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1934 CONGRESSIONAL. RECORD-HOUSE 2591 William Ransom Shaw. McDermott. Mark B. Strahl. Malta. Robert L. Hagerty, Mingo Junction. William E. Farmer. Piketon. Charles A. Ferren, St. Clairsville. Theodore A. Lauber, Sandusky. Paul M. Keyser, Shadyside. George. V. Wise, Shreve. John E. Kassell, South Zanesville. Arnold M. Speir, State Soldiers Home. James Connor, Toronto. Harry R. Schoner, Uniontown. Charles A. Trinter, Vermilion. William I. Dague, Wadsworth. Robert E. Jennings, West Milton. Henry C. Stapf. Willard.

OREGON Ruby 0. Roberts, Ione.

TENNESSEJ: James D. Clemmer, Benton.

·Alexander L. Allison, Dover. Etoile Johnson, Doyle. Roscoe T. Carroll, Estill Springs. Hugh C. McKellar, Memphis. David H. Ensley, Old Hickory. Joseph H. Sevier. Savannah. Nell E. Coleman, Smyrna. James H. Davenport. Soddy. James R. Hennessee, Sparta.

TEXAS Willie N. Cargill, Eddy. Charles R. Conley, Iredell. Clyde T. McWilliams, Malakoff. Theodore M. Hening, San Angelo.

WASHINGTON

Adrian C. Gehres. Connell. Oscar W. Behrmann. Fairfield. Gerald H. McFaul, Ione. George P. Fishburne, Tacoma. Edward Johnson, Twisp. Grover C. Houtchens. Waitsburg.

HOUSE OF REPRESENTATIVES THURSDAY, FEBRUARY 15, 1934

The House met at 12 o'clock noon. The Chaplain, Rev. James Shera Montgomery, D.D.,

offered the following prayer:

"God is love." It is in the inspiration of this deathless truth that all strength and virtue lie. In the moments of perplexity it is the merciful grasp of our Heavenly Father that holds and sends sunshine through the cloud. When we search after the Infinite One, we get fresh reason to believe that Thou dost hear all who struggle and aspire to the uplands of the soul. Adversity-when it comes-may it not be allowed to whiten our lips or chill our hearts. Blessed Lord, lead us to the Rock that is higher than I. Sweeten our spirits and permit nothing to contend with our peace of mind. O may we recall the height and the rapture and the passion of other days and cling to Thee. Thine arm is not shortened nor Thine ear stopped. With strength and hope and joy, in the power and pride of life, with work to do for men and praise to win for Thee, may we continue in life's joyous and daily path. Amen.

The Journal of the proceedings of yesterday was read and approved.

OLD-AGE PENSIONS

Mr. BANKHEAD. Mr. Speaker. I call up a privileged resolution from the Committee on Rules and ask unanimous consent that the reading of the preamble be dispensed with.

The SPEAKER. Is there objection to the request of the gentleman from Alabama?

There was no objection.

· The Clerk read as follows: House Resolution 249

Resolved, That the standing Committee on Labor be, and the same is hereby, authorized and directed-

(a) To study and investigate-!. The operation and extent of old age assistance systems now

1n operation in the various States; 2. The establishment of a system of old age contributory pen

sions for persons 65 years of age and over under the jurisdiction of the Federal Government or of any agency thereof, and the constitutional questions involved therein;

3. The actuarial problems involved in the inauguration of a contributory old age pension system;

4. The amount of contributions and the cost required for a contributory system for the payment of pensions, beginning at 65 and at 70 years of age at amounts ranging from $25 to $50 monthly: and

5. The desirabll1ty of contributions exclustvely from employers and employees or also from the Federal Government.

'(b) To sit and act in the District of Columbia or elsewhere in the United States, whether or not the House is sitting, has recessed, or has adjourned, . to hold such hearings, to consult or employ such experts, actuaries, and such clerical, stenographic, and other assistants, to request by subpena or otherwise the attendance of such witnesses. and the production of such books, papers, and documents, to ad.minister such oath, to take such testimony, to secure such data and any and all other information, to have such printing and binding done, as it deems necessary; an oath or amrm.ation may be administered by any member of the committee.

(c) To require the services of such employees of the House of Representatives, as are available, and of the Federal Government as it may deem necessary and as the department or independent agency is able to dispense with.

(d) To report before the adjournment of this session of Congress if possible, and if that should not be possible, then to file its report not later than-January 3, 1935, before noon, and to recommend legislation establishing an old age contributory pension system under the jurisdiction of the Federal Government, if the committee deems sueh legislation appropriate.

With the following committee amendments: Page 3, lines 10 and 11, strike out the words "or elsewhere 1n

the United States." · Page 3, lines 13 and 14, strike out the words "or employ such

experts, actuaries, and such clerical, stenographic, and other assistants " and insert in lieu thereof the following: " such experts and actuaries."

Mr. BANKHEAD. Mr. Speaker, it is not my purpose to take up any time in the consideration of this resolution. Many Members may not have it before them in printed form.

It is called up by agreement with the minority members of the Rules Committee in order that we may dispose of it.

Some time ago the gentleman from Pennsylvania [Mr. ELLENBOGEN] , who drew the original resolution, requested, and that resolution set up, a special select committee for the investigation of the old-age pension question. It was thought desirable not to grant that request because, among other reasons, it would entail possible expenditure of considerable sums of money. By consultation with the chairman of the Committee on Labor, which committee was pursuing a similar inquiry, it was agreed that the modified form of resolution would be prepared as amended, which strikes out all provisions for any junketing trips. The committee itself will hold these bearings. The resolution provides for no expense. It merely provides that the Committee on Labor shall hold the hearings.

This resolution is presented with the entire consent of the committee that the Committee on Labor shall be directed and requested to investigate not only the system of direct Federal aid but also the so-called " contributory system."

Mr. BLANTON. Mr. Speaker, will the gentleman yield? Mr. BANKHEAD. I yield. Mr. BLANTON. The gentleman says it will cause no ex

pense. Even after being amended the resolution provides that the Committee on Labor has authority, carte blancbe authority without any restriction whatever, to employ such experts and actuaries as it may see fit.

Mr. ELLENBOGEN. Mr. Speaker, if the gentleman will yield, the language of the resolution is " consult ", not" employ." The word "employ" has been stricken out.

Mr. BLANTON. Just a minute. Mr. Speaker, the resolution as amended by the Committee on Rules provides that

2592 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 the committee " may hold such hearings and consult such tributary basis. I would off er an amendment to strike out experts and actuaries'', and so forth. the words "on a contributory basis", because according to

Whenever you consult an expert or an actuary to help the heading of the resolution this would direct the coma committee of Congress you have to pay for the consulta- mittee to report and prepare legislation only on a contribution of the experts and the actuaries, for such gentlemen tory basis. do not serve this Government free. This has been my ex- Mr. COCHRAN of Missouri. Will the gentleman yield? perience in checking up the business of this Government for Mr. BANKHEAD. I yield to the gentleman from Missouri. many years; and I have checked it up for 50 years back, Mr. COCHRAN of Missouri. I think this is one of the long before I ever came to Congress. most meritorious resolutions providing for an investigation

Mr. BANKHEAD. I think I can satisfy the gentleman that has ever been brought in here. This is a matter that if he will let me speak for a moment. the entire country is interested in at this time, and we are

Mr. BLANTON. Certainly. I wanted to call attention to going to have to face this ·question sooner or later. I do this language. not think the Chairman of the Committee on Labor should

Mr. BANKHEAD. I do not agree at all with the con- tie himself down and say he is not going to need any money struction placed upon this resolution by the gentleman from in order to make a thorough investigation of this subject. Texas. I specifically stated that it was the purpose, and in The committee is supposed to investigate various systems my opinion the letter, of this resolution to entail no expense. now existing in the States and he is supposed to bring wit-

! see the Chairman of the Committee on Accounts now on nesses here. That will cost money and it will be well spent. the floor of the House. I state in his presence that if he How is he going to get them to come here at their own is presented with a bill for one dollar of expense in connec- expense? tion with this resolution, we hope he will not pay it. Mr. CONNERY. They have always come at their own

Mr. BLANTON. There will not be any cost to this expense to any hearings we have had. We have been able investigation? to get them here very readily.

Mr. BANKHEAD. Absolutely none. Mr. COCHRAN of Missouri. I am glad to hear that, but Mr. BLANTON. If that is the case, I have no objection, I as a member of the Committee on Accounts, I am willing

except this-I wa~t to ~all my friend's att~ntio1:1 to this ?ne I to support a resolution granting the gentleman's committee other matter: ThlS subJect of old-age pensions is something some money in order to make a real investigation. This is that applies to the whole United States; it applies to Ala- a question of outstanding importance to millions of our bama, to Texas, and to Washington, D.C. Now, if this in- citizens and we must meet it in the near future. vestigation is going to cover the whole United States, and Mr. CONNERY. The members of the Committee on Labor such legislation that may follow will apply to the whole feel they can get every fact necessary in connection with United States, I hope it will be understood and agreed here the subject of old-age pensions without spending any money that there will not be brought on this floor during this except for a stenographer to take down the hearings. session of Congress the bill that has been reported out of Mr. p ARKS. Will the gentleman yield? the District Committee to provide right now an old-age pen- Mr. BANKHEAD. I yield to the gentleman from sion just for the District of Columbia. This is a question Arkansas. that is coextensive with the limits of the United States, Mr. PARKS. Is it the purpose of the Committee on Labor Whenever an old-age pension is granted by the Government to bring in legislation that will take in the entire United of the United States for any. part of the United ~tates, States in connection with the subject of old-age pensions, as it ought to cover all the Umted States, and not Just a well as the District of Columbia? little part of it. Mr. BANKHEAD. I have nothing to say about that. I

Mr. BANKHEAD. Of co~se, as the gentleman from know nothing about the question, and I have no opinion Texas well kno~s, the Committ.ee ?n Rules has -?0 control about the matter. This is merely authorizing the committee over the Comrmttee on the District of Columbia or any to make an investigation. other. co.mmittee of .the House. . . . . . Mr. CONNERY. We are having some hearings now. A

This . is ~ very sim.ple proposition. I thin~ it has been bill was introduced in the last session requiring a contribufully exp~amed. It is agreeable to all parties co?cerned tion by the States having an old-age pension law. I do not and .enta1~s n? expense wh~tever. It. merely. provid~s for know what the committee will report. We expect them to the investigation of a question that is very mterestmg to report something. all the Members of the House. M NB w·11 h tl · 1 ?

Mr. CONNERY. Will the gentleman yield? r. ELLE OGEN. . 1 t e gen eman yie d. Mr. BANKHEAD. I yield to the gentleman from Massa- Mr .. BANKHEAD. 1 yield to th: gentleman from Penn-

h tt sylvama, the author of the resolution. c ~ ~ONNERY. Mayr say to the gentleman from Ala- Mr. ELL~~OG~N. '!he purpose of the introduction of bama and to the gentleman from Texas that the only the resolution is this: Smee 1907-. -expense that will be necessary in connection with this reso- Mr. BA-T·~K~EAD. Not the merits. Just state the purpose lution will be the stenographer who takes the hearings, of the resolution. which we expect to start on Tuesday next. Mr. ELLENBOGEN. Just one statement. Since 1907

Mr. COCHRAN of Missouri. Will the gentleman yield? Congress has had before it bills dealing with old-age pen-Mr. BANKHEAD. I yield to the gentleman from Missouri. sions, but in these bills it was contemplated that the expendiMr. COCHRAN of Missouri. I do not think the gentle- tures necessary for the pensions would be made out of the

man from Massachusetts [Mr. CONNERY] understands the Public Treasury. This resolution, however, contemplates the situation and I think he is making a mistake. establishment of a system by which contributions will be

Mr. CONNERY. That is our intention. The gentleman made by the employers and the employees. knows that certain charges have been made in reference Mr. O'CONNOR. Will the gentleman yield? to racketeering in connection with old-age pensions. We Mr. ELLENBOGEN. In a moment. intend to give all the publicity we can to this matter and Mr. O'CONNOR. The gentleman is telling us about a bill. break up racketeering in old-age pensions as we did in con- This is an investigation of every feature of the subject and nection with veterans' legislation some years ago. is not confined to a contributory system or any one type

Mr. BLANTON. Then the gentlemap will be doing a of system. great service to the country, such as he always performs Mr. ELLENBOGEN. Including the contributory system. here. Mr. O'CONNOR. Yes. This includes the contributory , Mr. CONNERY. There is one thing I noticed in the reso- system. · My suggestion is that the gentleman should not lution. It directs the standing Committee on Labor to make pursue his particular pet subject and go into the merits of a study and to prepare legislation for the establishment the resolution at this time. of ai uniform national old-age pension system on a con- Mr. SNELL. Will the gentleman yield?

1934 CONGRESSIONAL RECORD-HOUSE 2593 Mr. BANKHEAD. I yield to the gentleman from New

York. Mr. SNELL. I supp.ose the gentleman intends to cut out

aiI the whereases? Mr. BANKHEAD. Yes. I will ask that they be omitted. Mr. SNELL. And the gentleman is going to make a

motion to cut them out? Mr. BANKHEAD. I will. Mr. SNELL. As far as I am concerned, I have no objec

tion to an investigation of the subject. I think this is an important subject and should be investigated. However, I believe that the Committee on Labor at the present time has all the power they can get under this resolution and all they need, but I have no objection to passing this resolution.

Mr. CONNERY. We have not the power to subpena witnesses.

Mr. SNELL. I do not think the gentleman will have to subpena a single person who is interested in the subject. They will come here and bear their own expenses. They will come anyway.

Mr. CONNERY. We cannot subpena certain people who may be against this matter. They may not come in.

Mr. SNELL. We will have to pay them if they are subpenaed.

Mr. SHOEMAKER. Will the gentleman yield? Mr. BANKHEAD. I yield to the gentleman from Minne

sota. Mr. SHOEMAKER. I do not think there is a Member of

this House opposed to this resolution. The fact of the matter is that the United States, China, and Turkey are about the only countries that have not old-age pensions at this time. ·

Mr. DUNN. No. Mr. CULLEN. Mr. Speaker, I ask for the regular order. Mr. CONNERY. I ask the gentleman to yield to me for

one moment. Mr. BANKHEAD. I yield to the gentleman from Massa

chusetts. Mr. CONNERY. I merely want to make it plain to the

gentleman from Alabama and to the gentleman from New York that the title of this resolution does not confine the Committee on Labor to reporting legislation simply in reference to a contributory pension. That is all I want to make clear. This will cover the whole question, .and whatever the members of the committee see fit to report, whether it is contributory or otherwise, they are at liberty to do so.

The SPEAKER. · The question is on the committee amendments.

The amendments were agreed to. Mr. BANKHEAD. Mr. Speaker, I move to strike out the

preamble to the resolution. The motion was agreed to. Mr. BANKHEAD. Mr. Speaker, I move the previous ques-

tion on the resolution. The previous question was ordered. The resolution was agreed to. A motion to reconsider was laid on the table. Mr. MORAN. Mr. Speaker, I offer a privileged resolution

from the Committee on Accounts. The Clerk read as follows:

House &?solution 263 Resolved, That the expenses of conducting the investigation

authorized by House Resolution 237, incurred by the special eoJJJ,mittee appointed to investigate the conservation of the wild-life resources of the United States and related questions, acting as a whole or by subcommittee, not to exceed $10,000, including expenditures for the employment of experts, and clerical, stenographic, and other assistants, shall be paid out of the contingent :fund of the House on vouchers authorized by such committee, signed by the chairman thereof, and approved by the Committee on Accounts. ·

SEc. 2. That the official committee reporters shall serve said committee at its meetings in the District of Columbia.

With the following committee amendment: In line 6, strike out "$10,000" and insert "$7,500." Mr. COCHRAN of Missouri. Mr. Speaker, may I ask the

gentleman where this resolution comes from? Mr. MORAN. From the Committee on Accounts.

Mr. COCHRAN of Missouri. When did the Committee on Accounts meet?

Mr. MORAN. Yesterday. Mr. COCHRAN of Missouri. I received no notice of a

meeting of the Committee on Accounts. I am a member of that committee and always attend the meetings.

Mr. WARREN. Will the gentleman from Maine yield? Mr. MORAN. I will be pleased to yield to the gentleman

from North Carolina. Mr. WARREN. Every member of the Committee on Ac

counts, of course, is always notified of the meetings of the committee. The gentleman from Missouri [Mr. CocHRAN] was mailed a card, because I personally put the card in the mail box along with others for the other members of the committee. The gentleman's office was called twice yesterday morning before the meeting and notice was left at his office that there would be a meeting.

Mr. COCHRAN of Missouri. I will say to the gentleman from North Carolina that I did not receive the card. I will not challenge the gentleman's statement, for I may say I personally mailed two letters Sunday morning in the House Office Building chute, one to an address on Fifteenth and H Streets, and I find that neither of those letters has been delivered. I should like to know what is the -matter with our mail system. If my letters were undelivered, the committee notice could have failed to reach its destination.

Mr. WARREN. I cannot inform the gentleman about that.

Mr. COCHRAN of Missouri. I insist I did not get the notice of the meeting of the committee. Had I received it, the gentleman knows I would have been present. I always attend the meetings, and cooperate with the gentleman from North Carolina, as he well knows.

Mr. SNELL. Ask Mr. Farley and he will tell you all about it.

Mr. COCHRAN of Missouri. I am not talking about the merits of the resolution. Naturally, I was surprised to hear a report from a committee of which I am a member when I did not know a meeting _had been held.

Mr. TABER. Was it air mail? Mr. COCHRAN of Missouri. Now, as to the resolution.

I did not participate in the debate when the original resolution was before the House, but I did hear ' the gentleman from Texas, Mr. BLANTON, ask the author of the resolution, Mr. DRIVER, of Arkansas, what the expense would be and Mr. DRIVER informed him that the resolution had been amended so that the committee would sit in the District of Columbia and not go out on a junket. Mr. DRIVER said the amendment would mean that no expense would be involved. Mr. SNELL, likewise, inquired about expense, and again the statement was made that no money would be needed.

This is an important subject, and being interested in the conservation of wild life, not only wild fowl but also fish, I am perfectly willing that the money be appropriated if it is necessary; but, Mr. Speaker, I insist that Members should not come forward and ask the House to pass a resolution saying no money would be needed and then come back in 10 or 15 days and submit a resolution calling for an expenditure of $7 ,500. It is beyond me to understand how you can spend such an amount on an investigation of this kind to be held in the District of Columbia.

Mr. Speaker, a few moments ago we passed a resolution calling for a complete investigation of old-age pension systems by the Committee on Labor. Several Members wanted to know how much it would take. Here is a very live subject affecting the old men and women in this country. The committee said it wanted no money-or at least the chairman did; $7,500 for investigating wild life, not 75 cents for investigating such an important question as old-age pensions. Think it over.

Mr. MARTIN of Massachusetts. Will the gentleman yield?

Mr. MORAN. I yield. Mr. MARTIN of Massachusetts. When this resolution

was before the Committee on Rules, the statement was made

2594 _CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 that this would riot cost any money. Will the gentleman explain how this money is going to be expended?

Mr. MORAN. The committee yesterday had a meeting to discuss the matter of expense and considered in that connection the expenses of the Senate committee which has a similar purpose and which spends approximately twice the amount provided in this resolution. The expense invoved in the matter will be confined largely to the District of Columbia.

Mr. MARTIN of Massachusetts. Does the gentleman think it is fair to the House to go before the Committee on Rules and make a statement that the proposition is not going to cost any money, ·and when the authorization is granted because the House thinks it will not cost any money, to come in then and want $7,500?

Mr. MORAN. Of course, the ·committee on Accounts did not make any arrangement with regard to expense under the original resolution. The matter was presented to us as a necessity on account of secretarial and clerical services.

Mr. MARTIN of Massachusetts. Does not the gentleman think you ought to keep faith with the Members of the House when a promise of this sort is made?

Mr. COX. Will the gentleman yield? Mr. MORAN. I yield to the gentleman from Georgia. · Mr. COX. I want to corroborate the statement made by

my colleague on the Rules Committee, the gentleman from Massachusetts [Mr. MARTIN], when he states that representations were made to the Rules Committee that this investigation would not cost any money. I do not know, but it is my feeling that if the Rules Committee had been advised that the investigation would cost $7,500, the resolution would not have been favorably reported. Will the gentleman now inform the House what representations were made to the Committee on Accounts which justify the committee's asking for an appropriation of $7,500?

Mr. MORAN. The new committee which has peen created by the Speaker has presented to the Committee on Accounts the proposition that this will necessitate at least the clerical help of two employees and also the employment of a secretary.

Mr. COX. Does it not impress the gentleman as being absurd that the committee should need two stenogr;:i.phers and a secretary to conduct an investigation of this kind?

Mr. MORAN. I was simply presenting their request and not our final decision.

Mr. ROBERTSON. May I answer the gentleman from Georgia?

Mr. MORAN. Yes; I yield to the gentleman from Virginia.

Mr. BAILEY. May I ask if this is the_ resolution in which the gentleman from Texas [Mr. KLEBERG] is very vitally interested?

Mr. MORAN. Yes. Mr. BAILEY. I have just sent for the gentleman from

Texas; and if you will give him the opportunity, I know the gentleman will be pleased to explain the matter. . Mr. MORAN. Yes. I have just yielded to the gentleman from Virgina [Mr. RoBERTso:r-rJ, the chairman of the committee.

Mr. ROBERTSON. Mr. Speaker, I am sorry the members of the Rules Committee feel that this request for a limited fund for the work of the special committee is not keeping faith with the request of that committee to report out the original resolution creating this committee. I appeared before the Rules Committee and was not conscious of having made to them any statement that this would not involve any expense. What I thought I said to the committee was that the original resolution did not provide for any appropriation or any authority to spend any money, and what I think I said to the gentleman from Texas [Mr. BUCHANAN], when he offered his amendment and stated that the committee was expecting to take junket trips, was that there

·was no intention on the part of the committee to take any such trips, and we were very pleased to agree to his amendment that the committee could only hold hearings in the District of Columbia.

Mr. MARTIN of Massachusetts. Does the gentleman believe this $7,500 is necessary?

Mr. ROBERTSON. I certainly do. Mr. MARTIN of Massachusetts. Who are the scientistS

or the experts that are going to be employed? Mr. ROBERTSON. We hope that the services of the

experts can be obtained from existing Federal agencies. Mr. MARTIN of Massachusetts. Then why pay them? Mr. ROBERTSON. It is not contemplated that the

experts will be paid. Mr. MARTIN of Massachusetts. Then why are you put

ting that provision in the resolution? Mr. ROBERTSON. Because if for any reason we cannot

get the necessary experts, we want the privilege of employing them. I may say to the gentleman that we are spending millions of dollars in conservation. There are at least 10 Federal agencies whose work is not coordinated. They are spending much money on the conservation of a great natural resources. We want these activities directed toward giving simple, wholesome, and clean recreation to thousands of men of small means who now cannot hunt and fish.

Mr. MARTIN of Massachusetts. Is not all of that inf or:. mation available now?

Mr. ROBERTSON. I do not think it is; the various Federal agencies are not coordinated, and the results are not I what they should be. Over 40 conservation associations of a national character have endorsed the purposes of the Beck special committee.

Mr. KOPPLEMANN. Will the gentleman yield? Mr. ROBERTSON. If I have the :floor. Mr. KOPPLEMANN. In the opinion of the committee

will not this expenditure of money be the means of saving a. great many thousands of dollars?

Mr. ROBERTSON. If this committee functions properly, we ought to be able to save thousands of dollars in the sense of getting better value for the money expended.

Mr. MARTIN of Massachusetts. Are they not seeking the same information in the Senate?

Mr. ROBERTSON. Not that I know of, but I understand the Senate has asked that a committee be formed in the House to cooperate with them and to assist in legislation. When their constituents write to them about wild-life preservation, the Members of the House do not feel like going to the Senate to have some action taken there.

Mr. TABER. Will the gentleman yield? Mr. MORAN. I yield. Mr. TABER. Mr. Speaker, it seems to me that when they

come in here and tell the House that they are going to make an investigation without expense, we ought to have the investigation without expense. We have had large investigations on very important matters that did not cost the Government any money except for printing the hearings. I do not believe it is necessary at all to go into any large expense for the operations of this committee.

We have official committee stenographers who will take the hearings, and it seems to me absolutely ridiculous for them to come here now and ask for $7,500 at this time. I think the resolution should be laid on the table, and, Mr. Speaker, I move that the resolution be laid on the table.

Mr. KLEBERG. Will the gentleman yield? Mr. MORAN. I yield. Mr. KLEBERG. Would it be in accordance with the idea

of sane procedure for this committee to come into the House and deliberately hamstring itself by saying that it would incur no expense?

Mr. MORAN. I might say that the Committee on Accounts, of which a large majority were present, was unanimously in favor of the resolution.

Mr. MARTIN of Massachusetts. Does not the gentleman think that after the committee came in and said that it would incur no expense that they should adhere to that? It is the practice we are protesting against.

Mr. KLEBERG. May I say that as a matter of fact the study which it is proposed to w1dertake here has merely up to datz scratched the surface?

1934 CONGRESSIONAL RECORD-HOUSE 2595 Mr. MARTIN of Massachusetts. I am in favor of the in

vestigation; it is the principle of the thing that I am objecting to.

Mr. KLEBERG. Does the gentleman honestly believe that this committee set up here in accordance with the administration's desire to protect wild life--.

Mr. MARTIN of Massachusetts. The administration has had nothing to do with it until now.

Mr. KLEBERG. It would be impossible for this committee to function without some -expense, and the gentleman knows it.

Mr. SNELL. You were going to make the investigation without expense, and now you come in and say it is favored by the administration. I suppose if that is so, we will have to give them the money.

Mr. O'CONNOR. Mr. Speaker, in reply to the gentleman from New York [Mr. SNELL], the gentleman from his experience on . the Committee on Rules knows that ahnost invariably such a resolution does cost money.

Mr. SNELL. If the gentleman is referring to my experience, the gentleman knows that we put out very few of them when I was chairman of the Committee on _Rules.

Mr. O'CONNOR. Yes; but every time they say that, it is a hope rather than a fact.

Mr. SNELL. Is the gentleman from Alabama [Mr. BANKHEAD] this morning representing the situation?

Mr. O'CONNOR. No. There is going to be expense. · Mr. SNELL. Then the truth should be told to begin with, and the gentleman should not come in afterward with a request for money. ·

Mr. O'CONNOR. They may not spend any part of the $7,500.

Mr. COOPER of Ohio. Mr. Speaker, will the_ gentleman yield to me?

Mr. MORAN. I yield to the gentleman from Ohio. Mr. COOPER of Ohio. Mr. Speaker, I do not know what

took place when this resolution passed the House. I do not know whether the statement was made relative to expenses or not, but I understand this is a resolution calling for $7,500 for the Wild Life Conservation Committee of the House. All over the United States today we find a great desire upon the part of American people for the conservation of wild life. We can see our wild life passing away, and it will be only a little while before they are extinct in our country, unless something is done to conserve them. It seems to me that when in 30 minutes we can pass legislation carrying an appropriation of $950,000,000, we ought to be willing to spend $7,500 for this committee to do this work, to conserve the wild life of our country.

Mr. BANKHEAD. Mr. Speaker, will the gentleman yield? Mr. MORAN. Mr. Speaker, I yield now to the gentleman

from Alabama [Mr. BANKHEAD]. Mr. BANKHEAD. Mr. Speaker, I want to clear up what

I think is an honest misunderstanding about any representation before the Committee on Rules with reference to this investigation. The gentleman from Massachusetts, and other Members on that side, seem to be under an impression that when these gentlemen appeared before the Committee on Rules asking for the passage of the resolution setting up this joint committee, it was stated that it would involve no expenditure of funds out of the Accounts Committee of the House. As I told the gentleman from Massachusetts [Mr. MARTIN] a few moments ago in private conversation, I think he has an erroneous recollection about the facts of that case. It is my recollection that no assurance was given by the gentleman who presented the resolution that it would entail no expense, and I think I can have that confirmed by the other members of the Committee. That, at least, is my recollection about it.

Mr. COX. Mr. Speaker, will the gentleman yield? Mr. BANKHEAD. ¥es. Mr. COX. I regret that I cannot support the gentleman

in that statement. My recollection is very distinct that ·assurances were given the Committee on Rules that there would be no appropriation asked for the investigation.

Mr. BANKHEAD. , Mr. Speaker, in view of the statement of my colleague from Georgia-and our 'memories are always fallable-I hasten to say now that the gentleman from Massachusetts [Mr. MARTIN] may be right about it, and I am glad to withdraw the statement I made because the gentleman from Georgia [Mr. CoxJ and the gentleman from Massachusetts [Mr. MARTIN] seem to be under entirely different impressions.

Mr. KLEBERG. Mr. Speaker, will the gentleman yield? Mr. MORAN. Yes. Mr. KLEBERG. I rise to ask the gentleman from New

York [Mr. SNELL] if he knows of any . committee, either standing or temporary, in this House now created for the purpose of making the study now before .the group under this resolution, to whom we could go to have that study made?

Mr. SNELL. Oh, there have been committees in the past that have not incurred expense.

Mr. KLEBERG. Is there one now? Mr. SNELL. I cannot say whether there is one now or

not, but I do not think you gentleman do it as cheaply as we tried to do it.

Mr. KLEBERG. My colleague has been here a l-0ng time. Mr. SNELL. Perhaps too long. Mr. O'CONNOR. Right there, Mr. Speaker. the gentle

man from New York CMr. SNELL] has forgotten about the $500,000 expended to investigate ·why the eighteenth amendment should not be repealed, which proved afterward to have been wasted.

Mr. SNELL .. We never set up any such committee as that, and the gentleman knows it.

Mr. KLEBERG. The gentleman from New York has been here a long time, and the gentleman is aware of the fact that expense is incurred by every committee of this body. When the question of expense comes up, there might be great wisdom in the suggestion that all committees of this House be curtailed by depriving them of the use of any funds to function in the ordinary regular course of business. Would the gentleman consider merely the performance of the perfunctory duties which this committee would be called upon to undertake, an expense?

Mr. SNELL. Mr. speaker, I have no objection to the gentleman's general statement, but I do object to their continually coming on the fioor and setting up investigating committees and saying it is not going to cost a single dollar and then coming in afterward within a week or 1 O days and asking for $7,50() or for $10,000. I object to the way in which it is done more than I do to the fact itself. Why not ten the whole proposition the first time it is brought up?

Mr. KLEBERG. It should have been understood. Mr. SNELL. I certainly understood that this special com

mittee was not going to ask for any appropriation. Whether I was wrong or not I do not say, but that was my understanding at the time.

Mr. KLEBERG. Does the gentleman know of any committee in the history of the House that haS functioned without any expense?

Mr. SNELL. I know we have had a great many of them. Mr. TABER. I can refer the gentleman to a committee

that ran up no bills against the House. Mr. BAILEY. Mr. Speaker, I demand the regular order. Mr. MORAN. Mr. Speaker. I move the previous question

on the resolution. The previous question was ordered. The SPEAKER. The question is on the committee amend-

ments. · The amendments were agreed to. The SPEAKER. The question is on the passage of the

resolution. The resolution was agreed to, and a motion to reconsider

the vote by which the resolution was passed was laid on the table.

SUSAN B. ANTHONY The SPEAKER. Under the special order for today, the

lady from Massachusetts, Mrs. ROGERS, is recognized for 15 minutes.

2596 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 Mr. GRAY. Will the lady yield to me to make a unani

mous-consent request? Mrs. ROGERS of Massachusetts. I yield if it is not taken

out of my time. Mr. GRAY. Mr. Speaker, I ask unanimous consent that

I may be permitted, at the conclusion of the lady's remarks, to address the House for 10 minutes on the life and character of Abraham Lincoln.

·The SPEAKER. Is there objection to the request of the gentleman from Indiana [Mr. GRAY]?

Mr. TABER. Mr. Speaker, I object. Mrs. ROGERS of Massachusetts. Mr. Speaker, I asked for

time to speak today for two reasons. First, because this is the one hundred and fourteenth anniversary of the birth of Susan B. Anthony, and second, because, so far as I know, no recognition of her birthday has ever been made in Congress. As the first woman elected to Congress from her own State, it is a real privilege to eulogize her memory and to review briefly her untiring perseverance in the cause which she loved so well.

Born in the beautiful little town of Adams, in the Berkshire Hills of Massachusetts, on February 15, 1820, she was the second of eight children in a family which carried out the best traditions of old New England.

Both her father and her mother had been reared in comfort and plenty. Her father, Daniel, was a man of culture. When Susan was born, he was the owner of a cotton factory, and the Anthonys enjoyed a prosperity at that time unusual when small incomes and close economy were the rule.

Susan's father, a Quaker, was a strong temperance advocate and an equally strong opponent of slavery. His ways of thinking were of great influence in determining the course of her life. The little Quaker girl was unusually intelligent and precocious. She attended a little old-fashioned district school. When she was 15, she became a teacher in a school held by her father in one part of her home. At 17 she taught in a private family for $1 a week and board. Her teaching later became a necessity, through the crash of the Anthony fortune.

It is interesting to read of the causes of the depression which wiped out the Anthony fortune. I quote: "All manufacturing industries in the country were in a ruinous stafe. The unsound condition of the banks, with their depreciated and fluctuating currency, had created financial chaos. Overproduction of cotton goods on a credit basis, inordinate speculation, reduction of duties on importations, produced the inevitable result, and the commercial world began to totter on its foundations." How like the present day.

The people of that period also had the same problems that we have in 1934 in regard to the currency. When on a business trip to Washington, Daniel Anthony wrote to his family:

Our Congressmen are some like other folks, they look out first for themselves. They have spent most of this · day 1n debat.ing ·whether they shall be pa.id in specie.

In her early years of teaching she joined the Daughters of Temperance. Her heart and soul were enlisted in the cause. This was only a step to her first entrance into public life. Her religious training was responsible for much of her· progressiveness. The Quakers were firm in their belief in the equality of the sexes. They even encouraged their women in public speaking. In her own home her father believed in giving the same advantages in preparing the girls as well as the boys for self-support. The daughters were taught business principles and invested with responsibility at an early age. She was not told that woman's place is in the home.

Perhaps she owed more to her father than to anyone else. He thoroughly believed in her and encouraged her desire for reforms which were then considered radical. He gave his moral support and financial backing whenever he could.

In July 1848 the first woman's rights convention was held in Seneca Falls. Susan Anthony's parents and her sister attended and signed the declaration demanding equal rights for women. They brought home to her their enthusiasm on the subject.

At that time there was but one field of public work into which women had dared venture, except in a few isolated cases-that was the cause of temperance. Susan Anthony presented her credentials to the Daughters of Temperance Society at Rochester, and she soon became a leader.

She was sent as a delegate to the Sons of Temperance Convention at Albany. She caused a furor which brought her name to the notice of the country as a whole. Listening intently to the arguments at the convention, she could stand it no longer and arose from her seat. " Mr. President, I wish to speak to the question." All eyes were turned toward her. The meeting was aghast at the audacity and unprecedented nerve of a woman who dared rise and speak, even though she be an accredited delegate. The presiding officer hastened to admonish her, stating that "the sisters werP. not invited there to speak, but to listen and learn." AS a result, Susan Anthony and others left the hall and formed a committee, of which she was chairman, to call a woman's State temperance convention.

The refusal to let her speak at the Albany convention transformed Susan B. Anthony from a quiet domestic Quaker maiden . to a strong, courageous, uncompromising advocate of absolute equality of rights for women. She abandoned school-teaching and gave her life to advance the causes of t·emperance, antislavery, and equal rights for women.

At the second convention of the Women's State Temper .. ance Society, with men and women delegates, great dissen .. sion occurred. When a vote was passed that the society should have nothing to do with the woman's rights move~

• I ment, Mrs. Stanton, the president, and Susan Anthony with- , drew from the organization. Susan never again joined a; temperance society. She had reached the conclusion that, if women had the ballot, they could deal effectually with intemperance. She was very resourceful in always keepin~ her objective in mind. If she could not gain it in one way, she tried another. Thereby she showed her foresight.

The early meetings of the Equal Rights Society were held under great difficulties. Speakers were heckled, booed, and hissed. Often the meeting was forced to adjourn in the midst of great confusion. Of her courage in the face of hostile audiences there are numerous instances. On one occasion, the mayor of the town had to sit on the platform throughout the meeting with a shotgun across his knees to maintain order. Her unflinching courage carried her through all such · experiences. Nothing could thwart her.

Her life could not have been easy. It could not have been pleasant. Insult and ridicule were her daily portion. How weary and sick at heart she must often have been. As she went from place to place, trying to interest women in her cause, often the door was slammed in her face with the remark that they ·" had all the rights they wanted." At one time she was hanged in effigy. At another she was accused of being immoral because she advocated coeducation. Her feelings must have been crucified constantly. She was held up as a horrible example and women even drew their skirts aside as she passed.

She was quick of mind and ready of reply. She was equal to every battle of wits and often men who came to jeer remained to pray. At one time when she appeared before a committee, Horace Greeley asked her: "Miss Anthony, you know the ballot and the bullet go together. If you vote, are you ready to fight?" Her reply was instant. "Yes, Mr. Greeley, just as you fought the la.£t war-at the point of a goose-quill."

She proved her originality when she and two of her sisters decided to put to a test her theory that the fourteenth amendment to the Constitution gave the women the right to vote. She convinced the registrars of voters at Rochester, N.Y., that she had at least the right to try to vote. On election day Susan Anthony and a few others deposited their ballots. The newspapers made much of the occurrence and news of it was telegraphed to all parts of the country.

About 2 weeks after the election, she was arrested. How strange all of this seems to us in this time and age! Members of Congress now almost feel like sending women to jail who do not vote for them. Scarcely a Member but

1934 CONGRESSIONAL RECORD-HOUSE 2597 depends upon his women constituents for work at the polls. He has found that the loyalty of women workers is steadfast and dependable.

The trial which resulted is famous. Susan Anthony stood upon her theory that she was " called to the ballot box not as a female, but as a citizen of the United States." She was convicted and sentenced to pay a fine of $100. The trial brought the country to a better understanding of the question of equal rights. Converts were made daily to the cause. It was a victory even in def eat.

The trait in Susan Anthony's character most admired by all who have studied her active life was her absolute unselfishness. She gave to her cause every ounce of her energy. She gave up all that most women hold dear for her ideals. For their furtherance, she spent her own money and begged that of her friends. No motive of self-interest or lure of fame spurred her to battle. In the face of strong opposition, she never lost her smile or her good nature. This lightened her almost fanatical zeal. She was a true optimist, who searched out the brighter side when all seemed wrong. Above all, she was a most human person. Her prominence and position as a leader did not take from her that gracious charm and simplicity which made her so beloved by her friends and acquaintances. Curiously gentle to women and to the oppressed, she was militant in battering down the walls of precedent which imprisoned half the human race. ·

During a campaign in the early nineties she was obliged to stay for the night at a poor hotel. But even this apparently did not depress her, as through the thin walls of the partition the voice of the landlady was heard to say: " Well, I never supposed I could entertain big-bugs and I thought I couldn't live through having Susan Anthony here, but I'm getting along all right. You ought to hear her laugh. Why, she laughs just like other people."

The later years of her life were filled with activity. Her writings covered the vital question~ of the day and were always to the point. She was right when she said:

I marvel that the men did not see that the question of liberty and peace could not be settled until all the people, women as well as men, were enfranchised and had the power to work and enforce the laws. · -

. Perhaps the other great emanCipator, Abraham Lincoln, had this idea when he said:

That government of the people, by the people, and for the people shall not perish from the earth.

· In the early nineties, South Dakota had experienced one Of the hottest summers ever known. Drought and prairie fires had reduced the people to severe financial straits. She wrote:

Starvation stares them in the face. Why could not Congress have appropriated money for artesian wells and helped these earnest, honest people, instead of voting $40,000 for a committee to come out here and investigate.

If she were alive today, there is little doubt that she would have sat in Congress, if she so wished. Her earnestness of purpose and perseverance would have placed lier here-. Miss Frances Willard once said of her:

Susan B. Anthony-she of the senatorial mind-will be . remembered when the politicians of today have long been doomed to ''innocuous desuetude."

She believed in preparedness and realized the importance of accessibility of information. She insisted that -all of the workers for woman's suffrage keep scrapbooks. These, with her scrapbooks and her personal library, are now iri the rare-book department of the Congressional Library and form a complete history of the equal-rights movement. In each of her volumes there is an inscription of some length, in her own handwriting, which portrays the mental ability, the breadth of vision, and the warm and noble character of the great emancipator of women. The inscriptions are most delightfully and naively written and reveal a complete lack of ego. A marvelous biography of her life could be written from these inscriptions. I~ must have been a great sacri-

LXXVIII--165

fice for her to present her library to Congress before her death. She loved her books.

When this silver-haired warrior made the last speech of her life in Washington, at the celebration of her eighty-sixth anniversary, her voice was firm and she swayed her audience to enthusiastic applause. Her closing motto had been her guidon throughout her wonderful life: "Failure is impossible."

She died on Tuesday, March 13, 1906. One of the truest and most apt things ever said of her was by 3J friend in speaking of the many favors asked of Susan Anthony. It contains a sentiment which sums up her life of self-sacrifice. She said:

How they all turn to you when they want favors and perhaps forget you when it is the other way. Well, the Supreme Being is treated in the same fashion. People seldom think of God when they are happy but quickly turn to prayer in their hour of need. It is the way children treat their mothers, too, and you stand as a sort of divine mother to the women-children of today.

· Certainly the women for whom she opened the gateway to such broad liberties today are reaping the benefits of her self-sacrifice and ought to be supremely grateful to this great pioneer. She never faltered along the thorny path to her goal. It is cruel that she could not have lived to see her efforts crowned with complete success. But th2 spirit of Susan B. Anthony animates thousands of American women who are trying today to fol.low her shining example by giving themselves to the service of others. [Applause.]

REFINANCING FARM DEBTS, 1934

Mr. JONES. Mr. Speaker, I ask unanimous consent for the immediate consideration of the bill CH.R. 7928) to amend subsection Cb) of section 12 of the act ~ntitled "An act to provide for the establishment of a corporatlop. to aid in the refinancing of farm debts and for other purposes". approved January 31, 1934.

The SPEAKER. Is there objection to the request of the gentleman from Texas?

Mr. MARTIN of Massachusetts. Reserving the right to object, I would like to ask the gentleman if he has consulted the minority leader about taking up this resolution at this time?

Mr. JONES. I have, and it is satisfactory to the gentleman from New York [Mr. SNELL]; and I have also taken it up with the ranking member of the committee of which I am chairman, and he has no objection. . Mr. MARTIN of Massachusetts. Mr. Speaker, I have no objection.

There being no objection, the Clerk read as follows: Be it enacted, etc., That subsection (b) of section 12 of the act

entitled "An act to provide for the establishment of a corporation to aid in the refinancing of farm debts, and for other pur· poses", approved January 31, 1934, is amended to read as follows:

-" ( b) Mortgages executed to the Land Bank Commissioner and mortgages held by the Corporation, and the credit instruments secured thereby, and bonds issued by the Corporation under the provisions of this act, shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal, State, municipal, and local taxation (except surtaxes. estate, inheritance, and gift taxes)."

The bill was ordered to be engrossed and read a third time, was read the third time, and passed.

A motion to reconsider was laid on the table. THE REVENuE BILL

Mr. DOUGHTON. · Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the state of the Union for the further consideration of the bill <H.R. 7835) to provide revenue, equalize taxation, and for other purposes.

The motion was agreed to. Accordingly the House resolved itself into the Committee

of the Whole House on the state of the Union for the further consideration of the bill H.R. 7835, the revenue bill, with Mr. CANNON of Missouri in the chair.

The Clerk read the title of the bill. Mr. TREADWAY. Mr. Chairman, I yield 10 minutes to

the gentleman from Massachusetts [Mr. GIFFORD]. . ..

2598 · · · CONGRESSIONAL RECORD-HOUSE · ~EBRUARY 15 Mr. GIFFORD. Mr. Chairman, I feel like calling the

attention of the Members on the Democratic side to the fact that when we were considering a very important tax bill a few years ago, I was · glad to join with them~ in company with 15 or 20 other Republican Members, and we succeeded in amending that measure in several important particulars. I want to say that we had no gag rule on tax bills then. I for one, wish to remind you that the party on this side was much fairer in dealing with tax matters.

Mr. VINSON of Kentucky. Will the gentleman yield? Mr. GIFFORD. I yield. Mr. VINSON of Kentucky. Is the gentleman referring to

the 1924 Revenue Act? Mr. GIFFORD. I rather think he was. Mr. VINSON of Kentucky. Does the gentleman recall that

that side of the aisle hardly had a majority that would .ba ve supported a gag rule?

Mr. GIFFORD. I should like to say that this side has not, for a long, long time had a real majority, but now our socalled "progressives" are coming back· to the fold. You have gone b.ack on them. You have repudiated them, and, I think, you will find that for some time to come they will be sound Republicans after a few more gag rules like this ba ve been imposed upon them.

Mr. Chairman, I remind the gentlemen that in the matter of tariff bills, with their immense number of items, there may be a shade of reason for not throwing the entire measure open to amendments. But on a tax bill, which is to most people at least, far more important than a tariff bill, we should like to have the opportunity to express ourselves and off er amendments, because we shall certainly be held responsible for it.

I recall the attitude of the Democratic side in that year of 1924, relative to consolidated returns, and how we helped you to win your point regarding consolidated and affiliated returns. Now, I observe in this tax bill that you still recognize the wrong, but as a palliative have raised the rate from 1 to 2 percent for the privilege. Individuals and corporations cannot now carry their gains .and losses over and average them through the years. To illustrate, if one corporation makes $50,000,000 and another owned by the same parent company loses $50,000,000 let one offset the other. Perhaps all corporations should be treated alike and if they earn $50,000,000 the Government should get the tax thereon. There should be more explanation on this point than is offered in your report. I want to recall to the Members now in control the arguments of their own leaders in 1924. They now appear to have reversed their position and listened to the Treasury Department, when they say, "Oh, this method is simpler. If we do not adopt it we shall have to look into an awful lot of intercompany transactions and seek for fraud. And you know that would be very difficult." such arguments were ridiculed, then. As a further illustration, suppose that a parent company owns a dozen different vessels, which are incorporated separately. They would like to limit suits against the particular company involved. I recognize, of course, that these intercompany transactions are very difficult to determine as to their bona fide character. But I rose to remind you that about 20 from this side joined with you at that time in the arguments which you made then, but are now disclaiming.

Much has been said on the floor of the House-and I wonder that the committee does not profit by it-in favor of the sentiment to present the constitutional amendment required to make tax-exempt securities bear a little of the tax burden. Do you recall the year 1922 when, for several days, the argument waxed hot over such a proposed constitutional amendment? It was the argument of the Members on the Democratic side that the municipalities of the South and West needed to borrow money to construct schoolhouses and other public buildings and that they would be penalized. Therefore it was necessary to have this situation continue. Now, when you are in the majority, you say in this report that you are in favor of such an amendment. Yet you make no e1Iort whatsoever to bring it about.

I should also like to remind the House that the defeat of that amendment in 1922 was suddenly brought about when the Members from Penrisylvania, Ohio, and Illinois thought that their States would be forced to adopt an income tax before they could participate in such taxes, and that the advantage was altogether with the Federal Government. However, the original arguments against such a constitutional amendment came from the Democratic side, and I still doubt whether they are really sincere in this matter of placing a tax on securities of this character.

