;

l'tlr. BURTNESS. 1\Ir. Chairman, a parliamentary inquiry. The CHAIRl\I.A....~. The gentleman will state it. Mr. BURTNESS. I have an amendment to strike out sub·

division 1. Is this the proper place for me to offer it or at the end of line 21, on page 199?

The CHAIRMAN. When the Clerk gets through reading subparagraph 2.

The Clerk read as follows : (2) Every foreign corporation shall pay annually a special excise

tax with respect to carrying on or doing business in the United States equtvalent to $1 for each $1,000 o!. the average amount of captal em· ployed in the transaction of its business in the United States during the preceding year ending June 30-

Mr. BURTNESS. Mr. Chail'Illan, I offer an amendment. The CHAIRMAN. The gentleman from North Dakota offers

an amendment, whicb the Clerk will report

1032 CONGRESSIONAL REOORD-HOTI SE DECEl\IBER. 17

The Clerk read as follows: Amenument by Mr. BcnTNESS : Page 198, line 1~, strtke out all of

subdivision 1, lines 12 to 18, inclosh·e.

Mr. BEEDY. l\Ir. Chairman, a parliamentary inquiry. The CHAIRMAN. The gentleman will state it. Mr. BEEDY. Is it in order for me to offer an amendment

at this time as a substitute for the amendment offered by the gentleman from North Dakota?

The CHAIRMAN. It will be in order after the gentleman from North Dakota has made his statement.

Mr. BURTNESS. Mr. Chairman, I feel that the proposition involved here is a yery important one, and I am going to ask unanimous consent to proceed for 10 minutes.

The CIIAIRMAN. The gentleman from North Dakota asks unanimous consent to proceed for 10 minutes. Is there ob· jection?

There was no objection. Mr. BURTNE...!S. l\lr. Chairman, the amendment which I

haYe offered is, of cour.., e, yery plain and simply eliminates the so-called capital-stock tax, which is applicable to corporations. This amendment should recei-ve splendid support from the "'"'ays and Means Committee, because many of the members of that committee speaking in general debate stated that the capital-stock tax is one of the taxes which should be eliminated. Even the very con er·mthe gentleman from Massachusetts [~lr. TREADWAY]-and snrely no one will regard him as irregular, eYen though he did submit one amendment yesterday-stated that failure to take it out in this case was an oversight. I can quote that from the RECORD if it is so desired.

1\fr. GREEN of Iowa. Will the gentleman yield? 1\ir. BURTNESS. If the gentleman will get me more time I

will be glad to yield, otherwise I must decline. Mr. GREEN of Iowa. If the gentleman is willing to stay

here until 10 o'clock to-night, he can get more time. Mr. BURTNESS. If that is the case, what is the question? Mr. GREEN of Iowa. What I wanted to say was that there

was not any oyersight about it; there was nothing discussed in the committee as much as the capital-stpck tux, with few exceptions.

l\Ir. BURTNESS. Be that as it may, this is what the gentle­man from Massachusetts [1\fr. TREADWAY] actually said:

In exciting certnin persons the word "corporations" is like a t'ed flag to a bull. I am not one of those, however, who feel that every corporation is an easy mark or in the nature of things is a lawbreaker. Our business prosperity is dependent on the success of capital organ­ized into corporate form, together with the interest and support of the wage earners employed by them. This bill is open to criticism that there is practically nothing in it directly beneficial to business carried on by corporations. In a way, I think this is an oversight.

Let us first analyze and see what this so-called capital-stock tax is. It is a tax of $1 upon each $1,000 of the "fair average Yalue" of capital stock of corporations in excess of $5,000. In other words, it is nothing but a franchise or excise tax levied by th.e Federal Government, not upon profits or income, but upon the right to do bu ine"s. It seems plain that if such a tax should be lened such action should on principle be by the government which grants the privilege, which is the various States; and many State· do le-vy such a tax. Of course, all States levy a tax upon the property of the corporation, real and personal, represented by the capital, surplus, and undivided profits, and some State , like North Dakota, properly assess any corporate excess that may exist.

Perhaps the most important fact to be considered in connec­tion with this matter is that this is a tax which is levied regardless of whether the corporation earns a large or a small return or no return whatsoeyer. The tax must be paid whether the corporation earns a dollar or not. In other words, it is a direct charge upon business, including that which is not suc­cessful as well as that which is prosperous. Individual income taxes and the regular corporation tax on its income need, of course, only be paid '\"i·hen there is a net income; but a corpora­tion, large or small, knows at the beginning of the year that it mnst pay its capital-stock tax whether it does any business or not. In other words, it is a fixed charge upon the bu iness just as much as rent. salaries, wages, fuel, light, or any other expense connected therewith. It is part of the oyerhead. ·what is the result? The capital-stock tax is included in the l.mdget of expense. It must therefore be directly added to the cost of goods, and every business man knows that it must be collected from the public with whom he deals before his ex­penses are met. Of all taxes lened by the Federal Government, it is the one which must be passed on and which is passed on to the consuming public, and tends the;refore to increase the cost of every commodity purchased.

There has been a good deal of discussion during the last week on the floor of the House as to what the enactment of this bill will do for the benefit of the "average man," also for the benefit of the men with relatively fair-sized incomes but who can not be regarded as men of wealth, and also for the men of wealth and the ultrarich. While the capital-stock tux concerns each and eYery one of all these classe. , it much more concerns that tremendous number of people who are not for­tunate enough to haYe incomes large enough so that they need file any Federal tax return. I submit that if you do adopt this amendment and repeal this tax, you will directly help that class of our people, and they constitute those entitled to our greatest concern. Generally speaking, it includes all laboring people, the man with the white-collar job, our small. struggling business men, and our farmers.

The proposition is o plain and elementary that illustrations seem unneces ary. It applies to a small corporation which may sell us our groceries, our clothing, our boots and shoes, our furniture, or our fuel in the smallest towns throughout the country. The capital-stock tax becomes part of the pur­chase price. It applies to the railroads of the country. The West is now confronted with a demand for higher fTeig-ht rates upon our farm products, drie to the claim made by the railroads that capital inyested in them is not receiving a fair return. The capital-stock tax paid by such railroads is a part of the transportation cost charged directly to the farmers who ship their products over such railroads and to the people pur­chasing any commodity in which transportatiOlJ costs is a factor. The capital-stock tax is part of the o1erhead expense of corporations making farm machinery, automobiles, stoves, furnaces, tools, or equipment of any kind that i used by any of our people and is paid by the ultimate consumer thereof. President Coolidge in his various speeches on questions in­Yolving taxation, economy, and thrift has often pointed out the need of remembering the people who pay indirect rather than direct taxes, and here, this afternoon, is a specific op­portunity for you to do so.

The tax is wrong in principle in so far as the Federal Gov­ernment is concerned, for it is a property or a capital-tax levy and assessment, and the Federal Government is not in that field. It is, of course, within the province of States to levy taxes of that sort if they so desire. I have already pointed out that it is not akin to an income tax, and it finds no parallel in any of the other taxes levied by the Govern­ment. It is in effect as much a property tax as a levy of taxes would be by the }'ederal Government directly upon personal property or upon farm or other real estate.

Some say it is an economical tax to collect and administer. but I submit that if the law is strictly followed such can not be the case. Remember it is a tax not upon the nominal capi­tal of the corporation or upon the capital stock issued, but upon "the fair average value of its capital stock for the pre­ceding year ending June 30." What a tremendous ta ·k it would be for the Internal Revenue Bureau to as~ertain the fair aver­age value of the capital stock of all the corporations of this country throughout a giYen year ! It would be difficult to do so in the case of such as have a fixed market value from day to day. I contend it is impos:::;ible to do so in the case of the majority of corporations. The excess-profits tax against cor­porations was wiped out four years ago largely for the reu~on that it was practically impos ·ible to determine fairly the invested capital of a corporation; yet there has been retained, in connection with the capital-stock tax, a provision almost equally difficult of administration. • There is anotller reason why this tax is particularly obnox­ious to a great many small corporations of the country-that is, to such as most of us find in our home towns and commu­nities. None of these have regularly employed accountants or tax experts, but attempt to get along with bookkeepers of aver­age intellig-ence and ability. This provi ion of the law requires these enterprir.;es to submit a tax return in adc.lition to and separate from its income-tax return. It is required specifically for the preceding rear emling June 30, a time different from that usually covered by its income-tax return, which is the calendar year. It can easily be overlooked and often is over­looked, resulting in vexatious penalties and other difficulties. It is reports of this kind which make many of our people disgusted with the Federal Government and does not llelp them to become better citizens in any way. It is no wonder thnt many of these institutions '\"i·ould therefore prefer the wiping out of this tax even though it meant increasing the regular corporation income tax. While I am not adYocating such a step, I will say that it would be much better than the present plan, for it would at least tend to be more fair to suc:h lines of business as yield little or no income. This suggestion is

)

1 I

1925 -cONGRESSIONAL RECORD-HOUSE ~ 1033

in accordance with the well-known economist and tax expert, Doctor Seligman, who appeared before the Ways and Means Committee and said, with reference to taxes on corporations :

I should say that from every point of view, fiscal as well as eco­nomic, it would be better to have one tax and to get rid of the capital-stock tax. If you need more revenue, raise tlie corporate income tax: !Jut do not keep that division and do not follow that utterly unscientific method of levying taxes on a corporation accord­ing to the amount of the capital stock.

While not dil'ectly involved in this amendment the question of corporation taxes generally is material in determining its fairne ·., for unless cor·porations are now paying their fair share of the burdens of Government this tax should perhaps not be wiped out even though it is unscientific, vexatious, and baserl entirely upon a wrong theory. What are the facts? In order to di cuss them intelligently it is necessary to give a brief history of the rates.

With tbe beginning of income-tax legislation a policy was adopted -of making the tax against corporations conform sub­stantially to the highest normal rate applicable to individuals. In 1918 the tax on corporate income and the highest normal tax against individuals were both 12 per cent. In 1919 and 1920 the corporate tax was cut 2 per cent while the normal rate on individual income was cut 4 per cent, thus making the re­spective rates 10 per cent and 8 per cent. This was really the beginning of a spread between them. We then e_nacted the revenue act of 1921. The questions in connection with in­vPsted capital had become sQ involved and so unpopular that Congress at the urgent request of the Treasury Department, malle not only by the Republican Secretary of- the Treasury but also by the former Democratic Secretary of the Treasury and approved by President Wilson as well as President Hard­ing, repealed the so-called excess-profits tax. In order to pro­vide for the los of revenue involved thereby the corporation tax was increased to _12¥2 per cent. I then pointed out the unfairness of such increase to those corporations which had not exacted large profits, but which had begn content with moderate returns up to 6 or 8 or 10 per cent, and to such corporations as had not even earned that large a return.

I pointed out that their taxes would be increased just one­fourth, while Congress by wiping out the excess-profits tax was reducing the taxes on corporations which had earned much larger incomes and reducing the taxes of individual taxpayers. In 1924 we passed another revenue bill~ and we then reduced the normal rates on individuals down to 2, 4, and 6 per cent, as well as gave them increases in · exemptions and provided for a further credit for earned incomes. We also reduced surtaxes, but made no reduction in taxes against corporations.

Since it was announced that the surplus in the Federal Treas­ury would be large enough so that we can now enact revenue legislation that will mean a saving of from $300,000,000 to $350,000,000, I have thought that the time has come when relief could be given to a large number of the smaller corporations of our country competing directly with individuals and with partnerships, not alone for the interests of the persons owning such corporations, but also for the consumers who must buy their necessities from them: Those urging h·emimdous reduc­tions in surtaxes have said a great deal about releasing money and capital for business enterprises. I can not for the life of me understand why there has been so much propaganda throughout the country and apparently accepted as gospel in most quarters that reduction of surtaxes would particularly help business, and that nothing has been said concerning the need for reducing cor­poration taxes in order to assist business. Is it not plain that the corporation tax is a direct tax upon businessr while the surtax is only an indirect one? Generally speaking, surtaxes apply only to the income which reaches tbe individual after it has been distributed to h1m by a corporation or by some other form of business in which the individual has some inter­est. Why not reduce the burden on the business itself at least just as much as upon the surtax payer, who has an income in his hands to _reinvest? In private discussions I have often asked the que~tion why the propaganda has taken this form, but have rece1ved no satisfactory answer. I have had busi­ness men in my own State tell me that they think it would be a good plan to reduce surtaxes, and I have always told them that I would have no objection to so doing as far as ppssible providing we could furnish necessary relief elsewhere; .but I have asked them whether they did not think it would be even better for business generally and for the consumers to try to reduce the direct charges upon business, such as the various exdse taxes snles taxe , and so forth, including reducing the corporatio~ tax, and they have always on reflection reiJlied "Yes."

