10928 CONGRESSIONAL . RECORD-SENATE DECEMBER 21

SENATE TuESDAY, DECEMBER 21, 1943

(Legislative day ot Wednesday, Decem· ber 15, 1943)

The Senate met at 12 o'clock noon, on the expiration of the recess. ' The Chaplain, Rev. Frederick Brown

Harris, D. D., offered the following prayer:

. Our Father God, we thank Thee that as the time draws near the birth of Christ and bells of hope answer each other through the mist, casting aside all cynicism which the gray years may have brought, we join the radiant company of the world's dreamers whose eyes are on future days when the world will fill up with men of good will. We live in a black world-black sky, blackened earth, black deeds-but at Christmas we are dreaming of a white tomorrow.

We think gratefully of those who in spite of the stare of the wise and the world's scorn have been true to the vision of a petter day, a finer order, a cleaner and a kinder world. We thank Thee for prophetic souls who painted it .and preached it until the crowd has said, "Let us go and see this strange thing that bas come to pass." Set our feet in that great succession. As dreamers may we never barter what is over our heads for what is under our feet. Keep our hearts brave and believing, pioneers of that coming yet distant time when men shall lay aside their weapons, when lust shall be refined into love and greed into good· ness. Make us citizens of the New Jeru· salem, mankind's true country, coming down out of heaven from God himself. Amen.

THE JOURNAL

. On request of Mr. BARKLEY, and by unanimous consent, the reading .of the Journal of the proceedings of the calen· dar day Saturday, December 18,1943, was dispensed with, and the Journal was approved.

MESSAGES FROM THE PRESIDEN':£

Messages in writing from the President of the United States submitting nomina­tions were communicated to the Senate by Mr:Miller, one of his secretaries.

ENROLLED BILL SIGNED

The VICE PRESIDENT announced his signature to the enrolled bill <s. 1169) for the relief of Samuel Margolin, which had been signed previously by the Speak­er of the House of Representatives.

MESSAGE FROM THE HOUSE DURING RECESS

Under authority of the order of the 18th instant,

The Secretary of the Senate received the following message from the House of Representatives on December 20, 1943:

That the House had passed without amendment the joint resolution (S. J. Res. 105) fixing the date of meeting of the second session of the Seventy-eighth Congress;

That the House had agreed to the amendments of the Senate to the bill (H. R. 1616) to amend the Coast Guard Auxiliary · and Reserve Act of 1941, as ·amended; and

That the House had agreed to the con­current resolution <S. Con. Res. 29) pro­viding for final adjournment of the first session of the Seventy-eighth Congress.

THE BAR! BLOW

Mr. WALSH of Massachusetts. Mr. President, I approach this subject with some trepidation because I believe that every man at his post-field, ship, or sky-is doing his level best; but .what has happened at Bari makes it apparent to those of us who are not privileged actually to take arms but who are on the home front doing what we can to bring this conflict to a successful con­clusion, that a momentary relaxation can produce a terrible disaster. My thought is that the commanding officers in all the departments should renew what must have been o'riginal orders, that for every moment in the 24 hours, the eye, the ear, and the senses must be kept attuned to the approach of the enemy, Any momentary laxity_ may bring catas­trophe; and I ask, in this unceremo­nious way, that a further word be given that the commanding officers insist upon eternal vigilance, the price of liberty, and which must not be forsaken even for a fraction of time.

Mr. President, in connection with my remarks I ask that there may be printed in the body of the RECORD an editorial entitled "The Bari Blow," published in the Washington Star of December 18, 1943.

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

THE BARI BLOW The story of what happened on December

2 in the Italian port of Bari is a grim re­minder that we are up against an enemy whose sting · is still deadly and whose re­sourcefuln-ess demands of our Allied forces the fullest possible degree of vigilance at all hours of the day and night. At dawn, within the space of a few minutes, some thirty Nazi bombers sank 17 United Nations merchant ships and killed or injured about 1,00:> in­dividuals. The raiders came in very low and very fast-in much the same way as our own planes have often attacked-and · they were able to complete their mission almost before our side knew what it was that had struck.

The blow must be marked down as an Allied defeat serious enough to have impeded the Eighth Army's operation for 2 or 3 days. Apparently the Nazis themselves did not realize how damaging was the job they had done, for in their communique originally reporting it, they made only relatively modest claims. The story just revealed by Secretary Stimson must therefore please them quite as much as it should sober us. ··until yes­terday, presumably. for reasons of security, we had been told merely that Bari had been raided. Now we know the real magnitude of the attack, and although it is not clear whether our Allied forces were off the alert, something seems to have been lacking some­where. The deficiency, whatever it may have been, whether a shortage of fighter plane~

. or an inadequate warning system, has prob-

ably been taken care of by now. The enemy, at any rate, obviously still packs too much of a punch to warrant anything less than full Allied preparedness everywhere.

EXECUTIVE COMMUNICATIONS, ETC.

The VICE PRESIDENT laid before the Senate the following letters, which were referred as indicated:

JOSEPH LUKE LYDON: RECONSIDERATION OF SUSPENSION OF DEPORTATION

A letter from the Attorney General, relating to the case for suspension of · deportation of . the alien, Joseph Luke Lydon, stating that new evidence had been presented requiring that the matter be given further considera­tion, and request,ing that the case be with­drawn from Congress and stricken from the list of deportation cases submitted for sus­pension; to the Committee on Immigration. LAND ACQUISITION FOR SHIP REPAIR FACILITIES

A letter from the Secretary of the Navy re­porting, in accordance with Public Law 1, Seventy-eighth Congress, chapter 1, first ses­sion, that no acquisition of land by lease or otherwise for ship repair facilities, has been effected pursuant to the above-mentioned statute; to the Committee on Naval Affairs.

REPORT ON FOREST ROADS AND TRAILS A letter from the Acting Secretary of Agri­

culture, transmitting, pursuant to law, the Report on Forest Roads and Trails for the fiscal year 1943 (with an accompanying re­port); to the Committee on Post Offices and Post Roads.

' REDUCTION OF NONESSENTIAL FEDERAL EXPENDITUREs-PROGRESS REPORT (S. DOC. NO. 140)

The VICE PRESIDENT laid before the Senate a letter from Senator BYRD, chairman of the Joint Committee on Reduction of Nonessential Federal Ex­penditures, transmitting, pursuant to law, an additional report of the joint committee, · being a progress report, which was referred to the Committee on Appropriations and ordered to be printed.

Mr. BYRD. Mr. President, I ask that the report just laid before the Senate by the Vice President and ordered printed, also be printed in the body of the RECORD. .

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

The report is as follows: DECEMBER 21, 1943.

PROGRESS REPORT TO THE PRESIDENT OF THE UNITED STATES; THE VICE PRESIDENT OF THE UNITED STATES, PRESIDENT OF THE SENATE; THE SPEAKER OF THE HOUSE OF REPRESENT­ATIVES Pursuant to title 6 of the Revenue Act of

1941 (Public Law 250, 77th Cong.), approved September 20, 1941, the Joint Committee on Reduction of Nonessential Federal Expendi­tures was establiEhed in order to "make a full and complete study and investigation of all expenditures of the Federal Government, with a view to recommending the elimina­tion or reduction of all such expenditures deemed by the committee to be nonessential, and to report to the President and to the Congress the results of its study, together with its 1:ecommendation.'da ACCOMPLISHMENTS: OVER ~ JO,OOO,OOO SAVED

On December 24, 1941, ·p 1lor to the Presi­dent's Budget message to c ZfE.gress, the Joint Committee on Reductio:r4 of Nonessential

· Federal Expenditures rendnt •d a preliminary report to the President of "t,·e United States and to the Congress, in wlNh'1 reductions in

ir

1943 CONGRESSIONAL RECORD-SENATE 10929 12 items, nones~ential to the war effort, were recommended.

On July 25, 1942, the committee rendered a supplemental report to the President and to the Congress, in which it itemized the savings effected and indicated that further even greater savings might be made in pur­chasing; salaries, transportation·, · publicity, and overhead. Other economies in most, if not all, Government departments were sug­gested. During the committee's existence it h as operated on an annual budget of about $10,000.

The commhtee has issued 11 reports: 1. Preliminary (S. Doc. 152, pt. 1, 77th

Cong.). 2. Supplemental (S. Doc. 152, pt. 2, 77th

Cong.). 3. Questionnaires required of the public

(S. Doc. 4, '78th Cong.). 4. Federally owned passenger automobiles

·(S. Doc. 5, 78th Cong.). 5. Regional Agricultural Credit Corporation

-(S. Doc. 20, 78th Cong.). 6. Home Owners' Loan Corporation (S. Doc.

48, 78th Cong.) 7. National Youth Administration (S. Doc.

. 5~. pts. 1 and 2, 78th Cong.). 8. Federal travel and communication ex­

penses (S. Doc. 57, 78th Cong:). 9. Reductio:: of Federal personnel (S. Doc.

66, 78th Cong.). · 10. Federal ownership of real estate (S.

Doc. 130, 78th Cong.). 11. Federal personnel (additional report)

(S. Doc. 131, 78th Cong.). In each instancP- recommendations were

made to the President and to the Congress of the· United States which, when carried out, would effect substantial economies. But in concentrating on the curtailment of over­head expenditures the committee has made every effort to accomplish this saving in such a way as to contribute to the war effort rather than to interfere with it. ·

Results have been gratifying in some re­-spects. In all, a total savings of over $2,-000,000,000 were effected in items which the committee recommended be curtailed. Three depression-born agencies-the Civilian Con­servation Corps, the Work Projects Adminis­tration, and the National Youth Administra­tion-are being, or have been, liquidated fol­lowing recommendations of the Joint Com­mittee on Reduction of Nonessential Federal Expenditures. These alone total savings of over $1,000,000,000 annually.

A detailed break-down of savings accom­plished, following committee recommenda­-tions, is as follows:

SAVINGS, FISCAL YEAR 1943

1. Congress followed the committee's rec­ommendation that the Civilian Conservation ·corps be abolished. Savings, $238,960,000.

2. The commit~~e recommended the aboli­tion of all nondefense activities of the Na­tio'nal Youth Adminis-tration. Congress eliminated a major portion of the National Youth Administration's' nondefense program. Savings, $83,767,000.

3. The committee recommended 'drastic re­duction of the Work Projects Administra­tion's activities, which Congress accepted. Savings, $540,000,000.

4. The committee recommended deferment of land purchases, reduction of overhead costs, and curtailment of nondefense activi­ties in the Department of Agriculture. Con­gress reduced the appropriation of the De­partment of ! ~riculture. Savings, $.195,731,-208. ~

5. The carr. ·._.ttee recommended that the farm-te·nant I 1ogram be abolished. Congress reduced this ' propriation. Savings, $2,-270,000. - .

6. The co . F:irm Secul.'i' ' Congre~s red:

LXXX

ttee recommended that the Administration be abolished. ci' the administr_ative expenses

\.:--689

for the Farm Security Administration. Sav­ings, $26,180,000.

7. The committee recommended a 50-per­cent deferment of expenditures for. Federal highway projects. Congress reduced appro­priations for this function by about one­third. Savings, $50,300,000.

8. Congress followed the committee's rec­ommendation that nondefense public build­!ng construction be deferred. Savings, $33,148,000.

9. Congress limited appropriations to the Interior Department for nonessential public work projects to projects already under con­struction. This followed committee recom­mendations. Savings, $56,985,000.

10. The committee recommended cancela­tion- of loan authorizations for farm-tenant programs. Congress reduced the amount au­thorized to be borrowed from the Reconstruc­tion Finance Corporation for this program. Savings, $17,500,000._

11. The committee recommended cancela­tion of loan authorizations for the Farm Se­curity Administration. Congress reduced the authorization for the Farm Security Admin­istration to borrow from the Reconstruction Finance Corporation. Savings, $22,500,000 .

12. The committee recommended that the nondefense Rural Electrification expansion program be Q.eferred. Congress reduced the loan authorization of the Rural Electrifica­tion Administration to boiTow from the Re­construction Finance Corporation. Savings, $90,000 ,000.

13. The committee recommended the abo­lition of the National Youth Administration. Congress accepted this recommendation. Savings, $56,744,000.

14. The committee urged the cbmplete li­quidation of the work Projects Administra­tion's activities, which recommendation was accepted by Congress and the unexpended appropriation was returned to the Treasury. Savings, $106,168,499.

15. The committee recommended that pub­licity in the Federal- Government be cur­tailed. Congress reduced the appropriation of the domestic operations branch of the Office of War Information. Savings, $5,811,199.

16. The committee recomme.nded that overlapping and duplicating functions of the Federal Go.vernment be eliminated. Congress reduced the appropriation for the National Resources Planning Board. Savings, $937,922.

'17. The committee recommended that the Home Owners' Loan Corporation be liqui­dated. Congress reduced the authorization for administrative expenses·. Savings, $1,857,800.

18. The committee continued to recom­mend that reclamation projects not connected with tJ;le war program be deferred. Congress reduced appropriations for these reclamation projects. Savings, $52,719,470.

19. The committee continued to recom­mend that work on rivers and harbors be de­ferred . Congress further reduced appropria­tions for these projects. Savings, $181,894,100.

20. The committee recommended that the Farm Security Administration be abolished. Congress reduced appropriations for admin­istrative expenses. Savings, $18,022,142.

21. The committee recommended that the farm-tenant program be abolished. Congress reduced appropriations for administrative ex­penses. Savings, $298,930.

22. The committee recommended the im­mediate liquidation of resettlement projects. Congress reduced the appropriation for ad­.ministrative expenses. Savings, $78,961.

23. The committee recommended cancela­tion of loan authorization for the Farm Se­curity Administration from the Reconstruc­tion Finance Corporation. Congress reduced the amount available for loan autl:}orization from the Reconstruction Finance Corpora­tion. Savings, $37,500,000.

24. The committee recommended cancela­tion of loan authorization for farm-tenant programs. Congress reduced the amount available for loan authorizations from the

_Reconstruction Finance Corporation. Sav-ings, $2,500,000.

25. The committee continued to recom­mend over-all reductions in Federal person­nel. Reductions, totaling 134,395, have been accomplished by act of Congress, through the application of the Byrd-Langer amendment to the overtime-pay law, and through volun­tary action of various agencies. Savings, $295,669,000.1

Total savings, $2,117,543 ,231. Many of the savings of the committee can­

not be indicated exactly. For example, in addition to the stated reductions in Federal personnel, sharp curtailment in recruiting in certain agencies has been noted, occa­sioned, no doubt, by means of cong1•essional action inaugurated by the Byrd-Langer amendment to the Overtime Pay Act, by the reports and recommendations of the com­mittee, and by the activities of the House Civil Service Committee. · Consequently, al­though hundreds of thousands of unneces­sary Federal employees are still kept from more valuable war work by reason of their needless and duplicating activities, thou­sands of man-hours and considerable money have been saved already by restraining em­ployment.

Similarly, since the committee's investi­gations and reports to Congress, the flood of questionnaires, reports, and forms required of the public by Federal agencies, threaten,. ing for a time the continued progress in the war effort, has been sharply reduced.

Other savings, difficult to estimate in . ex­tent, have been, or are being, effected. The committee has sponsored a new personnel reporting system in the Federal Government which, when carried out, will bring about an estimated savings of $10,000,000 in per­sonnel reporting to the Civil Service Commis­sion. Such a system, in addition to saving manpower and money in eliminating certain overlapping features of reporting reguire-

. ments now· in use, will provide detailed in­formation on occupations and geographical distribution of employees never before ob­tainable. It is hoped that this system will remove the present confusion resulting from recent cha11ges in reporting procedure in­stalled by the Civil Ser:vice Commission.

The question of the disposition, use, and sale of waste paper from the Federal estab­lishment is being studied by the committee, which hopes to make early recommendations to eliminate the misuse of this no longer small item. Steps are being taken to curtail the irresponsible use of Federally owned pas­senger automobiles-and trucks and its result­ant waste of manpower, gasoline, and rubber. Travel and communfcation e·xpenses of execu­tive agencies have been brought to the eyes of th9 Appropriations Committees of the Con­gress and further reductions may be expected. The Home Owners' Loan Corporation is at present in the process of gradual liquidation.

· .The question of Federal purchase of large tracts of land is being studied and recom­mendations will be made which will attempt to promote savings to the Nation and to the several States.

In addition, the committee has provided numerous legislative and executive groups with information and advice pertinent to the savings of expenditures. The House of Representatives Civll Service Investigating ·committee has secured from the Federal de­partments and agencies r,opies of the monthly personnel report regularly sent to the Joint

1 Excludes estimated salaries of employees reduced from agencies cited above for fiscal year 1943.

10930 CONGRESSIONAL RECORD-SENATE DECEMBER 21 Committee on Reduction of Nonessential Federal Expenditures. Moreover, the Civil Service Commission, the Bureau of the Budg­et, the Labor Department, the Department of Commerce, the House Special Committee on Draft Deferments, the House of Repre­sentatives Select Committee to Investigate Act s of Executive Agencies Beyond the Scope of Their Authority, the House of Representa­tives Special Committee to Investigate the Farm Security Administration, as well as numerous individual Members of Congress, ha.ve availed themselves of the committee's investigations, statistics, and personnel.

1 • FUTURE PROGRAM 1 In July 1942 the committee stated that the . economy surface has merely been scratched. What has been accomplished is considerable. What remains to be done is still greater. On the basis of inform-ation received by the com­mittee, a gigantic task faces it in the coming year.

In general, the committee will continue its investigations as outlined in the prelim­inary report (S. Doc. 152, pt. 1, 77th Cong.). That is to say, it will continue to examine all Federal expenditures, particularly military expenditures, to determine where reductions can be made. It will probe more deeply into the activities of Federal departments for examples of duplication of functions. The committee will examine purchasing, classifi­cation, salaries, transportation, publicity, and other items of expense to determine where further economies may be made. It will also continue to make recommendations to elim­inate waste and inefficiency in administra­tion of war and nonwar activities.

Specifically, in the future, the committee intends to investigate and make recommenda-tions on the following subjects: .

1. The committee will investigate the large appropriations for the continuance of :par­mal peacetime and nonwar activities, which have been placed in the category of war activities. ·

2. Investigations will continue regarding the unexpended balances of the War and Navy Departments, the Maritime Commission, and the War Shipping Ad,ministration, as well as thos·e amounts which are now obligated on a contractual basis, v;:ith a vi~w toward re­turning portions of these large balances to the United States Treasury.

As shown by the following table the unex­pended appropriations of these departments and agencies totaled $186,000,000,000 in Sep­tember 1943, of which $92,000,000,000 are unobligated balances of unexpired appropri­ations which means they do not have any orders placed, contracts awarded, services re­ceived, or any other transaction charged against these funds, and they are available for expenditures.

. War Department_ ________ _ Navy Department_ _______ _ War Shipping Administra-tion ___________________ _

U . S. Maritime Commis-~on ___________________ _

Total ______________ _

Unexpended balances

$118,909, 963 , 187 58,609,475,565

2, 590, 350,007

6, 675, 595,038

186,785,383,797 The committee will urge an investigation

of these huge unobligated balances by the Appropriations Committee to determine whether additional appropriatidns will be needed until such time as all the outstand­ing unobligated balances have been encum­bered.

3. The committee will continue its investi­gation of nonessential personnel in the hope of eliminating 400,000 or more nonessential employees from the June 1943 peak of 3,095,-463 paid Federal civilian employees. The committee believes that there is a great op-

portunity, particularly in the war agencies, to reduce administrative expenses which, if effected, will strengthen these agencies. Du­plication of function and overlapping of per­sonnel must be eliminated. Indiscriminate hiring where it exists must cease. Hearings will continue to be held to determine where needless personnel may be eliminated.

4. The committee will continue to exam­ine Government-owned corporations to ascer­tain whether present loan policies, in the light of added budgetary commitments and

·changes, are still advisable. · 5. Continued efforts will be made to reduce

needless travel and communication ·expenses. A Federal automobile pool, together with a strict accounting of automobile use; has been recommended in the hope of further savings in critical materials and money.

6. Certai.n duplicating and useless func­tions of agencies within the Department of Agriculture, notably the separate function­ing of some 20 agricultural lending agencies and allied groups, will be brought to the at­tention of Congress again in the hope that these will be consolidated.

7. All new adventures and commitments in public works and similar costly govern­mental programs which may be undertaken will be carefully watched. The committee will particularly scrutinize the practice of creating agencies to handle some new phase of the war work where it ·is possible for an exist­ing agency to assume this function.

8. The failure of the Civil Service Commis­sion to execute a sufficiently intensive Fed­eral manpower-utilization program which function was delegated to it by the War Man­power Commission will continue to engage the attention of the committee.

9. The inequitable promotion policies of the various agencies involving skip-:grade pro­motions and violations of the Classification . Act of 1923 will be studied further and recom­mendations will be made.

10. As directed by Congress, the committee intends to investigate the penalty mail priv­ilege exercised by the various establishments to determine whether excessive use is being made of this privilege and if economies may be effected. · ·

THE NECESSITY FOR ECONOMY The Federal Government must unfalter­

ingly carry during this coming year the heaviest load ever imposed on any country. Total expenditures in the fiscal year June 30, 1943, were $78,182,348,641-more than double the expenditures for the previous year. Average monthly expenditures for war pur­poses alone were a little more than $6,000;-

"' 000,000-well over $8,000,000 an hour; and we are told that these may be increased. The Federal debt which stood at $61,000,000,000 at the start o:L the war has risen to the un­precedented heights of about $170,000,000,000. For the first time in history this Nation must now speak of its debt in terms of 12 figures .

While it is true that our .national income is increasing, yet our per capita debt has been quadrupled in 4 years. In 1938 the debt was $285; today it is $1,204. At the close of the last war it was $250 per capita. In more

.. realistic terms, the present debt of each tax­payer in the country is about $3,500. The interest load on this public debt is in itself staggering, it being estimated that the in­terest on Government borrowing alone is $2,700,000,000 per year.

It is estimated that revenue from our present tax system will produce $41,000,000,-000 for the fiscal year 1944. Of this, only $7,000,000,000 comes from "pay-as-you-go" in­come taxes. The present deficit (for fiscal year 1944) will be $57,000,000,000.

Even today the country as a whole does not feel the full impact of this debt load, for the

financial horizon gives no promise of early relief, but rather a greater burden in the future. There was a time when the Federal income tax was called a rich-man's tax; the masses believed that they would benefit and that the wealthy would pay the bill. Today all that has changed. From now on our Federal expenditures will be traced directly to tax burdens in the lower-income brackets, it being estimated that 50,000,000 people will now file income-tax returns. The Secretary of the Treasury must have had a similar idea in mind when he stated: "For the first time in our history the income tax is becoming a people's tax."

There can be no illusions as to this debt; for the welfare of. the country it must and shall' be paid. There are those economists who, advancing the "new philosophy of public debt," are brash enough to state tha.t the debt need not be paid; that a gradually ex­panding public debt is healthful to a country with a "mature economy"; that con­tinual pump priming is an economic neces­sity to the United States in the future. The committee sharply takes issue with such a

\ philosophy, believing, as it does, that public confidence in tJ::le financial integrity of a country-the 'acknowledgment of its obliga­tions-is necessary to the economic stability of that country. No nation may safely re­pudiate a debt and retain the confidence of its citizens. No nation which has lost the confidence of its citizens may remain a democracy.

One method of combating the latter is by elimination of nonessential expenditures. As can be seen from this report much has been done toward reducing nonessential expendi­tures, but much more remains to be done.

The committee believes it imperative that every effort be made to streamline the Fed­eral Government, to reduce to a minimum all expenditures not implicity furthering the successful prosecution of the war. It is not enough that expenditures are curtailed in a few instances, nor is it sufficient that a hand­ful of employees are transferred from one nonessential function to another nonessen­tial function. Nor is it enough to combine one group of offices with another, merely to erect a new superstructure at their head. Rather the value of each employee, each office,. and each dollar expended must be consciously weighed in its relation to the welfare of the people of the Nation. Agencies which have been built on years of depression must be abolished. The nonwar activities of those establishments not devoted entirely to war work must be curtailed. Bureaucratic poli­cies which sap the Nation of both financial solidity and a surplus of manpower must be eliminated. Only in so doing may the Fed­eral Government do its part in preparing for an economically sound post-war Nation.

Thus the committee feels that just as it is the patriotic duty of all citizens to reduce their spending to a minimum, so it is even more the patriotic duty of the Congress of the United States to curtail irreducibly all non­essential expenditures. That the people will hold this Congress strictly accountable for all wasteful or extravagant appropriations which divert sorely needed funds from the war effort is self-evident. Consequently it is hoped that Congress will continue to participate actively in this endeavor to provide a ch~ck­rein on runaway nonessential spending wher­ever it is found.

EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET,

WASHINGTON, D. C., December 17, 1943. Han. HARRY F. BYRD, <

Chairman, Joint Commit ee on Reduction of Nonesse Z Federal

Expenditures, Was gton, D. C MY DEAR MR. CHAIRMAN: le the prog-

ress report of the committe eludes much

1943 CONGRESSIONAL RECORD-SENATE 10931 that I endorse, I cannot sign it in its present form.

I think there is no basis for asserting, as t h is report does, that "hundreds of thou­sands of unnecessary Federal employees are still kept from more valuable war work by reason of their needless and duplicating act ivities," or for implying that there are "400,000 or more nonessential employees."

If I were to sign this report, I .would be in the position of predetermining judgments about Federal personnel which I am required by law to make quarterly.

Sincerely yours, HAROLD D. SMITH,

Director.

RESOLUTIONS OF AGRICULTURAL COOP· ERATIVE. COUNCIL OF OREGON

Mr. HOLMAN. Mr. President, I am in receipt of several resolutions which re­cently were adopted by the member or­ganizations of the Agricultural Coopera­tive Council of Oregon. The resolutions contain real wisdom, in my opinion, and, for the benefit of the Congress and of the American people, I request unanimous consent to have them printed in the CoN-· GRESSIONAL RECORD and appropriately re­ferred. I also ask that following the t·esolutions the stated purposes and the membership roll of the Agricultural Co­operative Council of Oregon be printed in the RECORD.

The VICE PRESIDENT. Without ob­jection, the resolutions will be received and· appropriately referred, and the matter referred to by the Senator from Oregon will be printed_in the RECORD.

To the Committee on Agriculture and Forestry: RESOLUTION NO. n; RELATING TO AGRICULTURE

. LABOR

'Whereas in the opinion of all interest ed parties, . the shortage of agricultural labor in 1944 unquestionably will become much more acute than was the case during the ye~r clos-ing; and -

Whereas the Agricultural Extension Service ably and efficiently carried out the bela~edly assigned duties of labor procurement to meet the critical situation existing in Oregon dur­ing the past harvest season; and

Whereas legislation is now pending in .Con­gress for the purpose of extending the re­sponsibility of the Agricultural Extension Service for procurement and placement of agricultural labor for 1944 and appropriating necessary moneys therefor: Therefore · be it

Resolved, That the Agricultural Coopera­tive Council of Oregon hereby record its posi­

.t ion in favor of continued supervision by the Agricultural Extension Service of procure­ment and placement of agricultural labor, and urge the members of the Oregon Delega­tion to lend active support for immediate passage of appropriate legislation.

RESOLUTION NO. m: }tELATING TO ANTI-COOPERA• TIVE ATTACK

Whereas there is being made a concerted attack upon farmers_.,marketing and supply cooperatives, and upon Farm Credit Admin­istration banks that assist in financing farm­ers and their business institutions; and

Whereas such attack, if successful, will jeopardize the stability of American agri­culture and thereby affect adversely the Na­tion's supply of food and fiber; and

Whereas no nation can long continue in a healthful condition without a dependable supply of these essentials of human life:

. Therefore be it Resolved, That the Agricultural Coopera­

tive Council of Oregon take such action as

will most effectively safeguard the public interest.

To the Committee on Banking and Currency: · :t

RESOLUTION NO. I: RELATING TO FOOD SUBSIDIES

Whereas the administration's food-subsidy program, if continued, will lead the Nation down the road to economic chaos, with com­plete political control, scarcity, excessive debt , and disastrous inflation the ultimate outcome; and

Whereas America's grocery bill is now being subsidized to the extent of $800,000,000 a year on borrowe~ money, thus developing one of the greatest inflationary threats exist­ing in the country today; and

Whereas every time a subsidy fails in its purported objective of keeping down the general price level additional inflationary pressure results; and

Whereas the American wage earner today is receiving nearly twice as much as in 1939, yet is spending only 20 percent of his income for food, the lowest percentage of such ex­ptJndit ure on record, is eating·far better than he d id in 1939, and if he were eating t}!e same kiud and quality of food he would be spending only 16 cents · out of each dollar; and

whereas America must operate on a pay­as-you-go basis for its current food bill, and since high-price subsidies which place the debt burden upon the p1en now fighting for freedom and upon their children can be no part . of a pay-as-you-go policy: Therefore be it

Resolved by the Agricultural Cooperative Council of OregoTJr, That we urge our Sen­ators a~d Congressmen to vigorously support the antisubsidy bill, and, in the event that the bill is passed and then vetoed by the President, we earnestly urge their support in overriding the veto.

The stated purposes and membership roll of the Agricultural Cooperative Council of Oregon, ordered to be printed in the RECORD on request of Mr. HOLMAN, are as follows: The purposes of the Agricultural Coopera­

tive Council of Oregon shall be as follows: 1. To promote the success of farmers' co­

operative marketing and supply enterprises in Oregon.

2. To secure and maintain cooperation and coordination of effort among all agencies en­gaged in or supporting agricultural coopera­tion.

3. To foster a better understanding of co­operative principles and practices on the part of growers !tnd the general public by educa­tional methods and by cooperating with edu­cational agencies and institutions in con­ducting such work.

4. To provide a representative body which may consider and pass upon the feasibility of proposed agricultural cooperative ventures which are of sufficient importance to affect the status of existing agricultural coopera­t ives and the -future development of the movement within the State. Recommenda­tions regarding such enterprises m ay be made by the council for the information of its members and the public.

5. To serve, upon the request of interested parties, as adviser or mediator in the settle­ment of any dispute or difficulty that may arise within an agricultural cooperative asso­ciation or between agricultural cooperatives, when the dispute or difficulty is one involving cooperative principles or practices.

6. To consider existing laws and proposed legislation affecting .agricultural cooperatives, for the purpose of supporting or opposing legislation as the need for such action arises, and otherwise to represent Oregon

agr,icultural cooperatives in legislative mat­ters.

7. To consider and deal with problems of finance, transportation, distribution, and other marketing functions or services of gen­eral interest to Oregon agricultural coopera­tives.

8. To provide a contact point for all official, public, and private agencies which desire /or need to confer with a..group representing Ore­gon's agricultural cooperatives.

9.' To secure and maintain public confi­dence in cooperative enterprises by the pur­suit of a conservative course...of action by the council and its members, at all times con­sidering the rights and interests of both con­sumers and producers.

10. To perform other similar activities or to take part or in formulating and carrying out programs. of cooperative work designed to benefit agricultur.e in genera1 and cooperative associat ions in particu1ar.

Apple Growers Association, Frank c. · Dethman, p_~:esident; J. E. Klahre,

general manager, Hood River; Baker County Livestock Marketing Association, Inc., Roy Vanderwall, president, Haines, P. T. :fortner, secretary-treasurer, Baker; Blue Lake Producers Cooperative, J. L. Goss, president, 0 . E. Snider, man­ager, Salem; Central Oregon Co­operative Creamery, Marion Tay­lor, president, Marvin Davidson, manager, Redmond; Columbia Fruit Growers, H. C. Nielsen, pres­ident, W. R. Bailey, manager, The Dalles; Dairy Cooperative As­sociation, L. Minoggie, president, W. W. Henry, manager, Portland; Division of Agricultural Eco­nomics, Oregon St ate College, E. L. Potter, chief, M. N. Nelson, Cor­vallis; Douglas County Farm Bu­reau Cooperative Exchange, D. N. Busenbark, president, C. E. Ban­ning, manager, Roseburg; Douglas Prune, Growers, D. N. Busenbark, president, M. F. Midqelburg, man­ager, Roseburg; Dundee Fruit Growers & Packers, F . W. Meyer, pr~sident, John L. Meyer, manager, Dundee; Eugene Farmers Cream­ery, J. W. Maxwell, president, G. A. Harnden, secretary-manager, Eugene; Eugene Fruit Growers As­sociation, Frank Harlow, director, E. A. McCornack, Eugene; Exten­sion Service, Oregon State College, Paul Carpenter, extension econo­mist, · L. R. ·Breithaupt, extension economist, Corvallis; Farmers Co­operative Creamery, Herman Ber­nards, president, Cadton, George C. Johnson, manager, McMinnville; Farmers Gas & Supply Exchange, Willard Bliss, director, Portland, R. A. Tribou, manager-treasurer, Gresham·; Farmers Union ·cooper-

. ative Creamery, Clyde W. Smith, president, Amos Henton, secretary, Sheridan; Farmers Union Coop­.erative Warehouse, Glen DeHaven, president, C. A. Curry, manager, Dallas; Gresham Berry Growers, C. A. Becker, president, Boring, J. J. Fisher, manager, Gresham; Hood River Grange Supply Co., Chester Shute, president, Richard H. Wil­cox, managel', Hood River; Inter­state Associated Creameries, A. P. Ireland, vice president, Forest Grove, G. A. Brown, manager, Portland; Jackson County Coop­erative, George H. Hiles, president, V. A. TUrpin, secretary, Medford; Lower Columbia Cooperative Dairy Association, M. J. Johnson, pres­ident, C. w. Laughlin, manager,

10932 CONGRESSIONAL RECORD-SENATE DECEMBER 21 Astoria; McMinnville Fruit Grow­ers Cooperative Association, James W. Richardson, president, Dayton, Fred Muhs, vice president, Mc­Minnville; Monmouth Coopera­tive Creamery & Warehouse, Chas. Bowman, president, E. W. Staats, vice president, Monmouth; Moro Grain Growers Association, Clar­ence Sparling, president, W. T. Balsiger, secretary-manager, Moro, Mount Angel Cooperative Cream­ery, R. J. Berning, president, Frank Hettwer, manager, Mount Angel; North Pacific Canners & Packers, Inc., Jos. J. Fisher, president, Gresham,· J. W. Mayo, executive ·secretary, Portland; North Pacific Nut Growers' Cooperative, R. A. Duncan, director, Portland, A. c. Jacobson, general manager, Dun­dee; Oregon Farmers Union .Co­operative Association, Chester W o h 1 e r, president, Hillsboro, Homer M. Smith, manager, Salem; Oregon Grange Wholesale, Inc., T. H . Fenton, field representative, W. J. Wilcox, manager, Portland; Oregon Nut Growers, ·Inc., W. J. Sullivan, president, John E. Trunk, manager, Newberg; Oregon Prune Exchange, H. Normandin, presi­dent, Forest Grove, John F. White, manager, Portland; Oregon State Farmers Union, Ammon Grice, president, Salem, Harley Libby, vice president, Jefferson; ­Oregon .State Grange, Morton Tompkins, master, Dayton, Ray W. Gill, member executive committee, Portland; Oregon Turkey Cooper­atives, Inc., 0. C. Brown, president, Roseburg, J. J. Jendrzejewski, di· rector, Hermiston; Oregon Turkey Growers, 0. C. Brown, vice presi­dent, Jay Conn, secretary-mana­ger, Roseburg; Pacific Cooperative Poultry Producers, Henry Erickson, president, Tigard, G. C. Keeney, manager, Portland; Pacific Supply Cooperative, R. W. Hogg, president, Salem, Charles Baker, secretary­manager, Walla Walla, Wash.: Pacific Wool Growers, R. L. Clark, president, North Portland, R. A. Ward, manager, Portland; Pendle­ton Grain Gl'owers, Inc., Carl Engdahl, president, Jafnes Hill, Jr., manager, Pendleton; Polk County Farmers' Union Cooperative Oil Association, R. 0. Dodson, presi­dent, Monmouth, R. : W. Hogg, secretary-treasurer, Salem: Pro­ducers Cooperative Packing Co., Paul Wallace, president, W. H. Wood, manager, Salem; Salem Co­operative Prune Growers, J. W. Simmons, president, C. A. Ratcliff, secretary, Salem; Southern Oregon Sales, Inc., S.M. Tuttle, manager, V. A. Turpin, assistant · secretary, M_edford; Springbrook Cooperative Prune Growers, Victor E. Rees, president, Springbrook, Myron H. King, manager, Newberg; Spring­brook Packing Co. Cooperative, Frank Carlisle, president, Victor E. Rees, manager, Springbrook; State Department of Agriculture, J. D. Mickle, director, Salem, W. E. Up­sh~w. Portland; Stayton Canning ­Co. Cooperative, Joe Schrewe, di­rector, Sublimity, George A. Smith, manager, Stayton; The Dalles Co­operative Growers, Ray F. 'Kelly, president, H. G. Miller, manager, The Dalles; Tillamook County Creamery Association, Jos. Max­.well, pr!lsident, Carl Haberlach,

secretary, Tillamook; Twin City Oil & Gas Co., Andrew Millar, president, George F. Preas .. mana­·ger, Milton; Union County Coop­erative Creamery, James A. Kof­ford, director, Union, 0. W. Howell, director, Imbler; Wallowa Live­stock Marketing Association, Inc., Oscar Maxwell, president, Wallowa, E. L. Pratt, vice president, Enter­prise: Willamette Cherry Growers, Inc., J. G. Hogg, president, Robert E. Shinn, secretary-manager, Salem; Woodburn Fruit Growers Cooperative Association, Chas. Sweaney, president, Earl House­worth, manager, Woodburn.

PROHIBITION OF LIQUOR TRAFFIC DUR­ING THE WAR-PETITIONS

Mr. O'DANIEL. Mr. President, l ask unanimous consent to present petitions for appropriate reference, and also to have inserted in the RECORD at this point a tabulation showing 662 petitioners, praying for the enactment of the bill (H. R. 2082) to reduce absenteeism, con­serve manpower, and speed production of materials necessary for the winning of the war.

There being no objection, the petitions were referred to the Committee on the Judiciary and the tabulation was ordered to be printed in the RECORD, as follows: California __________________ ..:__________ 98

Maryland ·----------------------------- 23 Minnesota---------------------------- 119 Nebraska______________________________ 36 Pennsylvania-------------------------- . 45 Texas-----~--------------------------- 325 Wisconsin-"!'·-------------------------· 16

Total----~-------------------- 662 PROHIBITION OF LIQUOR SALES AROUND

MILITARY CAMP8-PETITIONS

Mr. O'DANIEL. I also ask ·unanimous consent to present for appropriate ref­erence and to have inserted in the REc­ORD at this point a tabulation showing 5,513 petitioners, praying for the enact­ment of the bill <S. 860) to provide for the common defense in relation to the sale of alcoholic beverages to the mem­bers of the land and naval forces of the United States. ·

There being no objection, the petitions were referred to the Committee on Mil­itary Affairs and the tabulation was or­dered to be printed in the RECORD, as follows: California---------------------------· 67 ColoradO----------------------------· 25 Delaware---------------------------- 52.0 Illinois----------'--- ::----------------- 1, 229 Iowa-------------------------------- 124 Maine------------------------------- 95 Maryland-------------~-------------- 46 Minnesota--------------------------- 2, 377 Nebraska---------------------------- 5 New York-------------------------- - - 66 Ohio-------------------------------- 144 Oregon------------------------------ 267 Pennsylvania------------------------ 211 Texas-------------------------------- 337

Total---------------·----------- 5, 513

PRESERVATION OF SURVIVING JEWISH PEOPLE OF EUROPI. -TELEGRAM TO SENATE FOREIGN UELATIONS COM­MITTEE

Mr. GILLETTE. Mr. President, I ask unanimous consent to have printed in the

RECORD a telegram, numerously signed, addressed to the Committee on Foreign Relations of the Senate, proposing the creation of a special governmental com­mission to find ways and means to save the surviving Jewish people of Europe.