A day or two ago the gentleman from Maryland. small of stature though he may be, stood here and boldly proclaimed that the committee lacked courage. You have not brought in a tax bill, but merely a tax avoidance bill, and the lawyers will probably find a way to beat you in most of these items, at that. One of the greatest tax experts in this country a few years ago said that, under this income-tax method, it was costing the people of the United States-paid in fees to lawyers, accountants, .and others--$400,000,00() just to make out their returns. In order for the Federal Government to obtain two and a quarter billions of dollars it cost the American people $400,000,000, merely to prepare their tax returns! Now, with your Securities Act, with your condemnation of bankers and the current fear paralyzing business, there will be but few new concerns capitalized and few big fortunes made to tax. You have killed the goose which laid that $2,500,000,000 golden egg. You will get but few income taxes out of the higher brackets. The gentleman from Maryland was right; it is the middle-class people who must now pay and pay.

Mr. BULWINKLE. Mr. Chairman, will the gentleman yield?

Mr. GIFFORD. I yield. Mr. BULWINKLE. Is the gentleman in favor of or op

posed to the Securities Act? Mr. GIFFORD. I really do not know. Time will tell,

but at present it is little understood and greatly feared. Mr. RAYBURN. Mr. Chairman, will the gentleman yield? Mr. GIFFORD. I yield. Mr. RAYBURN. Is the gentleman for this bill now? Mr. GIFFORD. I have referred to the Securities Act.

The result of that act is that no one dares to put securities on the market today and sign the guaranties demanded. Only a short time ago I saw a sample of .that document. If I were a director of a corporation wishing to issue securities, I would not dare to sign anything like it. We do know the demand which has been made for its amendment, but I do not care to branch off into a discussion of that act, since I admit that I know very ·little about it.

Mr. ·RAYBURN. Mr. Chairman, will the gentleman yield further?

Mr. GIFFORD. I am not yielding for that purpose. I am talking now about a tax bill and the lack of courage on the part of this House to raise even sufficient money to meet current expenses or to pay the interest on the public debt. What muniCipality could possibly do that and obtain further credit?

A day or two ago I was talking with one of the prominent men disbursing emergency funds regarding the :financial condition of the city of New York. I said, " New York is probably the wealthiest city in the world. Does it owe more than four times its annual budget?" He could not answer. I then said, "It probably does and you are giving it a lot of the Federal Government's money. Are they, then, in real danger of collapse, owing four times their annual budget?" His reply was, "Yes; it would be in grave danger of losing its credit."

Of course, the bankers would put the city in a strait-jacket by tying up current revenues. Naturally it could not secure credit if it owed four to six times its annual budget. But the United states Government will owe $32,000,000,000-nearly 10 times its yearly budget--and this tax bill will not even take care of the interest thereon, while the Government continues to give away millions and millions to municipalities far better off financially than it.

1934 CONGRESSIONAL -RECORD-HOUSE 2599 But the statement is made, " Olir credit is still all right.

The securities of the Federal Government still sell readily." True. But why? Because bankers do not know where

else to put their money. They know also that they must furnish every dollar necessary to save the credit of the Federal Government, for when that goes all goes. Yet these same bankers would put a strait-jacket on the great city of New York and demand its current revenues as security.

Mr. O'CONNOR. Mr. Chairman, will the gentleman yield? Mr. GIFFORD. For a witticism or a question? I know

the gentleman. Mr. O'CONNOR. Maybe I shall combine the two; I do

not know . . Talking about the city of New York, does the gentleman

think that a city or a corporation or an individual which owes $2,000,000,000, having at the same time assets of $20,-000,000,000, is insolvent?

Mr. GIFFORD. No. Mr: O'CONNOR. Of course it is not. Mr. GIFFORD. But I ask if the city of New York does

not owe nearly slx times its annual revenue? Mr. O'CONNOR. No. Mr. GIFFORD. How much does it owe? Mr. O'CONNOR. It owes ·about $2,000,000,000, as against

an annual budget of $650,000,000. Mr. GIFFORD. Well, that is very nearly four times as

much. [Here the gavel fell.] Mr. TREADWAY. Mr. Chairman, I yield the gentleman

3 additional minutes. Mr. GIFFORD. I rose particularly to remind you -gentl-e-

. men on the other side of the aisle that we aided you in putting over certain things which now-when you are in authority-you are repudiating. Secondly, I remind you, and shall do so often, that the United States Government will soon owe $32,000,000,000. I remind you that England, France, and Germany, having large national indebtednesses, are sufficiently courageous at least to meet their current expenses.

A tax bill that does not pretend to take care of current expenditures and interest on the national debt is not a courageous bill. Do not expect the revenue formerly obtained from the rich. Their big incomes were never made from earnings and dividends. They largely resulted from the capitalization of everything possible for as much as would produce even a small dividend. All this is gone. Do not look for it any more.

Mr. LEE of Missouri. Will the gentleman yield? Mr. GIFFORD. I yield to the gentleman from Missouri. Mr. LEE of Missouri. These big fortunes were made un-

der a Democratic administration, Wilson's administration. At that time everybody had money and you Republicans came in power and refunded to every thief in this country the money they had paid into the Treasury of the United States.

Mr. GIFFORD. Shall we have another war such as Wilson had in order to' get prosperity? It was war that made those big fortunes, not the Democratic Party. We were left with a national debt of $26,000,000,000 as a result of it, and the Republican administrations reduced that debt to sixteen billion. For some years we had a Yankee President, and I wish that his voice could be heard now. I can almost hear him say, "You cannot spend yourself into prosperity." Yes, the Republicans reduced that debt to sixteen billion. You are swiftly raising it to $32,000,000,000. Are you boasting about this? We have not this session heard a speech from the other side in which they boasted about anything. All are riding along on the popularity of one man and hoping that the blame will be his, not theirs, if things go wrong.

But I can congratulate the committee on one thing, at least. We here have a bill actually framed by a committee of the Congress, itself. It was not sent down from the White House. On this point you are to be congratulated; but in closing, may I say that I cannot applaud your courage

in bringing in a revenue measure which fails of · its real purpose. [Applause.]

Mr. DOUGHTON. Mr. Chairman, I yield 15 minutes to the gentleman from Texas [Mr. PATMAN].

TAX ON COCONUT OIL

Mr. PATMAN. Mr. Chairman, in this tax bill there is a provision that coconut oil and sesame oil will carry a levY of 5 cents a pound excise tax. I am sorry it does not include palm, palm kernel, and whale oil, even if the rate of tax was lower. On this particular provision of the bill I want to make a few remarks.

The excise tax on coconut oil and sesame oil of 5 cents a pound will probably raise some revenue. At tpe sa_nie tinie, it will be, I presunie you would call it, a protection to a domestic industry.

FREEDOM FOR PHILIPPINES

I think that the Filipinos should be granted their freedom. I think that the people of the Philippine Islands are capable of self-government, and I should like to see the Congress of the United States grant them their independence. If we would, this would solve many of our problems that are now upsetting the economic situation as it affects the farm population in our own country.

A NATIONAL DANGER

If we ever have trouble with any country in that part of the world, the Philippine Islands will be seized by that· country, and then we will either have to send our boys several thousand miles across the sea to fight that country or sacrifice our national honor. We do not want to be in that position.

LOBBYIST

I have before me a statement gotten out by a man by the name of John B. Gordon, who· claims to be the secretary, and I presume he is, of the Bureau of Raw Materials for American Vegetable Oils and Fats Industries here in Washington, D.C. I want you to know why he is fighting the tax of 5 cents a pound on t_his foreign oil.

First, he says that it will destroy the smaller soap makers of this country. There is not a word of truth in this at all. This will give the smaller soap makers of the country the same opportunity to make a fair profit that Procter & Gamble, Peet, Palm Olive, and other large manufacturers now enjoy because they can . buy in such large quantities, whereas the small soap maker cannot buy in a large quantity.

WHO OWNS COCONUT INDUSTRY

This man Gordon further says that it will destroy the $35,000,000 investment in copra crushers in the United States and the Philippines. Who owns the coconut-oil industry in the Philippines? It is owned and controlled largely by the Chase National Bank and the National City Bank of New York City, together with a few other peopfo in this Nation. They are interested in making the coconut-oil industry prosperous. They do not care anything about local industries if they interfere with the making of a profit on their investment over there.

Mr. MOTT. Will the gentleman yield? Mr. PATMAN. I have not time to yield. I have only 15

minutes and my time is taken up. I am sorry. Mr. MOTT. I am sorry too. I wanted to ask the gentle

man a pertinent question. Mr. PATMAN. If the gentleman will get me additional

time I will answer questions all day, but I do not have the time now. I am sorry.

WHO OWNS RAILROADS THAT WILL .PROSPER

With reference to the National City and Chase National Banks, they are largely interested in investments in the transcontinental railroads. Gordon says if we put on this tax of 5 cents a pound it will destroy the second largest freight item on incoming ships entering our great west coast ports and of the transcontinental railroads running out of these ports. In other words, he would have you make it easy for the foreign fats and oils to come into this country; first, because it would help the small soap maker, which statement is absolutely untrue, and second, it will help the

2600 CONGRESSIONAL RECORD-HOUS;E FEBRUARY l& people who own the coconut groves in the Philippines, an~ third, it will help the owners of the transcontinental railroads extending from the Gulf ports, because this is their second largest freight item.

PROTECT GARBAGE PAIL

He does not finish there. He goes ahead and he criticizes and ridicules .the Congress of the United States in this. He says: · This is the first time in the history of America that protection has been carried to the point of protecting the garbage pall. Tallow renderers who collect the fat scraps from the hotels and restaurants produce 70 percent of the tallow consumed in the United States.

Why should they not be entitled to protection, if as he says, this is a bill for protection? Are not these poor people entitled to an honest living just the same· as the transcontinental railroad owners or the owners of the coconut groves in the Philippines? Here is what he refers to. Every butcher in your district is interested in this bill. All of his scraps are used to make tallow and fats, and they are interested in getting a good price for these scraps. Therefore, he says if you protect the butchers you are protecting the garbage pail, and he endeavors to criticize and ridicule you because you want to give the butchers of this country this 1,ittle item of protection which certainly . they are as much entitled to as anyone else.

INFLUENCE LAWYERS

This just goes to show the extent that they will go in order to carry a point to make a little profit for themselves. Too many members of the bar in Washington are selling influence, and there are too many lobbyists wlio will resort to any means on earth to mislead Congress. I invite your attention to this fact: I live iii a cotton-growing section of the South. The principal crop is my district is cotton, but the people are interested in getting into something they can make a living with, and if you do not help them make a living out of cotton they are going to produce other crops. For instance, the dairy industry will be interested in what I have to say about this coconut oil tax. The dairy industry, the hog industry, the beef-cattle industry, and the cotton-oil industry are all interested in this tax remaining in this bill, not only in this body but in the other body.

DO NOT PUT COTTON FARMER OUT OF COTTON BUSINESS

If the southern cotton farmers cannat make a living growing cotton, what are they going to do? They can go into the dairy business. They can put any other section of this Nation out of the dairy business. Do not forget that. They have 10 months of grass. They do not have to feed their cattle more than 1 or 2· months in the year. They do not need airtight barns, because any kind of shed will do. They do not have to go to any expense there. They are as close to the markets as the farmers of Iowa, Minnesota, and Wisconsin. They have cheaper labor and they have cheaper land than any other section of the Nation, and any time you force .the cotton farmers out of the cotton business you are going to put them in your business. which is going to damage the industries in your congressional districts. Therefore it is to your interest to cooperate with us and help us stay in the cotton business, and this will be one step in that direction.

I now want to say a few words in regard to publicity of income-tax returns.

INCOME-TAX PUBLICITY

The Government's system of requiring secrecy of incometax returns places the Governmen~ in its effort to collect revenue in almost the same position as a blind man passing around the hat. The blind man does not know who contributes nor how much. With the Government's system of collecting income taxes the people do not know who pays taxes nor how much.

MELLON'S REFUNDS

During 3,000 days, commencing in 1921, the Federal Government remitted to the taxpayers of this Nation more than $3,000,000,000. Were the taxpayers entitled to these remissions? We know that some of them were illegally made, the

few that have been brought to light. Income truces are not only paid in secret, but they have been remitted in secret. Therefore, the people do not know whether these remissions were properly made or not.

If it had been possible for even representatives of the Government, including Members of Congress, and a restricted number of the citizens of this Nation, to have had an opportunity to inspect income-tax returns I do not believe that the taxpayers would have indulged in the wholesale graft, corruption, and evasions that they have indulged in in recent years in order to escape the payment of income taxes~ Mr. Mitchell would have never attempted the absurd and ridiculous way of evading the payment of income taxes had he known that his return would be subject to public inspection.

:BILLIONS LOST BY SECRECY

If inspection of returns had been allowed, the Government would have probably collected billions of dollars more in taxes than it did collect during recent years. There is no way of estimating the enormous amount of money that the Government has been defrauded of by secrecy. Tax secrecy is a badge of fraud. It only helps the tax evaders, tax dodgers, the dishonest, unscrupulous, and unpatriotic.

Loopholes in the law under a secret tax system are not known until the Government has lost enormous sums of money. The Congress has just recently discovered the loopholes that have been used for tax-evasion purposes 3 years ago. Under a publicity provision loopholes will be discovered immediately and legislation passed to correct evasions.

JOINT COMMITTEE INEFFECTIVE

There is a joint committee of Congress that has a right to pass on refunds, credits, and abatements, where the amount involved is more than $75,000. This is a subterfuge and a hindrance. The committee cannot properly pass upon these cases. One large taxpayer a few years ago received a hundred million dollar tax refund. When a Member of Congress insisted that the joint committee should look over the evidence the Treasury Department sent to the Capitol six large truck loads of books and papers. It would require 25 years' time of the joint committee to properly investigate this one case. However, if the joint committee is privileged to keep up with the case during its progress, very little time would be required.

CHICAGO'S SECRET TAX SYSTEM

I invite further attention to the fact that the city of Chicago has had a secret tax system. An interesting article was written about that secret tax system not long since. The writer of the article warned the American J>eople not to keep their assessments secret. That should apply not only to the city of Chicago but to every State, county, and municipal government, and the Federal Government as well. Here is what happened in Chicago: It was discovered in an investigation that one man would be paying $5 taxes on his home, while the man next door would be paying $50 taxes on a home that had the same value, and the one next to him was paying $500 on a similar home. The reason why the man was paying $5 on that valuation was because of a political pull that he had and the secrecy of the returns, and it is my understanding that as a result of those fraudulent returns, which resulted by reason of a secret tax system, all assessments were declared void. Today Chicago is very much in the red and trace it back and it all comes from a secret tax system. Certainly there should be some way that representatives of the people should have the right to examine a tax return when the one who filed that return is making application for public funds to be returned to him.

A secret tax system has kept some of our so-called " big men" out of the penitentiary. I know one, and probably more, who would be in Al Capone's company were it not for our secret tax system.

TAX CHEATERS NEED NO PROTECTION

When the so-called "big men" of our Nation, the heads of the largest banks and ·· industrial · concerns in the world, seek to use, and do use, every method on earth to evade the payment of taxes justly due to their Government and seek the benefit of every loophole and twilight ruling for that

1934 CONGRESSIONAL RECORD-HOUSE 2601' purpose, they should not be further protected by secrecy. Many of our citizens pay no attention to the law. We have discovered that they believe in law and order only when they can make the law and give the order. They use the credit of our Nation, which represents a mortgage upon our homes and other property, free of charge and run rough-shod over our laws and Constitution. Such a group is not entitled to be dealt with in a secret manner.

One of the best revenue measures we could pass is one permitting publicity of income-tax returns. It would cause more money to come into the United States Treasury. than any other proposal that I know of.

I appeared before the Ways and M~ans Committee of the House asking that a provision be inserted in the pending tax measure permitting income-tax returns to be subject to public ~spection. It is my belief that the Government should deal with its taxpayers in an open and above-board fashion; that no secrecy should be allowed either in the expenditure or collection of public money. To require names and amounts paid to be subjected to public inspection would be very helpful. I am n1Jt so much interested in requiring as I am in permitting publicity. Even if the information could only be disclosed in answer to written inquiries of the Bureau of Internal Revenue, we would have a great improvement over the present system.

PUBLICITY FOR ALL OTHER RETUltNS Why should we have secret tax returns? Would you

stand for it in your own city, would you stand for it in your own county, would you stand for it in your own State? Would you be willing to have your tax collectors collect your money secretly and disburse the money secretly? Why, no; you would not. So why stand for it in this Government of ours? Every argument against it will apply with equal force to city, county, and State.

MITCHELL WOULD HA VE SUNG A DIFFERENT TUNE Do you think that Mitchell, head of the National City

Bank, when he was sitting in his own room writing a little note to his wife, "I hereby transfer to you so much stock'.' and at the same time saying that he did that to evade taxes, and thereby deprive the Government of hundreds of thousands of dollars--do you think he would have dared do that if the return had been subject to public inspection? No. There is only one answer.

MORGAN WOULD HAVE PAID Do you think that J. P. Morgan, the year he launched

his two and a half million dollar yacht and collected $8,000,000 interest on Government tax-exempt bonds and then neglected to pay any income tax of any kind--do you think he would have dared to do that if the income-tax returns had been subject to public inspection? You know he would not.

HOW IT CAN BE DONE I do not want to put the Treasury Department to too much

trouble, but I suggest that every person making an incometax return might fill out a publicity sheet which could be detached and sent to a separate department and which would be subject to inspection of any citizen at any time. There would be no harm to the Government, no inconvenience to the Treasury Department. The sheet would contain limited but all essential information.

WISCONSIN HAS PUBLICITY The State of Wisconsin has publicity of income-tax re

turns. The people in that State are well pleased with it, so far as I am able to find out-certainly, the people of Wisconsin see no reason why they should not have publicityjust like the city tax, the county tax, the State tax.

READ ABOUT WISCONSIN LAW

If you are interested in this subject, I hope you read what Senator LA FOLLETTE has said about 10 years of secrecy and 10 years of publicity of income-tax returns in his State. You may find his discussions of this subject in the bound CONGRESSIONAL RECORDS for June 13, 1933, page 5852, and for June 9, 1933, page 5419.

[Here the gavel fell.]

Mr. TREADWAY. Mr. Chairman, I yield to myself 5 minutes. Mr. Chairman, the gentleman from Texas for a long period of time has endeavored to convince the House of the merits, as he says, of the publicity of income-tax returns.

The gentleman from Texas appeared before the Ways and Means Committee at the hearings, and in the course of a colloquy, or rather before the colloquy began, the gentleman made this statement--and I am reading from page 303 of the hearings. He said:

The State of Massachusetts has a provision requiring publicity of tax returns.

Mr. Chairm·an, I ask that the Clerk read a telegram that I received from the Commissioner of Corporations and Taxation of the State of Massachusetts.

The CHAIRMAN. Without objection, the Clerk will read.

The Clerk read the following telegram: BosTON, MAss., January 15, 1934.

Congressman ALLEN T. TREADWAY, House of Representatives:

Answering your letter January 13. The statement attributed to Congressman PATMAN is in error. Massachusetts income tax returns are not available for publicity nor open to public inspection nor have they ever been. Massachusetts has always maintained her well-established principle that the relations between its taxing authorities and the taxpayer are entirely confidential and a complete and honest disclosure of the taxpayers' liability to pay can be made without hesitation. It seems reprehensible even to think of publishing the tax information furnished the Government by an individual taxpayer, as it cannot possibly help the governmental tax authorities but might seriously injure the taxpayer in his business and private relations. Massachusetts has a provision in the law that the tax commissioner must anwer yes or no to the question of did so-and-so file an income-tax return, but he cannot go ·further because the law forbids giving any further information as to a person's income tax return which can be used only for the proper calculation and collection of the tax. The law prohibits the commissioner and his assistants from giving any information in respect to income-tax returns and has a penalty in the event they do, which faces them with a fine or imprisonment, or both, and disqualification from public service. Over a long period of years it has been proven beyond question that Massachusetts has gained materially by adhering to the principles of no public disclosure of the taxpayers' information. I do not believe that Massachusetts will ever depart from that principle because the attitt1de of the Massachusetts taxpayer is one of cooperation and not one of hostility.

HENRY F. LONG, Commissioner of Corporations and Taxation.

Mr. TREADWAY. Mr. Chairman, if the gentleman from Texas is no more correct in his statements in relation to the general subject of publicity of tax returns than he has shown to be in the accuracy of his statement about the law in Massachusetts, I do not think the House need worry a lot about publicity.

Mr. PATMAN. Will the gentleman yield? Mr. TREADWAY. Yes. Mr. PATMAN. Does not the gentleman know that all in

come-tax returns in the State of Massachusetts are subject to public inSpection of the amount paid by taxpayers? Every year it is announced from Massachusetts how much in income taxes was paid by Henry Ford and others. So they do have publicity of the essential information there.

The CHAffiMAN. The time of the gentleman from Massachusetts has expired.

Mr. TREADWAY. I yield to myself 5 minutes more. I prefer to follow Commissioner· Long's reference to the

law rather than what the gentleman from Texas says about it. Henry Ford owns Wayside Inn, at Sudbury, Mass., made famous by Longfellow. The tax on this property is, · of course, a matter of town record, and I am of the opinion that the gentleman from Texas has his wires crossed. ·

Now, Mr. Chairman, the gentleman made several statements on the floor a moment ago in relation to the subject matter. One had to do with refunds. I am surprised that a Member of the House as well informed as we seem to find our friend from Texas [Mr. PATMAN] should fail to know that refunds have to be reported to Congress every year when they are in excess of $500. This report gives the name and addre_ss of the taxpayer and the amount refunded. In the

2602 CONGRESSIONAL. RECORD-HOUSE FEBRUARY 15 case of refunds-of $20,000 and more, the information given is more complete.

The CHAIRMAN. The time of the gentleman from Massachusetts has expired.

Mr. TREADWAY. I yield to myself 5 additional minutes. The gentleman from Texas went on to say that we ought to have these refunds reported. The law distinctly provides for that very thing, and if he wUI look at section 1676 of the Codification of the Internal Revenue Laws he will find that I am quoting to him the law under which he can see all the income-tax refund reports that he wishes to see. Moreover, the law provides that all refunds in excess of $75,000 must be referred to the Joint Committee on Internal Revenue Taxation before they can be paid.

Mr. PATMAN. Mr. Chairman, will the gentleman yield to me?

Mr. TREADWAY. Oh, the gentleman need not talk so loud. I can talk just as loud as the gentleman from Texas, and I ·shall continue to in my 5 minutes. With all due respect to my friend, I think he occupies probably an hour to every 5 minutes· on the :floor that I do. When I take the floor I like to use the 5 minutes myself. The gentleman further says that these examinations ought to be in the hands of experts. In whose hands are they but those of experts? I have had dealings with the chief of staff of the Joint Committee on Taxation for quite a number of years, and if the gentleman from Texas thinks that he is equally expert with that gentleman, he is showing great conceit, and that is all I have to say about it. I would trust the examination made by experts that we employ as against nosing desires of the gentleman from Texas.

There may be some advantage--there is one advantage, possibly, for this publicity of income-tax returns. It might show that somebody has not fully reported the amount of profits that he made in some business. Aside from that, I defy anybody to show the slightest good to be gained from publicity of income-tax returns, other than an effort, possibly, to blackmail. There are at least six outstanding reasons why it is not within common sense or decency to call for such publicity. First, the business secrets of competitors in business will be revealed. That is a good enough reason for any sensible man for not putting these reports in the public's hands.

Another thing is that the tax experts would be on every taxpayer, in order to get commissions for trying to save the taxpayer money. It would be the greatest harvest for the tax exp.erts who want to actually try to save in an illegal way money in behalf of the taxpayer. There is no question about that. No one can for a moment doubt it.

In the third place it would seriously interfere also with the taxpayer whose business may not be profitable. Frequently a man has to make an income-tax return which, if known to the public, might seriously embarrass him in his business.

Next is a reason that would not hit me, though it might hit the gentleman from Texas, because I judge he is a man of great property and means. Persons with substantial incomes would be hounded by bond and stock salesmen, promoters-every kind of person-trying to get a commission selling stocks or bonds or wildcat schemes. The income-tax returns form the best basis imaginable for the creation of so-called "sucker lists." ·

Mr. PATMAN. Mr. Chairman, will the gentleman yield? Mr. TREADWAY. I shall be glad to yield if the gentle

man wants to deny his afiluence. Mr. PATMAN. I disclaim any such afiluence; and any

bond salesman can get that same information now from either Bradstreet's or Dun's or from other credit agencies or banking institutions.

Mr. TREADWAY. Oh, I beg the gentleman's pardon, but that is not official information. I, for one, never have made such a report as the gentleman speaks of, and I have done business in Massachusetts for 30 or 40 years. I never have made any report to Bradstreet or Dun, and nobody can compel me make a report to them.

Mr. PATMAN. The gentleman said these tax lawyers will have a great harvest. One has to have a license to practice before the Bureau of Internal Revenue. One who would resort to such methods could easily be disbarred.

Mr. TREADWAY. When you deal with the Treasury Department or the Income Tax Bureau, you are dealing with officials; but when you deal with Bradstreet and Dun, you are dealing with business people. It is a great distinction.

The CHAffiMAN. The time of the gentleman from Massachusetts has again expired.

Mr. TREADWAY. I shall have to yield myself 2 minutes more to finish my statement.

Mr. PATMAN. Let me ask the gentleman another question. I want to explode another fallacy.

Mr. TREADWAY. There are no fallacies to explode in what I have stated, and I do not yield to the gentleman.

Mr. MOTT. Mr. Chairman, will the gentleman 'yield? Mr. TREADWAY. If I have any time, I shall be glad. Mr. MOTT. Just for a question. Mr. TREADWAY. I yield for a question. Mr. MOT!'. As a member of the Committee on Ways and

Means, is it not a fact that if the gentleman from Texas had voted against the gag rule instead of voting for it, and had assisted in killing the gag rule, it would then have been possible for the gentleman from Texas to have offered his publicity proposal in an orderly way by way of amendment?

Mr. TREADWAY. If he could have gotten a sufficient number of his Democratic colleagues to vote that way; but the gentleman voted for the gag rule, as I did.

Mr. MOTT. Then, in view of these facts, what is the pur- · pose of the speech of the gentleman from Texas?

I am glad the distinguished member of the committee yielded to me for the purpose of asking this question in regard to the gentleman from Texas [N'.u-. PATMAN]. I tried to ask this question of the gentleman from Texas himself, but the gentleman from Texas never yields to anyone for a question which he thinks may be embarrassing to him. And I might add that most questions that have been put to the gentleman from Texas at this session have been exceedingly embarrassing to him.

Mr. TREADWAY. Mr. Chairman, the fifth and greatest objection to this whole program is the possibility of blackmail, and you cannot get away from that as being an accurate statement. Further than that, if at any future time in its lack of wisdom Congress decides to make public such tax returns, then I say the man who applies for the right to see those returns should have his name published as well as the taxpayer's. That never has been suggested. Further than that, who is going to be smart enough to make these examinations, and why? Our tax exports are here for that purpose. I do not know who is going down to find out what Mr. PATMAN is paying unless he is some inquisitive salesman or a possible blackmailer.

The sixth disadvantage of publicity would be that every man will be made a spy on his neighbor and every employee a spy on his employer, or such persons will refuse to stoop to this practice, with the result that nobody with good purposes will examine the returns.

The CHAIR1\1AN. The time of the gentleman from Massachusetts has again expired.

Mr. TREADWAY. Mr. Chairman, in extension of my remarks I wish to say that no practical plan has been advanced which would secure the sole advantage to be claimed from the publicity of returns which at the same time would eliminate the serious disadvantages which have been stated. Until such a plan is advanced I am unalterably opposed to any such policy.

I wonder what my colleagues who favor publicity would expect me to do if we had complete publicity of returns. Do they expect me to look over their returns and the returns of the other Members? Do they expect to spend several months a year themselves checking up returns? Who do they expect will do this work? I know who would do this exam1mng if we had complete publicity--surely not my colleagues. surely not our honest citizens, surely not the

I t934 CONGRESSIONAL RECORD-HOUSE 2603 loyal employees. The type of people who would do the examining would he high-powered salesmen, the unethical tax expert, business competitors of the sharp-practice type, credit men, disgruntled employees, curiosity seekers, and black.mailers.

In my opinion the country does not want any such system as this, and if we force it upon the country we will by that act sound the knell of the income tax. The records show that the income-tax returns of the Civil War period were open to public inspection; That income-tax law was repealed, and the principal arguments for such action were based on the abuses resulting from publicity.

Mr. Chairman, I yield 20 minutes to the gentleman from New York [Mr. REEDJ.

Mr. REED of New York. Mr. Chairman, I am very glad of this opportunity to express my personal appreciation to the members of the Ways and Means Committee for the courtesy they have extended to me since I became a member of that committee .. . I want to bring home to the Members of the House a word or two with reference to the work done by a subcommittee of the Ways and Means Committee. On the 9th day of June 1933 a resolution was passed which authorized the Ways and Means Committee or a subcommittee thereof to investigate tax avoidances and also to discover, if possible, new sources of revenue. That committee was composed of Hon. SAMUEL B. HILL, of Washington; Hon. THOMAS H. Cm.LEN, of New York; Hon. FRED M. VINSON, of Kentucky; Hon. JERE COOPER, of Tennessee; Hon. ALLEN T. TREADWAY, of Massachusetts; Hon. FRANK CROWTHER, of New York; and Hon. JAMES A. FREAR, of Wisconsin. While the Membership of this House may have been enjoying a vacation, those men entered upon the discharge of their duties, and with the exception of 2 months1 they worked continuously until they made their report to the full Committee on Ways and Means on December 4 of last year.

On December 15 the Ways and Means Committee took under consideration this revenue bill, and if the Members will examine the hearings closely, you will see that very intensive study has been given to a highly technical subject.

I think it would be well worth the time of every Member of the House to read carefully, word for word, the report of the subcommittee. I have taken the liberty of making a sort of an analysis, giving the pages where the various subjects are treated in this subcommittee report, a report of some 49 pages. If the Members of the House desire to

• become familiar with the major and many of the minor tax problems which will arise here every 2 years, they could do no better than to study this report. It is arranged in sucdnct form, in logical sequence, and treats each subject in a way that is very understandable, even to a layman.

I am interested in one item in this bill. It deals with the removal of an excise tax. I want to go back a little into the history of the grape industry so that you may understand the justice of the removal of this tax, which this bill eliminates.

I can remember back when I lived on a farm, we had about 6 acres of vineyard. It was one of the early vineyards in Chautauqua County. Prior to our putting out 6 acres on our farm, there were only a few acres of vineyard in the township. There was no particular market for grapes then; but little by little the farmers put in small acreages, 5 acres, 6 acres, up to 10 acres of grapes. The income from those grapes helped them to pay the taxes and send the boys and girls to school. It was a sort of a cash income, very much the same as. the cash income which the southe.rn farmer receives from the cotton oil that he gets from the cottonseed. Gradually and up to the present time the acreage has increased, so that in Erie and Chatauqua grape belt there are some 30,000 acres of grapes. The grape farms average about 10 acres each. There was a time when they received a fair return for their grapes, but grapes have been developed in Ohio, Michigan, and other States, thus increasing competition. Some 3,000 farmers in my district are engaged in raising grapes; about an equal number in Michigan, a large number in Ohio, some out in Arkansas,

some in Washington; but you will find vineyards on almost every farm of any size east of the Rocky Mountains.

We raise a particular variety of grape known as the Concord. It has never really been adapted 'to the making of wine. Chemists have tried to make a palatable wine. but they have found it was better adapted to use as a table grape, and also in the making of unfermented grape juice. a pasteurized drink.

As time went on the market for table grapes was greatly imperiled by the development of vineyards in other states. In certain years, because of weather conditions, grapes would ripen in Michigan, New York, and Ohio at practically the same time. The result was that trainloads of table · grapes came into the Chicago, New York, Cincinnati, and · St. Louis markets, creating a glut in the market. The fruit being highly perishable, it would often spoil while it was waiting to be marketed, and in many cases the farmers would not get even the freight on the grapes. Grapes cannot be held in cold storage for any length of time. It is· too expensive; -but the farmers finally devised a plan for developing unf ermented grape juice. Factories were erected in my district, also in Michigan, Arkansas, Washington, and various other States. It is very expensive to erect these processing plants. They are operated for only 3 months or less a year. This method, however, although · expensive, has enabled the farmers to store the juice until it could be. absorbed by the market. A large portion of the unfermented grape juice is sold in our hospitals and prescribed by physicians for convalescing patients. It has been very beneficial. Up to the time of the economy act, the Federal Government was a very large_ purchas_er of unf ermented grape juice for use in the veterans' hospitals. However, that market has been largely lost because it has been necessary to cut down the expenditures of the Veterans' Bureau hospitals. ·

Another thing that enters into the picture is the great cost of raising grapes. When a vineyard is set out it requires 4 years before the vines come into bearing. A man who has a vineyard must have special apparatus, special farm tools, a p~cking hoµse, and other equipment not used in general farm work. The containers have increased in price; farm machinery has· increased in price; farm labor, during a period of years, has increased, and freight transportation has increased, with the result that the price of grapes has gone down.

In the 1932 Revenue Act the Senate, laboring under a misapprehension, placed a tax of 5 cents a gallon on unfermented grape juice.

Now, that is equivalent to a tax of over $8 a ton on grapes. Grape juice cannot compete with synthetic drinks because it costs so much to raise the grapes, so much to process the grapes that the grape juice has to be sold for a fairly high price, much higher than the price of synthetic drinks. The manufacturer, unable to pass the tax on to the consumer, has found it necessary to protect himself against this tax of 5 cents a gallon by reducing the price paid the farmers for their grapes. Last year the farmers who raised grapes received, on an average, $12 to $18 a ton. It is utterly impossible for a farmer to pay his labor, to pay for material, to pay for the frequent spraying and constant cultivation and have anything left at all from such a low price. The result is that the farmers in my district are in a desperate situation. The same holds true of the farmers in Michigan, Ohio, Arkansas, and many other States where grapes are grown. The farmers have been penalized by the tax to the extent of over $8 a ton.

Here is another situation I want to bring to your attention: Grapes are not a basic commodity under the Agricultural Adjustment Act. The result is the farmers have had no relief whatever from the Federal Government, except some of the cooperatives have received loans; but the situation has been so desperate that one of the cooperatives in my district has gone into the hands of a receiver; farmers have suffered terrifically from the loss, because, as a result of this failure, they have not been paid for crops produced 2 years ago. We cannot plow under every third

2604 CONGRESSIONAL RECORD-HOUSE ;FEBRUARY 15 row of grapes; we cannot destroy the vineyards. Unless the vines receive fertilizer, they soon deteriorate and become less productive. It is very difficult to bring them back to normal production. The vines have to be rooted out and replanted with new stock.

Our farmers are getting no money from the Federal Government, no loans to take care of the surplus grape juice. We must have relief from Congress; and the only relief that Congress can give, so far as I know, is to remove this 5-cents-a-gallon tax on grape juice. The provision in this bill removes the 2-cent tax on other fruit juices--lemon Juice, orange juice, and pineapple juice-all of them strictly farm products.

I think this committee deserves great credit in recognizing the situation as it exists in these States by removing the gallonage tax on grape juice and other fruit juices contained in the 1932 act. I know that when the question comes before the House, the Members on both sides of the aisle, understanding the situation, will vote as a unit to remove this unfair tax from all fruit juices. The tax on other fruit juices outside of grape juice is 2 cents a gallon. The tax on grape juice is 5 cents a gallon.

The total revenue realized by the Government from this tax during .the year was only $214,000. Why? Because of this tax many farmers did not even pick theh' grapes, did not harvest their grapes, and they could not afford to harvest them for the prices they were receiving.

I am very glad of this opportunity to talk on this par-ticular phase of the bill.

Mr. EVANS. Mr. Chairman, will the gentleman yield? Mr. RE.ED of New York. I yield. Mr. EVANS. The vote of the committee on the proposi

tion of removing this tax was unanimous, was it not? Mr. REED of New York. The action of the committee was

unanimous. Mr. EVANS. So there is no dissension at all as to the

removal of this tax on fruit juices? Mr. REED of New York. That is true. Mr. DOUGHTON. Mr. Chairman, I yield 30 minutes to

the gentleman from Kentucky [Mr. VrnsoNJ. Mr. VINSON of Kentucky. Mr. Chairman, ladies and

gentlemen of the Committee, as stated by the distinguished gentleman, who has just preceded me [Mr. REED of New York], the tax revision end of this bill, H.R. 7835, was considered by a subcommittee who spent many months on the subject matter. The work of the subcommittee was done under the authority of a House resolution authorizing this work. I was honored by the distinguished chairman of our committee, Hon. R. L. DOUGHTON, of North Carolina, to sponsor its passage through the House. It was adopted on June 10, 1933. The subcommittee consisted of Hon .. SAMUEL B. HILL, of Washington, chairman, THOMAS H. CULLEN, of New York, JERE COOPER, of Tennessee, and myself, Democratic members, and ALLEN T. TREADWAY, of Massachusetts, and FRANK CROWTHER, of New York, Republican members. The work of the subcommittee proceeded through the summer and fall. It made its report to the full committee on December 4, 1933, in a printed statement consisting of 42 pages.

We state, in compliment to ourselves, that the consideration of this general income-tax revision was wholly without political bias. The conclusions of the subcommittee were reached without a single division of its members. It was a unanimous report.

After the report of the subcommittee was submitted to the full committee, very comprehensive hearings were held, witnesses upon pra-ctically all the various subject matters presented their views, and thereupon the full committee spent several weeks in consideration of the subcommittee's report, the testimony of the witnesses and the views of the Treasury as expressed in the printed statement of the Secretary, and thereafter amplified through the Treasury's representative, Dr. Roswell Magill. The result of the full committee's consideration is H.R. 7835, which the Treasury endorses and estimates to yield $258,000,000 in the plugging of loopholes and the stopping of gaps in the income-tax structure.

It was the thought of those who initiated the resolution that there were loopholes that should be closed; that there were gaps that should be plugged in order that taxes might be collected from those who had incomes, those who are able to pay; in order that the tax burden might be distributed more equitably.

It might be interesting to know that when the incometax law was originally written we had a normal rate of 1 percent on individuals and a like rate on corporations. What happened after it was placed upon the statute books? The World War came along and it was necessary to increase the rates both as to individuals and as to corporations, to raise additional revenue in that field. The rates were increased; the revenues were obtained; and then with this burden upon them, the large taxpayers came silently. and secured amendment after amendment that applied to their particular industries and their particular class. Thereby we saw written into the law provisos and amendments that in effect nullified the purpose of the country in adopting the income-tax amendment and the passage of laws pursuant thereto. When the rates were reduced the amendments for the favored few remained in the law.

We are told by the experts, both those of the Treasury and of the House, that this is the first time there has been an effort to have a comprehensive revision of the incometax laws. This very nature of the. bill is good reason in defense of such a rule as was enacted by the House for the consideration of the pending bill

I now wish to ta!te up in as logical sequence as I may certain features of this bill, endeavoring as best I can to state my views with reference to them and to their effect.

TAX-RATE STRUCTURE

The first subject is the tax-rate structure. At the outset, let me say, the purpose of the subcommittee and the full committee as well in respect of this item was not to increase the rate on the income-tax payer as such. Our effort was to simplify the income-tax structure affecting millions of American citizens. Now, how do we do this? At the present time we have two normal rates, two brackets-the 4-percent and the 8-percent bracket. The committee has wiped out one of these brackets and now there is only one normal bracket of 4 percent. When it came to surtaxes, under the present law we have 53 brackets; the committee reduced them to 28 brackets. Certainly this will simplify the making of reports.

Personal exemptions and the exemption of dependents: We applied these exemptions not only against the normal tax but against the surtax as well. The effect of this change is to permit a married man with dependents to get the break. He will pay 1-::ss tax because of this change than he does now. The single man with no dependents will have an increase. The increase is very small and the decrease ls not large.

In this bill we bring back the earned-income philosophythat is, we make a distinction between income that is earned from wages, salaries, professional fees, and compensation for personal services and income from corporate dividends and partially tax-exempt interest.

I would like to know if there is a single Member of this House who would attempt to defend for one moment a law that would compel the man with an earned income to pay more taxes than the man that has an unearned income? To state the case answers it conclusively.

Income from partially tax-exempt interest and income from dividends have capital behind the income. It certainly is fair to tax this income reasonably and that is what we have endeavored to do in this bill.

How did this occur? By dropping the bracket where the surtax begins from $6,000 down to $4,000. Thus, we bring into the tax base millions of dollars of interest from partially tax-exempt securities, and corporate dividends. You understand that corporate dividends and partially taxexempt interest are not taxed at the normal rate. They are not subject to the normal tax, but they are subject to the surtax. We dropped the surtax bracket from $6,000 down to $4,000 and thereby made a broader base for sur-

.1934_ .CONGRESSIONAL _RECORD-HOUS;E_ 2605 taxes. Under the terms of the bonds from which partially tax-exempt interest is collected, this income is not subject to normal tax.

The changes in the tax rate structure, Mr. Chairman, will not increase the income tax of an individual in this country who has an income from salaries or wages or ordinary business. It decreases the taxes of married men with dependents. A person with an earned income gets a reduction. This reduction comes in as 10 percent of the gross income up to $8,000 used as a deduction rather than a credit. The earned-income feature makes a reduction in the tax, and all earned income up to $8,000 has a lesser tax to pay than heretofore.

It was suggested by a gentleman on the committee that it might not be fair to make the increase, not in rate, Mr. Chairman, but by virtue of the change in the surtax bracket, of the tax paid by a gentleman whose income would be $22,000 solely from corporate dividends or partially taxexempt interest. As I recall the figures, the increase was 100 percent. It was an increase from the present tax of $600 to the sum of $1,200. This looked like a real increase, whether you did it by broadening the base or by increasing the rate, which we did not do. But when you look at this same gentleman on the other side, the man who has an income of $22,000 from salaries, wages, Oi" from ordinary business, we found that under the present law he was paying about $2,000 tax and under the proposed law something less than that. This change in the rate structure means $28,000,000 to the Treasury of the United States. This is money that will be collected from those who are well able to pay. ·

Mr. HOEPPEL. Will the gentleman yield? Mr. VINSON of Kentucky. I yield to the gentleman from

California. Mr. HOEPPEL. Does the gentleman approve of taxing

unearned income more than earned income? This is what we find in the bill.

Mr. VINSON of Kentucky. I am fearful the gentleman did not get the real import of my remarks, because I just got through saying that the man with an income of $22,000 from partially tax-exempt interest and corporate dividends pays 100 percent increase, whereas the man who earns it in ordinary business pays no increased tax. In this bill we increase the taxpayer's bill 100 percent. · I feel certain the gentleman understands that the corporation pays a tax on its income before the dividend is distributed. The dividend under present law is not subject to normal tax. I can say to the gentleman from Calif omia that in the 1932 House bill, as well as the 1933 N.R.A. bill, I helped include provisions making corporate dividends subject to the normal rate, which was estimated in the 1932 bill to raise $88,000,000. The opponents argue that such a tax is double taxation, since the corporation has once been taxed upon it. The Senate refused this tax in the 1932 revenue bill, refused our provisions applying the normal rates on dividends in the N.R.A., but adopted a modified dividend tax of 5 percent collected at source, which, of course, went off automatically with the ratification of the twenty-first amendment in the proclamation of the President. Because of the promise made that such tax would be repealed upon the ratification of the twenty-first amendment, the committee felt that it would not be keeping faith with the country to subject this income to the normal tax at this time.

Mr. HOEPPEL. That is exactly what I want to find out, whether the gentleman is in favor of a higher tax for earned income or not?

Mr. VINSON of Kentucky. I certainly am not. I am in favor of earned income. paying its proportionate share of the tax burden of this country. But, as I have just stated, we have brought into the tax base in the lower brackets partially tax-exempt interest and corporate dividends not heretofore taxed in these brackets, and thus are placing the heavy hand of the Federal tax collector upon that sort of gentleman, as I have indicated.

Mr. HOEPPEL. The gentleman has not answered the question.

Mr. VINSON of· Kentucky. I have answered the question, if I understand the gentleman.

Mr. HOEPPEL. I asked the gentleman whether he approved of a tax on earned income larger than on unearned income?

Mr. VINSON of Kentucky. I certainly do not. Mr. SAMUEL B. HILL. Will the gentleman yield? Mr. VINSON of Kentucky. I yield to the gentleman from

Washington. Mr. SAMUEL B. HILL. In connection with the example

given by the gentleman from Kentucky as to the tax on the smaller income, the gentleman was limiting it to partially taxable Government securities and dividends from corporations.

Mr. VINSON of Kentucky. It was wholly that sort of income. I will say to the gentleman that when we take a taxpayer who has an income from wages, salary, or business, and likewise income from partially tax-exempt interest and corporate dividends in this increased tax, the gentleman will see that his attitude is well preserved in this bill.

Mr. SAMUEL B. HILL. Following up my statement, may I say that a corporation pays a 13%-percent tax on its corporate income. This is distributed to its stockholders and the stockholder pays on the distributive share of the dividends received no normal tax, but only a surtax. He pays a surtax upon his income according to the bracket in which he is placed. The recipient of a dividend from a corporation pays no normal tax. The recipient of interest on Government securities, partially taxable, pays no normal tax. He pays only a surtax. In this bill we· have increased the ~urtax of that individual on these partially taxed securities and corporate dividends 4 percent.

Mr. VINSON of Kentucky. May I say to the gentleman from California that this is the point I think he overlooked in connection with my statement: That is, that we bring into the tax vision and tax range income from partially tax exempt interest and corporate dividends that heretofore have not been taxed at all.

Mr. HOEPPEL. The gentleman has not answered the question yet.

Mr. VINSON of Kentucky. I have answered the question. Mr. HOEPPEL. I would like to get a statement from

the gentleman on the proposition, yes or no. I certainly feel that earned income is entitled to the lesser tax. ·

Mr. VINSON of Kentucky. I will say to the gentleman that when the corporation pays 13% percent, P.nd oftentimes they pay 2 percent additional, totaling 15% percent, that no one can o~erlook such tax in the effort to tax dividends. If our provisions are written into the law, and we drop the surtax from $6,000 to $4,000, the man who has what we term an income from partially tax-exempt interest and corporate dividends will be paying a very materially increased taxation without any increase in the tax rates.

When you increase the rates you are increasing the tax on the man who has an earned income as well as the man who has the so-called " unearned income."

DEPRECIATION

I now want to develop the depreciation item. This item was called to the attention of the Ways and Means Committee by me in the last session of the Congress when we went out to get the money for the amortization of the Public Works bonds, aggregating $3,300,000,000. I thought I had sold the idea to certain gentlemen connected with the Treasury and that $85,000,000 to $100,000,000 of revenue might be obtained in the lessening of the amount taken in annual depreciation. But it was said at that time it was necessary to have the cold coin of the realm, certain money, so that the purchasers of the bonds, amounting to $3,300,000,000, would know that the revenue had been provided in cold cash for their amortization. . Consequently, we were not able to impress our views successfully upon the Treasury and upon the committee at that time. ·

The subcommittee gave very considerable study to this item of depreciation. The fact we had before us when w~ started was that the depreciation item was mounting

2606 CONGRESSiONAL RECORP-HOUSE rEBRUARY 15 by leaps and bounds, both as to corporations _and a.s to individuals.

The Jaw as it is written today provides for a reasonable allowance of depreciation. It was toought by those who had given the matter some study that more than a reasonable allowance in depreciation was being awarded. This wa.s a difficult matter to develop~

When we got the facts and figures we found that in many instances, through the course of years, not only were corporations receiving 100 percent in depreciation, to which they were entitled, but in many cases they were receiving more than 100-percent depreciation. The depreciation item is simply giving credit for the use <Jf property according to normal life.

Mr. ARNOLD. Will the gentleman yield? Mr. VINSON of Kentucky. I yield to th~ gentleman from

Illinois. Mr. ARNOLD. I wish the gentleman would explain what

he has in mind when he says that depreciation c>f more than 100 percent ls taken. I do not understand how it is possible to take depreciation of more than the value of the property.