In the bill before us I am mighty well pleased that practi­cally all of the so-called ~uisa~ce taxes ~~d special taxes have

be·en eliminated. I am also pleased that it has been found pos­sible to increase exemptions both for single persons and heads of families. I realize also that the state of the Treasury is such and the interest on our war debt so large that it is prob­ably·impossible to reduce to any great extent the tax upon cor­porate incomes; yet I am not at all certain that it is a wise economic policy for the country, and it surely is not a good thing for the man of small means, the average consumer, to have the spread between the highest normal rate applicable to indi­viduals and that applicable to corporations made greater rather than smaller in this bill. Personally, I have not found that "\yhat you term here moderate income-tax payers-that is, indi­viduals-object to the individual tax which they have to pay even under our present law, although, as suggested, I am glad to see it made smaller. A person with an income of $5,000, and with a wife and two children, under our present law pays an income tax of $25.50. Surely that is not an exorbitant amount. Under this bill his tax will be reduced to $7.83. Larger incomes are reduc-ed relatively. As I said before, I do not object to these reductions, but I wonder whether more good might not have been accomplished by other possible reductions. With the increase of the exemptions the normal rate might well have been left at 2, 4, and 6 per cent instead of being re­cfuced to 1%, 3, and 5 per cent, and the amount so saved given to help indirectly the consumers of the country, which I feel could be accomplished by repealing such a tax as the capital­stock tax. It was with that idea in mind that I voted here in Committee of the Whole for an amendment increasing the sur­tax brackets, so as to run up to 25 per cent instead of stopping at 20 per cent.

In almost every town or city you or I may visit-and this is particularly true of towns and smaller cities-there are com­peting firms engaged in the same or similar lines-one doing business as a corporation, another as an individual or as a co­partnership. The present difference in the amount of taxes paid by such competitors is abhorrent to my sense of fairness.

The corporation, generally speaking, pays one-eighth of its net income to the Federal Government. In addition to that it pays this capital-stock tax which I am trying to wipe out· and the distinguished member of the Ways and l\leans Committee, the gentleman from Oregon [Mr. HAWLEY], than whom there is no abler statistician in this Hou e, is authority for the state­ment that the total of the normal corporation taxes plus the capital-stock tax imposes a total rate of 13.73 per cent on the income of all business corporations. The individual or partner­ship engaged in such business under the present law pays a graduated normal tax of 2, then 4, then up to 6 per cent, while under the present bill the maAimum limit will be 5 per cent. The rate of surtaxes is, of course, th~ same for both after they get into that class, for all dividends from corporations are subject to surtaxes levied against the individual stock­holders. To make my point clear perhaps I should give one moderate illustration. A business concern in one of the cities of my district-such as Fargo, Devils Lake, or Grand Forks­with a business investment of $100.000, might earn a net in­come during the year of $10,000. If such business is operated under corporate management it will have a deduction of $2,000 and will pay one-eighth of the balance, or $1,000, as taxes to the Federal Government. If such business is con­ducted by one individual, ay, a married man without children or dependents, his tax under· the present law can not possibly exceed $190,- and he would probably be entitled to a greater reduction under the earned-income provisions of the law. Under the provisions of the propo!)ed bill the tax will remain the same as against the corporate business, but will be re­duced to a -figure not greater than $142.50 as against the indi­vidual. Discrepancies of this kind can not be justified; but what I want to emphasize particularly is that they are re­flected in the price to the consuming public and therefore become even worse than -they appear to be. In this connec­tion let me urge agai_n, as I did on the floor two or three years ago, that Congress, and particularly the Ways· and Means Committee, continue studying the problem, with a view of de­termining whether it might not be practicable to impose a graduated tax upon the income of corporations, gradually in­creasing the rate against the corporation income as its rate of return on invested capital becomes higher and higher, much a.s the graduated tax and surta.x:es on individuals. If that can be done practic.ally it will not only solve the problem of unfairness but it will operate as a check on exorbitant profits, tend to avoid profiteering, and will at least compel tlw. e wno do profiteer or make exorbitant profits to pay a larger propor­tion of the expense of the Federal Government.

In connection with the present tax on corporate income I ~lso W~D:.t to invite attention to the discrimination which e:x~ts

1034 CONGRESSIONAL RECORD-HOUSE DECEl\IBER 17

as between wealthy and nonwealthy and poor stockhOlders in the same corporation. Perhaps I · can again make my point clearer by an illustration. Many of our corporations have stockholders scattered all over the country. Take, for instance, tlle Great Northern Railway Co. There are doubtless -stock­holders in that corporation who are mil.lionaires or multlmil­Uonaires. There are others who are what we in the West would term wealthy, or at least well to do, with incomes larger than they can spend each year, and there are many others who are relatively of small means and almost poor. Some of the :)tock is held in trusts for widows and orphans. The compe-

. tence of many people who, because of age or other reasons, are nn longer able to produce an~·thing ls invested in stock of this or similar corporatiouR. What is the result when the total income of a corporation is, as at present, subject to one specific tax? It is obvious. The income on that vortion of the stock owned by the widow or the orphan or the perHon of small meaus, whose total income is much less than one which would

feature of the bill which will not be approved by the country as a whole, it is the failure to give to the stockholders of cor­porations, and consequently the vast consuming public, a more square deal. [Applause.]

Mr. BEEDY. Mr. Chairman, I offer an amendment as a sub­stitute all'd ask that it be reported.

The CHAIRMAN. The gentleman from .Maine offers an amendment, whlch the Clerk will report.

The Clerk read as follows :

Amendment of'fered by Mr. BEEDY as a substitute for the amendment of'fered by Mr. BuuT~Ess : rage 198, line Hi, after the words " fair average value of its," insert " shares of" ; in line 16, after tbe figures " 5,000," str1ke out the balance of line 16, and also lines 17 and 18, :md insert in lieu thereof the following: "In determining the value <>f shares of capital stock which are unlisted and which have not ~n subject to bona fide sale the surplus and undivided profits shall be included."

put him into a taxpaying chtR~ at tlll. must as a r•art of the cor- Mr. BURT~~SS. A point of order, .Mr. Chairman. porution pay one-eighth thereof under present rates to the Fed- The CHAIRMAN. The gentleman will state it. eral Government. The same rate is applicable to all alike. Mr. BURTJ\'ESS. The amendment offered by the gentleman Hence. I again urge further study of the proposition, ·which I from Maine is plainly not a substitute, but could be offered as fir ·t advanced on the floor of rhi5 House in 19~1, of determining a perfecting amendment to the text as carried now. I would whether there is not some way in which corporate income may suggest that he so offer it, and then both propositions can be pay taxes to the Federal Government on rates that would be voted upon. I am in sympathy with the amendment offered by fair and would be based upon the ability to pay of the indi- the gentleman from .Maine. vidual stockholders then,of. I am glad, indeed, that during The CHAIRMAN. The Chair thinks the point of order is tlle past few weeks more serious consideration has been given well taken. by the Way· and :\leans Committee to t llis proposition than l\Ir. BEEDY. I so offer it, Mr. Chairman. Before I pro­ha~ ever been done heretofore. I was inllllenR<.>ly interested in ceed I would like to ask tlle gentleman from Illinois [l\lr. tlll' new carried in the preRs reports at one time that the CHINDBLOM], a member of the committee, a question. I sl10uld committee had ado11ted a provision substantially to the effect like to ask him if, in the deliberations of the committee, its tllat when all stockholder· consented thereto they could return attention was called to the effect of the Ray Consolidated as part of their individual income their proportionate share Copver Co. in the Supreme Court as to the administration of of the total income of the corporation. I found on reaching this section now in question. · here that practical difficulties had arisen whkh it did not seem l\lr. CHINDBLOM. I think the public hearings show tllat possjlJle just now to iron out. But, friends, such a plan is right that case was discussed by one of the men that appeared before in principle, and l trust that with fm·tller study and considera- the committee. tion administrative objections thereto may be obviated. l\lr. BEEDY. In relation to the operation of this particular

In listening to the general debate I noted that several section. Is the gentleman sure of that; was this case men­members of the Ways ami )lean~ Committee submitted views tioned before the committee? along the lines of those which I llave expressed thiR afternoon. Mr. CHINDBLOl\I. Tes; the Ray Consolidated case was I mentioned the gentleman from Massachn. etts [Mr. TREAD- mentioned before the committee, and I will find it for the gen~ w.-I..Y] at the opening of my remarks. The gentleman from tleman. Oregon [Mr. HAWLEY] discussed several of the propositions Mr. BEEDY. The gentleman need not go to that trouble. I wllich I llave touchecl upon, and on the specific amendment wanted to know if the committee was familiar with it. before us he stated that he was in favor of eliminating the 1\Ir. CHINDnLO~!. I have given the case some attention capital-stock tax in this bill. The gentleman from New Jersey myself. [)Lr. BACHARACH] will surely have to vote for this amendment, Mr. BEEDY. 1\lr. Chairman, I undertook on Saturday last in view of the statements which he made. One of the dis- to call the attention of this House to the fact that the Con­tinguished Democratic members of the committee, the gentle- gress, when it wrote the original law in 1916, used the term man from .Arkansas [:Ur. OLDFIELD] , stated specifically that he "capital stock" in the sense of shares of capital stock. I favored the repeal of this tax and would support such an quoted from debates indulged in by leaders on both sides of the amendment. The gentleman from California [.Mr. LEA.], though House to show that when the legislation was being considered

. not a member of the ·ways and Means Committee, clearly the term "capital stock" meant shares of capital stock. My l•rought out the evils of thi~ form of taxation in his address statement has not been refuted on the floor of the Ilou ·e. under general debate. Ordinarily, I prefer to follow the com- I have offered this amendment not to prejudice the opera­mit tee handling the legislation. It is with considerable lle ·ita-

1 tiou of the section in question. This section, I contend, can

tion tllat I offer this amendment, and that I have offered a 1 not be put into operation with equity and fairness unle s we couple of other amendments to the bill before us; but enter- 1 write into it what Congre s originally intended, namely, talning the positive views that I do on the matter, in the 1 "shares of stock." inlerest of t11e people as a wllole, and particularly that these I I called attention on Saturday to the fact that Congress did view. may be considered in future proceedings on this bill, I j not fix any standard of mea urement. did not say whethe1· in have made bold to pref'ent them to you. , determining the fair average value it should consider the earn-

! am not criticizing thi::~ measure as a whole. I shall vote for t ings, capital inve. tment, total assets, or what not. In the it with plea .. ure. I llaYe felt that it could be impeoved. anu absence of any criterion of measurement the case went to the tllat if we all vote our convictions some good changes can be Supreme Court. The qaestion was, What does this section made on the floor of this HouF:e. mean? The Supreme Court said to get a fail· average value

1 entertain a hazy notion that there are some things in it of the capital stock you must take into consideration the . indicating a yielding on the part of the committee to th£· tre- potential capacity of the corporation for profits. I challenged

mendon force of propaganda. I compliment, however, the any one, three, or a dozen Members to say that he or they could splendid chairman of the committee [Mr. GnEEN] and the dis- ever sit in a board o1· bureau of the Treasury Department and tinguished ranking minority member of the committee f:Mr. say what was a fair value of capital stock of a corporation, G.ARXl'~] upon their refusal to yield to some of the organized based on the criterion propo ed by the Supreme Court, namely, propa~anda so unfairly directed at them personally in their the potential capacity of the corporation for earnings when own States. 'I'here are many flu~ reductions given to people that involved an appraisal of the corporate property. The in thls measure where they are sorely needed, and I am appraisal, of course, is not practicable. ha11py to note its assured pas age by this House so suon after The CHAIRMAN. The time of the gentleman from 1\iainc commencing our labors. Some of the suggestions for improYe- has e~ired. ment will, I believe, be adopted by the Senate nnd HJ)proved :Mr. BEEDY. May I have unanimous consent for three min-in conference by both Hoi.t~es . Individuals with moderate in- utes more? come~ have been well taken care of by the rnea.<::ure. 'l'hat -is The CHAIRMAN. The g.entleman from Maine asks unanl-al:#l h·ue of tho:e with large incomes. Texatiou~ nniRance mous consent for three minutes more. Is there objection? taxes have been eliminated. If there is any oue outstauding '!'here was no objection.

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·1925 CONGRESSIONAL RECORD-HOUSE 1035

Mr. CHI~DBLOY. Will the gentleman permit a suggestion? :Mr. LUCE. l\Ir. Chairman, I move to strike out the la.t I want to say that the effect of the Ray Consolidated case is word. The necessity for making those returns at a different off~et in t.he suhparag1·aph on page 191. , period fi•om that when big corporation returns are made irn-

lli·. BEEDY. In my opinion that does not meet the needs of poses a needless hardship, it seems to me, ou about 200,000 tile situation. The suggestion is made frequently that ·we are little corporations. The big corporations can look out for doing a lot of injustice to business by setting up bureaus in themselves, but I like to say a word once in a while for the tlte llepartment which promulgate regulations having the force little fellow. Will the gentleman from Iowa please explain of law. why we can not make that return when we make the other?