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

As Christians and as Americans, we urge the passage of the Senate resolution propos­ing the creation of a special governmental commission to find ways and means to save the surviving Jewish people of Europe.

As Christians, how can we do less? As Americans we recall our liberal traditions of the past.

Universally is it known that more than 2,000,000 European Jews have been slaugh­tered by the Nazis. There has been no sur­cease, no intermission. The living remnants of European Jewry are still being drawn and quartered with unabated ferocity. There­fore, we cannot approach Christmastide without declaring that too many of us have been found wanting in the will to rescue

.. these suffering people. If the will be strong enough and the heart be stout enough, thEm efforts of rescue will be made and will suc­ceed. If we remain feeble and complaisant, then death alone will have its way. Let no possible sanc~ary be closed, whether in America or elsewhere. Let each door of ref­uge be opened and kept open. This is the Christian way.

.Shall we forget that Christ's greatest pas­sion is fatherly love for all men? Surely we can find nothing in His words and deeds that would exclude our Jewish brethren from His divine love and compassion. 'Surely was it never His wish that His own crucifixion should usher in countless others. And yet we Christians suffer by delay and inaction, the crucifixion of a whole people whom the Nazis have sworn· to destroy root and branch.

Could the more than 2,000,000 Jewish dead speak from the grave, should they not with gestures exclaim: "Our pairi has followed us into the tomb, for how can we rest when our living brethren suffer no less than we have suffered?"

This is why we as Christians and Ameri­cans urge the immediate adoption of the resolution.

Rt. Rev. William T. Manning, D. D., Bishop of New York, Protestant Episcopal Church; Archbishop Athenagoras, Greek Orthodox Archdiocese of North and South America; Dr. Henry Sloan Coffin, moderator of the General Assem­bly, Presbyterian Church, and president of Union Theological Seminary; Bishop William J . Mc­Connell,. resident bishop of Meth­odist Church; Rt. Rev. Thomas J. Heistand, Bishop of Harrisburg, Pa., Protestant Episcopal- Church; Dr. Angus Dun, dean of Protestant Episcopal ·Theological Seminary, Cambridge, ¥ass.; Dr. Russell St afford, minister of Old South Church, Boston, Mass.

ADJUSTMENT OF MILK ;E'RICES

Mr. AIKEN. Mr. President, I have in my hand a communication addressed to the Senator from South Carolina [Mr. SMITH], chairman, Senate Agricultural Committee, by the Natural Milk Pro­ducers' Association of San Gabriel, Calif.

I also have a petition addressed to . the Senator from South C~rolina signed by 1,819 individual milk consumers of the same vicinity, requesting an adjustment of t_he milk prices and expressing-~:oppo-

I

1943 CONGRESSIONAL RECORD-SENATE 10933 sition to the roll-back subsidy program for milk. .

I ask that the letter be printed at this point in the RECORD. I do not ask to have the petition printed, but it will be available at the office of the Senator from South Carolina to· anyone who de­sires to see· it.

The VICE PRESIDENT. ·Is there ob­jection to the request of the Senator from Vermont?

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

DECEMBER 10, 1943. Hon: ELLISON D. SMITH,

Chairman, Senate Agricultural Commit­tee, Senate Chamber, Washington, D. c.

DEAR SENATOR SMITH: In View of the Wholly misleading and unfair propaganda being used by the advocates of the administration's roll-back subsidy program, we have felt an expression of uncontrolled free individual consumer opinion on the milk phase of the question would be of service.

We transmit herewith a petition consisting of 85 sheets and bearing the signatures of some 1,819 individual consumers. This peti­tion was prepared by us as a test of public opinion and given to 16 of our dairy farmers who as producer-distributors deal directly with their customers.

The matter was submitted to· the latter without argument and without any high­pressure persuasion and thus these signa­tures represent the free expression of the signers' dpinion. We feel such expression is infinitely more truthful than statements is­sued or made before committees by officers of various organizations who claim to speak

.. for thousands of alleged. members, not 1 in · 100 of the rank and file having · been con­

sulted. Please consider the petitions herewith sub­

mitted .as preliminary only-many thousands more signatures will reach you in the next few days. However, those herewith, it will be noted, do represent an excellent cross section of southern California, _ not . only· the city . of Los Angeles, but also such communities as Pasadena, Santa Monica, Venice, Burbank, Glendale, North Hollywood, Montebello, El Monte, Chino, Pomona, Upland, Ontarfo, San Bernardino, Bakersfield, etc.

Our experience convinces us the public is no more in favor of subsidies than is the farmer once the falsity of the proponents' statements are understood, and we also are convinced the public is most seriously alarmed over the dwindling supply of milk, and cer­tainly willing to pay a price which covers the farmers increased cost of production.

Most truly yours, NATURAL MILK PRODUCERS AsSOCIATION, FRANK S. GLAss, Assistant Secretary.

Mr. AIKEN. Mr. - President, I also have two telegrams addressed to Hon. JoHN PHILLIPS, Member .of Congress from California, one from the Ralphs Grocery Co., of Los Angeles, the other from the Homemakers Club, signed by Grace F. Glasser, of Los Angeles. The~e also re­quest adjustment of producers' milk prices, and express opposition to the sub­sidy program. I ask that the telegrams be printed in the RECORD. .

There being no objection, the tele­grams were ordered to be printed in the RECORD, as follows:

Los ANGELES, CALIF., November 17, 1943. Hon. JOHN PHILLIPS,

Member Congress, House Office Building, Washington, D. C.: '

Between October 8 and 14, 1943, our organi· za tion mailed to Office of Price Administra·

~ion, Washington, D. C., petitions asking for adjustment of producers' milk prices, and ex­pressed willingness to pay proper increases. Approximately 50,000 consumers and, in addi­tion, the Homemakers Club, advised us their members forwarded in similar petitions of 25,000 signatures to Office of Price Adminis­tration. We also estimate 25,000 additional petitions were mailed by individuals airect'. We would request your bringing this knowl­edge of same to the attention of Congress.

Respectfully, RALPHS GROCERY CO.,

By WALTER w. RALPHS, Vice President.

Los ANGELES, CALIF., November 17, 1943. Han. JOHN PHILLIPS,

-Member Congress, House Office Building, Washington, D. C.:

This is to advise you the Homemakers Club mailed to Office of Prioe Administration, Washington, D. C., petitions containing over 25,000 signatures asking for adjustment of producer~· milk prices, and expressed willing­ness to pay proper increases. We would re­spectfully request your bringing 'this knowl­edge of same to th~ attention of Congress.

THE HOMEMAKERS CLUB, By GRACE F. GLASSER,

Los Angeles, Caltf,

REPORTS OF FOREIGN RELATIONS COM­MITTEE DURING RECESS

Under authority of the order of the 18th instant,

The following reports of the Commit­tee on Foreign Relations were submitted on December 20, 1943:

By Mr. CLARK of Missouri: H. R. 2924. A bill to give effect to the. Pro­

visional Fur Seal Agreement of 1942 between the United States of America and Canada; to protect the fur seals of the Pribilof Islands; and ·for other 'purposes; without amendment (Rept. No. 626).

By Mr. THOMAS of Utah: S. Res. 100. Resolution favoring action

looking to relief for starving peoples of Eu­rope; without amendment (Rept. ·No. 624).

By Mr. GILLETTE: S. Res. 203. Resolution favoring the ap­

pointment · of a commission to formulate a plan to save the Jews of Europe from ex­tinction by Nazi Germany; with an amend­ment (Rept. No. 625).

EXmctJTIVE REPORTS OF COMMITTEES DURING RECESS

Under authority of the order of the 18th instant,

The following favorable reports of nominations were submitted on Decem­ber 20, 1943:

By Mr. VAN NUYS, from the Committee .on the Judiciary:

Hugh B. Cox, of the District of Columbia, to be Assistant Solicitor General of the Unit· ed States, vice Oscar S. Cox, resigned;

Emil c. Peters, of Honolulu, to be Associate Justice of the Supreme Court, Territory of Hawaii. (Judge Peters is now serving in this post under an appointment which expired August 5, 1943) ;

Albert M. Cristy, of Honolulu, to be second judge of the First Circuit, Circuit Courts, Territory of Hawaii. (Judge Cristy is ·now serving in tliis post under appointment which expired August 5, 1943);

Willson C. Moore, of Hawaii, to be fourth judge of the First Circuit, Circuit Courts, Territory of Hawaii, vice Francis M. Brooks, term expired; and

Cable A. Wirtz, of Hawaii, to be Judge of the Second Circuit, Circuit Courts, Terri­tory of Hawaii, vice Daniel H. Case, term ex­pired.

By Mr. THOMAS of Utah (for Mr. CoNNALLY), from the Committee on Foreign Relations:

David C. Berger, of Virginia, now a Foreign Service officer of class 4 and a secretary. in the Diplomatic Service, to be also a consul general;

William D. Moreland, Jr., of Oregon, now a Foreign Service office of class 7 and a E;ecre­tary in the Diplomatic Service, to be also a consul;

Richard W. Byrd, of Virginia, now a Foreign Service officer of class 7 and a secretary in the Diplomatic Service, to be also a consul;

John Goodyear, of New York, now a Foreign Service officer of class 8 and a secretary in the Diplomatic Service, to be also a consul; and

J. Brock Havron, of Tennessee, to be a For­eign Service officer, unclassified, a vice consul of career, and a secretary in the Diplomatic Service.

REPORTS OF A COMMITTEE

The following reports of the Commit­tee to Audit and Control the Contingent Expenses of the Senate were submitted:

By Mr. LUCAS; S. Res. 136. Resolution increasing the limit

of expenditures for the holding of hearings by the Committee on the Judiciary in respect to judicial nominations; without amendment; and

S. Res. 198. Resolution to investigate the matter of the termination of Government procurement contracts; with additional amendments.

ECONOMIC AND SOCIAL CONDITIONS IN PUERTO-RICO (REPT. NO. 628)

Mr. CHAVEZ. Mr. President, on be• half of the Senator from Maryl~nd [Mr. TYDINGS], chairman of the Committee on Territories and Insular Affairs, I sub­mit a report of that committee, pursuant to Senate Resolution 26, Seventy-eighth Congress, relating to economic and social conditions in Puerto Rico. I re­quest that· the report be -printed, with illustrations.

The VICE PRESIDENT. The report will be printed, with illustrations. EMPLOYERS' ASSOCIATIONS AND COLLEC·

TIVE BARGAINING IN CALIFORNIA (REPT. NO. 398, PTS. 2 AND 3)

Mr. LA FOLLETTE. Mr. President, on behalf of the subcommittee of the Com­mittee on Education and Labor, pursuant to Senate Resolution 266, Seventy-fourth Congress, second session, I submit parts VI and VIII of the report on Employers' Associations and Collective Bargaining in California.

Part VI is entitled "A Study of Labor Policies of Employers' Associations in the Los Angeles Area, 1935-39." .

Part VII is entitled "A Study of Labor Policies of Employers' Associations in the San Francisco Bay Area, 1935-39."

I also ask unanimous consent that a brief collection of excerpts from parts VI and VII, constituting the introduction to and conclusions of these volumes be printed in the RECORD so that the Mem­bers of the Senate may have a readily available outline of the subject matter treated. These volumes are the sixth and seventh of a series of 10 parts based upon the committee's final field investi- . gation into undue interferences with the right of labor to organize and bargain collectively.

The volume dealing with ~os Angeles is particularly concerned ·with policies

/'

10934 CONGRESSIONAL RECORD-SENATE DECEMBER .21

and activities of the associfl,tions of in­dustrial employers in the metropolitan area of Los Angeles which are either vi­olative or perversive ·of the nationallab.or policy as expressed in the National Labor Relations Act.

Part vn is concerned similarly with policies and activities of organizations of employers operating in the San Francisco Bay area, which are ·izp.portantly related to the right of labor to organize and bargain collectively. It considers the apparent transition from antiunion em­ployers' associations to organized em­ployer coordination, based upon the pro­fessed acceptance of collective bargain­ing in that area. -It explores the various devices of organized employe·r activity that were directed not only to a destruc­tion of labor's rights but also the use of "pressure tactics.. that renders those rights of dubious value even when recog­nized in collective agreements.

The VICE PRESIDENT. Without ob­jection, the report will be received and printed and the excerpts referred to by the Senator from Wisconsin will be printed in the . RECORD.

The excerpts are as follows: EXCERPTS FROM REPORT ON EMPLOYERS' ASSO· ..

CIATIONS AND COLLECTIVE BARGAiNING IN CALIFOR~IA .

PART VI. A STUDY OF LABOR POLICIES OF EM• PLOYERS' AS~OCIATIONS IN THE LOS ANGELES AREA, 1935-39

[Pursuant to S. Res. 266, 74th Cong.] Introduction · ,

Pursuant to the authority of Senate , Reso­lution 266 (74th Cong., 2d sess.) ,1 the com­mittee herein submits to the Senate the sixth part of its report on employers' associa­tions and collective bargaining in California. This volume is concerned· particularly with policies and activities of associations of in· dustrial employers in metropolitan Los An­geles which are either v.iolative or perversive of the national labor policy as expressed in the National Labor Relations Act. As such, 1t deals with events during the period 1935-39, inclusive.2

Preliminary investigations were made by this committee in the winter months of 1938-39 and in the latter part of 1939. Public hearings were held in the city of Los An­geles from January 10 to and including Jan­uary 24, 1940. Testimony taken during the 13 days of tpese public he~rings re~ated al­most entirely to industrial labor ~elations _in Los Angeles.3 This part VI is · an analysis of the testimony and exhibits introduced; into the record during this period.' The entire report consists of the following parts:

Part I. General Introduction;

1 A subcommittee of the Committee on Ed­ucation and Labor was appointed by the chairman JunEi 6, 1936, under Senate Resolu­tion 266, which reads, in part, as follows: "Resolved, That the Committee on Educa­tion and Labor is authorized and directed to make an investigation of violations of the right of free speech and assembly and undue interference with the right of labor to organ­ize and bargain collectively." The limit of expenditures under this resolution was ex- . tended by various resolutions in the 74th, 75th, and 76th Congresses . .

2 A similar study for the period 1890-1936 appears in pt. II of this report.

s See testimony in pts. 52, 53, 56, 57, and 58. 4 Supplementary exhibits for this phase of

the committee's inquiry were introdl.1ced into the record on July 1, 1940, and appear in pts. 63-66, inclusive, of the committee's public record. ·

Part II; Organized Antiunionism in Ct\11· tern of orgap.ized interference, strong and fornia Industry Prior to the Passage of the precise · measures of protection ~ust be ~e-National Labor Relations Act. vised. Such opposition to the national labor

Part III. The Disadvantaged Status of Un- policy, as has existed in the Los Angeles organized Labor in California's Industrialized metropolitan area, can only result in a whole-Agriculture. sale violation of laqor's civil rights and i~

Part IV. Employers' Associations and Their societal attitudes which are at variance with Labor Policies in California's Industrialized the spirit of industrial democracy. Agrl:culture. Such areas are a haven for would-be ex-

·part V. The Organization of Resistance to ploiters and those who wou'ld preach radical Collective Bargaining in California, 1935- 39. political and economic doctrines. They are

Part VI. A Study of Labor Policies of ·Em- breeding grounds for strange nostrums. players' Associations in the Los Angeles Area, They are subject to a continuing unhealthy 1935-39. · unbalance of economic power and position,

Part VII. A Study of Labor Policies of Em- often accompanied by occasional outbursts players' Associations in the San Francisc_o Bay of class violence and a constant undercur­Area, 1935-39. · rent of class hostility.' They frequently pro­

Part VIII. The Associated Farmers of Cali- vide a 'reason for the location of industry Jtt fornia; Inc._.::.Its ·Reorganization, Policies, and substandard levels and thereby stimulate Significance, 1935-'-39. · counteraction in other urban areas where ·

Part IX. The Origin and R{omotion of Re- real estate, banking,, and service business are cent Legislation. in Califorma Limiting La• . drawn into · a circle of vicious competition. bor's Civil Rights. Where there are large tributary areas, a

Part X. Conclusions and Recommenda- whole State or section of the State may be tions. dQminated by the attitudes of industrial au-

In part II there is a discussion of the. his- tocracy that prevail in the urban center. Na­torical background dealing with labor poll- tional, State, or local policy and authority .cies in Los Angeles .Pefore 1935 and the may be plunged i~to a conflict or into an in­development and character of the employers' _consistent posi~ion that destroys respect for associations responsible for that policy.5 In law on all sides. Such areas are likely to be part V there is a broad analysis of these vulnerable to the economic, social, and po­policies in comparison and ·contrast with the litical evils that democracy must meet and State-wide patterns of employer oppositions vanquish if it is . to survive. Our society to collective bargaining.6 has adjudged them not the white spots b:ut

The city of Los Angeles has long been the cancer areas. From this point of view, considered a stronghold of antiunion in- this study of ·the Los f\,ngeles ~rea is of na-dustry. Termed by the open-shop advo- -tional significa~c~. . . ·.

· cates as the "white spot" 7 of · the Nation, . This_ i,nquiry_ const~tutes the most _exten­, this industrial . center has frequently been sive analysis of the integrat~d ·labor policy held up as an ex~mple of an urban area that of emp"toyers' associations ' in on~ ,m:etropoU­is tradittonally nonunion and actively anti~ tan area ever undertaken by this _ qom~tt-

. unton. As part II of the committee's re- ;.tee~ tn this analysis, the origln; ,·s~r:ucture, port on California has indicated, this tradi- finances, labor P,Olicies, ami ~ctivitie~ ·of tional lab_or policy was sponsored actively sevett employers' associations, operating in and supported effectively by leading indus- Los Angela's were .studied . . These include the trial and financJ,al groups long be!ore the Merchants and · Manufacturers Association, passage of the National Labor Relation~ Act. ·previously identified 8 as a typical belliger­Such organizations as ~he Merchants and ent or antiunion employerf?' association, and Manufacturers Association and the Los An- the Los Angeles Chamber of Commerce,• geles Chamber of· Commerce marshaled an which is similar in outward organizational imposing array of economic and political appearance to ·· the . typical local ch~mber. influence against any local application of an southern. ·· californians, Inc.,1o was a some­effective system of collective bargaining~ what streamlined, modernized version of the The nature, personnel, leadership, and employers' association and was significant method of these organizations prior to 1935 for its application of techniques more ob­were described in part II of this report. liquely angled _ against effective trade-union­Their- failure to respond favorably to the na- ism than those commonly employed. Three tiona! policy established in the National separate but related trade organizations, the Labor Relations Act in 1935 was accompa- Cabinet and Store Fixture Association,11 the nied by an organized and aggressive cam- southern California Garment Manufacturers paign of interference with the rights of labor. Association,12 and the Southern California

In a city of the si.ze .and importance of Los Restaurant 'Association 1a provided sharply Angele·s, this conspiratorial pattern of mal- etched examples of the labor-relations -policy

. feasance is a phenomenon which demands careful scrutiny. There a"l'e many industrial areas in other parts of the country which are known as open shop or ·nonunion centers. w:Qere, as in Los Angeles, there is a phalanx . of opposition to ,.,.trade-unionism composed of

. employers, civic groups, and public officials supported by dominant .banking and news• paper interests. In such an atmosphere, labor's civil rights cannot be properly exer­cised and the tyranny of local persecution and opposition to trade-unionism is intol­erable . • Proceedings against an individual employer for unfair labor practices under the National Labor Relations Act may not prcve to be an effective measure of protecti.on. When this opposition in the commu_nity is due to a lack of understandi~g or familiar_ity with labor relations; it inay dissolve with the passage of time. But when this opposition to the exercise of the rights of employees to organize and bargain collectively _is a pat-

e See pt. II of this report, pp. 77-78, 99- 114, and 12~141. · ' · . .

o See pt. v of this report, pp. 717-736, 750-754, and 767-77[).

'See pt. 63, exhibit ~686, p. 23109.

8 For a discussion o( the Merchants and Manufacturers Associatioh for the ·period 1890-1935 see pt. II of this report, pp. 106-112 and 1'26-141; for testimony and exhibits relating to the activities .of the Merchants

. and · Manufactur~rs Association, see pts. 52, ·sa, 57, 58, 61, 63, 64, and 65.

9 For a dis-cussion of the Los Angeles Cham­ber of Commerce for the period 1890-1935, see pt: II of this report, pp. 112-114 and 1~6-141; fcir testimony and exhibits relating to the activities of 'the-Los Angeles Chamber of Commerce, see pts. 52, 53, 56, 57, 58, 61, 63, 65, and 69:

10 For testimony and exhibits relating to the activities of Southern Californians, Inc., see pts. 56, 57, 58, 61 , 63, 64, 65, 66, 69; and 71.

11 For testimony and exhibits relating ·to the Cabinet and Store Fixture Association, see pts. 52 and 64. • 12 For testimony and exhibit~ relating to the Southern California Garmen-t Manufac­turers Association, see pts. 52 and 64 .

. 1s For testimony and exhibit~ relatfng_to the Southern California Restaurant :As!30Clati.o~, see pts. 56 and , 64. ' ·

1943 CONGRESSIONAL R'ECORD-SENATE 10935 sponsored by the more inclusive employers' associations. The seventh organization treated in this pt. VI, The Neutral Thou­sands,14 purported to be an organization of women and consumers who were interested in labor relations as a community service. Its precise character and relationship to the · other antiunion bodies is developed in this report.

Further, the committee inquired into the activities of other employers' associations which, although not directly identified with Los Angeles industry, were closely related- to it.

While Los Angeles Is impbrtant a.s an in­dustrial center, it is also the richest agri­cultural' county in the country and has been one of the focal points of the labor policy of agricultural interests in southern California. The activities of these employers' associa­tions,· the· Farmers Transportation Associa­tion,15 and the coup.ty units of the Associated Farmers in Southern California,l6 will be treated in part VIII of this report.

The enactment of the National Labor Rela­tions .\ct in 1935 &nd the fear of the in­crease in trade-unionism as a . result of sec- ­tion 7 (a) of the National Industrial Re­covery Act led the Los Angeles Chamber of Commerce to reexamine the open-shop movement in that city which, as has been previously described, was a synonym for antiunionism. This reexamination did not entail a change in the open-shop policy­efforts were directed only to the maintenance and reinforcement of that policy. The 1m­mediate result of this activity was a reor­ganizatio~ of the Merchants and Ma.nufac-· turers Associ"tion in 1936. Here again the alleged reorganization consisted merely of a restatement .of the old open-shop principles and the installation of a new program de­signed to · effectuate them.

' This program was characterized by the ·emphasis 'placed on the coordination of. the work of various law-enforcement agenc~es with the · activities ·of the Merchants and .Manufacture-rs Association, the establish­ment of a regular pool of strike guards by the signing of an annual supply contract with"the Bodell Detective Agency, and by a program intended to influence or coerce re­calcitrant or noncooperating employers who were inclined to adopt a labor policy which included collective bargaining. The new program was also marked by the resignation of Edgar R. Perry as president of the Mer­chants and Manufacturers Association be­cause, in his own words, this militant anti­labor program was to be carried on in a man­ner violative of the National Labor Relations Act.17

Under this program, the Merchants and Manufacturers Association organized small groups of employers, industry by industry. Two of the organizations studied by the committee were the Cabinet and Store Fix­ture Association of California and the Southern California Garment Manufac­turers Association. These employers' asso­ciations found their reason for existence in a clause included in the membership agree­ments of each group. In this provision, drafted by the Merchants and Manufacturers Association, each member bound himself not to enter into any agreement-oral, written,

• or implied-with any labor organization. The membership agreement also provided for a

14 For testimony and exhibits relating to The Neutral Thousands, see pts. 56, 57, 61, 65, and .66.

15 For testimony and exhibits relating to the, Farmers Transportation Association, see pts. 58 and. 71.

10 For .. testimony and exhibits relating to the act~ vi~i~s of the As so cia ted Farmers in Southern ,California, see pts. 55, 56, 58, 63, 64. €5, 1o: arid 71. .

11 see pt. 52, exhibit 8639-A, p. 19345.

penalty of at least $5,000 in one case 18 and $10,000 1n the other 19 for violation of its terms. When a member of the cabinet and store fixture industry refused to sign such an agreement, efforts were made to embarrass him by informing a bank to which he was under financial obligation of his attitude.2o

The reorganization program of the Mer­chants and Manufacturers Association also included the reopening of its employment bure.au for the supplying of strikebreakers, payments to municipal police for strike-guard duty, and a continuance of cooperation with th;1 intelligence bureau of the Los Angeles Police Department in matters of labor es­pionage.

These militant tactics of the Merchants and Manufacturers Association proved in­effective in stemming the tide of increasing trade-unionism. The teamsters• utiion, which was the spearhead of the drive, had started an organizing campaign in southern California in 1935 and the Merchants and Manufacturers Association promptly as­sumed leadership of tpe opposition. The struggle by the teamsters against low wages a::d poor working conditions finally culmi­m .ted in the -Pacific Freight . Lines strike in March 1937.21 In a final effort to maintain its position as the leader of the open-shop interests, the Merchants and Manufacturers Association marshaled all of Los Angeles in­d'l~stry to combat the union. ThE!"Los Angeles Chamber of Commerce publicly took a sup­porting role in the creation of a strike fund of more than $85,000 22 which was collected from employers in every type of industry in southern California. The efforts of the Mer­chants and Manufacturers Association proved unavailing. The strike wa.s terminated when the ·Motor Truck Association of Southern California, representing the Pacific Freight Lines, signed a written, closed-shop agree- . ment with the Teamsters' Union in June 1937. Fear of. reprisals by the open-shop forces led to strict secrecy as to the terms of the strike settlement, and these were not

-publicly revealed until October 1938. The Pacific Freight Lines strike marked

the end of the first reorganization program of the antilabor interests in Los Angeles. While the chamber of commerce was drafting a .new program, however, the trade-unions were not idle. The American Federation of Labor instituted an organizin-g drive in the restaurant industry in Los Angeles, that was immediately confronted by the industry's organization called the Southern California

-Restaurant Association. Working through a secret and mysterious group, called group A, within the restaurant association, the industry met the union drive with black­lists, strike guards, and the p ivate employ­ment of municipal police for strike duty.2s The creation of Southern Californians, Inc., in the midst of this struggle caused a change 1n the antiunion tactics of the industry. Under an express agreement, Southern Cali­fornians, Inc., assumed the- burden of com­bating the union in return for substantial contributions by the restaurant association, and the latter slipped quietly into the back­ground.

The validation of the Natlonal Labor Rela­tions Act in April 1937, followed immediately by the_ union victory in the Pacific Freight Lines strike, made the chamber of commerce

l8 See pt. 52, exhibit 8646, p. 19354. 10 See pt. 52, exhibit 8652, p. 19361. 2o See testimony of Clarence L. Dawson, Jr.,

pt. 52, pp. 19104-19107. . 21 For a detailed description of this strike,

see this pt. VI of the report, pp. 830-834. 22 See pt. 53, exhibit 8711, pp. 19603, 19604;

pt. 53, exhibit 8726, pp. 19658:-19662. 23 The activities of the Southern California

Restaurant Association and "group A" are described in this pt. VI of the report, pp. 835-843.

sharply aware of the ineffectiveness of its antilabor program. Once again came the realization that a second reorganization of the antiunion forces· was necessary if the open shop was to be maintained. Out of this realization came Southern Californians, Inc.,2' and the Neutral Thousands.~ both formed in the fall of 1937. In this reorgani­zation the chamber of commerce adopted the modern integrated corporate set-up. South­ern Californians, Inc., became the top holding company, the Merchants and Manufacture-rs Association was relegated to a secondary role, and, together with the Neutral Thousands, acted under the supervision of the major association. With this new alinement of forces, the chamber of commerce confidently entered the arena. with labor.

The primary function of Southern Califor­nians, Inc., was to coordinate the activities of otl:_ler employers' associations, namely, the Merchants · and Manufacturers Association, the Neutral Thousands, the Associated Farm­ers of Los Angeles County, and the Farmers Transportation Association. Its position v:g,s likened to that of the general staff of an army,26 with all employers• aEsociation activ· it; clearing through it. The Neutral Thou­sands and the other groups were to serve as combatant units, occupying a front-line po­sition in the battle to maintain the ope.n shop.27 In addition to this activity, Southern Californians, Inc., occupied itself with secur­ing the enactment of antilabor legislation, with obtaining the cooperation of various law-enforcement agencies in the promotion of its open-shop policy, and with the creation of an antilabor propaganda campaign iden­tical in many respects with that instituted by the National Association of Manufacturers in 1937.28 To carry on its activities, · the organization received more than· half a mil­lion dollars from various Los Angeles indus­tries during the 2 years from November 1937 through November 1939, of which some $300,. 000 was contributed by Southern Califor· nians, Inc., to the support of its subsidiary employers' associations and of the campaign to enact antipicketing ordinances in the city and State.~

The Neutral Thousands, second of the new organizations created by the chamber-of com­merce, was financed almost wholly by that group and by Southern Californians, Inc. Structurally, it was a citizens• committee and closely resembled similar organizations previ­ously studied by this committee.30 In short, it was neither neutral nor representat~ve of thousands. Under the slogan "Truth, not terror," the Neutral Thousands disseminated antiunion propaganda and set up company. dominated independent unions. In its prop­aganda work the Neutral Thousands worked very closely with its parent, Southern Cali­fornians, Inc., and utilized all the media of modern high-powered publicity, including billboard advertising, pamphlets, newspaper propaganda, and radio broadcasting. The independent union activities of the employ­ers' associations_ were carried on in a very

24 For the discussion of the formation and activities of Southern Californians, Inc., see this pt. VII of the report, pp. 844-914.

25 The Neutral Thousands, its formation, functions, and activities, are described in this pt. V1. of the report, pp. 915-996.

26 See pt. 56, exhibit 9065, p. 20764. 27 Ibid. 28 See S. Rept. No. 6, pt. 6, 76th Cong., '1st

sess., Labor Policies of Employers• Associa­tions, pt. III, The National Association of Manufacturers, chs. V and VI, pp. 154-206.

29 See pt. 56, exhibit 9057, p. 20748. so See S. Rept. No. 151, 77th Cong., 1st sess.,

Labor Policies of Employers' Associations, pt. IV, The "Little Steel" Strike and Citizens' Committees, ch. 15, pp. 291-315.

10936 CONGRESSIGNAL RECORD~SENATE DECEMBER 21 circuit ous way. The Merchants and Manu­f aeturers Association and. Southern Califor­nians, Inc., maintained contact with em­ployers and the Neutral Thousands. with em-­

. ployees-their joint endeavors being masked by a claimed independence, one from the other. More than 150 company-dominated

. unions were set up by the Neutral Thousands

.in the short period of 18 months.31 Appar­ently having served its purpose, the Neutral Thousands was liquidated by March 1939, although its independent union :work was continued by ·Southern Californians, Inc., · through the Employees Advisory Service, ere-

. a ted for that purpose. The effectiveness of this rejuvenated open

shop program cannot be accurately esti­mated .. In 1938 tbese employers' associations

.were successful ' in securing the enactment of a municipal antipicketlng ·ordinance, but · it was invalidated by the California courts in the following year. Friction between South­. ern Californians, Inc., and the Me-rchants and Manufacturers Association developed because of professional rivalry and jurisdictional dis­putes. Efforts were made to resolve these

- d ifferences and finally, under the guiding spirit of Harry Chandler, publisher of the Los Angeles Times,32 the two organizations .were merged in the spring of 1940, and a new employers' association · ca:lled the Merchants and Manufacturers Association ·of . ~outhern .California was crea,ted. This event occurred shortly after t he conclusion of the committee inquiry in California, but was contemplated by the dominant leadership of employers' as:­sociation activity during the cours!'l of the h earings.33

Conclusion The facts recited in this part VI force the

committee to t he conclusion that the most influential business and financial interests in Los Angeles have deliberately attempted to sabotage the n ational labor policy of collec­tive bargaining as expressed in the Nat iona,l Labor Relations Act. Despite the enactment of that law and it s declared constitutionality by the United States Supreme . Court, these business and industrial leaders determined to nullify it n ot only by negative but also by positive act ion. ·Pursuant to this determina­tion, they engagecl in a series of organized conspiracies to destroy labor's civil liberties. They sought to prevent bona fide collective bargaining from obtaining a strong foothold -in the u rban community of Los Angeles and its t ributary business and agricultural areas.

To carry out t heir conspiracy, they set up various employers' associations and auxiliary groups of women, consumers, agriculturists, and even employees. They lavishly financed these organizations and for the most part supplied them with a type of professional personnel that by reason of their background was wholly out of sympathy with trade­unronism. They concluded alliances with the local press, local police, local law-enforcement officials, and local business · organizations. Behind their ill€gal and antisocial policy they concentrated economic and political power that defied any local application of the law and cust om ·of the Nation.

Against this community of opposition the civil rights of labor were beyond even the protection of the National Labor Relations Act. his patt ern of organized conspiratorial interfer~nce with collective bargaining in­cluded the mass application of the common antiunion devi-ces such as labor espionage, the use of. professional strikebreakers, the use of industrial munitions, the blacklist, dis­criminatory discharge, and a host of similar weapons. It also included ·a vigorous and

31 See pt. 66, exhibit 10853, p. 24169; exhibits 10858-10862, pp. 24184-24189.

3!! See ~usiness Week, June 1, 1940. -•

33 See testimony of Paul Shoup, pt. 57, pp. 20918-20919. .

widespread application of newer ,tactics d{l­signed , to defeat trade-unionism and collec­tive bargaining through the now recognized third party technique. Subsidiary elements of this technique were the extensive use of all ,types of propaganda, the pressure for the en­actment of local laws declaring illegal the

-normal operations of trade-unions, a con­stant attempt to pervert local law-enforce­ment to the support of their antiunion policy, and the persistent ~!fort t~ prejudice the gen­eral public against labor organizations, labor leaders, and the practices of collective bar­gaining. There was mass production of ccim­p~ny unions through organizations main­tained indirectly for that purpose. Perhaps the most ou~standing feature of this broad sweep of antiunion activity was the enormous effort devoted to bringing the individual em­ployer in line with the community labor pplicy by inducing his affiliation with a group organized to operate its particular trade or industry without the benefit of a collective agreement between employers and employees.

Beh.ind this vast and powerful movement stood the leaders of business and industry, titular and real, the banking and financial

. groups, leaders of the local press and, until recently, many of the public officials. '· This

. made the sit uation peculiarly difficult for trade unions ·and for . those public officials whose dut y it was to protect the rights of labor. The very ,speQtacle of a local cham­'ber of commerce, comprising the sum total of the business influence in the community, actually dictating and stimulating the de­velopment of tactic after tactic to defeat the national labor policy, made anything but the strongest measures protective of labor's civil rights seem futile. The creation and maintenance of this policy of antiunionism in Los Ang~les for magnitude and. versatility . of the effort far surpasses ahy.thing the com­mittee has previously, encountered in its 4-year inquiry. For example, the investigation of. the Associated Industries of Cleveland Ohio, showed a total income over a 4-yea; period (1930-37) of $264,432.58.M During a similar 4-year period in Los Angeles ( 1936-39). the sum of $916,925.14 was collected to finance the two princi'pal antiunion employ­ers' associations .aG

In an y appraisal of this situation, . the re­cent effort of the National Labor Relations Board to deal with organized antiunionism in the Los Angeles area should receive close scrutiny. · While the powers and ability of the Board to deal with the unfair lab,or prac­tices of an individual employer or·~oncetn have been demonstrated, it is not clear as yet that these powers are adequate to deal with such a situation as was presented in Los Angeles. It was 1939 before the Board at­tempt ed to nfeet the problem head-on. In proceedings against certain tent and awning companies,30 the Board joined the leading antiunion employers' associations as they ex­isted at the time (the year 1939). The breadth of the proceeding and the scope of the evidence submitted raise' sharply the question of whether or not the Board's pow­ers and procedures are adequate to deal with this type of law infringement.

s~ See S. Rept. No. 6, pt. 7, 76th Cong.; 1st sess., Labor Policies of Employers' Associa­tion, pt. II, The Associated Industries of Cleveland, p. 45. The committee's investi­gation of the Associated Industries of Cleve­land was completed in, early 1938 and there­fore the organization's income for 1938 and

· 1939 is not available. 35 See pt. 52, exhibit 8611, facing p. 19317.

See also pt. 56, exhibit 9057, p. 20748. 36 See In the Matter ot Sun Tent-Luebbert

Co. et al. v. Textile Workers Union 'ot Amer­ica, Local No. 99, c. I. 0., and Independent Canvas Workers Union, Inc., Cases N. XXI-C-1907~1113-1114-1116.

As yet,.there has been no judicial determi­nation of the case and the committee is without the benefit of the views of the courts on the adequacy of the existing legal meas­ures to deal with the situation. In the

. meantime, one of· these employers' groups (the Neutral Thousands) has, gone out of existence and two others ·esouthern Cali­fornians, Inc., and the Merchants and Manu-

. facturers Association) have merged into a new entity. The committee feels that the outcome of this proceeding is a matter of

.public interest deservi.ng the close attention of the Congress. If the courts feel that the

·eXisting law is not adequate to enjoin the -individual . and corporate participants in . these various organizations from future anti­_union activity of the type disclosed, except . at the risk of criminal contempt proceed­.ings, .tnen Cj'lrtainly Congress sP,ould act to . close the _ door against further evasion and . breach of the national labor policy by or· ,g;mize.d a.ntiunionism. . It may be that in any event. Congress should declare it to be

. a crime to enter into and knowingly support

.a conspiracy to perpetrate wholesale inter­ference with the rigllts of labor to organize .and bargain collectively. The salutary effect of criminal penalties for antiunion activity in the Railway Labor Act should not be over­looked in the _constant favorable public ref­erence to other features of that act. 11le

.. prospect Of faCi;fig merely an administrative _proceeding wnich, after a lengthy period of lit.igation, could pnly result in an order, has not been sufficient to deter organized anti­unionism which functions through "bellig­erent" employers' associations and their related instruments.

If this situation were confined to the city ?f Los Ang~les and the area surrounding it, .1t would still be a matter of national sig­nificance. Los Angeles is a large and im­portant industrial center and the influence of a labor policy dominant there is bound to reach far beyond the confines of that area. The very fact that industry may be enticed to Los Angeles because of an alleged free­dom from unions and collective bargaining may bring banking, real estate, and related interests in other competitive urban areas. to press for the establishment of a similar "com- · mu~ity" policy. Law breaking is contagious, particularly where it is highly profitable.