Mr. VINSON of Kentucky. Well, it is hard for a person With the honest mind of the gentleman from Illinois to conceive that such a thing ever could happen, but I may say to the gentleman from Illinois it has happened many times. I can give the gentleman an illustration that will show how it happens.

We were told by our experts and by the Treasury' experts that this condition actually existed: Assume you have a plant that uses a. machine -that is given a 10-year life for purposes -0f depreciation. I think the gentleman will recognize that when the normal life of machinery is fixed for depredation that is ori the side -0f the taxpayer. In other words, the machinery would probably last longer than 10 years, but for the purpooe of depreciation it is assumed that the· machine will last 10 years. Now, assume you add a $100 machine every year for 20 years.

At the end of the tenth year, or the eleventh year, your first $100 machine should have 1·00 percent depreciation and pass from the picture, but it does not work out that way. We had men before us who testified that this was the actual way in which such depredation is handled: When you come down to the end of the twentieth year you would write off $1,950 in depreciation and then you would have the nineteenth machine with 9 ·more :v~rs of life, the eighteenth machine with '8 more years of life, the seventeenth machine with '7 more years of life, and when the final line was drawn they would get $2,450 of depreciation on items that cost $2.,000.

Mr. ARNOLD. Does the gentleman take into consideration the addition to capital assets in the buying of the new machines?

Mr. VINSON of Kentuclcy. Yes. That is carried right on down, the trouble is you do not drop off the value of the maehine that has had 100 percent depreciation allowed. ·

The subcommittee, after many weeks of work, concluded that we would have to go in and operate, and we recomme.nded that there be a 25 percent reduction in depreciation allowances for a temporary period of 3 years, 1934, 1935, and 1936.

Now. Mr. Chairman, this was in the nature of a meat-ax operation. I want you to realize that the law says there shall be a reasonable allowance for depreciation, but we could not get at the matter administratively. We had to do it by legislation and we planned for a temporary period of 3 years to reduce the depreciation allowance 25 percent and thereby recover for the Treasury of the United States $85,000,000 per annum.

Mr. TERRELL of Texas. Will the gentleman yield for a question on this subject.

Mr. VINSON of Kentucky. I yield to the gentleman from Te.xas.

Mr. TERRELL of Texas. Did the committee allow the same percentage of depreciation on the various kinds of industries, including oil wells .and everything else?

Mr. VINSON of Kentucky. I am fearful the gentleman is confusing depletion with depreciation. ·

Mr. TERRELL of Texas. I had reference to depletion. Mr. VINSON of Kentucky. The bill makes no change with

reference to percentage depletion. Mr. TERRELL of Texas. The bill leaves that exactly as

it was before? · Mr. VINSON of Kentucky. I know the gentleman from

Texas is interested in percentage depletion and this bill does not affect that.

Mr. EVA.'l\lS. Will the gentleman yield? Mr. VINSON of Kentucky. I yield to my colleague from

California. Mr. EV ANS. I fully appreciate the splendid work the

gentleman did on the subcommittee which sat for many months, having heard · the work expounded before the full committee, but the gentleman will recall that I did not concur in his views on this one paint.

Now, I would like to ask the gentleman if he believes that the plan proposed by the subcommittee allowing only 25 percent of actual depreciation would it be fair to the taxpayers who have been modest in reporting their depreciation in comparison to those whD have been padding their depreciatkm accounts?

Mr. VINSON of Kentucky.· I will be glad to answer the gentleman. When the subcommittee made its report we were criticized and attacked because it was said that our recommendation taxed capital. - The Treasury even misunderstood us because when they made the report on that item they attacked it rather severely, but when the representative of the Treasury Department came before the committee and his attention was called to a matter that he had overlooked-that our method of . treatment was merely temporary, that the proposed 25-percent reduction was for only 3 years-his testimony will show a much changed attitude.

Now. referring to the question by the gentleman from California, whether it was fair to the man who had been modest and the man who made an honest return. I will say that the man who had been honest in his statement of depreciation allowance would not have lost a dollar in depreciation, but, as a matter of fact, when a taxpayer had no income he was in a better condition under our proposal than under the language of the bill. He would still have this difference to use when he .. had taxable income.

Under the subcommittee's proposal we merely deferred the taking of the other 25-percent depreciation after the fiscal year 1936.

Mr. EV ANS. Will the gentleman yield again? Mr. VINSON of Kentucky. I will yield. Mr. EVANS. Does the gentleman believe that would be

fair, to compel the honest tax,payer who has claimed no more than he is entitled to, to compel him to defer his claim for three or four years'?

Mr. VINSON of Kentucky. I will say that the modest~ honest taxpayer to which the gentleman refers would not be affected under the subcommittee's plan, would not have lost a single dollar in depreciation as a deductible act.

Mr. EV ANS. After the end of the deference, probably that is true.

Mr. VINSON of Kentucky. As a result of the subcommittee's work, and as a result of the study of the subject by the Treasury, they came to us and said they would recover into the Treasury of the United States in administrative manner a sum equivalent to that which would have been covered into the Treasury, under the original proposal; namely, $85,000,000 yearly.

We have it on the printed page. in the lett.er signed by Mr. Morgenthau, Secretary of the Treasury, which may be found in full in the report. In the first place, they are going to review the income-tax reports, and fair depreciation shall not be reduced. Improper depreciation items will be handled in two ways. It will be done in reduction of the rates themselves, and then there will be ame dments to the regulations of the Treasury. At the present time, while the regulations say that the burden of proof is upon the

'.1934 CONGRESSIONAL RECORD-- -HOUSE 2607 taxpayers, in respect of reasonable allowances, that language is followed by the statement--

That such deductions will not. be disallowed unless shown by clear convincing evidence to be unreasonable.

In the first part of the regulations as they did stand, they said the burden of proof was upon the taxpayer to show reasonableness in the items for depreciation. Then in the next breath it says:

That such deductions will not be disallowed unless shown by clear and convincing evidence to be unreasonable.

Under new regulations the Treasury proposes to let the taxpayer show that the items are reasonable.

Mr. EVANS. Mr. Chairman, will the gentleman yield? Mr. VINSON of Kentucky. Yes. Mr. EV ANS. Will the gentleman state whether or not

that has not always been the real intent and purpose of the law?

Mr. VINSON of Kentucky. In regard to the burden of proof?

Mr. EV ANS. Yes. Mr. VINSON of Kentucky. I think it may have been to

start with. It seems to me it is one of those things that started off right-the burden of proof would be on the taxpayer. Then somebody came along who wanted to put his hand into the Treasury and to lower his tax burden and added additional language which nullified what was patently the original purpose.

Mr. EVANS. The gentleman will remember that in committee some of us contended that the law had always been sufficient to take care of the condition of which the gentleman complains.

Mr. VINSON of Kentucky. Yes; the law is fair, but the old regulation nullified the law. Under the old regulations it was impossible for the Treasury of the United States to go out and prove that the items of depreciation which had b.een sub::nitted in complicated businesses were unreasonable by "clear and convincing evidence." But now, under the schedules to be prepared by the taxpayers, they are to submit these items of depreciation and defend them. As a result of this change in the attitude of the Treasury, the change in these regulations, together with one further treatment, they tell us that they will recover into the Treasury something like $85,000,000 annually on the depreciation items alone.

Mr. BLANCHARD. Mr. Chairman, will the gentleman yield?

Mr. VINSON of Kentucky. Yes. Mr. BLANCHARD. I think the gentleman stated it was

possible under the old regulations for a taxpayer to obtain the benefit of more than 100-percent depreciation.

Mr. VINSON of Kentucky. I said that, and I hope that my illustrations proved it. At least, I am certain that that condition has arisen many times.

Mr. BLANCHARD. Was it not possible under the law and the present regulations for the administrative authorities to prevent a taxpayer from taking more than 100-percent depreciation?

Mr. VINSON of Kentucky. I certainly feel they had that power and that it should have been done, but the fact remains it was not done. There is one further thought in connection with depreciation, and that is this: The Treasury is going to operate it in this way, and possibly I can give you an illustration that will make it plainer than the use of many words. Naturally, when the life of property is determined for depreciation purposes, it is a reasonable thing to take such a figure that too taxpayer will not be injured. I think that is fair treatment. For instance, we had testimony that in many cases more depreciation had been allowed than was proper in accordance with the normal life of the property. Take, for instance, a plant that cost $10,000,000, and say that it had a 10:.year life, and therefore a depreciation of $1,000,000 a year. It runs along, say, for 7 years and $7,000,000 in depreciation has been taken. That would give a remainder of depreciation over a period Df 3 years of $3,000,000. With repairs and replacements,

and with the present outlook, the Treasury expects to review inspect, and determine a new life for purposes of deprecia~ tion. It is very probable that in going into that plant, instead of saying it would become obsolescent or worthless at the expiration of 3 years, they may say that it will have a normal life of- 10 additional years. It is proposed, in the treatment for depreciation, instead of allowing $1,000,000 a year for the 3 years remaining, to take that $3,000,000 and spread it over the new life of 10 years and allow a depreciation to the extent of $300,000 a year instead of $1,000,000. Thereby the taxpayer will not be deprived of a single copper cent in depreciation items at the end of its life; the owner will have his full 100-percent depreciation. If it becomes useless and worthless before its new life is lived, full 100 percent can be taken.

Mr. SAMUEL B. HILL. Mr. Chafrman, will the gentleman yield?

Mr. VINSON of Kentucky. Yes. Mr. SAMUEL B. HILL. And this readjustment in the

Treasury Department is the direct result of the disclosures by the Committee on Ways and Means as to this depreciation item. It is the direct result of the efforts of the Committee on Ways and Means in disclosing the extortionate demands in the way of depreciation allowances.

Mr. VINSON of Kentucky. There is no doubt about that because at the time we took it up with the Treasury that work had not been started. I might say that it is with pleasure that I note in the press that the great American who is our chief, President Roosevelt, is quoted as being strongly behind the efforts to stop the leaks because of excessive depreciation allowances.

DISCRIMINATORY FOREIGN TAXES

I want to develop one item in the bill-that is, present section 104-which deals with taxes that may be levied against the income of foreign individuals or foreign corporations, when it is determined that discriminatory taxes have been levied by such nation against our citizens and our corporations . . This provision was proposed by me in an effort to secure fair treatment for American industry abroad.

My friends, there are nations throughout this worlct,. who are not particularly friendly to Uncle Sam in a business way, and when they get an opportunity to dig into the pocketbook of his citizens, whether individual or corporate, they have not hesitated so to do.

There is one country, France, that is not satisfied with taxing the income of American individuals and American corporations as they tax their own citizens; they are not satisfied with getting a tax upon the income that is actually derived in their own country; but when the American parent company of that subsidiary declares dividends, they place a corporate tax upon these dividends, derived from whatever source. They are not satisfied with that, but they are seeking to use as a basis for their taxation the entire income derived by that American individual or corporation, wherever earned. Now, that is intolerable; and the committee, in its wisdom, has inserted a provision that will be known as "section 104" of this bill empowering the President of the United States when he,· in his discretion, ascertains and determines that discriminatory taxes have been levied against American citizens and American corporations, may increase the income tax upon individuals and corparations from that nation 50 percent of the ordinary income taxes that it would otherwise pay. This power can be used to protect American business from present discrimination and will probably help restrain foreign countries from further discriminatory levies.

CONSOLIDATED RETURNS

Mention was made today of consolidated returns, and we were chided with the fact that the committee, as presently constituted, had increased the rate on those corporations which chose to make consolidated returns from a 1-percent penalty to a 2-percent penalty instead of abolishing the returns in their entirety. Now, my friends, at different times in this House since I have been a Member, particularly in the act referred to by the gentleman from

2608 CONGRESSIONAL RECORD-HOUSE ;FEBRUARY . 15 Massachusetts in 1924, I voted to abolish consolidated returns. I think I voted to abolish them a time or two since. I do not know that I have changed my mind materially in that respect, so I have no quarrel with the gentleman 1'rom Massachusetts CMr. GIFFORD] with reference to his attitude toward the abolition of such returns; but I want to tell the House the condition which confronted us and what actuated us in bringing in this a-0.ditional penalty for those corporations filing consolidated returns rather than abolishing such returns.

In the first place, it was in 1932, as I recall, that we increased the tax that would be paid by corporations filing the consolidated or affiliated return. We made that penalty 1 percent. In other words, 137'4 percent is the normal cor-porate rate, and we increased it to 14%. ·

Mr. DOUGHTON. I think the 1932 law provided for three ·quarters of 1 percent, and the National Recovery Act raised it to 1 cent.

Mr. VINSON of Kentucky. I am glad to have the correction. It was increased a quarter of a cent under the N .R.A. law.

When we came to the treatment of this matter in this bill we were not able, because of the physical work attached to the consolidated returns that had been filed under this penalty statute, to have a complete picture of consolidated returns. That is a fact that no one can dispute. We did not have the complete picture. Many concerns testified that it would mean a loss of money to them if these returns were abolished. Others testified that they would not lose any money; that they would have intercompany transactions, and by bookkeeping entries change the profits and losses in such a way that it would not mean additional taxes. I believe that a substantial increase in revenue can be obtained by abolishing the consolidated returns, but I do not believe that such an amount of additional revenue can be obtained as many of my friends believe. I know that the bookkeeping arrangements in companies which are 100 percent owned by a parent corporation can be juggled so that real revenue from that source cannot be recovered.

Now, of course, as members of a committee and as Members, of the House, we have to be governed to a large degree by the evidence that is submitted to us, just as a jury who tries a case. I recall distinctly that in 1932 we were told that the abolition of the consolidated return would not mean a dollar of additional tax to the United States Treasury. I did not agree with that. I do not agree with that now. Later the Treasury told us that possibly $5,000,000 would be recovered if the consolidated returns were abolished. I just overlooked mentioning the thing nearest my heart when I think of the abolition of the consolidated return, and that is the .competitive factor in consolidated returns. I think that is a vicious thing. Back to revenue: The Treasury of the United States today tells us that with the added 1-percent penalty, and that is what it is-it is a penalty-we will recover into the United States Treasury $40,000,000 per year. Forty million dollars at this time is a considerable sum. I submit to you that when you compare $40,000,000 with $5,000,000 in the event the consolidated returns were abolished, you have a ditierence of $35,000,000 per year to consider.

The CHAffiMAN. The time of the gentleman from Kentucky CMr. VINSON] has again expired.

Mr. DOUGHTON. Mr. Chairman, I yield the gentleman from Kentucky 15 additional minutes.

Mr. VINSON of Kentucky. This will not be the only Congress. Some of us may not be here in the next Congress, but other gentlemen, probably far more capable than we, will cany on. When you take the added penalty of 1 percent for another year, you will get a better picture of the consolidated return. You will know how many corporations are willing to pay the 2-percent penalty for this privilege. While you are getting the real picture, you are getting the money paid into the Treasury of the United States in the amount of some $35,000,000 annually.

Mr. MAY. Will my colleague yield for a brief question for information?

Mr. VINSON of Kentucky. I shall be glad to yield to the gentleman.

Mr. MAY. I have read this bill, but it is a matter of such complex technicality that it takes almost an expert to understand it, and I am frank to admit there is one feature of it I do not understand.

I am sure my colleague can advise me on it; that is, the system that has been approved by the Treasury in the past of making refunds of income taxes to various corporations, which I have understood has always arisen more from the method of :figuring depreciation and items of this kind than anything else. Does this bill in any way stop these leaks so that the Treasury will not have to resort to so much calculating and refunding as it has done in the past?

Mr. VINSON of Kentucky. The question of refunds in the main is an administrative feature governed by the laws on the books. I think I can say without fear of contradiction that the legislation proposed in the pending bill not only will make recovery possible in _the first instance where money is justly due but also will prohibit the refunding of that money collected which was justly, fairly, and reasonably due. ·

Mr. KNUTSON. Mr. Chairman, will the gentleman yield? Mr. VINSON of Kentucky. I yield. Mr. KNUTSON. Before the gentleman takes his seat will

the gentleman discuss the publicity feature of this bill to which attention was called by the gentleman from Texas?

Mr. VINSON of Kentucky. I fear I shall not have time to do that. Other gentlemen have done it and still others will speak on' it.

PERSONAL HOLDING COMPANIES

The bill endeavors to reach a very prevalent form of tax avoidance which has been practiced for years by individuals with large incomes who form corporations which hold their personal income-producing property. This permits the collection of the corporate tax upon the income from his property and avoids such income from paying the surtax, which would have been imposed upon it, had the income from said property been received by the individual rather than the corporation.

To illustrate, a man with a million-dollar annual income from taxable bonds under existing law would pay $571,100. However, if a holding company was organized to take title to such bonds or other property, the corporation would receive the income, whereupon the old tax would be the corporate tax of $137,500, as long as no dividends were distributed. In this way, a tax saving of $433,600 is readily seen.

This resolution sets up the definition of personal holding. companies. They are defined as any corporation, 80. percent of whose gross income for the taxable year is derived from rents, royalties, dividends, interest, annuities, and gains from the sale of stock or securities and whose voting stock to the extent of more than 50 percent is owned by not more than five individuals at the close of the taxable year. All members of a family in the direct line, as well as the spouse and brothers and sisters are counted as one individual.

This measure levies a tax of 35 percent on what is defined a:s "undistributed adjusted net income" of such corporations. The manner of arriving at this undistributed adjusted net income is clearly set forth in the bill.

An amendment reducing the 50-percent rate carried in the present section no. 104 to 25 percent and excluding the amount of dividends paid during the taxable year is felt by the committee to make this provision of law, present section no. 103, more readily enforceable. It is estimated that from · these amendments $25,000,000 will be recovered into the Treasury.

POSTAL RATES

There is no member of the Committee on Ways and Means, so far as I ·know, who desires the continuance of the 3-cent postal rate on first-class matter. The recommendation for its continuance is brought about solely because of the specific recommendation of the President in his message

t934 CONGRESSIONAL RECORD-HOUSE 2609 ' and the recommendation from the Post Office Department that such rates be continued for 1 more year. The testimony before the committee in relation to the revenue end of the question was that the Treasury would lose $75,000,000 this year if the old rate were restored. We personally feel that a portion of this might be offset by increased volume, but as the sum total is so large the committee did not feel that it could make this restoration in this bill.

The committee, however, permits the old rates on the advertising matter in newspapers and publications to terminate on June 30, 1934. This item was not asked to be continued by the President in the Budget message above ref erred to.

As a matter of fact, the present rates on such advertising matter were inserted in the bill in the Senate in the 1932 Revenue Act. The Treasury, speaking through Hon. Ogden L. Mills, urged the increase on first-class matter from 2 cents to 3 cents per ounce; but, as I recall it, had no recommendation with reference to the advertising matter and second-class rates. The rates then existing were those recommended by a joint committee of the House and Senate, who put in 2 years' work on the postal-rate structure. The rate in effect prior to the 1932 Revenue Act on the advertising matter in newspapers and publications were those recommended by such joint committee after this extended study. For some reason, after the House bill got to the Senate, the rates on advertising matter in newspapers and publications then existing was raised. The conference report agreed to the increased rates.

Here is the result of the increased rates on this advertising matter. It has driven millions of pounds of advertising matter and many more millions of pounds of newspaper matters from the mails. In 1932, under the old rates, the mail carried 384,000,000 pounds of advertising matter. With the increased rates in 1933 the advertising matter was reduced to 265,000,000 pounds, a loss of 119,000,000 pounds in volume.

The Third Assistant Postmaster General, in a communication to me, advised that it would require a pick-up of 102,000,000 pounds of such advertising matter at the old rates to prevent any loss in revenue; that if the same amount of volume were carried in 1934 as in 1933, there would be a loss of two and one half million dollars in revenue. With the testimony available, the committee concluded to restore the rates in existence prior to 1932. It was the view that considerable volume of advertising would be restored, and likewise considerable revenues from nonadvertising matter in newspapers and publications would be received. Undoubtedly, much volume has gone from the Post Office Department because of the increase of these rates to shipments by truck, baggage, express, and freight. While the entire amount of revenue may not be picked up in the first year, it is the hope of the committee that such volume heretofore lost will be ultimately restored.

I wish to refer to an administrative change with reference to the tax on gasoline. This tax is a very sore spot to the Members of this House and we all are hopeful that the day will come when we can take the Federal Government out of this field of taxation.

A reading of the bill might leave the impression that there is some change in the rate. There is no change in the gasoline tax rate. What is done in this regard is simply to call for the payment of the tax on gasoline by the manufacturer. The 1932 bill provided that where the manufacturer sold it to a dealer, the manufacturer did not pay the tax; but you can very easily understand that the dealer might want to evade the payment of the tax, or he might be a fly-by-night dealer. So we have provided that the tax shall be paid by the manUfacturer. Then the manUfacturer will get a refund of the taxes paid on the gasoline sold by the dealer UPon which he pays tax, or which he shows went for a tax-free purpose. It is very apparent that if a dealer avoids payment of the tax, he enters unfairly into competition with his neighbor who does pay the tax.

It is estimated there will be a pick-up in the sum of $20,000,00~ or $25,000,000 through this particular ad.minis-

trative feature without any additional burden upon Iegiti- · mate dealers or legitimate business.

REGULATORY TAX ON CRUDE PETROLEUM AND REFINERIES

Through the provisions of this bill, there is levied a tax on crude petroleum and the refining of crude petroleum, one tenth of 1 cent per barrel each. It should be stated, however, that this is not a tax for revenue. The amount in itself shows that it is not a revenue proposition. It is a tax levied purely for regulatory purposes. As a matter of fact, I would not have supported a tax upon a commodity of this character, either in the raw state or in the refined state, but the induitry was very, very strong in its urging of this particular regulatory tax. They said that under the code authority the Federal Government should have the power to go in and inspect, should have this regulatory power, else code authority in this great industry might crumble and fall. It was at their urgent insistence that this regulatory tax was placed in the bill. It might be well to suggest that only recently a Federal court handed down a decision relative to the power of the Federal Government in respect of the oil industry, and this legislation may be very helpful to the oil industry throughout the country without being any appreciable burden whatsoever.

FOREIGN TAX CREDITS

I come now to the question of foreign tax credits. We did not get the full measure in this regard. I believe it was in the 1932 bill that we first observed the loopholes in our legislation on this subject. We found, Mr. Chairman, that in a statute that had been built for one purpose, to prevent credit for foreign taxes paid, just like the regulations in the Treasury Department had been originally built in regard to · depreciation, where it said there .should be no credit for taxes paid in foreign countries, a proviso was added: "Nevertheless, perhaps, mayhaps, but"; and then, through parenthetical clauses within very complex clauses, they rigged up a system whereby at one time the taxpayer doing business abroad was able so to apply ·his tax paid abroad as to wipe out entirely the tax on his domestic income.

In other words, if a corporation made $100,000 a year in America from American industry but paid a tax abroad of $15,000, it would take that $15,000 foreign tax and wipe out the tax of the American Government on earnings made in this country. Attempts were made to cure this situation and it was finally thought to be cured, but such was not the case for we saw the spectacle where certain credits were still allowed for taxes paid abroad. We plugged up that hole in the 1932 bill. We did not get all we sought inthe bill, but I want to say, frankly, I think it is a fair compromise. Our effort was to secure the taxes paid abroad as a deductible item rather than a tax credit. Now, if you use the taxes paid abroad as a deductible jtem, it amounts to about a 30-percent credit. Under the provision of the subcommittee the taxpayer gets 50-percent credit. So the only difference between the proposal of the subcommittee and that which is written in the bill is something like 20-percent credit of the foreign tax item. We feel that American industry should be encouraged in its business abroad, that we should take into account that part of their business where they use American labor, where they use American raw material and ship it abroad. We thought that the 50-percent compromise at this time was a fair one.

My time is about up, but before I close I want to pay my respects and tribute to some heroes that ordinarily are unheralded and unsung, and that is the staff of the joint committee, composed of our friends, Parker, Stam, Chesteen, and those other splendid fellows; and the legislative counsel, Beaman, O'Brien, and the other gentlemen associated with them, to that splendid, experienced, and helpful coworker, W. L. (better known as "Pete") Price; and then some fellows down in the Treasury, Bartholo, King, and others. I must refer to the splendid spirit of cooperation shown by our new Secretary of the Treasury, Mr. Morgenthau. He was keenly · alive to the question involved and cooperated. splendidly with us. Then the last one, evidently a real find, as I see it, for this or any administration, and that is Dr. Magill. I may say, however, that Dr. Magill does not like

•.

2610 CONGRESSIONAL ·RECORD-HOUSE ;FEBRUARY 15 ~ to be called "doctor", for some reason. He is a prince of good fellows; he is a profound student; he knows taxes; he thinks straight; he is a most capable gentleman. I think the whole committee will join me in saying that never has there worked with us any more splendid group than Dr. Magill and this group of splendid gentlemen. [Applause.]

Mr. FREAR. And, the gentleman might add, he comes to us at a less salary than he was getting at Columbia University.

Mr. VINSON of Kentucky. Thanks. This administration and this country would have a good investment in Dr. Magill at most any salary he might request. It is a difficult matter to iron out the different points of view held by the Treasury Department and by Congress. Dr. Magill rendered great service in this bill.

He showed breadth of mind and vision in meeting the House viewpoint, the viewpoint of the Representatives of the American people. I think I am within my rights in expressing appreciation to these gentlemen. We have lived together so long, we have had so many friendly fights together, that we c~n almost say we are one family. [Applause.]

Mr. TREADWAY. Mr. Chairman, I yield 1 minute to the gentleman from New York [Mr. CULKIN].

Mr. CULKIN. Mr. Chairman, I ask unanimous consent to extend my remarks in the RECORD by incorporating a letter from the Chairman of the Committee on Rivers and Harbors [Mr. MANSFIELD] on the subject of "Waterways."

Mr. PARSONS. Mr. Chairman, reserving the right to object-and I do not expect to object-may I ask what the subject matter was?

Mr. CULKIN. This is on the subject of "Waterways", with which subject the gentleman is very familiar.

The CHAIRMAN. Is there objection to the request of the gentleman from New York?

There was no objection. Mr. CULKIN. Mr. Chairman, under leave to extend my

remarks in the RECORD, I include the following letter written by Judge MANSFIELD, Chairman of the Rivers and Harbors Committee, to Mr. Lachlan Macleay, vice president of the Mississippi River Valley Association. This letter is by way of reply to the propaganda now being circulated by the railroads against existing and contemplated waterways. Judge Mansfield is a technician in this field, and his letter is very illuminating.

JANUAllY 31, 1934. Mr. LACHLAN MACLEAY,

Executive Vice President Mississippi Valley Association, 511 Locust Street, St. Louis, Mo.

DEAR MR. MAcLEAY: I am in receipt of your letter of January 25, enclosing copy of an article by George Creel entitled, " Get Out of the Ditches", and recently appearing in Collier's. The copy you send is a reprint in the form of a folder, by permission of the publishers, and, as you say, is being distributed to pa.ssengers on the Missouri Pacific trains. .

I read the article when it appeared but considering it a story for pastime reading, and seeing no authentic information in it, I failed to file it for reference. I have now reread it, and find no reason to change my first impression.

The writer criticizes waterways in general, but stresses the Government barge-line operations, the Missouri River improvements, and the St . Lawrence Treaty in particular. None of these measw·es can be said to be hobbies of mine or of the Committee on Rivers and Harbors, of which I am now the chairman.

The barge line is under the jurisdiction of the Committee on Interstate and Foreign Commerce. The St. Lawrence Treaty ta entirely with the United States Senate. I could not think of expressing a view in the face of that august body. For the information of Mr. Creel I will say that it has not yet been ratified, and the enormous expenditures he has in mind have not yet been authorized.

As to the Missouri River, the section below Kansas City has been under improvement for 70 years or more. When the proposition was before Congress to extend the project to Sioux City, I opposed it and helped defeat it in the committee. When it was offered as an amendment on the fioor of the House, I voted against it.

At that time every railroad lnfiuence in and around Congress joi.ned with the friends of the Missouri to have it put in the bill over the opposition of the Rivers and Harbors Committee. Their purpose was to load the bill down with what they considered objectionable matter, with a hope of eventually defeating the measure or of causing it to become unpopular. The Missouri River is, therefore, the baby of the railroads. They should not now disown or disinherit their ofispring. ·

I have looked over some of Mr. Creek's figures, to which you call my att.ention. Like the report of Mark Twain's death, they are " very much exaggerated." They remind me of some of the populist orators .of 40 years ago, who dealt so lavishly in figures. He says:

"Rivers and canals to date have cost the Federal Government around $1,000,000,000, and this is exclusive of the appropriations for flood control, seacoast harbors, and the Great Lakes."

I haven't the figures before me for the past year, but have a statement from the Chief of Engineers showing the expenditures from the beginning of our Government to June 30, 1932. It 1s as follows:

Cost of river and harbor work to June 30, 1932

River and harbor work New work Maintenance

Atlantic-coast harbors______________________ f.!76., 208, 555. 85 $83, rm, 913. 57 Gulf-coast harbors___ ___________________ ________ 85, 811, 659. 54 51, 843, 300. 30 Pacific-coast harbors ___ --- --------------------- 67, 84).(, 446. 37 26, 316, 488. 76 · Mississippi River system_ ___ __ .______ __ ______ 377, 2Zl, 994. 18 61, 17!, 183. 25 Intracoastal waterways_________________________ 47, 818, 948. 41 8, 746, 083. 35 Great Lake.'!_____ ___________ ____________________ lM., 798, 520. 23 40, 569, 220. S. Inland waterways__ ________ ___ _____ ____________ 38, W2, 939. 10 17, 137, 604. 55 Hawaiian harbors__________ ___________________ 9, !JO, 648. 78 616, 611. 79 Alaskan harbors________________________________ 1, 614, 388. 19 3J5, 608. 61 Puerto Rican harbors___ ____________________ 2, 671, 06l 57 529, 429. 66 Sacramento River, Calif____________ ________ 38I, 814. 93 2, 789, 879. 49

1-~~~~~-~~~~~-

Total _______________ _.__________ ________ 1, 062, 210, 9n. 15 29'J, 66{), 324.17

From this statement it will be seen that inland and intracoastal waterways combined have cost only $550,507,102.84 while ocean, Gulf, and Great Lakes harbors and channels, including also those o! Hawaii, Alaska, and Puerto Rico, h ave cost $805,370,198.47.

It must be borne in mind that more than 90 percent of these expenditures for harbor improvements have been made at the urgent request of the railroads, who have been the greatest beneficiaries of such improvements. Their viewpoint is, that the portion of these expenditures which is for the benefit of the railroads 1s not subsidy, but the portion for the benefit of others is subsidy.

Of the New York Stn.te canals, the article says: " New York has poured an aggregate of $346,000,000 into its

canal system." These figures are not borne out by any authentic statement.

On May 26, 1932, the Committee on Rivers and Harbors passed a resolution for the Engineers of the War Department to review this subject. A distinguished board was appointed for the purpose, consisting of Cols. George M. Hoffman, E. M. Markham, and G. R. Lukesh, and Major Eugene Reybold. All of these gentlemen have international reputations for ability, thoroughne5s, and accuracy. This same Colonel Markham is now a major general and Chief of Engineers of the War Department. ·

On September 28, 1933, the board made its report to Congress, which is embraced in Document No. 20, Seventy-second Congress, second session. Paragraph 17 of the report is in part as follows:

"17. The State of New York had expended large sums upon the construction, maintenance, and operation of its canal system before it was decided, in 1903, to build the more modern and so-called • barge system ', but the amounts actu.a.l.ly expended on the old Erie and Oswego Canals cannot be reliably stated. From the best available sources it has been determined that the tot al cost of all branches of the existing barge canal system (Erie, Oswego, Cayuga, and Seneca and Champlain Canals) , including court and legal costs, fees, and expenses of appraisers and consultants, damages, engineering, accounting, and superintendence, cost of real estate and water rights, reservoirs, power houses, bridges, terminals, and grain elevators was $230,881 ,000 up to June 30, 1932."

This report, it will be observed, emanating from the highest authority we have upon the subject, places the cost of the New York canals about $120,000,000 under the figures given by Mr. Creel.

As to the St. Lawrence River, Mr. Creel says: "It will cost between $999,000,000 and $1,350,000,000." Evidently he broke the keyboard of his typewriter before finish

ing his array of figures . I will let this statement of Mr. Creel be answered by the President of the United States. In the documentary statements submitted by him to the Senate on J anuary 10, 1934, embraced in Senate Document No. 110, on page 3, appears the following language:

" The total United States share of the cost of completing this waterway to open the Great Lakes to ocean-going commerce under the treaty is estimated at $272,453,000, including the development of 1,100,000 horsepower on the United States' side of the International Rapids .' Of this it is proposed, under the terms of the joint resolution which has already passed the House of Representatives, that $89,726,750 be assumed by the State of New York as representing the cost which may fairly be allocated to the power project. This would place the total net cost to the United States for the entire project under the treaty at $182,726,250."

These were the estimates of cost agreed upon by the boards of engineers representing both Canada and the United States. They were the result of perhaps the most thorough investigation ever made of any waterway.

Of the Missouri River, Mr. Creel says: "It was first figured that the comparatively small sum of

$3,500,000 would make the Missouri River permanently navigable between St. Louis and Kansas City."

l934 CONGRESSIONAL RECORD-HOUSE' 261l Further on he says -that - $58,000,000 ·wm now be required to

do this same work, first estimated at $3,500,000. I have not run across these estimates he refers to, but he says

they were the first estimates for the Missouri. If so, they were made somethi!lg like 70 years ago. At that time the elaborate system of dikes and revetments now being installed to prevent bank erosion, as well as fqr aid to navigation, were not even dreamed of. Those · early improvements only contemplated a depth of 27'2 to 3 feet for the little packet steamboats then in operation, carrying perhaps from 60 to 150 tons. The present improvements are for large steel barges in fleets of six and carrying from 6,000 to 10,000 tons. If Mr. Creel had gone to some reliable source for his information, he might have obtained these facts.

You, of course, know full well the tremendous influence exerted by the railroads to defeat the appropriations necessary to carry out the Missouri River improvements. This caused a very large proportion of the expenditures to go to waste. But for these infiuences the work could have been completed many years ago and at less than one half the cost. If you should desire any further information in regard to these matters, I will be glad to have them checked up and furnished you. I am,

Very truly yours, J. J. MANSFIELD.

Mr. TREADWAY. Mr. Chairman, I yield 5 minutes to the gentleman from Minnesota [Mr. JoHNSONJ.

Mr. JOHNSON of Minnesota. Mr. Chairman. no one can accuse me of taking up much of the time of this House, and I am only going to take up 5 minutes now. I want to pay my respects to all the members of this committee, who have been in session so long and have worked so hard. I want to particularly pay my respect to the gentleman from Nebraska [Mr. SHALLENBERGER] for putting this amendment of foreign oils and fats in this bill in order to help the American farmer and more especially the dairy farmer. I was at work for several days trying to prepare an amendment at that .time, and I went to the Federal Tariff Commission to get the information necessary, as I did 10 years ago when I found that Denmark, New Zealand, and other butter-fat-producing countries had exported to this country during the months of January and February 1924 butter fat to the amount of over nine and one half million pounds. As the Members of this House know, I introduced a short resolution to put a tariff on butter Jat coming into this country. It took a long time to investigate the cost of production of butter fat, not alone here but in Denmark. It took a still longer time for the President to sign the proclamation after the Federal Tariff Commission had agreed that a raise in the tariff of 50 percent, as I had requested in the resolution, was necessary.

The reason I mention this is to show that the American farmer has not been taken care of as he should have been. Even Republican spellbinders throughout the State of Minnesota have agreed that my resolution has brought millions of dollars to the dairy farmers of this country, and I hope that this amendment by the gentleman from Nebraska [Mr. SHALLENBERGER] will bring millions of dollars more in better prices for their products.

Mr. Chairman, we are all apt to make mistakes. We cannot put a tariff on duty-free coconut oil and other oils

· and fats from the Philippine Islands, but the thing we can do is to put a tax on this vicious flood of oil imports. I want to be fair to everybody. '!here are two sides to every question. And, as I have sat here day in and day out listening to these wonderful orators that I have had the privilege of listening to on both ends of this Capitol and in both houses of my own State legislature, it has often occurred to me that I would be willing to trade my voice for part of their brains, and in spite of this oratory it is very seldom that something worth while is accomplished for the farmer. [Applause.] But at the same time we have to get together and do something for the basic industry of this country. Unless we, the farmers, have buying power-apd I want to say to you gentlemen who represent the great industrial centers of this country, especially the New England States, that you cannot expec;t to sell very much to us unless you provide the necessary steps for building up prices for the things the farmer has to sell. His market to a great extent must be protected if he is to continue to be the greatest purchaser of manufactured goods both for his home and farm.

[Here the gavel fell.]

·Mr. TREADWAY. Mr: Chairman, I yield the gentleman 5 additional minutes ..

Mr. JOHNSON of Minnesota. Mr. Chairman, I will not take up much more time.

If the farmers of this country would have been organized like labor and big-business people we could have come down here to Congress and would have put our demands through and received attention. If we had been organized 100 percent it would have meant something. [Applause.]

We have the Farme~s· Union, Farm Bureau Federation, Farm Holiday Association, and the National Grange, -and other farm organizations, all-powerful well-meaning groups, perhaps, but still at the same time somewhat disassociated in matters of policy and principle and representing entirely different views on farm legislation. I say that big business has always been presenting a united front and it is big .business and special privilege that has written their own legislation in the style and form that would best suit their interests. But let farm organizations such as I have mentioned bring a program into this body and it is emasculated · to such an extent that it is no longer the same child. If we could get the farmers of this country solidly behind a program I am confident that beneficial farm legislation would be placed on the statute books, and this amendment that we are now striving to pass would have long been a law and the farmers would have long been benefiting under the provisions of it.

I have stood with the Democratic side on most of my votes, but, I have not voted for any gag rule so far, nor will I ever stamp my seal of approval upon gag rules [applause]; and I do not need to go home to Minnesota to apologize for my votes, as many may have to do when facing the voters at the next election.

As I stated, if we had been organized 100 percent; we could have accomplished something here, but we farmers are divided. One group has been telling us how to raise more, and we have spent millions and millions of dollars to · do so, and now we have to engage the "brain trust" of this country to tell us how to raise less, and even destroy the things that we have raised. Is it fair, is it right?-and if the prominent Congressman over. here will let me say something about what industry is doing every time the American farmer tries to get a square deal, I should be glad to take up a couple of minutes more.

The American dairy farmer has been slowly but surely crushed out of existence, he has, because of the ever increasing imports of duty-free fats and oils that have fiooded this country from the Philippine Islands, and also because of duty-free copra that has found its way into the United States by the millions of pounds. Mr. Speaker and Members of this House, I know that each and every one of you is anxious to aid the dairy farmer and the stock farmer. I know that this body is honestly endeavoring to see that commodity prices are again placed on a basis that will assure co.st o{ production with a profit to agriculture, and I know that if this Membership vote in behalf of section 602 of the revenue act they will, in a large measure, accomplish that very thing.

Section 602 of this act provides that a tax of 5 cents per pound be placed on the processing of all foreign coconut and sesame oils in manufacture or production of an article for sale. This processing tax to apply to the first use of this oil, and would also apply on the manufacture of mixtures and combinations of this oil. So rapidly have these imports been increasing and so effectively have they been finding their way into the homes of the consumers of this country that the Government has had to require the farmers to destroy acreage, by plowing under cotton, slaughtering thousands of hogs, and · have argued corn-hog reduction agreements, thus causing large surpluses of our domestic fats and oils to relegate to storage.

There is no livestock overproduction in this country; do not let anyone ever try to tell you that. But I personally do not believe that we can attain satisfactory results from a production-control .program until something is done to assure the American producer of the home market. The importa-

2612 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 tion of fats and oils, duty free, from the Philippine Islands is decreasing the demand for various fats and oils produced in this country. During July, August, and September of 1932 we imported from the Philippine Islands 152,000,000 pounds of coconut oil and copra, while during this same period in 1933 this figme increased 280,000,000 pounds. The coconut oil which has come into this country during this 3-month period amounts to as much beef tallow as that produced by 3 million 1,000-pound prime steers, or, putting this on a per-month basis, 1,000,000 steers per month. At present there are 9,000,000 cattle, and four and one half million are slaughtered under Federal inspection per year in this country, so you can readily ascertain what percentage of our domestic market is affected by this vicious flood of duty-free imports. Not only has it vitally affected this industry, but the evil influences are found in the large city markets, where oleomargarine and lard prices are reduced to such a figure that the dairy farmers are forced to sell their milk and butter products at below cost figures in order to compete with poor-quality butter substitutes.

The danger of this situation is alarming when we stop and pause and consider that the Philippine Islands and other growers of coconuts are considering the flooding of this country with still greater amounts of these oils and fats. Where 65,000,000 coconut trees were in production this year, we find that within a short time 35,000,000 more trees will be in production; and, with 100,000,000 coconut trees producing, the American home market for butter products, lard compounds, salad oils and dressings, and paints and their products will be completely destroyed.

The American farmer for years has petitioned Congress to aid them in their just fight for a home market that would be protected against this pernicious flood of coconut and sesame oils. More than 50,000,000 pounds of American butter would be consumed annually by the American people if the amendment to the revenue act was placed into effect. This amount now represents what is produced by the use of these imported oils and fats. Every farm organization with the interests of the farmers at heart is and has been actively behind this tax amendment. Today every farmer in this country. is anxiously awaiting Congress' action on this part of the revenue act. We must not fail them now. It is our duty to assure American agriculture that we are behind them. We must give the farmer the protection that his home ·market needs. He is the best customer on earth for American manufactured goods. Let us not desert him on this real chance to help.

Let us get solidly behind our good friend and colleague, Mr. SHALLENBERGER, on his amendment as introduced into the Ways and Means Committee. I wish to congratulate him on his very deserving efforts for our Ame1ican farmers and I ask the complete support of this body in behalf of our farmers.

I remember, as a member of the Minnesota Legislatureand I served in the State house and senate-and as a member of the senate I introduced a resolution to prohibit the State of Minnesota from using butter substitutes in State institutions. The bill passed the house and came to the senate. I shall never for get the day I walked into the senate chamber. In a speech I said that no one could dispute that by using butter instead of butter substitutes such as oleomargarine, we would build up the bones, flesh, and nervous systems of the unfortunates who were in our institutions; and I stated that the doctors would agree with me, and for this reason the resolution should be passed.

However, the oleomargarine lobby had already placed before the membership of the State senate propaganda illustrating and purporting unsanitary conditions of milk production and butter manufacture in a despicable effort to block the passage of my butter resolution. They tried to show how butter would be distributed so as to spread disease and went so far as to belittle the food content of butter as compared to oil substitutes. I am happy to say that my butter resolution was passed in both branches but was vetoed by a Republican Governor. In the next session, with the pressure of all Minnesota's dairy farmers behind the

measure, we succeeded in making it a law, and, gentlemen, in later years in the United States Senate I am glad to say that the butter resolution calling for investigation and tariff regulation sponsored by me has placed mil!ions into the pockets of all of the dairy farmers in the United States and has today reduced foreign competition of butter to an almost negligible amount. [Applause.]

This bill should have been amended in other ways, and I am firmly convinced that this Membership would vote al-

. most solidly behind amendments to eliminate the so-called "nuisance taxes" now prevailing on bank checks, as well ~s the reduction of the 3-cent postage to 2 cents for the first ounce. Both of these measmes should be eliminated at the first possible moment, and I am sure had the cloture rule not been put on this bill that these two items would have been properly eliminated and amended.

Ml·. TREADWAY. Mr. Chairman, I yield 20 minutes to the gentleman from Minnesota [Mr. KNuTsoNJ.

Mr. KNUTSON. Mr. Chairman, the bill now before the House is the result of many months of hard work on the part of the Subcommittee and the whole Committee on Ways and Means. We Etarted to hold hearings early in December and there came before our committee representatives of the Treasury Department, the Post Office Department, and scores of private individuals from every part of the country. One and all were given a full hearing for it was the earnest wish of the comffiittee to get all possible information before the measure was drafted. In this connection I wish to pay tribute to our chairman, Mr. DOUGHTON, and to the ranking minority member, . Mr. TREADWAY, both of whom proved towers of strength in the great problem that we had to solve.

Mr. Chairman, no member of the committee will contend that the bill now before us is perfect, but we do not hesitate to say that it is as good as it was possible for us to make. At no time was there any partisanship displayed in the committee and all worked together to a common end, that of putting a stop to the tax evasions that are possible under the present law. Our aim was to present a measure that would be sound and fair, and yet produce the required revenue.

For one, I am glad that the special rule, which accompanied the bill, was adopted by the House yesterday because that will prevent the 5 cents per pound excise tax on vegetable oils from being stricken from the bill while the measure is in the House. Ordinarily, I am opposed to gag rules; but when the Rules Committee brings in a rule that is for the benefit of the farmer, as it did in this instance, I can vote for it without crossing my fingers. It is so seldom that the farmer is the beneficiary of a gag rule in this body. I had to smile when I heard several "professional" friends of the farmer say that it was the principle of the thing that caused them to vote against the rule. Yes; that is a handy excuse and one that the soap and oleomargarine people will applaud in this instance. So will the House of Morgan and their kind, whom we propose shall henceforth bear their full share of the tax burden.

Mr. DOUGHTON. Will the gentleman yield? Mr. KNUTSON. I am glad to yield to my beloved chair

man. Mr. DOUGHTON. I was somewhat surprised when the

gentleman from Minnesota voted for the rule. I am wondering if I am correct in assuming that the gentleman had in mind the interests of the farmers of his district and the Nation when he did so.

Mr. KNUTSON. Absolutely; I broke a time-honored rule in voting for the rule, but there are good rules and bad rules, and this was a good rule in that it was brought in here to protect the provisions in the bill, among them the 5-cent excise tax on vegetable oils. The chairman will recall that Mr. LEWIS of Maryland served notice in committee that if given an opportunity he would offer such an amendment. In a nutshell, my friends, a vote for the rule clinched the coconut oil tax in the bill; a vote against the rule made it possible for an amendment to be offered to take it out, which might have carried.

Mr. JOHNSON of Minnesota. Will the gentleman yield? Mr. KNUTSON. I yield.

1934 CONGRESSIONAL RECORD-HOUSE 2613 Mr. JOHNSON of Minnesota. In ca8e we had an oppor

tunity to amend the bill, does the gentleman believe the bill is so perfect that it couldn't be amended in some other respects-in relation to banking conditions and other taxes?

Mr. KNUTSON. Let me say to my good friend that when the time comes he will be given an epportunity to explain his vote on the rule yesterday. I dare say there will ~e many who will wonder why the gentleman voted as he did, which would have thrown the whole bill open and the benefit the farmers are to receive might have been destroyed.

Mr. CELLER. Will the gentleman yield? Mr. KNUTSON. I yield. Mr. CELLER. I take it that if opportunity had been

offered for amendment the gentleman would have voted to include other oils with coconut oil, oils that are used as a substitute for vegetable fat.

Mr. KNUTSON. I should like to have seen the bill include other oils, but we took all we could, and we would rather have a half loaf than none.

Mr. CELLER. I am in sympathy with the gentleman. Mr. ARENS. Will the gentleman yield? Mr. KNUTSON. Yes. Mr. ARENS. I should like to ask the gentleman if this

is a correction of the omission in the Revenue Act of 1929? Mr. KNUTSON. That is a matter of opinion. Of course,

the tax should have been put on long ago. Perhaps the gentleman from Nebraska [Mr. SHALLENBERGER] and I having been put on the Ways and Means Committee only last year has had something to do with putting this tax in the bill.

Mr. ARENS. The point I am making is that the gentleman voted for the rule in 1929 that prevented any amendment.