)ly friend fi·om l\Ia sacl1usetts [Mr. TREADwAY] said a few Let me also add tllat it comes now in the middle of the year, days since that tlle::-;e rulings are always based on law; that they when we little fellows are apt to be away on vacation. It is are not illegal. difficult to get the nece ary oaths subscribed. The accounting

Let me show you what these regulations mean in practice. force of a small corporation is small. 1Vhy can not thi" petty IIer e are some I'nlings established by the Treasury Department annoyance be saved by having a return made at the time the

·Affecting the administration of this particular section. I am other return is made? quoting now from article 15, !'elating to form 707. In the en- Mr. GREEN of Iowa. :Mr. Ollairman, this has been on the forct>ment of this law three returns have to be made, the first statute books for nine years. I never beard any co_mplaint on F:howing net assets, the second the value of corporate shares, that particular point. If it had been called to the attention aU<l third gro ·s earnings over a period of years. I quote from of the committee when we were considering tlle bill we we •uld the regulation of the department applying to Exhibit A: have taken it up with the Treasury Department. Just exa<:tly

If the market value of the assets be established, the fair value of why that period is taken I would not be able to state. Some the capital stock 1s held to be not materially less than the fair market particular period had to be taken. The gentleman will r ernem­-value of the net aRsets. ber that large corporation3 at least have their fiscal year tf:!r-

Let us come to Exhibit B in connection with which the regu- ruinating at various times. · lations contradict themselves. The Exhibit B regulations read 1\lr. LDCEJ. I am speaking for the little fellow. as follows: 1\lr. GREEN of Iowa. Yes; and most of them, I sup}>Ose.

The market is regarded as a factor-And tlley go on to quote from the Supreme Court decision,

uut-the capital stock of a corporation, its net a sets, its shares of stock, nre entirely diJl'erent things. The value of the one bears no fixed or neressary rf>latlon to the value of the other.

So, if it develops, when they guess at the net assets of the corporation, that a tax based {)n the value of shares would y ielll les · to the Government than a tax on the guessed value of net n~sets, two or thr e young clerks in the bureau would say, "We can not concelle the value of the stock to be any less than the value of the net as ets." But, if the returns should flhow the value of the stock to be in excess of the value of net a set', and busine. s demands that both items be considered in fixing the tax, the buTeau clerk says, "'Ye will apply the regu­lation applicable to Exhibit B," and, in fixing the tax, they quote from the Ray Consolidated Copper Co. case that " the value of the assets and the value of the stock are two entirely different thing and bear no relation to each other." Which regulation is to be applied in levying this capital-stock tax? Either one could be imposed by virtue of regulations established in a bureau of the Treasury Department and applied to suit the whim of a bureau clerk. Such a method of imposing taxes upon legitimate busine ·s is indefensible. [Applause.]

The CHAIRMA~. The time of the gentleman from Maine has expired.

l\lr. GREEN of Iowa. Mr. Chairman, the gentleman from llaine has introduced here a highly technical amendment which would be considered by the Committee on Ways and :Means for hours if they thought there was anything in it. As a matter of fact, the only thing that is in his amendment is something now set forth in the regulations of the department.

l\lr. BEEDY. And covering the whole field. Mr. GREEN of Iowa. I can not yield. I only want to use

two minutes. The gentleman says that under the present law it can not be operated. This is the one department, the one tlhi ion, the only one llown there in the administration of taxes that is current with its work. It has found it so ea y to operate under this provision that it is the only one that is not behind in its work.

Mr. BEEDY. Will the gentleman yield for a question? The gentleman will not contend that is the unanimous view of the committee.

Mr. GREEN of Iowa. The unanimous view of the committee is what I tated with reference to their being current with the work.

'l'he CHAIR:UAN. The question is on the amendment offered by the gentleman from North Dakota.

'l'he amendment was rejected. The CHAIRMAN. The question is on the amendment offered

b~- the gentleman from Maine. 'l'he amendment was reje<:ted. 'l'he Clerk read as follows : (b) The taxes imposed by this section shall not apply in any year

to any corporation which was not engaged in bus1ne86 (or, in the case of a foreign corporation, not engaged in busine ·s in the "Gnited States) during the preceding year ending June 30, nor to any corporation enu­merated in section 231, nor to any insurance company subject to the tax imposed by section 243 or 246.

go by the calendar year? 1\lr. LUOID. .A.lmost all of them. I would like to empha~ize

for the RECORD that this continued string of returns of all sorts-National, State, and local-become. an infernal nuisance, if I may u<;e the phra e, and we wish it coulll be le~ ened.

The Clerk read as follow : (2) The determination by the commissioner as to the average

amount of capital employed in the transaction of business in the United States by a foreign corporation shall be only prima facie e\i­dence of the facts on whJch such determination was based.

Mr. DEAL. llr. Chairman, I offer the following amend­ment, which I send to the de k.

The Clerk read as follows: Amendment offered b7 Mr. DEAL: On page 198, strike out line.

8 to 26, and on page 199, strike out lines 1 to 20.

The CHAIRMAN. The Chair thinks that we have pa :-:ed that stage of the bill.

Mr. TINCHER. Mr. Chairman. I make the point of order that the amendment comes too late.

The CHAIRMAN. The gentleman from Kansas makes the point of order that the amendment is not in order.

Mr. DEAL. I think it comes down to the close of that sec­tion, Mr. Chairman.

The CHAIRMAN. The bill has been read beyond the page where this amendment would be in order, except that part of it on page 199.

1\lr. DEAL. Mr. Chairman, I could not have offered my amendment until the section which it proposed to aniend had been read. I contend that I have a right to offer the amenll­ment.

The CHAIRMAN. That is true as to page 199, as the Chair stated, but as to 198 we ha\·e passed that page.

llr. DEAL. Well, 1\Ir. Chairman, I ask unanimous consent to go back to page 198.

The CHAIRMAN. The gentleman from Virginia asks unani­mous consent to go back to the page de::;ignated and he be per­mitted to offer his amendment.

Mr. SPROUL of Illinois. Mr. Chairman, I want to be con­sistent, and I objected to returning back a day or two ago, and I object now.

Mr. DEAL. Mr. Chairman, I move to strike out the last word. 1\I.r. Chah·mtm, I ask unanimous consent to have in­COl'porated in the RECORD a speech by Judge Spruill, of North Carolina, before the North Carolina Pine As._·ociation on tlle question of capital-stock tax.

The CHAIRMA...."N". The gentleman from Virginia a~ks Ullani­mou con ent to extend his remarks in the RECORD by incorpo­rating a speech made by Judge Spruill on the nbject indi­cated. I there objection? [After a. pause.] Tlle Chair hears none.

The speech referred to is as follows: ADDRESS OF JUDGE F. S. SPR I!ILL, GE~EHAL C'OUXSEL1 BEFORE TII!'l

NOnTH CAROLIXA PINE ASSOCIATJOX

" CAPITAL-STOCK TA:X"

Twenty centuries ago the tax problem was acutely prcsentetl by a party of llerodians and Pharisees to Je n Chri t. 'l'he imJuiry was made of him, " Master, is it la wful to l{i\'e tributl' unto l'a.•.'ar or not?" His answer is th~ answer that the taxpayer should make to the

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·1036 OONGRESSION AL RECORD-HOUSE DECEMBER 17

government or sovereign In nil time: "Render unto Cresar the things that nre Cresar's."

It is our patriotic and necessary political duty to render unto the Go>ernment the tribute necessary for the proper maintenance and ad­ministration of tlle governmental affairs. TWs should be done cheer­fully, fairly, ancl with recognition we are not giving but rendering a ju t duty.

But wllile thli! should be the attitude of the taxpayer it should not be forgotten that the Government owes to the taxpayer a corresponding duty, 1. e., to make its taxation or tribute as little burdensome in amount and in method of collection n is consll!tent with the public welfare.

It is this thought in my mind that leads me to the deliberate opinion that in imposing upon corporat ions in this country a capital-stock tax the Government is not pursuing that course which renders its levy of tribute as little burden orne in amount and onerous in method of collec­tion as is consistent with the public welfare. A change can and should be wrought which, while it would not impair the sum total of the Gov­ernment's revenue!'l, would yet greatly reduce the burden to the tax­paying corporations of the country.

The capital-stock tax was in.;;t1tuted as a speclal source of war­expen e income and is denominated an excise tax. It is a levy of $1 on eat:h $1,000 of the fair average value of the capital stock in excess of $5.000.

The t•·ederal Go"Vernment levies no dlrect property (ad valorem) or cavitation tux. All of its sources of revenue are indirect and arise out of (1) duties, (2) imposts, (3) excise, and (4) income.

It is unnecessary to define these or any of these. Sutnce it to say that capital-stock tax 1 clas.,.ed as an excise tax.

The collection of these indirect taxe: has necessitated the employ­ment of a great army of tax gatherers, and has Imposed upon the tax­payer the inevitable duty of making various and sundry sets of re­turns to the Government. This has resulted further in the necessary en:tctment of endless regulations and of ever-ehanging and conflicting interpretations. It has been said by one statistician that 1 man in every 10 men in the United States is, in some form or other, a Go>­ernment employee.

The experiments in subjects and methods of taxation have worn the patience of a long-suffering people almost threfl.dliarc. Therefore au:rthiug that looks to simplification of 'the tax ml'thods should l>e favorably considered.

'.rile corporation has become the very vehicle of modet·n business. l'iinety per ceut of the country's commerce is done through the agency or corporations.

'fbe capital-stock tax purports to be a sort of llcense t3x for cor­porate activities. It is unjust in this aspect, because corporations pay already 12% per cent of net income, white individuals pay 6 per cent of net· Income. This difference of 6"¥.! per ceut between the cor­poration :wd the lndlvldual is the privilege or license tax which the corporation pays for being allowed to do business as n corporation, and there can, therefore, be found, in the ll't'ying of a capital-stock tax of $1 on each ·$1,000 of stock, no excuse or .oati factory explana­tion in the theory that It ts a license tax for corporate actlvitie .

'l'be method of asse sment and col1ection of the capital-stock tax is neitllet· scientific nor equitable:

{1) 1.'he tax is levied upon the e~timated fall· avet·age volue of the capital stock for the preccdiug yeae. The criterion for this estimate is tbe opinion of the commio: loner. It is not controlled by, nor ncce · arily based upon, the data which the corporation itself shall ha>e consciention ly furnislleu. It is not based upon ot• controlled by the book value3 of the corporate stock. It is litl'rally left to the whim and capt'ice of the fallible man maklng the estimate, and it should be noted tllat th estimate Is based upon the average value ol the capital stock for the pre<>eding yt>ar. ThlR, in corpo1·at1ons of a C<'rtain class, would be greatly misleRtUug. In a listed f:itoclr, the price which it brings in the open market from day to day nnd f1·om time to time is some indication of its actual value, but in an un· listed industrial stock, which llas no value unless profits be realized ft•om the operation, an estimate baseu upon the preceding year is misleading. There arc corporations in tills association that ha¥e made large profits in one year' operation to see them lost and submerged in tbe succeeding year's operation.

(2) In this estimate the nrplus and undlvldt>d profits of the cot·­poration, no matter when earned. nre requii·pd to be included.

(3) The estimate is pre~umal>ly made annually and therefore re­QUires data to be gathered by the section as much from matter out­side as inside your return.

The C.'lpital-stock tax, therefore, no mattl'r what the Ooverument calls it, is a pt·operty ot· cRpit!ll-tax leV,\' and assessment. It is asse sed and levi('d directly uptm the value of the prol1erty which bas been ascertained and fixed by the comntis:-<ioner. It is not at all akin to an income tax and finds no par-allel in any of the other indit·ect taxes levied by the Government. It is, in its last analysis, as much a capital or property tax as Is the tax levied by the Stare govern­ment upon your farm or )'Olll' solvent credits.