Furthermore, · Los Angeles has become the center of-important industries in which em­ployer-employee conflicts and _ill feeling must be reduced to a minimum because of na­t!onal defense considerations. The great air­craft industry in southern California has been built in the very shadow of a labor policy that breeds work stoppages, inefficiency, um·est , and disorder. Because the events connected with national defense problems in t :te aircraft industry in southern California occurred after the close of the committee's investigation, it cannot comment upon the precise degree of their relationship to or­ganized antiunionism in Los Angeles. It

_can only say that the contempt for demo-cratic trade-unions historically displayed by many leaders of Los / .ngeles business and industry is an inescapable part of the back­drop upon which the unbiased observer must appraise the events of the Vultee Aircraft Co. strike, the strike at North American Aviation ' Inc. , and the other labor disturbances that _obstructed our early national defense pro· ·gram. So long as this organized antiunion­ism persists, southern · California will be a breeding ground for disturbers of all varieties be they on. the side of labor or in the rank~ of employers.

Los Angeles is but a symbol of many other areas in various parts of the Nation where t~e exercise of labor's rights and the prac­tiCe of collective bargaining are met with hostility of an organized community char­acter, engendered by the ·strong industrial or ljlgricultural groups ,who stand to gain from

.1943 CONG.RESSIONAL RECORD-SENATE 10937 an anti-union-Iaborpollcy. In many of-these districts the force of trade-unionism are so weak that the potential con:flict between the rights of labor and organized antiunionism Is not observable in a dramatic context. The

' very weakness of trade-union groups reflects the strength of the nascent spirit of hostility that exists. There, even the rights of labor to speak freely and assemble peaceably are in jeopardy, The. advanced exercise of these rights through trade-union organization ~nd collective bargaining is, as yet, not at­tempted. In many such areas, it is not necessary yet for antiunion forces tg expend the funds and establish the organizations · necessary to enforce their pollcy. That· will come in the future. The Los Angeles situ­a-tion does and wm have many counterparts befor.e the national labor policy is observed on a Nation-wide scale. The battle for in­dustrial demom;acy is far from won. The tools which the Nation must use to secure -the rights of labor are not adequate -until they include the necessary legal devices to stamp out organized. intetference with the right of labor to bargain collectively, such as has existed in Los Angeles and southern Cali­fornia. Even then, the use of these devices :tor enforcement of the national labor policy against groups organized in definance of the law must receive the full support of public .opinion if it is to be effective.

RoBERT M. LA FOLLETTE, Jr., United States Senator.

ELBERT D. THOMAS, United States Senator.

ExcERPTS FROM REPORT oN EMPLOYERs' Asso­CIATIONS AND COLLECTIVE BARGAINING. IN CALIFORNIA

PART ' VII. A STUDY OF LABOR PO~ICIES OF EM­PLOYERS' ASSOCIATIONS IN THE SAN .FRAN• CISCO BAY A;REA, .19_35-39

[Pursuant to S. Res. 266, 74th Cong.]

Introduction

Pursuant to the authority of Senate Reso­lution 266 (74th Cong., 2d sess.) ,1 the com­mittee herein submits the seventh part of its report on employers' associations and collec­tive bargaining in California. This volume Is concerned particularly with policies and activities of organizations of employers op­erat.ing in San Francisco Bay area, which are related importantly to the right of labor '

. to organize and bargain collectively .2 It considers an apparent transition from anti­union employers' associations to organized employer coordination, based upon a pro­fessed acceptance of collective bargaining within a particular urban industrial area. It explores the various devices of organized employer activity that were directed not only to a destruction of labor's rights out also to the use of "pressure tactics" that renders those rights of dubious value even when recognized in collective agreements.

The entire report consists of the following parts:

Part I. General Introduction.

1 A subcommittee of the Committee on Ed­ucation and Labor was apPQinted by the chairman June 6, 1936, under Senate Resolu­tion 266, which reads, in . part, as follows: "Resolved, That the Committee on Education and Labor is authorized and directed to make an investigation of violations of the right of free speech and assembly and undue inter­ference with the right of labor to organize and oargaln collectively."

2 Hearings were held in San Francisco deal­ing witli the subject of this pt. VII on Jan­. uary 26, 27, and 29; see pt. 60 and pt. 61. For supplemen~ary exhioits, see pt. 76 _and pt. 77.

Part II. Organized Antiunionism In Call­fornia Industry Prior to the Passage ef the National Labor Relations Act . .

Part III. The Disadvantaged Status of Un­organized Labor in California's Industrial­ized Agriculture.

Part IV. Employers' Associations and The_ir Labor Policies in California's Industrialized Agriculture. · Part V. The Organization of Resistance to Collective Bargaining in California, 1935-39.

Part VI. A Study of Labor Policies of Em­ployers' Associations in the Los Angeles A~·ea, 1935-39.

Part VII. A Study of Labor Pol~cies of Em­ployers' Associations in the San Francisco Bay Area, 1935-39. • · .

Part VIII. The Associated Farmers of . Cali­fornia, Inc.-Its Reorganization, Policies, anq Significance, 1935-39.

Part IX. ·The Origin and Promotion of Re· cent Legislation in California Limiting La- · bor's Civil Rights. , Part X. Conclusions and Recommenda­tions.

As indicated above, part II of this report was devoted to labor policies in California before 1935 which had been dominated in San Francisco by the controll1ng antiunion­ism of the ·notorious Industrial Association of San Francisco.3 There the origin, fl"lanc­ing, control, and sweeping antiunion opera­tions of that organization were outlined. In part V the evolution of the various types of employers'· associations were analyzed on a State-wide scale covering the years 1935-39. The interrelationships of the various organ­izations were traced; their variety of tactics w·as recited; their over-all strategy and moti­vation were outlined.

From those recitals it is evident that the tactics of the San Francisco employer groups underwent a perceptible transition in the years following the passage of the National Labor Relations Act. Unlike the Los Angeles groups studied in part VI, certain dominant employers' associations in San Francisco, ostensibly at least, by the end of 1939 bad accepted the procedures of collective bar .. gaining for urban industry and sought pri­marily to represent and support the employer position in that bargaining process on a uni­fied basis. They had oecome "negotiatory" employers' associations, such as the various water front employers' associations and the San Francisco Employer's Council. In that sense they may be distinguished from "bel­ligerent" or "hostile" employers' associations,' such as the IndustrJai Association of San Francisco, which was dissolved in December 1938,5 a date between the inauguration of the committee's field investigation ~nd its hearings. Indeed, organized labor in San Francisco has more than kept pace with the national growth of trade unions. Member­ship hr.s increased substantially. Collective bargaining has become, for the time being, the basis of employer-employee relationships in San Francisco.6

Despite these developments, the committee determined to pursue its study to a conclu­sion. Several considerations prompted this determination.

Tbe collective-bargaining rights of large and · important elements of labor in San Francisco, although recogn:ized in collective agreements even before the passage of the

a See pt. II of this report, pp. 79-98, 117-125. 'For a complete discussion of this distinc­

tion, see S. Rept. No. 6, pt. 4, 76th Cong., 1st sess., Laoor Policies of Employers' Asso­ciations, pt. 1, the National Metal Trades Association, pp. 2-3.

G See pt. 60, pp. 21972-21973. e See testimony of John Shelley, pt. 60,

p. 21954.

National Labor Relations Act, have been per­sistently subjected to a variety of undue in· terferences stemming from organized em• player influence. The practice of industrial democracy · in San Francisco, seemingly ac­cepted in the years from 1935 to 1940, was a dangerous one, full of peril to labor's rights. Harsh and evil devices, properly and ob­viously cataloged as oppressive labor prac­tices and violative of human· rights and de­cency, were blended with more subtle tech· niques to create one vast repertoire of anti­unionism. The course of advancing union­ism seemingly inspired the ingenuity of or­ganized employers and their henchmen to devise new methods of obstruction. The committee felt that an analysis of these ma­neuvers would throw light on events that may accompany similar ·changes in other parts of the Nation.

Traditions developed over a long period of years did not disappear overnight. There was a considerable identity in the support and membership of the belligerent and negotiatory employers' associations, the old and the new. Hence, only a new order of problems emerged when labor's rights . were recognized by contracts with such employ. ers. They held a new type of peril for labor's civil rights. Unified action by employers, seeming to accept collective bargaining, be­came allied to forces that sought to destroy or nullify the rights of labor. Unfair pres­sure tactics in the bargaining process occa­sionally rendered those rights of dubious value. Undue interferences· appeared which are more difficult to hold up for public con­demnation. than the use of labor espion­age or professional strikebreakers. Even the acceptance of the forms of collective bar­gaining concealed efforts to thwart and weaken its desired economic and social pur. poses. -

A study of San Francisco employers' asso­ciations from 1935 through 1939 has a pecu­liar value. It demonstrates that, even though collective bargaining becomes the nationally or locally acc-epted pr<;>cedure for the conduct of employer-employee relationships, certain accompaniments of that procedure may pre­sent significant problems of labor's· civil lib­erties. Failure to recognize and meet head-on the is~ues so tendered may make of those rights a respectable facade for exploitation, or a form without substance that will be swept away. And so, throughout this part of the California report the emphasis will be upon the dangers to the civil rights of those workers who have won collective agreements from those who outwardly profess to accept collective oargaining by signed contracts. These dangers may not be cataloged under the National Labor Relations Act as unfair labor practices. They are nonetheless real interferences with the collective-bargaining operation on a plane that permi~s it to per­form its true economic, social, and political function. To avoid repetition, and because they are rich in content, the relationships between the water-front unions and the vari­ous employer groups are chosen most often for 1llustration.

Several factors directed an emphasis less upon the details of specific oppressive labor practices and more upon the changing form of employer resistance to labor's rights al­though recognized in a collective agreement. These factors deserve mention here.

Most important was the flagrant and will­ful destruction of much of the minutes,

·books, records, and files of the Industrial As· sociation of San Francisco in face of an a.ntic· !pated investigation oy the committee'~' and,

7 See testimony of John F. Forbes, pt. 49, pp. 17934-17935, and pt. 60, pp. 21957-21959, 21961-21962.

10938 CONGRESSIONAL RECORD-SENATE DECEMBER 21 even, after the service ·of a subpena.8 The necessary result of this contumacious action was characterized by Senator THOMAS in the following terms:

"As a result of the systematic destruction of records, Mr. ·Forbes, the Industrial Associ­ation has effectively prevented this commit­tee from carrying out its duty to Congress to secure information relative to the inquiry relating to activities of the Industrial Asso­ciation prior to the service of the second sub­pena in 1938." o

The committee believes that this act speaks more eloquently than could hundreds of pages of testimony or reports of the ques­tionable character of much of the activity of the association. The tacit admission of unworthy deeds of record creates an irrebut­table presumption that the conduct of the association included indefensible violations of the civil liberties of tl1e laboring men. and women of San Francisco. The sponsors of the-association were apparently not willing to risk the opprobrium that they felt would ensue from a public examination of the records of the organization. Thi is a sad commentary on the Industrial Association of San Francisco and the attitude of leaders of industry who participated in the forma­tion and execution of its policy.1o

Furthermore, a complete and closely woven analysis 11 of the more flagrant antiunion ac­tivities of the Industrial Association of San Francisco and certain related employer groups in San Francisco would only be cumu­lative. Other parts of this reJ?ort dealing with Los Angeles and the rural areas and previous· reports of this committee are de­voted spec~flcally to the use of' labor spies, the practice of professional strikebreaking, and union-busting systems that are char­acteristic of the belligerent employers' as­sociation. Any exposure, with detailed ex­amples of these reprehensible practices by those connected wiih that organization, would have constituted only an essay into passing personalities and would have been

..primarily of local consequence. Portions of part V 12 constitute an intro­

duction to this part of the report. A few of the aspects of the San :rranci~co situation will be · further accented here. They point up the significance of the factual summaries contained fn the sections that follow.

s See pt. 60, exhibit 9393, pp. 21958-21959. The correspondence in the exhibit noted, though obscurely worded, included the ines­capable admission that vouchers and records were destroyed after the service of the com­mittee's first subpena in November 1936. As the testimony of Mr. Forbes, the president of the association (see pt. 60, p. 21957), and Mr. Anson, the outside auditor (see pt. 60, pp: 21959-21961), indicated, a considerable por.;. tion of the records was destroyed prior tb the service of the committee's original subpena. In his letter, Mr. W. G. Storie, while seeming to deny destruction after the service of the subpena, gave the show away in the exception stated. It reads in part:

''Nor have any vouchers or records for any subsequent period beeri destroyed except pur­suant to the established practice of the as­sociation in force prior to the service of the subpena." [Italics ours.)

o See pt. 60, p. 21962. 1o See pt. 60, exhibit 9384, pp. 22121-22122,

for a tabular summary of the members of the board of directors of the Industrial Associa,­tion of San Francisco from 1933 through 1938. See pt. 60, exhibit 9390, pp. 22130-22135, for a list of the major contributors to the associa-tion in 1936. ·

11 See testimony of Eliel, pt. 60, pp. 21962-21971, inclusive, for a general description.

. 12 See particularly pp. 710-716, 724-736, 742-746, and 750-754 of pt. V.

The continuance of organized antiunion­ism in San Francisco after the 1934 strike and the passage of the National Labor Relations Act 13 was not unusual. Other reports by the committee show this not to be :1.n uncom­mon reaction to the national labor policy by autocratic employers when compelled to ac­cept it outwardly by a seeming acceptance of the forms of collective bargaining. The point of emphasis in San Francisco was the realiza­tion by the laborers who had achieved recog­nition of their rights in a collective agreement that the Industrial Association was a threat to the continued enjoyment of these rights. Organized workers, such as those in the wa­ter-front unions, sophisticated in their knowledge of the history of San Francisco's

- employer organizations,14 sought constantly to strengthen their rights by extending the scope of collective bargaining to workers in allied industries. They recognized that the mair..tenance of organized antiunionism in these industries was not only an "undue in­terference" to the achievement of collective­bargaining rights of unorganized worlters; it was a menace to their own .hard-won rights.

AFl if to give point to their fer.rs, members of the negotiatory water-front ·employers' as­sociations, with whom the water-front and . othet orga,nized workers had collective-bar­gaining contracts, continued their member­ship and contrihutions to the Industrial As­sociation.1G This. fact raised an important question of good faith and propriety which unions, appropriate public agencies, and the public should press continually before em­ployers who profess to accept collective bar­gaining. It is a question which has been persistently obsqured, namely: Is member­ship in, and contribution to, a hostile em­ployers' association to be excused, even if the particular ' employer is a party to a collective agreem~nt with a bona fide· trade-union?

The reaction of the unions in San Francisco in 1935 to this situation was not unexpected. The water-front unions, for example, were genuinely alarmed by the threat of eventual ·suffocation implicit in the continuance of the Industrial Association, particularly with the support of the water-front employers. Through a strengthening of job control and the aiding of the organization of employees in allied trades, they sought a broader base for 'survival. Aiding in the organization of the unorganized in the warehouses, process­ing plants, and even the fields and forests became a struggle against the encirclement that· had marked San Ft:ancisco labor history on several previous occasions.16 .

~his natural development need not have disturbed the existing contractual relation­ships with the water-front employers had it not been for one important factor. The ap­pearance · of unions in the allied trades and industries was greeted with fierce resistance engendered by the instruments of antiunion­ism, such as the Industrial Association and its allies, with the active collaboration of the water-front employers.11 This circumstance provided a variation on an issue previously marked for emphasis, namely: Is active par­ticipation in a program of interference with the achievement of collective-bargaining rights by an employer to be excused because he grants those rights to his own employees? May not the defeat of trade-union' principles in a· related field of industry undermine or vitiate the bargaining position of one's own employees?

13 See this pt. VII of the report, sec. 1, ch. lA.

14 See pt. II, pp. 79-98, 117-125. 1G See this pt: VII of the report, sec. 1, ch.

lB. 10 Ibid . 17 See this pt. VII of the report, sec. 1, ch.

lC.

The unions on the water front ·saw their own cause in the · struggle against this alli~ ance by warehousemen, canning employees·, and agricultural laborers. They · unhesi­tatingly used so-called "hot cargo" tactics, refusing to handle the goods made or handled • by allegedly unfair employers. To the cries of outrage against this conduct as syrp.pa­thetic action in violation of contract, the unions were insensitive because of the exist­ence of organized antiunionism.

The unions· felt that the persistent legisla­tive and judicial attempts to prohibit the use of these tactics were but drives to license and protect -the continued employer violation of labor's civil rights~ The contempt of many employers for · the National Labor Relation• Act and the failure of that act to protect agri­cultural laborers obscured any relief from the public side and aggravated the situation. Tha tactiq~l exchange was one of considerable in­tricacy. Crisis after crisis developed. The water front became a symbol of employer-em;. ployee failure to make collective bargaining achieve industrial stability; . ·

It is not necessary here to trace all of the steps in the movement of employers' associ.:. ations and unions 'along .the San Francisco water front. The committee conducted an intensive examination of the available docu­ments which were presented in response to subpenas upon the various water-front em­ployers' aEsociations and some ot the leading snipping companies. From these documents, which are. primarily minutes and correspond­ence, the labor policy of this group of em­ployers, operated on a unified basis for col:.. lective bargaining, may be ascertained. Cer­tain of these documents. have been organized and. assembled. in a memorandum which was prepared by · the committee staff and sub­mitted for comm.ent to the counsel for the pril).Cipal water-front employers' associations. This memorandum and the supporting ex­hibits referred to are reprinted as part 76 of the committee's public record.18 It covers only the period from -the conclusion of the 1934 water-front strike through the year 1937. It is supplemented by other documents re­lating to the Industrial AEsociation and vari­ous allied employers' groups in part 77.

The committee deems it necessary to point out here that these documents, so selected, do not purport to be a complete reflection of the labor policy and activity of the water-front employers during the period indicated. There is at least one important omission. That policy and activity also was importantly re­flected in the acts of the Industrial Associa­tion of San Francisco, to which many of the water-front employers were allied. The op­probrium that attaches to the destruction of the records of the Industrial Association, previously recounted, must extend to the in­dividual water-front employers who were af­filated with that organization, if not to the negotiatory associations through which they bargained with the unions. By that destruc­tion much of the conclusive evidence of labor espionage and related activity that was di­rected by · the Industrial Association at the water-front unions was lost. -

To illustrate the rea:Iitles of more subtle, but equally dangerous, pressure tactics that Jnay be used even by negotiatory employers' lassociations such as the water-front employ­ers' associations within the framework of an acceptance of collec·tive bargaining, three ex­amples have been chosen. They are the so­called suspension program, designed to "de­stroy the collective bargaining arrangerp.ent; the attempt to split or divide water-front unions a~d ther~by . weaken their bargai~i.ng power; and collaboration in. an attack upon

18 Other documents· not commented· upon are also reprinted in pt. 76 of the public record. ·

1943 CONGRESSIONAL RECORD-SENATE 10939 the leadership of an outstanding union, de­signed to intimidate the leaders or damage the prestige of the union before the public.19

These practices, it should be emphasized, were boldly indulged in by organized em­ployer groups that were committed by con­tract to collective bargaining. Their discus­sion will serve to underline a type of prob­lem that will be of increasing importance to the efficacy of labor's rights as collective bar­gaining becomes the accepted national pro­cedure for handling employer-employee re­lationships.

The culmination of many of those pressures was the expiration of the contract between the water-front unions and employers in the fall of 1336. This contract was concluded at the end of the 1934 general strike. Per­haps it was inevitable, in the light of the in­tervening events, that both parties would be dissatisfied with the performance under the old contract and would seek a new trial of strength. The resulting strike, which cov­ered the last 2 months in 1936 and ended early in February 1937, is not so important in retrospect as an event . . It is ·important be­cause it marked a definite turn toward the new patterns of organized employers' asso­ciation activity with which the water-front employers had experimented in 1935 and 1936.20

The 1936-37 water-front strike was an end and a beginning -in terms of the labor policy of organized employers in San Francisco. The long-awaited test of the vigorous trade­unionism that had characterized the water­front employees and their fellow workers in related trades was concluded. · It satisfied the more acute and realistic employers that organized employer activity should be prem­ised for the immediate future upon a con­tinuance pf the forms and procedure of col­lective bargaining. The hostile techniques of the Industrial Association had been tried and found wanting, at least for many situa­tions with which employers were confronted. The 1934 strike had been lost and the water­front and maritime unions had emerged with full recognition. The years intervening be­fore the 1936 strike, given over by employer policy to checking the growth and develop­ment of a broader union front, had been gen­erally unsuccessful from the standpoint of the staunch Industrial Association advocate. The careful build.:-up for the 1936 strike had produced only a long and painful cessation of trade, not a collapse of union strength, discipline, or organization.

Even the 1936-37 strike was fought new sty}e. There was little or no violence. There was much preliminary fencing before the bar of public opinion to fix the blame on the opposite party, much sidling away from col­lective bargaining toward arbitration before what was thought to be a relatively favorable tribunal, much effort to build up the ap­pearance or reality of outraged public opinion against the strike or rather the refusal of the union to leave aU issues to arbitration. There was a threat of third-party interven­tion from innocent bystanders such as the Associated Farmers.

The prelude and the actual strike con­vinced many that a new-style over-all or­ganization that would mass organized em­ployer activity behind such "negotiatory" groups as the water-front employers was a necessity. The old Industrial Asaociation was not cast aside. It was merely pulled back to a more limited role before the public and the unions. Many recalled the exchange of ideas that had accompanied the search for new organizational structures and policies at con­ferences such as that held at Del Monte in

1o See this pt. VII of the report, sec. 1, ch. 2.

20 See this pt. VII of the report, sec. 1, ch. 4.

February 1936.21 It was in this frame of mind that the employers of San Francisco received ln Ap ril 1937 the tidings of the con­firmation by the United States Supreme Court of the constitutionality of the National Labor Relations Act. The reality of collec­tive bargaining was established beyond early question.

The first tangible sign of a major policy t ransition among organized employers in San Francisco was the formation of the Committee of 43.21 It was established by the leading business interests of the city. It professed its purpose to be an organized re­view of wages and worki:Pg condlticns to the end that unsatisfactory conditions which might lead to disputes might be eliminated. It assumed the role of a tribunal for the public hearing and investigations of em- . player-employee disputes. It assumed to

.speak for and direct the expression of the public interest of the urbim community, despite the absence of other than employer representation. Indeed, the membership of the Committee of 43, viewed from the stand­point of the corporations represented, strongly resembled the leadership of the In­dustrial Association.23 rts relatively minor expenses were paid from contributions from the Industrial Association and the Chamber of Commerce.

The meaning of the Committee of 43 was characterized by its participation in certain actiVities. They were expressive of new trends of organized employer policy which sought a unified employer front that would be supported by a carefully cultivated public opinion. Five examples are sufficiently illus­trative.

The Committee of 43 conducted .an investi­gation of wages and working conditions among office workers,24 seeking~to remove the apparent iniquities that might be a target for union activity or public condemnation and to provide a uniform basis for a unified em­ployer stand. The Committee of 43 urged and promoted the Association of San Fran­cisco Distributors to make possible a unified negotl.ator_y action in behalf of employers engaged in wholesaling and distributive busi­ness.25 It promoted and conducted a public inquiry which riveted public attention upon the unpopular "hot cargo" disputes, involv­ing agricuJtural interests and unions in the transportation field; it omitted a determina­tion of a basic factor, namely, the "organized antiunionism" of the agricultural group.26

It participated in the pre_paration and con­duct· of the campaign to impose statutory restrictions upon trade-union activities.21

The common thread of these activities is the outward acceptance of the procedure of collective bargaining, accompanied by the development of "pressure" tactics that pre­serve the maximum advantage to the em­ployer. The most interesting aspect of these tactics is their strategic basis: the induce­ment of public intervention or public opin­ion to the side of employers.

It must be note!} that this type of activity was long foreshadowed. The Law and Order Committee of 1916 28 and the early Industrial Association 29 were aimed to inspire a public opinion that would curb the rising strength of trade unions by public act o-,: indulge a

21 See pt. V of this report, pp. 724-733; see also sec. l, ch. 4, of this pt. VII.

22 See this pt. VII of the report, sec. 2, ch. 1.

~s Id., sec. 2, ch. 1A. 24 Id., sec. 2, ch. lB. 2~ Id., sec. 2, ch. lC. 2a See this pt. VII of the report, sec. 2, ch.

lD. See also pt. VIII, sec. 3, ch. 5. · 21 See this pt. VII of the report, sec. 2,

ch. lE. See also pt. IX, sec. 2. 2s See pt. I, p. 86 :ff. 20 See pt. I, p . 98 fl.

restraint by private combine. After the loss of the 1934 general strike and the passage of the National Labor Relations Act of 1935, the urban business community ·encouraged or­ganizations that would ·enlist public opinion in the hinterland of San Francisco. The reorganization of the Associat ed Farmers in 1935-36 30 was a beginning. The arrangement of the meetings by the Commit tee of 43 with the representatives of this group for airing of grievances, whether or not so intended, culti­vated this hostile opinion as "grist for the mill" of the urban employers.

But the most disillusioning commentary on the heralded change in employers' associa­tion philosophy in San Francisco was the activity of the organized business community on behalf of Proposition No. 1, the anti­union initiative. In that campaign s1 the Committ ee of 43 and the employer groups rep­resented joined with the avowed antiunion forces of Los Angeles and the Associated Farmers, which were counted upon to pay off the heavy invest ment of urban interests.32

Hampered by law in using private unfair labor practices, the organized employers of San Francisco seemed only to have shifted their policy from one of direction to indirec­tion. They sought to persuade the public to curb the exercise of the rights of labor by law. The oldest .method of violating civil liberties, the one most feared by the sponsors of the Bill of Rights-namely, the law of the sovereign-was invoked.

Having demonstrated the advantages and matured the techniques of the "negotiatory" employers' association, the Committee of 43 gave way to a more formal and ambitious organization, the San Francisco Employers' Councn.as This association of associations, hailed as a phenomenon in this country, de­serves much attention from all those who are interested in industrial democracy. It marked the climax of the trend that was begun in San Francisco with the unified ac­tivities of the water-front employers in vari- · ous water-front organizations after the 1934 strike. It possesses great potentialities for good or evil. It may be a useful instrument for collective bargaining, which should be a model for numerous counterparts, or it may become the mechanism for a new and more subtle tyranny. Its short life at the time of this committee's final field hearings (1940) and its• potential usefulness for the indus­trial peace and understanding that San Fran­cisco so badly ne·eded, caused the commit­tee to forego any detailed public hearings on the act ivit ies and policy of the San ..J<'ran­cisco Employers'. Council. Hence, there will not be any findings or conclusions regarding this -body.

The committee Will only point out the varying attitudes that may drive such an organization into channels which provide useful outlets for the collective-bargaining procedures or, conversely, choke off the prac­tical economic and social utility of that dem­ocratic device. The Nation will do well to inform itself of the ascendancy of these con­flicting philosophies as reflected in the ac­tivities of the San Francisco Employers' Council.

In the pages that follow there . will be a. ' detailed treatment of the particularly indi­

cated phases of · this transition in organized employer policy during the years from 1935 to 1940. Certain obvious limitations affected the manner of treatment of some of the items covered, which -the committee wishes to an­nounce by way of introduction lest- some assume that the analysis herein purports to be definitive.

so See pt. VIII, sec .. 1. s1 For a full account, see pt. IX, sec. 2. a2 See pt. VIII, sec. 1, ch. 2. as See this pt. VII of the report, sec. 2, ch. 2.

10940 CONGRESSIONA-L RECORD-SENATE DECEMBER 21 For example, the committee does not as­

sume herein the burden of determining the merits of the innumerable points of contro­versy between such groups as the water-front employers and unicms over the 5-year period surveyed. Much of this conflict involved _matters other than collective-bargaining

,rights. · Much of it has been treated exten­sively by other agencies of the Government. Much of the detailed maneuver, if discussed, would add little to the total picture of the rapidly evolving strategy of the employers' associations improvised to meet the advance of unionism in the Bay area.

Furthermore, the relationships between the water-front unions and the water-front em­ployers, covered presumably by collective agreements since the 1934 general strike, were marked by literally hundreds of strikes, con· troversies, and disputes involving a wide range of problems. These employer-employee difficulties have been made the subject of searching ana lysis by the erstwhile Maritime Labor Board,34 accompanied by carefully pre­pared recommendations for legislation de­signed to encourage successful mediation and arbitration practice in th_is field.

Likewise, allegations of the affiliations to the Communist Party of union leaders, no­tably Harry Bridges, leader of the longshore unions, have colored the employer-employee relationships in this field. The committee did not take upon itself the burden of finding whether or not Mr. Bridges was so affiliated, because it was collateral to the basic inquiry for the reasons stated in part I concerning similar aliegations as to some engaged in trade-union activity in California agricul· ture.a5 During the California inquiry, this particular item became the subject of exten­sive hearings before the executive depart­ments duly authorized to carry on deporta· tion proceedings, and is being_judicially de­termined. As in other instances of this character, the committee will confine its comment to the evidence of participation of employers' associations in generating aliega­tions of this sort, true or false, for public consumption.

This phase was highly relevant because of its bearing upon the common practice of some employers of assiduously cultivating the un­popularity of union leadership with which they do not wish to deal, for the primary pur­pose of diverting attention from or ~xcusing their infringement of the rights of labor.

Again,' during the period covered, the operations of key unions (water-front and teamsters) were colored importantly by the jurisdictional difficulties encountered as each moved into new trades or territory. Ob­viously the committee's only concern with this intricate phase was with any attempt of organized employer groups to avoid collective bargaining by playing one group off against the other.

Conclusion There has been a shift in employers' asso­

ciation policy in the Sa:n Francisco area since the 1934 general strike and the passage of the National Labor Relations Act. That shift is from outright public belligerency toward unionism and collective bargaining to a new and as yet undetermined, attitude~ In out­ward form, employer organization has as­sumed the primary character . of the negotia­tory employers' association. The organiza­tion of employers in v,arious trades and in• dustries for the purpose of collective bargain­ing with unions representing workers -in the particular trade or industry has been a pro­gressive step toward making collective bar­gaining work. It is the combination of all such negotiatory employers' associations into a city-wide federation (the San Ffancisco

34 See report to President and Congress, Maritime Labor Board, March 1, 1940. . "" See Part I, General Introduction, pp. ?7 ff.

Employers' Council), successor to the old belligerent industrial association, that pre­sents a relatively unpredictable phenomenon. It is yet too early to make any final judgments concerning the relationship of such an or­ganization and the labor policy which it pro­motes to our national labor policy. However, it is appropriate now to voice conclusions concerning certain tendencies observable in the background of this organization which, if conttnually reflected in its positive opera­tions, may be damaging both to collective bargaining and ultimately to labor's rights. ·

It should be recognized that these tend­encies are most apt to develop at a time when labor unions are achieving increasing gains in terms of numbers of workers covered by contracts and improvements of wages, hours, and working conditions. Such was the situation in San Francisco in the last half of the decade of the thirties.30 In industry after industry, the overwhelming majority of workers achieved effective organization and collective-bargaining rights. It was an era of public recognition of the rights of labor. The successes in San Francisco called forth new and increased efforts by employers to under.­take and, if possible, to counter tllis measure of employee organization. The adaptation of older devices and attitudes to fit the frame­work of collective bargaining became a neces­sity. Such was the atmosphere in which the Committee of 43, the San Francisco Employ­ers' Council, and the tendencies to be noted, developed. -

The first tendency was to use the negotia­tory employers' associations to resist the en­trenchment of unionism and collective bar­gaining in a particular Industry or in related industries. This tendepcy is all the more difficult to combat because the respective par­ties are themselves covered by the Cloak of a collective agreement with their employees. The collaboration of the .organized water­front employers committed to collective bar­gaining with organized antiunionism in San ­Francisco (see sec. 1, ch. 1) illustrates this t~ndency. '

As the unions in the transportation and handling industry around San Francisco sought a greater security of position against the counterattack expected from antiunion­ism, they found themselves confronted by the collaboration of the employers' association with whom they were dealing with the old Industrial Association, the relentless foe of unionism. Resort by the unions to boycotts and so-called hot cargo tactics to break resistance to the advance of collective bar­gaining in related industries was affirmatively contested by this negotiatory employers' as­sociation. On occasion it precipitated in­dustry'-Wide work stoppages because of a re­fusal to handle a particular consignment. This practice left the unions the unhappy choice of either permitting an employer in the production or processing sphere to pur­sue relentlessly a ,policy of antiunionism or of carrying through a general work stoppage that would injure employees anc" emp!oyers not involved in the particular movement of goods. The constant striving' for union en­trenchment against undermining tacticS"' o-f other years gives rise to continued demands ·for guftranties of security through job con­trol. Resistance by the negotiatory employ­ers' association to these guaranties creates a: suspicion that they are instruments designed to .pave the way for a return to organized antiunionism, constituting a substantial ob­stacle to the natural course of collective bar­gaining.

A statement made to the committee by the president of the San Francisco Labor Council reflects this· attitude of labor, one which has a substantial ·measure of juStification iJ:?. the

80 See testimony of Shelley, president of' the San Francisco Labor Council, pt. 60, p. 21954.

light of union-labor experience in other years:

"It seems rather peculiar to anyone having a knowledge of the history of labor and its relationship with employers in San Francisco to arrive at an understanding of the renewed drive for open-shop conditions. For you to understand the point I am trying to make, it will be necessary for me to give some ex­planation as to why labor, not only in San Francisco but everywhere, has sought what is generally termed a union-shop or closed· shop clause in its contracts. This, like prac­tically every other position which labor has taken over the years, is a defensive mech­anism which their experience with employer tactics has· forced them to take. Union-shop contracts, with all of the employees of a given firm or given industry being members of the union, are not new in San Francisco. As a matter of fact, they are practically as old as the city itself. The only logical reason 1tho employers can . advance {and they don't advance it) for their demand for an open shop is so that they may keep the door open to break down the strength of the labor organ­izations. In the past year or so we find a very determined and much-publicized effort on the part of employers in San Francisco to resist any union-shop clause in their labor agreements, even though in some instances these same employers have~ had union-shop clauses over long periods of years prior to tl:is time.

"I call this point to the attention of the gentlemen of the committee simply ·for the purpose of laying the -foundation for this statement: ~abor in San Francisco met this problem before-in 1901, in 1916, in 1921, and in 1934, and on each of those occasions we

. were able to cope with the problem. , If this renewed activity is the infancy of a renewal of such a drive against labor, I wish to state here and now that we feel able' to meet it .again." 87

In the second place, organized employer .groups in ' San Francisco, while purporting to be organized for the primary purpose of collec_tive bargaining, have pursued a policy of usmg pressure tactics designed to weaken the position of the leadership chosen by their employees. A negotiatory employers' asso­_ciation (the Waterfront Employers of San .Francisco) attempted to divide the unions which ct:mfronted them at the bargaining ta­ble, by seeking to have a leadership replaced that was repugnant to them. The water­front employers collaborated in personal at­tacks upon this union leadership in a fashion designed to intimidate the leaders or damage the prestige of the union before the public because of the alleged character of the lead­ers. Finally, the association sought to de­velop a so-called suspension program for the purpose either of destroying the collective agreement or of providing an opportunity for circumventing dealings with a militant seg­ment with whom they were fated to deal by

.contract and the choice of their employees. It is unrealistic to refuse to recognize that

so-called negotiatory employers' associations may employ pressure tactics not consonant -with ~h~ development C?f SlfCCessful collective bargammg. ,The pubhc must examine the -activities of these negotiatory employer asso­ciations with a scrutiny even more persistent and searching than that given to organiza­tions of the union-busting type. The tend­ency to seek the substantial inequality of bargaini~g power within the framework of collective bargaining through the use of pressure devices is likeJy to become a com­monplace. A discriminating public opinion will single out these measures and show them exposed for what they are.

The third observable tendency W!iS _the in­clination of employers in the urban b"qsiness comm.unity t() encm,uage ()r. cbllab"?rai e with

B7 See pt. 60, p. ·21956.

1943 CONGRESSIONAL RECORD-SENATE 10941 organizations designed to enlist public opin­ion on a State-wide or regional basis on the side of employers in San Francisco. The re­organization of the Associated Farmers in 1935-36, the arrangement in 1937 of meetings with their hand-picked representatives, and the promotion of the dissemination of anti­union sentiment through these channels was a part of the eventual pressure system which slowly took form at the behest of San Fran:. cisco employer leaders. Other manifestations of this same tendency were attempts to widen the influence ()f employer public opinion along the entire Pacific coast, through the ­creation of coast-wide employer unity and an ever-increasing collaboration between vari­ous types of employers' associations on a lo· cal, State, and coast-wide scale.

Perhaps the outstanding illustration of this trend was the - State-wide political al­liance forged between antiunion, open-shop Interests in Los Angeles, the Associated Farmers, and San Francisco employer lead­ers to secure the enactment of a State law regulating the activities of unions in 1938. (See Part IX, The Origin and Promotion of Recent Legislation in California Limiting Labor~ Civil Rights.) This event is the out­standing illustration of the fact that, as yet, the difference between the philosophy of ne­gotiatory employers' associations in San FranCisco and avowedly open-shop and anti­labor groups in Los Angeles and rural areas Is not a broad span but a narrow line. The function of this unity of employers' asso­ciations was to deprive organized labor, by State law rather tllan by private action, of some of the more important rights and privi­leges which it might exercise in achieving employee organization and effective collective bargain1ng. The campaign for proposition No. 1 served to focus attention on a likely strategy of negotiatory employers' associa­tions not far removed from belligerent anti­unionism. That strategy is to broaden the organizational base' for a political onslaught on the legitimacy of some of labor's most im­porant bargaining rights.

In addition to noting some pf the tenden­cies of employer organization that serve as a background for the San Francisco Employers'

- Council, there are certain policy expressions of contemporary employer leaders that are worth noting. They serve to earmark some of the policy tendencies which, whether or not dominant today, are nonetheless poten­tial.

Even representatives of the Waterfront Employers' Association, ·a unit with extended experience in San Francisco ·as a negotiatory group, did not wholly accept the proposition that it is the right of employees to select their own bargaining representatives. In his report on prog_raming for negotiations filed on May 11, 1939, with the Waterfront Em-

. player Associations of the Pacific Coast, John . Cushing, who was in charge of that respon­

sible function, stated: "I may hold views contrary to the majority

of you here, but I firmly believe that there will be no relief from what we are no:w en­during as long as the present union leadership with its polici.es is in the saddle. To me that and that alone is the key to the problem._

"As long as that leadership continues I think any hope of restoring e1Hciency or doing more than resisting daily job-action is close to · impossible. I would not vote against spending money for programs of enforcement on the job but I would feel that it was money wasted. It is treating for symptoms without coming anywhere near the root of the disease." 38

In that spirit the report continued with specific recommendations for action. They

as See minutes of Waterfront Employers• Association . of the Pacific Coast for May 11, 1939, pt. 76, exhibit 14994,

are worth noting because they are reflective of psychological attitudes that breed drawn­out labor struggles in which the leadership of the employer group has for its objective -the destruction of the leadership of the em­ployee group. They read:

",Concretely then, I believe-"1. We should consider sharpening our

most effective weapon. On some real issue we should invoke coast ruspension for a local dispute. Frankly I know we could not maintain it long enough to accomplish any main purpose, but as a test to ourselves of our own strength and as a warning to the opposing leadership I believe it would be worth its cost. Concretely I would like to see this meeting appoint a committee to work with our officers in exploring the feasi­bility of such a program.