Mr. KNUTSON. Revenue bills should not be amended on the floor of the House, because the subject is too involved to take snap judgment on. ·

Mr. ARENS. Not under the gag rules. Mr. KNUTSON. Neither a tariff bill nor a revenue bill

can be written on the floor of the House. Mr. ARENS. I have never voted for a special rule and

I never will. Mr. TREADWAY. Will the gentleman yield? Mr. KNUTSON. I will yield to the gentleman from

Massachusetts. Mr. TREADWAY. Is it not a fact that in the Committee

on Ways and Means, two thirds of the bill wa.s not touched by the Ways and Means Committee in the preparation of this bill? Then why should we open the whole bill for amendment when two thirds of it was not considered by the Ways and Means Committee?

Mr. KNUTSON. That is another important reason. Mr. KELLER. Will the gentleman yield? Mr. KNUTSON. I yield. Mr. KELLER. Why should any member of the committee

be afraid to put these questions before the House? Mr. KNUTSON. That question assumes that the gentle-

man is not acquainted with the Membership of the House. Mr. TREADWAY. Will the gentleman further yield? Mr. KNUTSON. Yes; I yield. Mr. TREADWAY. In that connection, is it not a fact

that after the tax was adopted in the committee, on coconut oil, there was a lot of propaganda in opposition to the tax?

Mr. KNUTSON. There has been one of the most powerful lobbies that I have ever · seen in Washington since I have been here. It was in opposition to this tax, and let me say further that the gentleman from Massachusetts will recollect that there were five efforts made in the committee to have the Shallenberger amendment· reconsidered.

Mr. CELLER. There was a soap lobby here. Mr. KNUTSON. Not only that, but the oleomargarine

lobby, and also the Wall Street crowd, because we are plugging up the holes, and the Wall Street crowd was here with a lobby trying to kill that rule yesterday.

LXXVIII-166

Mr. CELLER. We have in New York a number of fatrendering companies. They take the suet and grease from the various restaurants and butcher shops and make a tallow and grease which they sell to the soap manufacturers, and the more they can get for their products the better it is for the farmer, because it increases the price of the animal on the hoof to the farmer.

Mr. KNUTSON. Precisely, and one of the purposes of this tax is to keep the grease from going into the swill pail by making it worth something.

Mr. HENNEY. Mr. Chairman, will the gentleman yield? Mr. Kl\TlJTSON. Yes. Mr. HENNEY. Would it have been possible to get this

5-cent tax on imported oils into this House and get it through without a cloture rule?

Mr. KNUTSON. If we did not have a cloture rule, the gentleman from Maryland [Mr. LEWIS] would have offered an amendment to strike out the 5-cent tax, and nobody knows how the 434 Members of the House would vote upon that.

Mr. HENNEY. That is what I have reference to. Mr. KNUTSON. Yes; and the test yesterday was whether

or not we wanted to throw the 5-cent tax on vegetable oils open to an attack on the floor of this House.

Mr. HENNEY. Whether we wanted to keep our promise to the farmers in our districts.

Mr. KNUTSON. That is it. Mr. JOHNSON of Minnesota. Mr. Chairman, will the

gentleman yield? Mr. KNUTSON. Yes. Mr. JOHNSON of Minnesota. I am glad to see the gentle

man is so interested in the farmers. He has been here for nearly 18 years, but during this whole time he has not been awfully particular about the farmers before at any time.

Mr. KNUTSON. Is that so? Mr. JOHNSON of Minnesota. But he is now, because

Magnus Johnson is going to run against him in the next election.

Mr. KNUTSON. Let me say to the gentleman that I do more ·than talk. The gentleman who is now addressing me has given the farmers lip service and that is all.

Mr. JOHNSON of Minnesota. Oh, the gentleman will have to do more than talk.

Mr. KNUTSON. That 5-cent tax is one thing. Mr. JOHNSON of Minnesota. Yes; and it is open to me

and the people from Minnesota--Mr. KL'ffiTSON. Oh, I don't want to enter into a per-

sonal altercation with the gentleman. Mr. MOTT. Mr. Chairman, will the gentleman yield? Mr. KNUTSON. Yes. Mr. MOTT. I do not want to enter into a row between

the gentlemen from Minnesota, but I do want to ask how m:.ny Members of the House the gentleman knows of who are against the 5-cent tax?

Mr. KNUTSON. Oh, a very considerable number. Mr. MOTT. How many? Mr. KNUTSON. The vote was very close in the com

mittee. The change of 2 or 3 votes would have changed the whole matter.

Mr. MOTT. I mean in the House. Mr. KNUTSON. I would say nearly one half, or perhaps

more than half. We don't know. We did not dare take the chance; we did not want to gamble on it.

Mr. REED of New York. Mr. Chairman, will the gentleman yield?

Mr. KNUTSON. Yes. Mr. REED of New York. The situation was placed before

the Committee on Ways and Means and a thorough investigation made of the whole subject. Propaganda was not coming to the · House generally, except the Soap Trust was bearing down on every member of the committee, and they were here by the dozens, the most powerful lobby, and the House generally was not well informed of the facts as was the Ways and Means Committee, and with that lobby working on the membership of the committee, talking about the

2614 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 ruination of the soap industry, which was pure bunk, they could .easily have been misled.

Mr. K.i'WTSON. The members of the Committee on Ways and Means bore the brunt of the attack, of course.

Mr. KELLER. Mr. Chairman, will the gentleman yield? Mr. ~UTSON. Yes. Mr. KELLER. I do not want to be insistent, and yet I

am not able to see why this body should not be trusted to express its opinion on any such subject as this, and I never will understand it. . Mr. KOPPLEMANN. Mr. Chairman, will the gentleman yield?

Mr. KNUTSON. No; I cannot yield any more at the present time.

The other day a member of the committee, in addressing the House on the revenue bill, decried the differential in the income-tax rates proposed in this measure and those in effect in Great Britain. Yes; the spread is big, I will admit; but in making a comparison one should bear in mind that while the British subject pays but one income tax the American citizen in many States pays a heavy State income tax in addition to the Federal income tax. The only fair way to compare the rates of the two countries is to give the total tax which the citizen of each country must pay.

In view of the fact that I represent an agricultural district I shall confine my remarks to that portion of the revenue bill which is of the greatest importance to my people, and that is section 602, title IV, which imposes a 5-cent per pound excise tax on coconut and sesame oils. For years the agricultural interests of this country have fought and strug.gled for protection against oils and fats coming from the Orient. While others were getting theirs the farmer was invariably left out in the cold. But now, thanks to Mr. SHALLENBi:RGER and the other members of the committee, he is at last going to get some real farm reEef. In fact, Mr. Chairman, this is the first real constructive thing that .congress has given to a bankrupt agriculture in years, as hundreds of letters and telegrams from back home attest. . The large users of vegetable oils naturally oppose this tax because it will tend to force them to the use of Americanproduced fats and oils. Four or five attempts were made Jn the committee to strike out or modify the Shallenberger amendment, but our forces held without a break, and while the several votes were too close for comfort, it was a~ot:tier case of "a miss being as good as a mile."

I understand that the soap people are advising their cus. tomers that the imposition of the 5-cent tax will increase soap prices 50 percent.. Let me say to you Members of the House that the soap ·people have fared better during the depression than almost any other class. ,At this point, Mr.

. Chairman, I desire to give some figures in support of that statement which have been compiled by the Department of Labor.

Wholesale prices-Bureau of Labor Statistics

Per·

1926 1927 1928 1929 1930 1931 1932 1933 centage 1933 is or 1925

- ---,-- ------Soap:

Laundry_---------· ------ 61.4 Laundry (Philadel· ---·-·1··----

phia) per 100 cakes .. $4. 8.'il $4. 851$4.851·$4. 851$4.851 $4. 851 $4. 528 $4. 4.29 91. 7

Oleomargarine: Stand· ! . 1 ard uncolored (Chica-

go) ... ________ per lb .. . 228 . 223 • 225 • 2351 • 2i81 .133 . 097 .087 38. 2 Butter: Creamery extra

(Chica!{o) ___ __ per lb .. • 423 .458 • 461 . 4371 . 3531 . 271 . 201 . 203 48.6 Lard: Prime contract

(New York) ___ per lb .• .150 .129 .123 .120 .109 .080 . 050 . 057 38.0 Raw materials:

.0851 Coconut oil (New

York) 1 ___ perlb .• .105 .097 .095 .073 .053 .045 • 0.12 39.6 Copra (coast) (Ne"lt

York). ___ per lb .. .058 .052 . 051 .C44 . C37 . 023 .019 .016 27.6 Palm oil (niger)

(New York) per lb .. .080 • 071 .073 .074 .C57 .039 .029 . 032 40.0

P alm-kernel oil (de-natured) (New York) ..•. per lb .. .100 .091 .091 .084 .068 .055 .043 .043 43.0

1 Crude, Manila spot, in barrels.

Wholesale prices-Bureau of Labor Statistics-Continued

1920

Raw materials-Con. 0JiY6 oil (New

York) , __ per gal.. $1. 911 Cottonseed oil

(New York) 1

per lb .. Soybean oil (New

York) 1 ___ per lb .. Oleo oil (extra)

(Chfoago)_pcr lb .. Tallow (edible)

(Cbicago)_per lb .. Tallow (packers

prime) (Chica~o) per lb . .

Glycerine (chemical i.:weJ (New York)

per lb .•

'Edible in barrels. : Prime summer yello'IT. 1 Crude in barrels.

.118

.126

.120

.0!;5

.087

. 275

Per-1927 1928 1929 1930 1931 l!J32 1933 centag&

1933 is of 1926

---------------$2.125 $~. 263 $1154 $1. 863 $1. 601 $1. 38() $1.473 $i7. l

.097 .099 .097 • 081 .060 .038 .045 38.1

.120 .122 .120 . 101 .066 .042 .063 51.6

.134 .141 .109 .105 .064 • 057 .05:J 49.2

. 089 .094 .089 .068 . 047 . 035 . 037 38. 9

.081 . 088 .085 .062 . 039 .032 . 034 39.1

. 249 .156 .144 .133 .119 .106 .104 37.8

Mr. VINSON of Kentucky. Mr. Chairman, will the gentleman yield at that point?

Mr. KNUTSON. Yes; gladly. Mr. VINSON of Kentucky. Would the gentleman care to

develop in respect to the action of the committee with reference to advertising matter in · publication, and the reduction of the postal rates?

Mr. KNUTSON. I have some tables here that I want to present first. I do not know whether I can get more time. If I do not develop it now, I shall do so under extension.

From the foregoing table it will be observed that while the price of laundry soap has declined less than 10 percent since 1926 the price of raw materials has dropped 50 and 60 percent. According to Poor's Manual for 1932 the gross sales of one of the largest soap companies in the country increased from $179,622,000 in 1928 to $190,523,000-a very substantial increase when everything else was on the toboggan. Another soap firm shows a net profit of $7,-598,000 on net sales of $89,844,000 in 1931-nearly 10 percent. If the price of soap, as a result of this tax, is increased to the consumer, in the face of this showing, the Government will no doubt take suitable steps.

Now, let us look at the other side of the picture. The American farmer has seen his products displaced in the domestic market by huge importations of vegetable oils and copra from the Orient. Our farmers are asked to reduce production but the _Government is giving no heed to the agricultural products that ar~ coming in and replacing the reductions e:ff ected. In other words, every reduction made merely serves to increase the market for foreign products so the American farmer does not gain any benefit from the reduction program. There are but two methods that will help him: Embargoes on all imports that compete with home produced products, or compensatory taxes on such imports. In this instance we seek to impose a tax which in my judgment is preferable.

Mr. Chairman, the American farmer, north and south, is compelled to meet a most relentless and devastating compe-

. titian. I call to your attention statements in the printed hearings by representatives of the dairy ·interests, the hog and cattle men and the cotton farmer. The vegetable oil importations are felt wherever land is being tilled and the effect is the same in all sections. As imports increase the price of domestic fats and oils steadily decrease. Butter fat reached its all time low last month when the price should have been at its peak. Cattle and hog prices barely pay freight and commis.sion. I have in my possession scores of stockyard receipts verifying this statement.

At this point I wish to call to your attention some very interesting figures compiled by the Bw·eau of Agricultural Economics, Department of Agriculture, which show the terrific shrinkage in butter-fat prices the past 10 years.

1934 CONGRESSIONAL RECORD-HOUSE 2615 Butter fat: Estimated average price per pound (in cents) received

by· producers, ·united States, 1923-32

~ ~ ~ ~ ~ .. ~ ~ ~ ~ ~ ~ i:

~ ,Q al Year ~ t>.ei""

r:i .ri :a ...: I» <l> I» "'° i ..; i> ci ·- <l>

0. al ~ '3 ::l <:> 0 <l> Q ...

"' <l> ::s ::s ::; <l> ~al ...... ~ < ...... ...... < en 0 z A

- - - - - - - - - - - --1923 ________ 47. 0 44. 9 44.9 46.0 40.3 36. 9 36. 7 38. 7 42. 2 44.1 47.8 49. 2 42. 2 1924 ________ 50. 61 48. 5 46.4 40.8 37. 6 37. 1 37.8 35. 8 36. 6 36.6 3.7. 0 41.1 39.8 1925_ ------- 4.0. 61 37. 9 41.5 40.5 4-0.3 39. 9 40. 5 41. 3 42.6 47.1 47.8 47.6 41. 9 1926 ________ 45. 2 43.1 42. 9 40.4 39.1 39.3 38. 6 38.6 40.5 42.4 44. 8 47. 9 41.3 1927 ________ 46. 9 46. 8 48.0 47.1 43. 6 4.0.8 40.3 39.4 41.6 44. 4 45.8 47. 8 43. 7 1928 ________ 48. 51 46. 0 46. 5 45. 4 44. 4 43. 5 43.3 44. 3 46.5 47.0 47. 6 4.9. 2 45.6 l!l29_ ------- 47.6 47.8 48.3 46. 5 45. 4 43. 6 43.4 43. 3 44. 6 45. 6 43. 5 41. 9 44. 9 1930 ________

36. 71 35. 4 34. 9 37. 3 36. 5 31. 6 31. 6 35. 2 37. 7 37.0 35. 3 30.6 34. 8 1931_ _ ------ 26. 2 25. 0 27. 5 26. 4 21. 2 20. 5 21. 1 23. 9 20.6 30. 3 2 . 2 27.3 24. 7 1932 ________ 22. 81 19. 8 19. 5 17. 8 16. 3 14. 6 14. 4 17.5 17. 6 17.8 18. 4 21.1 17.6

NOTE.-Quotations cover butter fat for all uses. Based on reports of special-price reporters. Monthly prices by States, weighted by number of milk cows Jan. 1, to obtain a price for the United States; yearly prica obtained by weighting monthly I>rices by production of creamery butter.

The shrinkage in beef-cattle prices has been equally violent as the following table, from the same source, will show: Beef cattle and veal calves: Estimated average price (in dollars)

per 100 pounds received by producers in the United States, 1923-32

~~ ~ ~ IO ~ ~ ~ ~ ~ ~ ~ ~

... b.O ~ ..... ,Q al

Year toe'"' r:i .ri ...: ... I» <l> I» t>ii P. ..; i> ci .... <l>

<l> "' 0. al i:1 '3 ::I <:> 0 <l> <l>P. al ::s ::s ::l <l> z A ~as ...... ~ -< ...... ...... ~ ta 0

- - - - - - ,_ - - - - --l92:L _______ 5. 51 5. 55 5. 62 5. 78 5. 77 5. 82 5. 72 5.60 5. 70 5.48 5. 23 5.26 5.58 1924_ _______ 5.33 5. 41 5. 58 5. 77 5. 91 5. 76 5.63 5.65 5. 51 5.44 5.4.0 5.32 5.55 1925 ________ 5. 61 F. 66 6. 15 6. 50 6. 44 6.43 6. 54 6. 55 6.25 6. 26 6.11 6.17 6.23 1926_ ------- 6.29 6. 39 6. 62 6. 64 6. 55 6. 55 6.43 6. 27 6.46 6. 4.0 6.29 6.37 6.43 1927 -------- 6. 42 6. 57 6. 79 7. 12 7.15 7.06, 7.11 7.18 7.39 7. 52 7. 96 8. 29 7.23 1928_ ------- 8. 45 8. 70 8. 81 8. 88 9.03 9. 071 9.16 !>. 45 9. 93 9.62 !l. 21 8. 90 9.12 1929_ ------- 8. 91 8. 83 9. 09 9. 45 9.64 9. 67 9. 75 9. 55 9.16 8. 85 8. 57 8.43 9.15 1930_ ------- 8. 66 8.ll:ll 8. 72 & 60 8. 32 8.141 7. 06 6. 22 6. 58 6.50 6. 39 6. 33 7.46 1931_ _______ 6. 38 5. 98 5. 98 5. 95 5. 61 5. 21 5.11 5.05 4. 96 4. 72 4. 70 4. 32 5.31 1932_ ------- 4. 29 4. 08 4. 25 4. 19 3. 91 3. 81 4. 52 4. 35 4. 31 3. 91 3. 73 3. 41 4. 07

. . Unlike the soap and oleomargarine business, nothing pro

duced on the farm has escaped the depression, not even swine. At this point I desire to read · to you from another table prepared by the Bureau of Agricultural Economics, Department of Agriculture: Hogs: Estimated average price (in dollars). per 100 pounds received

by producers in the United States, 1922-23 to 1932-33

'd Year begin- ~ ~ ~ ~

Q)<l>

~ ~ IO ..,

J ~ ~ ~bll

Ding Octo- .... ...... ........... .::::! "' i> .ri ~ I» <l> I>. t.O ..; tu) ...

...; g ~ -Q) ber d "' g '3 ~ ~ <l>?-<:> 0

"' &: ::s ::s >.,Ill 0 z A ...... -< ...... ...... ta , ... - --

1922-23 _____ 8. 33 7. 78 7. 63 7. 77 7. 05 7. 62 7. 45 7.13 6. 37 6. 68 6. 85 7. 81 7. 41 1923-24_ - - - - 7. 23 6.66 6. 39 6.59 6. 5 6. 63 6. 70 6. 68 6. 55 6. 60 8. 54 8. 50 6. 8.5 1924-25 _____ 9.45 8. 62 8.39 9. 31 9. 6211.83 11. 64 10. 78 ~~: ~~ g: ~~ fi: ~lg: g~ 10.15 1925--26 _____ 11. 16 10.66 10. 51 10. 99 11. 7611. 65 11. 49 11. 97 11. 55 1926-27 _____ 12.06 11. 45 10. 97 10. 97 11.19 10.89 10. 41 9. 41 8. 40 8. 58 9. 24 9. 78 10. 23 1927-28 _____ 10.16 8.99 8.14 7.80 7. 61 7.43 7. 75 8.82 8. 70 9. 64. 10. 01 11.17 8. 59 1928-29 _____ 9. 55 8. 51 7. 95 8.18 8.88 10.00 10.20 9. 96 9.80 10. 33 10. 28 9.53 9. 28 1929-30 ___ -- 9.10 8. 54 8. 53 8.80 9. 4S 9. 57 9.17 8. 99 9.10 8.38 8. 51 9.« 8. 95 1930-31__ ___ 8. 79 8. 20 7. 44 7.25 6. 81 6. 92 6. 92 6. 35 6. 70 6.20 6. 25 5.44 6. 95 1931-32 _____ 4. 70 4. 36 3. 76 3. 76 3.53 3.90 3. 58 2. 9C 2.82 4. 23 4. 06 3. 78 3. 78 1932-33_ - - - - 3.25 3.05 2. 73 ----- ----- ----- ----- ----- ----- ----- ----- ----- -----·

To get a true picture of the situation one should study the Agricultural Year Book for 1933, to which publication I am indebted for much of the statistical matter I have presented. From its pages we learn that imports of foreign oils have increased enormously. The average annual import- for the 5-year period 1914-18 was 238,826,000 pounds; 1919-23 the average was 425,489,000 pounds; 1924-28 the average was 513,958,000; and from 1929 to 1933 the average annual importations increased to 679,822,000 pounds. The importation of coconut oil for the first 5 months of this fiscal year aggregates 449,887,000 pounds, as against 204,-106,000 pounds in the same months last year.

Members of the House, it was upon this showing that the Ways and Means Committee placed a 5-cent-per-pound excise tax on coconut and sesame oils, which is going to put millions of dollars annually into the pockets of the American farmer. Our next task is to have palm and palm-kernel and soybean oils included in this tax. [Applause.i

Mr. SEGER. Mr. Chairman, will the gentleman yield? Mr. KNUTSON. Yes.

Mr. SEGER. Does the gentleman know of any substitute for coconut oil 1n making hard-water soap, as it is called?

Mr . .KNUTSON. I am not sufficiently versed in the soap business to answer that.

Mr. BROOKS. Mr. Chairman, will the gentlem:in yield? Mr. KNUTSON. If the gentleman has some information

to contribute on. the question just asked by the gentleman . from New Jersey.

Mr. BROOKS. There is really no substitute for coconut oil in the manufacture of soap, because coconut oil provides a gift to it that cannot be substituted.

Coconut oil produces a foam, and we see a quick-setting soap today which makes a sales value, as it is so attractive to the housewives. We have found nothing so far to replace that sales attractiveness of a soap which is made from coconut oil.

Mr. SEGER. Will the gentleman yield further for a question?

Mr. KNUTSON. At this point let me ask why should not the American producer of oils and fats have the nec~sary degree of protection, like all other lines have?

Mr. SEGER. The gentleman knows I am absolutely for protection.

Mr. KNUTSON. I understand that. Mr. SEGER. But if there is no substitute for coconut oil

to make soap not only attractive but to make it a hardwater soap, which is now used by the Army and Navy, if we had this soap denatured as we did alcohol, would that not answer the gentleman's purpose?

Mr. KNUTSON. No; because it would not give that degree of protection to the livestock industry that it should have. We are just as much concerned in the protection of animal fats as we are the protection of other farm products.

Mr. SHOEMAKER. Will the gentleman yield? Mr. KNUTSON. I yield. Mr. SHOEMAKER. I do not think there is anything i

that will substitute for all the palm-olive advertising that has been going on for these years. That is where the substitute comes in.

Mr. ARENS. Will the gentleman yield? Mr. KNUTSON. I yield. Mr. ARENS. The gentleman will agree with me that the

farmers of the United States, through cottonseed, flaxseed, and soybean oils, together with animal fats, can pro- · duce any fat needed in this country?

Mr. KNUTSON. It. would seem to me that way, and those who want the higher-grade soaps may have to pay a

_little more, perhaps, but we are entitled to a little help. This tax is necessary to our existence.

Mr. ARENS. We can produce all we need. Mr. KNUTSON. I think so. The CHAIRMAN. The time of the gentleman from Min

nesota EMr. KNuTsoNJ has again expired. Mr. TREADWAY. Mr. Chairman, I yield 2 minutes to

the gentleman from Pennsylvania [Mr. SwrcKJ. Mr. SWICK. Mr. Chairman, I realize the amount of work

required to prepare a tax bill such as the one before us. Coming from Pennsylvania, I am especially interested in this same section 602, the tax on certain oils. While Pennsylvania is not essentially a farming State, yet Lancaster County is the second richest farming county in the United States.

I have a letter from Hon. John A. McSparran, secretary of agriculture, who is a Democrat, in which he says that a tariff on these Asiatic oils, especially coconut oil, is highly desirable. I also have a letter from the Pennsylvania State Grange, whose president, J. Audley Boak, is a resident of my district. He sets out·practically the sa~ thing.

I realize the work required to set up a bill such as the one which is before us, and in order that the average citizen of the United States may know something of where this money will be used, I am inserting in the RECORD an extension of remarks.

I also take this opportunity to commend the Ways and Means Committee for their attention to the many petitions

2616 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 received from the small oil producers in my district, urging the retention of the percentage depletion allowance clause in the bill which is now before us and which the committee has done.

Mr. Cha'rman, the average citizen of the United States must feel lost when he or she attempts to analyze the structure of the Federal Government today. If, as has been intimated by members of the so-called" brain trust", much of the emergency structure set up to promote recovery in the recent months is to be made a part of the permanent system of Government the public schools of the country will require an entirely new text on civics and history. What was familiarly known as the" new deal", is now referred to by proud Jeffersonian Democrats as the '.'bloodless revolution ", an apt synonym for bewilderment and confusion.

What have been the results to date of this revolution, which swept into power a party whose national platform contained the following plank, drafted in June 1932, and was in no small measure responsible for the success of the party standard bearer in November:

We advocate an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance, to accomplish a saving of not less than 25 percent in the cost of Federal Government, and we call upon the Democratic Party in the States to make a zealous effort to achieve a proportional result.

Waiving that plank before the overburdened taxpayers of the Nation, and pointing to the extravagances of the Republican administrations, and shouting the battle cry "A balanced Budget", the Democratic Party stampeded a suffering electorate, and won a decisive victory at the polls. Their party had controlled Congress during the last 2 years of the Hoover administration, and had consistently opposed the enactment of measures which under the new deal would be labeled "emergency legislation" although the greatest of all recovery measures, the Reconstruction Finance Corporation was set up dUTing that time.

With the inauguration of the new deal, Congress promptly delegated almost unlimited powers to the Chief Executive, and the cry for nonpartisan consideration of legislation was heard from all sides. In several instances recovery legislation would have been endangered had it not been for the support given the President by Republicans.

We have abolished useless commissions and offices by setting up about 40 new ones, and adding more than 40,000 employees to the pay rolls, all of whom managed to escape competitive civil-service examinations.

There is a balanced Budget, but there is also an unbalanced Budget-one that could not be balanced during the present fiscal year, even though we we1·e to double and collect all prevs.iling taxes for the remainder of the year.

We have economized by sweeping more than 12,000 employees from the classified civil-service rolls, while more than 40,000 deserving men and women have been given employment through the means of patrnnage, all of them exempted from civil-service regulation by Presidential order or congressional enactment.

We have solved our problems by setting up an alphabetical organization for each one until at the present time these combined agencies have a pay roll exceeding $5,000,000 per month, all of which, of course, is charged to the unbalanced Budget, the emergency budget.

During the 100 eventful days of the special session called last spring, the new deal created the following group of new Fedaral agencies with the number of employees on the roll of each as of December 1, 1933: H.O.L.C. (Home Owners' Loan Corpor::i.tion) --------------- 13, 748 F.C.A. (Farm Credit Administration)--------------------- 6, 769 A.A.A. (Agricultural Adjustment Admin.l.stration) ---------- 4, 076 F.D.I.C. (Federal Deposit Insurance Corporation)--------- 1, 614 N .R.A. (National Recovery Administration)--------------- 1, 922 P.W.A. (Public Works Administration)-------------------- l, 764 T.V .A. (Tennessee Valley Authority)--------------------- 934 F.E.R.A. (Federal Emergency Relief Administration)------ 150 F.C.T. (Federal Coordinator of Transportation)------------ 94 C.C.C. (Civilian Conservation Corps)---------------------- 1, 109 F.T.C. (Federal Trade Commission (Securities Act))------ 87 U.S.E.S. (U.S. Employment Service (recovery)----------- 437

Each of the following have from 10 to 50 employees: C.S.B. (Central statistical Board), F.C.C. <Federal Com

modities C011)oration), N.L.B. (National Labor Board), C.F.C. (Commodity Finance Corporation), P.A.B. (Petroleum Administrative Board), F.C.W.A. (Federal Civil Works Administration), R.C.A. <Retail Code Authority), F.H.C. (Federal Housing Corporation), S.E.S. (Soil Erosion Service), S.H.D. (Subsistence Homesteads Division), P.L.P.B. (Petroleum Labor Policy Board), D.L.B. <Deposit Liquidation Board), B.A.P .C. <Business Advisory and Plamling Council), N .P .B. (National Planning Board).

To review pension claims of World War veterans, . the Veterans' Administration established 58 regional boards of inquiry, composed of five members each, who were paid at the rate of $15 per day for their services.

The Deposit Liquidation Board, created to hasten the reopening of banks closed by the March holiday orders, set up 64 regional offices to receive applications for liquidating loans from the R.F.C.

The Home Owners' Loan Corporation maintains 257 offices and at least 1 appraiser and 1 title examiner in each of the 3,016 counties in the country.

The Agricultural Adjustment Administration maintains quota inspectors in every contract-production county.

The Farm Credit. Administration and the Reconstruction Finance Corporation each maintain 79 branch offices.

The Executive Council, composed of the Cabinet and the chiefs of the emergency units, meets with the President once a week as a board of strategy. It was necessary to allot $10,000 from the Public Works appropriation to defray the expenses of the council. It was also necessary to allot $5,000,000 from this appropriation to defray administrative expenses of tlie N.R.A., and the $300,000,000 required to continue the C.C.C. for the second 6-month period likewise came from that appropriation.

Under the direction of the Postmaster General, who is also the Democratic national chairman, we have adopted an entire new policy in the selection of personnel for the Federal services, one entirely different from that known as the "merit system" under the Civil Service Commission which existed from 1883 until 1933, which recognized three basic principles of the Civil Service code-competitive examinations, dismissal for cause only, and promotion by efficiency ratings.

Beginning with the farm bill in the special session and continuing with each new bill creating new agencies, the administration forces in Congress succeeded in preventing the inclusion of a provision that all new employees should be selected from civil-service classification rolls.

This practice h::i.s also been reported in older agencies; for instance the National Civil Service Reform League reported on November 15, 1933, that it had twice requested information from the Post Office Department as to the number of postmasters dismissed since March before the expiration of their appointed terms. In each instance the Department replied that the figures were not available.

We have received numerous complaints of Presidential postmasters being asked to resign before the expiration of their terms of office and being succeeded by acting postmasters, for obviously political reasons-

The report continued-one common and recurring complaint is that efficiency ratings

have been juggled, so that when reductions in force become necessary those employees not persona grata may be removed, even though years longer in service than those retained.

President Luther Steward, of the National Federation of Federal Employees, has tabulated some 12,000 classified civil-service employees dismissed from positions since last March-this while some 40,000 nonclassified workers were being added to the pay rolls. Mr. Steward made the following charge:

Serious inroads are being made into the merit system by spoilsmen representing the largest army of political job hunters in the history of the Nation. In many instances, newly appointed politicians with administrative authority have begun forcing out capable, experienced employees with competitive status, in order to replace them with political hangers-on.

1934 CONGRESSIONAL RECORD-HOUSE 2617 It is palpably absurd to expect the Federal Government to exert

its maximum infiuence toward national economic recovery when such a large proportion of the agencies engaged in recovery work are overburdened with political appointees.

In July of last year the President was reported to have directed Mr. Farley, the Postmaster General, to draft legislation to bring all postmasters under civil-service regulations, " in order that I may submit it to the next session of Congress ", but a month later, in an address before a national postal convention in Rochester, N.Y., Mr. Farley acknowledged that since March some 640 appointive postmasters had been removed, prior to the expiration of their terms, for violations of the Postal Regulations. During the same month a prominent district Democratic leader was appointed postmaster at Brooklyn. Announcing the appointment, Mr. Farley said the appointment would be made permanent" as soon as 1\1r. Sinnott completes his civil-service examination." Mr. Farley evidently meant just what he said when he announced " patronage is a reward ·to those who have worked for party victory."

New agencies, regardless of their name, mean additional jobs, which in turn require additional expenditures. So great were the new expenditures that a dual budget system was required to carry the load and at the same time spread the mounting deficit in su~h a manner that for purposes of public consumption it is entirely concealed, despite the fact that the national debt marches steadily upward and onward to a new high.

The Seventy-third Congress met in extra session, called for the express purpose of balancing the Budget and of maintaining the credit of the United States, shortly after the "new deal" was inaugurated. Overwhelmingly Democratic and lashed by the threat of withheld patronage by party leaders and the fright of a money panic as a result of the closing of all ban.ks, the emergency Congress reluctantly decreed savings of more than $4501000,000, veterans contributing to the extent of $325,000,000, while Federal employees gave up $125,000,000 as the result of a 15--percent pay cut. The Congress then proceeded to increase the Federal revenue by imposing $1,000,000,000 in new taxes. The "new geal" was then able to point with pride to its accomplishment of having taken a billion and a half dollars from the red side of the Federal ledger for the fiscal year 1934.

But we did not stop there. That was only the first act, in which the Director of the Budget was permitted to play the lead, ably assisted by men who in years gone by had championed the cause of the veteran, basking in the spotlight of publicity, and denouncing the Republican administration for its disregard of disabled veterans. Those men today hold the legislative programs of veterans in their hands, clenched tightly; lest they see the light of day.

Then came the second act, the "emergency program", starring the " bi-ain trust " and the birth of the second Budget.

What has been the result? The daily increase in th~ national debt for the fiscal year

ending June 20, 1933, according to the official report of the Secretary of the Treasury, was at the average rate of $6,013,000, while the daily average increase in the national debt for the first 4 months of the present fiscal year was $6,079,000. All this despite the fact that the first act in the play had reduced expenditures $500,000,000 and increased taxes $1,000,000,000 a year ..

Regardless of the manner in which we juggle the Budgets and show a profit of $2,806,817,226.42 from the reduction in the weight of the gold dollar, we secure a true picture of the national-debt trend by comparing the net debt with the corresponding period in the previous fiscal year. The daily statement of the United States Treasury, issued by the Treasury Department, shows the following figures as of February 9, 1934: Public debt this date (Feb. 9, l934) __________ $25, 144, 785, 750. 30 Public debt corresponding date 1933__________ 20, 935, 855, 181. 76

Net increase____________________________ 4, 208, 930, 568. 54

In the same statement we see a comparison of the receipts and expenditures as follows:

Fiscal yeac 1934 Corresponding

period fiscal year 1933

Receipts ___ -----------·-··-------------~ ----- $4, 588, 415, 275. 31 $1. 189. 370, 188. 76 Expenditures ____ -------- - ·---- ~ - -- - - -------- 3, 819, 876, 705. 55 3, 147, 268, 366. 56

The following comparative figures from the emergency Budget give a graphic picture of the daily cost of the emergency program, including individual costs of the larger projects. With the exception of the R.F.C. none of the agencies charged with these expenditures were in existence prior to the present fiscal year. The figures are taken from the daily statements of the United States Treasury for February 7 and 9; the difference therefore represents the expenditures for 2 days. The amounts given under each date is the total expenditure of the fiscal year 1934 to date.

Agency Feb. 7 Feb.9 2 days' ex· penditures

Civil Works Administration ___ $303, 112, 404. 11 .$314, 316, 927. 21 $11. 2M, 523.10 National Recovery Adminis-

tration ___ ___ ___ ___ __ _ -- - --- 3, 076, 406. 4-0 3, 094, 867. 06 18, 460. 60 Agr~c~tura~ Adjustment Ad-

630, 508. 72 llllIUStratJOIL-- --- ----- ----- - 51, 662, 844. 83 52, 293, 353. 55 Civilian Conservation Corps __ 189, 287, 276. 49 192, 484, 609. 59 3, 197, 333. 10 Reconstruction Finance Cor-

poration_ ________ ----------- I. 065, 310, 71J_ <J1 1, 102, 268, 444. 05 36, 957, 726. 08 All others_ __________________ 431, 494, 742.. 06 439, 027, 933. 13 7, 533, Hll. 07

TotaL _________________ 2, 043, 942, 387. 92 2, 103, 484, 14-0. 59 59, 541, 752. 61

'Ib.e · following figures are for the same periods and are th-0se charged to the regular Budget, known as " general expenditures ":

FISCAL YEAR 1934

Feb. 7 Feb. 9 2 days' expenditures

.. General e:rpenditares_ ------ $1, 699, 231,

0

787. 62 $1, 716, 392, 564. 96 $17, 160, 777. 34

FISCAL YEAR 19 3 3

General expenditures ________ $2, 487, 877, 237. 86 Reconstruction Finance Cor-

$2, 511, 077, 102. 37 $23, 199, 864. 51

poration ________ ----------- 618, 850, 387. 95 636, 091, 264. 19 17, 340, 876. 24

Total, 1933 ___ ·--------- 3, 106, 727, 625. 81 3, 147, 268, 366. 56 40, 540, 740. 75

Total, 193L ________ 3, 743, 174, 175. 5413, 819, 876, 705. 55 76, 702, 530. 01

The same statement indicates the following revenue received from all sources for the same 2-day periods: 1933 ____________________________________________ $12,087,109.14 1934 ____________________________________________ 19,832,758.70

It is thus very plain to any person of average intelligence that in 1933 for this particular period our expenditures exceeded ouT income at the average rate of $13,853,991.02, while in the present fiscal year 1934 expenditures exceed income at the average rate of $28,434,885.65 per day.

In closing these remarks, which I have made for the purpose of giving facts, untainted with political bias, in order that those who read this RECORD may have a knowledge of the trend of Federal finances, I desire to insert an editorial from the Butler Eagle, published in Butler, Pa., which indicates that the public is beginning to think of the future. This editorial was carried in the issue of February 10, 1934.

PUBLIC WORK AND POLITICS

Rather startling figures were those produced by Ira Jewell Williams at the Chief Justice Marshall meeting of the Philadelphia Bar Association. He made specific charges that "the cotton vote, the farmer vote, the minimum-wage vote-all are being paid for, if not bought, and almost all out of the pockets of the taxpayers. The obvious, if not the announced, objective is the redistribution of property (if not of poverty) largely away from the East and the North."

These are serious charges. They involve manipulation for political purposes. How dces Mr. Williams justify them? He insists that Pennsylvania is being "bled white "; that while this

2618 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 Commonwealth contributes $114,000,000 to the Federal Treasury in taxation, which works out to $11.73 per capita, she receives back through the Public Works Administration only $1 for every $100 paid in. He contrasts this treatment with that accorded some other -States--Mississlppl and Arkansas, for example.

Mississippi is the home of the Democratic chairman of the Senate Finance Committee. Mississippi gets back $11 for every $1 paid in taxes or 1,100 times what Pennsylvania receives. Arkansas is the home of the Democratic leader of the Senate, and Arkansas is awarded $5.75 for every $1 of taxes that goes to the Federal Government---575 times what Pennsylvania obtains. One cent comes back to Pennsylvania out of every dollar levied by the processing tax under the Agricultural Adjustment Administration, but to Mississippi is restored $23.20 and to Arkansas $26.57.

Such criticism, coming as it does from a responsible citizen, requires explanation, remarks the Philadelphia Inquirer. Pennsylvania is victimized, says Mr. Williams, and so, he asserts, are New York and New Jersey. He has given the good people of the£e parts something to think about.

· Mr. TREADWAY. Mr. Chairman, I yield 20 minutes to the gentleman from Ohio [Mr.· JENKINS].

Mr. JENKINS of Ohio. Mr. Chairman, I have been here for the last 2 or 3 days listening patiently to the eloquent dissertations on this important piece of legislation. Not yet have I heard anyone raise his voice against the passage of this bill. It is passing strange to me that we are about to enact a piece of tax legislation that calls for an additional tax of $258,000,000 from the people of this country, who are now staggering under such a tremendous tax burden, and yet nobody objects seriously. It seerµs strange that we could with apparent unanimity agree on the passage of this important measure. What is the reason for it? They tell us they want to stop up some of the loopholes in the tax fabric. The fact that it does stop a few loopholes in the tax fabric is my reason for voting . for it. But there is another reason-and it is a very important reason-and that is .that we need the money. It is a proven fact that our country today owes more money than it ever did in its history. The Secretary of the Treasury came before the Ways and Means Committee a week or two ago and testified that between now and July 1 the Treasury Department of this country must arrange to refund $14,-000,000,000 that it cannot pay-$14,000,000,000 is 14,000 million dollars. How are we going to pay 14,000 million dollars? How are we going to pay a debt that is increasing at the rate of about $20,000,000 a day?

I just want to throw these facts out to you to have you stop and think that all over this country there are a lot of people who are not going to be satisfied with this bill that we will pass in a few days. They will wonder how about it; but whenever we tell them that we need the money, perhaps they will be satisfied for a short while; but the time will soon arrive when they are not going to be satisfied, and we have to do something different. What must we do? We must see to it before long that we cannot go on forever spending $20,000,000 a day more than we take in. We have to see to it also that our national revenues increase rather than decrease as they have been doing foi· the last year or two. Because of failing incomes the revenues which the Government has been receiving are greatly diminished. But to add to this unfortunate situation we are piling up additional debts at a rate never before contemplated by the wildest Communist or the most profligate spendthrift, and I ask, in all solemnity,· What has become of the promise thai; the " new deal " would balance the Budget?

In other words, we have a great and gigantic task before us. How are we going to come out of it? Well, I do not know. I do not think we will be out of it until we reelect the good old Republican Party to power. [Applause.] You know, when the Republicans took over the affairs of government after the last Democratic administration, our country then was facing the biggest debt it ever had faced prior to that time. Twenty-seven billion dollars was our debt.

Mr. VINSON of Kentucky. Mr. Chairman, will the gentleman yield?

Mr. JENKINS of Ohio. I am very happy to yield to my distinguished friend and neighbor who lives across the river from nie, a well-informed man, who, I think, knows as much about this tax bill as anybody else in this House. [Applause.] I think I have successfully disarmed him. [Laughter.]

Mr. VINSON of Kentucky. Referring to the hope expressed by the gentleman with reference to the time when we would snap out of it, I was just thinking the folks down around Ashland, Ky., and Ironton, Ohio, may have many, many hard winters if we wait until the gentleman's hope is realized. [Laughter.]

Mr. JENKINS of Ohio. I hope the gentleman is a false prophet. [Laughter.] ·

Mr. TREADWAY. It looks as though he were, too. The gentleman from Ohio thinks that, does he not?

Mr. JENKINS of Ohio. Yes. I was about to say that in the 10 years of Republican regime the debt was being paid at the rate of $1,000,000,000 a year. This is at the rate of $120,000 an hour. For the 10 years of Republican ad.ministration every hour the clock went around, summer or winter. day or night, we paid off $120,000 of Democratic debts.

Mr. WOODRUFF. And paid all our other expenses, too. Mr. JENKINS of Ohio. · Yes; we balanced our Budget

every year. No other nation in the history of the world ever paid a debt as rapidly as we paid that debt.

Now, I shall vote for this bill, of course, because they say we have got to have the money to feed the poor. Yes; and I say that the poor must be fed. Bless your life! I! we cut out a lot of the money we have wasted in an attempt to feed the poor, we would have a whole lot left to feed more poor people. I have injected a little partisan politics into this, which I did not intend to do, but I firmly believe that when we shall have continued this orgy of spending a little while longer, the people of this country will rise up in their honest might and place in power the Republican administration, the Republican Party that ha::J always paid the debts that have been piled up in this country by the opposition party.

Mr. WEST of Ohio. Will my good friend from Ohio yield for a question?

Mr. JENKINS of Ohio. Yes; I am glad to say that another dear friend of mine from the great State of Ohio is about to propound to me a question; and if his question is as nice and as easy and as agreeable as he is personally, I shall have no trouble in answering it. [Laughter.]

Mr. WEST of Ohio. Of course, I am deeply grateful to the gentleman from Ohle, my good friend and colleague, for his gracious reference to me. The gentleman's knowledge regarding questions of public policy is very great. He has just made reference to the orgy of expenditure that the present administration has made in connection with the recovery program. I am just wondering to what part of this expenditure for 1·elief and recovery he is opposed.

Mr. JENKINS of Ohio. Well, in fact it would take me too long to · point them all out. [Laughter.] I have not the time to do that. But surely the gentleman 'does not believe, and surely he, himself, does not stand here and offer full approval of all this wild extravagance that his party has been guilty of in the last 8 or 10 months.

Mr. WEST of Ohio. If the gentleman will permit--Mr. JENKINS of Ohio. Will the gentleman answer me

that? Mr. WEST of Ohio. I should like to ask this question:

Is it not true that during the period of time this debt was being paid off, according to the statement of the gentleman, that there was an increasingly diminished percentage of the national income which went into wages and the maintenance of purchasing power, while there was an excessive and increasingly enlarged percentage or the national income that went into industrial profits and then in turn into industrial expansion? Is it not a fact that this tendency developed to such an extent that during the period of 5 years before 1929 only 13 percent of the national income went into labor and 70 percent went into industrial profits, while that which went into corporation dividends increased by 265 percent? Moreover, is it not true that the money that should have gone into internal-revenue collections through the income tax leaked out through the tax evasions we are now trying to prevent?

Mr. JENKINS of Ohio. Will the gentleman permit me to ask him a question? [Laughter.] Does he really intend that I should consider that long statement a speech or a question?

1934 CONGRESSIONAL RECORD-HOUSE 2619 Mr. WEST of Ohio. I am simply asking if it is not a

fact that there is a social obligation resting upon us to regard the income tax as a basis for social and industrial recovery and to seek to improve it by making it obligatory for those into whose hands great wealth has become concentrated to turn part of it back to the Government so we can get it out through the various relief agencies and raise the purchasing power generally of the people of our country?

Mr. JENKINS of Ohio. Surely the gentleman, when he has the floor in his own right, will take the opportunity to say the nice things about me that I have said about him inasmuch as I have been so patient to listen to him.

Mr. WEST of Ohio. I am very grateful to the gentleman for his courtesy, and I am sorry to have taken so much of his time. Because of his understanding of this important subject I am sure he must agree with this point of view.

Mr. JENKINS of Ohio. Because of confusion I did not catch any point of view, and I do not know whether I agree with it or not; but, anyhow, my dear friend, let me say this, that while the Republican Party was paying off this debt at this enormous rate, that same party nearly every year brought in a different kind of tax bill than this. In nearly every year of those 10 years it brought in a tax reduction bill. Nearly every year the taxes were reduced many millions of dollars.

Mr. WEST of Ohio. Is this a bill to increase taxes, may I ask the gentleman?

Mr. JENKINS of Ohio. It surely does. It raises taxes to the extent of $258,000,000. If it does not raise the taxes, we are just wasting our time.

Mr. WEST of Ohio. This bill does, in fact, propose to secure this sum of money in revenue, but we are simply getting in the money that should have come in under the present system and which has been lost through tax avoidance owing to the defects in the law.

Mr. JENKINS of Ohio. I shall address myself to just one paragraph in connection with the bill, and that is a paragraph to which I am opposed and was opposed to in the committee. But, of course, I will not oppose the whole bill just because I cannot get my way. Before we vote on this bill, I hope the committee will bring in an amendment to change this provision of the bill relating to pre-March 1, 1913, dividends. When the first income tax bill was passed, an exemption was made to all companies and all individuals who had a reserve of assets as of March 1, 1913. The law provided then, and has always provided since, that any distribution of assets accumulated before 1913 should be tax free. This bill changes that so that any distribution made henceforth, after the passage of this bill, shall be subject to the income tax. It is not right; it is not fair; and I hope the majority Members on this committee will appreciate this, that they will realize that we are about to do something that is not right, and will remedy it by striking out this section. The most sanguine prophecy only sees about $6,000,000 additional revenue. This will not justify the hardships that it will entail to lumbermen and many others who have retained these surpluses, in the. shape of timber or other assets, and will now be compelled to dispose of them under circumstances that will be very discouraging to them.

I have only to cite as authority for my position one of the greatest Democrats that ever graced this body, who was later elevated to the Senate of the United States. I ref er to Senator Oscar Underwood. He made a great speech against this change in the tax law. I have not time here to quote his speech, but under leave to extend my remarks in the RECORD I am going to put in his remarks with ref erence to this matter.

Mr. President, I had personally something to do with this legislation in its initial stages. There is no doubt in the world that the men who wrote the original bill and the Congress when they enacted it--at least, a majority of the Congress--were attempting to fix the status of the property throughout the United States so that the power to tax the incre.ase--no matter what it was, earnings, profits on unearned increment--should begin on March 1, 1913, and that before tbat time it should be exempt. I do not think that there is a doubt in the world that that

· was the original intention. Of course, the recent decision of

the Treasury Department puts a different interpretation on the case; but, to my mind, it is clearly not the interpretat ion which is proper, if the viewpoint of the men who passed the legislation has any weight in the decision of the question.