It Is contended by the Government that this is the most economically administered and collected tax, proportionately speaking, ot all tlle bureaus: that is to say, the boast of the Government is that it cost'l a little more than $300,000 to collect the eighty-odd million dollars of cllpltal-stock tax. 'l.'his is grossly misleading. If the Govemment con­tented itself with accepting the flgm>es the corporntions returned, e'·en then this would not be true. The annual revaluation, which is Imposed upon the department by this tax levy, is left out of consideration. But a more serious matter is that it leaves out of consideration tbe return or questionnaire required at the hands of the taxpayer. That return or questionnaire is one of the most complicated and dangerous thing~:~ conceivable. It is the dil'ect antipodes of the data of the return llnd qnestionnalt·e required by the income tax, and it consumes m11lious or dollars of time of the corporations to get them up. For illustration, there are 367,000 corporations in the United States. All have to make not only the income-tax returns but the capital-stock tax retums. whi(·h are utterly dlil'erent and proceed from an exactly opposite angle. 1 make bold to say that there is not any operating corporation that t:Jn

make up one of these returns properly in less than a day with two men, including the work of a certified tax accountant, which has to be considered. Twice 807,000 days equals 734,000 days, or over 2,000 rears of 365 days each, for one of your highest-priced men ; and wlll'u the Government claims that this is an inexpeno;ive tax to collect it leaves out of >iew the fact that to muke the returns upon which the Government e!ltimatl'S and levies its tn.x each year 1'1?-qnirPs wl1at amounts in aggregate time to !!,000 years of one high-priced employee. This leaves out of view also another element, that of constant con· tro>ersy and wrangle and di ·agreement between the taxpayer and the Government. It leaves out of consideration the immense lo · s or time of the corporation in attl'nding the hearings and the ever acct·uing and increasing expense of going to Washington for these hearings. I am advised that there are now pending before this tax section nearly 25,000 cases in which hearings by the section ~Ul have to be had, and we are but fairly embark d upon the consideration of this question. Five years from now they may reach your tax return and make such radical changes in it as wiH compel you to employ counsel and person­ally attend upon a Government bearing.

The income taxes paid by the corporations amount to $1,000,000,000 a year. The capital-stock tax amounts to 1 s tban $f.IO,OOO,OOO, aud yet the annoyance and expense of the latter is greater than the former, llesidea which, as above stated, we have the interminable con­troversy with the Government that is thet·eby begotten.

The corporations feel that of the protlosed c~1t of $~08,000,000 in the Government's re>enue, $90.000,000 should be from this source, but they would rather pay enough target· per cent in income tax to nMke it up anct send into lirul>o tbe capital-stock tax.

The Committee on Ways and Means has r('J)Orted out a bill retaining this vexatious feature, but tbe sentiment of Cougrcss is rapidly solldlfy­Ing against It, and it becomes the duty of the corporations of _\mt'-rlca. to inform their own Representatives in Congt·ess of tl1e status, furnish­ing tTiem the nt>cessm·y figures unu arguml'nts, aud to urge upon them the correction of wl.tat they feel to be both an evil and a mistake in tax leglsla tion.

:\Ir. DE~U.. ~Ir. Chairman, I do not wlsh to dit:~cuss the que-s­tion, realizing that no u eful end can be accomplished by doing it. I merely wi~h to call the attention of the committee to the substance of tbls speech ma<le by Ju<lge Sprui1I. It is con­tended by the Internal Revenue Department that the tax is easy to collect and economical iu the cost of collection.

The corporati,ons contend tllat while that may be true, the cost to the corporations for making the returns, coming to Washington and appearing at hearings, cor.;t them something like eight to ten million dollars, and that the cost to the cor~ poration is entirely out of proportion and unrea. onaule, and that, thet·efore, tlley ·bould have some consideration iii this question of capital-stock tax. He further contended that the corporntions would be very willing to make up the amount of taxes that wonld be lost by reason of striking out the capital­stock tax and adding it to the 12% per cent tax on corpora­tions, so that the corporation woultl have to make out only one income-tax retm·n. I wanted to get that before the commit­tee, not that it will do any good now but hoping that at some future time if we should write another tax: !Jill the committee will have this tllought l>efore them and give it due considera­tion.

1\Ir. CRIXDBJ10:\I. If the gentleman will yield? Mr. DEAJ,. I do. Mr. CHIXDBLO~I. If the gentleman will permit me t.o

make a statement, that Yery qul'stion was thoroughly cousid­ere<l by the committee, and I will :ay frankly there was a great deal of sympathy for the views expres~ed; but it mean~ the loss of $90,000,000 or more in the first place, and the com­mittee was doubtful that all corporatiom: would look kindly to the increase of the profit.>:; tax. the income tax, from 12% to 13¥.& or prol>ably 14 per cent, aud that it wouid re ·ult in a

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1925 ·· CONGRESSIONAL RECORD-- HOUSE 1037 joint attack following the 'Change to retain the present income tax on corporations.

The ·Clerk read as follows: MISCELLANEOUS OCCUPA.TIO:SA.L TAXES

SEc. 701. On and after July 1, 1926, there shall be levied, collected, , and paid annually, in lieu of the tax imposed by section 701 of the

revenue act of 1924, a special exciBe tax of $1,000, in the case of ('Very person carrying on the business of a brewer, distiller, whole­sale liquor dealer, retail liquor dealer, whole ale dealer in malt liquor, retail dealer in malt liquor, or manufacturer of stills, as de­fined in section 3244 as amended and section 3247 of the Revised Statutes, in any State, Territory, or District of the United States eontt·ary to the laws of such State, Territory, or District, or in any place therein in which carrying on such busine s is prohibited by local or municipal law. The payment of the tax imposed by this section shall not be held to exempt any person from any penalty or punishment provided for by the laws of any State, 'l'errltory, or Di trict for carrying on such business in such State, Territory, or District, or in any manner to authorize the commencement or con·

- tinuance of such busine s contrary to the laws of such State, Territory, or District, or in places prohibited by local or municipal law.

Mr. BOYLAN. Mr. Chairman, I offer the following amend· · ment.

The CHAIRMAN. The gentleman from New York offers an amendment, which the Clerk will report.

The Clerk read as follows : On pages 199 and 200, beginning with line 21 on page 199, strike

out the entire line, al o strike out entire section 70.

Mr. BOYLAN. Mr. Chairman and gentlemen, I assume that the J)urpose of the committee in inserting this section is to give encouragement to the occupation of a brewer, distiller, wholesale liquor dealer, retail liquor dealer, wholesale dealer in malt liquor, Tetail dealer in malt liquor, and manufacturer of stills. I am glad to see · the committee is taking a liberal view of these occupations, and, in a measm·e, they are by legalizing them. I take it that this is the first indication, the first tangible indication, we have of the proposed policy of the adminish·ation of liberalizing the enforcement of the Volstead Act, because, if the committee did not put in this section pro­viding for this tax, of course, they would have no legitimate field or basis for operation. [Laughter.]

Now, inasmuch as you might say the taxes are levied, al­though they are working in opposition to the law, on the other hand you could say, Why not have an occupational tax for burglars, taking the various degrees, first, second, and third1 Why not have a special occupational tax for post-office robbers, hold-up men, and so on along the line? 1Laughter.]

Now, we have been informed that there are no wholesale liquor dealers in the United States and that there are no retaiJ liquor dealers in the United States. You admit, however, by levying this tax, that they are still doing business. There are many men in the city of W-a.shington who would like to -know the addresses of some of these who.Iesale and retail liquor dealers. [Laughter.] I would like to know whether or not the information that will be supplied through the payment of the tax will be public property.

Mr. ARENTZ. Mr. Chairman, will the gentleman yield? M.r. BOYLAN. Yes. M·r. ARENTZ. I had occasion to ask the committee. just

now as to the reason for this particular section, because, before the eighteenth amendment was passed, if a man wanted to buy

_a still he went to the hardware store and-got a permit from the revenue collector, who J>Ut a number on that still and kept track of that still. Since the eighteenth amendment was passed any man can go into a hardware store and .buy it.

Mr. o·coNNELL of New York. -They are buying them still. [Laughter.] -- · -

Mr. CHI!\TDBLOM. Is the gentleman under the impres ion that there· is a change in the tax under the new law?

Mr. BOYLAN. No. But it is asserted by people_ in the city of Washington that this occupation does not exist. That all liquor dealers have been put out of business. We are told that this . is a wonderful bill, with a magnificent fabric, with a structure which, in its perfection, excites the admiration of the world. Here is a section that seems to be useless. Therefore it should be stricken out, because the occupations that it seeks

' to tax no l9nger legally exist in _this country. Why, therefore, the necessity for this section in the bill, if 1t is ·such a perfect

0

bill? Mr. ARENTZ. The gentleman seems to think that if a State

gives the right to these manufacturers _to exist, then they will charge a thousand dollars. So the committee says.

The CHAIRMAN. The ·time of the gentleman from New - Yurk"ims expired.

Mr. BOYLAN. Mr. Chairman, I would like to \lave two minutes more.

The CHAIRMAN. The · gentleman from New York .asks unanimous consent to ~roceed for two minutes more. Is there objection?

There was no objection. Mr. BOYLAlY Acting on that same theory, then, if you

recognize an industry or occupation by taxing it, you recognize it as being legitimate. I am glad to see the first indication we have had in this session of a more liberal policy in the ad­ministration and enforceme t of the Volstead Act. [Laughter.]

Gentlemen, I think if you will pursue this policy a little further and report favorably and pass a bill which I have introduced, which will permit the ruanufactm·e and sale of beer and ale containing 8 per cent of alcoholic content, and the sale of wines containing 10 per cent of alcoholic content, you ·will justify and particularly distinguish the liberality of mind of this first session of the .Sixty-ninth Congress. [Laughter and applause.]

The CHAIR~IAN. The question is on agreeing to the amendment.

The que tion was taken, and the amendment was rejected. The CHAIRMAN. The Clerk :will read. The Clerk read to line 20 of page 222 of the bill. Mr. GREEN of Iowa. l\Ir. Chairman, I ask unanimous con­

sent to return to page 220 for the purpose of correcting a typographical error.

The CHAIRMAN. The gentleman from Iowa asks unani­mous consent to return to page 220 for the purpose of making a correction in the language. Is there objection?

There was no objection. The CHAIRMAN. The Clerk will report the amendment. The Clerk read as follows : Amendment oft'ered by Mr. GREEN of Iowa: Page 220, line 17, strike

out the word " of" where it occurs tbe thlrd time and insert in lieu thereof the word "or."

The CHAIRMAN. The question is on agreeing to the amendment.

The amendment was agreed to_ Mr. GREEN of Iowa. Mr. Chairman, I move that the com­

mittee do now rise. T.he motion was agreed to. Accordingly the committee rose ; and the Speaker having

resumed the chair, Mr. MAnnEN, Chairman of the Committee of the Whole House on the state of the Union, reported that that committee, having had under consideration the bill (H. R. 1) to reduce and equalize taxation, to provide revenue, and for other purposes, had come to no resolution thereon.

HOUit OF 'MEETING

Mr. TILSON. Mr. Speaker, in order to be sure that there is ample time for the consideration of the re\enue bill to its final conclusion and a vote upon it to-morrow, I ask unanimous con­sent that when the House adjourns to-day it adjourn to meet at 11 o'clock to-morrow.

The SPEAKER. The gentleman from Connecticut asks unanimous consent that -when the House adjourns to-day it adjourn to meet at 11 o'cl-ock to-morrow. Is there -objection?

Mr. GARRETT of Tennessee. Mr. Speaker, reserving the right to object, 'I understand it is the de ire to have the final vote or votes before adjournment to-morr-ow?

Mr. TILSON. I so understand. 1\Ir. GARRETT of Tennessee. We sometimes, of cour e,

simply conclude a bill in Committee of the Whole and let the vote go over until the following day. I understand that tile reason for making the request is the desire to have the final vote on the bill to-morrow?

l\Ir. TILSON. That is trne, as I understand it. A number of gentlemen have spoken to me about being away on Satm·day of this week for one reason or another, and •it seems to me it would be better to have a vote to-morrow.

Mr. GARRETT of Tennessee. Several gentlemen on this side have £POken to me to the same effect. If we do get this bill out of the way to-morrow, then I understand the order o~ busi­ness will be an appropriation bill?

Mr. MADDEN. I give notice now that as chairman of the Appropriations Committee I -shall report the ·Treasury-Post Office pill to-morrow when the House convenes, and if this bill is out of the way, we will take it up Saturday morning.

Mr. GARRETT of Tennessee. And will Saturday probably be taken up with general debate?

Mr. MADDEN. Yes. Mr. HOWARD. 1\fr. Speaker, 1·eserving the right to object­

and I ha \e not yet-I seem to ha-ve the unanimous desire to speak a little in the morning aftm· the .manner of some of my

1038 CONGRESSIONA.L RECORD-HOUSE DEOE)IBER 17

distinguished friends who do not pn.y mu<.:h attention to the genc:rnl subject of the l.Jill under cliscussion. I would like to ask the floor leader ou the other side if he would think it would be right to arrange for me to talk quite a while in the morn­iuo-. [Laughter.]

:llr. TILSON. I can make no promises as to what other geutl('men will do, but personally I never refuse the gentleman the opportunity of speaking, and I do not wish to lose the pri'dlege of hearing the gentleman.

Mr. HOWARD. Mr. Speaker, under the circumstances and in Yiew of the fact that the leader is not in thorough accord with himself ju. t now, I will let it go until some other tim£:;.

Tlte SPEAKER. I · there objection? There was no objection.