"2. We are committed to the principles of arbitration, with force as last resort if arbi· tration fails. I believe we should stream­line our program and procedure in all the ports, so that any dispute can be carried to disagreement and arbitration with a mini· mum of delay. I believe that our repre­sentatives on the labor relations commit­tees with some short-cut control from head­quarters should always be in a position where they can talk strongly and definitely to the union representatives . on any threatening issue. An ounce of prevention is still worth a pound of cure.

"Our present procedure is cumbersome and lacks uniformity and definiteness. It is the primary job of this board to correct that defect.

"3. We should cheerfully accept any de· cision against us and fight to the limit for the enforcement of those in our favor. You don't gain much by winning a iawsuit if you lie down on collecting the judgment. There again we have been weak and again this board has a job to do.

"4. we should take no action which will give th.e present union leadership tha slight­est semblance of any real rallying cry or any opportunity to build itself up with its people on what we do. I would reluctantly bow to a contrary majority opinion, but cin that score I do not believe we should move to reopen the agreement this year. I would like to see us work for a renewal unchanged . .

"5. We should prepare ourselves for a union reopening, and if that comes we should resist any concessions whatsoever-to and through a strike.

"6. Finally, we should prepare our own minds and the minds of those to whom we are responsible so that if a strike is forced on us we wm go through with. it and stead­fastly refuse under any conditions what.so­eyer to lnake our peace again with the present union leadership and the philosophy it rep­resents.

"That leadership today is fightii1;g for its life. We haven't begun to fight as yet." so

The following cryptic minute should, in the years that are to come, give pause to any public opinion which assesses an unmixed blame on the unions for strikes or the failure to settle strikes quickly and peaceably:

"Upon motion of Mr. McGowen, seconded br Mr. Wi!lkler, the following reselution was unanimously adopte(l:

"Be it resolved, That Mr. Cushing's report on programing for negotiations ahead -be adopted."

So long as the fundamental objective _or policy of any substantial group of organized employers 1n a collective bargaining arrange­ment is to undermine or make impossible the position of leaders chosen by their em­-ployees whom the employers consider ob­jectionable, just so long will the collective bargaining processes fall to attain a maxi­mum of industrial peace and stability in labor relations. This will be so regardless of

IIIJbid,

the good, bad, or indifferent character of the labor leadership.

Another policy which has been articulated as an appropriate one for the negotiatory employers' association is contained in a statement by Mr. Almon Roth, at the time he was the head of the San Francisco Em­ployers' Qouncil. He explained as one of the fundamental premises of tl,le council that: "Collective bargaining is primarily a pres­sure game."

Such a conception raises sharply the ques­tion of differentiating between proper a,nd improper pressure tactics within the frame­work of collective bargaining. The problem of identifying, classifying, and assaying the propriety of the various pressure moves of an or&anization such as the San Francisco Employers' Council will _be constantly pre­sented.

Such a policy ·as that described does ·not embody a psychological attitude toward col­lective bargaining and its underlying eco­nomic theory that bodes well for industrial peace. It frankly assumes the reality of a class struggle with an ease that startles those that have become accustomed to hearing that assumption roundly denounced from the employer side. It precludes the possibility -that there may be no fundamental diver­gence of interest between employers and em­ployees in collective bargaining. It destroys the possibility result in agreements fixing them which are mutually advantageous to employers and employees. ·

BILLS INTRODUC!ro

Bills were introduced, read the first time, and, by unanimous consent, the second time, and referred as follows:

By Mr. BUSHFIELD (for himself, Mr. WHEELER, Mr. CHAVEZ, Mr. SHIPSTEAD, and Mr. MOORE) :

S. 1608. A bill to provide for the enforce.:. ment of the penal laws of the States on In­dian Reservations, and for other purposes; to the Committee on Indian Affairs.

(Mr. MURRAY introduced Senate bill 1609, Which was referred to the Committee on Mil­itary Affairs, and appears under a separate heading.)

By Mr. STEWART:. S. 1610. A bill to amend the Defense High­

way Act of 1941, as amended; to the Com­mittee on Post Offices and Post Roads.

By Mr. O'DANIEL: S. 1611. A bill to confer jurisdiction upon

the United States district court for the north­ern district of Texas to hear, determine, and render judgment upon the claim of R. A. Quince against the United States (with ac­companying papers); to the Committee on Claims.

UTILIZATION OF SURPLUS MACHINE TOOLS

Mr. MURRAY. Mr. President, I ask unanimous consent to introduce for ap­propriate reference a bill providing for the equitable disposition and effective utilization of Government-owned sur­plus machine tools.

This measure was drawn to meet the problem: What is to be done with the staggering volume of surplus machine tools accumulated in the course of our­war production effort over the past 3 years?

A few figures will serve to convey to the Senate some idea of the enormous proportions to which this volume has al .. ready grown. From 1941 to 1943, inclu­sive, not less than 700,000 machine tools were produced in this country compared with 250,000 produce<t during the 10 years ending 1939. Stated in dollar

10942 CONGRESSIONAL -RECORD-SEN·ATE DECEMBER 21 terms, our machine-tool output totaling more than $3,000,000,000 for 1941 to 1943, inclusive, exceeds the value of our total output for the entire 20 years preceding Pearl Harbor.

Making due allowance for normal peacetime needs, the excess of this ex­panded supply over the most liberal esti­mate of current wartime needs, amounts to at least 300,000 tools which are now lying idle in storage or occupying valu­al;>le space in the war plants of the country.

It is common knowledge among those conversant with cut-backs and contract terminations in ordnance and related procurements that the abundance of war materiel and the equipment on hand which these machines have already pro­duced now renders a substantial portion Of them surplus to current needs. This sharply raises a problem which is the · particular concern of this measure·.

What shall we do with this enormous potential of productive capacity paid for with over $3,000,000,000 of public money, not to mention the additional ftlillions that went into the construction and equipment of the plants which pro­duced these tools?

To me, it is unthinkable that these machines should be disposed of in the conventional manner by public sale to the highest bidder. In fact, Mr. Presi­

·dent, I prefer to regard these properties tts presenting ·a problem not merely of disposal but rather one of their utiliza­tion for the protection of our American economy. That is why this measure is called the Surplus Machine Tool Utili­zation Act. Any other method of dis­posal woula create a high degree of speculation and distress and would op­erate to the obvious disadvantage of small and intermediate-si~ed . business and, therefore, of · free .enterprise itself. Such a course, moreover, would be ·cer­tain to retard post-war employment and

· t{ie . technological development of the machine-tool ·industry. This would strike an irreparable blow at an indus­try that lies at the very nerve center of our economy as a whole.

Mr. President, what is called for here is legislation which will define and pro­vide the means of carrying out a clear and consistent policy to utilize thi~ vast reservoir of productive power for the preservation of free enterprise and the atta·nment of maximum employment now as well as in post-war America. For this is truly· an immediate problem, Mr. President. It cannot be otherwise with an estimated surplus . of 300,000 idle machine tools waiting to be used.

The· measure which I have just intro­duced is designed to achieve these broad purposes. It establishes what is no more than a policy-making. commission and in no sense a new bureau; It is to be composed of representa-tives of the War and Navy · Departments, the Maritime Commission, and the Defense Plant Corporc~.tion, besides five additional

. members representing the industries concerned and the public at large.. Ex­isting Government personnel and facil­

. ities are to be used to the utmost extent feasible, and the employment of add:i- 1

tional personnel avoided wherever pos­sible.

Procedures are provided for determin­ing what tools are surplus and the stand­ards for their classification prescribed. The manner of disposition of all surplus tools which is provided in section ·5 has been conceived to carry out in concrete terms the broad purposes defined in sec­tion 1. After reserving a sufficient supply of tools for all Government needs, cur­rent and future, the remainder under ap­propriate terms and conditions are to be allocated for the maintenance and estab­lishment of small metal-working con­cerns generally and in particular· to aid in setting ·up war veterans in metal­working enterprises. Government loans and advances are provided for these

. purposes. ,, Provision is also made for permitting

the schools and colleges of the country to avail themselves of these machine tools to initiate and extend courses· of instruc­tion in the sciences and in the develop­ment of skills connected with their oper­ation. The residue is to be available for .export in foreign trade subject to license by the ·Secretary of State in each instance

. in accordance with the requirements of our foreign policy. The life of the act is limited to 3 years following the termina­tion of hostilities, after which any tools then remafning on hand are to be sold as br.oken scrap. , ·

Mr. President, I confidently believe that the principles underlying th1s meas­ure and its provisions for carrying them out, offer a satisfactory solution · of a problem which is certain to grow in scope and urgency -as the war progresses to­ward victory.

I ask that this bill be .printed at this point in connection with my remarks.

There being ~o objection, the bill (S. 1609) to provide for the equitable dis­posal and effective utilization of Govern­ment-owned surplus machine tools, and for other purposes, was received, read twice by its title, referred to the Commit-

; tee on Military Affairs, and ordered to be printed in the RECORD, as follows:

Be it enacted, etc., That the purposes of this act, which shall be cited as the "Surplus Machine Tool Utilization Act," shall be to provide for the equitable disposal and effec.; tive utilization of those machine tools now or hereafter owned or con trolled by or in behalf of the United States as a result of the prosecution of the war, which have or will become surplus to Government needs and functions upon termination of war pro­curement contracts or otherwise; and, by the disposal thereof, to aid and promote {a) the national defense; (b) the preservation ·and est!!oblishment of small business concerns in an economy of free enterprise; "(c) interna-

. tional trade; and (d) public education in the : mechanical skills and the sciences connected with the operation of machine tools.

SEc. 2. As· used in this act--(a) The term "Government-owned ma­

chine 'tool" shall mean any power-driven mechanism, whose primary use and function are to form or shape metal by means of a cutting p ocess and in- which the United States Government or any department, agency, or .establishment thereof has hereto-: fore acquired and, at any time prior to the si~tieth _day next following. termination bf hostilities in the present war, shall hereafter

·acquire any title, right, or other po~sess.ory or

property interest .for the primary purpose of using such mechanism· in connection with the prosecution of the pre.sent war or to a~d the national defense. .

(b) The term "termination of hostilities in the present war" shall mean the conclusion of an armistice with all the nations now at war with the United States, or such time prior thereto as the President may declare for the purposes of this act.

(c) The term "political subdivision" shall mean (1) the District of Columbia; {2) any county of any State, posf?ession, or Territory of the United States; and (3) in the absence thereof, the territorial unit of any ~tate, Territory, or possession of the United States which the Commission, established under section 3 of this act, shall deem most nearly approxi,mate ·to a county.

(d) The terms "public school" and "public high school" shall mean any institution sup­ported, in whole· or in part, by funds apprQ­priated by any appropriating power of the United Statess, State, or local governments, whose primary function and. purpose are to provide training and instruction of any kind to all persons conforming to standards of admission lawfully required.

(e) The term "war veteran" shall mean any member of the armed forces of the United States who shall have been honor­ably discharged therefrom and all members of the merchant marine who shall have re­ceived an honorable discharge or · its equiva­lent ·certifying to satisfactory service.

(f) The term "larger metal working indus­try" shall. refer to those metal-wor~ing con­cerns. which are not within the definition of .a smaller metal-worl~ing concern as that term cis ·hereinafter defined in section 5 (c) of this -act. · .. SEc. 3. A Federal Machine Toof ' commi~·­.sion lhereinBtfter called the Commissim:i) Js hereby created, to consist of nine members who shall be appointed in · the following manner:

(a) The Secretary of War, the Secretary of the Navy, the Chairman of the United States Maritime Commission, and the· Chairman of the Board or' Dire.ctors of the' Defense· Plant Corporatton shall each designate for mem­bership on such Commission one representa­tive from his department or agency, whose functions and duties relate primarily to the acquisition or usc:._ of machine tools.

(b) The President, by and with the advice and consent .of the Senate, shall appoint the five remaining members from the following , groups, namely: One member from large metal-working industry, one member from smaller metal-working industry, one member from the machine-tool industry, and two members from the public at large. A va­cancy shall not impair the right of the re­maining members to exercise all the powers of the Commission and five members shall

· at an ·times constitute a quorum. The Pres­ident shall designate the Chairman and Vice Chairman from among the appointees pro­vided for in this subsection and each such appointee shall receive compensation to be determined by the Commission: at a rate not to exceed $50 per diem.

(c) The principal office of the Commissidn ·· shall be in the District of Columbia, but' the

Commission may--establish such branch offic'es in other places of the United States as it may d'etermine. · The Commission shall have an official seal which shall be judicially noticed.

(d) · The ·commission is authorized to ac­cept and utilize such voluntary services arid property as it may deem necessary to carry out its duties and functions and with the consent of any department or agency may

. utilize the services, facilities, an,d .personnel thereof, including field services, tp carry out

. its ,duties and functions. The Co,m:r;nJ,ssion shall, without regard to the civil-service laws,

. appoint and prescribe -the duties o( a ,secre-

1943 CONGRESSIONAL RECORD-SENATE 10943 tary and general counsel. To the extent that such additional personnel as the Commis­sion may require is not available to it from the other departments and agencies of the Government under subsection (b) of this section, the Cqmmission, subject to the civil­service laws, shall employ uch additional personnel, whose compensation shall be fixed in accordance 'with the Classification Act of 1923, as amended.

(e) The Commission from time to time, without regard to the provisions of the civil­service laws, may employ the temporary serv­ices of such qualified engineers, agencies, or other qualified specialist s as it may deem necessary to carry out its duties and func­tions under this act. It may fix the com­pensation of such personnel, without regard to the Classification Act of 1923, as amended: Provi ded, That all such compensation be on . a per diem basis, not to exceed $50 per diem for each such employment.

(f) The Commission may make such ex­penditures at the seat of government and elsewhere as are necessary in the exercise of its duties and functions, including expendi­tures for (1 ) · rent and personal services a.t the s~at of government and elsewhere; (2) traveling expenses; (3.) office furniture, equipment and supplies, newspapers, period­icals, and books of reference (including the exchange thereof); (4) printing and binding; and ( 5) inquiries and stu~Ues concerning the supply, location, availability, disposal, and utilization of machine tools.

SEc. 4: The Commission shall require from any executive department or agency, and s;uch department_ or agency shall thereupon fUrnish, any information and data with re­spect to such machine tools as are in ·the possession, u,se, or control of such department or. agency·. Upon the submission of such information and data, the Commission shall determine wJl,at machine tools, if any, are 'fmrplus to the needs and functions of such department or agency and such determina­tion shall 'be final or conclusive upon such department or agency. The Commission shall thereupon clar;;sify all machine tools so detert:nined to be surplus, according to the following manner:

Class ~shall consist of those Government­owned machine tools which, for a period not

. exceeding l year next following their manu­facture and prior to the date of such classi­fication, have remained continuously unused;

Class B shall consist of those Government­owned machine tools which at any time prior to the date of classification had been in use for a total period not exceeding 7,200 hours.

Class C shall consist of all Government­owned machine tools determined to be sur­plus under the provisions of this act, which are not properly classifiable thereunder in class A or class B : · Provided, That no machine tool which shall be acq'IJired by the Govern­ment, or for its account, .more than 60 days next following termination of hostilities in the present war shall be subject to classifi· cation under this section or be subject to the provisions of this act.

SEC. 5. Such machine tools, as so classified, shall thereupon be disposed of under the direction of -the CommissiOn according to

~ the following order of priority and up-on the following conditions: ·

(a) All Government machine tools of what­ever classification which are specially de­signed, equipped, and manufactured for the

·production of military or. naval equipment and which the Commission shall find are not -readily replaceable from the ope1;1 market, shall ):>e :retained by or redistributed among the appropriate G9vernment departments or agencie~ in ~uc~ type~ and quantities and ac­cording to ·,such procedures as the Commission shall _pr:escribe~ Provided, That the retention· qf --,a~r, ~ 1iia~~ine .to?ls unde! this subsection s:pan ·captinue ·untll such time, not exceed­ing '20' years; as the same become obsol-;te or

are abandoned as otherwise unsuitable for military or naval purposes.

(b) Class A a~d B machine tools, excepting such quantities as the Commission shall deem required for the purpose specified in subsec­tion (a) of this section, shall be allocated and made available first for the machine tool re­placement needs of Government arsenals, n avy yards, maintenance and repair facilities, _ shore establishments, and similar installa­tions ?f the Un_!ted St ates, in such types and quantities and upon such conditions as the Commission shall determine: Provided, ( 1) That no machine tool shall be allocated or disposed of under this subsection unless the Commission shall first det ermine that the same is superior in design oF condition for the particular purpose of the machine tools which it is to replace; and (2) that the Gov­ernment establishment receiving any machine tool pursuant · to this subsection ehall there­upon become accountable therefor in accord­ance with existing provisions of law relating to accountability for Government property and the Government establishment releasing any such tool shall thereupon be relieved of al~ such . accountability.

(c) Classes A and B machine tools, except­ing such quantities as the Commission shall deem required for · the purpose specified in subsections (a) and (b) of this section, shall be allocated and made available to smaller metal-working concerns in _such types and quantities and upon such terms and condi­tions as the Commission shall deem neces­sary or appropriate to maintain or establish any smaller metal-working concern in busi­ness: Provided, That in allocating and dis­posing of each type of machine tool under this subsection the Commission shall give preference to any war veteran desiring to maJntain or establish himself individually or as a participant having a substantial inter­est in a smalle! metal-working business and the Commission shall prescribe appropriate rules and· regulations to carry out the pur­pose of this proviso, which shall govern the determination of such preferences: Provided further, ·That the Commission, in disposing of machine tools under this subSection to war veterans and smaller metal-working con.;. cerns, shall, in aU proper cases, arrange through the medium and by means of the funds of the Smaller War Plants Corporation or any other existing agency of the Govern­ment (and such agencies are hereby directed to comply with the Commission's directives issued under this subsection) 'for the exten­sion of credit to the purchaser or user of such tools or, through such media and by means of such funds or otherwise, to make or guar­antee such other financial arrangement re­specting the use and disposition of such ma­chine tools as in it s judgment will carry out the purposes of this act: Provided further, That the rate of interest in connection with any credit, loan, or deferred payment under1 this subsection shall not exceed 3 percent per. annum: And provided further, That for the period of 10 years following the disposi­tion of any machine tool pursuant to this subsection the same shall be subject to re­possession by the appropriate department or agency of the Government if n the event of war or national emergency it 1s not being utilized for the production of military, naval, or maritime equipment. To carry but more ~effectively the purpose of this subsection, the Commission shall promptly conduct a gen­eral survey of the machine-tool capacity and potential capacity of the smaller metal­worki~g concerns of the country, the results of which shall be made public. For purposes of this act, a smaller metal-working concern or business shall be deemed to be any hide­pendent, unaffiliated manufacturing enter­prise which utilizes not more than 100 ma­chine tools for not less than 75 percent of the number of ·man-hours involved in its total productive operations. Upon the de-

livery of any machine tool to any smaller metal-working concern pursuant to this sub­section the account;;~.bility of any Govern­ment department or agency under existing provision of law relating to accountability for Government property ·shall terminate, but such accountability on the part of such department or agency shall thereupon attach to any property or other thing of value re­ceived by it or for its account in considera­tion of or i!l connection with the particular transaction -involved.

(d) Class A, B, and C machine tools, ex· cepting such quantities as the Commission shall deem required for the purposes speci­fied in subsections (a), (b), and (c) of this section, shall be made available without charge and for the purposes hereinafter " specified, in such types and quantities and upon such terms and conditions as the Com. mission shall determine, to promote training and instruction in the skills and sciences connected with the operation of machine tools, in public schools heretofore and here­after established in the several States the District of Columbia, and the Territorie~ and possesswns of the United States: Provided, That no allocation of any machine tools shall be ·made under this subsection unless ( 1) such courses shall be . plann.ed and • super­vised by a local boarp of five members for each political subdivision, three members of which shall be supervisory employees of. in­dustrial plants; one member a representative of the local school system and one member a representative of the local public at large; and (2) that the standards of eligibility for

· admission to such courses shall not be per­mitted to vary or differ from the standards ' of general admission to public· high schools lawfully prevailing in the particular political subdivision involv.ed. The .commission, for each allocation and disposal under this sub­section, shall prescribe suitable terms and conditions concerning the ·scope, character, and duration of the courses to be given.

(e) Class A, B, and C machine tools, ex­cepting such quantities as the Commission shall deem required for the purposes speci­fied in subsections (a), (b), (c), and (d) of this section, shall be made available for sale, exchange, lease, or other suitable disposition to ·friendly nations and their nationals in such types and quantities and upon such terms and conditions as the Commission shall deem appropriate within the purposes of this act: Provided, That each such allocation made for foreign consignment pursuant to this sub­section shall first be authorized by license issued by the Secretary of State or by. such other Government establishment as he shall designate for that purpose. The accounta­bility of any Government department or agency in respect of all machine tools dis­posed of under this subsection shall termi­nate upon delivery thereof and such account- · ability on the part of such department or agency shall thereupon attach to any prop­erty or other thing of value received in con­_sideration of or in connection with the par-ticular transaction. .

(f) Whoever, in connection with any trans­action...under this section, makes any material statement in writing, knowing it to be false; or for the purpose of influencing the action of any Government establfshment or any em­ployee, agent, or designee thereof, or for the purpose of obtaining any machine tool, prop­erty, or other thing of value hereunder from any Government establishment, offers, or tenders to any employee, agent, or designee, of any Government establishment any bribe, gratuity, or other consideration or thing of value in connection with the performance of any official act or duty under this act and any employee or .agent who accepts the same, shall be punished by a fine of not more than $5,000 or by imprisonment of not more than 2 years, or both. The provisions of sections

10944 CONGRESSIONAL RECORD-SENATE DECEMBER 21 112, 1~3 , 114, 115, 116, and 11~ of the Crimi­nal Code of the United Stat~s (U. s. C., title

' 18, ch. 5, sees. 20~ to ·207, inclusive), insofar as applicable, are extended to apply to con­tracts or agre~ments made under the provi- '

· sions of this act. · SEc. 6. (a) The authority granted under

· this act ·shall cease and the existence of the :Commission terminate on a date which shall be 3 years following the termination of hos­tilities ·in the present war, except that withil_l 60 days after such date the Commission shall

· make a final report of its operations, together · with its recommendations under this act, to · the Presid~nt, the President of the Senate, : · and the Speaker of the House of Representa­tives. Such t'eports shall include a summary and brief ae<!ount of all tran&actions not ·pre­

. viously reported and a full itemization of all · Government · machine tools remaining on · hapd, together with the reasons - for their

nondispbsal ·under this act. · (b) On.-exp1ration of 60 days next following · submission of such final report, all machine too1s remaining on hand shall be broken up .

· as scrap .by and at the expense of the depart­. ments and agencies of the Government ac­. c :mntable therefor and the same shall be s?ld as broken scrap metal .for the purpose

· of being remelted: Provided, That no part of any such scrap metal shall be at any time thereafter · re~old ·ar consigned to or 'for ·the account of an'y •:foreign purchaser and all Goyernment Uepartments or agencies making

- any sale under this subsection shall incor--porate therein such terms and conditions as will apply the intent of this proviso to the

· particular transaction in each instance. The proceeds of . all -sales under this subsection

· shall be paid into the general fund of the · Treasury.

SEc. 7. In addition to the final report re­quired under section 6 of this act, the Com­mission shall render semiannual reports, in

· writing, to the Congress, beginning the first d ay of the sixth month following the effective date of this act, setting forth in detail its operations under this act and such recom-

. mendations as . it may deem appropriate within the purposes of this act.

SEc. 8. The Commission shall adopt and promulgate .appropriate rules and regulations which shall be binding upon all executive d c-,partments and agencies, to carry out its

· duties and functions under this act ~ SEc. 9. 'There are authorized to be appro­

priated s_uch sums as are necessary or appro­. priate to carry out t he purposes of this act.

SEC. 10. (a ) Except as otherwis.e specifically ·. provided in this act, no department, agency,

or establishment of the Government shall be 1n any degree relieved · of its accountability for any Government-owned machine tool in accordance wit h exist ing provisions of law

. relating to accountability for Government property. .

(b) In complying with such directives as the · Commission may issue to carry out its functions under this act, the departments, agencies, · and establishments of the Govern­ment to which such directives are issued shall

. be responsible for all expenses and charges connected witn the storage, protection, prep­aration for shipment, and shipment of any Government-owned machine tool involved in any such directive or in any transaction under this act: Provided, That nothing in this section shall be construed to prohibit the assumpt~on of such expenses or charges bY, any other party to such transaction, ex­cepting the Commission.

SEc. 11. Whoever, being connected in any capacity with the Commission or with any other Government establishment involved in th_e administration of this act, embezzles, abstracts, purloins, or wilfully misapplies any morieys, funds, securities, or other, things of

. value, received or conneCted with any trans­action under this act, or ·with intent to de­fraud the CGmmission 'or · any· Government

establishment, or any other body politic or -.corporate, or any indi~idual, or -to ·aeceive any officer, auditor, or examiner of the Commis­sion or ·other Government establishment, makes any false .entry in any book, report, or statement of or to the Commission or to any other Government establishment in connec-

, tion with the administration of this act, or, ' without being authorized, draws any Order. :!lr .issues, puts forth, or assigns any note, de-benture, bond, or other obligation, or, with intent to defraud, participates, shares, re­ceives~ directly or indi·rect1y, any money, profit, property, or benefit thro-ugh any trans­action, loan, commission, contract, or any other ac-t of the Commission or Government establishment, or gives any unauthorized in­fol'mation concerning any future action ·or

- plan of the commission or of any Government establishment under this act which· might

_ . affec;t the value of securities, or, having .such ­knowledge, invests or speculates, directly or ' imUreetly, in the securities or property of

-afl. company or corporation recewirlg or about to receive loans or other benefits· under this act, shall be punished by a fine of not more than $10,000 or by imprisonment of not more than 5 years; or both. -

SEC. 12. This act shall take effect imme­diately.'

VIOLATIONS OF, 'FREE _ SPEEC,H . A~D .RIGHTS OF LABOR

Mr. LA FOLLETTE submitted the ·fol-·lowing resblution -<S. Res. 224), which was referred to the Committee to Audit and Control the Contingent Expenses of the Senate: ·

Resolved, That the authority conferred under Senate ResGlution 2'66, Seventy-fourth

-Congress,- second session, agreed to June 6, 1936; and ·under senate Resolution · 70, s ·ev­enty-fifth Congress, first session, agreed to February 19, 1937; and under Senate Resolu- · tion 154, Seventy-fifth Congress, first session, agreed to August 12, 1937; and under Senate Resolution 266, Seventy-fifth Congress, third se.c:;sion, agreed to May 18, 1938; and under

· Senate Resolution 126, Seventy-sixth Con­gress, first session, agreed to August 4, 1939; and u :1der Senate Resolution 135, Seventy­seventh Congress, first session, agreed to June 28, 1941; arid under Senate Resqlution 98, Seventy-eighth Congress, first session, agreed to February 25, 1943, to investigate the viola­tion of the right of free speech and assembly and interference with the right of labor to organize and bargain collectively is hereby continued during the second session of the

. Seventy-eighth Congress for the sole purpose of concluding the printing of hearings and reports .

REAPJUSTMENT IN CIVIL LIF_E OF VETERANS OF WORLD WAR NO.2

Mr. CLARK of Missouri submitted the following resolution (S. Res. 225'), which was referred to the Committee on Fi­nance:

Resolved, That the Committee on Finance, or a subcommittee thereof, is authorized and directed tp~ conduct a study of problems re­lating to the readjustment in civil life of veterans of World War No. 2, particularly as such problems affect their employment or r~employment. The committee, or a sub­committee thereof, may conduct hearings, public or ex-ecutive, assemble and publish data, analyses,-and shall report to the senate . such findi:pgs as it may make from time to tillle, together with its recommendations, if any, for neoessary legislation. For the pur-

. pose of this resolution the c_ommittee, or a subcommittee thereof, may sit and act at such times and places during the sessions, recesses, and adjourned periods of the Sev­enty-eighth Cohgress, to employ such clerical

and ·other assistants, to ·borrow from Gov­ernment deparctments ana- agencies such special assistants, to require by subpena or

·otherwise the attendance of such witnesses and the production Of SlJ,Ch corresponden·ce,

.. books, papers, and documents, · to administer such oatJ;ls, to take such testimo:py, ·and to make such expenditures as it deems advisable within the limits of such funds as shall be set aside for its use by the Committee on

· Finance or shall be appropriated to it di­rectly by resolution of the· Senate. · The cost Of stenographic services to report SUCh-hear­ings shall not be in excess of 25 cents per hundred words. The expenses of the com­mittee which shall nat exceed $10,000, in addition to the cost of stenographic services to report such · hearings, shall. be paid ' from

·the contingent fund of the Senate upon vou~h_ers approved by. the ~hairliian. · -

. GRACE .D. MEYERS

Mr. TYDINGs-submitted the follow­ing resolution (S. Res. 22~), w_hich was referred to the Committee to Audit and Control the Contingent Expenses of the Senate: · ·

Resolved, ,That the Secretary of the Senate hereby is authorized and dir~cted to pay from the contingent fund of the- Senate to Grace ·n. Meyers, cousin of Hazel P. Yates, late an assistant in the· Senate Library, ·a· sum equal to 6' months' ·compensation at the rate she was receiving · by law at the time of her death; said sum to be considered inclusive of funeral expenses and all other ~llowance_s.

PRESERVATION OF DYING CHII.pREN OF EUROPE-ADDRESS BY DR. HOWARD E. KERSHNER

M:r.''aiLLETTE.- Mr. Pre~i.d~nt, task unanimous consent to have. prin.ted in the RECORD and appropriately referred, a radio address entitled "Strategy and Hu­manity of Rescuing the Dying Children of Europe" delivered by Dr. Howard E.

. Kershner, on November 2( 1943 . There being no objection, the address

·was referred to the Committee on For­. eign Relations, anql ordered to be printed in the RECORD, as follows:

A skeleton sits at the conference of the · United Nations Relief and Rehabilitation · Administration meeting in Atlantic City to

consider relief to. occupied nations after lib­eration-a hideously grinning skeleton which

.. says: "I represent more human beings dead or dying from st~arvation thap. Hitler's armies have slain on the battlefield. We will not need relief after liberation, but some of us you could save now." To the skeleton, the head of ·the conference, former Governor Lehman replies: "You are not on the agenda." But the skeleton sits there, in the minds of the delegates if not on th~ir lips. Like Banquo's ghost it will not "avaunt."

Periodically the governments in exile have pleaded with Bri.tain and America to al­low them-to use their own funds and neutral ships to send food to their dying children. Two years ago General de Gaulle asked for milk and vitamins for the children of France. Six months ago a joint French and Belgian request was made. Queen Wilhelmina and the Foreign Minister of the Netherlands have implored help for Dutch children. The Nor­wegians and others have done likewise but always the answer is "No."

Jean Monnet, recently escaped from · France, says the average Frenchman has lost

33 pounds in weight. Herve -Alphand, sec­ond in rank of the French del'egation· at A-t­lantic City, says: "the last thing the people of France want to do is h 'elp ·.tbe•·eermans, whom they hate more than the devil, but we ar~ convin:ced - that a ·limited'' ail(\. proper-Iy 1

1943 CONGRESSIONAL RECORD-SENATE 1Q945 controlled distribution in the cities could needed for ourselves or our allies would -be not benefit the Germans." sent from this country. It could be brought

Mr. Spaak, Belgian Foreign Minister, says: from South America and South Africa. Half "We ask for 2,000 tons· a month. It might of what we waste here would save the lives save our children. We have a ship of ciur of at least 10,000,000 children. · own that could transport the supplies." But The witnesses agreed that the war comes Britain and America say "No." . first, but they insisted that giving strength · In Washington a subcommittee of the and moral courage to our friends and allies Senate Foreign Relations Committee has held who are figl;lting hard for us now would hearings on Senate Resolution 100 which shorten rather than prolong the war . . One urges immediate help to the children. Many witness said it is as shortsighted to refuse distinguished witnesses, headed . by former help to those who are .fighting for us as it · President Hoover and including r'epresenta- .would be to short ration our own Army. tives from--- organized labor, the church- .What a ghastly ·and costly blunder we are

' Catholic -and Protestant-relief committees, making by depriving the peeple. who are help-societies . and spokesmen for the invaded ing us of the strength to do more. countries,. urged adoption of · the resolution. We trust the German Red Cross to dis- · Not one wo.rd was· said against it. .tribute over 7,000 tons of food a month which · ' The testimony made three things clear: we · senit to prisoners ,of war. It .is meticu-. (1) the children can be saved without aiding lously done to the satisfaction of a-ll con- , the enemy or d-etracting from our war effort, cerned. If we can trust the . German Red (2) such action would shorten rather than Cross to do ·this, surely we can· tru~t tlle- In-prolong ·the war, -and (3) it would make post ternational Red Cross to do it for the starving ·war reconstruction much less difficult. chil.dren of these same ' prisoners. Imagine

Note some of the high points of the evi- -the feelings of a European prisoner eating a dence. -food package from America when he knows

· As a free gift from Canada, Greece receives that we will not permit the sending of food 15,000 tons of grain a month while the United to save the life of his child who .at that very States sends 3,600 tons of dehydrated veg- time is dying of starvation. If we are will-etables and dried milk monthly. The Ger- ing, as we . all are, to feed able.:bodied pris-mans do not take. any of this. food, .the opera- , oners of war who work for the Germans, it is tion is:.of no benefit to Axis economy, and it , entirely •illogical' to starve their children who does prevent the extinction .of the qreeks. If cannot· possi-bly assist the Axis war effort. it is right to save the Greek children, why . Furthermore, we are sending to each Brit-not the children of the other Nazi-occupied ish and Amei:ican civilian interned in Ger-countries? So far Greece is the only country , man-held territory 50 pounds of :food and to which the American l'!nd British Govern- other relief supplies monthly, while we will ments will permit the sending of food not permit our Dutch, Belgian, Norwegian, · through the blockade. · · ' . French, and other allies to use their own

· From June 1940 to the fall of :1942, lOO,QOO · funds to send even a little powdered milk to children in unoccupied France were fed under their starving babies. How is that ..going to my direction, with food bought in Asia, Af- look when the war is over? Will we ever live rica, apd central Europe. The Germans nev- down suph a shameful disgrace? Who . can er took a mouthful of this food nor inter- justify such selfishness? How can we send fered with the operation in any way. ;More-_ food through the blockade to our own but over, each child helped ate just as much of deny it to the dying children of our friends? the local food as it would have eaten had we The abnormal mentality of many Germans not been there. Obviously this did npt leave today is no doubt due in part to undernour-any extra French food as a result of our op- ishment in childhood during the previous eration by which the Germans could profit war. But at the worst German children then even indirectly. got twice as much as large numbers of French

Impressive testimony was given by spokes- and Belgian children are getting today. men for ·the occupied countries showing that What, then, of the future of these children the children are dying. In some areas over ' of our friends and allies, even though they

. half of them have tuberculosis and the others survive? are threatened. They faint in the school- It was pointed out that one of the strongest rooms. They have stopped growing, are trag- appe;;tls us_ed in soliciting subscriptions . to ically underweight, have no breakfast, a small the National War Fund was to send food to

. piece of· bread for lunch with an onion or a the starving children of the occupied, coun-turnip; and vegetable soup for ' supper- tries. This was definitely promised and the perhaps one . small portion of m'eat a week. , American people have a right to demand that Millions of children are getting no more than this promise be kept. 700 to 900 calories of food daily, about one- · ' One witness pointed out the injustice of third of what we give our children, and not enough to sustain life over a long period of ~asking Norwegian seamen to continue risk-

' time. I have seen these children with starva- ing their lives to take food to England, Rus- . tion bloated stomachs. I have seen their blue sia, and elsewhere while their own wives and lips and bloodless faces, their rickety legs, children are starving in Norway. and hollow chests. Their sad little eyes ac- Much evidence was presented to ~how that cuse us of murder. I have heard the tuber- American and British public opinion want

. cular cough mingled with the cry for bread immediate action to save the children. A and I can never !orget it. large collection of editorials from leading

Hitler wages biological war. He seeks to journals in both countries was presented, all destroy whole peoples and we play into his urging child feeding. Posters making graphic· baRds by doing nothing to save them. Those the suffering of the children in German-oc-who survive will be subnormal in mind and cupied countries are in use ali over England. body, unable to compete with the Germans in · Samples were presented to the committee, as the reconstruction of Europe. The people were statements by churchmen and labor who established the principles of free speech, leaders in both England and America. The

. free press, ,·free religion, trial by jury, and all · British Red Cross has long urged that food the institutions of freemen are dying while be sent to the children on the continent. the Nazis are still getting enough to eat. Probably a strong majority of the members What will the future be if the people who be- . of the American Congress and the British lieve in human freedom are not here when Parliament want it done immediately. Cer-the war is over? tainly 85 percent of the members present at a

It 1R not a choice between: sending food meeting which I addressed in the House of to .the children or sending more bombs, for Commons in London last winter favored it. the :rood WQUld ~o in neutrttl ships that· can- No opposition was expressed .a.t a:ri informal not be hired for the war effort and would not meeting of Members of the House of Repre-cost the American people a dollar. No food sentatives which I was privileged· to address :

LXX:XIX---690

in Washington last week. I have talked with seven top men in the.administration at Wash­ington who favor it and .none who oppo11e. I believe our Commander in Chief ·r :1d his prin· cipal advisers want to do it,. I belleve we the people ought to tell him that we approve and that we will ·back him in whatever action is ·necessi':U'Y to save the children. There is every evidence that a great majority of. the Ameri-

.. can and Britisn people would welcome such action on the part o+ _our Government.

The British Government took a -stand against feeding in ~940. We can understand

.. and · sympathize with that position when Britain was unarmed and alone, but conch­tions -are -different today. She is well armed and has powerful allies. We are pulling our full share of the ·war load, and there is no lo}!ger any reason why British tenacity in high quarters -should bloc;k the desire of the people of both' countries to rescue Europe's

·dying children. · On the platform, over the radio, and in the

press of both Britain and America l have paid high tribute to the integrity and capac­ity of the British people and to their Govern­ment. I have continuously urged the closest unity between our two countries. I still do and shall so continue. It is the brightest hope of the .future. The two countries should stand together,. but on this issue the British have stood on us and not with us. Our Government has been prevented from doing what ought to be done and what it

: would like to do for humanitarian as well as strategic reasons. This has become in­tolerable.

If your best friend were making a serious mistake, you would try to restrain him, and the closer he was in friendship to you the harder you would try to prevent the cata_s­j;rophe. I feel exactly that same way about Britain except that we, as well as our friend, are - involved in the tragedy. All honor to Britain for the noble stand she has made and is making and thank God for the great lead• ership of h _er Prime Minister; but surely we are close enough in friendship to our great ally to save her and ourselves from the need-~~S:t ~~f:~~~~ of the lives ,of millions of our

We know and approve of the efforts the President has made on behalf of sending :food to the children and we honor him for them . We also know and approve of his diligence in maintaining cordial American-British re­lationships, but there comes a time, after long, patience and years of delay, when the will of one man or a few men in London can­not be allowed to prevail against the 'good sense of our Commander in Chief, backed by the American Government, the American peo­ple, and, there · is every reason to believe, a large majority of the British people.