Just visualize the situation for a moment. Here is a man who bought a piece of city property, say, in 1900, for $100,000. In 1913 it had increased in value to $200,000. Now, 8 or 9 years have run by and the time comes for him to sell tb.at property. He sells it for $200,000. The entire increase in value occurred before the income-tax amendment to the Constitution was adopted by the people of the United States; and yet it is proposed to go back and apply the heavy and severe taxes growing out of the recent war to the accumulations which came to him by the increased value of his property. Such action might halfway destroy an estate.

I had hoped we would have in this bill a provision reducing the rate of postage from 3 cents to 2 cents. I should like to see the committee between now and the time we vote on the bill change this provision so that it may apply between now and the 1st of July. The Post Office Department is the one great governmental Department that reaches nearly every citizen. Many of the people of this country have estranged themselves from this great Department because of this change in postal rates. I think if we would change the rate back to 2 cents, this would bring back into the channels of the mails a great volume of business. The additional revenue can be made from the additional volume.

I should like to see the provision reducing the tax on bank checks advanced so that this might become effective as soon as possible after the passage of the bill. There is no reason in the world why we should permit this tax on bank checks to continue until the 1st of January 1935. It should be stricken out now. It is a burden upon the business of the country. It does not produce a great amount of revenue, and I think while we are putting additional burdens on the people it would be a mighty good thing if we would relieve them of some of the burdens they now have.

The section dealing with personal holding companies should, I think, be amended so as to omit the word "1·ents." The language in the bill is as follows:

Derived from rents, royalties, dividends, interest, annuities, and (except in case of regular dealers in stock or securities) gains from the sale of stock or securities.

I am in sympathy with the purpose of this section. It proposes to reach individuals commonly known as the "big fellows" who have evaded their taxes successfully. In doing this, however, I am afraid if the word " rent " is not stricken from this bill that many individuals and corporations not intended to be reached by this section will be reached and thereby put to a great deal of trouble from which no great amount of revenue will result. By way of illustration I will say that suppose "A" and his wife and daughter own an office building. This office building represents the greater portion of their holdings. Their principal income therefore would be rents. Unless they distributed the income from this property each year they would be liable for this 35-percent additional tax. They might find it inconvenient to distribute, for they might need to maintain a surplus of more than $1,000 for repairs, and so forth. This would create a great hardship in many cases and should be taken care of before the bill finally passes.

It is proposed in this bill to raise $258,000,000 in taxes. As I have heretofore stated this bill is designed to be one which will stop up gaps and will not work hardships on many except those who heretofore have been favored. I know this impression is broadcast in the country. I know this is one of the reasons why this bill has not met more opposition.

The report accompainy.ing this bill indicates that $28,000-000 is to be raised by changes in the tax-rate structure. It cannot be successfully claimed that these changes are made to reach persons who have heretofore escaped their just share of taxes. It is true tha·t these changes probably are more equitable. I am led to support these changes not because they stop up any gaps, but rather that they furnish a more equitable plan of tax collection.

Likewise it is claimed that $85,000,000 will be saved in the administration of depreciation allowances. Not · a single line has been changed in the law yet the Treasury Depart-

2620 CONGRESSIONAL RECORD-HOUSE ~EBRUARY 15 ment states that $85,000,000 additional can bi collected by a more zealous effort on the part of the Department. Of course this is only problematical and whether it results in this gain in taxes will depend upon the zeal which the Department shows in the performance of this task.

Thirty-five million dollars is to be secured from a change in the allowances known as "capital gains and losses."

It is estimated that $25,000,000 will be collected from personal holding companies. I have heretofore discussed this item.

It is further claimed that $10,000,000 will be raised from exchanges and reorganizations. This also is problematical.

Six million dollars is the amount expected to be raised from the change in the law taxing dividends out of preMarch 1, 1913, earnings. I have heretofore discussed this item and I hope it will be stricken from the bill.

Five million dollars is to be raised from a change in that portion of the law known as " foreign tax credit." At present a taxpayer with property in various States pays the same income tax on income derived from this property regardless of where located. A taxpayer with property in foreign countries is allowed a greater exemption from income received from such property than he would be allowed if the money were invested in any of the various States. It was sought to repeal the provision allowing this exemption but because of entanglements resulting from complications of business in foreign countries it was decided to reduce the credit by 50 percent.

Twenty million dollars will be obtained from a change in the paragraph dealing with consolidated returns. Many large companies with intermeshing subsidiaries find it very convenient to make consolidated returns. It is claimed by many tax experts that through this provision they are able to balance off the losses in the nonproductive industries against the gains in the productive industries and thereby reduce their taxes materially.

There is no question but that there are · many honest advantages in permitting consolidated returns, and rather than punish those who may be dishonest in the making of their tax returns under this provision it has heretofore been held wise by the Congress to charge an additional tax of 1 percent for permission to make consolidated returns. Under the present bill this rate is increased by an additional 1 percent so that corporations filing separate returns will pay 13% percent on their incomes and those filing consolidated returns are taxed 15% percent.

From other changes in the paragraphs dealing with partnership returns and from changes in numerous other sections it is sought to increase the taxes by approximately $50,000,000. .

Time does not permit me to go further into detail and explain these various items. The average taxpayer will be more interested in a table showing the difference in the amount of taxes that will be collected under this new law as contrasted with the present law and for that reason I am appending hereto a copy of such table.

(e) Effect of rate structure changes: The changes recommended in paragraphs (a), (b). (c). and (d), above, are interrelated, and it is now necessary to point out the combined result of these changes. The exact results are s}?.own in two tables, · .which set forth the present and proposed taxes on va-rious amounts and kinds of net income in the case of both single and married persons.

Comparison of present and proposed tax SINGLE MAN

Net income

If all earned income 1

If half earned income and half All dividends 2

dividends'

Present Proposed Present Proposed Present Proposed law law law

---------1---1·--------------$2,000_ - - - ----------------- - $40 $32 0 0 0 0 $3,000_ - -------------~------ 80 68 $20 $8 0 0 $3,500_ - - --- ----- ---- ------ - 100 86 30 18 0 0 $4,000_ - -------------------- 120 104 40 28 0 0

1 Earned income means wages, salaries, professional fees, or other amounts received for personal services actually rendered.

2 Dividends from stock of domestic corporations. Same treatment is accorded interest from partially tax-exempt Government bonds.

Comparison of present and proposed tax-Continued SINGLE MAN--Continued

Hall earned If half earned income income and hall All dividends

dividends Net income

Present Proposed Present Proposed Present Proposed law law law

---$4,500_ - -------------------- $140 $122 $50 $38 0 0 $5,000_ - -------------------- 160 140 60 48 0 0 $6,000_ - -------- ------------ 24.0 216 80 108 0 $40 $7,000_ - -------------------- 330 292 . 110 166 $10 80 $8,000_ - ---------------- ---- 420 368 14-0 224 20 120 $9,000 _ - -- ----- ------ ----- - - 510 448 170 282 30 160 $10,000_ - ------------------- 600 538 200 350 40 210 $12,000_ - -----·------------- 800 728 320 496 80 320 $14,000_ - - ------------------ 1,020 938 460 662 14-0 450 $16,000_ - ----------------- -- 1,260 1, 168 620 848 220 f()() $1 ,000_ - ----------------- -- 1, 520 1,428 800 1,068 320 780 $20,000_ - ------------------- 1, 800 1, 728 1,000 1,328 440 1,000 $25,000_ - ------------------- 2, 64-0 2,648 1, 640 2, 148 880 1, 720 $30,COO __ ------------------- 3,600 3, 708 2,400 3, 108 1, 440 2, 580 $40,000_ - ------------------- 5, 920 6, 148 4,320 5,348 2, 960 4,620 $50,000_ - - --- --- -------- ---- 8, 720 9,098 6, 720 8,098 4,906 7, 170 $60,000_ - ----------------- -- 12, 020 12, 558 9,620 11, 358 7,460 10, 230 $70,000_ - - ------------------ 15,820 16, 498 13, 020 15, 098 10,460 13, 770 $80,000_ - - ------------------ 20, 120 20, 948 16, 920 19, 348 13, 960 17,820 $100,000_ - ------------ ---- -- 30, 220 31, 168 26, 220 29, 168 22, 460 ZT,240 $200,000_ - - ----- ------ ------ 86, 720 87,638 78, 720 83, 638 70, 960 79, 710 $500,000_ - ------------------ 263, 720 264, 608 243, 720 254, 608 223, 960 244, 680 $1,000,000 ____ - - --- - - --- - - - - - 571, 220 572, 088 531, 220 552, 088 491,460 532, 160

MARRIED MAN, NO DEPENDENTS

$3,000 __ -------------------- $20 $8 0 0 0 0 $3,500_ - -------------------- 40 26 0 0 0 0 $4,000_ - - ----------- ---- ---- 60 44 0 0 0 0 $4,500_ - ------------ -------- 80 62 0 0 0 0 $5,000_ - -------------------- 100 80 0 0 0 0 $6,000_ - -------------------- 140 116 $20 $8 0 0 $7,000_ - - ------------------- 210 172 50 46 $10 $20 $8,000_ - - ------------------- 300 248 80 104 20 60 $9,000_ - - ----- -------------- 390 328 110 162 30 100 $10,000_ - - ------------------ 480 408 140 220 40 140

$12,000_ - ------------------- 680 583 220 351 80 235 $14,000_ -------------------- 900 778 340 502 140 350 $16,000_ - ------------------ 1, 140 993 500 673 220 485 $18,000_ - ------------------- 1,400 1, 228 680 868 320 MO $20,000_ - ------------------- 1, 680 l, 498 880 1, 098 440 830 $25,000_ - ------------------- 2, 520 2, 348 1, 520 1,848 880 1,480 $30,000_ - ------------------- 3,480 3, 378 2, 280 2, 778 1, 440 2, 310 $4-0,000_ - ------------------- 5, 800 5, 743 4,200 4, 943 2, 960 4, 275 $50,000_ - - -------- ---- -- - --- 8, 600 8,633 6,600 7,633 4,960 6, 765 $60,000_ - - ---- ----- ----- - --- 11, 900 12, 003 9,500 10,803 7,4.60 9, 735 $70,000_ - ------------------- 15, 700 15, 858 12, 900 14, 468 10, 460 13, 200 $80,000_ - ------------------- 20, 000 20, 258 16,800 18, 658 13, 960 17, 190 $100,000_ - ------------------ 30, 100 30, 358 26, 100 28, 358 22, 460 26, 490 $200,000_ - ------------------ 86, 600 86, 783 78, 600 82, 783 70, 960 78, 915 $500,000_ - - ----- -- ---------- 263, 600 263, 708 243, 600 253, 708 223, 960 24.3, 840 $1,000,000 ___________________ 571, 100 571, 158 531, 100 551, 158 491, 4.60 531,290

An examination of these two tables reveals that the tax on ordinary income is not changed to a consequential extent, except that a very moderate reduction in tax is given to taxpayers with small amounts of earned income. On the other hand, the tax on income derived from dividends and partially tax-exempt Government bonds is substantially increased, although the tax on this class of income will still be materially less than on earned income of equal size. It is believed this increase can well be borne both in the case of dividend income and in the case of income from partially tax-exempt securities.

THE REVENUE BILL

The motion was agreed to. Accordingly the Committee rose; and Mr. CANNON of

Missouri, Chairman of the Committee of the Whole House on the state of the Union, reported that the Committee, having had under consideration the bill H.R. 7835, the Revenue Act, had come to no resolution thereon.

REAR ADMIRAL JAMES J. RABY

Mr. WOODRUFF. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD upon the death of Admiral James J. Raby. ·

The SPEAKER_. Is there objection to the request of the gentleman from Michigan?

There was no objection .. Mr. WOODRUFF. Mr. Speaker, Rear Admiral James J.

Raby, United States NaVY, commandant of the sixth, sev-

1934 CONGRESSIONAL RECORD-HOUSE 2621 enth, and eighth naval districts and of the NavY Yard, Charleston, S.C., was killed in an automobile accident near Midway, Ga., at about 4:30 Monday afternoon, January 15, 1934. He is survived by his widow, Mrs. J. J. Raby. His son, Lt. (Jr. Gr.) John Raby, United States NavY, is attached to Aviation Squadron VF-3B, attached to U.S.S. Langley. Funeral services and interment took place at Arlington.

Admiral Raby had been ordered to duty as commandant of the twelfth naval district and naval operating base, San Francisco, Calif., as relief of Rear Admiral George W. Laws, United States Navy, who will be placed on the retired list of the NavY on March 1.

Rear Admiral Raby was born in Bay City, Mich., September 17, 1874, and was appointed to the Naval Academy in 1891. During the Spanish-American War he served on the U .S.S. Marietta in Cuban waters. For his service during the World War he was awarded the NavY Cross with the citation-

For distinguished service in the line o:f his pro!ession as commanding officer of the U.S.S. Albany, engaged in the important, exacting, and hazardous duty of escorting and protecting vitally important convoys of troops and cargo ships through the area of submarine activity. Later in command of the U.S.S. MissOUTi ·tn the Atlantic fieet.

He also received a special letter of commendation from the War Department.

He was on duty in the Navy Department and at the Washington Navy Yard from April 1919 until February 1922 when he was ordered to command Destroyer Squadron 9, Scouting Fleet, and later was in command of the U.S.S. Rochester. From June 1923 until April 1926, Admiral Raby, then with the rank of captain, was in command of the Naval Air Station, Pensacola, Fla. He enrolled in the naval aviation course and qualified on August 6, 1926, as a naval aviator, the second officer in the NavY to qualify as a naval aviator while holding the rank of captain.

From Pensacola, Admiral Raby was ordered to command the aircraft Squadrons, Scouting Fleet. In April 1928, he returned to duty in command of the naval air station, Pensacola, with additional duty as commandant eighth naval district. He was under instruction at the Naval War College from July 1929 until June 1930 when he was given command of Train Squadron 1, Fleet Base Force, and served in that capacity until he was appointed commandant of the sixth naval district in September 1931. He was given additional duty as commandant of the seventh and eighth naval districts on June 30, 1933.

Mr. Speaker, Admiral Raby was a native of my home city. There, among those who knew him from early boyhood, he leaves a host of friends to mourn his passing. I consider it a great privilege to have known him personally for many years, and to have made it possible for his only son to follow in his footsteps, by appointing him to the Naval Academy, from which he was graduated in 1928. I think without exception every person who came in contact with Admiral Raby was impressed with his high character, outstanding abilities, and kindly qualities. As is the case with all men of leadership, he was modest, tolerant, and generous in his judgments of others. He always impressed me as being one of the finest Christian gentlemen it has ever been my good fortune to know. In his death his family lost a devoted husband and father, and his country one of its citizens whose outstanding talents had been importantly recognized in the branch of the public service to which his entire life had been given.

PERMISSION TO ADDRESS THE HOUSE

Mr. IGLESIAS. Mr. Speaker, I ask unanimous consent to address the House for one minute.

The SPEAKER. Is there objection to the request of the Resident Commissioner from Puerto Rico?

There was no objection. • Mr. IGLESIAS. Mr. Speaker, I ask unanmous consent to

extend my remarks by inserting certain documents. The SPEAKER. Is there objection to the request of the

Resident Commissioner from Puerto Rico?

There was no objection. Mr. IGLESIAS. Mr. Speaker, ladies, and gentlemen, a

recent and important message from the President ei1.dressed to Congress, recommending making sugar a basic commodity and fixing sugar quotas, appee.rs to have caused a tremen.:. dous and unexpected effect in Puerto Rico. The recommendation prompted the sending of cables and letters from the island and the· mainland by prominent personages discussing the subject matter and exposing their apprehensions and opinions with reference to the best interests of the people of the island. And for this reason I think it my duty to ask you to permit me to insert into the RECORD these communications for the information of all concerned and in behalf of those individuals who have at heart the welfare of the Puerto Rican people.

It may be that there are some misunderstandings and misapprehensions in the matter, but I consider it my duty to urge all the members of committees and Congress to give their most sympathetic and unprejudiced consideration to the suggestions contained in these cables when the bills dealing with sugar, which have already been introduced, are considered, in the interest of over 1,500,000 American citizens of the island of Puerto Rico. I hope, also, that the term "domestic", as may be used in these bills intended for the protection and control of sugar marketing in the mainland, be made applicable to Puerto Rico as an integral part of the United States. ·

I request that these cables and letters be inserted in the RECORD as an extension of my remarks.

SAN JUAN, P.R., February 14, ·1934. Hon. SANTIAGO IGLESIAS,

Puerto Rico Resident Commissioner, House Office Building, Washington, D.C.:

Jones bill introduced in House to control sugar production would force our sugarcane farmers and cane-sugar producers out of business. Section SA of bill includes Puerto Rico and other possessions with foreign countries, and this would bring disaster to general islands' interests. Economic life and government public services in Puerto Rico chiefly depend on sugar industry, and any discrimination against sugarcane farmers and cane-sugar producers would be seriously reflected upon all private and public enterprises, and labor more especially. Puerto Rico should appear in section 3B of Jones bill in accordance with Agricultural Adjustment Act that places Puerto Rico on equal level with continental domestic producers. The prosperity and happiness of 1,600,000 loyal American citizens depend upon tbe consideration given to the islands' sugar industry. Puerto Rico is cooperating to the relief of continental farmers, manufacturers, and laborers through the high increase in the cost of living brought by the operation of N.R.A. and A.A.A. We are paying for continental relief, and have been expecting national aid in line with whatever is done in behalf of our fellow domestic producers. Puerto Rico requests your valuable cooperation so as to bring our cane farmers and sugar producers out of depression.

RAM6N A.Boy BENiTEz, President Puerto Rico Sugar Producers' Association.

SAN JUAN, PUERTO Rrco, February 12, 1934. Hon. SANTIAGO IGLESIAS,

Puerto Rico Resident Commissioner, . House Office Building, Washington, D.C.:

Sugar control bill (Jones) practically means ruin to cane farmers, sugar producer, and labor tn Puerto Rico. This bill in section 3B includes Puerto Rico and other possessions with foreign countries imposing ruinous processing taxes. Under Agricultural AdjuStment Act Puerto Rico properly belongs with American producers, therefore, your good services are extremely important so that Puerto Rico be placed in section 3B of this bill with American producers. Puerto Rico should be included in section 3B. If such discrimination is maintained, labor particularly will be disastrously affected inasmuch as all benefits recently received by labor here through employers-and-work.men agreements would be unavoidably destroyed as well as other betterment expected based on sugar price unless sugar industry be granted immediate due aid. As American citirens we demand eq~l benefits, consideration to compensate the hardships brought to the island under N .R.A. and A.A.A. so far.

SANTIAGO IGLESIAS,

RAFAEL MARTINEZ NADAL,

PEDRO JUAN SER.RALLES, Senators.

PONCE, PuERTO RICO, February 12, 1934.

Resident Commissioner of Puerto Rico, Washington, D.C.:

Sugar plan .prejudicial to island. Reduction in production will sharpen unemployment problem, increasing misery and demolishing small landlord. Government will be obliged to reappraise the

2622 CONGRESSIONAL RECORD-HOUSE _FEBRUARY 15 land, determining considerable reduction in the revenue of the insular budget. Surplus :production imnossible to storage. Financial banking method in the island will not be able to finance surplus. We beg that you display your accustomed activity in defending our island.

Hon. SA.."'ITT..AGO IGLESIAS,

BANCO PONCE. BANCO CREDITO Y AHORRO PONCENO.

PONCE, PUW....RTO RICO, February 12, 1934.

Resident Commissioner of Puerto Rico, Washington, D.C.:

Referring to the limitation of sugar production in Puerto Rico as proposed to Congress, we submit the following: The proposed limitation of 821,000 tons raw sugar for Puerto Rico would mean a reduction of at least 18 percent from this year's estimated output. One million short tons and more than 20 percent reduction in acreage, since the best lands would be kept in cultivation while the less productive fields which are more expensive to cultivate would be abandoned. This would mean a reduction of probably 25 percent in field labor employed to bring the cane to the point 'of harvesting; in order to appreciate what this would mean ln ·unemployment, it should be remembered that the reduction in field labor would come at the time w~en employment in Puerto Rico is normally at the minimum and would thus accentuate a condition which is always a problem and calls for a careful consideration. It is hoped that before Rnything definite is done along the lines of the proposed reduction these facts will be carefully considered, as otherwise the next dead season will witness a more serious situation than ever before.

Hon. SANTIAGO IGLESIAS,

CAMARA DE COMERCIO OF PONCE, President.

FEBRUARY 10, 1934.

Resident Commissioner of Puerto Rico in Congress, · Washington, D.C.

DEAR MR. IGLESIAS: Enclosed please find copy of a letter .addressed to Secretary Dern and ·one to the Agricultural Adjustment Administration which speak for themselves. ·

Please convey it to Senator CosTIGAN as soon as possible, and have him take into his consideration the suggestions made to the sugar bill that he may introduce.

Best regards. JOHN BASS,

Chairman Producers Sugar Association of Puerto Rico.

WASHINGTON, D.C. February 10, 1934.

Hon. GEORGE H. DERN, Secretary of War, Washington, D.C.

DEAR Sm: I enclose herewith copy of a letter which I .forwarded today to the Agricultural Adjustment Administration in co1,mection with the proposed bill making sugar a basic commodity and fixing the Puerto Rico sugar quota..

You will see from my letter the injustice toward Puerto Rico if no adjustment can be made on account of tlfe hurricanes in Puerto Rico, and I wish that you would kindly use your good offices in seeing to it that the bill be adequately changed, before being introduced, to take care of the Puerto Rican problem.

I understand the bill is still ·being changed today and in view of the urgency of this matter I wish that you would kindly see to it that my proposed change also be made.

Thanking you in advance for yqur courtesy, I remain, Very sincerely,

JOHN BASS, Representing the Puerto Rico Sugar Producers Association.

WASHINGTON, D.C., February 10, 1934. AGRICULTURAL ADJUSTMENT ADMINISTRATION,

Department of Agriculture, Washington, D.C. GE:r.""TLEMEN: With further reference to the personal conversation

I had with your Mr. Weaver and Dr. Bernhard this morning in connection with the Puerto Rico sugar quota, I would like again to state to you the point of view of the Puerto Rico Sugar Producers Association, which I represent.

As you know, Puerto Rico has been visited by two very severe hurricanes, one in 1928 and one in 1932, which severely affected the crop outputs for 1929 and 1933. The effects of these hurricanes were so disastrous that the Puerto Rico sugar industry and, as a matter of fact, the entire island, has suffered severe financial losses, which we all feel we are entitled to make up in years to come. It would be unfair and unjust and discriminatory if the Puerto Rico sugar producers should have to suffer for such catastrophes for which they were not responsible, and it would be just as unfair to give the other sugar-producing areas the benefits of any such catastrophies by cutting down the Puerto Rico quota to the advantage of the other producing areas. In other words, if the other producing areas' quotas should be based upon an average of 3 years taken out of the last 8 years, of which the last 3 years are the highest ones, then it would be unfair to cut out the two hurricane yea.rs when considering the Puerto Rico quota, especially so when one of these hurricane years falls into the last 3 years, showing the highest production in the island, the same as in other areas. For that reason I feel that it is only fair

and just that a provision be made in regard to Puerto Rico whereby the delivery figures for Puerto Rico for 1929 and 1933 be based upon the actual production figures, which naturally were considerably reduced on account of the hurricanes. A readjustment of these individual years could be made easily by taking the official estimates of these crop years made prior to the hurricanes by the Department of Agriculture in Puerto Rico or by the Puerto Rico Sugar Producers Association, or both, in which event it will be quite clearly shown that Puerto Rico would havo supplied the continental United States in 1933, not with 791,000 short tons raw sugar value, but with at least 910,500 short tons. The mere striking out of the actual delivery figures for 1933 would not be fair in view of the above-mentioned arguments, but I feel that it would be fnir to substitute the actual figure for 1933 with the estimated normal deliveries for 1933, thereby giving Puerto Rico the same privileges of including the three large crop years fn their average as is being given to other areas. I therefore would suggest that you recommend a provision in the propcsed blll reading approximately as follows:

"Since some of the Puerto Rico crop years have been abnormally affected by hurricanes and the inclusion of these abnormal figures in the 3-year average would be misleading and cause undue hardship to Puerto Rico, such actual delivery figures for these hurricane years shall be increased by the amount of the estimated crop damage as approved by the Secretary of Agriculture."

I would highly appreciate it if you would recommend the inclusion of such section in the proposed bill before same is submitted to Congress. I am quite sure that in view of the fairness of this request no other area will have any objection to the inclusion ot this section in the bill.

Thanking you in advance for your courtesy, I remain, Yours very sincerely,

JOHN BASS.

BUCKLEY & BUCKLEY, ATTORNEYS AT LAW,

Washington, D.C., February 14, 1934. Hon. SANTIAGO IGLESIAS,

Delegate from Puerto Rico, The Capitol, Washington, D.C.

MY DEAR MR. IGLESIAS: I beg to enclose herewith a memorandum which has l;>een prepared by Senator Serralles showing the facts on the sugar situation in Puerto Rico as it exists at present and demonstrating that any reduction in duty or reduction in output in Puerto Rico will be a very serious damage to the island.

The proposed output in Puerto Rico in the President's message amounts to about 20-percent reduction in acreage, which means aaout 25-percent reduction in field labor. You, as the leading exponent o! labor benefits in the island of Puerto Rico, can appreciate what this will mean in unemployment, particularly as the reduction wlll come at the time when employment is normally at the minimum.

The enclosed memorandum is one which you are at liberty to use in such manner as you think will best serve the interests of the people of Puerto Rico.

Sincerely yours, DAVID A. BucKLEY, Jr.

Enclosure: One memorandum.

MEMOR.\.NDUM RE SUGAR MESSAGE 1. High cost of sugar to the American consuming public. Sugar

has been for years lower in cost than any other foodstuff available and in general use. Based on annual per capita consumption of slightly over. 100 pounds, the cost of sugar consumed by the average ihdividual has been less than $5 per year. I! sugar were placed on the free list, the saving to the consumer, assuming that Cuban raws did not advance in price, as they surely would advance, would be only $2 per person per year.

2. Value of American interest protected by the tariff on sugar. Apparently the annual gross value, $60,000,000, as stated, includes only the price paid to growers for beets and cane, f.o.b. cars, for shipment to the mills, and it refers to continental growers only. We must therefore add to the 60 million, $35,000,000 for value of cane grown in Puerto Rico and $45,000,000 for that grown in Hawaii, thereby arriving at the total farm value of beets and cane, grown by American farmers, $140,000,000.

This sum represents only the price received by the grower. To get · a fair picture of the situation it must not be forgotten that transportation and factory costs add value to the product and represent American industry which is justly entitled to consideration. The raw sugar from Puerto Rico and Hawaii is transported to the mainland in steamers of United States registry, and this .service is the principal source of income to the line serving Puerto Rico. Without sugar freights these lines could not stay in business on their present scale, and rates would inevitably be much higher.

So in considering the importance of the American production of raw sugar it would be fair to base calculations, so far as Puerto Rico and Hawaii are concerned, Q,Il the raw sugar value delivered at continental ports. The c.1.f. price at New York is lower than and controls the price at other ports. The average New York price for 96° sugar c.i.f. New York for 1933 is given by Wlilet & Gray as $3.208. Based on this figure, the value of Puerto Rican raws for 1933 crop was about $59,000,000 and the H.awaiian crop about $66,000,000; Louisiana-Florida, $16,000,000; add United States

1934 CONGRESSIONAL RECORD-HOUSE 2623 beet crop, market value of sugar, $125,000,000, give a total of $266 ,000 ,000.

The total value of United States sugar production, not including refining costs of cane sugar, was therefore about two hundred and sixty-six millions for the 1933 crop. It should be borne in mind that stigar was one of the first products to be deflated after the era of high prices following the World War, and that there was no sugar boom in the period 1926-29. Quite the contrary. The average prices for 96° sugar c.i.f. New York, duty paid, as given by Willet & Gray, were as follows: 1924 ___________________________________________________ _ 1925 ___________________________________________________ _ 1926 ___________________________________________________ _ 1927 ___________________________________________________ _ 1928 ___________________________________________________ _ 1929 ___________________________________________________ _

1930---------------------~------------------------------1931 ___________________________________________________ _ 1932 ___________________________________________________ _ 1933 ___________________________________________________ _

$5.964 4.334 4.337 4.730 4.229 3.769 3.387 3.329 2.925 3.208

It will be seen that the foregoing computations of gross annual value are based on the lowest price (with the exception of 1932) in 10 years. ·

The present rate of duty on sugar became effective June 18, 1930, and carries an increase of 23.52 cents per 100 pounds, from $1.7648 to $2 in the rate on CUban raws. Notwithstanding this increase, the average price for 1930 was 38.2 cents per 100 pounds lower than the average for 1929, and 1931 was still lower by 5.8 cents than 1930. New York price for Puerto Rican raws, June 16, 1930, was $3.33; June 17, $3 .30, $3.27; new tariff, June 18, $3.25; June 20, $3.24; June 23, $3.24; June 25, $3.30.

On June 27, 1930, the price rose to $3.42 and after that ranged downward until October l, when it touched the low of $3.03.

Considering these facts it is clear that the market price of raw sugar does not rise and fall in strict accordance with the changes in tariff duties imposed by the United States of America. There are other factors which sometimes exert a stronger influence, as witness the recovery from 1932, $2.925, to 1933, $3.208=28.3-cent increase without change in rate of duty.

A study of the foregoing statistjcs does not justify the conclusion that the American consumer is paying over $200,000,000 for protection of $60,000,000 production. Apparently this statement is based on the assumption that the entire consumption of sugar in the continental United States of America, 5,270,366 tons in 1933 (Willet & Gray), cost the consumer 2 cents per pound-$44.80 per ton-more than it would have cost had there been no duty on Cuban raw sugar. The Cuban sugar imported into the United States during 1933, 1,471,705 tons, would pay about $66,000,000 in dutie,s. It is difficult to believe that the Cuban producers would, if there had been no duty, have donated to the American consumer the one hundred and thirty-four millions' difference between this duty and the two hundred millions the duty is supposed to cost the consumer. Rather, it is reasonable to suppose that the Cuban would have collected for himself as much of this difference as possible. And in the light of history it appears that the Cuban has not altogether neglected his opportunities to collect. From March l, 1914, to May 27, 1921, the duty on Cuban raws, 96°, was 1.0048 cents per pound and the average price paid for Cuban raws, c.i.f. New York, ranged from the 1914 average of $3.7498 duty-paid, to the 1920 average of $12.3385 duty paid. Comparing these prices with the present price, $3.40 duty paid, it does not appear that the American consumer can reasonably expect cheaper sugar or a continuance of the present price level if the duty is lowered or abolished.

Why should the consumer expect sugar to continue selling at such ruinously low prices as have prevailed for 'several years? Puerto Rico and other sugar-producing sections have been paying higher prices for supplies ever since last July. The processing taxes on cotton, wheat, corn, and hog products have been passed on to the consumer in every case. For example, cotton bags used as containers for sugar refined in Puerto Rico cost 8Y:z cents each a year ago. They now cost l 7Y:z cents each. Jute bags for containers of raw sugar now carry a compensating tax of 7 cents each, the duty-paid cost before the compensating tax being about 15 cents each. These taxes are paid by the sugar producer who is the consumer of bags.

So if a processing tax is to be levied on sugar, why should it not be paid by the consumer as the other processing taxes are?

A TALK AMONG FRIENDS

Mr. BOLAND. Mr. Speaker, I ask unanimous consent to insert in the RECORD an address delivered in Manila by the Resident Commissioner from the Philippine Islands, Mr. OSIAS.

The SPEAKER. Is there objection to the request of the gentleman from Pennsylvania?

There was no objection. Mr. BOLAND. Mr. Speaker, under the leave to extend

my remarks in the RECORD, I include the following address by Hon. Camilo Osias, Resident Commissioner from the Philippines, Manila, P.I., November 24, 1933:

the Filipino people who cooperated in securing an Independence Act. I thank you and the organizers from the very depths oI my heart.

The people who are here and those they represent, I assume · are either sympathetic to the unanimous stand of the members of the Osmefia-Roxas Mission, and the Resident Commissioners in favor of the acceptance of the Independence Act or are at least open-minded as to the merits of the congressional enactment. I am therefore among friends, and mine will be a heart-to-heart talk to fellow citizens friendly to me and sympathetic to the cause which I defended in the United States and in the Philippines.

CONSERVE AND WIN FRIENDS

We who have stood together, fought together, even suffered together, must conserve our friendship. We should organize to strengthen that friendship and lend a helping hand to those who have been or are being intimidated, threatened, or made to suffer by the ruthless and vindictive leadership that has become drunk: with power.

We should continue to enlighten the people and win friends to a great and righteous cause. This is no time to make enemies here or in the United States. By the contagion of our faith in our people, in the Americans, and in the inevitable triumph of a great and dynamic idea let us go forward as crusaders for human freedom and justice.

We must not forget our duty to conserve our friends in America and win more friends there to espouse the cause of Philippine independence. In words and in deeds we must show our appreciation and gratitude to friends true and tried, like Senators Hawes, Cutting, Pittman, Tydings, Robinson, King, Byrnes, Borah, Norris, La Follette, Nye, Metcalf, McNary, and others who in committee or on the fioor of the Senate defended the Filipinos and their independence, and loyal helpers like former Speaker Gamer, Speaker Rainey, Representatives Hare, Byrns, McDuffie, Lozier, Cross, Bankhead, Cox, Knutson, Beedy, Thurston, and other Members or former Members of the United States House of Representatives who, by their voice, work, or vote, helped push forward the cause of Philippine independence in the Congress. Let us keep on contacting men, women, organizations, publications, and other entities who can be of assistance in the proper solution o! American-Filipino relations.

GREAT DANGERS FROM REJECTION

A danger of incalculable cons~quences arising from the rejection of America's offer of self-government and independence lies in the possible disillusionment and disappointment of many American friends of Philippine independence. The Filipino people are not blind to the good that friends in America have sought to bestow upon us. But the Quezon leadership has been deaf to the advice and counsel of Americans friendly to independence. Mr. Quezon and his rabid followers were deaf to Senator Hawes who advised . acceptance of the act to which Congress gave a large share of its time and attention. Our great friend, Senator Hawes, last April said: ·

"It is reported that some Filipinos opposed to this act will attempt to persuade Congress to enact a new independence measw·e or to change the act just passed so as to meet certain objectio!lS against the economic and political provisions of the latter. If those promoting this movement will acquaint themselves with American public opinion and the temper of Congress it is my judgment they will ascertain and admit that the act submitted to their countrymen for acceptance or rejection is the very best that can be obta:ined from the current Congress or any other in the next 10 years, if ever."

The full report of the Philippine Independence Commission (ch. XVIII) gives documentary evidences and authoritative statements from Senator PITTMAN, Senator LA FoLLE'ITE, Senator TYDINGS, Representative McDUFFIE, the last two being the chairmen of the Senate and House Committees in charge of Philippine affairs in Congress, showing the adverse effects of rejection but all these were utterly disregarded by Mr. Quezon and the rabid re j ectionists.

Congressman LOZIER said: " If the people of the Philippines reject the proffered independence, such action will keenly disappoint millions of Americans in every· walk of life who have generously and unselfishly supported the cause of Philippine independence."

Mr. Quezon and his fellow antis or fellow-rejecttonists in the legislature turned deaf to all such statements and their portentous implications. We can only say to our American friends that the Filipino people were denied the opportunity directly to act on the acceptance or rejection of the Independence Act. · The foregoing danger, together with the division and confusion

that have followed the act of nonacceptance, must be borne in mind in order the better to shape the course that we should pursue in our emancipatory struggles.

It should not surprise the Filipino people if in the near future, following the rejection of the Independence Act, there will be several things that will be done in the United States that would not prove favorable to the Filipino cause. I shall mention some:

1. The delegations sent from the islands may suffer rebuffs. 2. There may be lessened faith in the declarations and state

ments of our leaders. 3. Many papers of the United States which have opposed the

Independence Act will be found opposing any other independence measure.

It is very gracious of this representative group here gathered 4. Continued oppositition to independence may be expected from to hold this banquet in honor of a bumble representative of former opponents of the Hare-Hawes-Cutting enactment such as

2624 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 Hoover, Hurley, Stimson, Theodore Roosevelt, Jr., General P..arbord, and others like them.

5. The Philippine-American Chamber of Commerce in New York, which has contributed money in the past to fight our attempts to get independence legislation, may be expected to continue its campaign of opposition against immediate or early independence.

6. The imperialists that fought the Independence Act will fight any other independence measure.

7. The retentionists who opposed independence in 10 years will oppose independence within a shorter period.

8. People who in the past have accused Filipino leaders of publicly demanding "immediate, absolute, and, complete independence '', but praying they will not get it, may be looked for to resume their whispering campaign.

9. Many chance readers of newspaper headlines wm conclude rightly or wrongly that either the Filipinos do not know what they want or that they refused independence.

10. The American ·exporters to the Philippines may resume their fight against independence.

11. Many vested interests will likewise fight us anew. 12. Certain selfish groups may be expected to push for legisla

tion in Congress that are reactionary and even discriminatory. I can imagine those who have criticized me in the past as being

unpatriotic because I sought to utter truths and facts renewing their campaign of vilification and vituperation. I do not mind the bitter criticisms of those who think they have a monopoly of patriotism. The Filipino people are entitled to know the unalloyed truth. " Know the truth and the truth shall make you free."

ANTIS REPENT

I venture to state that· even now some of the antis who are neither rabid nor fanatic realize with the pros at least some of the meritorious provisions of the act. I entertain the belief that many more will become repentant over the rejection of a congressional measure to enable the people of the Philippine Islands to adopt a constitution, form a semi-independent government of a Phllippine commonwealth, and, after 10 years, enjoy the blessings of complete independence.

Many of those who opposed the Independence Act on the erroneous belief that we are compelled to pay our bonded indebtedness 1n 10 years will repent when they see the error of their views. They must realize that if it is difficult to pay our debt in 10 years it must be harder, not to say impossible, under the plan of immediate independence advocated by the leaders of rejection.

Many of those who rejected the ' law under the belief that commonwealth means common death, will realize that the government the commonwealth contemplated by the Independence Act would have been more autonomous and more advantageous than a government under the Jones Act, if we really and sincerely desire to be independent and free.

Many of those who opposed the act on the score of sugar limitations will soon realize that with or without a Hare-HawesCutting Act limitation is in the offing as a means of bolstering up commodity price and as a means of salvation ror the sugar industry itself.

Me.ny of those who opposed the act on the ground of its provisions en military, naval, and other reservations will realize that the Philippines would fare better under the Independence Act than under the Jones Act. I make bold to assert that if the Quezon Mission will secure interpretation or clarification of the Hare-Hawes-Cutt ing Act on the question of reservations, the interpretation secured from responsible and authoritative sources in Washington will be substantially the same as we of the Philippine Independence Commission explained th.e provisions of the law in our official report and in our speeches and articles.

Those wl::.o have been led to oppose the act because as Mr. Quezon stated the Hare-Hawes-Cutting law was worthless, that under it there can be but a Filipino figurehead as chief executive, and that independence that is a joke is offered will find among responsible Congressmen and Senators that they did not entertain similar views when they worked and voted for the Independence Act.

Many Filipinos indeed, wm repent of these. Their disgust and disappointment will grow with the passing montr..s and years. But the crime of rejection has been committed and, as always, repentance comes too late.

OSROX MISSION AND QUEZON MISSION

While the responsibility for the nonacceptance of the Independence Act must be that of the Quezon leadership, we, who are for the acceptance must help mitigate the evil consequences of rejection. Ours is a common country and it is clearly our duty to do our share to prevent a complete debacle. This, we must do as a patriotic duty and not to take away one iota of the credit that belongs to the Quezon mission should it succeed in redeeming its pledge to secure a better law that would insure prosperity and immediate independence. Should it fail then there must be a group ready to assume new obligations and responsibilities for the Philippines.

It is especially incunibent upon the proindependence citizens of the Philippines or upon us the pros to combine our forces and coordinate resources for the sake of the impending change. The Philippine Independence Commission that brought the Independence Act to the Philippines was a representative and united mission. Both the majority and the minority were represented. They had the unanimous vote of the legislature when selected.

They labored in cooperation in Washington. The official report submitted was signed by all. The recommendation for the ac, ceptance of the Independence Act was unanimous.

The Congress was impressed by that representative commission and because of the unity and character of the members of that commission of legislative members and Resident Commissioners they were hailed as " agents of the Filipino nation • • • alert and able champions of their people's rights and aspirations." A concrete and positive result was achieved.

How about the new Quezon mission? According to one of its members, Senator Quirino, it is the best mission ever selected. He is entitled to that opinion, but others ought likewise to be entitled to opine.

For more reasons than one the new Quezon mission is a mission of division. For the second time Mr. Quezon Will have to state in America, if he is honest, as he did when he headed the mixed mission, that " the people are divided."

The Quezon mission is a divided mission now, because while Messrs. Que~on, . Quirino, and Gabaldon have gone with their retinue of technical advisers and other personnel have left our shores, Messrs. Paredes, Zulueta, Sumulong, and Auginaldo are still here. The advance guard is not truly representative.

The Quezon mission has no rep_resentation of the minority in the legislature. The very resolution creating the new mission ls a documentary evidence of division. The leader of the minority in the senate was named, but the minority leader of the house was purposely omitted. One Resident Commissioner was mentioned in the resolution, but the other was not. I am the one omitted, but instead of complaining I declare I am glad because I shall feel free to act in accordance with the dictates of my conscience and the best interests of the Filipino people.

A:N .. rIS AND PROS

In the foregoing observations I have given certain impressions of what we may expect in the United States now that the Independence Act has been rejected, or in the words of the leading rejectionists or antis that it has been "killed and burled." Recently they have been vociferating on unity which they destroyed, and they have been preaching that "it is now idle or futile to talk about the Hare-Hawes-Cutting law." It is understandable why the killers of the Independence Act would ·want silence on the part of us who condemn the murder perpetrated. But the antis themselves continue discussing the law and their attack on those who favored the law.

The pros have a perfect right to discuss the Independence Act and carry the issue to the people. .

We have a right to conduct a campaign of information. We owe it as a duty to the people to fiscalize the acts of a

leadership that has been insincere and undependable. \Ve must not permit honest convictions to be repressed and

freedom of thought and freedom of speech to be curtalied if we are to have a sound democracy in the Philippines. .

We must expose the acts and conduct of leaders who play politics out of our liberty.

We must fight every attempt to tyrannize and terrorize especially the poor and defenseless employees.

We must forestall the implantation of the spoils system In our government.

We must exalt merit, enthrone reason, and establish a regime of right and justice.

Yielding to none in love of country and devotion to independence, we who are known as the "pros" must oppose men and measures that obstruct our freedom and progress and support whatever makes for the advancement, happiness, and independence of the people of the Philippines.

IMPRESSIONS OF THE PHILIPPINES

When I return to the United States, as I shall soon do, I shall carry with me certain definite impressions from my visit and travel in different parts of the Philippines. Among these impressions are that while a majority of the present members of the legislature have apparently voted to decline to accept the Independence Act, if there had been an opportunity in an honest plebiscite, the Filipino people would have voted to accept the Independence Act without thereby relinquishing their right to labor for modifications they deem desirable.

The majority of the newspapers of the country have favored acceptance. Even the daily paper in Manila that has been most rabid and bitter against the members of the mission editorially 1n August 1933 said:

"In resolutions, public demonstrations, and in private c.ircles, the people In the Provinces have stood foursquare for the conditional acceptance of the act.

"• • • Clear and unmistakable, frankly and squarely, the irresistible force of the people's will demands that the HareHawes-Cutting Act be conditionally accepted without delay."

A PERSONAL WORD

Just a personal word in closing. I wish again to thank you. Your manifestations of support and affection have been inspiring and will be a solace and encouragement to me in continuing the constructive service which I am pledged to render to our people and country.

I covet the friendship of people here and in the United States who are sympathetic to Philippine independence. It shall be my endeavor as a public servant to merit their friendship.

1934 CONGRESSIONAL RECORD-HOUSE 2625 SERVICES IN CONGRESS OF HON'. GEORGE HUDDLESTON TO VETERfllS

Mr. HILL of Alabama. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD on the services in Congress of Hon. GEORGE HUDDLESTON.

The SPEAKER. Is there objection to the request of the gentleman from Alabama?

There was no objection. Mr. HILL of Alabama. Mr. Speaker, under leave to ex

tend my remarks, I wish to make a· brief statement upon the services in Congress of Hon. GEORGE HUDDLESTON as they relate to legislation of interest to veterans and to veterans' claims.

Congressman HUDDLESTON, a veteran himself, has a :firsthand knowledge of veterans' problems. His own experience in service has enabled him to deal with such matters from a standpoint of deep sympathy with the veterans and of understanding of their situation. His long experience as a lawyer, before coming to Congress, qualifies him to handle veteranst claims with great success. The veterans have not only had his sympathy but his training as a skilled lawyer in dealing with their affairs. This fact has enabled him to perform services of the highest value.

Without making any attempt at an exhaustive statement, I set forth, in as few words as possibl~. his record as it has an especial interest to veterans:

VOLUNTEER PRIVATE SOLDil:R

1898: May 1 to November 1-served as volunteer private soldier, Company K, First Alabama, Spanish War; has never claimed pension, bonus, or other benefit; asks nothing now except a square deal from his fellow veterans.

May 1, 1899: Elected first commander Alabama Veterans of Spanish War; served 1 year; has been member of all Spanish War veterans' camps organized in Birmingham.

RECORD IN CONGRESS

1916: Opposed conscription of National Guard for Mexican service; was one of the only two Congressmen voting against it.

1916: Introduced and had legislation passed making Confederate veterans eligible for pensions for death of sons in United States Army. (Prior to this ex-Confederates were barred from receiving pensions, even for disabilities incurred in their own service in Federal Army.)

OPPOSED CONSCRIPTION

1917: Spoke and voted against conscription as undemocratic, violative of American fundamentals, and depriving patriotic men of the opportunity to volunteer.

1917-18: Voted for all appropriations to carry on war, for compensation legislationt for increase in soldiers' pay, for increases in compensation, for all measures designed to bring war to successful conclusion; advocated :financing war, as far as possible, by taxation of war profits instead of through bond issues; demanded that " no citizen should be allowed to come out of the war richer than when we entered it."

September 11, 1917: Voted and made speech which defeated proposal to place officers on higher rates of disability compensation than enlisted men; the law as passed placed all upo.n an equality.

FATHER OF SOLDIERS' BONUS

December 16, 1918: Father of soldiers' bonus. Introduced bill and spoke for bonus; adyocated payment of $30 monthly for 6 months to enable discharged veterans to eat while looking for jobs-" I made it as much as I thought Congress would agree to and as little as I thought it would be decent to give. I would give more." (Speech, Jan. 2, 1919). Secured $60 bonus paid to soldiers on discharge. This fight for bonus was started while the soldiers were still in service. before the Legion was organized and months before any other Congressman had thought of it. Consistently advocated payment of a reasonable cash bonus down to passage of bonus bill, 1924. Opposed "tombstone bonus" ill principle but voted for it as all that could be pas.sed.

1918: Author of law creating presumption in favor of veterans, that all disabilities found while in service were caused by service unless noted at time of enlistment. Passed

(act June 25, 1918). Thousands of veterans have been benefited by this.

1919: Advocated prompt return to the United States and discharge of soldiers aJter armistice (speech Feb. 6, 1919). Denounced social caste in Army (speech Jan. 28, 1919).

December 9, 1919: Introduced bill to provide homesteads for honorably discharged veterans; introduced bill again on April 22, 1921; again on February 28, 1924.

FAV01tED EQ'UALrl'T 'IN VETERANS' RELIEF

May 11, 1928; Voted and spoke against Emergency Offlcers' Aet, which gives officers having exactly the same disaabilities, special status, and greater disability compensation than enlisted men.

1920-31: During all these years supported every proposal offered in Congress for veterans' relief and benefits) including compensation inereases, 50 percent loan on bonus, and so forth.