EXTE~SION OF REMARKS

Mr. FtJLMER. Mr. Speaker, I ask unanbwus consent to insert in the RECORD a couple of short article on agriculture by Col. Hm:ver Jordan and Mr. Wanamaker.

'l'he SPEAKER. The Chair wishes the gentleman would postpone his requet't until to-morrow. There are a number of gentlemen who usually object to the insertion of rema1·ks othrr than those made by Members of the llouse. Perhaps there will llc no objection if the gentleman will po tpone bis request.

Mr. FULMER In that event, ~Ir. Speaker, I will withhold the request for the present.

TIIE REVE~UE RILL

i\Ir. SCHNEIDER. :Mr. Speaker, I ask unaniruou consent to e:x teud my own remarks on the tax bill.

The SPEAKER. ~'he gentleman from 1Yiscon .. Jn asks unal}l.­mons con ·ent to extend his remarks in the RECORD on the tax bill. Is there objection?

'l'here was no objection. l\Ir. SCHj_ TEIDER. Mr. Speaker, it is no great astonishment

to me, nor, am I sure, to my progre ·sh·e colleagues, to see the leacler · of the Democratic Party and the leaders of the pre. ent Coolidge Republican administration in this House affectionately pattiug each other on the back, loudly acclaiming the action of the Wars and l\lea.ns Committee for repo1iing the tnx bill to this body as the initial business of this Congress. RepubJi­cau leaders are profuse in their praise of the Democratic friends of thi::J measm·e, while the Democrats are equally a' gradous in their acknowledgment of this so-called new biparti­san relation. This merger of the Democratic Party and the Republican Party in everything but in name is not new. The intere ted parties, however. can no longer keep the truth from the public, since by their very action they llave again revealed the identity of purpose of the reactionary Democratic and Republican Members of thls body. Arm in arm Democrats nntl Republicans, who have been elected by suppo ·eclly different parties and upon whlely different platforms, it seems are about to forget their trust to the voters and are now bent on doing the bidding ·of the same master-namely, big business-and I am afraid they have the power through this combination of Demo­crats and Republicans to sene these interests very well indeed.

vnth the progressive Members removed from important com­mittees, such as the Ways and .Means Committee, which is nominally responsible for this bill, the machinery, it evidently appears, is now set in high gear and ready for anyone who would dare to face such a steam roller as this. But, confillently, gentlemen, you may ride roughshod O\er tlle few of us who are now insisting that Congress take due cognizance of the p('Ople's rights in this matter, and who are voicing our objec­tions to this obnoxious piece o£ legislation ; you may pass this :special-privilege tax bill, which is nothing more than the origi­nal Andrew Mellon concept in its final product, with perhaps some additional trimmings furnished by Wall Street; you may even continue to pass more of this kind of legislation, but I warn you, gentlemen, that when you again have to face the voter::; and appeal for their trust, they will no longer need to rely on empty promises and colorful platform pledges. But1

instead, your record to-day and on other measures that may come up to-morrow will be the guide by which they will deter­mine whether you have fully m·easured up to tlle trust so faith­fully placed in you by your constituents.

I do not expect to be able to stop the stampede for this meas­ure, and frankly confess that I do not possess that power that could match the almost magical effect of the party lash and the demands of Wall Street, but I do insist on making a· few ob­~·ervations regarding the tax-reduction question in general, and particularly as to some of the major objectionable features of thi -. bill which I feel should interest yon.

C.A USE FOR TAX-REDUCTIO~ T-ALK

Wbat gives ri. ·e to the present so-called tax-reduction action on the part of Congress is the fact that the revenue act of 1924

is producing more revenue than what is claimed by the Wuys and Means Committee and the Secretary of the Treasury to he necessary to carry on the functions of the Government. Tllere is, it is claimed, over $300,000,000 in surplus re"\"enue that come::~ into the Treasury under the existing law.

Assuming for the time being that all this amount is in ex­cess of what the Government could judiciously use, let us see what the advocates of this bill intend to do with this surplus money. Let us see how much of this money will go toward the relief of the farmer and the wage worker of this Nation. How much of this can the small-salar-y man and t11e small-busine s man expect by the generosity of this body.

HOW Ml'CH THE FARMEB, W.~GE WORKER, A.:XD OEXERAL PUBLIC BEXEFITS

U~DEB THIS PROPOS~L

It can not be said, of course, that there is no single provision in the bill worthy of support. Like in most everything, if one looks hard enough, he may see some good even in the wor t of things, and so here, I confess that I have no quarrel with such provi::dons in the bill tending toward a reduction 1n tax on cigars, automobiles, trucks, and other motor Yehicles, or automobile accessorie , and on such other articles of general use by the public, such as cameras, lenses, jewelry, and so forth. These taxes are war taxes and also amount to sales taxes, and are invariably passed on to the public. I have taken the position all along that a sales tax i · wrong, and these sales taxe · and nuisance taxes should have been aboli hed long be­fore this. That was my position in the last Congre .. s when the tax question came up, and was the position taken by Progres­sives generally. I also approve of the reductions in the income taxes in the lower brackets, which affect those of moderate means. But this throwing a few crumbs to the multitude can not win my support to a blll otherwise full of impossible sug­gestions and reeking with direct and indirect attempts upon the coffers of our Treasury, designed to benefit a privileged few.

CHIEF OBJECTIOXS TO THIIJ BlLL

Tll e reduction ill income and surta.re8

The biggest ancl most important reducing performance pre­:cribed by this bill for the Treasury of the United Stn.te · is the reduction in income and surtaxes. This alone will mean a loss to the Treasury of approximately $193,575,000, of which $08,575,000 represents the proposed reduction in surtaxes. The following table will .. how just how these reductions are dis­tributed amongst the 'l"arious cla. es of income taxpayers:

Table shou; ing income8 of married persons uith 110 depencle11t11

Net income

$4,000. ____ - ------------------- .. __ · __ $5, ooo ____________________ -.--------$6,000. ____ ------------. ----- -- -- ---$7,()()() ___ ---------------------------$8,000 ____ ------------ .. --- .. ·---- - ---$9,()()0 ___ ------- ----- ---- ------- .. ---$10,000.----------------------------$11,000. _____ -----------------------$12,()()0 ___ .. -- .. -------------- --------

13,000 ___ ----- ---------------------$14,000_.------ ---------------------

15,000 ________ ---------------------$16,01)0 ___ --- -----------------------$18,000.------------------------- ... -$2:!,()()0 ___ -- ------------------------$22,000 __ ----- ----------------------$24,000 ____ --------- ----------------$26,000 ____________ - ---- ------------$28,000_ ----------------------------$30,000 _____ -------------- ----------$32,000 ... ---------------------------$34,000 ___ --------- -----------------$36,0{)() __ ---------- .. ----------------$38,000. _____ ---- -------------------$40,000. _ ·-- ------------ ------ ------$4/i,OOQ. _________ ------- ·---- -------$50,000._-- -- .. ---------------------­$55,000._ --------------------------­$60,000. · - - ------------------------­$70,000. _ -· -------------------------$80,000_ .. ·--- --------------:--------$90.000 __ --------------------------­$100,000. ·- --------- .. - ·-- -----------$200,000 ____ ------------------------$300,()()() ___ --- ----------------------$500,()()() ___ - ------------------------$1,000,000-------------------------­$2,000,000.- -----------------------­$3,000,000 .. ----- ------ --- ·------- --­$4,000,000-------------------------­$5,000,000 .. ---- ----------------.----

Amount by Total tax under Total tai un<ler whi_cb taxes will

present law proposed bill be reduced un-

~22.50 37.50 62.50 75.00

105.00 135. ()() 165.00 225.00 295.00 365.00 !35. 00 515.00 595.00 775.00 975.00

1,195. 00 1,435. 00 1,695. 00 1, 975.00 2, 275.00 2,595.00 2, 915.00 3,255.00 3,615.00 3, 995.00 -i, 98.5. 00 6, 095.00 7,325.00 8, 635. ()()

11,535.00 14,835.00 18,495.00 22,575.00 65,575.00

109,675. ()() 199,575.00 429,575.00 889,575.00

1, 349, 575. 00 1, 809, 575. 00 2, 269, 575. 00

$5.63 16.88 28.13 39.38 56.25 78.75

101.25 131.25 lfi8. 75 213.75 258.75 311.25 363. 75 {83. 75 618. 75 818.75

1,038. 75 1, 278.76 1, 638.75 1. 818.75 2, 118. 75 2, 418.75 2, 738.75 3,078. n 3, 43 . 75 4, 368.75 11,358.75 6,408. 75 7,458. 75 9,658. 75

11,958.75 14,358.75 16,758.75 41,758.75 66,758.75

116,758. 75 241,758.15 {91, 758.75 741,758.75 991,758.75

1, 2!1, 758. 75

der proposed bill

$16.87 20.62 24.37 35.62 48.75 56. 25 63.7.5 ~:\.1:\

126. 25 151.25 176. Z.j 203.75 231.25 291.25 356.25 376.25 396.25 416.25 436.23 456.25 {76. 25 496.25 516. 25 536.25 556. 2!1 616. 2a 736.25 916.25

1,176. 25 1, 876.25 2,8i6. 25 4,136.25 6, 816.25

23,8l6. 2.)

!2,816. 25 82,816. 25

187,816. 2j 397,816.25 607,816.25 817, 816. 2.j

1, 027, 816. 25

{

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I

\

J

f

i J

1925 CONGRESSION 1\.L RECORD-HOUSE 1039 It must be interesting for the small taxpayer or the farmer

or wage worker who is not even privileged to pay income taxes, because of his small ea1·ning power, to observe what a tremen­dous saving this bill would make to a privileged few .with the one hundred thousand and million dollar incomes if the pro­posed cut in surtaxes from 40 to 20 per cent is put through. Is it any wonder why they are making such a persistent fight for this bill? One can fully understand the reason why Mr. Mellon came upon this unique plan, and why he so en­thusia tically advocates its adoption, when you know Mr. Mellon and his brother paid $3,066,000 in income taxes this year, and under the proposed tax cut of 50 per cent it would mean a saving to them alone of $1,400,000. Why should not these gentlemen want to pass this bill? But if we are to apply the principle so oft repeated as the basis for taxation, which even our independently wealthy colleague of New York [Mr. MILLs] himself expounded the other day in his speech on this measure, namely, that each man should pay in accord­ance with his ability to pay, it would seem to me that it should also follow that reductions in taxe should _be made for the benefit of those now in greatest need. This, I believe, estops these privileged few from making any claim to any of these moneys which is said are surplus funds of the Government. There are, I am convinced, others in this Nation more deserv­ing of the benefits of any surplus moneys that the Government may have. I am unalterably opposed to further reductions in taxes for these multimillionaires. I am, therefore, opposed to this 50 per cent cut in surtaxes on large incomes, and I am in favor of retaining this source of revenue for the Government at the present rate of 40 per cent as the maximum.

THE REDUCTION 0~ ESTATE OR INHERITANCE TAXES

Another objection to this bill is the provision for the reduc­tion in the rates on inheritance taxes on large e tates.

The Federal inheritance tax does not apply to estates amount­ing to less than $50,000, so that the argument that it is wrong for the Government to tax this kind of income since it might affect the poor unfortunate widow, can not apply here, and it will also be noted that the rates on estates above $50,000 are graduated and are only 2 per cent on estates between $50,000 and not over $100,000; 3 per cent on estates of $100,000 and not over $150,000, and so on, increasing with the larger estates. Anyone who by inheritance comes into possession of such large fortunes sho1;1ld be willing to give to his country a substantial part of this unearned income, which the Nation, however, has helped his predecessors to accumulate. Such individuals can not justly complain when they give up part of something they really did not earn, and it comes with poor grace for them to now make this fight to keep the Government from taking its just share. I say that no fairer tax could be had than a tax on this kind of unearned income ; I therefore oppose this attempt to lower the rates and cut the 40 per cent inheritance tax to a 20 per cent maximum. This provision of the bill now under discussion would mean an additional loss to the Treas­ury of approximately $70,000,000.

THlD GIFT TAX PROVISION

The abolition of the gift tax not only takes away another lucrative source of revenue to the Government, but it also in­directly helps to complete the plan of those who want to abolish the Federal inheritance tax entirely as advocated by Secretary .Mellon, who himself, or his family, as is generally known. are in line for such new fortune via inheritance. All of you know that we are constantly faced with the problem of tax dodging, especially when it comes to collecting inheritance taxes. We cannot always depend on the loyalty of the millionaire citizen to pay his share of taxes to his State, which helped him to accumulate his wealth. . The State of Wisconsin has recently had some experience with tax dodging when 1t tried to collect on the Begg's estate. With such an avenue of escape as created by this provision it will make it possible to grant a way these large estates in order to escape paying inheritance .taxes, and it will make it nigh impossible for the Federal Government to get its just dues.