Will you help save these innocent children? Write a letter or card to the President, the Secretary of State, your Congressman, and your two Senators urging immediate action to get food to them. They are dying every day .

Copies of this talk, my previous talk over the Columbia Broadcasting System and other literature may be obtained free from the Na­tional Committee o;n Food for the Small Democracies, 420 Lexington Avenue, -New · York.

With grateful thanks, good morning.

UNITY-ADDRESS BY HON. SAM RAYBURN AND HON. CHARLES E. WILSON (SENATE DOQNO.l42)

1

Mr. TRUMAN. _ Mr. President, a short time ago the Speaker of the House of Representatives, Hon. SAM RAYBURN, made what I considered a very great speech on unity, arid Hon. Charles E. Wilson, vice chairman of the War Pro­duction Board, also made an outstanding

10946 CONGRESSIONAL RECORD-SENATE DECEMBER 21 address on that subject~ In unity there is no partisan opinion. We all know that our distinguished Speaker is an out_:­standing Democrat, and that Mr. Wilson, who is serving in this administration, is of Republican political faith. I ask that the two addresses be printed as a Senate document.

The VICE PRESIDENT. Is t)lere ob­jection? The Chair hears none, and it is so ordered. BENEFITS FOR VETERANS (S. DOC.

NO. _141)

Mr. CLARK of Missouri. Mr. Presi­dent, I have before me a tabulation pre­pared at my request by the Veterans' Administration of the benefits presently afforded members of the military forces of the United States under the laws ad­ministered by the Veterans' Administra­tion. This document contains a great deal of very valuable information, and, therefore, for -convenience of Senators, I ask unanimous consent ,that the matter may be printed as a Senate document.

The VICE PRESIDENT. Without ob­jection, the matter will be printed as a document. ADDRESS BY SENATOR MURRAY BEFORE

.MEDICAL SOCIETY OF COUNTY OF MON­ROE, ROCHESTER, N.Y.

[Mr. WAGNER asked and obtained leave to have printed in the RECORD an address de­livered by Senator MURRAY on November 17, 1943, before the Medical Society of the County of Monroe, Rochester, N. Y., which appears 1n the Appendix.]

SCIENCE, FAITH, AND . FREEDOM-AD­DRESS BY SENATOR BURTON

[Mr. BURTON asked and obtained leave to have printed in the RECORD an address en­titled "Science, Faith, and Freedom," deliv­ered by him at the commencement exercises of the Case School of Applied Science, Cleve­land, Ohio, December 20, 1943, which appears 1n the Appendix.]

THE REALTOR AND THE NATION-AD­DRESS BY SENATOR WILEY

[Mr. WILEY asked and obtained leave to have printed in the RECORD an address en­titled "The Realtor and the Nation," delivered by him on December 14, 1943, before the Mil­waukee Real Estate Board, which appears in the Appendix.]

. /

ADDRESS BY NORMAN H . . DAyrS AT AN-NUAL MEETING OF RED CROSS

[Mr. CAPPER asked and obtained leave to have printed in the RECORD an address de­livered by Norman H. Davis, chairman of the American Red Cross, at the annual meeting of the Red Cross, held . in Washington, D. C., on December 8, 1943, which appears in the Appendix.] '

ALLEY SLUMS IN THE DISTRICT-EDITO­RIAL FROM WASHINGTON POST

[Mr. CAPPER asked and obtained leave to have printed in the RECORD an editorial en­-titled. "Price Paid in Lives," published in the Washington Post, w~ich appears in the Ap-pendix.) ·

CHINA AND THE CAIRO PARLEY-ARTICLE BY JAMES D. WHITE

[Mr. ANDREWS asked and obtained leave -to have printed in the RECORD an article entitled "Chinese ~egaining Prestige as Re­sult of Cairo Parley," by Associated Press writer James D. White, published ' in the Washington Star of December 19, 1943, which appears in the Appendix.]

PRODUCTION OF SYNTHETIC RUBBER­ARTICLE BY HIRAM HOWARD

[Mr. DAVIS asked and obtained leave· to .have printed in the RECORD an ~~;rticle re­garding the production of synthetic rubber, written by Hiram Howard and published in the Pittsburgh Sun-Telegram of pecember 19, 1943, which appears in the Appendix .]

LEND-LEASE-EDITORIALS · FROM THE D:ECATUR (ILL.) HERALD AND PEORIA (ILL.) JOURNAL-TRANSCRIPT

[Mr. LUCAS asked and obtained leave to have printed in the RECORD an editorial en­titled "It's 'Lend,' Not 'Give','' from · the Decatur (Ill.) Herald of November 13, 1943, and an editorial entitled "Worth 20 Billion,'' pul:Hished in the Peoria (Ill.) J.ournal-Tra~­script of November 12, 1943, Which appear m the Appendix.]

EDITORIAL COMMENT ON J140SCOW CONFERENCE

[Mr. BREWST-ER asked and obtained lea~e to have printed in the RECORD several edi­torials commenting on the Moscow Confer­ence, ~hich appear in the Appendix.]

ALARMING TENDENCIES IN THE N~TION'S LIFE-EDITORIAL FROM THE RICHMOND -TIMES DISPATCH . [Mr. DOWNEY asked and obta~ned . lea:ve

to have printed in the RECORD an editonal entitled "When Will America Wake Up?" from the Richmond Times Dispatch of December 19, 1943, which appears in tbe . Appen'dix.]

OUR CHARTER OF LIBERTY

Mr. DAVIS. Mr. President, here in the United States, where the light of ·free­dom glows with undiminished power, we are commemorating the one hundred and fifty-second anniversary . o~ the Amert­can Bill of Rights with th~ observance of · Bill of Rights Week.

In all the history of the world there has never been a document of human liberty so far-reaching, so inspiring, and so impelling as th~t which is ··com­prised by the immort~l Bill of Rights in­scribed in the Constitution of the United States. .

During these times -of great crisis, when the bastions of civilization and hu­man liberty are everywhere menaced by the benighted forces of treachery and oppression, it is well that we should re­dedicate ourselves to the Bill of Rights and to the principles of human liberty which are conta-ined in that enduring charter. ,

For that reason, Mr. President, I ask unanimous consent to include in 'the RECORD, as ·a part of my remarks, an edi­torial written by Harry H. Schlacht, en­titled "Our Charter of Liberty," which appeared in the Pittsburgh Sun-Tele­graph on Sunday, December -19, 1943. This editorial describes in words more appropriate than I could choose, the true value and ·enduring significance of the American Bill of. Rights, which · is now being defended with full gallantry by the courageous fighting men of a free Amer­ica.

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

OUR CHARTER OF LIBERTY (By !larry H. Schlac]J.t)

Born in the birth of a new nation, our historic Bill of Rights has become the charter of liberty.

In the midst of war America has paused to celebrate the covenant of our freedom, to rededicate its principles and its practices.

In commemoration of its one hundred and fifty-second anniversary, we declare in the words of the Great Master to the Apostle Peter:

"Upon this rock I will build my church; and the gates of hell shall not prevail against it." .

Liberties explicit in the Bill of Riglits are the same liberties our forefathers won with their lives. · ·

It was purchased with their blood and tears.

It sprang from an innate desire of man­kind to be free.

It is the echo of past centuries. It is the brightest gem in the crown of our

American democracy. -It is our protective mantle. It is the high concept of man's estate pro­

claimed in the Declaration of Independence­the birth certificate of our Nation-and em­bedded in the Constitution of the United States.

Like fibers of gold running through the history of the human race are the stories ol man's struggle for liberty.

The scale of justice came from _ Egypt, the modern concept of right from wrong from the Ten Commandnien'ts, and t}te rights of man from the Magna Carta.

It typifies the path man has laboriously traveled from servitude to civilization, from slavery to freedom. ~

The seeds of man's struggle for human rights were planted and nurtured · more than 2,500 years ago:

It continues its slow growth through the various governments of ancient Rome.

It survived the blighting influence and oppressions of the Mi.ddle Ages. .

It came into full flower in the det1nite pro­visions of our Constitution. ' ''

Our ~iii of "Rights affirms thE( right ot every man to these · great basic freedoms which keep inviolate the personality and the con­science of man: Freedom of speech, freedom of the press, freedom of religion , freedom of assembly, and the otherAnalienable freedoms of a self-respecting nation. America has emblazoned these ideals upon her shield.

From the masterful blood of many great races has sprung a mighty people-America. America does not mean gigantic forests, tow­ering peaks, or far-reaching valleys and crys­tal lakes. It means our cherished and glori­ous traditions. It represents the political institutions of the most democratic republic ever conceived by the genius and the daring statesmanship of man.

It signifies the acceptance of the eternal law based upon the postulate of the father­hood of God and the brotherhood of man.

Refuge of the oppressed, America is the cradle of religious toleration, the citadel of liberty, and the great exponent of man's in-herent dignity. .

In the twenty-fifth chapter of Leviticus, we hear God speaking to Moses on Mount Sinai:

"Proclaim liberty throughout all the land unto all the inhabitants thereof."

That command has come down through the ages.

It is recorded on the Liberty Bell. The American flag is -humanity's noble and

glorious answer to that divine edict. God-given principles are now challenged. They are menaced by a world-engulfing

bondage. The mailed fist of the strong has smitten ­

the jaw of the wea~. The iron heels of tyrants ·are grinding the

defenseless into dust. · !,: .• f: Miss . Liberty has grasped the'.sworct. -· __ , The · torch of liberty is ablaZf;). :;,' : .. The command: Fall in! has,J:>een .giyen. ';l'he campfires ar_e burnin~, ' · · · · .. , _

1943 CONGRESSIONAL RECORD-SENATE 10947 We are keeping fait h with our countless

dead who sacrificed their all that we might live. . . ·

However . long our travail, however heavy the blows which the structure of liberty bas t.o endure, this we know: . when the holo­caust is over, we shall be able to say like the prophet of Isaiah of old: .

"The bricks are fallen down, but we will build with hewn stones; the sycamores are cut down, but we will cpange them into cedars." . .

Right will win the day. . The dreams and visions of our poets and

prophets and saints will some day find ac­ceptance among the nations of the earth. After the darkest hour of the ri:ight comes the splendor of the morning, the glory of the sunrise, and the grandeur of the new-born day. .

May we ever realize what the Bill of Rights means to us. ·

May we always strive to exemplify its prin­ciples in our daily lives, and may its pure white li'ght, streaming from the throne of God, illuminate the world . .

So "Conquer we must . When our cause it is just, And this be our motto, 'In God is our trust.'"

HEROES ON THE HP¥E FRONT-COM­• MANDER MALCOLM ARNOLD

Mr. DAVIS. Mr. President, heroes on the home front should be recognized during the emergency. I call the atten­tion of the Senate to .the heroic work of Commander Malcolm Arnold, of the Navy Medieal Corps, after the unfortu­nate train wreck in North Carolina last week . ..... ··

En route to h1s home in Gettysburg, Pa., from 18 month& .sea duty, Com­mander Arnold, with scant medical sup­plies, saved many lives. Clac;l only in an overcoat and his underwear, .with the temperature at 10 degrees above zero, he 1aided injured civilians and service · men· and women in the wreck, working · heroically for 8 hours before . outside. medical aid arrived.

I ask that attention of the Secretary of the ·Navy be · called . to Commander Arnold's conduct and that his heroism be recognized by the Navy Department.

AUTHORIZ~TION TO FILE REPORT DURING REyESS

Mr. TRUMAN. · Mr. President, I ·ask unanimous consent for permission to file during the recess a report from the Special Committee to Investigate the National Defens~ Program.

The VICE PRESIDENT. Is there ob­jection? The Chair hears none, and it is so ordered.

PRELIMINARY REPORT ON CONTRACT TERMINATION LEGISLATION

Mr. MURRAY. Mr. President, in September 1943 . the . chairman of the Senate Committee on Military Affairs,

· the Senator from North Carolina [Mr. REYNOLDS], .appointed a subcommittee to consider certain. problems involved in war contracts. The subcommittee is composed of the Senator from Missouri [Mr. TRUMAN], the Senator from West Virginia [Mr. REVERCOMB], and myself, as chairman.

The ·subcommittee is submitting a re­port to the full committee, and also an outline of a proposed bill. The matter is of such importance that I ask that the

•

preliminary report be printed in the RECORD in connection with my remarks.

There being no objection, the report was ordered to be printed in the RECORD, as follows: PRELIMINARY REPORT ON CONTRACT TERMINA­

TION LEGISLATION . INTRODUCTION

In September 1943, · Senator RoBERT R. REYNOLDS, chairman of the Senat~ Military Affairs Committee, established a subcommit­tee to handle certain problems involved in war contracts. The members of the sub­committee are Senator JAMES E. MuRRAY, of ¥ontana (cbai.rman); Senator HARRY S. TRu­MAN, of Missouri; and Senator CHAPMAN REVERCOMB, of West Virginia. . .

The following measures have been referred to your subcommittee: ·

· I. On contract termination: . s . .:.280. To provide authority to the Sec­

retary of War to use funds now or ,hereafter appropriated for adjustment of contracts, and for other purposes. (Introduced by Senator REYNOLDS.)

S. i268. To facilitate the termination cif war contracts. (Introduced by Senator MURRAY.) .

S. 147. To provide for mandatory loans to small business concerns upon termination of their war contracts. (Introduced by Sen­ator MURRAY.) ·

s, Res. 198. To investigate the matter of the termination of Government procurement contracts. . (Introduced by Senator MUR­RAY.) (Thi& resolution defines the functions of the subcommittee and provides the neces­sary funds.)

II. On cost-plus-fixed-fee contracts: s. J . Res . 80 . . To probi}lit the use of . the

cost-plus...,fixed-fee system of contracting in comiection with war contracts. (Introduced by S~nator FERGUSON.)

III. On surplus property disposal: s. Res. 195. Requesting . an investigation

conc~rning Government . property· and ma­terials no longer needed for war purposes. (Intr.Jduced by Senator MURRAY.)

S. 1478. To. provide for the conservation and proper disposal of surplus war . proper­ties, and for other purposes. (Introduced by Senator MURRAY.)

Of the abov~ measures, Senate Resolutions 1~5 and 198 have . been reported favorably by . the subcommittee to the full committee. Senate ·Resolution 198 bas been reported

. favorably by the full committee, with amend­m~nts, and sent to the Committee to Audit and Control the Contingent Expenses of the Senate. Senate Resolution 195 bas also been reported favorably by the full committee and is now on the Senate .calendar. '

Thus far the subcommittee has concen­trated its attention mainly on contract ter­mination and bas therefore been unable to make any detailed study of Sena.te Jp int . Resolution 80, on cost-plus-fixed-fee con­tracts, or of Senate bill 1478, on surplus property disposal.

With regard to the bills on contract ter­mination the subcommittee bas held exten­sive hearings.1 Detailed ·testimony has been taken from individual businessmen who have had difficulties in obtaining settlements on claims arising from terminated war con­tracts; and from representatives of business organizations. The subcommittee has also heard from important Government officials, such as the Comptroller General, the Under Secretary of War, the Under Secretary of the Navy, the Chairman of the War Production Board, the Chairman of the Maritime Com­mission, the Secretary of Commerce, the At-

. torney General, the Secretary of Labor, the General Counsel of the Treasury Department,

1 October 14, 15, 21, 22, 27, and 28, and November 4, 5, 8, 9, and 10.

and the Acting Chairman of the Smaller War Plants Corporation.

Furthermore, hundreds of statements have been received from represe1;1tativ~s of busi­ness and people in all walks of life, stress­ing the importance of prompt settlements of ·contract-termination claims a:hd decisive ac­tion by the Congress to expedite such settle­ments.

The subcommittee bas also been in close touch with the Special Senate Committee on Post-War Economic Policy and Planning, whose excellent report of November 18, 1943, entitled "Cancelation of War Contracts, Dis­position and Sale of Surplus Property, and Industrial Demobilization and Reconver­sion," has been most helpful. The subcom:.. m'ittee intends to · carry on all its future studies · of proposed legislation in close co· operation with the special committee under the chairmanship of Senator GEORGE. Jolnt hearings may be held and iegislative pro-posals may be jointly sponsored. •

For the present, your subcommittee is ncit reporting any bill on contract termination. It is the intention to await fuller explora­tion of ~h.es~ problems by the George com­mittee.

GENERAL CONCLUSIONS Certain general conclusions ha ve been

reached by your subcommittee on contract termination: I

First, Congress must develop ari omnibus contract-termination statute and avoid the enactment of a host of sep..arate, conflicting, and ill-related acts. ·

It bas been the thought of some Govern­ment officials that we should have a separate law on advance payments, a separate law on the validation of defective contracts, another sep~rate law on the personal liability of con­tracting officers, and separate laws on many other individual problems. Your subcom:­mittee rejects this approach.

Many Government officials prefer legisla­tion that deals only with organization and procedures and omits any declaration of con­gressional policies. Rather than have the Congress clearly define their responsibilities, they prefer to operate under amorphous, in­complete legislation that would leave them full powers .of discretion in formulating basic policies. Your subcommittee feels that this approach is not acceptable to the Congress.

Second, regardless of the type of legislation enacted, the Congress must exercise a full and constant check upon its administration.

Congressional vigilance is an essential pal,'t of any program to. prevent the overpayment of huge sums of money. in settlement of con­tract-termination claims. This is particu­larly necesssary if the policies that will be · set forth by the Congress are to be adminis­tered in conformance with the intent of the Congress.

Your subcommittee, therefore, advises that in any legislation enacted Congress should underscore this principle by spelling out the responsibilities of appropriate Senate a:qd House committees in surveying and studying the administration of the act and developing necessary amendments. · Third, the legislation should be based upon

a declaration of policy that imposes upon the . Government and its executive agencies the following responsibilities:

A. To provide all business enterprises bav .. ing claims arising from terminated war con­tracts, whether prime contracts, ·subcontracts, or purchase orders, with (1) the opportunity to obtain quick equitable final se.ttlements, and (2) adequate interim financing during the period between· termination and final settlement. · ·

B. To protect· the interests of small busi­ness in contract termination.

C. To protect the Government's interest by · preventing overpayments, recovering excess

payments, and vigorously prosecuting all cases of fraud.

10948 CONGRESSIONAL RECORD-SENATE DECEMBER 21 SUMMARY OF BILL OUTLINE

Your subcommittee also submits an outline -of an omnibus bUl, based upon the three conclusions set ' forth above.

Until now no proposal that has been of­fered, whether in the form of a bill or other­wise, has undertaken to cover the entire sub­ject. In this respect the attached bill outline is unique.

It is the thought of the subcommittee that Widespread study of the bill outline by busi­ness a:o.d labor, as well as by the Members of the Congress and Government officials, will help develop constructive thinking upon the problem as a whole. The crystallization of informed opinion on this subject will enable the Congress to work toward the enactment of an omnibus contract-termination statute by the end of February.

While concurring in the general principles embodied in the bill outline, the subcom­mittee emphasizes the fact that it has not yet finally committed itself to any of the specific sections. -

The bill outline, which is in five parts, may be briefly summarized as follows:·

Title I sets forth -a declaration of policy, the responsibilities of Congress, and defini­tions of terms.

Title II sets up an office of contract settle­ment under the present Office of War Mobili­zation. Your subcommittee, however, is also studying the desirability of having the office of contract settlement· operate under a new demobilization agency to be set up by the Congress.

The director of the office of contract set­tlement is given the task of formulating all major administrative policies under the legis­lation. He is given specific. responsibilities, including the p-romulgation of uniform· ter­mination clauses for prime contracts and sub­contracts, the establishment of uniform rec­ord-keeping systems, the promotion of com­pany-wide settlements, the establishment of machinery for appeals, consultation with in­dustry, and the submission of quarterly re­ports to Congress. He is instructed to use existing administrative machinery to the fOil­est extent possible, but is authorized to estab­lish his own ,administrative machinery wher­ever necessary.

A list of allowable charges in contract-ter­·mination claims is provided for in this title. The specific definitions of such charges are to be developed by the director.

An advisory committee on contract settle­ment is also provided, .under the chairman­ship of the director. Representation on this committee is given to the General Accounting Office, the contracting agencies, the War Pro­duction Board, the War Manpower Commis­sion, the Department of Labor, the Depart­ment of Justice, and the Smaller War Plants Corporation.

Title Til lays down the general rules under . Which final settlements are to be made. ·

The existing authority of the contracting agencies to negotiate final settlementS · is recognized and clearly defined: The personal liability of individual officers; in the absence · of fraud, is removed. The General Account­ing Office is given the power to avail itself of all records and the responsibility of report­ing all cases of suspected fraud to the · Con­gress, the Department of Justice, and the particular agency involved, but shall not have authority to withhold payment of funds.

Special attention is given in the bill outline to the specific methods available to the con­tracting agencies in discharging their respon­sibilities toward subcontractors. First, the contracting agencies are to encourage the ·prime contractors to negotiate the bulk of the settlements with subcontractors on the basis of the policies laid down by the office of contract settlement. Where this is not fea­si-ble, the contracting agencies-with the con­sent of the prime-are to negotiate settle­ments directly with the subs. Where, for on3

reason or another, the prime's consent cannot be obtained, the contracting agencies may purchase the sub's claims.

Policies to be followed with regard to mate­rfals left on hand and goods in process are outlined in detail. Registr ation of released manpower with the United States 1Employ­ment Service is required. Provision is made to protect against misuse of termination for default in contract performance at the end of hostilities; to coordinate contract settle­ment with renegotiation; to continue the responsbilities of sureties; to protect the rights of assignees; and to perfect or validate defective contracts under appropriate circum-stances. -

Title IV deals with interim financing. Mandatory advance payments shall be made

to prime contractors within 30 days after sub­rrissio:h of claims; these ,payments shall be at least 7'5 percent, and may be 100 percent, of the amount certified as due.

The contracting agencies are authorized to make termination loans directly and to guar­antee termination loans of banking institu­tions. Borrowers from the Reconstruction Finance Corporation and the Smaller War Plants Corporation are given the same· pro­tection on termination as holders of V and V-T loans.

Title V deals with assistance to small busi­ness through the Smaller War Plants Corpo-ration. ·

The Smaller War Plants Corporation is given the power to purchase contract termi­nation claims from small companies; make or guarantee contract termination and re­conversion loans; buy, sell, or lease facilities and materials; anl advise small companies on their contract-termination problems.

The present bill outline does not take up the subject of judjcial review, which must be considered in connection with the final legislation. Your subcommittee expects to deal with this matter in the near future.

related .to the prosecution of the war, en­tered into by any department or agency which has been or may hereafter be authorized to place contracts pursuant to the authority granted by section 201 of the First War Powers Act, 1941, or (b) any subcontract as defined herein.

(2) "Subcontract" shall mean any contract, agreement, or purchase order directly or in­directly connected with or related to the performance of ~ny prime contract referred to in subsection 1 (a) of this section or of any subcontract.

(3') "Termination," "terminate," or "ter­minated contract" shall refer to the termina­tion, in whole or in part, of any prime war contract for the convenience or at the option of the Government {but not termination for default) or the termination or cancelation of any subcontract resulting from any such termination of a prime war contract.

(_4) "Material" shall mean any commodity, ,equipment, accessory, part, assembly, or prod-uct of any kind. ·

TITLE II. OFFICE OF CONTRACT SETTLEMENT SECTION 201. An Office of Contract Settle­

ment shall be establiShed within the Office of War Mobilization. A Director of Contract Settlement shall be appointed by the Presi­dent, by and with the advice and consent of the Senate, and shall receive a salary o! $15,000.

SEc. 202. The Director of Cont~act Settle­ment is authorized to establish field offices wherever necessary: Provided, That he works through the existing offices and personnel of the contracting agencies to the fullest ex­tent poEsible. . SEc. 203. The responsibilities and powers

of the Director of the Office of Contract Set­tlement shall be as follows:

(1) To make all major decisions of admin­istrative policy under all -the titles of this act, except where specified to the contrary. This does not include determination of the

OUTLINE FOR f. CONTRACT TERMINA~ION BILL V~lume Of contracts "to be terminated, the TITLE 1. GENERAL PROVISIONS choice of particular contracts to be termi­

nated or the disposal of Government-owned SEcTION 101, Declaration of policy: . surplus war property. (1) That it is the responsibility of the · (2) To promulgate regulations with regard

United States Government to provide all business enterprises having claims arising to uniform termination clauses for prize con-

tracts and subcontracts, advance payments, from terminated war contracts, whether glAaranteed lo!'l-ns, disposal of materials and prime contracts, subcontracts, or purchase orders, with the opportunity to obtain quick, equipment that are not 'taken over by the equitable final settlements and adequate 1n- Government, etc. terim financing during the period between (3) To promote the integration of the con-termination and final settlement. tract-settlement program with other pro•

(2) That it is the further responsibility uf·- grams relating to war production, demobili-the United States Government to protect the zation, disposal of surplus war property; and interests of- independent small business en- the renegotiation of war ' contracts. . terprises having claims arising from termi- (4) To promote the decentralization of nated war contracts and subcontracts. contract-settlement operation.

(3) That it is the further responsibility of (5) To promote the development of indus-the United States Government to protect the try-wide Government policies on contract Government's interest by preventing overpay- settlement. ments by the Government in the settlement (6) To advance and ,protect the interests of claims arising from terminated ·contracts of smaller prime contractors and subcon-and, whenever such overpayments have been tractors in contract settlement and to work made, to use. all possible methods to recover jointly with the Smaller War Plants Corpo-excess payments and prevent the recurrence r2.t1on toward that end. of similar overpayments, and to vigorously (7) To promote the use of simple reporting prosecute all- cases of fraud. forms that minimize the burden on record-

(4) That this policy is binding upon, and keeping and accounting personnel, particu-shall be adhered to by, all the departments, larly, of smaller companies. agencies, commissions, and corporations of (8) To direct the contracting agencies .in the United States-Government. the training of personnel compe_tent to han-

SEC. 102. Responsibillty of Congress: The die contract-settlement problems. Military Affairs Committees of the Senate and (9) To cooperate with the contracting the House, acting through appropriate sub- agencies in advising the major prime con-committees, shall currently appraiSe the ad- tractors on the organization of their contract ministration of the act, shall study each termination departments. \ report to Congress submitted under the act, (10) To provide businessmen with current and from time to time shall recommend ad- information on termination policies and pro-d1tional legislation or improvements in ad- cedures. ministrative policies and procedures. (11) To establish a _regular reporting sys-

SEc. 103. As used in this act; unless the con- · tern on the progress of termination settle-text indicates otherwise- ments and to obtain such additional infor-

(1) "War contract" shall mean (a) any mation from the contracting agencies from prime contract which Ia connected with or time to time as may be determined necessary •

•

1943 CONGRESSIONAL RECORD-SENATE 10949 (12) To review regularly a sample of con­

tract-settlement negotiations and agreements as a means of checking on possible overpay­ment, violation of policy directives, etc.

(13) To report to Congress every .3-months on the status of contract terminations and contract settlement, on the exercise of his responsibilities and powers, on the operations of each of the contracting agencies under the act and on the need for any additional

' legislation. SEc. 204. The Director of Contract Settle­

ment shall have the power to intervene in any particular settlement negotiation and set forth terms of settlement. These terms shall be fully binding on the agency or agencies involved.

SEc. 205. The Director shall have the power to assign individual companies having claims against terminated contracts or subcontracts that originated with a number of agencies or a number of bureaus or departments with­in an agency to any particular agency or department thereof for an agency-wide or Government-wide settlement of its claims.

SEc. 206. In setting forth uniform regula­tions and contract provisions under this act, the Director is authorized to include as allow­able charges against the Government direct costs, indirect expenses and overhead, pre­production costs, a fair profit on the un­completed portion of the contract, an inter­est charge on the amount owed the contractor to cover the period between termination and settlement, the cost of canceling leases on property no longer needed, the cost of re­moving materials or machines from the plant, storage costs on materials or machines, and Qther legitimate termination or settlement e':penses. Th~ Director is authorized to de­fine these allowable charges and to allow the use of standard costs.

SEC. 207. The Director shall set forth ,pol­icies and procedures with regard to advance notice of contract termination. These shall include (1) immediate stopping of new work, except insofar as starting new work is neces­sary to avoid injury to plant or materials; (2) a minimum of 15 days advance notice with regard to work-in-process, with additional ad­vance notice wherever possible; (3) the com­pletion of work-in-process to the extent that a saving to the Government may be effected thereby; (4) to the fullest extent possible, prior consultation with the contractor; (5) immediate notification of subcontractors; (6) adoption by prime contractors of the same policies followed by the Government.

SEc. 208. The Director shall establish a system whereby adequate advance notice and other information on contract termination and on the settlement of claims against ter­minated contracts is made available to . the War Production Board, the War Manpower Commission, and other Government agencies.

SEc. 209. The Director shall set forth poli-., cies and procedures in accor<;lance with which

appeals boards shall operate within the con­tracting agencies. He is authorized, wherever he deems necessary, to direct the establish­ment of local appeals boards or interagency appeals boards and to direct. the appointment ·of public members of such appeais boards.

SEc. 210. There is hereby established a Committee on contract Settlement, to be made up of full-time representatives of the procurement agencies, the War Production !Board, the War Manpower Commission, the Smaller War Plants Corporation, the General Accounting Office, the Department of Justice, ·and the Department of Labor. The Director shall act as chairman of the committee and shall convene and consult with the commit­'tee at regular intervals on the major problems involved in administering the act.

SEC. 211. Through advisory committees or such other methods as he may determine, the Director shall consult to the fullest extent possible with war .contractors, small and large, and wHh labor and other interested groups on basiQ policies .and procedures.

TITLE Ill. FINAL SETTLEMENT

SECTION 301. The head of each contracting agency shall have the power to negotiate final settlements on terminated war contracts based on the specific policies and regulations set forth by the Office of Contract Settlement. Once approved by the head of a contracting agency, such settlements will not be subject to reversal or change in any fashion outside of the individual contracting agency, except

. through court action. This power may· be delegated and redelegated within the agency or among the agencies.

SEc. 302. In the absence of fraud, no officer of the Government shall be personally liable for excess payments made in settlement of claims against terminated contracts.

SEC. 303. The contracting agencies · shall have the following responsibilities and powers with regard to subcontraCtors and suppliers:

(1) To the fullest extent possible, delegate to the prime contractor the responsibility of negotiating final settlement with subcontrac­tors.

a. In so doing, the contracting agencie~ shall set forth the general policies and pro­cedures to be followed by the prime contrac­tors and negot~ate with the prime contractors 1 for the insertion of uniform termination clauses in subcontracts.

b. The contracting agencies shall make spot checks of payments ne~otiated by the prime contractors, varying the intensity and frequency of such checks in accordance with the size of the claims.

c. The contracting agencies shall hear ap­peals from subcontractors against .the prime contractors and intermediate subcontractors.

(2) To the extent that final settlement with subcontractors cannot be properly han­dled by the prime contractors, and provided that the prime contractor consents, negotiate final settlement with subcontractors directly.

a. Where necessary, and with the consent of the prime contractor, the contracting agencies may enter into new contracts di­rectly with subcontractors for the settlement of termination claims ·or for the transfer of subcontracts from the prime contractor to the contracting agencies.

(3) To the extent _that final settlements cannot be properly handled by the prim~ con­tractors and that consent of the prime con­tractors cannot be obtained for direct nego­tiations between th~ contracting agencies and the subcontractors, the contracting agencies may .purchase the claims of the subcontrac­tors.

a. This process shall be ·used in the case of subcontractors whose prime contractors are -insolvent, irresponsible, or out of busi­ness or whose contracts have been canceled as a result of default on the part of the prime contractor.

b. This process shall also be used in devel­oping agency-wide or Gover~ment-wide set­tlement of all the claims of a company.

SEc. 304. In case of the insolvency of any prime contractor, the subcontractor shall have a lien upon any final settlement funds paid to the prime, prior and superior to the lien of any general · creditor. This would be along the lines provided in section 4 of the Dent Act of 1919.

SEC. 305. DISPOSITION OF MATERIAL5-(a) Contracting officer is to give contractor

directions as promptly as possible as to de­livery of ma,terial to be transferred to Gov­ernment.

(b) Title to material as to which contract­ing- officer fails to give directions within 30 days after submission of· inventory by con­tractor automatically vests in the Govern­ment.

(c) Government shall accept, a_s_ adequate credit for value of material in hands of sub­contractor, the price received by subcontrac­tor, if material is sold in good faith at public sale under general conditions set forth by the Government.

(d) Con tractor may remove and store ma­terial if Government fails to authorize de­livery within 30 days after written request.

(e) Disposition of material is subject to all priorities orders and regu.lations.

(f) The War Production Board is author­ized and directed to obtain from prime con­tractors and subcontTactors information on raw materials, tools and facilities released through contract termination. .

SEC. 306. All war contractors, whether prime or sub, releasing employees as a result of con­tract terminations shall file with the local office of the United States Employment Serv­ice a list of the released employees.

SEc. 307. To assist in the identification of claims, all termination notices to primes shall require that notices going down the line to subs include such basic information as would .enable the subs to know the particular Gov­ernment agency that originally awarded the contract. Such · information shall also be made available, to the fullest extent possible, before termination.

SEc. 308. I! termination of contracts is part of general termination of war contracts. at the end of hostilities, contract may not be terminated for default unless contracting officer finds c;lefaults have been gross or will­ful and have caused substantial damage.

SEc. 309. Wherever possible, contracting agencies shall settle contracts on such a basis as to enable them to agree that payments made on terminated war contracts shall not be subject to renegotiation.

SEc. 310. Sureties remain responsible for all obligations of contractors as modified by termination notices.

SEc. 311. Any payments made in settlement of, or on account of, claims against termin­ated war contracts shall be f\Ubject to any valid assignment of such contract or sub­contract or of any claim thereunder.

SEc. 312. Informal or defective contracts . made prior to the passage of this act may be validated by the contracting agencies. ,Agen­cies are to convert existing contracts of this type to formal contracts, to the fullest extent possible, within 90 days and report to Con­gress on the matter within 120 days.

SEc. 313. Provisions of section 35 (a) of Criminal Code are applicable to any state­ment submitted in support of any claim against terminated war contracts.

SEC. 314. The Comptroller General shall have access to all records included in the settlement of claims against terminated war contracts and is authorized to examine such records before or after final settlement. He shall have the responsibility of reporting to the agency involved, to the Department of Justice and to Congress any case of apparent fraud. He shall not have the power to with­hold payment of any funds.

SEC. 315. The Director of Contract Settle­ment is authorized to set forth the policies to be followed in the administration of all sections of this title except section 314. He is authorized to delegate this authority to any other Federal agency.

TITLE IV. INTERI~ FINANCING SECTION 401. Mandatory advance payments

shall be made to p:r;ime contractors within 30 days after application, of at least 75 per­cent and up to 100 percent of claim submitte by prime contractors. .

The contracting agencies are authorized to make advance payments to subcontractors.

Advance payments in excess of the sum paid ln final settlement shall be treated as loans, with interest of 6 percent. .

SEc. 402. The contracting agencies are au­thorized to pay to prime contractors or sub­contractors any p~rtial sums that have fin?-lly been agreed upon.

SEc. 403. The contracting agencies are au­thorized to make contract termination loans or to guarantee such loans made by banking institutions. ·

10950 CONGRESSIONAL RECORD-SENATE -DECEMBER 21 Amount of loan made or guaranteed, plus

any advance or partial payments, shall be no larger than the total estimated final settle­ment.

Where existing V' loans are terminated as the result of a cont ract termination, the con­tracting agency or age~cies involved shall arrange for another_guaranteed loan or for a direct loan to take its place.

Any Federal Reserve Bank may act as the :fiscal agent of the United States in making the authorized loans ot- guaranteed loans.

SEc. 404. Any funds now or hereafter avail­able to a contracting agency may be used for m aking advance payments, partial payments, direct loans, guaranteed loans, or any other purposes authorized under this act.

SEc. 405. Upon request of Reconstruction Finance Corporation a:J;ld Smaller War Plants Corporation borrowers with terminated war contracts, the proper portion of interest and amortization payments shall be suspended until date of final settlement. .

SEc. 406. Provisions of section 35 (a) of Criminal Code are applicable to any state- ' ment submitted in support of application for an advance payment or loan.

SEc. 407. The Director of Contract Settle­ment is authorized to set forth the policies to be followed in the administration of all sec­tions of this title, including the information required in applications for advance pay­ments, the type of investigation to be made, and the terms and conditions of direct and guaranteed loans. TITLE V. RESPONSmiLITIES AND POWERS OF THE

.SMALLER WAR PLANTS CORPORATION SECTION 501. It shall be the duty of the

Smaller War Plants Corporation to take all possible steps to aid small business produc­tion concerns in problem~ connected with the termination of war contracts, the settlement of claims thereon, and the conversion to peacetime production or ot her types of war production. For' these purposes it shall have and exercise the following powers:

(1} It may purchase claims of small busi­ness production concerns arising . out of the termination of war contracts, together with such material ·and machinery as may be inci­dental thereto or a part thereof.

(2) It may make or guarantee loans. against claims on terminated war contracts. Identi­fication and appraisal of individual claims shall not be a necessary condition for receiv­ing a loan.

(3) It may make or guarantee loans to assist in conversion to peacetime production.

( 4) It may purchase and sell or lease ma­chinery,-plants, or materials released through contract terminations.

( 5) It shall advise and help small business concerns on the various prob!ems invo1ved in contract 'terminations-including the selec­tion of contracts to be terminated, obtaining authority to continue all or parts of certain contracts accounting and record-keeping sys­tems, and so forth.

SEc. 502. The above activities shall be ad­ministered on a decentralized basis, with broad delegation of lending and purchase powers to local offices. Contract termination advisers shall be appointed in all local offices.

SEc. 503. The sum of $ shall be ap-. propriated to the Smaller War Plants Corpo­ration for the above purposes.

SEc. 504. The Director of Contract Settle­ment is authorized to set forth the policies to be followed in the administration of section 601 (1) and section 501 (2) of this title, but of no other section of this title,

MESSAGE FROM THE HOUSE

A message _from the House of Repre­sentat~ves, by Mr. Chaffee, one of its reading clerks, announced that the House had passed a joint resolution <H. J. Res. 2J.O) authorizing the printing and

binding of a revised edition of Cannon's Procedure in the House of Representa­tives and providing that the same shall be subject to copyright by the author, ·in which it requested the concurrence of the Senate. ENROLLED BILLS AND JOINT RESOLU­

TIONS S,.IGNED

The message also announced that the · Speaker had affixed his signature to the following enrolled bills and joint res­olutions, and they were signed by the Vice President:

H. R. 1203. An act to limit private suits for penalt ies and damages arising out of frauds against the United States;

H. R. 1616. An act to amend the Coast Guard Auxmary and Reserve Act of 1941, as amended; ·

H. R. 2562. An act to authorize the Secre­tary of Agriculture to sell and convey to The State Hospital at Goldsboro, Goldsboro, N. C., a certain tract of land, situated in Wayne County, N. C.;

H . R. 3598. An act making appropriations to supply deficiencies in certain appropria­tions for the fiscal year ending June 30, 1944, and for prior fiscal years, to provide supple­mental appropriations for the fiscal year ending June 30, 1944, and for other purposes;

S. J. Res. 103. Joint resolution continuing the Commodity Credit Corporation as an agency of the United States;

S. J. Res. 105. Joint resolution fixing the date of meeting of the second session of the Seventy-eighth Congress;

H. J. Res. 171. Joint resolution to permit the importation from foreign countries free of duty, during a period of 90 days, of certain grains and other products to be used for live­stock and poultry feed, and suspending for 2 months the increase in the tax rates under the Federal Insurance Contributions Act; and

H. J. Res. 209. Joint resolution extending until January 31, 1944, the provisions of the act of April 29, 1943, making an appropria­tion to assist in providing a supply and dis­tribution of farm labor for the calendar year 1943.