June 15, 1932: Bonus marchers picketed Capitol demanding that Congress pay the balance of the bonus, in effect, an additional and new bonus for the reason that the 50-percent loan voted in 1931 had consumed all but less than .5 percent of both principal and interest of the original bonus voted in 1924, so that the alleged balance consisted merely of unearned interest on a debt already paid. Voted .. no." This bonus drive aroused great prejudice against all veterans· and gave force to the sentiment which caused drastic cuts in compensation and i'elief to the injury of many worthy veterans.

March 1933: With all banks closed, upon President's insistence that the credit of the Government wa.s at stake, voted for Economy Act. This vote was cast upon the expectation that the cuts would be limited to 25 percent and upon the assurance, given by the President's spokesmen. that he was sympathetic, and would deal generously with the veterans.

June 10, 1933: Voted and spoke fbr the Connally amendment to limit cuts in pensions and compensation to 25 percent.

HANDLED 15,-000 VETERANS' CLAIMS

As a veteran private soldier, has taken a deep interest in enlisted men, and in the disabled veteran-has handled over 15,0-00 separate soldier claims, for pensions, compensations, pay, and so forth, and claims no return in thanks or support from those he has served-is proud of his own service, and feels that the Government owes neither him nor any other able-bodied man any money merely because he did his duty by serving in time of war.

LINCOLN'S BIRTHDAY

Mr. DARROW. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD and to include therein an address by Senator Drc:KmsoN delivered in Philadelphia on I.incoln's Birthday.

The SPEAKER. Is there objection to the request of the gentleman from Pennsylvania?

There was no objection. Mr. DARROW~ Mr. Speaker, under leave to extend my

remarks in the RECORD, I include the following speech of Senator L. J. DICKINSON, of Iowa, at the Lincoln banquet of the Germantown Republican Clq.b, Philadelphia, Pa., on Monday evening, February 12, 1934:

On February 12, 1921, Dr. Montgomery opened the House of Representatives with prayer and, in part, said:

" Equip us this day with the best manhood. Rebuke us not with indignation but reprove us with tenderness. Stay with us while we tarry at the aitar of our country and renew our vows and our pledges of patriotic devotion. Grant that the ideals, the labors of Abraham Lincoln, the preserver of our country, may live. :May they live in the sweet ministries of our fireside; may they liV€ in the glowing intensity of our national spirit."

There is a. growing fear in this country that the politicr..l philosophy of Lincoln is slowly being forgotten. In the solitary confines of our own homes, and to our close associa~s in business today, we are expressing our hope for, and fear of, many of the present-day trends.

It is true that the life of Lincoln exemplifies the culture of the open spaces. He knew no force that he could not resist. Life to him was a battle, and regardless of the circumstances surrounding him, and the resistance he was compelled to face, he knew no

2626 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 surrender and never once thought of turning back. He was always :firm in his faith in and loyal to his country.

Provincialism is city-bred; broad vision comes from the fields and forests and man's cultural contact therewith.

In today's discussion it seems to me that we can, with profit, parallel some of the problems of '64 with some of the problems of 1934.

Apparently we are not seasoned in our resistance to destructive forces as were the pioneers of the earlier days. No one can read of the experiences of the early pioneers and of the conditions under which they were compelled to live, without realizing the strength of character necessary to carry through under such conditions. Their only assurance for food and shelter was their capacity to acquire these necessities. Their traits of character are best illustrated in the portrayals of early life in Vandemark's Folly, and in the endurance of the sod house, as described in Bess Streeter Aldrich's A Lantern in Her Hand.

They were not asking the Government to assure them of a meal tlcket; they were not asking the Government to shelter them, nor house them, nor loan them money. All that was asked in the pioneer days was the right to use a small tract of land. The Lord would send the sunshine and the rain; fuel for the fire was in the forest. Everyone assumed the responsibllity of not only supplying food, clothing, and shalter for their family, but also supporting the Government as well. Those were the conditions faced by the pioneers of the early centuries. ·

If we are to follow early traditions, if we are to follow the policies of Abraham Lincoln, we will today set our face to the preservation of our liberties by reestablishing the representative form of government of our fathers.

LINCOLN AND HIS COUNTRY

Lincoln saw the real necessity for the organization of the Republican Party. There was no suggestion that the pai:ty should promote other than the advancement of the . country.

We are still the same Republican Party of the days of Abraham Lincoln. We are progressive enough for advancement, and yet, I hope, conservati-.e enough for safety. We were the party of the Constitution under Lincoln, and we are still the party of the Constitution, and not a party against it.

Many governments have failed, · not because they did not do enough for their people but always because they attempted to do too much. The Constitution of the United States is not a restriction on liberties but rather a protection of liberties. When we exceed its privileges, we are on dangerous ground.

The Democratic legislative program may be an experimental program, but one experiment may lead to another until no retreat is possible. Experiment is leading us far astray.

Most of the problems now confronting us are the problems of the individual and of the State a d its subdivisions. Yet we hear the continuous cry, "Why oes not the Government do something?" We ask the Gov ent to plant our gardens, to plow our fields, to control our · dustries, and run our stores. The sooner we regain the self-co sclousness that these are the problems of the individual and ot of the Government, the quicker a safe road to recovery will ap ear in the foreground.

We are now enjoying a 'et of alphabetical soup. These new bureaus are entering into practically every phase of our domestic and business life. Many of them have no foundation in legislation whatsoever. They are the result of Executive orders--illegitimate stepchildren of an 1ll-advised law whereby the legislative body surrendered its birthright and delegated legislative authority to the Executive of the United States.

We are at present the victims or· such delegated authority. Pressure on Congress put through many measures transferring authority from Congress to the Executive--a cowardly procedure. Those governing us today were not elected to office. Johnson was not elected by the vote of the business men, nor Davis by the vote of the farmers. This has all been brought about by a delegation of power.

The Republican Party has always stood for, and now stands for, a return to fundamentals.

LINCOLN AN INDIVIDUALIST

Lincoln was an individualist-:-far-seeing, determined. No more fitting example of conquering adverse conditions can be given in any history than the ambition and determination of Abraham Lincoln to overcome the surroundings of his early life.

And yet, today we are about to abandon individual initiative. We are about to adopt the problem of planned society. We are no longer making any attempt to maintain inviolate our property rights

BUSINESS LEADERSHIP

The greatest tragedy of today is that the leadership of industry and business, which should oppose the present program of Federal regulation and control, is so irresolute and divided in what should be done.

If socialism once grips American capitalism, 1t will never release its grasp. One of the early conceptions of social reform is that the state shall control all means of production. There is nothing new in the present-day suggestions. All these theories have been tried in one form or another and failed.

But a Socialist never admits defeat. He will admit that his program has not worked, but never admits that its failure is on account of the defect in the system. The failure is always because he was not permitted to go far enough and extend his program to complete control of the economic system.

Once the Government begins the task of controll1ng economic relationships, it must continue. One commitment leads to the next. American capitalism, in its present faltering experiment with State control, is playing with the buzz saw.

STATE RIGHTS

Lincoln did not want to abolish State rights. He was a believer in fundamentals and believed that every locality should solve its own problems. His whole philosophy of life stressed individualism and its protection under State laws and under Federal laws. He did not believe that every individual should carry his complaints against society to the doorstep of the White House.

His career as a lawyer was based. on the fundamentals of individual rights under the State, of State rights under the Federal Government, and the Federal Government merely a clearing house for conflicts between various States and individual differences in the States. But how far we have drifted from this philosophy!

Where are the advocates of State rights? The shades of democracy grow dim when the legislative leadership of that party forsake every tradition of Thomas J~fferson and the South and surrender to a centralized Government control. In finance they surrender to the R.F.C.; in industry to the N.R.A.; in agriculture to the A.A.A.

LINCOLN AND SOUND MONEY

Lincoln was for a sound currency. He said on December 20, 1839:

" • • No duty is more imperative on that Government than the duty it owes the people of furnishing a sound and uniform currency."

On December 1, 1862, he said: " Fluctuations in the value of currency are always injurious,

and to reduce these fluctuations to the lowest possible point will always be a leading purpose in wise legislation. Convertibilityprompt and certain convertibility-into coin is generally acknowledged to be the best and surest safeguard against them • • • ."

What about our currency today? A foreigner bought gold a short time ago at 23. He took it to Europe or to sea or hid it. With the assistance of our Government, he now returns it to the United States and sells it at 36, and pockets his profits. Who is to blame? Our own Government.

The Treasury statement of January 27, 1934, shows cash balance on hand of $462,000,000 plus. The statement of February 1, 1934, shows balance on hand of $4,434,000,000-money by legislative and Executive manipulation.

BUREAUCRACY

We are gradually centralizing all financial control in government. Most banks are merely discount agencies for Government securities. They are requested to sell stock to a Government agency.

Chairman Jesse H. Jones said: " In fact, as I see it, if the banker fails to grasp his oppor

tunity and to meet his responsibility, there can be but one alternative-Government lending. The question therefore follows, will our banking be continued in private hands or of necessity be supplanted by the Government?"

Where does such a program lead us? History tells. Daniel Webster, on March 15, 1837, said:

"A bank founded on the revenue and credit of the Government and managed and administered by the Executive was a conception which I had supposed no man, holding the Chief Executive power in his own hands, would venture to put forth."

Webster cites the experience of our country with a political bank as follows:

" * • A disposition was manifested by p0litical men to interfere with the management of the bank. Members of Congress undertook to nominate or recommend individuals as directors in the branches, or offices, of the bank. They were kind enough, sometimes, to make out whole lists, or tickets, and to send them to Philadelphia containing the names of those whose appointments would be satisfactory to General Jackson's friends.''

Here in Philadelphia the Constitution was written. Lincoln held the Constitution inviolate. Our party should be commltted to the principle as established by our forefathers. The preamble should continue to be our golden rule:

"We, tl:{e people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

This has been revised in the new deal and now reads entirely differently. At the present time, if I were to write a preamble to fit into the present-day program, it would be as follows:

" We, the people of the United States, in order to test the stabil1ty of the Union, and to divide one section against the other, to endanger justice, to insure domestic discord, to retard the general welfare, to endanger the civil liberties of ourselves and our posterity, do ordain and establish the A.A.A., the C.A.B., C.C.C., C.S.B., C.W.A., E.C.P.C., E.H.F.A., F.A.C.A., F.C.A., F.C.T., F.D.I.C., F.E.R.A., F.HL.B.B., F.S.R.C., G.S.C., H.OL.C., I.A.B., I.B.R.T., I.T.P.C., L.A.B., N.C.B., N.E.C., N.I.R.A., N.I.R.B., N.L.B., N.P.B., N.R.A., P.W.A., P.W .E.H.C., S.A.B., S.B.P.W., S.R.B., T.C.F.T., T.V.A."

This gives you some comprehension of the change being brought about in the Federal Government.

1934 CONGRESSIONAL RECORD-HOUSE 2627 Thirty-seven new bureaus have been established since March

4, last. Approximately 50,000 new employees have been added to the Federal pay roll. All are the recipients of Democratic patronage and have all escaped competitive civil-service examination. The added eost of running the Government, because of this established bureaucracy, is now estimated at more than $5,000,000 a month for pay roll alone. The promise of the Democratic Party to reduce the Federal expenditures by a billion dollars this fiscal year has not been kept.

PLUNDER

Our country is plunder-mad. Lincoln suffered a condition similar to th.at of our day. When throngs of office seekers visited the White House, he observed, " There y<m see something which, in the course of time, will become a greater danger to the Republic than the rebellion itself." Four years later he remarked to Carl Schurz on the same subject, "I am afraid this thing is going to ruin republican government."

At one stage of the game Lincoln compared himself to a man who was so busy renting rooms in _ one end of the house that he had no time to put out a fire which was destroying the other end.

In 1861 he was stricken by an attack of varioloid, and he said to an usher, "Tell all the job hunters to come in and see me. I have something I want to give them."

There was the usual ridicule as against reason, but in the end a sane policy was found, and the country was carried through to a successful preservation never since to be challenged. Then the difficulties had to do with personal rights. Now they . have more largely to do with property and property rights.

TARIFF

Abraham Lincoln once said that if one buys a suit of clothes abroad, he gets a suit of clothes, a foreign country gets the money, a foreign laborer gets a job-a job an American laborer ought to have had. But if one buys a suit of clothes in America, he gets a suit of clothes, America keeps the money, and an American laborer is given a job. This is the old-time philosophy of protection.

Yet tod:11.y we find two proposals now being considered by the administration. One of them proposes reciprocal trade and tariff agreements, to be negotiated by the President under delegated authority of Congress. The second plan includes Government financing to engage in import trade.

No one depreciates the necessity for favorable trade relations with foreign countries. However, these agreements must not be made to the disadvantage of American workmen and American industry.

FOREIGN PRODUCTS

Many countries that desh·e to export their products to the United States produce only agricultural products for export. This is true of Canada and Australia, many of the South American countries, and so forth. Any trade agreement should not be made with these countries to the disadvantage of American interests already producing an oversupply of such products.

Who wants to delegate to the Executive the authority to make such an agreement? An eastern interest or a western interest might require a certain schedule of protection. They might find an agreement entered into that would put them out of business over nij;ht and subject them to foreign competition that they could not endure. Why disregard the precedents of 150 yea.rs and embark upon such an experimental program?

Even the N .R.A. is basically dependent upon protection. Higher prices for American-made products are a direct invitation to increase importations of competitive foreign products. The N .R.A. promises both h~gher prices and higher wages. The whole organization of industry under the N .R.A. makes the maintenance of our tariff schedules more important and tariff reciprocal agreements with foreign countries less advantageous and less likely.

Our domestic interests should come first. Our national program should be fixed neutrality with all foreign countries, and we should arrange our policies to attract goods and not to bargain with nationals. Uncle Sam cannot at!ord to become a reciprocal-trade-bargain hound.

CONCLUSION

We need a crusade for the return to fundamentals. We should guide ourselves by the experience of Abraham Lincoln during the time of a national crisis.

Legislative authority delegated to the Executive should be withdrawn. Congress should again assume the responsibility of fixing the salary of Federal employees and the compensation due the soldiers of our previous wars and the veterans of the World War.

The authority granted the Reconstruction Finance Corporation to go into the banking business and to name the banking personnel should be repealed. Jesse Jones should no longer be continued as the Government banking Santa Claus.

The law permitting Hugh Johnson to become ringmaster of all business -ethics should be repealed. Business, in order to regain its momentum, must be permitted to use its own initiative.

The law permitting the investment of Government funds in Jand rentals and marginal lands should be repealed. The country is in no apparent danger of starving to death, but 6,000,000 little pigs have died in vain. Secretary Wallace says that from those that ha.th it shall be taken away.

· Secretary Ickes now wants to go into the cement business. Why should the Government of the United States engage in the production of cement? The theory that the Government can run a business better than an individual has been disproven for 2,000

years, but Secretary Ickes commands-build everything; we have the money.

The law permitting the Government tt:> employ labor should likewise be repealed. It is not the function of the Federal Government to help individuals or groups of individuals who are in distress, but it is the business of the Federal Government to provide funds for the preservation of life. The present-day program of Administrator Hopkins is not only wasteful but expensive. Paying a living wage is an entirely different matter from providing a sustenance. But the program of Administrator Hopkins appears to be-eat, drink, and be merry, for tomorrow I shall ask for another $2,000,000,000.

So let me again repeat that we are in a grand and glorious c.ampaign of trying everything for something that ails us, with the hope that somewhere, somehow, someone will find himself better off.

We find foreign countries without emergency legislation, without delegating legislative power to the executive, without charging against the government treasury all the ills of humanity, making greater advances than we are making.

It is now conceded that we scraped economic bottom the world over in 1932. It is well to compare the efforts of America with those of England under the present stress. In the United States we are spending money to bring back prosperity. In England they are saving it for the same reason. Naturally, both methods will make some progress. In Great Britain they ask no emergency or extraordinary powers. It is well to remember that the stability of the English course has weathered many tests. In America we are sending up a trial balloon. No one can predict the expected landing.

There is nothing in the present program that encourages the individual to start over again. In fact, there is every reason for the individual's withdrawing from business activity.

There seems to be a desire on the part of those in control to subject our country to every form of panacea that has been suggested for 50 years. If these socialistic experiments are to be continued, then the people of the United States should prepare themselves to accept the inevitable consequences of such a social disruption. We should remember and realize that, regardless of au the socialistic schemes that have been tried out in the world, in the end nearly everybody has to work for a living after all.

From Samuel Crowther's America Self-Contained, I Quote: " If we choose, with all the facts at hand, to bring to an end

the America we have known and lived in, then that is one thing. But it would be very sad if, like a child tinkering with a toy, we should destroy our Nation and all its future may hold, while innocently believing that we are mending it."

OUR UNFINISHED WORK Mr. MARTIN oi Massachusetts. Mr. Speaker, I ask unani

mous consent to extend my remarks in the RECORD by inserting an address delivered by my colleague, the gentleman from New Jersey, Mr. EATON, at Red Bank on Lincoln's Birthday.

The SPEAKER. Is there objection to the request of the gentleman from Massachusetts?

There was no objection. Mr. MARTIN of Massachusetts. Mr. Speaker, under the

leave to extend my remarks in the RECORD, I include the following address delivered by my colleague the gentleman from New Jersey [Mr. EATON] at Red Bank, N.J., on Lincoln's Birthday:

I am here tonight for three reasons: First, to pay once more my tribute of honor to the sacred memory of Abraham Lincoln, a man raised up by the God of our fathers to lead our country through the terrific testing of the Civil War, and as our first Republican President to inaugurate the magnificent service of the American people which our party has rendered for all but 16 years since Lincoln took office.

Second, I rejoice in the opportunity your invitation affords me, in his home county and his home State, to pay public tribute to your noble-hearted townsman and friend, Senator WARREN BARBOUR. By his integrity of mind and purpose, his directness and simplicity of approach to the people, his courage and devotion to the welfare not only of his State but of the country at large, Senator BARBOUR has already made for himself a place of distinction and honor. I join with hosts of his fellow citizens in the feeling that he has been called into public service because of his unusual equipment to become a guide and leader of our people in this time of stress and uncertainty. I congratulate New Jersey upon its good fortune in having so human a representative as Senator BARBOUR fighting its battles in Washington.

My third reason for being here is to refresh my mind by contact with the courage, loyalty, and enthusiasm characteristic of the young Republicans of our State. As a citizen, I wish to thank you and all other similar organizations for your helpful service · to our country and party. I should like to use this occasion to summon the youth of New Jersey, regardless of party, to a new vision of and a new consecration to the task of helping to solve our common problems. And while we are grappling with these new problems, I look to the young men and women of our State to help in the preservation of all that •is best in the principles, ideals, and

2628 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 methods by which the American people have made their Nation the most powerful, progressive, and prosperous in the world.

Abraham Lincoln will stand through the ages as the symbol of the passion of man to be free. Under a republican form of government in a democratic society we need, in these troubled times, to recall his definition of democracy. He said: "As I would not be a slave, so I would not be a master. This expresses my idea of democracy. Whatever differs from this, to the extent of the difference, is no democracy."

On November 19, 1863, Lincoln delivered an address at Gettysburg· where was fought one of the · great battles of history. He said: ·

"Fourscore and seven years ago, our fathers brought forth on this continent a new nation, conceived in liberty . and dedicated to the proposition that all men are created equal.

"Now we are engaged in a great civil war, testing whether that Nation, or any nation so conceived and so dedicated, can long endure. * * * It is for us, the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us--that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion; that we here highly resolve that these dead shall not have died in vain; that this Nation, under God, shall have a new birth of freedom; and that government of the people, by the people, for the people, shall not perish from the earth."

Since these immortal words fell from the lips of Lincoln, 70 years have rolled by, and once more the American people are facing the question whether a nation conceived in liberty can endure.

With the progress of the years and following the frightful upheaval of the World War it was thought that political liberty had become the common possession of the civ111zed world, and yet less than 16 years after the ·armistice it would seem that political liberty is in danger of passing out of the world. The Italian people, with thousands of years of noble history, have abandoned self-government and submitted their political liberties to a dictator. The German people, among whom was born the great liberating energies of the Lutheran Reformation, are today under a dictatorship without parallel in civilized history. The Russian people, turning from the domination of one class to the domination of another, have ended in a dictatorship whose announced ambition is to destroy liberty throughout the world as it is understood by men who speak the English tongue.

And here in America, a nation "conceived in liberty", we are build.Ing up today by the expressed will of a vast majority of our people a bureaucratic control over the life of the individual citizen, which is an absolute and complete denial of Lincoln's conception of American liberty and without sanction in the Constitution, under which we have lived and prospered for 150 years.

I have no illusions as to what is going on in the world. While we are now in the darkest hour of distress and ruin, affiicting every nation, I do not for a moment relinquish my faith and hope that mankind wm finally emerge into a brigh~er and, better day.

wages of men and women will have to increase. If this ts accom~ plished by governmental action alone, we will become a· socialistic state. If by private endeavor under reasonable governmental guidance and control, we s]lall remain American.

I maintain that we have brains enough and character enough in this great Nation of ours successfully to solve every problem in our national life, but at the present moment the American people have turned away from their ancient practice of individual initiative and self-reliance and are looking to political government to do for them what hitherto they have gloriously done for themselves.

This brings us face to face with the real need of the hour. We have all the necessary machinery for the production and distribution of economic wealth; we have a superabundance of po- . litical machinery and officials to run it. Our supreme need-and the supreme need--of the whole country at this moment is moral and spiritual. Men have lost their faith in God and, as an inevitable consequence, their faith in each other, in themselves, and in their institutions. Faith is the victory that overcomes the world. ·

I do not know from what source this new spiritual awakening will come, but, judging from the history of past ages, it will surely come. Because of the universal nature of the problems it must solve, this new spiritual and moral power will transcend

-any experience in history. It will have to be as universal as the world in its sympathies, understanding, and application. It will have to go to the deepest recesses of the individual heart and mind: It will have to contain within itself an energy sufficient to implant a new faith in a faithless world, a new hope . where hope has died, and a new courage where men have faltered and fallen by the way. It will have to furnish us with principles, ideals, and moral energies sufficient to undergird and organize a social system in which economic freedom will become practically possible.

Lincoln summoned us to our unfinished work. Tonight let us believe that we have not yet reached the time when the creative and reformative powers of the human race are exhausted. We have not yet reached the period of social, facial, and individual senile decay. We are in the twilight, but it is not the twilight which is to usher in the final starless night of eternal stagnation for mankind. Surely science has not made its last contribution to man's dominion over nature; rather science knows that it is only in the morning of its achievements. Religion is not dead; it Ii.es under the chill of an i.ntellectual and spiritual winter, but the spring will come when it will blossom into a new and more divine revelation to govern, inspire, and heal the souls of men.

Is there any man so blind to the facts that he believes that there are no more homes to be builded, no more schools and churches and roads and bridges and factories and ships for sea and air? Surely we have not reached the time when no further progress is possible in the science and art of political government. Is any man, acquainted with history, willing to say that the human race has nothing more to achieve in religion, music, literature, and philosophy?

To face these realities of work unfinished or yet to be begun is to -lift before the gaze of youth and age alike the most glorious era of opportunity, the -hour of heaviest responsibility, the supreme challenge to a consecrated life of intelligence, integrity, wisdom, and service. ·

The essence of the wor.ld conflict today contains the reason for my hope for the future. That conflict in every civilized country , centers around the demand of the masses of men for an adequ3.te and reasonable share in the economic resources of the world. L'l other words, for the first time in history civilized mankind is girding itself for a death grapple with economic poverty. And this ANNIVERSARY OF THE SINKING OF THE BATTLESHIP "MAINE,,

:battle, because of the contribution of science in the last century Mr. GILLETTE. Mr. ·speaker, I aek unanimous consent to to man's dominion over nature, is narrowed down to the question of the distribution of wealth. We have a productive capacity in extend my remarks in the RECORD with particular reference industry and agriculture and in all other departments of human to this anniversary of the sinking of the Maine. activity more th3.Il sufficient to satisfy every reasonable human The SPEAKER. Is there objection to the request of the need. we are now floundering in the darkness searching like blind gentleman from Iowa? men for some workable plan .bY which to justly distribute our surplus wealth. There was no objection.

It is at this point that the American people for the first time Mr. GILLETTE. :Mr. Speaker, 36 years ago last night the in their history have turned away from their own self-reliance, the b b

:individual initiative. and courage and ability to cooperate in American battleship Maine, in : Ha ana Har or, was . private enterprise, and fixed their attention upon th..eir political sunk with the destruction of all of the officers and men on government as containing the cure-all for their economic ills. board. This condition amounts to a national hypnosis. I am firmly con- · t't t db th Am · G

. vinced, in the light of history, and especially in the light of A board of inqmry was ins 1 u e y e er1can overn-American history, that this is a vain hope. The further we ad- ment and one by the Government of Spain for the purpose vance toward the bureaucratic, political control, the further '\11'.e are of determining the cause of the explosion which sank this away from any solution of our problem. America was made by the battleship. But the cause was never definitely determined. American people. They made their own Government; the Gov-ernment did not make them. This- appalling catastrophe had the effect, however, of

On this memorial day I am offering no partisan criticism of , definitely-breaking the strained-relations between the Govany political party or J!!lersonage. I am simply 011tllning a situa- ernment of Spain and that of the United states, over a tion as I think it really is, and I wish to place myself on record as

·having no faith in the possibility of finally solving a great world- period of many years, owing to the treatment of the people of wide economic problem by political 01· partisan-.methods. Cuba by the Spanish governmental regime. It brought to

It is only fair· that I be asked what --solution -of the problem do naught all the earnest efforts of Presidents Cleveland and I propose. My answer to that question · is that our iirst step ls to

·abandon the enormous expenditures of taxpayers' money around McKinley to avoid an open break between the two coun-the circumference of the problem and go at once to its center. tries. It resulted in an immediate determination on the Unless we do this, we shall have shot away all our ammunition part of the people of the United States to intervene in aid of without hitting the target. We shall have spent so much time · th C b . . 1 d · f t · di t I

.studying and defending proposed med!clnes that the patient will ' ' e = U a17 .peop e, .an a ~er1es o evez: s rmme a e Y re-

. perish. The center of the problem is ·the unjust and ·unequal ' sulted which -culmmated m a declaration of war on the ·distribution of wealth; and the center ·of -thls unjust condition is 25th of April 1898. On the 23d day of April the President expressed in .wide-spread unemployment in industry and unprofit- of the United States issued a call for 125 000 volu.."lteers able product10n in agriculture. In the new age toward which we . . ' . ' are journeying the wages of _monet will have to go down; the which resulted m the_ most astounding demonstration of

193~ CONGRESSIONAL RECORD-HOUSE 2629 patriotic fervor ever displayed. More than 1,000,000 volunteers offered themselves in answer to the call. The quota could have been filled entirely by veterans of the Civil War, as more than a hundred thousand who had fought in the Union and the Confederate Armies volunteered for service. Thousands of sons of men who had fought under Grant and Lee, Sheridan and Stuart, entered the service. Again in the fallowing May a second call for 75,000 troops brought out as astonishing a response in the way of volunteers offering their services.

But my purpose in securing time to address this House was not for the purpose of recalling these well-known historical events. Neither was it for· the purpose of indulging in any fulsome eulogy of those who served in the war. I have never been able to go along with those in or out of Congress who take advantage of every occasion to indulge in fulsome praise and exaggerated panegyrics relative to the ex-service man. If there is anything that is abhorrent to exservice men, it is to be classed as heroes, supermen, or demigods. I think I may be pardoned a personal allusion to preface the further remarks I wish to make. It was my privilege to serve in both the Spanish-American War and the World War, and I think I speak what most of the exservice men feel when I say that to enlist one's services in a time of the country's need is an easy thing to do. It is far more difficult to face a condition where age, physical defects, or dependents prevent one from becoming part of the necessary determining force. I wish to say further that while it takes courage to face the mouth of a cannon, it takes more courage to face the mouth of ridicule, derision, and misunderstanding. My comrades do not pose as heroes. It took more courage to cast a vote for the economy bill last spring than it did to file enlistment papers in the opening of the war.

I wish to take this opportunity, on the anniversary of the incident mentioned, to make a special plea in behalf of my comrades of the Spanish-American War. When these men entered the services, they entered into an implied contract with the Government of the United States that any loss to themselves by disability or to their dependents by death should be compensated by the United States on the basis of the pension policy which had been fallowed over a term of years. This contract has been broken by our Government. I want to protest with all earnestness the classification of these Spanish War veterans with my comrades of the World War in the matter of determining their pension and compensation. May I briefly call attention to a few outstanding points of differences: The private of the World War drew $30 per month. In the Spanish War he drew $15 per month. In the World War the soldier was surrounded and protected by every development in sanitation and in medical advances that had been made, largely because of the· unfortunate experiences of the Spanish War. During the Spanish War, in Camp Thomas, at Chickamauga Park, more than 25 percent of the men in the First and Third Army Corps were victims of typhoid fever alone. During the service of the World War soldier, he was given the protection for his family of a $10,000 policy of insurance. The Spanish War soldier had nothing of this kind. When the World War soldier was discharged he received a bonus payment of $60. The Spanish War soldie1" received nothing. Most of the States of the. Union voted a special bonus for their World War veterans, but none was voted for the Spanish War soldier·. Congress provided for an adjusted-compensation payment at the rate of a dollar a day for home service and a dollar and twenty-five cents a day foreign service for the World War veteran. The Spanish War veteran received nothuig. For more than 20 years no provisions whatever were made for these men whQ served in the Spanish War.

After the enactment of the economy bill, boards were set up to determine the presumptive cases for the World War. These service boards examined 51,000 cases at the rate of about 8 per day, and found more than 41 percent service connected. The Spanish-American War veteran had practically no hospital records available. Thousands of his com-

LXXVIII--167

rades were dead. Thirty-five years had elapsed since his service. The Government, in Public, No. 78, stipulated that his disability would be presumed to be service connected and . the Government must combat the presumption. A central board considered these cases. I am informed that they considered 236,000 at the rate of about 1,200 per day, and found but 5,400 service connected, or a trifle better than 2 percent. Never in the history of our country has an army of its soldiers been as ruthlessly treated as these comrades of mine. Averaging 60 years of age, with practically no opportunity for gainful employment, crippled and infirm in thousands of cases, unable to trace service connection through no fault of their own, the rules adopted have been so discriminatory against them that, as I stated a few moments ago, it is a tremendous breach of contract and faith on the part of the United States Government. I want to urge, in conclusion. upon the Members of this House and the Congress, not to let the Seventy-third Congress pass into history without the passage. of legislation correcting and rectifying, insofar as we are able to do so, the gross injustices that have been done these men. The opportunity is still with us to restore them the pension rights under the clear-implied contract which we entered into with them. With faith in that contract and their country they offered their services. We accepted those services. we benefited by their contribution and sacrifices. Let us fulfill our part of the contract.


Mr. BUSBY. Mr. Speaker, I ask unanimous consent to address the House for 1 minute.

The SPEAKER. Is there objection to the request of the gentleman from Mississippi?

There was no objection. THE NATCHEZ TRACE PARKWAY

Mr. BUSBY. In the year 1806 the Congress of the United states passed an act which was approved on April 21, authorizing President Thomas Jefferson to lay out and open a road from Nashville, Tenn., to Natchez, Miss.

The particular part of that act pertaining to the establishment of this road is section 7, and reads as follows:

Be it enacted, That the President of the United States be, and he hereby ts, authorized • • • to cause to be opened a · road from Nashvllle, in the State of Tennessee, to Natchez, in the Mississippi Territory: Provided, He shall not expend more than $6,000 in opening the same.

This appropriation was followed by another appropriation of $3,ooo ·tn 1809, which sums were used to convert the old Natchez Trace from an Indian foot-arid-bridle path into a usable wagon road. Thus the ancient Indian trail leading from the section about Nashville was established as a national highway connecting the white settlements of Tennessee, Kentucky, and the East with the white settlements that had sprung up in the Spanish, French, and later the English settlements on the lower Mississippi.

At this period of our Nation's history, white settlements were rapidly developing in different parts of the southern territory, being acquired by the United States from other nations. The obstacles in development lay in the fact that accessibility between the several parts of the country was difficult because there were no roads. Rivers and streams were largely depended upon, and along which. white settlements first sprang out. To a certain extent Indian trails were utilized and some of the most important of them were converted by the Government into wagon roads.

Realizing the importance of the Natchez Trace leading through the lands of the Chickasaws, in 1801 a treaty was entered into between the United States and the Chickasaw Indians who occupied the southern part of Tennessee and the northeastern part of Mississippi, in which treaty it is provided that the Chickasaws:

• • • Give leave and permission to the President of the United States of America, to lay out, open, and make a convenient wagon road through their land between the settlements of Mero District in the State of Tennessee, and those of Natchez in the Mississippi Territory, in such way and manner as he In:ay deem proper, and the same shall be a highway for the citizens of the United States. and the Chickasaws.

2630 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 In the same year a treaty was entered into between the

United States and the Choctaw Indians, whose territory lay just south of that of the Chickasaws~ in which treaty it was provided that the Choctaws:

• . • • do hereby give their free consent, that a. convenient and durable wagon way may be explored. marked, opened, and made, under the orders and instructions of the President of the United Sta tes, through their lands, to commence at the northern extremity of the settlements of the Mississippi Territory, and to be extended from thence, by such route as may be selected and surveyed under the authocity of the President of the United States, until it shall strike the lands claimed by the Chickasaw Nation, and the same shall be and continue forever, a highway for the citizens of the United States and th~ Choctaws.

Thus the right-of-way for the Natchez Trace Road was secured and the basis for the action of Congress in 1806 was laid for the establishment and construction of a wagon road by the United St.ates between Nashviile. Tenn., and Natchez, Miss. Along this roadway established by the Government and used throughout its length by the citizens of the United States. and the Indians, much history was made by the pioneers: taverns were established, stage lines were vperated, and many are the stories of bravery, chivalry, violence, and crime told even today of the happenings along this road of some. 500 miles in length. It was over this road that part of Jackson's force traveled from Nashville to New Orleans; and it was over this road that Jackson retum~d with his army from New Orleans to Na.shville after his famous victory where he so overwhelmingly defeated the British in the last battle oi the War of 1812.

THE NA'l'CHEZ TRACE

Mueh history has been compiled concerning the Indian trails which were used prior to the coming of the white man. In the Forty-second Annual Report of the Bureau of · American Ethnology, published by the Smithsonian Institution, at page 811 is an article headed " The Natchez Trace." It begins:

When the whites first came into middle Tennessee they found an Indian path or trace running from the former India,n settlements around Nashville to the Chickasaw towns about Pontotoc in northern Mississippi, where it connected with trails leading to all sections of the southern United States. The middle Tennessee whites called it the Chickasaw Trace beca.use it went to the Chickasaw towns, but later on it was known as the "Natchez Trace".

NATCHEZ TRACE CONNECTS PORTS OF UNITED STATES

This same article further recites concerning this trace that it-

• • was regarded by our early whites as being ancient and was spoken of by them as the old Chickasaw Trace. Its route was the logical one for movements between large and important sections in the central United States. Over it, beyond question, passed in later times parties of Chickasaw, Choctaw, Natchez, and other southern tribes on their way to midule Tennessee, Kentucky, and the territory of our present North Central States, while the many unknown peoples who preceded them must also have traveled it. Its key situation forced its use, and it played a vital part in the life of the region, both in war and in peace.

When settlements began to spring up in different parts Qf the country, mostly along rivers and water courses because they could be used as a means of transportation, it also became apparent to the settlers that land routes to connect these settlements must be planned and developed. In th~ same article, _referred to above, it is recited:

The white man began using this trail (Natchez Trace) as soon as he cam'e into the region. Over it passed many southern Inciian war parties to attack the feeble white settlements in Tennessee, and over it in return huTried armed white bands to attack and destroy their red enemies south of Tennessee River.

THE NATCHEZ SETTLEMENT

Speaking of the white settlement that had grown up on the Mississippi River about Natchez, this article recites:

As the number of wWte settlers increased and their llllld and water traffic grew, Natchez, in tl'le Mississippi Territory became of more and more importance. The whites floated their products by wate:r to Natehez or beyond. but many of them preferred to return by land over the old CWc:kasaw Trace and its connections rather than by the long and laborious upstream pull-and-pushagainst-the-current journey by river. The newly formed United States Government also began to realize the possibilities of this great southern section very soon and planned to, open. better means of communication through it.

NATCHEZ TRACE ESTABLISHED BY CONGRESS

After reciting the activities of Congress in making appropriations. in 1806 and 1809, totaling $9,000, which was expended under th~ authority of the President to open up the Natchez Trace Road, this article closes the paragraph:

Thus the celebrated Natchez Trace was established. It followed substantially the route of the Chickasaw Trace and its connections, departing therefrom only where the necessities of a wa~on road varied from the requirements of aboriginal foot travel or where the newly formed settlements of the whites drew it slightly from its ancient course.

Park Marshall, a well-known historian of Tennessee, writ~ ing on the Natchez Trace, states:

General Wilkinson (who supervised the laying out of the road under authority of President Jefferson) is reported as saying to the Indians, " The Chickasaw Trail is a very uncomfortable road and we wish to improve it for the use of both the Indians and the white people."

Mr. Marshall also states:-r have looked upon the Chickasaw Trail as a route or path

leading from the main villages of the Chickasaws, in what is now Pontotoc County, Miss., to the vicinity of Nashville. This trail crosi:>ed the Tennessee at the northwest corner of Alabama, close to the mouth of Big Bear Creek (near Waterloo ) . It was planned for the Natchez Trace to cross at the same place, but the officers in charge (Captain Butler and Lt. E. Pendleton Gaines ) , perhaps with the consent of General Wilkinson, were persuaded to cause it to cross 1 or 2 miles above, at Colberts Ferry.

The article quoted from at length, published by the Bureau of Ethnology, gives specific points through which the Natchez Trace passed: First, from the section about Nashville to the Indian towns in Pontotoc County, and then from this Chickasaw region in Pontotoc County on to Natchez, on the Mississippi River.

Route of the Natchez Trace: The old Chickasaw Trace and the later Natchez Trace passed from Nashville through the following points in Tennessee: Near Belleview, Davidson County; near Leipers Fork, in Williamson County; near Leatherwood, in Maury County; through Gordonsburg, in Lewis County; an d near Victory, in Wayne County. It then passed int o Alabama. At or near Dart, in Lauderdale County, Ala .. the Natchez Trace left the old Chickasaw Trace in order to cross Tennessee River at Colberts Ferry, the latter trace crossing the Tennessee about 2¥.! miles downstream from Colberts. The Natchez Trace joined t he old Chickasaw Trace near Allsboro, in Colbert County, and thence passed into the State of Mississippi, where it went through Tishomingo and Saltillo, and on to the maze of India n tra ils and Chickasaw towns in Pontotoc and Union Counties. Here the old Tennessee Chickasaw Trace ended, but it connect ed with other Indian trails leading to all parts of the southern United St ates.

The route from Pon.totoc to Natchez: Leaving the Chickasaw region in Pontotoc County, the Natchez Trace continued on to Natchez over another old Indian trail, passing through or very near the following towns: Houston, in Chtckasaw County; Ackerman (French Camp, to be exact), in Choctaw County; Kosciusco, .in Attala County; Canton, in Madison County; Clinton and Raymond, in Hinds County; Port Gibson, in Claiborne County; Washington, in Adams County.

It is also recited in this article that " the United States mails were carried over the Natchez Trace in the years immediately following its opening."

Great research is disclosed in the preparation of this article published by the Bureau of Ethnology, It leaves no doubt as to the location of the old Natchez Trace or its importance as a road connecting the white settlements of the Northeast with those of the South and West.

OLD MAP OF 1830

Some years ago I was making a search at the Census Bureau for certain material. I came across an oltl atlas published in Philadelphia by Anthony Finley in 1830.

The map of Mississippi in this atlas marked very distinctly the boundaries of the few counties which had been established in the southern portion of the State. It also distinctly marked the boundaries of the Indian lands in the State.

The Indian tribes then remaining in Mississippi were chiefly the Chickasaws and Choctaws.

On this map of 1830, which was published in the time of Jackson and only 16 years after the Battle of New Orleans, are plainly-marked the leading Indian trails and wagon roads that had been developed in the State. Some of the settlements that have served as landmarks, even to the present

1934 CONGRESSIONAL RECORD-HOUSE 2631 time, were in existence then. Monroe, a missionery station, and the Chickasaw Agency near what is now Pontotoc are noted on this map.

The Natchez Trace passed through the Chickasaw Agency. Some few miles north of this is Longtown; to the east of these several miles on the Tombeekbe River is located Cotton Gin Port; just south of it are Bolivar, Hamilton, and Columbus.

From Columbus to Columbia, both of which are noted on this map, leads the Jackson's Road; from Columbus to what is now Canton, in what is now Madison County, leads the Robinson Road. It joined the Natchez Trace 7 miles northeast of the present town of Canton.

Very plainly shown is the old Natchez Road, beginning at Natchez, then passing through Washington, Seltzerstown, Uniontown, Greenville-Jefferson County-Post Gibson, Grim.estone Ford; thence to Mount Satus, near Raymonu; Old Agency, near Madison Station; Doaks, through the present city of Kosciusko, but not shown on the map; Pigeon Roost; Folsoms; Underwoods, near the location of Old Cumberland; then Chickasaw Agency, already mentioned; Longtown, Underwood Village, which is just over the line of Mississippi and Alabama near where the village of Alsbo:ro now stands. From there the trail crossed Bear Creek, proceeded across the corner of Alabama, crossed the Tennessee River on the north side to a village marked on the map as "Ravanna'', but which at the present time is known as " Waterloo."

From this point the Natchez Trace proceeded in a northeastern course to Nashville, crossing Wayne County, Tenn., Lewis County, Hickman, Maury, Williamson, and Davidson Counties, into Nashville, touching the points as above stated.

MAP OF TENNESSEE

A splendid map of the course of this road is shown at page 746 of the Forty-second Annual Report of the Bureau of American Ethnology, showing the passage of the trace from Ravanna through Tennessee to Nashville.

I have introduced two bills in Congress-one providing for $50,000 with which to make a survey of the old Indian trail known as the "Natchez Trace" with a view to constructing a national road on this route to be known as" The Natchez Trace Parkway." I have designated this "The Natchez Trace Parkway " because there has been recently set up in the Department of the Interior the Division of National Parks, Buildings, and Reservations.

The road now being constructed from the Shenandoah National Park to the Great Smoky Mountain, a distance of about 500 miles, is under this authority. It has jurisdiction of Government parkways, but does not have jurisdiction over roads or highways.

A BILL CH.R. 7312) TO SURVEY THE NATCHEZ PARKWAY

In the preamble to the bill providing funds for the survey, I call attention to the fact that the Natchez Trace was one of the most ancient and important Indian roads leading from the territory in the section of Tennessee about Nashville in a southwest course, crossing the Tennessee River at Colbert Shoals, a few miles below Muscle Shoals, thence passing in a southwest course through the Chickasaw and Choctaw Indian lands in what is now Mississippi, in an almost direct course by Jackson, Miss., to Natchez; and that the Natchez Trace is located throughout almost its entire length on highlands between watersheds on the most suitable route over which to establish the national parkway, through a section of the country greatly in need of such road facilities· from a national standpoint, to connect the North and East directly with the Natchez, New Orleans, and southwest section of the country; and that the Natchez Trace was made famous for the service it rendered in affording General Jackson a route over which much of his forces moved to take part in Jackson's famous victory over the British at New Orleans, and also by reason of the fact that General Jackson returned with his army over this trace to Nashville after the Battle of New Orleans; and that the Natchez Trace is known as one of the Nation's most famous old roads, and has been marked at great expense by handsome. boulders with suitable inscriptions by the Daughters of the American Revolution,

these boulders being placed every few miles from one end of the trace to the other; and that unusual interest is being manifested in the building of a national parkway by the Government, Natchez Trace organizations having been perfected in almost every county through which the trace passes; and that the Government has recently adopted a policy and set up a division in the Department of the Interior, known as the "Office of National Parks, Buildings, and Reservations", to engage in a national way in laying out parks, reservations, and building parkways.

BILL (H.R. 7345) TO CONSTRUCT THE NATCHEZ PARKWAY

The second bill I introduced in Congress provided for a $25,000,000 appropriation with which to construct the Natchez Trace Parkway along the route of the old Natchez Trace as established by Congress under the act of 1806 and as laid out and developed in response to that authority.

In recent years, especially since the coming of the automobile, the United States Government has sponsored a policy which has meant much in developing road building and the construction of permanent highways in this country. No more beneficial improvement can be had than a well-constructed highway which may be used by everyone alike. Money expended in recent years for highways mounts into the billions of dollars. Much of this was spent to poor advantage when highway building was in the experimental stage, but the States and the Nation are now turning to a more dependable type of road construction. They have learned that the road which has proper engineering, roadbed and surface construction, is, in the long run, the most acceptable and the cheapest. ·

POLICY OF NATIONAL HIGHWAYS BY UNITED STATES

In recent years a system of national highways has been advocated from many sources. Undoubtedly necessity and wise decision will cause the Government to enter upon such a course in the near future. The construction of the scenic highway for a distance of 500 miles between the Shenandoah National Park and the Great Smoky Mountain Park at a cost of much less than one half the sum required for a single battleship I believe is a wise thing to do.

The construction of the Natchez Trace Parkway from Nashville to Natchez, a distance of about 500 miles, would connect the North and East with the highly developed sections of the South and West and prove an advantageous and useful investment by the National Government, for all the people.

If this road should be constructed at an average cost of $30,000 per mile, the total outlay would not exceed $15,000,-000. The road facilities between the highly developed section about Nashville and that part of the United States about Natchez, New Orleans, and the southwest sections of our great country are poor indeed. ·It is a difficult matter to travel by automobile from Nashville and points south and west without having to go many miles out of the way and for the most part over poor and impracticable roads.

The Indians, for hundreds of years before the coming of the white man, recognized the great advantage of the Natchez Trace route, its location along high, level land almost free from swollen streams and difficult barriers, but the white man continues to go hundreds of miles out of his way and fails in the development of a direct and connecting highway which would mean so much to the convenience of untold numbers of people and the saving of time and travel by almost every person who desires to go from the northeast to the southwest of our great country.

A . country with poor roads is a country undeveloped, regardless of what other advantages and improvements it may have. People living close to each other remain strangers and the country undeveloped. The most notable thing for which ancient Rome is remembered is the Appian Way, the construction of which was begun in 312 B.C. Perhaps this is the oldest and most celebrated of all roads because of its permanence and the grandeur of its construction.

England was known for her poor roads and poor internal development even 150 years ago. A well-constructed permanent highway is a permanent asset of the nation. It does

2632 CONGRESSIONAL RECORD-HOUSE . FEBRUARY 15 not benefit the people living close to it solely; it does not belong solely to the generation living at the time of its construction. It is traveled 'by and becomes a benefit to the people of all the States, and passes down to the succeeding geneTations as a heritage from us who have gone before.

As I look out toward the west from my .office window, I see the beginning of the Lee Highway here in Washington. That beginning is the beautiful bridge that spans the Potomac River. While that bridge is not more than one half mile in length, on it was expended more than "$15,00-0.,000--enough money to constrnct the Natchez Tr.ace .Parkway from Nashville to Natchez, .a 'distance rof 500 miles.

The Lee Highway leading to the west out of Washington connects Nashville with this Capital City. The -construction of the Natehez Trace Parkway would connect the southwest with Nashville and the Lee Highway, thereby bringing thousands of people hundreds of miles closer by highway travel to the National Capital. _

I ~ommend this proposal to the -Congress. I commend it to the administratiou. I submit that the construction of the Natchez Trace Parkway is one of the soundest, most permanent, and valuable investments that our Government coul-d make.

l ask the cooperation of the Congress in the consideration and passage of the bills which I have proposed .for the survey and construction nf the Natchez Trace Parkway.