THE INCOME-TAX Pt:JBLICITY CLAUSE

But not only does this bill provide for tax reductions for these privileged few who get these enormous incomes, and who usually are heirs to immense estates, but it is also suggested that we abolish the income-tax publicity clause, thus permitting them to go back to the method of dealing with the Government ln the dark, so far as the public is concerned. We know full well what that means. Public scrutiny on the returns of big income taxpayers may cause some of them no little embarrass­ment when we have men in public office like Senator CouZENS, Senator LA FoLLETTE, Senator- NoRRIS, Senator WHEELER, Sena­tor W _ALBH, and others, as well as progressive Members in this

body, who deem it necessary now and then to carry on an in­vestigation to determine whether there are any irregularities in the Revenue Department and other governmental depart­ments. This is particularly displeasing to Secretary Mellon and others who are now being investigated, and they would welcome the setting of the stm.

I believe it can properly be claimed that the increases -in income-tax reports were partly due to the existence of this publicity clau e. What objection can the honest man have toward the publicity of his income, if it deters ot11ers from making false reports or helps us to discover tax dodgers. Tbe publicity provision of the existing revenue act is highly com­mendable and should by all means be retained.

CONCLUSION

Clearly from what I have thus far disclosed this bill does not represent a proper spirit toward our Treasury and the inter­est of the American people at large. A bill which contemplates the taking of millions of dollars from our Treasury and giving it away through tax reductions on surtaxes from 40 per cent to 20 per cent, through reductions on estate and inheritance taxes from the present maximum rate of 40 per cent to 20 per cent, through the abolition of gift taxes, all of which are entirely uncalled for at this time, and to a privileged few who already have more money than they need, and when at the same time there are millions of people in this country with earning ca­pacities netting them a bare subsistence, who are greatest in need of assistance, if any are to have Federal aid-! say such wholesale advances upon the Nation's Treasury by these inter­ests amount to nothing short of lootfng public funds. It can not merit the support of Congress.

We are told by the Ways and Means Committee, however, that in reporting this bill to us it is "complying with what the country believes to be sound business policy." They assure us that considerable sentiment, both in Congress and the country, favors these reductions on surtaxes, inheritance taxes, and the rest of the features of the bill. But I ask you, gentlemen, was any of this so-called sentiment the expression of the workers and farmers in our land? Can the committee· point to a single instance of having received any such urgent requests for this legislation from farmers or workers in my district, who deemed it good policy that you make this Christmas gift to special interests out of the coffers of the United States Treasury?

Why, it is common knowledge that this so-called sentiment was largely paid newspaper articles and editorials appearing in our large dailies all over the country. I am, indeed, sorry that the Ways and Means Committee takes the newspapers so seri­ously as tO believe that what the reactionary press of the coun­try, which .fs largely owned and controlled by Wall Street, voices the sentiments of the American people. They certainly do not! But they tell us that the reduction in taxes will stimu­late business, and it wlll give the captains of industry more capital to invest, thus bringing greater prosperity to all.

If this were true and if these reductions would result in bringing a little of this much talked-about prosperity to the needy farmers and workers of this country, it would be sufficient cause for anyone to vote fo it. But what are the facts? Everyone knows that the United States to-day has more capita 1 than any other nation in the world. Yet while big business is prosperous millions do not know what that is. Instead of carrying on greater developments in business enterprises or bettering the lot of the workers by increasing their wages and thus increasing their buying power, which is the only real way of creating better conditions in the United States, as far as the masses of farmers and workers and the small business men are concerned, big business and the financial interests of the country are ever ready to seize upon every opportunity to take any of its capital or the capital that our good friends here would now release them by tax reductions and loan it out to foreign countries at high interest rates or make other foreign investments, where the yield would be greater than by doing business here. •

BIG Bt:SlNJ:SS LOOKING OUT FOR ITSELB'

No ; gentlemen, big business does not sense any moral obliga­tion to its country and the American citizens. It is inter­national. Profits; that comes first, their country or the welfare of the people who have helped them accnmul~;tte their fortunes is merely a secondary consideration. For example, are they not willing that this country surrender its rights to the foreign debts due us by the Ew·opean nations when such cancellation of the foreign debts or the granting of easy terms to our debtors will mean the building up of new markets for loans and safe investments of their surplus moneys at exorbitant interest rates, yielding en0rmous profits to them at the expense of their own country and its peoples.

1040 CONGRESSIONAL RECOR.D-HOUSE DECEJllBER 17 I

The farmer and the worker can not expect much from special To the Congress of the United States: interest which is con~tantly e::ploiting ·hi;n. Nor is the fari?er I transmit herewith a report from the Secretary of State in or wage. worker particular.ly mterested I? .the development .of relation to the following claims presented by the Governments new. proJect~ or the eXJ?answ~ of the do~mmons of o~r financ1~l of Dempark, Sweden, and Norway against the Government of and mdustr1al barons m their ownersh1p of the wealth of this the United States on account of damages sustained by vessels Nation. owned by their nationals in collisions with vessels in the public

The concentration of the wealth of this Nation in the hands service of the United States: of a few is becoming ever more obvious day by day. Already 1. Tile claim presented by the Government of Denmark on only about 4 per cent of our population owns nearly 6-1 per cent account of los es sustained by the owners of the Danish steam­of the wealth of the Nation. What the farmer and the wage- ship Masncdsttnd as a result of collisions between it and the worker is interested in is not so much more jobs for more wage U. S. S. S·iboney and the U. S. Army tug No. 21 at St. Nazaire, toilers, but better prices and better wages to better his own lot. France. In other words, he wants some of this prosperity that is so 2. The claim presented by the Government of Sweden on much talked about and promised by politicians. This can not account of the losses sustained by the owners of the Swedish be done, nor will it be done by a reduction in taxes for the steamship Olivia as a result of a collision between it and the rich who can afford to pay. You will not be giving the wage- U. S. S. Lalce St. Glai.r. worker or the farmer anything by reducing the taxes for the 3. The claim presented by the Government of Norway on ac~ man who is earning $100,000 or a million or more every year. count of the losses sustained by the owners of the Norwegian

WORTHY CAUSES ENTITLED TO OUR SURPLUS PUBLIC FUNDS Steamship John Blnmer as a result Of a COllision between it

Gentlemen, think this over. President Coolidge in his mes­sage to Congress points out that we still have an enormous debt of $20,000,000,000 to pay. He says :

The present interest charg~

Speaking of this debt-

is abont $820,000,000 yearly. It would seem to be obvious that the sooner this debt can be retired the more the taxpayers will save in interest and the easier it will be to secure funds with which to prose­cute needed running expenses, constructions, and improvements. This item of $820,000,000 for interest is a heavy charge on all the people of the country, and it seems to me that we might well consider whether it is not greatly worth while to dispense with It as ea.rly as possible by retiring the principal debt which it is required to serve.

I am firmly in accord with that view, but I fail to see the logic or consistency with this position on the part of the Presi­dent, when in the same breath he advocates the depletion of our Treasury by favoring this tax bill. I ask you, Would it not be wiser, perhaps, to lift this $183 per capita debt now burdening every man, woman, and child in this land by using some of this surplus money obtained from taxes to retire this staggering war debt of $20,000,000,000 as soon as possible, rather than to grant these reductions as provided in this bill to people with enormous incomes, many of whom have accumu­lated their vast fortunes out of the war, and who are best able to pay.

Perhaps it would be better to lay aside a little of these surplus moneys as a sinking fund for the care of the victi}ns of the last great war, or to create a mothers' pension law, to keep her from destitution and despair when fate throws her at the mercy of this cold and heartless system, wherein she must try to provide for herself and innocent babes, who often are the orphans of some man who paid the supreme price to his country, or had given his all upon the altar of the grim reaper of our industrial system-the machine and factory. Perhaps the creation of an old-age pension law, or an insurance plan for the protection of the jobless multitudes, also victims of our present selfish money-making profiteering system of production, which forces man and man to compete in the human market fo1· a job to earn enough to sustain himself and family, should appeal to us as worthy of furtller consideration.

These are but a few humble suggeE.1ions how you can, if you sincerely desire, help the most needy. But I repeat, you will not give them any help by passing this special privilege bill. You will only help the rich, and at the same time "hamstring­ing" our Government, so that if it should be so inclined in the future it would. not have these ready moneys to carry on such work of public service.

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES

A messageJn writing from the President of the United States was presented by 1\lr. Latta, one of his secretaries, who also announced that the President had approved and signed the fol­lowing joint resolution:

H. J. Res. 67. Authorizing payment of salaries of the officers and employees of Congress for December, 1925, on the 19th day of that month.

CLAIMS OF DEN~IARK, SWEDEN, AND NORWAY (S. DOC. NO. 24)

The SPEAKER laid before the House the following message from the President of the United States, whicil was read and, with the accompanying papers, ordered printed and referred to the Committee on Foreign Affairs ;

and a barge in tow of the U. S. Army tug Britannia. 4. The claim presented by the Government of Norway on ac~

count of the losses sustained by the owners of tile Norwegian bark Janna as a result of a collision between-it and the U. S. S. lVestu:ood.

I recollllllend that appropriations be authorized to effect a settlement of these claims in accordance with tile recommenda­tion of the Secretary of State.

CALVIN COOLIDGE. THE WmTE HOUSE, December 1"1, 19Z5.

ADJOURNMENT

Mr. TILSON. Mr. Speaker, I moYe that the House do now adjourn.

'l'he motion was agreed to; accordingly (at 6 o'clock and 2 minutes p. m.) the House adjourned until to-morrow, Friday, December 18, 1925, at 11 o'clock a. m.

EXECUTIVE COMMUNICATIONS Under clause 2 of Rule XXIV, executive communications were

taken from the Speaker's table and referred as follows : 181. A letter from the chief clerk of the Court of Clnims,

transmitting a statement of all judgments rendered by the Court of Claims for the year ended December 5, 1925, the amount thereof, the parties in whose favor rendered, and a brief synopsis of the nature of the claims; to the Committee on Claims.

182. A letter from the Comptroller General, h·ansmitting a report with reference mnde by the War Department to certain leather manufacturers, members of the National Saddlery Man­ufacturers' Association, in reimbursement of increases of wages paid to workmen when the contracts with said manufacturers did not provide therefor ; to the Committee on Expenditures in the War Department.

183. A communication from the President of the United States, transmitting a supplemental estimate of appropriation for the Post Office Department for the fiscal year ending June 30, 1927, pertaining to the Rural Delivery Service, S1,600,000, of which amount not to exceed $350,000 silall be immediately available (H. Doc. No. 138) ; to tile Committee on Appropria­tions and ordered to be printed.

REPORTS OF COMMITTEES ON PUBLIC BILLS AND RESOLUTIONS

Under clause 2 of Rule XIII, Mr. GRAHAM: Committee on the Judiciary. H. Res. 40. A

resolution directing the Secretary of State to transmit to tile House of Representatives information as to which States have acted upon the child labor amendment ; without amendment (Rept. No. 5). Referred to the House Calendar.

Mr. REED of New York: Committee on Education. H. J. Res. 65. For the participation of the Government of the United States in the Philadelphia conference in 1926 upon narcotic education; without amendment (Rept. No. 4). Referred to the Committee of the ·whole House on the state of the Union.

CHANGE OF REFERENCE Under clause 2 of Rule XXII. committees were discharged

from the consideration of the following bills, which were re­ferred as follows :

A bill (H. R. 4887) granting an increase of pen ~ion to Susan 0. Adams; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

i \

1925 CONGRESSIONAL RECORD-HOUSE 1041 A bill (H. R. 4888) granting an incre:!JJe of pension to

Sophronia Burden; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 4889) granting an increase of pension to Matilda J. Eubanks; Committee on Pen ions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 4. 90) granting a pension to Mary A. Hatton; Committee on Pensions discharged, and referred to the Com­mittee on Im·alid Pensions.

'A bill (H. R. 4891) granting an increase of pen ion to Martha M. Henderson ; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 4892) granting an increase of pension to Mary A. Hester ; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 4893) granting an increase of pension to Eliza­beth M. Miller ; Committtee on Pensions discharged, and re­ferred to the Committee on Invalid Pensions. .

A bill (H. R. 481)4) granting an increase of pension to Sarah A. Nelson; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 4895) granting an increase of pension to Per­siller Parmley ; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (II. R. 4896) granting an increase of pension to Eady Elizabeth Ripple ; Committee on Pensions discharged, and re­ferred to the Committee on Invalid Pension .

A bill (H. R. 4897) granting a pension to Elda Leota Ruther­ford ; Committee on Pensions discharged, and referred to the Committee on Invalid Pensions.

A bill (H. R. 48!>8) granting an increase of pension to Mar­garet A. Saunders ; Committee on Pensions discharged, and r eferred to the Committee on Invalid Pensions. •

A bill (H. R. 4899) granting a pension to Martha Smith; Committee on Pensions discharged, and referred to the Com­mittee on Invalid Pensions.