.REVISED EDITION OF CANNON'S PRO­CEDURE IN THE HOUSE OF REPRESENT­ATIVES

Mr. HAYDEN. Mr. President, I ask unanimous consent that House Joint Resolution 210, just messaged over from the House, be· laid before the Senate.

The VICE PRESIDENT. The Chair lays before the Senate a joint resolution coming over from the House of Repre­sentatives.

The joint resolution <H. J. Res. 210) authorizing the printing and ·binding of a revised edition of Cannon's Procedure in the ·House of Representativ~s and pro­viding tl;lat the same shall be subject to copyright by the author was read twice by its title.

Mr . . HAYDEN. Mr. President, I ask unanimous consent for the present con­sideration of the joint resolution.

The , VICE PRESIDENT. . Is there objection?

There being no objection, the joint resolution <H. J. Res. 210) authorizing the printing and binding of .a revised edition of Cannon's Procedure in the House of Representatives and providing that the same shall be subject to copy­right by the author · was considered, ordered to a third reading, read. the t~ird tilt!e, and passed.

PHYSICIANS' FORUM -SUPPORTS HEALTH INSURANCE

Mr. WAGNER. Mr. President, on be­half of the Senator from Montana [Mr. MuRRAY] and myself, I wish to call to the attention of the Senate a statement released yesterday by the Physicians' Forum for the Study of Medical Care, a group of more than 250 doctors. On November 3, I inserted in the Appendix of the REcORD extensive materials ex­plaining proposed legislation on the sub­ject of health insurance, Senate bill 1161, and showing the falsity of the wide­spread propaganda which has been circulated against it in some quarters.

The report · of ~he Physicians' Forum just released supports the general , principles of the medical and hospital insurance provisions of the social-secu­rity bill, which the Senator from Mon­tana and I have sponsored in the Senate and Representativ·e JoHN DINGELL has sponsored in the House of Representa­tives. We are pleased that this impor­tant group of physicians, including many of the highest rank in professional attainment, have taken this view of the proposed legislation. We are especially gratified also that they have presented constructive criticisms and suggestions for its improvement. This important group of physicians is to be congratu­lated on its public spirited and construc­tive outlook, as citizens and as profes­sional men and women.

The sponsors of the proposed legisla-. tion have repeatedly stated that they make no claim to perfection in its terms; that it is put forward as a basis for study and earnest attention on the part of Congress, and alf interested in improv­ing the quality and distribution of medi­cal care for the American people. We therefore welcome most heartily the constructive suggestions which have been made in this report. They will receive our open-minded and careful study.

I ask that full text of the report by the Physicians' Forum be printed in the RECORD. .

There being no objection, the report was ordered to be printed in the RECORD, as follows: PHYSICIANS FORUM TAKES ISSUE WITH AMERICAN

MEDICAL ASSOCIATION-ENDORSES WAGNER BILL Taking issue with the American Medical

Association's opposition to the Wagner­Murray-Dlngell bill, the Physicians' Forum today hailed the bill as epoch making and the most realistic legislation yet proposed for improving the quality and di&tribution of medical service on a national scale.

The Physicians' Forum is a national organ­ization, with headquarters in New York, founded in 1939 for the study of medicai care. Its membership includes more than 250 doctors. Dr. Ernst P. Boas is chairman of the ·group. · _

The general principles of the medical and hospitalization provisions of the social-secu­rity b111 introduced by Senator RoBERT F. WAGNER and JAMES E. MURRAY in the United States Senate and Congressman JoHN DINGELL in the House of Representatives were ap­proved by the Physicians' Forum in a state­ment released by the executive committee.

"The basic concept of the bill should not only be accepted but actively supported by

1943 CONGRESSIONAL EECORD~SENATE 10951. all physicians," the Physicians' Forum de­clared. "This concept is that sickness has · profound economic and social consequences and that measures for its prevention and treatment are therefore the concern of the entire community as well as of the doctors.

"The bill comes to grips with the funda­mental issue of ·economics which is at the core of the entire problem of improving dis­tribution of medical service. Recognizing that scientific advances have so increased the costs of modern medical care that it is be­yond the reach of most people, the authors of the bill rightly declare that only through compulsory health insurance on a national scale can these costs be met.

"Compulsory Federal health insurance through social-security payments is ·at pres­ent the most practical and soundest financial method of assuring in dl'lmocratic fashion the greatest medical b nefits to the greatest number of people. This insurance provides that all but the completely indigent will receive medical services not as a charity but as a tight for which they have individually contributed; this likewise assures doctors of payment for all their services, thereby raising the general level of physicians' income.

"Federal insurance funds are allocated ' for medical research, education, and post-gradu­ate study, the benefits of which will redound to the advantage of the people whose ~ontri­butions .make this possible. Medical stand­ards will be universally raised · through the formulation of policy ~n a nationf!l . bas~s .. The provision for scientific study· of distri­bution- of medical services marks a notable advance in legislative recommendations.

"The bill, as Senator WAGNER himself says, • is by no means a perfect instrument in its

present state. Many modification~, addi­tions, and clarifications are necessary. Ad­ministrative procedures need particular study; certain principles must be assured. Matters of a medical nature must be con­trolled by physicians. The administration should be entirely no1;1political; the maximum degree of local autonomy through local coun­cils representing the medical ~rofession and. the lay public should be assured; and par­ticipation of these councils ·in all major policy decisions ·should be permitted.

"The Surgeon General of the United States Public Health Service should be the chief administrator, as the bill now provi-des, but policy should be formulated by a health officer with Cabinet rank or a board represent­ing physicians and the public. The bill should specifically provide for the promotion of group medical practices, particularly should oonsideration be given to capital funds necessary for hospitals and related facilities. The section of the bill relating to hospitals and specialists needs further study and clari­fication. The bill does not provide for pay­ments for drugs, an item which represents one of the main costs in medical care.

''Notwithstanding these def~cts, the Wagner-Murray-Dingell bill contains all the chief requisites of a democratic and efficient distribution of medical' care. It has our whole-hearted support."

HOm~ING AT NORTH AMERICAN AVIATION PLANT,DALLAS,TEX. .

Mr. O'DANIEL. Mr. President, in or­der that North American Aviation of Dallas might comply with the request of the Army for increased production of bombers and fighters, it was necessary that · additional temporary housing be built, ancfit is being built by the National Housing Authority in the form of 3,000 temporary housing units. The produc­tion of bombers and fighters for our boys overseas is actually being delayed be .. cause of a lack of adequate housing for needed· ~mployees. -

In the face of this situation, a dispute arose between the painting contractor and the union because the contractor wanted to dip the trim instead of spread­ing the· stain on with a brush. After sub­stantial negotiation, the contractor pointed out that if he agreed to put the stain on with brushes it would mean the use of a tremendous amount of addi­tional manpower, that if would slow up the job of finishing the housing, and, furthermore, he could not buy the brushes necessary to apply the paint.

While this controversy was proceed- ­ing, Mr. Sorenson, labor relations ad­viser for the National Housing Authority, went to Dallas to make a speech. Let it be borne in mind that this Mr. Sorenson was a Government representative paid by the taxpayers, and that his job was to try to get these houses built and to avoid labor difficulties. But instead of talking to the painters and endeavoring to get them to take a common-sense view of the situation, the report of his speech shows that he took exactly the opposite course, and that his remarks were calculated to incite and continue labor trouble rather than to settle any labor difficulty.

I think it is time for the National Housing Authority to call in this Mr. Sorenson, who is being paid with the taxpayer's money, and at least keep him parked here in Washington, where he will not be sabotaging war work, which he most definitely was doing in the type of statement he made in Dallas. I think it is easy for us to understand why the building of housing : throughout the United States for our war workers has been so poorly handled, when we read this statement of Mr. Sorensen and dis­cover the kind of people the Federal Housing Authority ·have selected to be their labor advisers. We can understand the kind of advice they are uniformly getting with such men as this as advisers.

Mr. President, in connection with these remarks I ask unanimous consent to have inserted in the RECORD, at this point, copy of letter fr.om Holmes Green, Chairman War Housing Committee, Dal­las, a letter from Frank H. Abel, painting contractor, of Dallas, addressed to Holmes Green; copy of letter from Frank H. Abel to Robert E. McKee, general con­tractor, of Dallas, and copy of sworn statement of remarks of Mr. Sorenson, labor adviser of the Federal Public' Hous­ing Authority.

There being no objection, the letters and statement were ordered to be printed in the RECORD, as follows:

W. A. GREEN Co., Dallas, ·Tex., December 13, 1943.

Senator W. LEE O'DANIEL, United States Senate,

Washington, D. C. MY DEAR SENATOR: For over 3 years I have

been chairman of the local war housing committee and during that time we have secured the construction of many thousands of small houses for war workers in order to take care of the tremendous immigration of people to Dallas. The same conditions which have confronted our city have also confronted the other large cities of Texas.

Recently we passed through a very critical and threatening manpower shortage. In order to remedy this situation and to furnish quick housing for several thousand war work-

er& who desired to move to Dallas, the Na­tional Housing Agency f,~.Utl:orized the con­struction of 3,000 temporary housing units. These units were necessary and it was vital that they would be mass-produced with all the speed posssible.

About 3 weeks ago the painters' union walked off the job because they claimed that certain interior shelving was being dipped rather than painted with the hand brushes. Needless to say the contractors involved have gone right ahead with the work, and these units should be compl-eted by February 1. Attached is a record of the controversy. I thought you would be particularly interested in the remarks made by Mr. Sorenson, who is the labor adviser to the Federal Public . Housing Authority, which agency is charged with the duty of constructing these tempo­rary units. Mr. Sorenson attended a meeting of the pain~ers' local in Dallas and encour­aged the painters· to walk off the job. It seems amazing to many of us that anyone whose salary was paid by the taxpayers :would encourage any delay in the construction of planes during a period of tremendous labor shortage. I thought you would be interested in this data, and I am quite sure that you will be interested in the remarks of Mr. Sorenson, which are on page 13.

Very sincerely yours, HOLMES GREEN,

Chai rman, War Hous!nf! Committee.

DALLAS, TEx., December 9, 1943. Mr. HOLMES GREEN,

Care of W. A . Green Co., Dallas, Tex.

DEA~ MR. GREEN: Enclosed please find copies of letters and statements relative to the strike on the war-housing project in Dallas which you requested.

You have my permission to use these in any way you see fit without reservation. You need not worry about anything you might wish to do affecting me or my work, 15e.cause I am fast coming . to the conclusion it is rather hopeless to have to fight Government agencies and unions backed up by these agen­cies putting them in a position to force you to their terms, regardless of conditions.

I{ in the future I might be of' service .to you in any way, please do not .hesitate to call on me. ·

Yours very truly, FRANK H. ABEL.

DALLAS, TEX;, November 30, 1943. ROBERT E. McKEE,

General Contractor, Dallas, Tex. DEAR Sm: In order that you might fully

understand my position and what has taken place up to this date regarding the dispute between the Painters Local Union, No. 53, and myself, in connection with the dipping of the interior stain trim, I ,am giving you the following information from the beginning of the discussion and the beginning of the job.

After receiving the award of the painting on ttie above-described project, I was advised through one of my workmen, Mr. Jerry Gateley, that Mr.·Marr, the painting business agent, advised him that no dipping would be permitted on this job. In view of this I con­tacted Mr. Dave Marr prior to commencing work on the job and requested a meeting with the painters' executive board for the purpose of arriving at the best and fastest means of handling the large quantity of interior trim.

The meeting was held in my office prior to November 9, at which time no stain work had been done on the project. After a quite lengthy discussion regarding the job (the stain trim in particular) , the executive board agreed that the method described by me, which was dipping, was the most practical way to handle this particular item. It was agreed also at this meeting that I would not request permission to spray any part .of this

10952 CONGRESSIONAL RECORD-. SENATE DECEMBER 21 project and that all walls and -ceilings, both interior and exterior, would be brush painted. Each member of the executive board agreed to make a statement to that effect, setting forth the conditions under which the project would operate in order that no controversy would come up among the workmen regarding this dipping. The following meeting night, which was November 9, the painters~ local voted on the agreement made between the executive committee and myself, overruling their de­cision. This information, however, was not conveyed to me by Mr. Marr or other officials of the union until several days later, .which was November 12.

Certain preparations for doing this work were made in the meantim·e, which included the renting of a large tent to house this trim and other general preparations of an expen­sive nature. Mr . .Marr came to the job on November- 12, at which time he ·advised me the dipping would have to stop. I advised him that this was the · first knowledge I had of a reversed decision on the subject and asked why I had not been previously notified. He advised me that possibly he was a little lax in informing me of the painters' meeting at which tl.me they overruled the executive board's decision. He also stated that we had better call another meeting and try to get the matter straightened out. I agreed with Mr. Marr, and a m~eting of the executive board was called that evening, November 12. .At this meeting there were some new faces in the executive board, together with some of the members that were present at the first meet­ing. The dipping of trim was discussed

· thoroughly again and the committee agreed again that the ~ethod of dipping was the most practical means of executing the work in question, in the working time allotted for the job and this particular item. They also advised me at this meeting that they could not give me the authority to go ahead without taking the matter up with the painters at their next regular meeting. I then advised them that there was a large quantity of this trim being delivered to the job that evening whiclr was going to be installed in the buildings the following Mon­day, and that it would be necessary for me to dip this trim in order to make it ready for installation . . They concurred with me and advised me to dip this trim and at their next meeting they would use their influence with the painters to secure their permission to continue the practice of dipping on the re­mainder of the project.

I proceeded with the dipping and was not!· fied the night of November 16, by their presi­dent, Mr. Fuller, that again the members had voted against dipping this trim, and that no member of local union No. 53 would be per­mitt ed to dip such trim and if they did they would be subject to fine. i:n view of the painters advising me they would not permit any of their mem_bers to dip said trim, on November 17 I employed laborers to carry on the work they had refused to do. Mr. Fred W. Thompson, superintendent on the, job, was instructed by me to carry on tl;le work as originally d.irected by me.

I was advised by my superintendent the morning of November 24 that Painters Local Union No. 53 had declared me unfair at their meeting held November 23. The official no­tice, however, was not given me until Satur­day, November 27, at which time I received notice by mail of their action. ·

On November 26 a meeting was held in the office of Project Engineer H. R. Dillingham tor the purpose of settling the dispute and continuing with the work. At this meeting ' the following were present: Mr. John Ge­maro, superintendent for Robert E. McKee; Mr. Dan Kennard, labor-relations adviser; Mr. D. H. Marr, representative of local union No. 53; and myself, Frank H. Abel, painting con• tractor.

I will state briefly that Mr. Kennard's at• tltude ·was anything but helpful in that he took issue with both myself and Mr. Gemaro on every detail . I also wish to state at this point that Mr. Kennard was in the city prior to our first meeting held on November 23 at which time he met with union repre­sentatives, receiving their views and com­plaint s prior to ' the meeting of November 23 and at no time did he question me or con­verse with me regarding my problems in the matter prior to this meeting. · On the morning of November 24 I was ad­

vised by several members of the painters' local union that Mr. Sorenson, a representa­tive of the Federal Public Housing Authority, met with the painters on the evening of No­vember 23 and made a number of derogatory remarks about me. I am attaching a state­ment made and signed by several members of the local union who were present at this meeting. I fully believe had Mr. Sorenson stayed away from the meeting ,and not aroused the members the way he aid. that there would have been a vote taken til my favor. I feel that it is not necessary for me to make further comment on Mr. Sorenson's lecture, except that his actions to me in such an important matter are deplorable. Omit­ting the personal slander, his actions wer.e not becoming a Government representative who is charged with dealing fairly with both sides.

Briefly, my sole purpose for insisting on dipping this trim is to save bristles, of which we have a very few, and the Federal Govern• ment has requested that we contractors con­serve these bristles. The method used is also a labor-saving procedure, and using any othe:r method would definitely delay the finishing of this proj_ect. The bylaws of the local union, No. 53, . or their general constitution does not make mention of this procedure and therefore, according to their own working rules, Jlas no jurisdiction over ~his dipping. I consider that every contraqtor or Sllbcon­tract or has a duty and obligation to develop a labor-saving method that is practical and

. workable at this time. However, due to the opposition encountered with the union and the Federal Housing Authority representa­tives, Mr. Soren~on and Mr. Kennard, I agreed to proceed with the staining of this work in question by these methods as they recom­mended, which is brushes, as long as the brushes hold out, or apply stain with rags or lamb's wool. I agreed to this at the meeting November 23. The special meeting the night · of th'e 23d refused to consider my proposal and declared me unfair.

My only request 1n agreeing to their de• mands was that the entire matter be dis­posed of and members of their · union who w6rked on the job as superintendent and foreman not be penalized. My .reason for that request was to protect the superintend­ent and foreman who stayed on -this Job dur­ing the period of discussion, also forestall any . attempt made by some of the prejudiced members and business agent to bar these men from the job. It would be a serious mat­ter and would delay the painting to be forced . to change keymen at this time.

Mr. Marr and Local Union No. 53 are re­sponsible for the confusion in this matter, and they themselves doubted that their by­laws could require this stain to be brushed. Members of tne executive board made those statements to me. I feel my actions are jus­t~fied for the following reasons':

1. This is an important war-housing job, and time is the essence of the contract.

2. Not possible to execute a job of this type in time allowed for completing by meth­Ods other than dipping.

S. D.ipping or .staining not covered in by­laws or constitution of the painters, therefore they do not have jurisdiction.

SA. Specifications do not requi11e . this trim to b~ brush~d. ·

'r

4. Painters have refused to do this dip· ping, therefore it belorigs to soineone else.

5. Laborers should be the ones to do this work, because no skill is necessary. The treatment ~s no more than an oiling which is usual.ly done with unskilled labor.

6. Executive board made investigation of conditions, granted permission, sonie ·mem­bers o~ executive board being ·emplOyed on project were fami11ar with conditions job had to be done under, and was in a better posi­tion to know the facts before granting per­mission. Members of the Local Union No. 53 did not aquaint themselves with the neces­sity of doing this dipping.

7. Job does not carry priority high enough to purchase brushes, if brushes were avail­able. Quality of brushes and mechanics not good enough to cut into walls with stain without damaging walls.

Since the. painters have struck on the job, and after 3 days' delay, I have employed any painter ~vailable for work, whether he be­longed to the painters' union or not. By De­cember 5, I expect to catch ·up with all the ~ork which has fallen behind due to the above conditions.

Very truly yours, FRANK H. ABEL,

The following general remarks were made by Mr. Sorenson of the Federal Public Hous­inl? Authority at a special meeting of the pamters local union held November 26, 1943, in the Painters Hall, at Dallas, Tex., in re-

. gards to dipping stain trim on the Federal -public-housing project No. Tex-41605. .

"I was sent over here by the Federal Hous­ing Authority heads to assist in this contro­versy between the Local Union No. 53 and ~ Frank H . .Abel, contractor. I was sent here as an adviser and you do not have to take this advice, . b'l:lt nevertheless we are not in an enviable position,' but ·it is still our job. He then went on to explain> the stabilization agreement, with a few words on it in regards to the general contractors having signed the stabilization agreement with the F. P. H. A:, and that. the subcontractor or subcontractors were a party thereof, and also the members of the Local Union No. 53. He explained about it being made in regards to ·keeping down stoppage of work but he said, to my opinion that when this was made it was not made with the idea that the contractors and certain Fascist elements could cram open­shop conditions down our throats. [Loud applause from the union members.) Also the Smith-Connally bill was not made with these thoughts in mind, and I advise this or­ganization to take this case before •a board of review of the F. P. H. A. You have had this same trouble with this contractor before in Orange, and you are having it now, and I don't expect this to be the last tinie. · I don't blame you for holding up for your rights that you have fought for for the last 40 or 50 years, and your forbears before that . . I don't see why our conditions have to be torn down because some man is waving an American flag · in our faces. I realize that this is a Government job and it has to go on and you men will have to do it. I st11I want you to know that I am only here for the pur­P9Se of giving advise and you are not com­pelled to take it and neither is the contractor compelled to take it. I am only here in an advisory capacity."

I, the undersigned, was present at this mee·~ing and heard Mr. Sorenson of the Fed­eral Public Housing Authority make the above remarks. I am also a member in good standing with the Painters, ·Paperhan·gers, -and Decorators Union of America.

. · _ W~ H~ GLASS, Sworn to before me this .3Ptll ~ay o~ No-

vember 1948. . ; 1 · ; .·1· : •• , ·

[SEAL] ROSE MARt _ Moli.R~S, · · flofary Puulio.

1943 ·coNGRESSIONAL .RECORD-SENATE 10953 PRESERVATION OF SURVIVING JEWISH

·PEOPLE OF EUROPE

Mr. GILLETTE. Mr. President, yes­terday by ·direction of the Committee on · Foreign Relations I reported favorably Senate Resolution 203. - I wish to say

·in that connection that I have been re­quested by the chairman of the com·­mittee to ask unanimous consent for the

. immediate _consideration of the resolu­tion, but I have been informed that the

· leaders on both sides of the aisle have made certain commitments. - In defer­

. ence to the plans which have been made by the leadership I shall not ask for present consideration _of the resolu~ion.

• OREGON'S· CONTRIBUTION TO THE WAR · EFFORT ..

Mr. HOLMAN. Mr. President,-as the calendar year 1943 draws to a -close and this session of the Seventy-eighth Con­gress is . about to terminate, I wa~~ to record and to call to the attention of the Senat'e, the House of Representatives, and the American people, a little noted but tremendously important event in the Oregon country.

On December 14, 1943, the tenth and . last generatjng unit of the ,Bonneville Authority on the Columbia River went into operation. This, in my ·opinion, represents the symbol of Oregon's many outstanding war contributions, and fixed the beginning of the State's transition

· from the· status of an empire producing chiefly raw, or unprocessed, products to an ever-expanding industrial develop­ment, whereby the almost boundless and infinite variety of raw products will be refined in the area for use and consump­tion throughout the world. The com­pletion of the Bonneville plant signifies the advance of the area known as the Oregon country, and its growing . im- . portance in the industrial and commer­cial enterprise of the Nation and of the

. world. For these reasons this ' accom­plishment must be considered Oregon's outstanding event in the past year.

As one of Oregon's representatives in the Senate of the United States, it has been m.Y good fortune to urge success­fully those enactments which made pos­sible the completion of the Bonneville Dam project, together with its adjacent projects which effect a better utilization and distribution of the State's resources.

When I came to the Senate in 1939 and was designated as the only Pacific coast representative on the Senate Appropria­tions Committee, I found that a fixed

- policy had not been established covering. the completion and utilization of the Bonneville plant, and of the hydroelec­tric power generated in the Columbia River. During the course of an inves­tigation of this entire subject I also fqund that our country was woefully lacking in electrochemical and metallurgical plant capacity, and that this deficiency would retard seriously any possible modern de..: fense effort. Fortunately; the Senate accepted the proposals I' offered; and the House reversed its limitation enactment ­and adopted the Senate bills. This pro­vided one of the means of rectifying the Nation's defense deficiencies.

- The war contribution of Columbia River power has not been ·fully . under­stood. Columbia River power . is fur- ·

. nishing about one-third of the light_· metal requirements of.our total airplane program; about one-fifth of the· power required by our maritime construction; and about one-third of another most im­portant tool of offense. For military reasons, the details of these contribu­tions cannot be fully given; but they are

-of ·major importance, and so ·located a·s to be beyond the range of enemy at­tack .

This -industrialism, and-the work, will, and the sacrifices and contribution of Oregonians, have placed our State high

. on the list of the States · underwriting victory.

Columbia .River power, fortunately, is. . also a great instrument for furthering regional development in the post-war period. It can be made the means of providing expanded elll,ployment and ex­tending opportunities for our returning soldiers to rehabilitate themselves in peaceful pur~;uits. In this obj~ctive all of us have a commo_n cause. _

The Corps o:f Engineers, United States -Army, and the staff and personnel of the Bonneville Power Administration are· to be congratulated on the successful, early, and efficient completion of the Bonneville plant and of its marketing facilities.

CONSTRUCTION OF CERTAIN .PUBLIC WORKS FOR THE NAVY

Mr. WALSH of Massachusetts. Mr. President, I ask the attention of the ma­jority leader the Senator from Kentucky [Mr. BARKLEY] and the acting minority leader the Senator from Maine [Mr. WHITE]. I should like to make a pre­liminary statement prior to asking unanimous consent for consideration of Calendar No. 631, House bill 3741.

The VICE PRESIDENT. The bill will be stated by title for the information of the Senate.

The CHIEF CLERK. A bill (H. R. 3741) to authorize tfi.e Secretary of the Navy to proceed with the construction of cer· tain public works, and for other pur­poses.

Mr. WALSH · of Massachusetts. Mr. President, I am reluctant to ask unani­

. mous consent for consideration of the bill, in view of what" may perhaps be an understanding reached in reference to

. no legislation being ·taken up at this time, but I am compelled to make the

- request because of the needs of the war effort, as evidenced by a very urgent letter which has come to me from Vice

-Admiral Horne, which I should like to ·read:

DEPARTMENT OF THE NAVY 1

Washington, December 20, 1943 • Hon. DAVID I. WALSH,

Chairman of the Committee on Naval Affairs, United States Senate.

MY DEAR MR. CHAIRMAN: The bill, H. R. 3741, "To authorize the Secretary of the Navy to proceed with the construction of certain public works, and for other purposes," was reported out by your co!llmittee on December 18, 1943, with certain amendments. · Th~ prospective adjournment of Congress,

· together with other developments, make i~ imperative that the Navy Department obtain

·contract authority for the full amount of the ·authorization contained in the bill, H. R. · 3741, prior to the adjournment of Congress. ·

The Bure.au of the Budget has cle~red- the request of the· Navy Department to submit to the Senate Naval Affairs Committee for pos-

. sible inclusion 'in H. R, 3741 'a provision which · will grant the necessary contract authority. Accordingly, it is requested that your committee offer an amendment to the bill, H. R. 3741, which will include the pro­vision as cleared by the Budget. It is recom­mended that the amendment read as follows:

"At the end of section 1, change the _period to a colon .and add the following: 'And pro­vided further, That the Secretary of the Navy is hereby authorized to enter into contracts under the appropriation "Public Works, Bu­reau of Yards -and Docks", for public-works equipment, materials, and construction, in­cluding collateral public-works items, to the extent of the total cost hereby authorized and without regard to the provisions of sec· tibn 3709, Revised Statutes.'"

Sincerely ·yours, F. J. HORNE,,

Acting Secretary of the Navy.

Mr.'~Preside~t, the bill provides that the · approximate cost indicated for each cate­gory may, in the discretion of the Secre­tary of the ~avy, be varied upward or downward but that the total cost shall not exceed $271,060,000. This flexibility is deemed necessary in order to permit the Navy Department to make changes in its construction program as the mili· tary situation changes.

The bill also provides ihat prior to the acquisition, by lease or otherwise, of any land under authority of this act, the Sec­

. retary of the Navy shall report to the Senate and House Naval Affairs Commit­tees all such prospective acquisitions.

The bill as originally introduced au­thorized an apprvpriation of $200,000,000. This was increased by the House of Rep­resentatives to $235,060,000. The Senate committee increased the amount author· ized to be approved under three headings and reduced the amount under one head­ing. The original amount, the increases, the decreases, and the total how author­ized to be appropriated are as follows:

Changes made by

Original bill the House of Representa­

tives

Changes made by

the Senate committee

Total now authorized

--------------------------- ------------1-----il-----Fleet facilities____ ________ ________________________________ $4, 000~ 000 --- -- --------- ------------ --Aviation facilities .............................. ---------- 25,000,000 +$2, 000,000 +$23, 000,000 Storage facilities ..•••••••••••••••••• ~--- ------- ------- ---- 20,000,000 ----------- --- +3, 000,000 Ordnance facilities ...... ---------- -- -----···-·----------- 60,000,000 +12, 000,000 +20, 000,000 Personnel trainin~ and housing facilities.................. 81,200,000 +11, 060,000 --------------Shore radio facilities __ __ ---------------------------------- 5, 000,000 -------------- --------------Naval Research LaboratorY------------------------------ 4, ggg., ggg -+--iii,-ooo,-000- ·:.:io,-000;000-Miscellaneous structures.--------------------------------

$4,000,000 50,000,000 23,000,000 92,000,000 92,260,000 5,000,000

800,000 4,000, 000

----------1---------1---------1---------TotaL---------------------------------------------- 200,000,000 +35, 060, 000 +36, 000,000 271,060, 000

'

•

10954 CONGRESSIONAL RECORD-SENATE ·DECEMBER 21 I hope the Senator from Maine [Mr .

WHITE] may feel at liberty to permit ex­ception being made in the case of this bill so that it can be passed today. It has a unanimous committee report.

The VICE PRESIDENT. Is there ob­jection to the immediate consideration of the bill?

Mr. WHITE. Mr. President, reserving the · right to object, let me say that for various reasons I feel constrained to ob­ject to the present consideration of the bill. I think there has been a general understanding, if not a specific agree_. ment, that business of a general char­acter would not be considered and trans­acted in the closing hours of this ses­sion. I should like to see t}J.at general understanding resp~cted. Furthermore, Mr. President, the bill, if it were passed by the Sen,ate, would have to go back to the other House, for action by it. There are involved in the bill some six or eight amendments-! have not counted them accurately-and the Senate amendments would increase ·:·.he amount carried in the House bill by more than ·$35,000,000. I feel that no public intere!!it will be jeopardized if the matter is delayed for 3 weeks. Therefore, reluctantly, I object.

The VICE PRESIDENT. Objection is heard. AUTHORIZATION FOR FINANCE COMMIT..;

TEE TO REPORT TAX BILL AND FILE REPORT THEREON ..

Mr. BARKLEY. Mr. President, I ask unanimous consent that the Committee on Finance be given until midnight- to­night to report to the Senate the tax bill, House bill 3687, and that the com­mittee be given until midnight tomorrow night to file its report to the Senate.

The VICE PRESIDENT. Is there ob­jection? The Chair hears none, and .it is so ordered.

AUTHORIZATION TO FILE MlNORITY VIEWS ON TAX BILL

Mr. WALSH of Massachusetts . . Mr. President, I ask unanimous consent that I, together· with other members of the Finance Committee, may, during there­cess of tl;le Senate, jointly file minority

' views in opposition to certain renegotia­tion provisions reported in the S~nate tax bill.

The VICE PRESIDENT. Is there ob­jection to the request of the Senator from Massachusetts? The Chair hears none; and it is so ordered.

NOTIFICATION TO THE PRESIDENT

Mr. BARKLEY. Mr. President, I send to the desk a resolution, and ask unani­mous consent for its immediate consid­eration.

The VICE PRESIDENT. The resolu­tion will be.. read.

The legislative clerk read the resolu­tion. <S. Res. 223) , as follows:

Resolved, That a committee of twO Sena­tors be appointed by- tbe President of the Senate to join a similar committee ap- ' pointed by the House of Representatives, to wait upon the President of the United States a.nd inform. him that the two Houses, having completed the business of the present ses­sion, are ready to adjourn unless the Presi-

dent has some further communication to make to them.

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

There being no objection, the resolu­·tion was considered and agreed to.

The VICE PRESIDENT. The Chair appoints the Senator from Kentucky [Mr. BARKLEY] and the Senator from Maine [Mr. WHITE] as the committee on the part of the Senate.

MESSAGE FROM THE HOUSE

A message from the House of Repre­sentatives, by · Mr. Maurer, one of its reading clerks, announced that the

, House had agreed to a resolution· (H. Res. 391), as follows:

- .Resolved, That a committee of two' Mem­bers be appointed by the House to join a similar committee appointed by the Senate to w,ait upon the President of the United States and inform him that the two Houses have completed the business · of the session and are ready to adjourn unless the Presi­dent has some other communication to make to them.

ENROLLED JOINT RESOLUTION SIGNED

The message aiso announced that the' Speaker had affixed his signature to the enrolled joint resolution. <H. J .. Res. 210) authorizing the printing and binding of a revised edition of Cannon's Procedure : in the House of Representatives and pro:.. viding that the same shall be subject · to · copyright by the author, and it was signed by the Vice President. AUTHORIZATION TO RECEIVE MESSAGES

AND TO SIGN BILLS AND RESOLUTIONS · AFTER FINAL ADJOURNMENT

On motion by Mr. BARKLEY, it was Ordered (by unanimous consent), · That

notwithstanding the final adjournment of the first session of the Seventy-eighth Con­gress, authority be given to the Secretary of the Senate to receive messages from the House of Representatives, and to the Vice President to sign duly enrolled bills and joint resolutions.

ANNA BELLE LLOYD

Mr. HAYDEN. :M:r. President, on be­half of the Senator from Illinois [Mr. LucAs], from the Committee to Audit and Control the Contingent' Expenses of the Senate, I report favorably Senate Resolu­tion 218, and ask unanimous cortsent for its immediate consideration.

The VICE PRESIDENT . . The resolu­tion will be read.

The resolution <S. Res. 218) submitted by Mr. TYDINGS on December 9, 1943, was read, as follows:

Resolved, That the Secretary of the Senate hereby is authorized and directed to pay from the contingent fund of the Senate to Anna Belle Lloyd, widow of Daniel B. Lloyd, late an official reporter of debates of the Senate, a sum equal to 1 year's compensation at the rate he was receiving at the time of his death, , said sum to be considered inclusive of funeral expenses· and all other allowances.

.The VICE PRESIDENT. Is there ob­jection? -

There being no objection, the resolu­tion was considered and agreed to.

-GRACE D. MEYERS

Mr. HAYDEN. Mr. President, on be­half of the Senator fror:. Illinois [Mr. LucAs], from the Committee to Audit and Control the Contingent Expenses of the Senate, I report favorably Senate Resolution 226, and ask unanimous con­sent for its present consideration.

The VICE PRESIDENT. The resolu­tion will be read.

The resolution <S. Res. 226) submitted by Mr. TYDINGS on December 21, 1943, was read, as follows:

Resolved, That the Secretary of the Senate hereby is authorized and directed to pay from the contingent fund of the Senate to Grace D. Meyers, cousin of Hazel P. Yates, late an assistant in' the Senate Library, a sum equal to 6 months' compensation at the rate she was receiving by law at the time of her death, said sum to be considered inclusive of funeral expenses and all other allowances . .

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

Mr. WHITE. Mr. President, reserving the right to object, let me inquire whether the resolution and the one pre­viously agreed. to would authorize pay-

. ments to employees of -the Senate. Mr. HAYDEN. Yes, .Mr. President;

they would authorize the custoD,lary pay­, ment to be made as a result -of death.

The VICE PRESIDENT. , Is t\lere ob-jection? . '

There being no objection, the ;resolu- · : tion was Gonsidered and . ag:seed to. · . EXPENSES OF COMMITTEE . ON -THE DIS­

TRICT OF COLUMBIA-INVESTIGATION OF HEALTH CONDITIONS:' AND · FIRE ESCAPES ,, :'. , ,

Mr. HAYDEN. Mr. Presid~nt,! from · the Committee to Audit and' Control the · Contingent Expenses of the 'Senate, I re- ­port favorably Senate Resolution 147, and ask unanimous consent for its present · consideration. · ·

The 'VICE PRESIDENT. The resolu­tion will be read. · The resolution <S. Res. 147) submitted

by Mr. McCARRAN on May 4, 1943, was read, as follows: ·

Resolved, That there is hereby authorized to be paid out of the contingent fund of the Senate the sum of $105.70, for expenses incurred by the Committee on the District of Columbia in the investigation of health conditions and fire escapes in the District of Columbia.

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

Mr. WHITE. Mr. President, may I have some explanation of the resolution?

Mr. HAYDEN. The resolution would authorize the payment of $105.70, to be paid out of the contingent fund of the Senate, for expenses incurred by the Committee on the District of Columbia in investigating health conditions and fire escapes in the District of Columbia. The resolution was submitted by the Sen­ator from Nevada [?4:r_:. MqC~R,R1~L .

Mr. WHITE. I pre~u~e: .ft. ! Wo\lld be cheaper for the country to bav,e ,the Sen­ate speedily agree to _the. :r;e~q1l)tioii arid speedily adjourn, rath~r . J,fi.an . . to ·have

I

1943 CO~GRESSIO.NAL RECORD--SENATE 10955 Senators .raise ~ny question about the the mobilization of the Nation's resources, and I will not now oppose the request of resolution. including the technological resources, pur.:. the Senator from Nevada.