'RURAL 'LETTER CARRIERS

Mr. ROGERS of Oklahoma. Mr. Speaker, I ask unanimous consent to insert in the RECORD a letter from the president of the Oklahoma Rural Letter Carriers·' As.soci-atio~ ·

The SPEAKER. Is there objection to the request -of the gentleman from Oklahoma?

There was no -objection. Mr. ROGERS of Oklahoma. :Mr. Speaker, under the leave

to extend my remarks in the RECORD, I include the following letter from the president of the Oklahoma Rural Letter Carriers' Association:

TISHOMINGO, ·OKLA., January 31, 1934. Hon. WILL RoGERS,

House Office Building, Washington, D.C. MY DEAR CONGRESSMAN: Please allow me to extend to you th-e

thanks of the 1,100 rural carriers of Oklahoma for the fair consideration you have given to legislation affecting rural mail service and to thank you in advance for a continuation -0f thls attitude of fair consideration of our program on its merits.

I have been reading the CONGRESSIONAL RECORD, and from the statements of some of the Representatives 1 do not believe they understand the rural earner's position, his present salary and allowance status, or his hopes fm the immediate future.

I know that you do understand our needs and desires, and from Mr. HASTINGS' statement in the RECORD, January 25, I believe he understands. In fact, I believe Oklahoma's delegation is well posted on the needs of the service, and it is with the hope that you may be in a position to state these needs at some opportune time, that I restate our hopes at this time to you.

It stands to reason that all postal workers are very anxious for the return of such a condition of prosperity in this country that a restoration of the old pay scale will be warranted.• We are as anxious to see this 'Condition return to the people as a whole as we are to regain our own temporary losses. We are more anxious at this time to see the smiles of happiness return to the faces of our patrons and the people in g~neral than we are to repair our personal losses. However much we have and do hope ior, these general gains affecting the ·whole of our beloved country, the major objective of our group just now ls the hope that pay and allowances that have already been restored to all other groups will be restored to us, and in that way the gross discrimination against the rural carrier, under which he is today carrying a greater percentage of burden than any other postal or Federal worker, will be removed.

The particular measure we have reference to as discriminatory, or which is being administered in a discriminatory manner, is the amendment to the independent offices appropriation bill of last June,, by virtue of which authority the President issued an Executive order effective July 1, 1933, providing for payless furloughs to postal employees, except rural carriers, and for rural carriers the order reduced the allowance for the upkeep of eqUipment used in serving rural routes to 1 cent per mile net. You heard no loud protest from the rural carriers over the very harsh and unreasonable features of this order, because the sacrifices we were to make under it were in a measure proportionate, and all employees alike were sacrificing in the name of economy, in the interest of a balanced Budget, and the preservation .of the national credit.

Now the pa:rticular order whlch we contend is gross discrimination against the rural carrier, and which is in effect at this gvod hour, is the order effective October 1, 1933, which continues a. portion of the sacrifices required of employees under the measure above .referred to, .ag.ainst only one group of employees, the rural carriers. That order in effect restored the reduction provided for in this particular act of economy to every group excepting only the rural carrier. It continued the reduction in all its harshness for the month of October, 'Somewhat mooified for the months of November, December, January, and February, and continued the original cut for the month of March.

We do not believe that Congress intended that we should receiv-e a g~ater reduction under this measure than other groups were required to accept, or that it should be continued against one group after all -other groups had ·been relievoo. We are -0f the further opinion that this measure was not intended as a salary-adjustment measure, but purely as an economy measure. It was accepted and recognized as such by our group, and silently appro\'"oed by patriotic rura.1 carriers everywhere, until that fatal an~ discriminatory order effective October 1, in effect continuing this cut against our group and our group alone. ,

It is my sincere hope that this message may convey to you· the assurance that the rural carriers of Oklahoma have been, are now, and always will be willing to do their full part as citizens of th!$ Republic, anxious to cooperate with the .administration in a. program of reconstruction, willing to make any reasonable and even in periods of national emergency, to make more than reasonable sacrifices for the common welfare, and that we do not wish to avoid any of the duties and responsibilities of citizenship, as we always consider those duties a paramount privilege. That the only .consideration we have or will ask is th1lt we be accorded the same consideration and treatment that has been accorded other groups. To this end we hope some move may be made that will effect the discontinuance of the reductions above referred to, that have long ago been discontinued in the case of every employee in the postal family excepting the rural carrier.

We contend that we can conform our standard of living to any standard set in the form of salary by the Congress, but that we have no control over the cost of eqUipment and its maintenance. In view of this fact the cost of this item should be exempt from provisions affecting salary. It is not fair to require ain .employee on a salary not above the average salary paid for the same or similar work in the same department of the same Government, to travel half y;ay around the world each year on an allowance for that purpos.e which represents from 15 to 50 percent of the actual cost of the trip. That is what has been required of the rural carrier, and of the rural carrier only.

We offer the suggestion that if the Congress thinks w-e are profiteering on the allowance paid for this purpose, we will re.linquish all claim to such an allowance if the Congress will provide and upkeep the equipment we use as we do now. We hope anyone can see that this is a fair proposal.

"Thanking you again for your consideration of our cause ori. its merits, and for your time ·in reading this uninteresting protest, and hoping, always hoping for a fair deal for the rural carriers, the service they render, and the people they serve.

I am, very truly yours, L. M. WALKER,

President Oklahoma Rural Letter Carriers' Association.

LABOR UNDER THE NEW DEAL

Mr. GREENWOOD. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD on the question of Labor Under the Recovery Act.

The SPEAKER. 1s there objection to the request of the gentleman from Indiana?

There was no objection. Mr. GREENWOOD. Mr. Speaker, the labor movement in

America, distinctly the outgrowth of American democracy, has had a historical development based upon necessity. Without fanaticism, it has applied the American ideals of individual liberty to the problems of those working to create wealth and comforts for the human race. It has been a strong factor in both our industrial and our political lives. Affiliated labor organizations are now striving to swing our perverted economic condition back into normal channels; back where ~very man may have employment and receive his full share of our aggregate wealth and income-a wealth created by the many, but often appropriated by the few. An abundance of every comfort of life prevails in these beloved United States, if we can but provide an equitable system of distribution and consumption. If America is to survive the fate of many pr-evious empires, this problem of more equitable distribution <>f income to the wage earner must be solved.

GROWTH OF THE FEDERATION

Thirty years ago the American Federation of Labor had . half a million members. At the close of the World War this membership had increased 800 percent, aggregating a. total membership of 4,ooo,oo·o. Today the Federation has between

1934 CONGRESSIONAL RECORD-HOUSE 2633 three and four million members under the splendid leadership of William A. Green. There are many other splendid crafts organized for cooperation and mutual advancement. The organized-labor movement has long since passed the experimental stage. It now wields a forceful and uplifting influence upon our social, industrial, and political conditions. During my 10 years service as a Representative in Congress, organized labor has never made an unjust demand of me. It never has requested my support of a single measure that I would not have supported without persuasion.

SHORTER DAY AND WEEK

We are now in the midst of one of the most tragic worldwide break:-downs of our economic system. Our country never has been so dangerously affected by numerous elements of instability. With environment continuously being changed by science, human nature and natural requirements remain much the same. The inventor builds a new machine, and it is immediately installed to reduce labor costs. Many men are displaced and cast aside, like derelicts upon a troubled ocean. Labor-saving machines are almost invariably appropriated by the management of industry for the purposes of profit, and rarely are Installed to increase wages or reduce the hours of labor . A system that permits the advantages

. of invention and discovery to accrue almost wholly to capital and leaves labor impoverished is unhealthy. A fair adjustment of them advantages lies in a shorter workday and fewer days per week. Furthermore, the shorter day and shorter week will create a wider distribution of em-

. ployment. Many economists declare that 5 days per week is more than sufficient to produce all the commodities that we can use. Let 6 men work 5 days per week rather than 5 men work 6 days. May we not hop~ by this adjustment, that with more hours of leisure, the wotkingman will pursue recreation, seek culture, and show improvement of self and home surroundings?

NATIONAL RECOVERY ACT

We are going through an economic revolution. Ethics and humanity are moral forces in adjusting codes of fair competition under the National Recovery Act. Today, when industry meets under Government supervision for industrial planning, organized l&bor is present with representatives of its own choosing. The right to bargain collectively is fully sanctioned. The labor union is acknowledged as the most potent agency for negotiating and enforcing terms of agreement between employer and employee. Wages have been substantially increased, working conditions improved, and hours shortened. This new law has proved the Magna Carta of the wage earner. We are, therefore, entering a new and better day for workingmen. This is a recognition · long delayed, but brings hope of a better day. The Congress deserves great credit and support for backing the President in this advancement of the group who toils. Child labor is decreasing. Sweatshops are being eliminated. Women are being emancipated from industrial servitude. The new deal means a fair deal to those who work. I see a new civilization that recognizes the rights and equality of the mass of humanity.

CIVIL WORKS ADMINISTRATION

Under the leadership of our President a definite allocation of funds was made to give employment in every community. This has been the main support through these trying days for those who were in great need. Congress has voted additional funds to carry this work through to warm weather. It is the earnest desire of Congress and the President that everyone shall have opportunity to earn a livelihood. This means of Government aid has given a new hope and confidence to those who desire to work rather than to ask for charity. I most heartily supported this program.

WAGE REDUCTION NO CURE FOR DEPRESSION

tion of wages cannot cure this depression. Every wage earner is a purchaser of goods, and to penalize him with a smaller income is unwise and unjust. The wage earners of America, receiving a fair and continuous "income, will help to solve the problem of the farmer's overproduction. Many economists believe, after all, that our agricultural problem is not one so much of overproduction as it is of underconsumption. Give the workingman the capacity to buy the products of the farm and our agricultural problem will be solved.

SECURITY OF REGULAR EMPLOYMENT

This recent period of industrial stagnation demonstrates that modern business has most tragically failed in two great e[sentials: First, to maintain a continued confidence of the public in its methods, and, second, to give a security of continuous employment to the workingman. Today unemployment is unsolved. Old age has little or no protection. No reserves have been created during the fat years to guarantee employment through the lean years. No wage earner can be composed unless he has a feeling of security in his employment which will bring self-respect, adequate leisure, and a growing independence. Today workingmen have no such security of employment at a fair and reasonable wage. They have a job one day and none the next. As a group, they take the brunt of a depression that they did not help create.

SURPLUSES DO NOT FEED THE HUNGRY

It is reported that we have in our country 11,500,000 ablebodied workers out of employment . . Next to war, this is the greatest menace which could confront any nation. The savings of a lifetime have been exhausted; bankruptcy faces the business man; the farmer staggers on the brink of ruin. Acute human suffering accompanies this phenomenal and serious break-down of our capitalistic system. Phenomenal, because in a land of surpluses, there is unparalleled want. A surplus of wheat, and millions are hungry. A surplus of cotton and wool, and many unclothed. A surplus of gold, but with a restricted circulating medium, and credit dried up. Rampant greed and unearned profits, with but little regard for the human elements in society, have controlled motives- of business. These narrow, selfish business policies have taken us into the valley of despair.

CORPORATE CONTROL OF WEALTH

In this period of extreme wealth and widespread poverty, we discover 200 corporations controlling 48 percent of the business wealth of the country. These corporations are managed by 2,000 directors, many of whom do not direct. Their methods have fully demonstrated their failure. There is not now an outstanding business leader who proposes a way out of the morass into which the country has been plunged.

Furthermore, it has been convincingly asserted that we are living in a gamblers• civilization. Not content with a

· reasonable and legitimate profit from the production of commodities, they have launched into the manipulation and inflation of securities. These finanriial manipulators, by subtle methods, pool credits to gamble in stocks for unearned paper profits. Some of them have sold foreign securities of a questionable character for fat commissions, to an unsuspecting buying public. They have taken the savings from the people, and the assets and credits of smaller financial institutions, into their stock market maelstrom for gambling purposes. Money went to Wall Street which should have remained on Main Street. We observe that these unsound methods have eventually killed the goo::;e that laid the· golden egg. The wage earner and the farmer, who constitute the bedrock of our stability and prosperity, have been reduced to bankruptcy. The buyers and consumers of our country have beel"l: stripped of their capacity to purchase and consume the merchandise which keeps the wheels of the factory turning and the wage earner employed. This is a rich man's panic, but the poor man

Understand that while I advocate reducing the hcurs of shares the tragedy. We have much yet to learn. labor per week, I do not advocate the reduction of wages. Many of the methods of modern business control must be The income of labor must stand unimpaired .. They are the I cast into the discard. The greed of the closed corporation spenders who h_elp to turn the wheels of busmess. Reduc- may well be supplanted by giving labor a greater share of

2634 CONGRESSIONAL RECORD-HOUSE ;FEBRUARY 15 the profits and a stronger voice in industrial management. Give labor a new deal and humanity a chance. This alone can save America from a premature decadence.

COMM1J'NISM NOT WANTED

Individual freedom is a priceless heritage. Communism that will rob the American wage earner and farmer of this independence is not desired. Let us preserve our rugged individualism and organize our social order on a basis of a better collective cooperation. The mutual interest of the farmer and the industrial worker can be promoted by cooperation and organization. The newspaper, Labor, published by the railroad labor organizations, always reliable, is authority for the following statement:

In 1929, 38 superrich men got $38,000,000 more in net profits than 428,000 workers in our cotton mills received as total wages. And, as often told before, a little over 500 men, with net profits of that year, could have bought at farm prices the wheat and cotton crops of the Nation. raised by 2,300,000 farmers in 1930.

Does this represent the equality of men of which Jefferson spoke in the Declaration of Independence? Democracy and representative government are on trial today as never before.

These facts should convince everyone that the future must produce a plan that will give the wage earner and farmer a greater distribution of the income from their productive efforts. The experience gained from recent trends of business methods demands new formulas.

TAX RELIEF

Farmers and home owners are primarily interested in taxation. Unless real estate can be given a market value, normal conditions cannot prevail. The reduction of the costs of government, evidenced by reduced appropriations of Congress, and in the recent session of our legislature, are most commendable. With the burden of taxation shifted to profits, incomes, and intangibles, there is hope that real estate in Indiana may come back to a normal sale value. I had hoped that an income tax might be passed by the rec~nt session of the legislature. In the recent Congress there was a concerted drive by a certain group to shift Federal taxation from incomes, profits, luxuries, and inheritances to a general sales or consumption tax. This fundamental change of taxation was inspired by wealthy men in both political parties, and was consistently promoted by the metropolitan press. It amounted to a conspiracy to shift the burden of taxation to the consumers, who are less able to bear it. Labor and farm organizations were against the general Federal sales tax. Your Representative helped to def eat this unjust shift of taxation. The revenue bill, as passed, still has some undesirable excise. taxes, among them being the tax on bank checks, which is a hindrance to business, and the tax on electric current, which is an added burden on the home. It is to be hoped that as soon as the gigantic deficit of the Treasury is reduced these nuisance and indefensible tax items can be eliminated.

LABOR'S SPLENDID MORALE

We regret exceedingly the troubles that have so recently transpired in our coal fields. It is to be hoped that the management and the labor organizations shall soon be able to reach a permanent settlement with reference to wages and working conditions. We feel that such an agreement will reestablish peace and avoid further bloodshed. These are desperate times in all lines of industry where overproduction prevails. ·We can, however, well congratulate ourselves because of the manner in which the American working man has withstood this period of unempioyment. The composure and morale· that have dominated his conduct in these most trying times are most commendable. It demonstrates the sound philosophy which is back of his ideal. The American working man is thoroughly American, believes in his Government, and hopes for better times.

the right of contra-ct. Those who would deny these privileges have often gone too far in their methods of suppression. The powers of Federal courts have been used to enforce contracts of labor that are now considered un-American. In this land of freedom and equal rights, there can be no place for the so-called "yellow dog contract." Since Congress enacted the anti-injunction bill, the Federal courts have their equity powers defined. These comts will still have a reasonable and legitimate power to protect property and preserve peace. But in dealing with human liberty, no judge is free from human frailties. Criminal cases should be tried according to constitutional methods prescribed. No court should be allowed in criminal cases, by the use of the equity power of the court, to become the grand jury, the prosecuting attorney, the trial jury and the judge all in one. Human liberty was purchased with the blood of our fathers, and constitutional rights are too sacred in America to permit them to be usurped and destroyed by a tyrannical" judicial system.

HOPE FOR A NEW DAY

This depression has brought us many crosses, and let us hope that it has taught the industrial leaders and financiers of America some lessons. The farmer, wage earner, small business man, and the great mass of producers have been led down into a Gethsemane. They have sweat drops of · blood while those who should have watched and guarded our sacred heritages have either gambled or slept. Frequently the wrong man has had to pay the penalty. In many instances the transgressor has escaped, and the pun- · ishment has fallen upon the innocent. Many have been crucified . upon the cross of gold and gross materialism. Having seen the error of. this system of greed, may we not now hope for a new day of resurrection, a day in which brotherhood in industry and business may have a new and vital significance, a day in which selfishness and grasping power may be supplanted by humanity and fraternity? In promoting this most worthy objective, I am sure labor will do its full part. My fondest hopes are with you, and my best services are at your command.

PE.RMISSION TO ADDRESS THE HOUSE

Mr. MEAD. Mr. Speaker, I ask unanimous consent to proceed for 3 minutes.

The SPEAKER. Is there objection to the request of the gentleman from New York?

There was no objection. . Mr. MEAD. Mr. Speaker, I hope no one will interpret my

remarks as a charge or a complaint against anyone, but in this morning's paper my distinguished colleague f ram New York [Mr. F'IsH] made this statement:

Pan American Airways received approximately $5,000,000 from the Treasury of the United States to carry mail.

And then, among other things, he said that the chairman of the board of Pan American Airways, Cornelius Vanderbilt Whitney, ran for Congress and made a contribution to the Democraic Party and, reading between the lines, one might be led to believe that these may be the reasons why the contract with Pan American Lines was not canceled.

I find an answer to this statement in the RECORD of January 26, by the gentleman from New York [Mr. BACON], a member of the Appropriations Committee who, by the way, ran for Congress against Mr. Whitney. This is Mr. BAcoN's statement:

This air-mail service (meaning Pan American) has been of the greatest benefit to the merchants of this country in their trade relations With Central and South America; it has been of the greatest benefit in the higher plane of diplomacy, friendship, and good will in bringing the countries of Central and South America closer to us and bringing us closer to them. The -President of the United States now ls engaged in conversation with Central and South American countries looking toward better

GOVERNMENT BY INJUNCTION trade relationships. . . . If we do anything to hurt this service at this time, we will be

The most fundamental prmc1ple of cooperative labor or- putting an obstacle in the path of the President in his e:trorts, ganizations is the right to bargain collectively. It is the today, to bring Central America, South America, and North heart of unionism. The denial of the laboring man's right I America closer together. to bargain collectively amounts to an infringement of his Mr. PETTENGILL. Mr. Speaker, I ask unanimous con-constitutional privileges of free speech, free assembly, and sent to address the House for 1 minute.

1934 CONGRESSIONAL RECORD-HOUSE 2635 The SPEAKER. Is there objectioI! to the request of the

gentleman from Indiana? There was no objection. Mr. PETTENGILL. Mr. Speaker, with respect to the Fed

eral estate tax, I wish to express my agreement with the views set forth in the dissenting report filed by the member of the Ways and Means Committee from Maryland, Mr. LEWIS.

I earnestly request the committee to reconsider Mr. LEwrs' proposal and bring in an amendment that will permit the House to vote upon it.

Last fiscal year we collected from Federal taxes on inheritance only $29,000,000. This was only about half what we collected from stamp taxes. It was about as much as we collected from the tax on electric energy to light our homes and run our electric motors. It was less by $12,-000,000 than we collect<:d from taxes on bank checks, by which· we transact our daily business. We charged people for going to the theaters, and so forth, half as much as the tax on estates. The estate tax brought in only one quarter of the tax ·on gasoline and only one thirteenth of the tax on tobacco.

Mr. Speaker, in the light of the necessities of our Treasury, what excuse is there for this wide discrimination in favor of inheritances and against the necessities and comforts of life?

We have cut the wages of Federal employees, even those getting only a few hundred dollars a year; we have reduced the pension benefits of war-disabled veterans and of veterans such as the Spanish-American and Civil War soldiers, Whose advanced age ha~ long since placed them past the industrial dead line-men who cannot hope to benefit by the returning prosperity arid reemployment we all so earnestly pray for, men who have no means of support except their pensions--and yet we are tender, inexcusably tender, it seems to me, to fortunes, large and small, which the recipients never turned a hand to earn.

It is true that estates have shrunk tremendously in market value, and that the returns of the last fiscal year were small, but let us prepare estate-tax schedules that will in the next few years be really effective in reducing a public debt tha.t will be around $32,000,000,000 a year from next July, and that will make a real contribution toward our just obligation toward Federal employees and disabled veterans, that will help provide a fund to meet the payment of the adjustedservice certificates of $2,400,000,000 in 1945, or at any earlier period when they can be paid.

Here let me quote from the minority report of Mr. LEwrs: Why should the Treasury of the United States be left to run

ln the red, year after year? It is the depression, the depression. But the depression ls world-wide; it atHicts England; it atHicts Germany and France as well as our own country. But their treasuries are not in the red-have not been left to run in the red, year after year. Again they say the United States expended $3,300,000,000 during the current year to relieve social distress. But Great Britain is expending annually its 3 Y2 billion dollars and Germany 3 billions, in terms of our population for social relief; that is, to take care of the aged, the helpless, and the unemployed. And the treasuries of these countries are not in the red. . Now frankly, why is our Treasury in the red and their's not? It is because their parliaments provide the necessary revenues, and this Congress does not. Those parliaments go to their citizens Who are able to pay and assess them according to their ability to pay. This Congress does not. Here is the proof. TABLE !.-Comparison of death taxes United States, Great Britain,

France, and Germany-Estate of married persons, no dependents, all passing to widow

Net estate before exemption United States

f 1,000_ - - --- - ------------- --- ------ --- ---------

E~~ct ~~~~:::~---_-_-_-_-_-_-_---~~~~~~== ===========~ Death taxes _____________ percent __ ------------$10,000_ - - - -------------- - -- -- ----- --- -- - --- ---Death taxes _____________ percenL ------------$15,000_ - - -- -------------- --- --- - -- ------------

p~~~~~~====----------_-_-_-_-_~~~~~~== ============ Death taxes _____________ percent __ ------------

Great Britain

(1)

$10 1.0

$150 3. 0 ~300 3. 0

$450 3. 0

$1,000 4.0

France Germany (2) (3)

$70. 24 7.02

$.'i06. rn 10.12

$1, f;62. 01 15.62

$2, 629 17. 53

$6, 504 25

$30 3.0

$250 5.0

$600 6.0

$975 6.5

$1, 875 7.5

TABLE 1.-Comparison of death taxes United States, Great Britain, France, and Germany, etc.-Continued .

Net estate before eJ:emption United States

$50,000_ - - ~------------------------ ------------

Pi~~~~~===-------_-_-_-_-_-_-_-_~~~~~=== -----$1;500· Death taxes ______________ percanL_ 1. 5 $Hi0,000 __ ------------------------- $5, 000 Death taxes ______________ percent__ 3. 3 $200,000___________________________ $9, 500 Death taxes ______________ percent__ 4. 8 $300,000_ - ---------------------- - -- $19, 500 Death taxes ______________ perC{}nt.. 6. 5. $400,000___________________________ $30, 500 Death taxes ______________ percent.. 7. 6 $.500,()()()___________________________ $42, 500 Death taxes ______________ percent__ 8. 5 $000,000___________________________ ~55. 500 Death taxes ______________ percent.. 9. 3 $800,000___________________________ $84, 500 Death taxes ______________ percent._ 10. 5 $1,000,000__________________________ $117, 500 Death tru::es ______________ percenL 11. 8 $2,000,000__________________________ f,315, 500 Death taxes ______________ percent__ 15. 8 $3,000,000__________________________ $553, 500 Death ta.xes ______________ percent._ 18. 5 $.5,000,000__________________________ $1, 149, 500 Death taxes ______________ percent._ 23. O $10,000,000_________________________ $3, 094, 500 Death taxes _____________ percent__ 31. O

Great Brit-ain

(1)

France Germany (2) (3)

$2, 500 --------·---5. 0 25

$9, 000 ------------9. 0 25

$18, 000 ------------12. 0 25

~28. 000 ------------14. 0 25

$51, 000 ------------17. 0 25

$76, 000 ------------19. 0 25

$105, 000 ------------21. 0 25

$138, 000 ------------23. 0 25

$..')()(), OOQ ------------25. 0 25

$270, 000 ----------- -27. 0 . 25

$660, 000 ------------33. 0 . 25

$1, 110, 000 ------------37. 0 25

$2, 050, 000 ------------41. 0 25

$.5, 100, 000 ------------51- 0 25

$5,000 10.0

$11,000 11.0

$16, 500 11. 0

$24, 000 12. 0

t39,000 13. 0

$56, 000 14.0

$75, 000 15. 0

$90,000 15.0

$120,000 15. 0

$150,000 15.0

~.ooo 15.0

$450, 000 15. 0

$750, ()()() 15. 0

$1, 500,000 15.0

It will be noted in the above comparison of rates that an estate of $100,000 pays $1,500 in the United States, pays $9,000 in Great Britain, $11,000 in Germany, and $25,000 in France. A $200,000 estate here pays $9,500, in Great Britain $28,000, in Germany $24,000, and in France $50,000. It is not until the estate reaches $2,000,000 in the United States, and pays $315,500, that our estatetaxes equal those of Germany and about one half equal those of Great Britain and France. To the figures in the above table showing the taxes in the United States should be added the estate and inheritance taxes l~vied by some 23 of our States. If such State taxes be added to the Federal estate tax, it would be increased by 26 percent, or about one fourth.

Taking State and Federal estate taxes together, $180,000,000 was derived from this source in 1930. If we had levied the same rates as the British, the total revenue here would have been $755,000,000.

So for the year 1930 the difference between what we got and what we did not get but would have gotten if we had the British rates in force was $575,000,00Q. If the estate taxes imposed by the Federal Government and the average inheritance taxes imposed by the States were together as much as the British rates, the Federal Government and the States would have -still left to the heirs of decedents after all debts of the estates were paid, about 91 percent of estates of $100,000, 86 percent of estates of $200,000, 79 per-. cent of estates of $500,000, 73 percent of estates of $1,000,000, and so on. So no injustice seems to be done to heirs, nor does it appear that the British rates would discourage thrift nor the natural desire of men to make reasonable provision for their widows and children.

This sum of $575,000,000 is alone greater than the total estimated expenditures for 1934 for the Veterans' Administration, as set forth in the Budget.

In other words, Mr. Speaker, what the National and State Governments are losing by not taxing inheritances as the British do would in a normal year pay the entire cost of veterans' relief.

If democracy is to survive, and if the system of private ownership of property which we call capitalism is to survive, the time has certainly come when we must place much heavier restrictions than we have in the past upon the accumulation of great fortunes. The man who makes this statement is not a radical, he is a conservative. He is trying to conserve the best values of our civilization. The necessity for taking stronger steps in this direction has increased with the tremendous productivity of our industrial plant. We all realize now that a much wider distribution of purchasing power is essential if our machine age is to go on. Men must be able to buy what the machines make. With the loss in large part of our European markets, which for decades furnished a favorable balance of trade to this country, we must now rebuild the American home market. Heretofore the owners of industry and the manipulators of credit have

2636 CONGRESSIONAL RECORD-HOUSE ~_EBRUARY 15 absorbed entirely too much of the economies of machine production. In doing so they have drained dry the purchasing power, without which the machines can no longer find markets.

In 1929 some 508 men reported net taxable realized incomes, greater in the aggregate by $100,000,000 than the gross incomes of all the wheat and cotton farmers of this country put together, representing with their wives and children some 8,000,000 Americans. Is it any wonder that the American people stopped buying? The great CoolidgeHoover bull market was advertised as one of the marvels of the age, but while the bulls were going to market the cows were going dry.

This enormous concentration of wealth in recent years which is certain to be repeated in the anticipated return of prosperity must be more widely distributed through the imposition of taxes on large incomes and inheritances. Not only did the concentration of wealth dry up the purchasing power of the consuming masses of America but of necessity it sought investment in further productive enterprises. This in turn speeded up production capacity at the same time it was lowering our consuming capacity. . According to Sir Arthur Salter, in his book Recovery, it was the lowering of Federal income and Federal inheritance taxes under the regime of Secretary Meilon which helped to stimulate that enormous bubble of speculation that burst in 1929. The taxes imposed in the Wilson administration to pay for the costs of the war should have been left in force. But the money power that ran this Government during the last 12 years, blind to its own legitimate and far-sighted objectives, dictated a policy that brought on its own collapse.

I know, Mr. Speaker, that there are always those who condemn as a long-haired radical anybody who uses the phrase "the money power." Lord Bryce, for many years Ambassador from England to the United States, and one of the most greatly respected men of the age, could not be classed as a long-haired radical. But in his final work, Modern Democracies, he used these words:

Democracy has no more persistent nor insidious foe than the money power, to which it may say, as Dante said when he reached in his journey through hell the dwelling of the god of riches "Here we found wealth, the great enemy." The enemy is for~idable because he works secretly, by persuasion or deceit rather than by force, and so takes men unawares.

Whatever the faults or virtues . of Mr. Andrew Carnegie may have been he was preaching as far back as 1892 in his two books-the Gospel of Wealth, and My Partners, the People-the doctrine of the social justice of high inheritance taxes and the trusteeship of wealth. In 1892 be said:

We must let the worker alone during his life, but after his death the State should step in and demand its share of his hoard, through a. graduated system of taxation. ~very fortune left by a hoarder should contribute to the State m proportion to its size; small amounts left to those dependent upon the decedent being exempt, but the scale rising by steps until With enormous fortunes reaching into many millions it should be decreed that "one half goes to the privy coffers of the State." This is the proportion which the laws of Venice exacted from her Shylock. Our modern Shylocks should be made to contribute at least as much.

In the matter of inheritance taxation we have not yet gone as far as Mr. Carnegie urged us to go 40 years ago, whereas the accumulation of great fortunes since that time bas multiplied many times. Even such a representative of the conservatives as James P. Warburg, vice chairman of the Bank of Manhattan Co., who has recently been carrying on a controversy with Father Coughlin, stated on January 16, 1934, "We have no famine of money, we have a maldistribution of wealth."

The accumulation of great fortunes is nearly always due to many other factors other than the foresight, invention, thrift, enterprise, or ability of the owner. These factors are often some privilege conferred by the State, such as patents, copyrights, tariffs, monopolies, or the unearned increment of land values. Other factors by which large fortunes are secured are those which, as Lord Bryce said, "work secretly" through the manipulation of credit resources, the pumping of water into capital structures. the erection of one super-

holding company upon another, and the consequent sweating of labor and the consumer in order to pay dividends upon water.

By these means resources that spring from and in a very real sense belong to the entire people, are gathered into a few hands. Mr. Carnegie recognized this in his phrase "my partners, the people", and be advocated that at death the fortunate partner should be compelled, through the inheritance tax, to make distribution to those silent partners who had unwittingly, perhaps, contributed to the large accumulation in his hands.

As I say, Mr. Speaker, there is nothing radical about the doctrine of high inheritance taxation. It is one of the most conservative things we can do if we are to preserve our institutions. For centuries Anglo-Saxon civilization has felt that the concentration of enormous wealth in a few hands is opposed to the general welfare and the common weal. For hundreds of years laws have been passed by our· forefathers or court decisions have been rendered designed to break up great estates and to free the living generations from the dead hand of the past. For example, the statutes against mortmain; the abolition of primogeniture, under which the eldest son took the entire landed estate; the repeal of entail, under which land could not be sold, but descended indefinitely to the blood heirs of the ancestor; the rule against perpetuities under which trust funds might accumulate indefinitely, and so forth. What our forefathers accomplished by these means we must accomplish through high inheritance taxation. The principle, therefore, is a truly as truly a part of our tradition as Magna Carta or Concord Bridge.

More than a century ago Thomas Jefferson constantly preached that "the earth belongs always to the living generations." A little later Daniel Webster said:

The freest government cannot long endure when the tendency of the law is to create a rapid accumulation of property in the hands of a few, and to render the masses poor and dependent.

A little later Abraham Lincoln said: Inasmuch as most good things are produced by labor, it follows

that all such things ought to belong to those whose labor has produced them. But it has happened in all ages of the world that some have labored and others, without labor, have enjoyed a large proportion of the fruits. This is wrong and should not continue. To secure to each laborer the whole product of his lauor as nearly as possible ls a worthy object of any good government.

Still later, in 1912, Woodrow Wilson said: And we stand in danger of utter failure yet, except we fulfill

speedily the determination we have reached to deal with the new an.d subtle tyrannies according to their deserts. Do not deceive yourselves for a moment as to the power of the great interests which now dominate our development. They are so great that it is almost an open question whether the Government of the 'United States can dominate them or not. Go one step further, make their organized power permanent, and it may be too late to turn back. The roads diverge at the point where we stand.

As one who loves his country and believes in her institutions, as one who does not wish to see the force of circumstances impose upon us the antidemocratic despotisms of Europe, as one who believes in social justice and the widespread distribution of the total earnings of the American people not only as a matter of equity to the underprivileged classes but as the only safe insurance for the preservat~on of the system of private ownership of property and the exercise of private initiative, as one who, in the words of Edmund Burke, "places his feet in the tracks of his forefathers where he can neither wander nor fall", as one who would heed the warnings of the great voices of the past, regardless of party, I urge this Congress and the Ways and Means Committee to attack this problem and attack it now.

THE POST.l\L SERVICE UNDER THE NEW DEAL

Mr. MEAD. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD by including a speech by my colleague, the gentleman from Michigan [Mr. MussnWHITE], on the Postal Service under the new deal.

The SPEAKER. Is there objection to the request of the gentleman from New York?

There was no objection.

1934 CONGRESSIONAL RECORD-HOUSE 2637

Mr. MEAD. Mr. Speaker, under leave to extend my remarks in the RECORD, I include the following speech of Hon. HARRY w. MUSSELWHITE, of Michigan, which he delivered today over a national hook-up on station WMAL, Washington:

Friends of this radio audience, as a member of the House Committee on the Post Office and Post Roads, I am privileged to address you briefly on a subject in which I am deeply interestedthe welfare of our great Postal Service under the new deal.

You know, the Postal Service is one of those things which most of us take for granted, like the water we drink-I hope it is water-and the air we breathe. For a trifling sum letters and cards are posted, carried great distances, and without delay delivered clean and neat to those to whom they are sent. It is only on those rare occasions when something goes wrong that we really appreciate what the perfection of our Postal Service means to us.

We would appreciate the Service more had we lived a hundred years ago, when postage rates were much greater and service infinitely slower. Pioneers in my home State of Michigan had to pay 25 cents every time they sent a letter back East, and it was several weeks on the way, transported by stage coach. What a contrast to the air mall of today, which makes it possible to transmit a letter from coast to coast in 24 hours, for only 8 cents.

Speaking of the air mail, the action last week of the administration in canceling all contracts with private companies does not in any manner indicate that there will be any permanent impairment of this service. It simply means that President Roosevelt is determined to rid the Government of the profiteering through the granting of huge subsidies to private air-line corporations that bas prevailed under the pretext of development of commercial aviation. The Postal Service is no place for graft or corruption. We have the assurance of the administration that this essential feature of the Postal Service will be in no way impaired or curtailed. We can rely on that. I am 1n full accord with this policy.

Our committee, as you may surmise, is much concerned with the problem of restoring the first-class postage rate to 2 cents, instead of the present 3 cents. I am reminded of one of Bud Fisher's cartoons depicting the adventures of "Mutt and Jeff" in Mexico. In an effort to make a big impression on the natives, Jeff said: " The way to make them think we have a lot of money is to try to buy something we know they .can't sell us." Whereupon, to Mutt's disgust, Jeff stepped up to the post-office window and demanded "3 cents worth of 2-cent stamps."

I suppose many of you today feel that you are getting only 2 cents worth in a 3-cent stamp, and I confess I feel that way myself. There is one reason, though, why Congressmen should be in favor of high postage rates. If rates were higher, we might not have to answer so many letters from back home. But in spite of this, we really are in favor of restoring the 2-cent rate as soon as possible. You know, the 3-cent rate was born of the depression, not of the new deal. Since the new deal began the local first-class rate has been lowered to 2 cents, and I am certain it is only a question of time until the 2-cent rate will be restored for all first-class mall.

Before I close I wish to say a word for the postal employees, than whom there is no more loyal, dependable body in the Federal service. Like all Government employees, including Members of Congress, they took a cut of 15 percent in their salaries as an economy measure. Now, with living CO!]ts going up, they are feeling the pinch. I am hopeful that a way will soon be found to restore at least a part of their former salaries. For who is more deserving of fair treatment from the rest of us than the men who handle the mails? I am sure you all share my hope that as the new deal continues to progress the pay of the people in the Postal Service will be restored to its former level and the postal rates will go back to their level.

I am in favor of all legislation designed to benefit the postal employees, clear down the line to the humble substitutes and special-delivery men, and I pledge my support to any movement calculated to build up the Postal Service to the highest standard ot efficiency, without taint of graft or corruption. I have full confidence that under the administration of our great leader, President Roosevelt, with the full cooperation of an able, alert, and conscientious Post Office Department administration, the highest ideals of service above reproach will be attained.

I thank you sincerely.


Mr. SHOEMAKER. Mr. Speaker, I ask unanimous consent to address the House for 10 minutes.

The SPEAKER. Is there objection to the request of the gentleman from Minnesota?

There was no objection. GRAFT IN OUR PRISON SYSTEM

Mr. SHOEMAKER. Mr. Speaker, ladies and gentlemen, were I in possession of the wisdom of Solomon, the eloquence of William Jennings Bryan, the sincerity of Saint Francis, the patience of Job, the physique of Horatius, combined with the touch of King Midas, the organization ability of Lenin, and the rabble-rousing proficiency of a Hitler, my

combined accomplishments would not do justice to the subject that I wish to discuss here today. Noah Webster, hitting on high, would lack the vocabulary necessary to describe the corruption, crime, and degeneracy that now exists in our.so-called "prison system" of the United States of America.

I am not speaking of the so-called " criminals " who are locked behind steel bars, but I am speaking of the officials who are suppased to reform and rehabilitate the unf ortunate who falls into the hands of this group of unscrupulous and conscienceless type of reprobates and human degenerates who pose before society as human benefactors.

I have prepared very thoroughly the charges that I am about to specifically call to your attention-charges which will astound not only the Membership of this House but the entire Nation; charges backed up by documentary evidence taken from the files of the prison records of the United States of America-official correspondence and records that, when once brought to light, would make Captain Kidd and his group of pirates look like a class of Sunday-school scholars compared to the gentlemen I am about to expose. Al Capone, Machine-Gun Kelly, Wilbur Underhill, "Pretty Boy" Floyd, Verne Miller, Dutch Anderson, Gerald Chapman, and the late Sankey are gentlemen and could be classed in the highest character of human benefactors, for -they are but the products, graduates, and proteges of our prison officials and so-called " prison system of education in crime." These men were convicted and sent to prison-most of them as "kids "-for some more or less insignificant crime or misdemeanor, and after arriving in prison were educated in graft and corruption under the tutelage of our so-called " department of injustice " and

. prison officials. They were brought face to face with corruption and graft that permeates our prison system. They were thrown together with the hardened criminal and degenerate. Their prison environment caused them utter disgust for the manner in which these human lepers stewed and fermented in the ~ewers of degeneracy, corruption, and graft with the business intrusted in their hands by the United States Government to the extent that all respect for law and order was banished from their minds and their only thoughts were upon graduation that they might step out to" a · bigger and better racket of their own.

Mr. SIROVICH. Will the gentleman yield? Mr. SHOEMAKER. Yes. Mr. SIROVICH. Why do they allow that? Mr. SHOEMAKER. Because of medical inefficiency.

Forty-five or fifty percent of the inmates placed on the operating table down there die due to the surgical incompetency of the operating physicians. Several injections of serum given by the doctors have killed the patient. One happened the other day when a bubble of air got into the circulation and the patient died. There are doctors there who only served a short time as an interne and have not -the practical experience necessary to operate upon a patient.

Mr. SIROVICH. Has the gentleman called this to the attention of anyone?

Mr. SHOEMAKER. I have called it to the attention of the Department of Justice, but they have done nothing about it. As I have said, there are a number down there sutf ering from syphilis.

Mr. SIROVICH. Will the gentleman state whether he knows whether or not narcotics are being used there?

Mr. SHOEMAKER. I am coming to that. This is what the prison system of the United States of

America does to its citizenship. This is the result of an insane system wherein graft is interpreted as "God", and thievery is looked upon as a legitimate racket.

My statements thus far have been more or less general. I shall endeavor at this time to take up phase by phase some of the things that are bred under our degenerate prison system. .

First of · all, ladies and gentlemen, I wish to call your attention to Government Pocument No. 299-B, prepared by our notorious " Code Fish " Hugh S. Johnson, of the J. Pierpont Morgan fame.

2638 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 Concerning the code laid down as to the sanitation and

health conditions which must be followed by employers of labor, on page 64, under section 5, you will find the following paragraph:

Employers shall also comply with the hygienic regulations promulgated by the United States Public Health Service.

Let us now step across the river to the penitentiary at Lorton, owned and operated by your " Uncle Samuel."

Let us for a moment gaze into the facts as they present themselves to those who have ears and will hear, and those who have eyes and will see.

Do the Members of this House of Congress realize that there are 103 persons working in the laundry at the Lorton Penitentiary-and Lorton is only symbolical of our entire penitentiary system-and that out of these 103 men employed in that laundry, who, by the way, are working overtime while our city taxpayers are required to support on the charity rolls hundreds of people who walk the streets of Washington, D.C., and other cities, because they have no jobs. ·

This, however, is incidental to the astounding information that I wish to call to your attention, of the sanitary conditions under which these men labor. When an individual sets out to kill a polecat in a chicken coop, the odor sometimes is not pleasant. For that reason I shall endeavor to set forth plain facts, in language so plain that even the' White House may be able to hear me.

At the present time in the Lorton Penitentiary laundry there are employed 14 prisoners who are suffering from twoplus syphilis. Out of these 14 with two-plus syphilis, 3 have refused treatment. I can go still further. There are 5 of these 103 convicts who are suffering from four-plus syphilis, 1 of whom has refused treatment; and for the benefit of those who are not familiar with the various stages of this terrible disease, I make the plain and homely illustration by saying that four plus represents the last and final stage of this dreaded disease. In fact, students in medical schools often use this illustration: "They have come to the point where their ears almost fall off when they sneeze."

In addition to this I might call your attention to the fact that 29 prisoners out of 103-totaled together-are suffering from other communicable diseases and atllictions. I have here before me the names and the numbers of these prisoners along with the records taken from the medical records of Lorton Penitentiary.

You may say, '"I am not interested", but I wish to call your attention to a very serious situation that exists here in the District of Columbia as a result of the exposure that is daily being made of our people as a result of this condition.

Do the Members of this House know that every towel in their own office in the House Office Building is handled, folded, wrapped, and packed by these same germ carriers?

Do the Members of this House realize that our Government institutions and various departments in the District of Columbia are all having their laundry work done by these germ carriers? ·

Do the Members of this House realize that the towels and uniforms used in the Government hospitals, including the Veterans' Hospital, are all contaminated by these same germ carrieTs?

Do you good Democrats, here to my right, realize that you are, by lack of action on your part, responsible if you fail to support the resolution I have introduced today and are subjecting the highest official in our land, the President of the United States, to these germ carriers daily? For this laundry is doing all the work for the White House as well as for your p1ivate offices in the House Office Building. I hope the Senators and the Supreme Court Judges read this as well as the " Department of Injustice."

I might further call your attention to the fact that 15 inmates who work in the kitchen and mess hall are suffering from 2-plus syphilis. Five inmates are suffering from 4-plus. Out of this group of 20, 7 have refused treatment. And what applies to the laundry and the kitchen, applies also to the canning factory and the bakery, t:Q.e

prison barber shops, and various other prison institutional departments.

So much for disease and the spreaders of disease germs. I shall dwell for ·a few moments on the graft in our

prisons, under the heading of-GALLOPING BRICK

The United States Government has a brick plant at Lorton. I deliberately charge that the officials of the Lor~ ton Penitentiary make it their business to steal brick that are manufactured by the convicts and dispose of them to private citizens. I shall not go into the details but I wish to read one paragraph from a letter written by Mr. J. E. C. Bischoff, superintendent of industries at the " Lorton College of Graft." The paragraph reads as follows:

In bringing this report down to April 1, it discloses that we should have had on hand at Ninth Street Wharf, April 1, 948,383 brick. However, the two issues as of April 1 and 2 total only 73,300 and on the night of April 3, we were advised that there were no brick on the wharf, thus showing a shortage of 875,083 brick, which at the present · value of $15 per thousand amounts to approximately $13,125.

J. E. C. BISCHOFF, Superintendent of Industry.

Rather strange how these bricks should be able to vanish and disappear as they cild. They say that the good Lord made man of clay and put the breath of life into him and that was the origination of man, but the grafters at the Lorton Penitentiary have taken clay, molded it into brick, and put the breath of life into it so that 875,038 brick galloped off in one little group, amounting in value to approximately $13,125.

DISAPPEARING SWEETNESS

For years it has been common knowledge among prison authorities and bootleggers that sugar is one of the principal ingredients that enters into the manufacture of bootleg whiskey, and for several years this much-sought-for sweetness at the hands of bootleggers has been disappearing from shipments that leave the Ninth Street Wharf via the Tugboat Tindall to be delivered at the "College of Graft."

Bootleggers, in and out, need sugar and get it. Then when the sugar must be accounted for) we find that this very elusi'\re and disapeparing sweetness gets lost beneath some beans.

Members of the House, I know whereof I speak and I hold here before me the evidence, taken from the penitentiary files, showing the manner in which vanishing sugar has returned via the bookkeeping department.

WORKHOUSE COMMISSARY, Occoquan, Va., October 28, 1931.

Replying to your memorandum dated October 27 regarding a shortage of 1,000 pounds sugar from general supply committee. After checking records I found that we had received above sugar on said date.

The 1,000 pounds sugar was stacked beneath some beans and was overlooked; but after rechecking I found that we were in error.

I have this day corrected my records accordingly. R. P. MCCOLLUM,

Property and Commissary Officer.

It will also be noted the offi.cial stamp of the prison is upon these communications which I shall enter into the RECORD.

Mr. SIROVICH. Will the gentleman yield again? Mr. SHOEMAKER. I yield. Mr. SIROVICH. The gentleman said that graft and cor

ruption was prevalent in other Federal prison institutions. Will the gentleman state whether he knows it was prevalent in Chillicothe?

Mr. SHOEMAKER. Absolutely. Mr. SIROVICH. I want to call the gentleman's attention

to the fact that the man in charge at Chillicothe, Mr. Maccormack, was made commissioner of public welfare in the city of New York.

Mr. SHOEMAKER. I want to call the gentleman's attention to the fact that when Taft was Chief Justice of the Supreme Court there was an investigation made of the parole system in Michigan and one man, who was named Wood, had charge of that. He is chairman of the Federal

1934 CONGRESSIONAL RECORD-HOUSE 2639 board. Judge Taft in his report said that he foUnd that the Michigan ·parole system was largely a pay-as-you-leave proposition, indicating that Wood was selling paroles. It turned out that if a man had the money to retain Wood's law partner they usually made the parole.

Mr. SffiOVICH. The gentleman said he was going to speak of the narcotic question.

Mr. SHOEMAKER. I have introduced a resolution to investigate the system and I have 18 charges which I will bring before the House.