PUBLIC BILLS AND RESOLUTIONS Under clau e 3 of Rule X.."'{II, public bills and resolutions

were introduced and severally referred as follows: By Mr. BLOOM: A bilr (H. R. 5808) to provide for the con­

struction of a new building for the Patent Office, and for other pm·poses; to the Committee on Public Buildings and Grounds.

By Mr. McDUFFIE: A bill (H. R. 5809) to establish a fish­cultural station in the State of Alabama; to the Committee on the Merchant l\!arine and Fisheries.

By Mr. MILLER : A bill (H. R. 5810) granting a certain right of way, with authority to improve the same by the con­struction, maintenance, and operation of a toll bridge and approaches thereto across Lake Washington from a point on the west shore in the city of Seattle, county of King, State of Washington, easterly to a point on the west shore of Mercer Island, in the same county and State ; to the Committee on Interstate and Foreign Commerce.

By 1\fr. CRAMTON : A bill (H. R. 5811) to prevent fraud, deception, or improper practice in connection with business before the United States Patent Office, and for other purposes; to the Committee on Patents.

By Mr. RATHBONE : A hill (H. R. 5812) for the purchase of a site for a Federal building at Roodhouse, Ill. ; to the Com­mittee on Public Buildings and Grounds.

By Mr. CitOWTHER: A bill (H. R. 5813) to increase the cost of con truction of the Federal building at Fort Plain, N. Y.; to the Committee on Public Building and Grounds.

Also, a bill (II. R. 5814) to enlarge and extend the post-office building at Amsterdam, N. Y.; to the Committee on Public Buildings and Grounds.

Also, a bill (II. It. 5815) to enlarge and extend the post­office building at Schenectady, N. Y.; to the Committee on Public Building. and Grounds.

By l\Ir. WURZB.d..CH: A bill (H. R. u816) to refund moneys paid by States to the Federal Government for importation of quail used for propagation pm·poses ; to the Committee on Ways and l\Ieans.

By l\Ir. FUL~IER: A bill (H. R. 5817) to increase the per diem pay of juror in all courts of the United States; to the Committee on the Judiciary.

By Mr. EVANS: A bill (H. It. 5818) to prohibit the printing and sale of envelopes by the Post Office Department; to the Committee on the Post Office and Post Roads.

By Mr. IRWIN: A bill (H. R. 581!>) to authorize the Secre­tary of tlle Trea~·ury to acquire such additional land in the city of Belleville, Ill., as may be necessary for the extension

LXVII--GO

and remodeling of the post-office building of said city, to cau ·e said building to be extended and remodeled, and authorizing an appropriation therefor; to the Committee on Public Buildings and Grounds.

By l\fr. DOYLE: A bill (II. R. 5820) to admit wives of Amer· ican citizens to the United States without reference to date of marriage, condition of quota, or any other provision of the Im­migration laws; to the Committee on Immigration and Natural­ization.

By Mr. "WOODRUM : A bill (H. R. 5821) to authorize the Secretary of the Treasury to acquire, by condemnation or other­':i e, such land in the town of Blacksburg, .Montgomery County, "\a., as may be necessary for tlle location of a post-office build­ing in the said city, and also to construct a suitl:lble building thereon, and making an appropriation therefor; to the Com­mittee on Public Buildings· and Grounds.

Al o, a bill (H. R. 5822) to authorize the Secretary of the Treasury to acquire, by condemnation or otherwise s{1Ch land in the city of Radford, Ya., as may be necessary f~r the loca­tion of a post-office building in the said city, and also to con­struct a suitable building thereon, and making an appropriation therefor; to the Committee on Public Buildings and Grounds.

By :Mr. LINEBERGER: A bill (H. R. 5 23) to amend the Code of Laws for the District of Columbia. in relation to the qualifications of jurors; to the Committee on the District of Columbia.

By l\Ir. CROWTHER: A bill (H. R. 5824) to enlarge and extend the post-office building at Glo"rersville, N. Y.; to the Committee on Public Buildings and Grounds.

By Mr. WOODRG"M: A bill (H. R. 5825) for the construction of a. public building at Roanoke, Va.; to the Committee on Public Buildings and Grounds.

By Mr. LEAVITT: A bill (H. R. 58~6) for the erection of a public building at Glendive, Mont., and appropriating money therefor ; to the Committee on Public Buildings and Ground .

Also, a bill (H. R. 5827) for the erection of a public buildlng at Havre, Mont., and appropriating money therefor; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5828) for the erection of a public building at Lewi. town, Mont., and appropriating money therefor; to the Committee on Public Buildings and Grounds . .

By Mr. ELLIS: A bill (H. R. 5829) to provide for the pur­chase of a site and for the erection of a public building thereon at Lees Summit, State of Missouri; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5830) to provide for the purchase of a site for the erection and equipment of a suitable public building at or near the Union Railway Station at Kansas City, Mo., for a terminal post office, parcel post, and other Government serv­ices; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5831) to authorize and direct enlarge­ments and rearrangemeBts and renovation of the post office and courthouse building at Kansas City, Mo. ; to the Committee on Public Buildings and Grounds.

By l\lr. GARBER: A bill (H. R. 5832) providing for the purchase of a site ann the erection of a public building at Blackwell, Okla. ; to the Committee on Public Buildings and Grounds. -

By 1\fr. JOHNSON of South Dakota: A bill (H. R. 5833) for the promotion of certain officers of the United States Army now on the retired list ; to the Committee on Military Affairs.

By Mr. DYER: A bill (H. R. 5834) to amend the national motor vehicle theft act; to the Committee on the Judiciary.

By Mr. LINEBERGER: A bill (H. R. 5835) to prohibit the printing and sale of enYelopes by the Post Office Department, or by any other department or agency of the Government, for the purpose of sale for the Post Office Department; to the Committee on the Post Office and Post Roads.

By .Mr. JARRETT: A bill (H. R. 5836) to amend the organic act of the Territory of Hawaii by adding thereto a new sec­tion to be known as section 108 ; to tlle Committee on the Ter­ritories.

By Mr. DAVILA: A bill (H. R. 5837) to extend to Porto Rico the benefits of the act entitled "An act for the promo­tion of the welfare and hygiene of maternity and infancy, and for other purposes," approved November 23, 1921; to the Com­mittee on Interstate and Foreign Commerce.

Also, a bill (H. R. 5838) exempting from the provisions of the immigration act of 1924 the Spanish citizens who were residents of Porto Rico at the time of the American occupa­tion; to the Committee on Immigration and Natm·alization.

By Mr. STOBBS: A bill (B. R. 5839) to provide for the purchase of a site and the erection of a public building at

1042 CONGRESSIONAL RECORD-_ HOUSE DECEJHBER 1 7

Worcester, :llass.; to the Committee on Public Buildings and Grounds. · By l\1r. SPEAKS: A bill (H. R. 5840) to equalize the pay of retired officers of the Army, Navy, l\Iarine Corps, Coast Guard, Coa ·t and Geodetic Survey, and Public Health Service; to the Committee on Military Affairs.

By .:\Ir. PEllKL.'S: A bill (H. R. 5841) to amend and con­solidate the arts respecting copyright and to permit the United States to enter the International Copyright Union; to the Committee on Patents.

By ~Ir. XELSON of Missouri: A bill (H. R. 5842) to pro­vide for the purchase of a site for a post-office building at Eldon, Mo. ; to the Committee on Public Buildings and Grounds.

.Also, a bill (H. R. 5843) for the erection or enlargement of a Federal building at Columbia, Mo. ; to the Committee on Public Buildings anu Grounds.

By Mr. NELSON of Maine: A bill (H. R. 5844) to provide for the purcha e of a site and the erection of a public build­ing thereon at Buck port, l\:le. ; to the Committee on Public B\lildings and Grounds.

Also, a bill (H. R. 5845) to provide for the purchase of a site and the erection of a public building thereon at Lubec, Me. ; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5846) to provide for the purchase of a site and the erection of a public building thereon at Blue Hill, Me. ; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5847) to provide for the erection of a post-office building at Hallowell, Me. ; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5848) to provide for the purchase of a site and the erection of a public building thereon at Pittsfield, Me. ; to the Committee on Public Buildings and Grounds.

By Mr. WILLIAMSON: A bill (H. R. 5849) to authorize the acquisition of a site and the erection thereon of a Federal building at Hot Springs, S. Dak.; to the Committee on Public Buildings and Grounds.

Also, a bill (H. R. 5850) authorizing an appropriation for the payment of certain claims due certain members of the Sioux Nation of Indians for damages occasioned by the de­struction of their horses ; to the Committee on Indian Affairs.

By Mr. BERGER: Joint resolution (H. J. Res. 84) direct­ing the President of the United States to recognize the pres­ent Government of Russia ; to the Committee on Foreign Affairs. .

By 1\Ir. LUCEJ: Joint resolution (H. J. Res. 85) to amend an act entitled "An act to create a Library of Congress trust fund board, and for other purposes," approved March 3, 1925: to the Committee on the Library.

By Mr. CRAMTON: Joint resolution (H. J. Res. 86) for the relief of George Horton ; to the Committee on Claims.

By Mr. WURZBACH: Joint re olution (H. J. Res. 87) ex­tending the time during which certain domestic cattle which have crossed the boundary line into foreign countries may be returned duty free; to the Committee on Ways and Means.

By Mr. BLACK of New York: Resolution (H. Res. 54) re­questing the President of the United States to call a conference of attorneys general and other officials of the various States for the purpose of suggesting changes in Federal I a ws, and for other purposes ; to the Committee on the Judiciary.

By Mr. KI~TDRED: Re"olution (H. Res. 55) directing the Federal Trade Commission to investigate the production, dis­tribution, and sale of flour, bread, etc., and the control of the baking and milling industries ; to the Committee on Interstate and Foreign Commerce.

PRIVATE BILLS ~'TI RESOLUTIONS

Under clau e 1 of Rule XXII, private bills and resolutions were introduced and severally referred as follows:

By Mr. ADKINS: A bill (H. R. 5851) granting an increase of pension to Adatlne Addis ; to the Committee on Invalid Pensions.

By Mr. BEGG: A bill (H. R. 5852) granting an increase of pension to Elizabeth Boetticher ; to the Committee on Pensions.

Also, a bill (H. R. 5853) granting an increase of pension to Catherine S. Hood; to the Committee on Invalid Pensions.

Also, a bill (H. R. 5854) for the relief of Charles G. Bartlett; to the Committee on Claims.

By 1\!r. BELL: A bill (H. R. 5855) for the relief of N. H. Strickland; to the Committee on Claims.

By :Mr. BRAND of Ohio: A bill (H. R. 5856) for the relief of Maj. Thoma J. Berry; to the Committee on Claims.

AI o, a bill (H. R. 5857) for the relief of Dr . .A. S. Bech."With; to the Committee on Claims. _

/

By Mr. BUTLER: A bill (H. R. G858) for the relief of Charles Ritzel; to the Committee on Naval Affairs.

By Mr. CAUTER of California: A bill (H. R. 5859) to au­thorize a p-reliminary examination and survey of the harbor of the city of Alameda, State of California ; to the Committee on Rivers and Harbors.

Also, a bill (H. R. 5860) granting an increa e of pension to John E. Markley ; to the Committee on Invalid Pen ions.

By Mr. CROWTHER: A bill (H. R. 5861) for the relief of John Dzikowicz ; to the Committee on Claims. ·

By Mr. DRA~TE: A bill (H. R. 5862) granting a pension to Mary Pratt; to the Committee on Invalid Pen ion .

By Mr. GOR)lAN: A bill (H. R. 5863) appointing Charles H. Slack to the grade of chief engineer on the retired li t · to the Committee on Naval Affairs. '

Also, a bill (H. R. 5864) for the relief of Archibald L. Mac­nair ; to the Committee on Claims.

AI o, a bill (H. R. 5865) granting an increa e of pension to Sarah E. Pegram ; to the Committee on Invalid Pen. ion .

By Mr. GRAHAM: A bill (H. R. 5866) for the relief of the Lehigh Coal & Navigation Co.; to the Committee on the Judici· ary.

By l\Ir. GREENWOOD: A bill (H. R. 5867) granting an in­crease of pension to Myrtle C. Harrison ; to the Committee on Pensions.

Also, a bill (H. R. 5868) granting an increase of pension to Charles Treece; to the Committee on Pensions.

By Mr. HAUGEN: A bill (II. R. 5869) granting a pension to Maggie A. Farrill; to the Committee on Invalid Pensions.

By Mr. HAWES: A bill (H. R. 5870) granting an increa e of pension to Mary A. Cochrane, and for other purposes ; to the Committee on Invalid Pensions.