Th VICE PRESIDENT I th b suant to Senate Resolution 303 of the Sev-e • s ere o - Mr. BARKLEY. Mr. Presi· dent, let me· j

enty-seventh Congress and Senate Resolu-ection? tion 107 of the seventy-eighth congress, is ask the Senator from Nevada whether the

There .. being no objection, the resolu.:. increased by $5,000. resolution would create a new committee, tion was considered and agreed to. or whether it relates to a committee al-INCREASE OF LIMIT OF ExPENDITURES OF The amendment was agreed to. ready in existence? ·

MILITARY AFFAIRS SUBCOMMITTEE The resolution as amended was agreed Mr. MCCARRAN. It would set up a STUDYING MOBILIZATION OF THE NA- to. new special committee, consisting en-TIONS' RESOURCES INVESTIGATION OF CONDITIONS IN PU- tirely of members, as nearly as we could Mr. HAYDEN. Mr~ President, the so- ERTO RICO--LIMIT OF EXPENDITURES select them, from the States having iron.

called Kilgore subcommittee of the Com- Mr. HAYDEN. Mr. President, from ore deposits. · mittee on Military Affairs is out of the Committee to Audit and Control the Mr. BARKLEY. How many members money. From the Committee to Audit Contingent Expenses of the Senate I would the proposed committee have? and Control the Contingent Expenses of report favorably, with an amendment, Mr: McQARRAN. Seven members. the Senate, I report favorably, with an Senate Resolution 222, and ask unani- There is a like committee in the House, amendment, Senate Resolution 216, and mous consent for its immediate consid- with seven members. · . ask unanimous consent for its present eration. Mr. BARKLEY. Would the commit­consideration. The VICE PRESIDENT. Is there ob- te~ include members from all the States

The VICE PRESIDENT. Is there ob- jection to the request of the Senator in which there is any suspicion of the jection to the present consideration of from. Arizona? presence of iron ore. the resolution? There being no obje'ction, the Senate Mr. McCARRAN. Not all. We could

Mr. WIDTE. Mr. President: reserving proceeded to consider the resolution, not include all unless we had a much the right to object, let me inquire which had been submitted by Mr. · larger committee. However, members whether the resolution would make avail- CHAVEZ on December 17, 1943. · were selected from the South, the South­able to the subcommittee of which the The amendment was, in line 5, after west, the North, and the Northwest. Senator from West Virginia [Mr. KIL- the word "by", to strike out "$15,000" There is a comparable committee in the GORE] is chairman, funds for tne further and insert in lieu thereof "$5,000", so House. work of that committee. as to make the resolution read: Mr. BARKLEY. Would the member-

Mr. HAYDEN. It would. ·The ·resolu- Resolved, That the limit of expenditures - ship of the committee be selected from tion would not change the duties or i:e- · authorized ·by senate Resolution 26, agreed the membership of tlie Senate generally, sponsibilities of the subcommittee. But, to January 28, 1943, authorizing the subcom- or from some standing committee? as the Senat.or will remember, theinves..: mittee of the Committee on Territories and Mr.- McCARRAN. From the member-trgation has; been proceeding fdr a · con- Insular Affairs to hold hearings during the ship of the Senate generally. siderable time, and is very in:tportant; Seventy-eighth Congress, is hereby increased Mr. BARKLEY. It would not be lim-.The 'Senator has advised our committee· .bY-.1115•000· - ited to the membership of any commit-that it is necessary to have the additional The amendment was agreed to. tee already in existence? · · sum of money in order to carry on tne The resolution as amended was agreed Mr. ·McCARRAN. No. work. to. Mr. HAYDEN. Mr. President, from

Mt. WHITE. The Senator from Wiest INVESTIGATION OF THE EFFECT OF THE the Committee to Audit and Control the Virginia spoke to me about the reso u- CENTRALIZATION OF HEAVY INDUSTRY Contingent Expenses.of the Senate, Ire-tion. I understand, as does the Senator port favorably, without additional from Arizona, that the real purpose of Mr. McCARRAN. Mr. President, I am amendment, Senate Resolution 190. the r'esolution .is to bring the study to a advised that there is in the hands of the The VICE PRESIDENT. Is there ob­condusion-to pull in the ends and tie ' · senior Senator from Arizona [Mr. HAY- • jection to the present consideration of the knots on this study,' Which t.he SUb- DEN] a ' resolution which we have been · the resolution? committee has been conducting for sev- trying for several months to have con-era! months. I may add that a good deal sidered. I refer to Senate resolution 190, There being no objection, the Senate of criticism has come to me, first in the .which ·would create a special committee proceeded to consider the resolution nature of objection to contemplated leg• of seven Senators to investigate the ef- which had been submitted by Mr. Mc­islat'ion on the subject involved-and I feet upon interstate commerce of the CARRAN on October 12, 1943, and pre­·have a suspicion that the objection is well centralization of heavy industry in the viously reported from the Committee on founded-and• also criticism that the United States, and would. provide an Interstate Commerce, with an · amend­proponents of the legislation had occu- appropriation of $5,000 for the expenses ment, on page 2, line 21, after the word pied the major part of the committee's of the investigation. "exceed", to strike out "$10,000" and in­time and attention. The Senator from I am particularly interested in the sert in lieu thereof "$5,000", so as to West Virginia assured me that those who question as it affects the steel industry. make the resolution read: might be opposed to it would be given full The · steel industry is essential to the Resolved, That a special committee o:f opportunity to appear if the life ·of the war effort, and it will be essential in the seven Senators, :to be appointed by the Presi­committee, through the aid of this ap- years to come. In the West there are dent of the Senate, is hereby authorized and propriation, was extended. In the cir- available large deposits of iron ore. If directed to make a full and complete invest!:. cumstances, I simply cannot object, arid at this time the resolution should be .gation of the effect upon interstate commerce · of the centralization of heavy industry in I do not object. · agreed to, there would probably be some the United states, with particular regard to

The VICE PRESIDENT. Is there ob- time between now and the reconvening whether such centralization inhibits or deters jection to the present consideration of of Congress when the committee which adequate use and dev:elopment of natural re­the resolution? is making a study of this matter and is sources or hampers the full and free flow of

There being no objection, the Senate very much interested in it might go for- commerce between the States, and to make proceeded to consider the resolution ward with .some of the work which is · a comprehensive study of plans and proposals (8. Res. 216), which had been reported deemed essential. · for industrial recentralization, particularly through establishment of new or expanded from the Committee to Audit and Control I hope the Senator from Maine [Mr. . facilities for the production of iron and steel. the Contingent Expenses of the Senate, WHITE] can see fit to relent in his objec.; such committee shall report to the Senate with · an _ amendment, on page 1; line 6, tion to this particular resolution. at the earliest practicable date the results after the word ''by", to strike out "$10,- Mr. WHITE. Mr. President, I came of its investigation and study, with such 000", and insert ''$5,000'', so as to make here today with my mind filled witp recommendations for legislation as it may the re.sol_utio,nl read.: -worthy purposes. I felt that all these deem-necessary and desirable, and shall also _ report to the Senate from time to time its

Reso~ved, That the limit of expenditures of new matters should go over until the next views on needed or desirable executive or the subcommittee of the Military Affairs session. My resolution bas already administrative action by any department or Committee authorized and directed to study broken down ' in half a dozen instances, agency of the Federal Government.

\.

10956 CONGRESSIONAL RECORD-SENATE DECEMBER 21 SEC. 2. For the purposes of this resolutio~

the committee, or any duly authorized sub­committee thereof, is authorized to hold hear­ings, to sit and act at such times and places during the sessions, recesses, and adjourned periods of the Senate during the Seventy­eighth Congress, to employ such experts, and such clerical, stenographic, and other assist­ants, to request such assistance and infor­mation from any departments and agencies of the Government, to require by subpena or otherwise the attendance of such witnesses and the production of such correspondence, books, papers, and ·documents, to admin,ister such oaths, to take such testimony, and to make such expenditures, as it deems ad­visable. The cost of stenographic services to report such hearings shall not be in excess of 25 cents per hundred words. The expenses of the committee, which shall not exceed $5,000, shali be paid from the contingent fund of the Senate upon vouchers approved by the chairman of the committee.

The amendment was agreed to. The rel;)olution as amended was

agreed to. The V1CE PRESIDENT. Pursuant to

the resolution just agreed to, the Chair appoints the Senator from Nevada [Mr. McCARRAN], the Senator from Alabama ;[Mr. BANKHEAD], the Senator from Iowa [Mr. GILLETTE], the Senator frorr~: Utah .[Mr. MuRDOCK], the Senator from Idaho [Mr. THOMAS], the Senator from North Dakota [Mr. NYE], and the Senator from Wyoming [Mr. RoBERTSON] members of the special committee.

EXECUTIVE SESSION

Mr. BARKLEY. Mr. President,"! move that the Senate proceed to the consid­eration of executiv.e business.

The motion was agreed to; and the Senate proceeded to the consideration of ex~cutive business.

EXECUTIVE MESSAGES REFERRED

The VICE PRESIDENT laid before the Senate messages from the President of the United States submitting sundry nominations, which were referred to the appropriate committee.

(For nominations this day received, see the end of Senate proceedings.)

REPORTS OF COMMITI'EES

Mr. WALSH of Massachusetts. Mr. President, I ask unanimous consent to submit certain reports of executive nom- · inations: From the Commtttee on Fi­nance, one nomination in the Bureau of Internal Revenue; and from the Com­mittee on Naval Affairs, three Marine Corps nominations.

I ask the Senator from Maine if he ob~ects to the immediate consideration of the nominations, or whether he insists that they be placed on the calendar.

Mr. WHITE. Mr. President, I think the nominations should be placed on the calendar in order that Members of the Senate may have opportunity to famil ... .iarize themselves with them. I therefore object to their present consideration.

The VICE PRESIDENT. Objection is heard. Without objection, the reports will be received, and the nominations will be placed on the calendar.

The nominations reported by Mr. :WALSH of Massachusetts are as follows:

From the Committee on Finance: Denis W. Delaney, of Lawrence, Mass., to

be collector of internal revenue for the dis-

trict of Massachusetts, in place of Thomas B. Hassett, resigned.

From the Committee on Naval Affairs: Col. William P. T. Hill to be the quarter­

m aster of the Marine Corps, with the rank of brigadier general, for a period of 4 years from the 1st day of February 1944;

Col. William J. Wallace to be a brigadier general in the Marine Corps for temporary service from the 5th day of December 1943; and

Col. Thomas J. Cushman to be a brigadier gener:cl in the Marine Corps for temporary . service fro.m the 7th day of December 1943.

The VICE PRESIDENT. If there be no further reports of committees, the clerk will §tate the nominations on the calendar.

DEPARTMENT OF JUSTICE

The legislative clerk· read the nomi­nation of Hugh B. Cox, of the District of Columbia, to be Assistant Solicitor Gen­eral of the United States,

The VICE PRESIDENT. Without ob- . jection, the nomination 'is confirmed.

THE JUDICIARY

The legislative clerk read the nomi­nation of Emil C. Peters, of Honolulu, to be Associate Justice of the Supreme Court, Territory of Hawaii.

The VICE PRESIDENT. Without ob­jection, tlfe nomination is confirmed.

The legislative clerk read the nomi­nation of Albert M, Cristy, of Honolulu, to be second judge of the First Circuit, Circuit Courts, Territory of Hawaii.

The VICE PRESIDENT. Without ob­jection, the nomination is confirmed.

The legislative clerk read the nomi- • nation of Willson C. Moore, of Hawaii, to be fourth judge of the First Circuit, Cir­cuit Courts, Territory of ,Hawaii.

The VICE PRESIDENT. Without ob­jection, the nomination is· confirmed.

The legislative clerk read the nomi­nation of Cable A. Wirtz, of Hawaii, to be judge of the Second Circuit, Circuit Courts, Territory of Hawaii.

The VICE PRESIDENT. Without ob­jection, the nomination is confirmed.

FOREIGN SERVICE

The legislative clerk proceeded to. ·read sundry nomination in the foreign service.

The VICE PRESIDENT. Without ob­jection, the nominations are confirmed en bloc.

Mr. BARKLEY. I ask that . the Presi­dent be immediately notified of the nom­·inations this day confirmed.

The VICE PRESIDENT. Without ob­jection, the President will be notified forthwith. ·

That completes the calenda~. STATUS OF NOMINATIONS UNACTED UPON

DURING THE CURRENT SESSION

Mr. BARKLEY submitted the follow­ing order:

Ordered, That paragraph 6 of r11Ie 38 of · the standing Rules of the Senate, relating to proceedings on nominations, be, and it is hereby, suspended with respect to nomina­tions unacted upon during the present s~s.;, slon, and their status quo shall not be af­fected by the final adjournment of the tl.rst session of the Seventy-eighth Co~gress:

The VICE PRESIDENT. Is there ob­jection to the proposed order?

Mr. HOLMAN. Mr. President, reserv­ing the right to object, may I inquire what it means? In the Military Affairs Committee we are holding up several nominations. I have a particular inter-est in holding up two of them. ·

Mr. BARKLEY. The meaning of the order is that nominations which are not acted upon will remain in status quo, without having to be resubmitted to the Senate after the Senate reconvenes in January.

Mr. HOLMAN. I thank the Senator. Mr. WHITE. Mr. President, the only

effect of the order is to avoid the gen­eral r.ule that at the termination of the session nominations not acted upon must be returned to the White House.

Mr. BARKLEY. That is true. Mr. WHITE. Otherwise such nomina­

. tions would have to be resubmitted. Mr. BARKLEY. That is true. Mr. WHITE. And committees would

have to. consider them all anew. Mr. BARKLEY. That is true. Mr. WHITE. The · proposed order

would obviate that difficulty. Mr. BARKLEY. Yes. There are some

200 nominations of postmasters still not acted upon in committee, and there are military nominations, and others. The order would simply preserve their status as though Congress were not adjourn-ing. _

The VICE PRESIDENT. Is there ob­jection to the proposed order? The

· Chair hears none, and the order is agreed to.

NOTIFICATION TO THE PRESIDENT

The Senate resumed the consideration of legislative business. , Mr. BARKLEY and Mr. WHITE ap­

peared anci Mr. BARKLEY said: Mr. President, -as in legislation session, l wish to report that the committee ap­pointed earlier in the day to wait upon tbe President to ascertain whether he

. had any further communica'tion to make to. the Congress has performed its duty, and that the President has advised the committee that he has no further com.:. munication to address to the Congress. ENROLLED BILL AND JOINT RESOLUTIONS

PRESENTED

Mrs. CARAWAY, from the Committee on Enrolled Bills, reported that on today, December 21, 1943, that committee pre­sented to the President of the United C'tates the following bill and joint resolu­tions:

S. 1169. An ·act for the relief of Samuel Margolin; ·

S. J. Res. 103. Joint resolution continuing . the Commodity Credit Corporation as an agency of the United States; and

S. J. Res. 105. Joint resolution fixing the date of meeting of the second session of the Seventy-eighth Congress. ·

ADJOURNMENT SINE DIE

Mr. BARKLEY. Mr. President, in ac .. cordn.nce with the terms of Senate Con­current Resolution 29, heretofore agreed to, providing that when the two Houses of Congress adjourn today they adjourn sine die, I now move that the Senate adjourn.

' I

1943 CONGRESSIONAL RECORD-· SENATE 10957 The motion was agreed to; and <at 12

o'clock and 46 minutes p. m.) the Senate !:tdjourned sine die.

REPORT OF REVENUE BILL BY FINANCE COMMITTEE SUBSEQUENT TO FINAL ADJOURNMENT Under authority of the order of Decem-

ber 21 , 1943, · Mr. GEORGE,. fr.om the Committee on

Finance to which was referred the bill <H. R. 3687 ' to provide revenue, and for other purposes, reported it on December 21, 1943, with amendments, and on De­cember 22, 1943, he submitted a report <No. 627) thereon. MINORITY VIEWS ON THE REVENUE BILL

(PT. 2 Ol<, REPT. NO. 627)

Under authority of the order of De­cember 21, 1943,

On January 6,1944, Mr. WALSH .of Mas·­sachusetts <for himself, Mr. LA FoLLETTE, Mr. CONNALLY, and Mr. LUCAS), as mem­bers of the Committee on Finance, sub­mitted minority views on the renegotia­tion provisions of the revenue bill (H. R. 3687). INVESTIGATION OF THE NATIONAL DE­

FENSE PROGRAM-THE CANOL PROJ­ECT (PT. 14 OF REPT. NO. 10)

Under authority of the order of De­cember 21, 1943,

On January 8, 1944, Mr. KILGORE (pur­suant to S. Res. 71, 77th Cong., and S. Res. 6, 78th Cong.) from the Special Committee to Investigate the National Defense Program submitted an addi­tional report relating ~o the Canol project. APPROVAL OF BILLS AND JOINT RESO­

LUTIONS The President of the United States,

subsequent to the final adjournment of the first session of the Seventy-eighth

· Congress, notified the Secretary of the Senate that he had signed and approved act~ · and joint resolutions as follows:

On December 21, 1943: S. J. Res. 105. Joint resolution fixing the

date of meeting of the second session of the Seventy-eighth Congress.

On December 22, 1943: S. 1169. An act for the relief of Samuel .

Margolin; and s. 1576. An act to provide for the extension

of certain oil and gas leases. On December :;:;1, 1943:

S. J. Res. 103. Joint resolution continuing the Commodity Credit Corporation as an agency of the United States.

NOMINATIONS

Executive nominations received by the Senate December 21 (legislative day of December 15), 1943:

THE JUDICIARY

UNITED STATES MARSHAL

F:·.:J A. Canfil, of Missouri, to be United States marshal for the western district of Missouri, vice Henry L. Dillingliaffi, term ex­pired.

SELECTIYE SERVICE

The · following-named person for appoint­'ment as ·state director of Selective Service for Delaware, under the provisions of section ·10 (a)' (3) cif the Selective Training and Serv­ice Act of .1940 :.

Col. Albert W. Foreman, United States Arniy, retired. (Recalled to active, duty.)

Compensation for this office will exceed $5,000 per annum and will be in accordance

with the rates prescribed for officers of his rank and length of· service in the Army pay tables.

APPOINTMENTS, BY TRANSFER, IN THE REGULAR ARMY OF THE UNITED STATES

TO ADJU'I'ANT GENERAL'S DEPARTMENT

Lt. Col. Thomas Francis Keefe, Field Artil­lery (temporary colonel), with rank from No­vember 24, 1942.

Maj. Charles Metz Seebach, Infant .. ·r (tem­porary colonel), with rank from July 1, 1940.

TO FINANCE . DEPARTMENT

Lt. Col. Harold Stuart Ruth, Infantry, with rank from Dec~bel;' 11, 1942.

First Lt. Joseph Henry Wiechmann, Infan­try (temporary lieutenant colonel), with rank from June 12, 1938.

TO ORDNANCE DEPARTMENT

Capt. John Frederick Thorlin, Coast Artil­lery Corps (temporary lieutenant colonel), with rank from June 13, 1943.

TO INFANTRY

Lt. Col. Albert Gillian Kelly, Adjutant Gen­eral's Department (temporary colonel), with rank from July 1, 1943.

First Lt. Robert George Fergusson, Cavalry ( ~emporary lieutenant colonel), with rank from June 12, 1939. '

TO COAST ARTILLERY CORPS

Second Lt. George Thomas Mehalko, Air Corps (temporary first lieutenant), with rank from February 20, 1942.

PROMOTIONS IN THE REGULAR ARMY OF THE . UNITED STATES

To be colonel with rank f1'0m December 1, 1943

Lt. Col. Hume Peabody, Air Corps (tempo­rary brigadier general) .

Lt. Col. Martin John O'Brien, Coast Ar­tillery Corps (temporary colonel), subject t:> examination required by law. , Lt. Col. Joseph Cumming Haw, Coast Ar­tillery Corps (temporary colonel). · Lt. Col. Earl Larue Naiden, Air Corps (tem­

porary colonel). Lt. Col. He·nry McElderry Pendleton, Cav­

alry (temporary colonel) .. Lt. Col. Iverson Brooks Summers, Adjutant

General's Department (temporary colonel), subject to examination- required by law.

Lt. Qol. Edmund DeTreville Ellis, Quarter­master Corps (temporary colonel), subject to examination required by law. ·

To be major with rank from January 22, 1944

Capt. Earl · Qlinton Robbi.ns, Air Cbrps (temporary colonel).

Capt. Andrew Joseph Kerwin Malone, Air Corps (temporary colonel).

Capt. Russell Keillor, Air Corps (tempo­rary colonel).

Capt. Ernest Harold Lawson, Air Corps (temporary colonel).

Capt. John Edward Bodle, Air Corps (tem­porary colonel) .

Capt. Russell Scott, Air Corps (temporary colonel).

Capt. Burton Mur~ock Hovey, Jr., Air Corps (temporary colonel).

To be major with rank from January 23, 1944

Capt. Dale Davis Fisher, Air Corps (tem­porary colonel).

Capt. ·Henry Weisbrod Dorr, Air Corps (temporary colonel).

Capt. Carlisle Iverson Ferris, Air Corp!; (temporary colo~el).

Capt. Elwood Richard Quesada, Air Corps (temporary brigadier general).

Capt. Willard Roland Wolfinbarger, Air Corps (temporary colonel).

MEDICAL CORPS

To be colonel Lt. Col. Martin Robert Reiber, Medical

Corps (temporary colonel), with rank from January 15, 1944.

Lt. Col. Forrest Ralph Ostrander, Medical Corps (temporary colonel), with rank from January 21, 1944.

To be captain First Lt. Matthew Anthony Surrell, Jr.,

Medical Corps (temporary major), with rank from Janua-ry 2, 1944.

First Lt. Donald Withers Lyddon, Medical Corps (temporary major), with rank from January 2, 1944, subject to examination re­quired by law.

First Lt. Orland Stenberg Olsen, Medical Corps (temporary captain), with rank from January 16, 1944, subject to examination re­quired by law.

PHARMACY CORPS

To be colonel Lt. Col. William Harvey Kernan, Phar.;.

macy Corps, with rank from January 12, 1944.

CHAPLAINS

To be captain

Chaplain (First Lt.) Max Walker Foresman, United States Army (temporary captain), with rank from January 6, 1944.

IN THE NAVY

Capt. RussellS. Berkey, United States Navy, to be a rear admiral in the Navy, for tempo­rary service, to rank from the 25th day of No­vember 1942.

Francis E. Pierce, Jr., a naval aviator of the Marine Corps Reserve, to be a 'second lieuten­ant in the Regular Marine Corps in accord­ance with the provisions of the Naval Avia­tion Personnel Act of 1940, as amended, to rank from the lOth day of September 1941. · Maurice L. Appleton, Jr., a citizen of Vir­

ginia, to be a second lieutenant in the Marine Corps from the 15th day of May 1942.

Donald B. Lee, a citizen of Connecticut, to be a second lieutenant in the Marine Corps from the 24th day of March 1943.

The below-named citizens to be second lieutenants in the Marine Corps from the 4th day of May 1943:

Douglas E. Haberlie, a citizen of Texas. Arthur J. Bilava, a citizen of Nebraska. The below-named citizens to be second

· lieutenants in the Marine Corps from the 7th day of August 1943: ~obert w. Anderson, a citizen of Indiana. Charles C. Crossfield, III, a citizen of Texas.

. Jerome J. Tuckner, a citizen of Minnesota. Charles W. Boggs, Jr., a citizen of Cali-

fornia. _ The below-named commissioned warrant

and ·warrant officers of the Marine Corps to be captains in the Marine Corps from the 16th day of September 1943:

Warrant Officer Robert E. A. Lillie. Warrant Officer Marshall R. Pilcher. Warrant Officer Madison C. Whiteside. Commissioned Warrant Officer Tom Woody,

CONFIRMATIONS

Executive nominations confirmed by the Senate December 21 (legislative day of December 15), 1943:

FOREIGN SERVICE

TO BE A CONSUL GENERAL OF· THE UNITED STATES

OF AMERICA

David C. Berger

TO BE CONSULS OF THE NITED STATES Oi'

AMERICA

William D. Moreland, Jr. Richard W. Byrd John Goodyear

TO BE FOREIGN SERVICE OFFICER, UNCLASSIFIED,

VICE CONSUL OF CAREER, AND SECRETARY IN THE DIPLOMA'l'IC . SERVICE OF THE UNITED

STATES OF AMERICA

J. Brock Havron

10958 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 . DEPARTMENT OF JUSTICE

ASSISTANT SOLICITOR GENERAL

Hugh B. Cox to be Assistant Solicitor Gen­eral of the United States.

THE JUDICIARY

SUPREME COURT, TERRITORY OF HAWAU

Emil C. Peters to be associate justice of th.e Supreme Court, Territory of Hawaii.

C:tRCUIT COURTS,_ TERRITORY OF HAWAU

Albert M. Cristy to be second judge of the First Circuit, Circuit Courts, Territory of Hawaii.

Willson C. Moore to be fourth judge of the First, Circuit, Circuit Courts, Territory of :Hawaii.

Cable A. Wirtz to be judge of the Second Circuit, Circuit Courts, Territory of Hawaii.

HOUSE OF REPRESENTATIVES TUESDAY, DECEMBER 21, 1943

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

gomery, D. D., offered the following prayer:

Eternal God, Lord of Love, we rejoice that the ·christ child of St. Mary is called the Son of the -Highest. In lowii­ness He was born, the manger bare re­ceived Him; a throne awaited Him and to His kingdom there shall be no end. With unutterable praise we invoke Thy presence and in our hearts raise the mighty seng, Glory to God in the High­est, with the story of His wondrous birth and tidings of great joy. We pray that Thy guidance, the reali2;ed ministry of Thy spirit, may constitute a radiant hope ­amid the gloom and shadow of this evil world. Inspire us to stretch forth our hands, pulsing with love and overflowing with tenderness, enriching those who mourn, blessing the merciful and the · peacem_akers, for the world shall yet see in them the children of God.

Heavenly Father, trusting in Thy lov­ing kindness, let Thy blessing in full measure descend upon our Speaker, the Members, the ofiicers, and employees during the days of our separation. We come to' Thee with gratitude and hope in our hearts that their home ties may be sustained and blest with Thy fatherly care. Keep them all free from sorrow, affliction, and beyond the sphere of grief until we meet again. -''If we can kneel as did those men of

old, Who laid frankincense and myrrh and

gold Before the Christ child's feet;

If we can -bring our gifts, a grateful heart, -

Where unkind thoughts and envy have ne part,

And love dwells true and deep; Then in rhrist's birthday we may truly

share And feel His presence with_ l:W every­

-where." In His name. Amen.

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

MESSAGE FROM THE PRESIDENT

A message in writing from the Presi­dent of the United States was commu­nicated to the House by Mr. Miller, one of his secretaries, who also informed the House that on December 18, 1943, the President approved and signed a bill of tJ::le House of the following title:

H. R . 255. An act for the relief of Col. E. H. Tarbutton.

M~SSAGE FROM THE SENATE

A message from the Senate, by Mr. Frazier, its legislative clerk, announced that the Senate had passed without amendment a joint resolution of the House of the following title:

H. o1. Res. 210. Joint resolution authorizing the printing and binding of a revised edition of Cannon's Procedure in the House of -Rep­resentatives and providing that the same shall be subject to copyright by the author.

• The message also announced that the Senate had adopted the following reso-lution (S. Res. 223) : -

Resolved, That a committee of two Sena­tors be appointed by the President of the Senate to join a similar committee appointed b.,Y the House of Representatives, to wait upon the President of the United States and ln., form him that the two Houses, having com­pleted the business of the present session, are ready to adjourn unless the President has some further communication to make to them.

The message also announced that pur­suant to the above resolution, the Vice President had appointed Mr. BARKLEY and Mr. WHITE members of the com­mittee on the part of the Senate.

SIGNING ENROLL-ED BILLS ANQ JOINT RESOLUTIONS

Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that, notwith...: standing the sine die adjournment of the first session of the Seventy-eighth Congress, the Speaker be authorized to sign enrolled bills and joint resolutions, duly passed by the two Houses and ex­amined by the Committees on Enrolled Bills and found truly enrolled.

The SPEAKER. Is there objection? There was no objection. APPOINTMENT OF COMMISSIONS AND

COMMITTEES

Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that notwithstand­ing the itdjournment of the first session of the Seventy-eighth Congress, the Speaker be authorized to appoint com­missions and comm~ttees authorized by law or by the House.. ·

The SPEAKER. Is there objection? There was no objectio~.

GENERAL EXTENSION OF REMARKS IN . THE RECORD

Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that all Members of the House shall have the privilege until the last edition authorized by the Joint Committee on Printing is publish­ed, to_extend and revise their own re­marks in the CONGRESSIONAL RECORD on more than one subject, if they so desire, and may also Include therein such short quotations as may be necessary to ex-

plain or complete such extensiop of re­marks; but this order shall hot apply to any subject matter which may have oc­curred or to any speech delivered subse­quent to the adjournment of Congress.

The SPEAKER. Is there objection? Mr. RANKIN. ·Mr. Speaker, reserving

the :r;ight to object, I think that request ought to be confined to Members who are exten~ding their own remarks. Therefore · I shall - object for the time _ being,

The SPEAKER. Objection is heard. RECEIPT OF MESSAGES FROM THE SENATE

Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that notwith­standing the adjournment of the House the Clerk be authoried to receive mes­sages from the Senate.

The SPEAKER. Is there objection? · There was no objection.

COMMITTEE TO INFORM THE PRESIDENT OF ADJOURNMENT OF CONGRESS

Mr. McCORMACK. Mr. Speaker, I . offer the following resolution <H. Res. 391), and ask for its immediate consider­ation.

The SPEAKER. The Clerk will report the resolution.

The Clerk read as follows: Resolved, That a committee · of two Mem­

bers be appointed by the House to join a similar committee appointed by the Senate to wa-it upon the President of the United States and hiform him that the two Houses have completed the business of 'the session and are ready to adjourn unless the Presi-

. dent has some other communicatiqn to m;:tke

.to them. .

The resolution was agreed to . . The Chair appointed Mr. McCORMACK

and Mr. MICHENER as members of the committee. · W. L. HURLEY AND JOE WHITSON-VETO

MESSAGE OF THE PRESIDENT (H. DOC. NO. 369)

The SPEAKER 1aid before the House the following veto message from the President of the United States which was read by the Clerk:

To the House ot Representatives: I return herewith, without my ap­

proval, H. R. 2299, a bill "Conferring jurisdiction upon the United States Dis­trict Court for the Eastern District of Arkansas to hear, determine, and render judgment upon the claims of w. M. Hurley and Joe Whitson."

The purpose of this bill is to waive the immunity of the Federal Government from suit in tort, so as to permit the claimants to prosecute in the district court a claim for damages to their prop­erty alleged to have resulted from the failure of the Government to maintain in proper repair a dike constructed by it on the Arkansas River as an aid to navigation. ·

This dike was constructed in the pros­ecution of the work of improving the Arkansas River for the benefit of naviga­tion under the authority of acts of Con­gress. In the absence of a direct taking or physical invasion whereby owners have been deprived of their property,

.1943 CONGRESSIONAL RECORD--HOUSE 10959 any damage resulting from such an undertaking is generally_ regarded as indirect and incidental to the legitimate and proper exercise of governmental powers for the improvement of naviga­tion, and the Government is not legally required to make compensation there­for. The present claim, however, is based on the theory that it is the duty of the Government to maintain such improvements in good order, and that it should, therefore, be held accountable in accordance with established princi­ples of negligence law, insofar as they are applicable, for any damage to ripar­ian owners that may result from a neglect of that duty.

It h,as not been the practice or policy of the Government in undertaking proj­ects or constructing works for the im­provement of navigation to assume an incidental duty or obligation to private interests, which may benefit thereby, to provide for their continued mainte­nance. In my opinion it would be con­trary to the public interest for the .Gov­ernment to assume such an obligation. Such a policy would entail the expendi­ture of sums greatly in excess of those now provided by the Congress for such improvements. Under this bill a re­sponsibility might be imputed to the Government which it has not heretofore been the practice to assume. If ap­proved, it would provide a precedent for the presentation of like claims and recognize a corresponding obligation in connection with every similar improve­ment of navigable waters undertaken by the Government.

On two previous occasions I have withheld my approval from legislation in support of the present claim for the reasons herein set forth. On the second occasion, when the bill had been amend­ed to provide for a judicial hearing and determination, I pointed out, in addi­tion, that the language employed was susceptible to the interpretation that proof of negligence on the part of the Government was not ·· required. The present bill was apparently enacted in the belief that my objections woul.d be met if the interests of the Government were protected by requiring proof of negligence. While the present bill affords such protection, it nevertheless is subject to the fundamental objection which I have stated herein and in my two previous veto messages.

For these reasons, I feel obliged to withhold my approval of the bill.

FRANKLIN D. ROOSEVELT. .The WHITE HOUSE, December 21,1943.

The SPEAKER. The objections of the President will be spread at large

-upon the Journal; and the bill and veto message referred to the Committee on Claims and ordered printed. PROPOSED ACTION OF THE BOARD OF

GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO PROHIBIT BANKS FROM ABSORBING EXCHANGE AND COLLEC· TION CHARGES

Mr. BROWN of Georgia. Mr. Speaker, I ask unanimous ·consent to addres~ the House for 1 minute.

The SPEAKER. Is there objection? There was no objection.

Mr. BROWN of Georgia. Mr. Speaker. while Congress has been absorbed with important -legislation arising out of the war and has been preparing for adjourn­ment, a matter of vital importance to many sections of this country has arisen which I feel it my duty to call to the attention of my associates in Congress. This is the recent action of the Board of Governors of the Federal Reserve Sys-.. tern in holding the widespread practice of banks in this country to absorb ex­change and collection charges to be in violation of its regulations prohibiting the payment of interest on demand de­posits. The Committee on Banking and Currency has been holding hearings on this question for the last several weeks,..... but has been unable to recommend leg­islation owing to the absences due to the adjournment of Congress.

The 1933 Cong:J;:ess passed a law pro­hibiting banks which are members of the Federal Reserve System from paying in­terest on any deposit which is-payable on demand, and in 1935 this statute was amended to authorize the Board of Gov­ernors of the Federal Reserve System to define what should be deemed a payment of interest within the meaning of the statute. This legislation arose out of the disclosures in congressional hearings .which indicated that corporations and banks were placing large sums of idle cash in the New York and other metro­politan money markets at interest in­stead of investing these funds in their home localities. Many experts believed that this practice gave rise to the infla­tionary trends of the late twenties, when interest rates on call money on the New York markets reached an all-time high. Many of the New York and large eastern city bankers favored the enactment of this law because they: realize~ that its prohibitory provisions would save them millions of dollars of interest on the idle funds of the country banks which they would have the · use of anyway because of the necessity of the country banks to keep a substantial part· of their money on deposit in these metropolitan centers in order that it might be available for the use of their customers in the met­ropolitan markets when required. In other words, these large city banker-s supported this legislation because it en­abled them to get for nothing what they had previously been required to pay in­terest to obtain. As usual, the country banks and smaller depositors were the sufferers. 1

In 1935 Congress passed a further law which authorized the Federal Deposit In­surance Corporation to adopt regulations prohibiting the payment of interest on demand deposits by all insured banks other than those which were members of the Federal Reserve System. Thus the law after 1935 subjected banks which were members of the Federal Reserve System to the interest regulations of the Board of Governors of the Federal Re­serve· System and submitted all other in­sured banks to the interest regulations of the Federal Deposit Insurance Cor­poration.

In 1936 both of these banking agencies adopted interest regulations which pro­vided that -interest should be deemed to

mean any payment to or for the account of any depositor as compensation for the use of funds constituting a deposit. At that time the Board of, Governors of the Federal Reserve System included a fur­ther provision in their interest regula­tions known as regulation Q, to the ef­fect . that the absorption of exchange charges by member banks of the Federal "Reserve System for the account of their deposito.r:s, should be deemed a prohibited payment of interest. The exact lan­guage of this provision was as follows:

The term "interest" includes the payment or absorption of exchange and collection charges which involve out-of-pocket expenses.

This provision provoked such a storm of protest from Members o( Congress that the Board was forced hastily to withdraw this provision from its regulation. The Federal Deposit Insurance Corporation had steadfastly refused to include a pro­vision of this kind in its own regulations affecting the nonmember insured banks and following the withdrawal of this pro~ vision by the Governors of the Federal Reserve System in 1936 it appeared that the efforts of the Federal Reserve to abol­ish the absorption of exchange charges had been abandoned. In fact, they were abandoned until September 1943. .

The Federal Deposit Insurance Cor­porat~on had taken the position in con~ ferences with members of the Federal Reserve Board regarding the latter's in­terest regulation, that the law did not authorize the prohibition of the practice of absorbing exchange charges under the guise of interest regulation and in the January 1936 bulletjn, prepared by the Federal Reserve, a notice wa~ published to the effect that the Federal Reserve had deferred the effective date of sub­se.ction (f) of section 1 of its regulation Q which contained the provision defining interest as including the payment or abandonment of exchange or collection charges. The exact language of this pub­lication, under_ which the Board of Gov­ernors of the Federal Reserve System ran to cover is as follows:

On December 28, 1935; all Federal Reserve banks-· were advised, and requested to advise their_ .mem~er banks without delay, that, pendmg actton by the Federal Deposit Insur­ance Corporation on its regulation relating to the payment of interest on deposits by in­sured nonmember banks, the Board had de­ferred until such date as might be fixed by fur~her action of the Board, the date upon Wh1ch subsection {f), entitled "Interest," of sect~on 1 of revised regulation Q, would be­come effec~ive, but that all other provisions of regula tlon Q would become effective on January 1, 1936.

In the i:nonth of September 1943 the Board of Governors published in its monthly .bulletin a ruling on the question in Which they held that under the fact~ of a specific case, a bank which I under­stand was a national bank in the State of Nebraska, had violated its interest regu­lation-regulation Q-by absorbing ex­change charg~s for various correspond­ent banks and other depositors. In this opinion the Board stated that-

From the facts of the present case it ap­pears that the payments resulting from ex­change charges are made by the subject bank for the purpose of solicitiPi and augmenting

10960 CONGRESSIONAL RECORD-HOUSE . DECEMBER 21 its deposit accounts; in other words, as com­pensation for the use of funds constituting deposits. No other reason for the absorption of such charges is !1-pparent.

In making its September ruling, the Federal Reserve dug up an old case con­cerning which they had had correspond­ence with the Office of the Comptroller of the Currency of the Treasury Depart- . ment in 1938 an 1, because the facts ap­peared to them to be tailored to fit their particular purposes, they directed their ruling to this case. Although the ruling was purportedly limited to that particu­lar case, the Board very adroitly gave widespread publicity to the ruling and sent circular copies thereof to the 12 Fed­eral Reserve banks and-to the examiners of these institutions who were in contact with most of the banks in the country. It was not long before what started out to be a ruling in a particular case had become a ukase of general application to all of the member banks of the Federal Reserve System in the United States.

When the controversy had arisen in 1936, I understand that there were nu­merous conversations between Hon. Hen­ry B. Steagall, former chairman of the House Banking and Currency Committee, and the Chairman of the Board of Gov­ernors of the Federal Reserve System, Mr. Eccles, as a result of which the Federal Reserve had agreed to take no action to disturb the practice of absorbing ex­change charges without giving ample notice to Congress. Shortly befor~ the separate ruHng was issued Mr. Eccles sent a letter to Chairman Steagall and Chairman WAGNER of the S.enate reading as follows:

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM,

Washington, August 6, 1943. Hon. ROBERT F. WAGNER,

Chairman, Committee on Banking and Currency,

United States Senate, washington, D . C.

MY DEAR SENATOR: You may recall that early in 1937 I talked with you and with sev­e.ral other Members of Congress about the question whether the absorption by banks of exchange and collection charges should be regarded as a payment of interest on demand -deposits within the prohibition of the law and the Board's Regulation Q. As a result" of these discussions, it was understood that I would advise you in advance of any future action which might be taken by the Board affecting the status of this matter. That time seems to have arrived, as the necessity for action has increasingly impressed itself upon us. ·

As you may also recall, the Banking Act of 1933 amended. section 19 of the Federal Reserve Act so as to provide that no member bank "shall, directly or indirectly, by any device whatsoever, pay any interest on any deposit which is payable on demand," and the Banking Act of 1935 authorized the

'Board to determine what shall be deemed to be a payment of interest within the meaning

·of this section. In view of this provision of the law, the Board adopted a definition of interest under which the absorption of ex­change and collection charges by a member bank as compensation for the maintenance of a demand deposit would be construed as a payment of interest on such deposit.

On January 30, 1937, however, at the re­quest of Mr. Steagall and yourself, th~ Board

deferred the effective date of this definition. Following a discussion with Mr. Crowley, because of the fact that the problem involved an interpretation of the law under which the Federal Deposit Insurance Corporation op­erates with respect to nonmember insured 'banks, the Board amended its Regutation Q by striking out .the definition in question and providing that, for the purposes of the regulation, "interest" should mean "any pay­ment to or for the account of 'any depositor as compensation for the use of funds con­stituting a deposit," and the Federal Deposit Insurance Corpo~ation amended its regula­tion so as to define interest in identical language. The regulations of both agencies therefore became uniform in this respect. At the same time, the Board and the Federal Deposit Insurance Corporation issued a joint stat ment for the press in which it was pointed out that the effect of the amend­ments was to declare existing law rather than to interpret and apply the law to par­ticular cases. It was stated that this would permit the general application by each agency of a uniform law and a determina­tion, based upon the facts involved, in specific cases.