Mr. SffiOVICH. I want to ask the gentleman if the same conditions that existed at Welfare Island-the selling of dope and narcotics and favoritism and corruption--exist in these penitentiaries or Federal p1isons throughout the country and at Chillicothe?

Mr. SHOEMAKER. Absolutely. In many prisons they do not wear numbers on their backs because they serve as chauffeurs to the wardens.

FIGURING LIARS It has been said that figures do not lie, but it is equally

as true that liars can figure. I wish to call your attention to the fact that for years the

officials of penitentiaries have been condu_cting petty thievery in which they have been stealing little gifts of money that have from · time to time been donated to unfortunate prisoners by friends and relatives and other interested parties, so that they may buy tobacco and other little necessities of life. As a :result of the stealing there is usually a shortage in the canteen fund and the welfare fund. When this shortage occurs it must be taken care of in some manner. This is very easily accomplished through the juggling and transferring of funds from one department to another. I am inserting a letter into the RECORD written by the chief accountant and signed by him, in. which he juggles funds stolen from the prisoners. It reads as fallows:

(Memorandum) DISTRICT OF COLUMBIA PENAL INSTITUTIONS,

BUSINESS OFFICE, Lorton, Va., December 4, 1931.

Mr. BISCHOFF: A shortage in the amount of $331.97 has occurred tn the reformatory canteen during the period of 2 months from September 1 to November 1, 1931. We are making necessary entries for our records to agree with inventory as of November l, 1931.

We are also making a transfer of $433.62 from the reformatory mark-up account to welfare-fund earnings.

Yours very truly, c. w. HANGER, Chief Accountant.

. Many prisoners in the past have complained to me about the shortages which have occurred in their accounts. They have even written to the "Department of Injustice" asking that something might be done to protect them. Their letters, when they came through, were usually acknowledged by the " Department of Injustice ", but nothing was ever done about it. To verify my statements regarding past complaints, I shall insert a letter signed by Mr. J. Edgar Hoover, stating that he referred this to Mr. Keenan, who, by the way, is probably too preoccupied chasing kidnapers who have been educated and tutored in the prisons owned and operated by the United States Government. The letter reads as foUows:

Mr. WILLIAM HARRIS,

DIVISION OF INVESTIGATION, UNITED STATES DEPARTMENT OF JUSTICE,

Washington, D.C., October 25, 1933.

Register No. 2293, Box 25, Lorton, Va. DEAR Sm: Receipt is acknowledged of your letter offering to

furnish information relative to irregularities on the part of some of the officials at the Lorton Reformatory.

Please be advised that a copy of your letter has been referred to Mr. Keenan, Assistant · Attorney General, for his consideration.

Yours very truly, J. E. HOOVER, Director.

WhY has nothing been done? LEFT ;ME HOLDING THE SACK

It has also been common knowledge that graft exists in practically every prison contract or purchasing order that

goes through, in which the prison officials are the recipients of material gain. This may sound like a broad statement, but Mr. John S. Slater, of the Grateless Furnace Co., Inc., of Johnstown, Pa., complains over his own signature:

They divided the cash and left me holding the sack.

For the information of those who may be skeptical, I will insert at this time the following letter, addressed to the business manager at the Lorton Penitentiary:

THE G&ATELEss FuRNACE Co., INc., 915 Ash St.reet, Johnstown, Pa., July 24, 1933.

Re Brick plant: Mr. J.E. C. BISCHOFF,

Business Manager District of Columbia Penal Institution, Lorton, Va.

DEAR Sm: • • • This stock I had to accept as part, on the order Mr. Green fixed up with the other fellows, and they divided the cash and left me holding the sack • • •.

Mr. Slater complains that he was left out in the cold; but to soothe his hurt feelings and to pacify his aching heart, as well as his impoverished pocketbook, as well as to silence his talking, he was sent another order amounting to $725.

There is much that could be said with regard to the man .. ner in which the books are kept and the accounts juggled. To prove I know what I am talking about I am inserting at this point one paragraph from a letter written by the chief accountant, which reads as follows:

Since the 1st of July last year we have completed on old orders $2,427 .26. This covers mostly misciellaneous castings. The charg· ing back of sums such as this each year results in a :fictitious balance being shown in our annual report, as the ultimate balance is actually from two to three thousand dollars more than we report yearly.

This is certainly a fine mess for prisoners to go through daily and see the manner in which those who are supposed to reform them are grafting on the United States Govern .. ment.

MORE GRAPT IN PURCHASING

I might go on for weeks setting forth the manner in which purchases are made to avoid competitive bidding and collect graft, but I could not make it any more explicit than does Mr. J. E. C. Bischoff, former husband of the late Vivian Gordon, better known as the " Broadway Butterfly."

Bischoff is now the business manager of the Lorton Peni .. tentiary, and he sets forth the evidence in very explicit form in a letter over his own signature, which reads as follows:

Government red tape does not permit us to draw a requisition more than $25 without resorting to competitive bidding • but as we need this material we are going to ask you to ship same to us at your earliest conveni£nce and permit us to forward you a number of small requisitions, each amounting to less than · $25, until' the entire order has been covered and vouchered through for payment. If this is agreeable to you, we will start through the requisitions at onc,e and follow them with subsequent requi· sitions in about 10-day periods until the entire order is covered. Please instruct your bookkeeping department so that these orders will not cause a duplication of shipment, which may get us both into trouble.

There you have it. Look it over. This is the same Bischoff who is endowed with such paternal instincts, whose aching breasts are so loaded with the milk of human kind· ness that he had his own wife arrested on a charge of prostitution so that he might divorce her and get another one. This is the same hyena in human form who per .. mitted his murdered wife to be buried through the gener .. osity and human kindness of the Actors' Guild of New York City, after he did not so much as attend the funeral or send a floral offering. Before Vivian Gordon was murdered she appealed to Bischoff for financial assistance for herself and daughter-the daughter by her of J. E. C. Bischoff. She was refused consideration, and it seems to be common knowledge among the prisoners at Lorton that she threatened to expose Bischoff unless she received aid.

Upon returning to New York City she attempted to carry out her plans by writing the following letter to the police investigator in New York City, a copy of which I have here in photostat in her own handwriting. It reads as follows:

2640 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 156 EAsT TlmtTY-SEVENTH. STREET,

New Yark City, February 7, 1931. DEAR MR. KRESEL: I have some information in connection with

e. frame-up by a police officer and others which I believe will be of great aid to your committee in the work.

I would appreciate an interview at your earliest convenience. Very truly yours,

VIVIAN GORDON.

Shortly after this letter was written she was found murdered in Van Cortlandt Park, in New York City.

Shortly after the murder of Vivian Gordon, the wife of Bischoff, Benita Bischoff, the daughter of J. E. C. Bischoff and Vivian Gordon, who was left destitute in the world, was found dead and officially decl&red a suicide.

Once more BischofI's paternal instincts were aroused. Once more the milk of huinan kindness c1abbered in his aching breasts to the extent that he never contributed one penny to the burial of his own daughter-his own flesh and blood-nor did he even offer so much as a floral tribute.

Prisoners of the penitentiaries throughout the United States discuss this case very freely and are of the unanimous opinion that Mr. Bischoff ·sent some of his former students up to New York to eliminate his erstwhile family, either directly or indirectly, and that this was the frame-up his wife referred to in her letter to the investigator.

I am not saying these things about Mr. Bischoff because of any personal grievance against Mr. Bischoff. I do not even know the man; but I want to hring to your attention the type of officials, and it is this type and stripe who largely dominate the personnel of our prison institutions in the United States.

How, in the name of God, can people expect to place unfortunates under the jurisdiction of this type of men to be reformed . and made good citizens?

I, for one, am particularly elated over the manner in which our. former colleague.- now the present mayor of the city of New York. has gone into the .situation in New York ·City. He is, at least, taking a step in the right direction and should be given every assistance and cooperation in his constructive work, but after all is said and done, what may be brought out as ·a result of the recent raid in New York City, it will be a strawberry patch compared to the facts which can be ascertained in our Federal prisons.

I would like for a few moments to call your attention to the fact that Congress appropriated $25,000 some time ago for the purchase of a tugboat for the Lorton Penitentiary. The entire purchase of this boat was graft from sta1t to finish, and instead of getting a new boat and equipment, a ·conspiracy was entered into and an old ramshackle one with new paint was loaded onto the Goyernment. Several months after this so-called " tugboat " was purchased the Government was required to spend· in the neighborhood of $750 for repairs on an engine that was bought as a new engine, which upon investigation on my part, turned out to be not only second-hand but third-hand.

I hold in my hand the invoice covering the repair parts on this engine, as they are listed, from the Fairbanks-Morse & Co. books.

Then speaking of boats, the warden spent over $2,000 to have built a beautiful mahogany launch for joyriding purposes up and down the Potomac River after the old boat has been mysteriously destroyed by fire. And then speaking of fires, the prisoners who are required under orders to falsify accounts, at one time suggested to the warden what would be done in case of an investigation of all these files, the warden curtly replied: " This is an old frame building and it is full of paper; and it is surprising what one little match will do."

This is a fine statement for a warden to make to men who are under him for the purpose of reformation.

I would like very much to go on and could go on for hours, setting forth specific charges and submitting bona fide evidence which is in my possession, but in closing I wish to make the following and specific eharges generally against the officials of all Federal penitentiaries in the United States

with the exception of two men, whom to my knowledge have clean hands-I speak of Mr. Lloyd, formerly of Leavenworth, and now at the Lewisburg (Pa.) Penitentiary, and Mr. Fred Zerbst, the warden of Leavenworth, but they are not the chief clerks or bookkeepers.

There may be others, but these will be exceptions rather than the rule.

I have in my possession hundreds of letters over the signature of prison officials to prove any and all of the charges that I have made in this speech, and at this time I wish to make the following specific charges of existing conditions in all penitentiaries throughout the United States:

First. Fraud-or gross mismanagement that amounts to fraud.

Second. Monopoliz~ng the District laundry and foundry business.

Third. Larceny by personnel. Fourth. Dope traffic. Fifth. Degeneracy. Sixth. Criminal negligence. Seventh. Proven charges. Eighth. Juggling prisoners, commissary, and public wel

fare funds. Ninth .. Diseased prisoners working in laundry, canning

factory, barber shop, kitchen and mess hall, bakery, and knitting mill.

Tenth. Favoritism in competition building. Eleventh. Charge prison doctors with general incompe-

tency. Twelfth. Gross insanitary conditions throughout prison. Thirteenth. Coddling of "big shots." Fourteenth. Drunkenness of prisoners and officers. Fifteenth. Fictitious balancing of Government ledgers. Sixteenth. Fomenting possible ma~cre and racial riots. Seventeenth. Cruel and inhuman punishmeD:t of pris-

oners. Eighteenth. No reform.

Resolution Whereas it is becoming evident and of current knowledge that

certain irregularities are existent in the management in a number of prisons, jails, penitentiaries, asylums, and reformatories under the Department of Justice and the Commissioners of the District of Columbia.

Whereas many of the industries in the a!oresaid prisons, etc., are managed in a very inefficient manner and many unexpls.ined losses of materials, supplies, and products have developed, and irregular attempts have been made to adjust the losses through manipulating the accounting systems to the loss and embarrassment of the Government of the United States and contrary to its laws and dignity.

Resolved, That the Speaker of the House of Representatives be directed to appoint a special committee of five Members of the House of Representatives to investigate the management of the penitentiaries, prisons, jails, reformatories, and asylums of the United States now being supervised by the Department of Justice and the Commissioners of the District of Columbia.

SEC. 2. The committee, or any authorized subcommittee thereof, is authorized to sit and act a.t such times and places as may be necessary to hold hearings and conduct investigations of the management of the aforesaid penitentiaries, prisons, jails, reformatories, and asylums.

SEc. 3. The committee is embodied to subpena persons, records, documents, minutes of meetings, summon and swear witnesses, and to secure data on any and all information as may be deemed nec.essary to aid the committee in the ascertaining of the facts, particular attention to be directed to the laxity of the various Executive and judicial deparnnents in enforcing the laws of the United States.

SEC. 4. The committee shall report to the Congress, before adjournment at this regular session, all findings that they may have determined at that time, the final report to be made on the first day of the first regular or special session of the Seventyf ow-th Congress, the final report to contain complete findings of this investigation together with such recommendations for legis- . lation, as it may deem advisable.

SEC. 5. For the purpose of carrying out the provisions of this resolution, there is hereby appropriated the sum of $50,000 from the contingent fund of the House of Representatives, not otherwise appropriated.

SEC. 6. When this report is filed as provided the committee shall cease to exist.

Mr. KRAMER. Does the gentleman know anything about the narcotic ring operating in San Francisco?

'1934 CONGRESSIONAL RECORD-HOUSE 2641 Mr. SHOEMAKER. No; but I can find out awfully quick

for you. I have here before me letters, every one of which will indict under any of the charges I have made here this afternoon. I have not time to go into details. These letters were signed by prison officials, with their names to them, letters taken from the files of private individuals.

Mr. SffiOVICH. Would that indict also the former warden of the Chillicothe Prison in Ohio?

Mr. SHOEMAKER. The warden is not always responsible for what goes on. He has plenty of men under him, and he can get from under whenever he wants to. He has nothing to do with the bookkeeping department. There is a civilian at the head of that, and I say to you that the rottenest, dirtiest crook in America is Paul Weiss, chief accountant at the Leavenworth ·Prison, and he bas been there for years and years.

Mr. PATMAN. What does the gentleman think about the use of Alcatraz Island for the most hardened criminals?

Mr. SHOEMAKER. Our entire prison system is entirely wrong. We have the most antiquated and out of date and inhuman system of prison reform that there is in the world today. If we had the system England has we would not have these criminals. England has not got them. They have no kidnaping; they do not have these troubles that we are having; this crookedness and graft and corruption in our prison system and in our Department of Justice, if you please, that causes the criminals we have in the United States of America today, and if I had the time I could go into this. I have made a study of it. I have lived with them; I have rubbed elbows with these men. I was secre-· tary to the chaplain at Leavenworth Penitentiary. I took these criminals in, I wrote their life's history; I was in a position where I could get facts and statistics and a knowledge of the conditions and affairs that no officer or guard in the penitentiary could get, because these men placed confidence in me. I have these records, because the prisoners know they can place confidence in me.

The SPEAKER. The time of the gentleman from Minnesota has again expired.

Mr. SWANK. Mr. Speaker, I ask unanimous consent to address the House for 5 minutes.

The SPEAKER. Is there objection? There was no objection. Mr. SWANK. Mr. Speaker, more important legislation

has been enacted in this, the Seventy-third Congress, than in any Congress for many years. One of the most important acts of legislation was the National Recovery Act, commonly referred to as the "N.R.A." Under this general bill is administered Public Works, Federal Relief, and the Civil Works Administration. This temporary law was necessary in these times of depression, when our citizens have been beset with so many difficulties.

The greatest single act of legislation in recent times was the passage of the money control bill, which passed this Hom:e January 20 by a vote of 360 for the bill, 40 against, and 32 recorded as not voting. This bill is now the law and takes the control of our monetary system from the hands of Wall Street and the international bankers, who have controlled this country for so long. No President since the days of "Old Hickory" Jackson has denounced them and called them by their right names as has President Franklin D. Roosevelt. He has the ability, the determination, and the courage to oppose them in behalf of our people. I am proud to be a member of the committee which prepared that bill.

Something had to be done, and Congress proceeded to enact these bills under the leadership of our great President. Millions of our people have been put to work since these laws were passed. In the midst of plenty we have been in want, but now work is being provided, and we will do our .best to continue in this direction.

Mr. Speaker, there has never been a more important question before Congress than that of education. The Government of the United States and that of all other civilized and Christian nations of the earth are based upon three foundation stones, namely, the home, the school, and the church. Without a comfortable and satisfactory home life

•

there can be no stable form of government. No person except the mother contributes more to our citizenship than our teachers. During the school year the teachers have charge of our children more than the parents do and more than the church. These three institutio::is must be supported and maintained. We must provide laws which shall be administered for the benefit of our people, and in a great country like ours no person should go hungry.

No institution in our Government has suffered more in the last few years than our public schools. According to figures compiled by the National Educational Association an appropriation of $100,000,000 should be l)rovided, beginning January 1, 1934, in order to maintain adequately our publicschool system. These figures show that for the school year. 1933-34, 2,600 schools, affecting 140,000 students, were closed because of insufficient funds. These figures also show that by April 1 of this year about 20,000 rural schools wlll be closed, affecting more than 1,000,000 children. Two hundred thousand teachers are receiving salaries of less than $750 per year, and about 85,000 teachers are receiving salaries less than $450 per year. ·

January 8, 1934, I introduced House bill 6533, "A bill to promote education, relieve unemployment and economic distress, and for other purposes." In other words, it is a bill for the aid of our public-school system. The bill provides that the public schools of the United States are a proper subject for Federal aid and that the Government should protect its public-school system and the teachers. The bill authorizes the Secretary of the Interior to allocate to such public schools as are unable to maintain their regular school terms sufficient sums to maintain them as they were maintained on an average for the school years 1931, _ 1932, and 1933. Under the terms of the bill no school shall receive aid unless the school district is unable to continue its school term on the average stated.

The bill provides that the funds authorized shall be used only for the payment of teachers' salaries, and this is the most important item. Most schools have their buildings and equipment, but many of them·do not have money with which to pay their teachers. By the terms of the bill the aid provided shall be administered by the Secretary of the Interior through the Office of Education and such agencies in each State as may be designated by the Secretary of the Interior.

The bill also provides that no department of Government shall exercise any control, authority, or supervision over the curriculum or management of any of the schools receiving aid as provided in the bill. The schools are left independent. The bill authorizes such appropriation as shall be necessary to carry out its provisions. It is also provided in the bill that teachers' salary warrants, regularly and legally issued between July 1, 1932, and July 1, 1934, shall be eligible for Government loans and at a rate of interest not to exceed 1 percent per annum.

Since the introduction of this bill it is reported through the press that " United States levies $7,000,000 to keep 100,000 students in college." This plan as announced provides that the different educational institutions give jobs to these students who will be paid from the Federal relief funds. When this plan is put into effect it will enable thousands of worthy students to continue their college courses. I am glad the administration recognizes the need of this assistance.

Mr. Speaker, I have been a school teacher, and had the honor of serving in the capacity of county superintendent of schools in Cleveland County, Okla., for two terms or 4 years. Since that time I have kept in close touch with our public schools in which my children are now enrolled. I have always done everything within my power for the promotion of our public-school .system and the cause of our teachers, who compose one of the greatest and most honored professions. While all professions have suffered during these times of depression, no profession has suffered more than that of our teachers. They are engaged in a most worthy enterprise, that of educating and directing our children, and they cannot continue without pay .

2642 CONGRESSIONAL RECORD-HOUSE FEBRUARY 15 This bill is endorsed by many of the leading educators of

my home State, by numerous county and city superintendents of schools, many other teachers, and parent and teachers' associations. · I greatly appreciate these endorsements and this assistance. I do not believe that Congress can do any better act at this time· than to provide for legislation along the lines proposed in this bill.

I am glad to have the opportunity and it is an honor to be permitted to address the House of Representatives of the American Congress in behalf of our teachers and our public schools. I certainly hope that something will be done in this direction before this session of Congress adjourns. We must now do something for the cause of education. The President stresses the rights of the common people, and the importance of the home, the school, and the church. The children of this country must be fed, clothed, and edu-~re~ .

Mr. HASTINGS. And "the gentleman, of course, contemplates the appointment of these teachers in the same manner they are appointed.now, namely, by the local board.

Mr. SWANK. I yield back the remainder of my time. EXCISE TAX ON IMPORTED OILS AND FATS

Mr. PATMAN. Mr. Speaker, I ask unanimous consent to exrend my remarks in the RECORD by inserting therein a statement by W. H. Jasspon, an expert on imported oils and fats. ·

The SPEAKER. Is there objection? There was no objection. Mr. PATMAN. Mr. Speaker, under the leave to extend

my remarks in the . RECORD, I include the fallowing statement by Mr. W. H. Jasspon, an expert on imported oils and fats: - ·

The supplies of ells and fats in continental United States today are so large as to preclude a satisfactory price return to the agricultural producers of these raw materials. A higher price level is warranted by the prospective curtalled production of such crops as cattle, hogs, etc., and the already increased consumption of oils and fats due to an increase in buying power. This condition is directly traceable to an unbalanced world situation in oils and fats and which permits excessive quantities of foreign oils to supply the additional demand and consequently affect the normal consumption of their domestic counterparts. The intention of the various recovery programs which the administration has undertaken is to assist in returning to the· producers of livestock and agriculture the 1909-14 parity price levels. The excise tax which will be proposed herein is the only logical and practical step in this direction and will be immediately effective.

The purpose of this tax is twofold: First. To advance the price legitimately and to immediately in

crease the consumption of domestic oils and fats. Second. To bring revenue to the Government without working

a hardship on the consumer. It is not the intention that this excise tax shall be a tariff or

embargo under another name. In fact the Tariff Acts of 1922 and 1930, which taxed certain oils and fats while omitting to tax other oils and fats, caused a dislocation of the normal fiow of fats and oils from one country to another, and these very tariffs, therefore, are in part responsible for the condition which requires correction. In other words, the proposal which is herein advocated is an attempt to bring about for a short period-during the life of the present revenue bill-a normal relationship of all oil and fat values so that our domestic surpluses may flow into consumption. During this period a more perfect and desirable solution of this important problem may be devised and established as a permanent policy if it should prove necessary.

It is recognized that there are specific uses for imported otls and fats. It is not proposed that these commodities shall be embargoed or taxed out of existence. Nor will the excise tax have this practical effect. But it is ·sincerely believed that the present emergency· demands ·an adjustment in the price relationship to what may be called a normal price relationship in order that an increased consumption of our domestic oils and fats, to the extent that they can be advantageously used at fair price levels, may result as above stated. In no other way can the American producer hope to receive a return that will take into account the additional growing and manufacturing costs of our recovery programs at a time when crop production is being cur..: tailed in our basic commodities from which most of these fats and oils originate. How can we compete with coconut and palm oil which can be delivered to ports of this country at prices from 2¥.z cents to 3 cents a pound-practically all-time "lows" fo1• commodities whlch to the extent that our surpluses are involved directly affect our economic welfare.

A most comprehensive study of this entire problem is contained in Report No. 41 of the United States Tariff Commission from which certain data and statements will be cited. This report indicates:

First. That there is a certain amount of interchangeability possible between imported and domestic oils and fats.

Second. It shows how, and the increased imports confirm, the change in the price relationship which has taken place in the last 10 years has supplied the dollar incentive to bring about this increased and unjustified importation where domestic production at the same or a lower price would have been used instead.

Third. The report indicates the possibility for a still further increase in the production of such oils as coconut and palm. It might be stated at this point that palm and palm-kernel ons which are affected by the dollar rate show no evidence of increased cost on that account.

Fourth. The report further tends to the conclusion that the excess importation of these commodities bears an almost direct relationship to the decreased cost of these foreign commodities in re la ti on to our own. Obviously a manufacturer will seek the lowest cost article and it is questionable 1f the consumer has received all of this benefit.

In the hearings before the Ways and Means Committee, and m certain hearings on marketing agreements, much has been said concerning the need of certain oils for specific trade demands. In practically every instance these industries are highly specialized, and their consumption of oils is relatively insignificant.

On pages 41 and 42 of the Tariff Commission report, one Instance of this kind is recorded. It deals with the confectionery and baking trade, which consumes approXimately 60,000,000 pounds of coconut and palm-kernel oil annually out of a. total of approximately 6,000,000,000 pounds of food oi!s and fats consumed in this country annually, or 1 percent. The report says: " Confectioners and bakers state that if necessary they would be wllling to pay a price premium for coconut and palm-kernel oils for many types of fillings and coatings."

The fact that a certain amount of interchangeability is not only possible but practicable between various oils and fats, and that the price level is the sole controlling incentive to the extent that interchangeabllity is practiced, makes it necessary that if a tax shall be effective it must include all imported oils and fats that are either at present untaxed or taxed at a lower level than the rates which wm be proposed.

Since this whole question has been under consideration it has been intimated by opponents of any change in the old order that a tax on foreign oils for edible consumption will not be opposed. In fact, some of these opponents have recognized it as advisable, provided no demand for a tax on oils and fats for inedible consumption is made. The line between inedible and edible fats is so narrow it is a well-known and well-recognized fact that the price level of edible fats is pulled down by the price level of inedible fats. It is impossible to concede the equity or necessity for this kind of special protection for such an industry, for example, as the soap industry. It is highly specialized, most flexible in its ability to interchange raw materials; it is highly profitable and merchandises a large part of its output under proprietary brands and at prices which seldom bear a direct rela· tion to the fluctuating cost of its raw materials.

The Bureau of Labor Statistics supplies data which show that the decline in the price of soap has not been in proportion to the decline in the oils and fats from which it is produced. Statements have been publicly made that if the tax which has been proposed by the Ways and Means Committee be adopted, the price of soap will double. Similar statements have been coming in from laundrymen all over the country in protest of a tax. Even at the higher rate proposed by the House amendment this statement is absurd and unfounded in fact.

On page 52 of the Tariff Commission's report, a. table gives the percentages of various oils used in soap. This table shows that for the years 1914, 1916, and 1917 soap consisted of 13 percent coconut oil, plus palm-kernel oil combined, and 14Y:! percent of cottonseed oil. For the 5-year period, 1926 to 1930, inclusive, the percentage of coconut and palm-kernel oil · consumed in soap" making amounted to approximately 23 percent average of the total fat In soap. During this sa:rµe period only 1.1 percent of cottonseed oil was consumed. During the earlier period coconut and palm-kernel oils commanded higher prices than cottonseed oil and other domestic fats. In the latter period the price position was completely reversed and coconut oil therefore replaced cottonseed o~.

As information, current prices are: Crude cottonseed oil, 4 cents per pound f.o.b. mills; coconut oil is 2¥.z cents per pound f.o.b. American ports; palm oil is 2% cents per pound f.o.b. American ports. Based on ofilcial statistics it becomes obvious that even a 5-cent tax would hardly warrant an additional cost of more than 1 cent per pound of soap, or one-eighth cent to one-half cent per bar, and this tax might easily be absorbed by the manufacturer.

On page 32 of this same Ta.riff Commission report a table shows that in 1912, 81 percent of the total consumption of all oils in soap manufacture was of domestic origin and 19 percent imported; in 1929, 53 percent was domestic and 47 percent was imported. In pounds the consumption of imported oils in soap alone increased from 140,000,000 pounds in 1912 to 789,000,000 pounds in 1929. Some of this increase, it may be again stated, was entirely the result of the mote favorable price level of the imported oils.

It is estimated that approximately 400,000,000 pounds of excess imports are annually being consumed in both edible and inedible channels whlch technically and practically should be supplied from our domestic stocks. Th.is will still permit the importation at a fair price level of about 800,000,000 pounds of oils and fa.ts, yielding over $25,000,000 annually to the revenue of the Govern-

•

1934 CONGRESSIONAL RECORD-HOUSE 2643 ment. It is only fat.r to the Government that these imported oils and fats should pay a tax, since they do not now bear any form of taxation whatsoever.

A great deal llas been said as to the effect of this tax on the margar ine industry. The record is quite clear that the margarine industry, like the soap industry, was developed through the use of home-produced fats and oils and that the increased consumption of foreign oils and fats has synchronized with the decreased cost of these imported oils which heretofore were supplied from our home production. It is, therefore, far-fetched to say that a tax will destroy this business. In fact, in a marketing agreement for edible-oil industries there is a proposal for a levy on imported oils to represent "the difference between such costs and the equivalent costs of domestic substitutes.

Having suggested tl1at an excise tax will accomplish two purposes-a legitimate source of revenue to the Government and a proper increase in the use of American-grown fats and oil&-1t is recommended that a flat tax of 3¥2 cents per pound be levied on all imported oils and fats, edible and; or inedible, which can be used interchangeably with their domestic counterparts, whether such oils are directly imported or produced domestically from imported raw materials. Where certain imported oils and fats are now taxed at a lower rate it is intended that the tax shall be increased to equalize the 3Y:i-cent rate. In addition to the oils

· and fats which are now dutiable, this tax will include fish and marine oils, coconut, palm and palm-kernel, s~same, and suntlower oils, and shall be imposed at the point ·Of first domestic processing, and shall apply to all floor stocks on hand at the date when the revenue bill becomes effective. · It is the considered judgment of practically all representatives of the producers of cotton, cattle, hogs, and other fat-bearing materials, that this tax will not be burdensome to the consumer; that it will not exclude the importation of foreign fats and oils except to the extent that domestic stocks or production can be more advantageously used, and that it w111 have the very definite effect of increasing the farm income of millions of producers in this country.

It is much more important that a somewhat lower tax rate shall be levied on all imports than a higher tax on any specific imports. A tax of 5 cents per pound on coconut oil, for example, will have the tendency to cause a shift not so much to domestic production as it will to other imported oils that may remain untaxed. Therefore, under such a condition the two desired objectives will only pe accomplished in a small and ineffective way.

Respectfully submitted. W. H. JASSPON, Memphis, Tenn.

A table is given below showing the price comparisons between coconut oil and several domestic oils and fats indicating how coconut oil-and this includes palm-kernel oH-have changed their price relationships between 1913 and 1931. These are otficial Government figures taken from the Tariff Commission Report No. 41 for the years 1913-31. The figures for 1933 are for crude coconut oil f.o.b. port and crude cottonseed oil f.o.b. southern points of manUfacture: ·

1913 1914 1926 1931 1933

----------·!-----------------Cents per Crnts per

pound pound Coconut oil ____________________ _ 12. 6 12. 8 Cott.onseed oil _________________ _ 7. 3 6. 6 Neutral lard ___________________ _ 11. 8 11. 4 Oleo oil ___ __ ____ ---------- _____ _ 11. 5 10. 9 Tallow ___ ---------------------- 7.1 6. 9

1 Packers prime tallow.

ADJOURNMENT

Cents per pound

10. 2 11. 8 16. 8 12 8. 7

Cents per Genta per pound pound

5. ~ 2}i 7. 2 3~-4

9. 5 ----------6. 8 ----------4. 3 13-3~~

Mr. BYRNS. Mr. Speaker, I move that the House do now adjourn.

The motion was agreed to; and accordingly <at 4 o'clock and 25 minutes p.m.) the House adjourned until tomorrow, Friday, February 16, 1934, at 12 o'clock noon.

COMMITTEE HEARING CO:MMITTEE ON INTERSTATE AND FOREIGN COMMERCE

(Friday~ Feb. 16, · 10 a.m.) Continuation of the hearing on H. R. 7852, National Se

curities Exchange Act of 1934.

EXECUTIVE COMMUNICATIONS, ETC. Under clause 2 of rule XXIV, executive communications

were taken from the Speaker's table and referred as follows: 354. A letter from the Secretary of the Treasury trans

mitting a draft of a proposed bill authorizing and directing the Comptroller General of the United States to credit in the accounts of Charles H. Holtzman, former collector of customs, Baltimore, Md., the sum of $704.80; to credit ill the accounts of George D. Hubbard, former collector of cus-

toms, Seattle, Wash., the sum of $45.25; and to remove the direct charge raised by the Comptroller General against former .Customs Agent William L. Thibadeau for his alleged unauthorized use of transportation requests in the sum of $159.48; to the Committee on Claims.

355. A letter from the Comptroller- of the Currency, transmitting- text of the annual report of the Comptroller of the Currency, covering activities of the Currency Bureau for the year ended October 31, 1933; to the Committee on Banking and Currency.

REPORTS OF COMMI'ITEES ON PUBLIC BILLS AND RESOLUTIONS

Under clause 2 of rule XIII, Mr. MORAN: Committee on Accounts. House Resolution

263. Resolution to authorize payment of expenses of inv.estigation authorized by House Resolution 237 (Rept. No. 761) . Ordered to be printed.

Mr. GREEN: Committee on the Territories. H.R. 6185. A bill fixing the date for holding elections of a Delegate from · Alaska to the House of Representatives and of members of the Legislature of Alaska; fixing the date on which the Legislature of Alaska shall hereafter meet; prescribing the personnel of the territorial canvassing board, defining its duties, . and for other purposes; with amendment (Rept. No. 762) . Referred to the House Calendar.

Mr. CROWE: Committee on Immigration and Naturalization. H.R. 4739. A bill to amend the naturalization laws by conferring upon judges of. State courts empowered to naturalize aliens the right to designate naturalization examiners to conduct preliminary hearings and to authorize said courts in their discretion to hold final hearings on petitions without the necessity for the attendance of the witnesses of the applicant, without amendment <Rept. No. 766). Referred to the House Calendar.

REPORTS OF CO:MMITI'EES ON PRIVATE BILLS AND RESOLUTIONS

Under clause 2 of rule XIII, Mr. SEGER: Committee on Claims. H.R. 19~_. A bill to

refund to Caroline M. Eagan income tax erro11eously and illegally collected; with amendment CRept. No. 73.2). Referred to the Committee of the Whole House.

Mr. O'BRIEN: Committee on Claims. H.R. 872. A bill · for the relief of Florence Overly; with amendment CRept. · No. 733). Referred to the Committee of the Whole House.

Mr. O'BRIEN: Committee on ·Claims. H.R. 4460. A bill to provide for the payment of compensation to George E. Q: Johnson; with amendment <Rept. No. 734). Referred to the Committee of the Whole House. · Mr. WALTER: Committee on Claims. H.R. 4567. A bill

for the relief of James P. Spelman; with amendment <Rept. No. 735). Referr~ to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 4666. A bill for the relief of Jerry O'Shea; with amendment <Rept. No. 736). Referred to the Committee of the Whole House.

Mr. WALTER: Committee on Claims. H.R. 4838. A bill for the relief of the Massachusetts Bonding & Insurance Co., a corporation organized ·and existing under the laws of the State of Massachusetts; with amendment <Rept. No. 737). Referred to the Committee of the Whole House. ·

Mr. BLACK: Committee on Claims. H.R. 5170. A bill for the relief of the American ... La France & Foamite Corporation of New York; with amendment <Rept. No. 738). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5357. A bill for the relief of Alice M. A. Damm; with amendment <Rept. No. 739). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5375. A bill for the relief of Albert Gonzales; without amendment <Rept. No. 740). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5417. A bill to reimburse Dominic Fracapane for injuries sustained in an accident with a Government-owned motor truck; without amendment <Rept. No. 741). Refen-ed to the Committee o! the Whole House.

2644 CONGRESSIONAL RECORD-HOUSE fEBRUARY 15 Mr. BLACK: Committee on Claims. H.R. 5543. A bill for

the relief of T. Brooks Alford; with amendment <Rept. No. 742). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5567. A bill for the allowance of certain claims for extra labor above the legal day of 8 hours at certain navy yards certified by the Court of Claims; without amendment (Rept. No. 743). Referred to the Committee of the Whole House.

·Mr. BLACK: Committee on Claims. H.R. 5606. A bill for the relief of W. R. McLeod; with amendment <Rept. No. 744). Referred to the Committee of the Whole House.

Mr. SMITH of Washington: Committee on Claims. H.R. 5639. A bill for the relief of Harriet V. Schindler; without amendment <Rept. No. 745). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5783. A bill for the relief of William H. Chambliss; with amendment <Rept. No. 746). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 5900. A bill for the relief of Ben D. Showalter; with amendment <Rept. No. 747). · Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 6016. A bill for the relief of M. P. Creath; with amendment <Rept. No. 748). Ref erred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 6238. A bill for the relief of M. R. Welty; with amendment <Rept. No. 749). Referred to the Committee of the Whole House.

Mrs. CLARKE of New York: Committee on Claims. H.R. 6856. A bill to authorize the settlement of individual claims of military personnel for damages to and loss of private

· property incident to the training, practice, operation, or · maintenance of the Army; without amendment <Rept. No. 750). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 7161. A bill to provide for the refund or abatement of the customs duty on altar candlesticks and cross imported for the Church of the Good Shepherd, Memphis, Tenn.; without amendment (Rept. No. 751). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 7697. A bill for the relief of William Chinsky; with amendment <Rept. No. 752). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. H.R. 7698. A bill for the relief of Louis Zagata; with amendment (Rept. No. 753). Ref erred to the Committee of the Whole House.

Mr. BROWN of Kentucky: Committee on Claims. S. 177. An act for the relief of Woodhouse Chain Works; without amendment <Rept. No. 754). Referred to the Committee of the Whole House.

Mrs. CLARKE of New York: Committee on Claims. S. 785. An act for the relief of Elizabeth Bolger; without amendment (Rept. No. 755). Referred to the Committee of the Whole House.

Mrs. CLARKE of New York: Committee on Claims. S. 1073. An act for the relief of E. Walter Edwards; without amendment <Rept. No. 756). Referred to the Committee of the Whole House.

Mrs. CLARKE of New York: Committee on Claims. S. 1081. An act for the relief of McKimmon & McKee, Inc.; without amendment <Rept. No. 757) . Referred to the Committee of the Whole House.

Mr. OWEN: Committee on Claims. S. 1321. An act authorizing adjustment of the claim of Korber Realty, Inc.; without amendment (Rept. No. 758). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. S. 1504. An act for the relief of Walter J. Bryson Paving Co.; without amendment (Rept. No. 759). Referred to the Committee of the Whole House.

Mr. BLACK: Committee on Claims. S. 1680. An act for the relief of the estate of. George B. Spearin, deceased; without amendment <Rept. No. 760). Referred to the Committee of the Whole House.

Mr. GREEN: Committee on the Territories. H.R. 7761. A bill to authorize the incorporated town of Wrangell, Alaska, to issue bonds in any sum not exceeding $47,000

for mrmiclpal public works, mcluding enlargement, extension, construction, and reconstruction of water-supply system; extension, construction, and reconstruction of retaining wall and filling, and paving streets and sidewalks; and extension, construction, and reconstruction of sewers in said town of Wrangell; with amendment (Rept. No. 763 ) . Referred to the Committee of the Whole House.

Mr. GREEN: Committee on the Territories. H.R. 7763. A bill to authorize the incorporated city of Skagway, Ala::;ka, to issue bonds in any sum not exceeding $40,000, to be used for the construction, reconstruction, replacing, and instana .. tion of a water-distribution system; with amendment (Rept. No. 764). Referred to the Committee of the Whole House.

Mr. GREEN: Committee on the Territories. H.R. 7764. A bill to authorize the incorporated city of Juneau, Alaska, to issue bonds in any sum not exceeding $100,000 for municipal public works, includmg regrading and paving of streets and sidewalks, installation of sewer and water pipe, construction of bridges, construction of concrete bulkheads, and construction of refuse incinerator; with amendment <Rept. No. 765). Referred to the Committee of the Whole House.

CHANGE OF REFERENCE Under clause 2 of rule XXII, committees were disch:i..rged

from the consideration of the following bills, which were referred as follows:

A bill <H.R. 4819) authorizing adjustment of the claim of the Public Service Coordinated Transport of Newark, ' N.J.; Committee on Claims discharged, and referred to the Committee on War Claims.

A bill ra.R. 6093) for the relief of the counties of Haywood and Swain, in the State of North Carolina, by rea.son of , their loss in taxable valuation by the establishment of the Great Smoky Mountains National Park; Committee on the Judiciary discharged, and referred to the Committee on the Public Lands.

PUBLIC BILLS AND RESOLUTIONS Under clause 2 of rule XXII, public bills and resolutions

were introduced and severally ref erred as follows: By Mr. BAILEY (by request): A bill (H.R. 8014) amend ..

ing the Agricultural Adjustment Act of May 12, 1933; to the Committee on Agriculture.

By Mr. FULMER: A bill (R.R. 8015) to provide emer .. gency relief with respect to certain business-property mort .. gage indebtedness through the Home Owners• Loan Car .. poration; to· the Committee on Banking and Currency.

By Mr. STEAGALL: A bill (H.R. 8016) to amend sec .. tion 12B of the Federal Reserve Act so as to extend for 1 year the temporary plan for deposit insurance, and for other purposes; to the Committee on Banking and Currency.

By Mr. AYERS of Montana: A bill (H.R. 8017) to pro .. vide for expenses of the Crow Indian Tribal Council and authorized delegates of the tribe; to the Committee on In .. dian Affairs.

By Mr. DEAR: A bill <H.R. 8018) to authorize payment for the purchase of, or to reimburse States or local levee districts for the cost of, levee rights-of-way for flood-control work in the Mississippi Valley, and for other purposes; to the Committee on Flood Control.

By Mr. ROGERS of Oklahoma: A bill (H.R. 8019) provid .. ing for national defense; to the . Committee on Foreign Affairs.

By Mr. SffiOVICH: A bill (H.R. 8020) to promote the exportation, purchase, and sale of agricultural products, and for other purposes; to the Committee on Agriculture.

By Mr. KENNEY: Resolution CH.Res. 268) requesting the Commissioner of Education to study the desirability of intro .. ducing courses in aviation in public schools; to the Com .. mittee on Education.

By Mr. SIROVICH: Resolution (H.Res. 269) to promote and aid in the recovery of agricultural and other trade by the creation of a Federal Export and Import Corporation; ta the Committee on Agriculture.

1934 CONGRESSIONAL RECORD-HOUSE 2645 By Mr. RANDOLPH: Joint resolution <H.J.Res. 277) to

prohibit officers and employees in the executive branch of the Government from competing with persons in private employment; to the Committee on the Judiciary.

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

were introduced and severally referred as follows; By Mr. BRUMM: A bill (H.R. 8021) for the relief of

Esmond Gains Moyer; to the Committee on Military Affairs. By Mr. COLDEN: A bill <H.R. 8022) granting a pension to

Alice Lucy Duling; to the Committee on Invalid Pensions. By Mr. CONNOLLY: A bill <H.R. 8023) granting a pen

sion to Martha F. Raglan; to the Committee on Pensions. By Mr. DIES: A bill <HR. 8024) for the relief of the

heirs of William Wesley Turner, deceased; to the Committee on War Claims.

By Mr. DIMOND: A bill <H.R. 8025) granting an increase of pension to James C. Virdin; to the Committee on Pensions.

By Mr. JONES: A bill <H.R. 8026) for the relief of Margith Olson von Struve; to the Committee on Foreign Affairs.

By Mr. KNUTSON: A bill (H.R. 8027) granting a pension to Jane Smith; to the Committee on Invalid Pensions.

By Mr. RANSLEY: A bill <H.R. 8028) granting a pension to Maurice Yudis; to the Committee on Pensions.

By Mr. REECE: A bill · <H.R. 8029) to extend the benefits of the Employees' Compensation Act of September 7, 1916, to Annie Hill Cease; to the Committee on Claims.

Also, a bill CH.R. 8030) for the relief of Charles N. Gambreal; to the Committee on Military Affairs.

By Mr. REILLY: A bill <H.R. 8031) to correct the military record of Earl Edward Brownlea; to the Committee on Military Affairs.

Also, a bill (H.R. 8032) granting a pension to George Beck; to the Committee on Invalid Pensions.

B:v Mr. TAYLOR of Tennessee: A bill (H.R. 8033) for the 'relief of Howard Hollis Hammack; to the Committee on Military Affairs.

By Mr. THOMAS: A bill <H.R. 8034) granting an increase of pension to Flora M. Leake; to the Committee on Invalid Pensions.

By Mr. THOMPSON of Illinois: A bill (H.R. 8035) for the relief of James M. Pace; to the Committee on Claims.

By Mr. WOODRUM: A bill <H.R. 8036) for the relief of Thomas Harris McLaughlin; to the Committee on Claims. . By Mr. WARREN: Resolution CH.Res. 267) to pay the funeral expense of Herbert Greene; to the Committee on Accounts.

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

laid on the Clerk's desk and referred as follows: 2283. By Mr. AYERS of Montana: Petition of L. W.

Shotwell and 43 other employees of the Indian Service on the Fort Belknap Reservation in Montana, praying for restoration of former salary levels; to th~ Committee on Appropriations.

2284. By Mr. CULLEN: Petition of the Parliament of Community Councils of the city of New York, petitioning Congress to enact such legislation as will amend section 1062 of the Federal Immigration Laws <Mar. 2, 1929, ch .. 536; sec. l, 45 Stat. 1512) so as to permit those desirable aliens, who arrived here prior to July 1924 and who qualify under these statutes, to register and obtain the rights thereunder; to the Committee on Immigration and Naturalization.

2285. Also, petition of the Vessel Owners' and Captains' Association, opposing the consolidation of the Coast Guard Service with the United States Navy; to the Committee on Naval Affairs.

2286. !By Mr. CUMMINGS: Petition signed by 140 residents of Fort Collins, Colo., protesting against certain inter! erence

LXXVIII-168

through censorship of radiobroadcasting; to the Committee on Merchant Marine, Radio, and Fisheries.

2287. Also, petition of the Sterling Methodist Home Missionary Society, of Sterling, Colo., urging the passage of House bill 6097 providing higher moral standards for films entering interstate and international commerce; to the Committee on Interstate and Foreign Commerce.

2288. Also, petition of the Aurora Woman's Club, Aurora, Colo., urging favorable action on House bill 6097 pi:oviding higher moral standards for films entering interstate and international commerce; to the Committee on Interstate and Foreign Commerce.

2289. Also, petition of the official board, First Methodist Episcopal Church, Boulder, Colo., urging the passage of the Patman motion-picture bill providing higher moral standardS for films entering interstate and international commerce; to ·the Committee on Interstate and Foreign Commerce.

2290. By :Mr. HOOPER: Petition of residents of Battle Creek, Mich., urging immediate action by Congress to safeguard inherent rights of American people relative to the radio; to the Committee on Merchant Marine, Radio, and Fisheries.

2291. By Mr. KENNEY: Petition of the Grand Council, Epsilon Sigma Phi, the National Honorary Extension Fraternity; to the Committee on Public Buildings and Grounds.

2292. Also, petition of Alpha Xi Chapter, Epsilon Sigma Phi, Rutgers University, New Brunswick, N.J.; to the Committee on Public Buildings and Grounds.

2293. Also, petition of the League of New Jersey Municipalities, endorsing House bill 3082 providing for loans by the Reconstruction Finance Corporation to municipalities on their tax-anticipation notes; to the Committee on Banking and Currency.

2294. Also, petition of the New Jersey Congress of Parents and Teachers, petitioning the endorsement and furthering of the proposition to be brought before the Congress on February 26 by the National Education Association in behalf of the 30,000,000 children in the schools of the country, in a request for Federal emergency aid, especially for 1934-35; to the Committee on Education.

2295. By Mr. LINDSAY: Petition of the Community Councils of the City of New York, Inc., regarding amendments to the Federal immigration laws; to the Committee on Immigration and Naturalization.

2296. Also, petition of Stephen Jerry & Co., Inc., Brooklyn, N.Y., opposing the Connery bill, HR. 7202; to the Committee on Labor.

2297. By Mr. RUDD: Petition of the Community Councils of the City of New York, favoring certain amendments to the immigration laws; to the Committee on Immigration and Naturalization.

2298. Also, petition of the Merchants' Association of New York, favoring the passage of House bill 7808; to the Committee on Foreign Affairs.

2299. By Mr. STRONG of Pennsylvania: Petition of the Oakland Woman's Christian Temperance Union of Johnstown, Pa., urging early hearings and favorable action on the Patman motion-picture bill; to the Committee on Interstate and Foreign Commerce.

2300. By Mr. STUDLEY: Petition of Joseph S. Gozse, 515 West One Hundred and Tenth street, New York City, N.Y., and approximately 500 additional citizens, urging Congress to abolish the 15-percent pay cut now imposed upon Government employees; to the Committee on Appropriations.

2301. By Mr. WERNER: Petition of citizens of Hill City, Second Congressional District of South Dakota, protesting against certain interference through censorship of radiobroadcasting; to the Committee on Merchant Marine. Radio, and Fisheries.

2302. Also, petition of citizens of the towns of Colome and Winner, Second Congressional District of South Dakota, for an adequate appropriation by Congress for grasshopper control; to the Committee on Agriculture.

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