By Mr. IACOBSTEIN: A bill (H. R. 5871) granting an in­crease of pension to Mary J. Runyan; to the Committee on Invalid Pensions.

Also, a bill (II. R. 5872) granting an increase of pension to 1\Iary A. Helm ; to the Committee on Invalid Pensions.

Also, a bill (H. R. 5873) granting an increa e of pension to Tonia Mock; to the Committee on Invalid Pen ions.

AL"lo, a bill (II. R. 587 4) granting a pension to Frances C. Davie; to the Committee on Pensions.

Also, a bill (H. R. 5875) granting an increase of pension to Margaret O'Leary; to the Committee on Invalid Pension .

Also, a bill (H. R. 5876) granting an increase of pen. ion to Josephine C. Jones; to the Committee on Invalid Pensions.

Also, a bill (H. R. 5877-) granting an increase of pemdon to Ida M. Wheeler ; to the Committee on Invalid Pen ions.

Also, a bill {H. R. 5878) for the relief of Maurice E. Kinsey, of the town of Rush, Monroe County, N. Y.; to the Committee on Claims.

By l\Ir. JOHNSON of Indiana: A bill (H. R. 5879) granting pension to Elizabeth Lawler; to the Committee on Invalid Pensions.

Also, a bill (H. R. 5880) granting an increase of pen ion to Elizabeth Fuqua ; to the Committee on Invalid Pensions_

By Mr. LI~TEBERGER: A bill (H. R. 5 ~1) to correct the na.val record of Robert F. Rife; to the Committee on Naval Affairs.

By Mr. l\Icl\IILLAN: A bill (H. R. 5882) for the relief of Lieut S. Jacobs, United States Navy; to the Committee on Claims. -

By l\Ir. MAJOR: A bill (H. R. 5883) for the relief of John M. King ; to the Committee on Military Affairs.

Also, a bill (H. R. 58 4) for the relief of Joseph L. Morgan ; to the Committee on Military Affairs.

By Mr. 1\lt\1\'LOVID: A bill (H. R. 5885) granting an increase of pen ion to Martha E. Lowery ; to the Committee on Invalicl Pensions. .

Also, a bill (H. R. 5886) granting an increase of pension to Amelia Miller ; to the Committee on Invalid Pen ion ..

Also, a bill (H. R. 5887) granting a pension to Mary L. Speer; to the Committee on Invalid Pension .

Also, a bill (H. R. 5888) granting a pen ion to Margaret .A .. Parks; to the Committee on Invalid Pensions.

Also, a bill (H. R. 5889) ~p:anting an increase of pen ·ion to William S. McGaha ; to the Committee on Pension .

Also, a bill (H. R. 5890) granting an increase of pension to I. J. Howard; to the Committee on Pension .

Also, a bill (H. R. 5891) granting a pension to Mary P. Mclntil·e; to the Committee on Pensions.

Also, a bill (H. R. 5892) granting an increase of pension to Emma McGowen; to the Committee on Pensions.

Also, a bill (H. R. 5893) granting an increase of pension to Samuel F. Brown; to the Committee on Pensions.

1925 \ CONGRESSIONA_L RECORD-SENATE 1043

Also, a bill (H. n. 58!}±) granting an increase of pension to Jane C. Stiunett; to the Committee on Pensions.

By Mr. MEAD: A bill (H. R. 5895) granting a pension to .Amanda •r. ]fuller; to the Committee on Invalid Pensions.

ll)~ ).lr. MERH.l'rT: A hill (ll. R. 5896) granting an inrrea:e of pension to Charlictta A. Bloxsom; to the Committee on In­valid Pension ·.

By ::\1r. ::\IOO lEY: A l>ill (H. R. 5 97) granting an increa::.~e of pt-u~iou to 'l'homas H. Flynn ; to the Committee on Pension .

By ~lr. ~100RE of Kentn<:ky: A bill (H. R. 5898) granting au iucrea::;e of pen ion to Henry P. Logsdon; to the Committee ou Pen. ions.

AI o, a bill (H. R. 5899) granting an increase of pension to Minerva J. Ca~Hady; to the Committee on Invalid Pensions.

By ~Ir. MORGAN: A bill (H. R. 5900) granting a pension to C<ltherine A.. Stevens ; to the Committee on Invalid Pen~ion:.

.Al~o. a l.Jill (IT. R. 5001) granting au increase of pension to :Mary S. Rine-; to the Committee on I.nvalid Pensions.

Al:-o, a bBl (II. R. 5!)02) granting an increase of pension to Ella Wright; to the Committee on Pension~.

AlRO, a bill ( ll. R. 5!)01) granting an increase Of pemdon to John Casey; to the Committee 011 Pe.n. ions.

Also, a bill (H. R. 5004) granting an increar-:e of pension to Cordelia A. Wil on ; to the Committee on Invalid PPnsions .

.Al 'O, a bill (H. R. 5905) granting an increase of pem:ion to Emma A. Larue ; to the Oommittee on Im·alld Pensions.

By Mr. P.ARK,': A bill (H. R. 5906) granting a peuF:ion to John Jackson; to the Committee on Invalid Pensions.

By 1\fr. PARKF1R: A bill (H. R. 5907) granting an increa:e of pen ion to Ito etta Connelly; to the Committee on Invalid Pen ions.

By 1\Ir. PURNELL: .A bill (II. R. 5908) granting an increa e of pension to \on a Dickerson ; to the Committee on Pensions.

Al ·o, a bill (ll. R. 5909) granting an increase of pension to :Margaret Haas ; to the Committee on Invalid Pensions.

By l\Ir. REECE: A bill (H. n. 5910) granting an increase of pen.'i0n to 1-Jlimina C. Stanley; to the Committee on Invalid Pensions.

.Also, a bill (II. R. 5911) granting an increase of pension to Charles E. Hilliard; to the Committee on Pemdons.

By Mr. ROBSION of Kentucky: A bill (H. R. u912) granting a pension to Pearl Elizabeth Worley; to the Committee on Pen ions.

..\.h;o, a bill (H. R. 5913) granting an increa e of pension to William R. Neal; to the Committee on Pensions.

By Mr. ROUSE: A bill (H. R. 5914) granting an increu. e of p 11:-;ion to Jane Robinson; to the Committee on Invalid Pen­sion . .

By Mr. SMITH: A bill (II. R. 5!l15) granting an increa e of pensi.on to Sarah E. ZeDWler; to the Committee on I11valid l>enswns.

.Al o, a bill (H. R. 591G) granting an increase of pension to Mary M. Sams; to the Committ~e on Invalid Pensions.

.Also, a bill (H. R. 5917) to reimburse certain fire-insurance compa11ies the amounts paid by them for property destroyed b,v fire in suppl·e -·sing bubonic plague in the Territory of Hawaii in the years 1899 and 1900 ; to the Committee on Claims.

By 1\lr. SNELL: A bill (H. R. 5918) granting a pension to Amanda A.• Clar.v ; to the Committee on Invalid Pensions.

.Al::~o, a Lill (II. R. 5919) granting a pension to Sarah A. 1\oxon; to the Committee on Invalid Pensions.

By l\lr. STALKER: A bill (H. n. 5920) granting an increase of pen ion to l\Iary E. Stowell ; to the Committee on ren.:ions.

By Mr. STllO'l1HER: A bill (H. R. 5921) for the refund of money erroneou ly collected from Thomas Gdffith, of Peach Creek, 'Y. V a. ; to the Committee on Claims.

By Mr. STUOKG of Pennsylvania: A bill (H. R. 5V22) for the relief of l\lartha D. l\IcCune; to the Committee on 1\lili­ta ry Affairs.

By Mr. TIIURSTOX: A bill (H. R. 59.23) ~anting a peu­·ion to Henry Webb; to the Committee on Pensions.

Al ·o, a bill (H. R. 5924) granting an increase of pension to l\ltutha J. Syferd; to the Committee on Invalid Pensions.

By Mr. TINCIIER: A hill (H. R. 5925) granting a pension to Sarah E. Powell; to the Committee on Invalid Pen. ions.

By Mr. TINKIIA.M: A bill (H. R. 5926) for the relief of Martin J. Duggan ; to the Committee on Claims.

Al o, a bill (H. n. u927) for the relief o~ Annie Cragg ; to the Committee on Claims. • ·

.Also, a bill (H. R. 5!)2 ) for the relief of Miriam E. Ben-jamin: to the Committee on Claims. 1

By l\lr. TRRAD,Y....\Y: A bill (H. R. 5929) granting an in­crease of pension to Hep~e;y A. Wheelock ; to the Committee on Invalid Pension::J.

By Mr. VARE: A bill (H. R. 5930) for the relief of William J. Donalu~on; to the Committee on Claims.

By Mr. WHITE of Kansas: A bill (H. R. 5931) granting an increase of pension to Julia l\1. Go1·don; to the Committee on Invalid Pen ions.

Also, a bill (II. R. 5932) granting an increa. e of pension to Sarah S. Yaugh:m; to the Committee on Pension ..

By Mr. WILLlA.:llSON: A bill (H. H. u933) granting an in­crea e of pension to Mary )1. Payne ; to the Committee on In, valid Pension .

By l\1r. WOODYARD: A bill (II. R. 5934) granting a pen ion to :Mary Cline; to the Committee on Invalid Pen!':lion .

Also, a bill (II. R. 5935) granting an increase of pension to Lucy A. Smith; to the C0mmittee on Invalid Pensions.

By Mr. 'VYAr~'I : A bill {H. R. 5036) granting an increa~e of pen ion to Elizabeth Clark; to the Committee on In\alicl Pension .

Also, a bill (H. R. u937) granting a pension to Christ Cribbs ; to the Committee on InYalid Pensions.

Also, a bill (ll. R. 5938) granting an increase of pension to Annie Elizabeth Brinker; to the Committee on Invalid Pen­sion:;.

PE'£ITIO::\"S, ETO. Under clanse 1 of Rule XXII, r1etition:-; and papers were laid

on the Clerk's de k and referred as follows: 17G. By Mr. BA.l{BOUR: Re. olntion of Madera County

(Calif.) Cham! er of Commerce, urging continuance of Federal aid to highways; to the Committee on Appropriations.

177. Also, resolution of Stanislau County (Calif.) Develop­ment Board, favoring continuation of Federal~aid appropria­tions for highways; to the Committee on Apprpriations.

178. By :Mr. FULLER: Petition of l!,, M. Lam~r"on and sundry citizens of DeKalb County, Ill .. favoring repeal or re­duction of the' tax on indu._trial alcohol ; to the Committee on ·ways and :Mea:ns.

179. By ::\Jr. KINDRED: Petition of the Kew York State Pharmaceutical Association, favoring committee bill reducing tax on medicinal alcohol; to the Committee on Ways and M~~ .

180. Also, resolution adopted by large gathering of repre­sentati\es of Methodist Episcopal Church, Buffalo area, Syra­cuse, rT. Y., fa-.;roring the ·world Court; to the Committee on Foreign Affairs. ·

181. Also, petition of E. R. Squibbs & Son, of Brooklyn, N. Y., to the Congress of the Vnited States ·to defeat anv bills w-hlch contemplate tax changes on alcohol; to the Committee on Ways and ~Ieans.

182. By Mr. SWARTZ: Evidr-nce in . upport of pen:ion claim of :Mrs. Sarah A. Heilig (H. R. 3-157) ; to the Committee on In· yalid Pt>nslons.

183. By l\lr. WY.AXT: Papers in support of House bill 4731 granting an increase of pension to Hester A. Brier ; to the Committee on Invalid Pensions .

184: . .Also, papers in support of Hon:e bill 5557, granting an increa~e of pension to Henrietta R. Bill ; to tile Committee on InYalicl Pen~ions.

18!3. By :\Ir. YATES: Petition of the Anti. ·aloon League of America, concerning proposed tax on smuggled liquors, and advocating same; to the Committee on Way· and Means .

186. Also, petition of International Union of Steam and OperatinO' Engineers, 2715 East Seventy-sixth Place, Chicago, Ill., praying for inyestigation of the Bread Tru t, and to fix: prices; to the Committee on Interstate and l'oreign Commerce.

'SENATE Frun.AY, Decernber 18 19~5

The Chaplain, Rev. J. J. Muir, D. D., offered the following prayer:

Our Father, the author of our being and from whom all ble sings flow, we want to recognize this moming in thi1 brightness of the day our dependence upon Thee more and more. May we get away from the selfishne:s that prompt~ us to be our own interpreters of life and of duty, and so help us that in dependence upon Thy w-isdom we mny fulfill the highest purposes to the glory of Thy great 11ame. For Jesus' sake.. Amen .

The Chief Clerk vroceeded to read the Jourual of ye~ter­day's proceedings. 'Yhen, on reque<:t of Mr. Cunns and by unanimous con ent, the further reading was cli>:3pensed with and the Journal was approved .

•