Since then the Board's regulation has re­mained unc'hanged in this respect and no ruling has· been issued by the Board regarding the question whether the absorption of ex­.change charges constitutes a payment of in­terest. It was hoped, and there was some reason to believe, that the ·practice would gradually diminish, particularly since many bankers regarded it as unsound, and that the problem would eventually solve itself witn­out more specific action. Recently, however, it has appeared that the practice, instead of diminishing, has increased. The Board has been informed that some banks have taken advantage of the situation to engage in a competition for bank deposits on the basis of absorption of exchange f..nd collection charges which othei· banks have believed to be unlawful. As a result, the Board of Governors has been urged on a number of occasions to take action. Requests of this kind have come from members of the Federal Advisory Council as well as from other bankers.

Last year the Board received a letter from the Office of the Comptroller of the Currency under date of July 31, 1942, calling attention to the continued absorption of exchange charges in considerable amounts by a par­ticular national bank and urging upon the Board the desirability of a prompt ruling wl.th respect to the question as applied to this specific case. A copy of this letter is enclosed for your information. The Board has recon­sidered the entire matter carefully in the light of this case; and there is also enclosed a copy of the reply which has been prepared with a _view to its transmission to the Comptroller on August 23, 1943. In this letter the position is taken that the absorption of exchange charges by the bank is a payment of interest on demand deposits in violation of the law .and the Board's. regulation Q. Since a ruling in conformity with this letter is one th-at would be applicable to all member banks, we contemplate publishing the ruling in the September issue of the Federal Reserve Bulle­tin, which will go to the press about the date of the letter to the Comptroller of the Cur­rency. I am therefore writing you in accord­ance with the understanding mentioned in the first paragraph of this lett'er so that you may be advised of the proposed action before it takes effect, and I am writing letters to Messrs. Steagall and DaUGHTON to the same effect. If in the meantime any of you should desire to discuss the matter with me, I will be at -your service.

Very sincerely yours, RONALD RANSOM,

Vice Chairman.

Copies ·of this letter were furnished to Chairman Leo T. Crowley, of· the Federal Deposit Insurance Corporation, who promptly wrote a letter to the late Chair­man Steagall, of the House Banking and Currency Committee, to Representative DOUGHTON and to Senator WAGNER, chair­man of the Senate Banking and Currency Committee, reading as follows:

AUGUST 20, 1943. The Honorable H~NRY B. STEAGALL,

C!f,airman, ComT?tittee on Banking ant! Currency,

House of Representatives, Washington, D . C.

MY DEAR MR. CHAIRMAN: We are interested to read the proposed letter of the Board of Governors of the Federal Reserve System to the Comptroller of the Currency accompany­ing Governor Ransom's letter to you under date of August 6, a copy of which was sent us with advice that it would be mailed on August 23.

In this letter the Board of Governors holds that the absorption of exchange charges by a national bank constitutes a payment of in­terest in violation of section 19 of the Fed­eral Reserve Act and of the Board's regula­tion Q which prohibit payment of interest on demand deposits by member banks.

The subject matter of this letter was dis­cussed by representatives of this Corporation . with members of the Federal Reserve Board staff in January 1943, at which time they were advised that this Corporation believes the Board of Governors' position to be untenable, as the question involved appears to be one which Congress has pointedly refrained from de~egating to the Federal banking agencies for disposition and in which the theory of the Board of Governors would appear to require it to outlaw as well the absorption of service charges and other expenses for depositors which all banks now incur to some degree.

In practically all systems of service charges on deposit accounts, credit, up to a maximum amount of the charges, is given fQr the worth of the balance to the bank in terms of an assumed or hypothetical rate of interest. A surve~ of service charg~s conducted by the Amencan Bankers Association in 1938 showed that out of 478 clearing houses replying to the inquiries, at least 387, or 81 percent, used service-charge systems which in effect gave customers credit for interest on their ac­counts in determining the amount of service charges to be levied. Of course, no interest was actually paid; it was credited against charges which would otherwise be levied. The practice has become more widespread since that survey was made.

Under these methods of service charges the depositor whose account is considered to be desirable receives a pecuniary benefit which he would not otherwise receive in the form of free ser~ices, which represents essentially a rebate of charges. This benefit is an incentive for the maintenance of larger balances on deposit with the bank than might otherwise be maintained.

We know that it is a common practice of many depositors to balance the rate of re­turn which they could secure on their funds, if invested, against the service charges which they would have to pay if their larger bal­ances were withdrawn, and to base their de­cisions with respect to the use of their funds upon the relative advantage to .accrue there­from. The system of providing free services on the basis of minimum balances and of levying charges against those who do not maintain such balances appears to us · to be as much a payment of interest as the absorp­tion of exchange charges. In the latter case, the bank pays for something; ~n the former case, the bank refrains from collecting in~ come which it would otherwls.e receive. The net result to the bank is pr~ci~ely the same;

1943 CONGRESSIONAL RECORD-HOUSE 10961 the purpose is precisely the same. The only difference is an accident of accounting.

Therefore, 1f the absorption of exchange charges constitutes a prohibited payment of interest, it seems to us equally clear that the absorption of internal service charges, telephone, and telegraph charges and post­age for depositors is likewise a prohibited in­terest payment. Dollar-wise, the volume of service charges and expenses absorbed by the banks is immeasurably greater than the ex­change charges which the banks pay for their customers. Yet, the Board of Governors, we believe, would frankly admit that to com-

. pel banks to pass on to their depositors ex­penses and charges of this character would not only be a disservice to the depositing public, but wouid, in their opinion, be as far beyond the scope of the Board's authority as we consider the proposed ruling to be.

·As we view the proposed ruling, it i s simply another attempt to force par clearance upon nonmember banks. In the past, all such attempts have been defeated administra­tively, legislatively, and judicially.

Over 2,100 insured banks charge exchange on items drawn against them and, while the total involved is relatively small, these charges constitute a vital source of income to these institutions. They have long fought the efforts of the proponents of free clearing to outlaw the practice and Congress was not unaware of that fact in enacting the inter­est provisions of the 1933 and 1935 acts. Yet Congress did not attempt to deal with the question then, and we do not believe it in­tended that the banking agencies do so in­directly under the guise of an interest regula­tion. This corporation does not intend to do so, and it hopes that the Board of Governors will not give rise to a situation where two Federal agencies make conflicting decisions to the consternation of the public. In such a situation we c.onsider it singularly appro­priate to await precise directions from Con­gress.

A similar letter is being sent to Senator WAGNER and to Representative DauGHTON. · Very truly yours,

LEO T. CROWLEY, Chairman.

Owing to the fact· that Congress was in recess and immediately upon its return occupied its entire attention with the farm subsidy question, the House Bank­ing and Currency Committee was unable to consider the question until after the proposed ruling of the Federal Reserve had been made public. Thereafter, the activities of the committee were upset by the untimely death of our beloved colleague, Chairman Steagall, and it was not until early in December that the matter came up for hearing.

During these hearings many members of the committee ~ere amazed to learn that the Board of Governors of the Fed­eral Reserve System had adroitly planned this entire matter. Their first step was to issue what appeared to be a ruling of limited application applicable only to one bank, or possibly to a few more banks which might have engaged in the same practice. This was followed by widespread publicity to the ruling and apparently by secret instructions to all of the 12 Federal Reserve banks to whip the banks in their districts into line by January 1 under threat of expulsion from the Federal Reserve System, or other severe disciplinary action if they did not cease absorbing exchange charges by tLat date. While Governor Ransom, of the . Federal Reserve System, who ap­peared as the spokesman for the Board

LXXXIX--691

in these hearings, piously denied the giving of any such circular instructions, it nevertheless appears that by some pe­culiar coincidence most of the banks of the country that are affected by this rul­ing are notifying their depositors that they will cease to absorb exchange charges by January 1 because of the rul­ing which the Federal Reserve has given. The question immediately arises why January 1 has been fixed, and the obvious answer is that this is a date which could safely be fixed to force the issue on all of the banks without giving Congress a fair opportunity to act to prevent this bureaucratic bludgeoning of the banks into complying with a regulation which it is my opinion Congress never author­ized and never had the remotest inten­tion of permitting the Federal Reserve to adopt.

My colleagues, I want you to know that this innocent looking ruling, in my opinion, will have a revolutionary effect upon our banking system. It is a death­blow at many of the banks in my own State of Georgia and in the States of many of my southern and western col­leagues and I exhort you to join with me in defeating this unparalleled effort to force over 2,100 of the small country banks of this Nation into the harness of the · Federal Reserve Board's design. Bear with me and I will explain the full significance of this move but in order to do so I must go into the history of one of the most celebrated fights on economic questions that ever occurred in this coun­try. This has to do with the so-called par-clearance system which, the Su­preme Court of the United States has said, the Federal Reserve is under no ob­ligation to enforce upon the banks of this Nation but which it has steadily and persistently fought for for over 25 years. The tragedy of the present situation is that because of the adjournment of Con­gress, it is impossible for us to pass legis­lation to defeat the efforts which the Federal Reserve are making and which they have timed perfectly to accomplish their purpose before Congress has an op­portunity to act. Bankers everywhere tell me that if the ruling on which the Federal Reserve has undoubtedly set a deadline of compliance by banks gen­erally for January 1, goes into effect and if the banks stop absorbing exchange charges that the practice will be dead and no amount of legislation can ever revive it. This, bear in mind, is being accomplished with the utmost adroitness without the reenactment of the provision in the 1936 interest regulation which was withdrawn because of the tumultuous protests from the Members of Congress, but by the simple expedient of a "ruling" which has the force of law but without observance of any of the formal requi­sites which usually accompany the adoption of a regulation.

Several members of the Banking and Currency Committee, including myself, urged Governors Ransom and McKee, of the Federal Reserve Board, to defer the operative effect of this ruling for 60 to 90 days beyond January 1, so as to give the House Banking and Currency Committee an opportunity to recommend legislation

on this subject, if legislation is required, but they very blandly replied that they had not adopted a regulation and hence they could not defer its effective date, and further that they could not defer the effective date of an act of Congress. This, notwithstanding the fact that the law under which they purport to act was passed in 1933 and stayed on the statute books until 1936 without any attempt to apply it to the matter of absorbing ex­change charges, and then when the reg­ulation was promulgated to be effective on January 1, 1936, the same Board of Governors which now says it cannot postpone the effective date of its ruling published a formal suspension of the provisions of its own regulation, as I have outlined above, indefinitely postponing the effectiveness of this provision. I charge that they stand indicted of their shrewd and cunning maneuver to force par-clearance upon the country banks of this Nation by their refusal to give Con­gress an opportunity to act before this is put into effect.

What is par-collection or par-clear­ance? Par-clearance is the payment by a bank of a check drawn against it of the exact sum called for by the check with­out deducting any service or exchange charge for the payment thereof. In other words, if I give a check for $100 to a man in one Sta:;te on a bank in another State and he places it in the hands of his bank for collection, the check is cleared at par if the bank on which it is drawn remits the full sum of $100 and this sum is credited to the payee of the check. Now, there are a gnat many banks in the United States which do not clear at :;.Jar but on all out-of­town collections they charge an amount usually not in excess of one-tenth of 1 percent of the face amount of the check for issuing their out-of-town draft in settlement.

In other words, the check for $100 would be remitted for when sent to the drawee bank through the mails for pay­ment in the sum of $100 less 10 cents ex­change charges, or a net of $99.90. This exchange charge is exactly like the well­known service charges which depositors pay to their banks in the metropolitan areas, the only difference being that the exchange charge is imposed as a charge against the payee of the check in the case of the nonpar banks, whereas the service charge.is assessed against the de­posito;: by most of the banks which have service charge systems. However, the principle is the same. Now, there are over 2,100 banks in the United States which are not members of the Federal Reserve System but whose deposits are insured by the Federal Deposit Insurance Corporation, and some others whose de­pos~ts are not insured, which do not clear at par and, in addition, there are a sub­stantial numl:er of banks which are mem­bers of the Federal Reserve System which do not clear at par ch~cks which are mailed in for collection directly by their correspondent banks. Checks are cleared in the United States through two princi­pal channels, first, through the clearing facilities of the Federal Reserve banks

1.0962 CONGRESSIONAL RECORD-HOUSE DECEMBER, 21 and, secondly, through banks in metro­politan centers, including banks in small cities whjch act as clearing agents for their correspondents. Under the latter procedure a bank, for example, in Atlan­ta, Ga., would act as the clearing agent for the Lanks in the smaller towns ad­jacent to Atlanta. These latter banks would send their checks to the Atlanta bank for collection and the latter would either send them to the Federal Reserve for collection or would send them directly to the banks upon which they · were drawn, or to intermediate correspondent bani,.c; which in turn would send them to the banks on which they were drawn. Bear in mind that the Federal Reserve banks do not handle the collection of ~PY checks on banks which do not remit at par. Ther_efore, checks on the so­called nonpar banks are usua:ily cleared by sending them to a correspondent bank which sends them directly to the non­par bank in the mails and the latter re­mits by a draft on its out-of-town cor­respondent nearest to the point from which the check originated.

The banks which undertake to collect these checks as clearing agents are us­ually qualified to carry the legally re­quired reserve balances of other banks and the relationship between the two sets of banks is commonly known as a ·cor­respondent bank relationship which car­ries with it service to the smaller bank similar to that which the Federal Re­seFve banks render to the larger banks. In other words, the correspondent banks are the banks of the smaller banks.

For over 20 years it has been the cus­tom of most of the correspondent banks to absorb" the exchange charges assessed by the smaller country banks on out-of­town collections and to remit to their depositors the gross amount of the it~m collected. In other words, the $100 check · which is remitted for at $99.90 by the country bank is credited to the depositor for the full $100, the 10 cents being ab­sorbed as part of the expense of collec­tion. The reason for this practice ap­pears to be that the bai_lks which engage in the business of making collections find it cheaper to do business by mail and pay the exchange charges themselves than they do to maintain the elaborate ·clear­ing system which the Federal Reserve banks maintain under Government spon­sorship. Just as they pay their clerks and their tellers, their rent and other miscellaneous expenses, the correspond­ent bnnks have also paid the exchange charges assessed by the smaller institu­tions. The result is that the exchange charge practice is primarily something between · bankers and the public knows very little about it.

Now, what the Federal Reserve System proposes to dci is to prevent the inter­mediate collecting bank from absorbing the exchange charge on the theory that the absorption of this expense constitutes a payment of interest to . its depositor. The history of the legislation leading up to the prohibition of the payment of in­terest on demand deposits shows that at all times Congress . clearly distinguished between the payment of interest as such and the absorption of exchange charges.

Hearings were conducted on H. R. 12379 by the Sixty-sixth Congress in 1920, the testimony in connection with which shows th.at the practice of absorbing ex­change charges was then well known. When Congress investigated the pay­ment of interest on demand deposits its investigation was clearly limited to the solicitation of money upon the payment of an agreed consideration to attract it and no word crept into the record indi­cating any criticism of the practice of absorbing -exchange.

Now, you may ask me what the sig­nificance is of the prohibition against absorbing exchange. You may say, What of it; how will this affect the smaller banks? My answer is that ex­perts who have studied the par-clearance question for a generation say that if the correspondent banks are prohibited. from absorbing exchange charges for their customers it will have the effect of forc­ing the banks which charge exchange to clear at par or to go out of business. I believe that many of them will be forced to go out of business because their in­come is largely derived from exchange charges, just as many other banks today find a substantial part of their income in the service charges . which they levy on their depositors.

Leo T. Crowley, Chairman of the Fed­eral Deposit Insurance Corporation, tes­tified on December 17, 1943, before the House Banking and Currency Committee that the net result of · the enforcement by the Board of Governors of the Federal Reserve System of regulation Q against absorption of exchange would be, first, forcing of par clearance on all banks; second, detriment to small bank earn­ings possibly breaking some of them; and, third, opening the way for advo­cates of branch and chain banking to take over many small banks.

Everyone knows from the many speeches and publications of Mr. Crow­ley that he is the friend of the small-unit bank, and he has opposed the ruling which the Federal Reserve has made in a forthright and forceful manner almost without precedent as between Federal administrative officials. I think that his word of warning should be heedeq before it is too late.

The controversy between advocates of par collection and those opposing it has been one of the most bitter in all of the banking history of the United States. During the hearings which preceded the passage of the Federal Reserve Act many objections to par collection were raised. Sections 13 and 16 of the Federal Reserve Act, which· laid the foundation for a clearing and collection system through the instrumentality of the Federal Re­serve banks, was permissive rather than compulsory so far as member banks are concerned. · The power to collect checks em nonmember banks was founded on section 4 of the Federal Reserve Act, which authorized the Reserve banks to exercise such incidental powers as might be necessary to enable them to carry on the business of banking. The Federal

. Reserve started in 1914 with its efforts to enforce par clearance on all banks, and they have renewed their efforts from

time to time ever since, the ruling which I have discussed being their .latest effort. In 1920 W. P. G. Harding, who was then the governing head of . the Federal .Re­serve Board, sent out a circular letter, in which he said that-. The action of the various Federal Reserve

banks in extending th~ir par· lists has met with the cordial approval of the Federal Re­serve Board, which holds the view that under the terms of existing law the Federal Reserve banks must use every effort to collect all bank checks received from member banks at par.

To this end it developed that during the Board's campaign of that period, during and prior to the 1920's, the Fed­eral Reserve banks would accumulate the .checks drawn on nonpar banks and present them over the ·counter by mes­senger to the banks against which they were drawn, even though in remote lo­calities. Sometimes the messenger chosen was an express agent and at other times an especially engaged person but in most instances, the checks were presented in large amounts shortly be­fore the banks closed and cash demanded in payment. Many of the banks found it inconvenient to keep larg~ amounts of currency on hand to meet these un­expected demands and as a result in order to block the intimidating efforts of the Federal Reserve Board to force them on the par list, went to their State legislatures which passed acts making it legal for them to settle by drafts on their correspondent bank balances, for checks against them presented ov-er the counter by clearing agents. Many banks sought relief from the courts to protect them­selves against the coercive efforts of the Federal Reserve banks to secure remit­tances at par and it appears from the history of these cases that most of them resulted in' favorable decisions to the banks which invoked court· aid at that tizpe. One case went to the Supreme Court of the United States, which recites in a most interesting manner in a de­cision by Justice Brandeis the history of the whole par clearance controversy. This was the case of Farmers and Mer­chants Bank of Monroe, N. C., et al., against Federal Reserve Bank of Rich­mond reported in volume 262, United States Reports., page 649. in this opinion the Court explains what par clearance is, states briefty. the legislative history of par clearance, and interprets the pertinent provisions of the Federal Reserve Act and the Board's powers and limitations thereunder.

This case arose out of a suit brought under a North Carolina statute, which is discussed in the opinion, by the Farmers & Merchants Bani{, of Monroe, N. C., to enjoin the Federal Reserve Bank of Rich­mond from dishonoring checks which the Farmers & Merchants Bank paid by ex­change drafts on reserve deposits with correspondent banks. Two hundred and seventy-one other banks joined later as plaintiffs. The trial court granted a per­petual injunction. The supreme court of the State reversed the decree of the trial cour·t, and the case was appealed to the Supreme Court of the United States. The Supreme Court of the United States sustained the lower court, 'reversing the

1943 CONGRESSIONAL RECORD-HOUSE 10963 action of the supreme court of the State and held that the North Carolina statute under which the suit was brought did not obstruct the performance of any duty imposed upon the Federal Reserve Board and the Federal Reserve banks, and that the contention that Congress had im­posed upon the Federal Reserve Board and banks the duty of establishing uni­versal par clearance and collection of checks was irreconcilable with the spe­cific provision of the Federal Reserve Act, which affirmed the right of banks to make limited charges for clearance and collection of checks, provided such charges are not made against the Fed­eral Reserve banks. The Supreme Court held that Federal Reserve legislation did not "impose on the Federal Reserve Board or the Federal Reserve banks a duty to establish in the United States a uni versa I system of par clearance and collection of checks."

That part of the decision pertinent to this discussion follows:

Parcelearance does not mean that the payee of a check who deposits it with his bank for collection will be credited in his account with the face of the check if it is collected. His bank may, despite par clearance, make a charge to him for its service in collecting the check from the drawee bank. It may make such a charge, although both it and the drawee bank are members of the Federal Reserve System; and some third bank which aids in the process of collection may likewise make a charge for the service it renders. Such ·a collection charge may be made not only to member banks by · member banks, National or State, but it may be made to member banks also by the Federal Reserve banks for the services which the latter ren­der. The collection charge is expressly pro­vided for in section 16 of the Federal Re­serve Act (38 Stat. 268) which declares that:

"The Federal Reserve Board shall, by rule, fix the charges to be collected by the mem­ber banks from its patrons whose checks are cleared through the Federal Reserve bank and the charge which may be imposed for the service of clearing or collection rendered by the · Federal Reserve bank."

Par clearance refers to a wholly different matter. It deals not with charges for collec­tion but with charges incident to paying. It deals with exchange. Formerly checks, ex­cept where paid at the banking house over the counter, were customaiily paid either through a clearing house or by remitting, to the bank in which they had been deposited for collection, a draft on the drawee's deposit in some reserve city. For the service ren­dered by the drawee bank in so remitting funds available for use at the place of the de­posit of the check, it was formerly a common practice to make a small charge, called. ex­change, and to deduct the amount from the remittance. This charge of the drawee bank the Federal Reserve Board planned to elimi­nate, and in so doing to concentrate in the 12 ,Federal Reserve banks the clearance of checks and the accumulation of the reserve balances used for that purpose. The Board began by efforts to induce the banks to adopt par clearance voluntarily.1 The attempt was not successful. The Board then concluded to apply compulsion. Every national banlt is necessarily a member of the Federal Reserve System and every State bank with the requi­site qualifications may become such. Over members the Board has large powers as well as influence. The first step in the campaign of compulsion was taken in tlie summer of 1916, when the Board issued a regulation re-

t See Report, Federal Reserve Board, 1915, pp . 14- 17; ibid, 1916, pp. 9-11.

quiring every drawee bank which is a mem­ber of t he Federal Reserve System to pay, without deduction, all checks upon it pre­sented t hrough the mail by the Federal Re­serve bank of the dist rict. The operation of this requirement was at first limited in scope by the fact that the or iginal act (sec. 13) authorized the Reserve banks to collect only those checks which were drawn on member banks, and which were deposited by a mem­ber bank or another Reserve bank or the Unit ed States. Few of the many St ate banks had then elected to become members. In Sept ember 1916 section 13 was amended so as to authorize a Reserve bank to receive for col­lection from any member (including other Reserve banks) also checks drawn upon non­member banks within its dist rict. Thereby the Federal Reserve Board was enabled to extend par clearance to a large proportion of all checks issued in the United St ates. But the regulat ion J then issued expressly · pro­vided that the Federal Reserve banks would receive from member banks at par only checks on those of the nonmember banks whose checks could be collected by the Federal Re­serve bank at par. It was recognized that nonmembers were left free to refuse assent to par clearance. By December 15, 1916, only 37 of the State banks within the United States, numbering about 20,000, had become mem­bers of the System, and only 8,065 of the State banks had assented to par clearance.

Reserve banks could not, under the then law, make collections for nonmembers. It was believed that if Congress woUld grant Federal Reserve banks permission to make collection also for nonmembers, the Board could otier to all banks inducements ade­quate to secure ·their consent to par clearance. A further amendment to section 13 was thereupon secured by act of June 21, 1917 (ch.- 32, sec. 4, 40 Stat. 232, 234), which pro­vided, among other things, that Federal Re­serve banks:

"Solely for the purposes of exchange or of collection, may receive from any nonmember bank • • * deposits of * * * checks • • payable upon presenta-tion *: Provided, Such nonmember bank maintains with the Federal Reserve bank of its district a balance suffi­cient to offset the items in transit held for its account by the Federal Reserve bank."

To this provision, which embodied the legislation proposed by the Federal Reserve Board, there was added, while in the Senate, another pro-·iso, relating to the exchange charge, now known in a modified form as the Hardwick amendment, which declares:

"That nothing in this or any other section of this act shall be construed as prohibiting a member or nonmember bank from making reasonable charges, to be determined and regulated by the Federal Reserve Board, but in no case to exceed 10 cents per $100 or frac­tion thereof, based on the total of checks and drafts presented at any one time, for collec­tion or payment of checks and drafts and remission therefor by exchange or otherwise; but no such charges shall be made against the Federal Reserve banks."

Thus a Federal Reserve bank was author­izd to receive for collect ion checks from non­members who maintained with it the pre­scribed balance; and strenuous etiorts were then made to induce all State banks to so arrange. But the law did not compel State banks to do this. Many refused, and they continued to insist on making exchange charges. On March 21, 1918, the Attorney General (31 Ops. Atty. Gen. 245, 251) advised the President:

"The Federal Reserve Act, however, does not command or compel these State banks to forego any right they may have under the State laws to make charges in connection with the payment of checks drawn upon them. The ·act merely otl'ers the clearing and collection facilities of the Federal Re-

serve banks upon specified conditions. If the State banks refuse to comply with the con­ditions by insisting upon making charges against the Federal Reserve banks, the result will simply be, so far as the Fedetal Reserve Act is concerned, that since t.he Federal Re­serve banks cannot pay these charges, they cannot clear or collect checks on banks de­manding such payment from them."

The Federal Reserve Board and the Federal Reserve banks were thus advised that they were· prohibited from paying an exchange charge to any bank. But they believed that it was their duty to accept for collection any check on any bank; and that Congress had imposed upon them the duty of making par elearance and collection of checks universal in the United States. So they undertook to bring about acquiescence of the remaining State banks to the system of par clearance.2

Some of the nonassenting State banks made stubborn resistance.3 To overcome it the re­serve banks held themselves out as prepared to collect at par also checks on the State banks which did not assent to par clearance. This they did by publishing a list of all banks from whom they undertook to collect at par, regardless of whether such banks had agreed to remit at par or not. This resulted in draw­ing to the Federal Reserve banks for collec­tion the large volume of checks which there­tofore had come to the drawee bank by mail from many sources and which had been paid by remittances drawn on· the bank's balance in some reserve city. If a State bank per­sisted in refusal to remit at par, the reserve banks caused these checks to be presented, at the drawee bank, for payment in cash over the counter. ·The practice adopted by the reserve banks would, if pursued, neces­sarily subject country banks to serious loss of income. It would deprive them of their income from exchange charges; and it would reduce their income-producing assets by com­pelling them to keep in their vaults in cash a much larger part of their resources than theretofore. That such loss must result was admitted. That it might render the banks insolvent was clear. But the Federal Reserve banks insisted 'tha\ no alternative was left open to them, since they had to collect the checks and were forbidden to pay exchange charges. The State banks denied that the Federal Reserve banks were obliged to accept these checks for collection, and insisted that Federal Reserve banks should refrain from accepting for collection checks on banks which did not assent to par clearance.

It was to protect its State banks from this threatened loss, which might disable them, that the legislature of North Carolina enacted the statute here in question.4 It made no

2 North Carolina was placed on the par list on November 15, 1920. There were on Jan­uary 1, 1921, in the United States, 30,523 banks, State and National. Of these, 1,755 State banks had refused to enter the par list. About 250 of the banks so refusing were in North Carolina. During the year 1921 the number which refused to consent to par clearance increased to 2,353. Annual Report of Federal Reserve Board, 1921, p. 71.

a See Ameri can Bank & Trust Co. v. Fed­eral Reserve Bank of Atlanta, supra; Brook­ings State Bank v. Federal R eserve Bank of San Francisco (277 Fed. 430; 281 Fed. 222); Farmers' & Merchants' B ank of Catlettsburg, Ky. v. Federal Reserve Bank of Cleveland (286 Fed. 610).

4·Statutes similar in purpose were enacted in Alabama, Florida, Georgia, Louisiana, Mississippi, South Dakot a, and Tennessee. See Annual Report of Federal Reserve Board, 1921, p. 70; Alabama, General & Local Acts, 1920, No. 35; Florida Laws, 1921, c. 8532; Georgia Laws, 1920, p. 107; Louisiana, Acts, 1920, No. 23; Mississippi Laws, 1920, c. 183; South ·nakota, Laws, 1921, c. 31; Tennessee, Public Acts, 1921, c. 37. ·

10964 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 attempt to compel the Federal Reserve bank to pay an exchange charge. It made no at­tempt to compel a depositor to accept some­thing other than cash in payment of a check drawn by him. It merely provided that, unless the drawer indicated b~ a no­tation on the face of the check that he required payment in cash, the drawee bank was at liberty to pay the check by exchange drawn on its reserve deposits. Thus, the statute merely sought to remove (when the drawer acquiescEd) the absolute requirement of the common law that a check presented at the bank's counter must be paid in cash, It gave the drawee bank the option to pay by exchange only in certain cases; namely, when the check was "presented by or through any Federal Reserve bank, post office, or ex­press company, or any respective agents thereof." The option was so limited, because the only purpose of the statute was to re­lieve State banks from the pressure which, by reason of the common-law requirement, Federal Reserve banks were in a position to exert and th'l)s compel submission to par clearance. It was expected that depositors would cooperate ·with their banks and re­frain from making the prescribed notation; and that when the Reserve banks were no longer in a position to exert pressure by de­manding payment in cash, they would cease to solicit, or to receive, for collection, checks on non-assenting State banks. Thus, these would be enabled to earn exchange charges as theretofore. Such was the occasion for the statute and its purpose.

As stated, the Court found against the Federal Reserve bank.

This latest move by the Federal Re­serve is but another of its efforts to force par clearance but this time it takes on the guise of interest regulation. In 1936 the Board in its efforts to accomplish by regulation what it is now seeking to ac­complish by a campaign of publicity and intimidation was defeated and nullified by the protests of the banks throughout the country and the representatives in Congress from their districts. From my own congressional district I have re­ceived many telegrams of protest and I know that the other Congressmen par­ticularly from the States of North Caro­lina, South Carolina, Mississippi, Ala­bama and the Middle western States have received similar protests. You are going home now for the holidays and will have an opportunity to investigate this matter first hand. I urge you to look into it carefully. Talk to your home-­town banker and hear from him first hand what this ruling means. When you talk to him do not forget ·the address which Marriner S. Eccles, Chairman of the Board of Governors of the Federal Reserve System made on September 17, 1943, before the National Association of Supervisors of State Banks at their an­nual convention meeting in Cincinnati, Ohio. Mr. Eccles is himself a branch banker and comes from Utah where in the Twelfth Federal Reserve District branch banking has enjoyed widespread development. Mr. Eccles favors allowing banks to branch across State lines and in his speech to the State bank super­visors he said that he believed that-

The dual banking system, as now consti­tuted, is outmoded.

He referred to the large mergers and conso1idations in the industrial world and the development of modern trans-

portation and distribution systems stat­ing-

Attempts to halt this march of progress by antitrust, antichain-store legislation or other statutory pains and penalties have largely been in vain. It requires no gift of prophesy to foresee that the same economic forces will in time compel the banking sys­tem to follow a parallel pattern.

He then says: I have long felt that limited branch bank­

ing is the practical solution of the banking problems confronting those areas where unit banks cannot succeed.

My colleagues, I ask you to mark those words well for it is my opinion that this is exactly what will happen if this regu­lation forces the independent unit coun­try banks on the par list. They will not be able to succeed without the revenues which the exchange charges have b;. ought them in the past and branch banking will follow in their funeral pro­cession.

PERMISSION TO ADDRESS THE HOUSE

Mr . . MICHENER. Mr. Speaker, after the other special orders today I ask unan­imous consent that the gentleman from South Dakota [Mr. MuNDT] be permitted to address the House for 25 minutes.

The SPEAKER. Is there objection? There was no objection. Mr. EBERHARTER. Mr. Speaker, I

ask unanimous consent that after the disposition of matters on the Speaker's desk and the legislative calendar and any other special orders, I be permitted to address the House for 5 minutes.

The SPEAKER. Is there objection? There was no objection.

COOPERATIVE BUSINESS ORGANIZATIONS

Mr. VOORHIS of California. Mr. Speaker, I ask unanimous consent to ad­dress the House for 1 minute.

The SPEAKER. Is there objection? There was no objection. Mr. VOORHIS of California. Mr.

Speaker, 99 years ago today a few weavers of cloth at Rochdale, England, faced by a lock-out from their jobs, by poverty and desperation, worked out an answ.er to human problems which is today the most completely hopeful and construc­tive regenerative force to which the peo­ples of the world can look ahead through their present darkness and difficulty.

That answer was (;Ooperation-an ap­plication of the Golden Rule to the every­day problems of mankind. No revolution was called for except in men and wo­men's ways of thinking and attitude to­ward their fellow men. No special favors or help was asked of government. No quarter was given to private monopoly.

Four simple principles were laid down: First, one vote to each member of the cooperative business organization, one vote to each partner in the common en­terprise; second, a limited dividend­generally 4 percent-on all capital in­vested; third, membership open to all men of good will regardless of politics, race, or creed; and fourth, business to be done at going market prices but earn­ings- of the business to be returned· to members at the end of the year in pro-

portion to their patronage or participa­tion in the business.

Today all around the world the coop­eratives are the most solid hope of the common man.

The cooperatives of China have made it possible for the Chinese to rebuild in Free China the industries which Japan took over or destroyed; the cooperatives of Yugoslavia offer the one solid hope of guiding that country down a middle course between the extreme right and the extreme left; in Scan dina via the coop­eratives have been intrumental in solv­ing in fundamental and long range fash­ion such problems as unemployment, in­stability of farm income, and the deeper problem of reconciling true economic and political liberty with the necessary de­gree of security for the people; all over central and eastern Europe the coopera­tives offer the one best method of re~ habilitation of those countries through the efforts of their own people with such necessary assistance, primarily in the form of seeds and tools rather th~n di­rect relief, as other nations may be able to give.

In our own country some 10,000,000 people are members of cooperatives of one sort or another. Co-ops have en­abled farmers to get fair prices in the· market place for their crops; they have made possible the electrification of mil­lions of farm homes; they have beaten the fertilizer trust; have given effective competition to the insurance trust; and are even challenging the oil monopolies. Two million American families trade at retail stores which they themselves own with a resulting increase of between 5 and 15 percent in their standards of liv­ing. And finally some 4,000,000 Ameri­can citizens habitually place their savings ­with their own credit unions and borrow money when necessary from themselves.

The principles and methods of cooper­ation can lead us down a middle road to a better world after the war than any mankind has ever known.

Cooperation is right because it is the expression in the field of economics of the fundamental principles of the Christian religion.

The SPE~KER. The time of the gen~ tleman has expired.

EXTENSION OF REMARKS

Mr. O'CONNOR. Mr. Speaker, I ask unanimous consent to insert in the REc­ORD an editorial from a paper in Montana upon the soldiers' vote. ·

The SPEAKER. Is there objection? There was no objection. Mr. O'CONNOR. I ask unanimous

consent to extend my remarks in the RECORD and include an article about Barney Old Coyote, the first Indian sol­dier enlisted from Montana.

The SPEAKER. Is there objection? There was no objection.

TAXES

Mr. IZAC. Mr. Speaker, I ask unani­mous consent to address the House for 1 niinute and to revise and extend my remarks.

The SPEAKER. Is there objection? There was no obje-ction.

1943 CONGRESSIONAL: RECORD-HOUSE Mr. IZAC. Mr. Speaker, whenever a

revenue bill is brought in it is under a closed rule. The last one was no exception.

The Naval Affairs Committee of the House held hearings on renegotiation of contracts for over a month. We arrived at some conclusions. These renegotia­tion processes have brought into the Federal Treasury about $5,000,000,000. The new revenue bill is due to throw that all out. While we are to get about $2,000,000,000 in new revenue, we are giv­ing back about $5,000,000,000 in uncon­scionable exGess profits. I solemnly warn this House that you will hear more about it. from the soldiers who come back if you do not hear about it from other people before that time. I propose my­self to bring it to the attention of the House at a more appropriate time. I . will tell you exactly what it means in dollars to the American taxpayer.

The SPEAKER. The time of the gen­tleman from California has expired. PERMISSION TO ADDRESS THE HOUSE

Mr. ROLPH. Mr. Speaker, I ask unan­imous consent that at the conclusion of the other special orders today I may be permitted to address the House for 15 minutes.

The SPEAKER. Is there objection? There was no objection. Mr. CANNON of Missouri. Mr. Speak­

er, I ask unanimous consent that I may address the House for 20 minutes today at the conclusion of all other special orders.

The SPEAKER. Is there objection? There was no objection. Mrs. ROGERS of Massachusetts. Mr.

Speaker, I ask unanimous consent that I may address the House for 15 minutes after the other special orders today.

'rhe SPEAKER. Is there objection? ·There was no objection.

EXTENSION OF REMARKS

Mr. KUNKEL. Mr. Speaker, I ask unanimous consent to extend my remarks in the RECORD and include a speech on Social Security in a Democracy, by Clem­ent W. Hunt. This exceeds the permit­ted space, and the Public Printer has given me an estimate that the cost will be $120: I ask unanimous consent that it may be printed notwithstandiilg,

The SPEAKER. Without objection, it is so ordered.

There was no objectiop. . Mr. KUNKEL. Mr. Speaker, I ask

unanimous consent to include in the Ap­pendix, some of my own remarks on the subject of China, extending over the pe­. riod of the past 20 months.

The SPEAKER. Is there objection? There was no objection.

FULTON LEWIS, JR.

Mr. McWILLIAMS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and ex­tend my remarks.

The SPEAKER. Is there objection? There was no objection. Mr. McWILLIAMS. Mr. Speaker, last

night while wrapping up Christmas packages and addressing last. minute Christmas cards, I took time out to lis-

ten to Fulton Lewis, Jr., broadcast. The. information which he gave the public last night would make any true Ameri­can's biood boil and; if any of our boys who are spending their lives in the fox holes were listening in, they must have asked themselves this question, "What in the world are we fighting for?"

If what Fulton Lewis, Jr., said last night is true, and I have no reason to doubt his veracity, then hanging is too good for some people.

Mr. Speaker, I would like publicly to congratulate Fulton Lewis, Jr., on bis splendid contribution in smoking out the rats and the termites who have gnawed and wormed their way into our political and military lire. I hope he keeps up his good work, for by contrast to those he exposes, the men who are trying to do a clean, honest, respectable job appear as lily white.

The SPEAKER. The time of the gen­tleman from Connecticut has expired. COMMITTEE TO INFORM THE PRESIDENT

Mr. McCORMACK. Mr. Speaker, your committee appointed to join the committee of the Senate to inform the President that the Congress is ready to adjourn, and ask him if he had any fur­ther communication to make to the Con­gress, has performed that duty.

The President has directed us to say that he has no further communication to make to the Congress.

EXTENSION OF RE?viARKS

Mr. HORAN. Mr. Speaker, I ask unanimous consent to extend my re­marks in the RECORD, and include a letter.

The SPEAKER. Is there objection? There was no objection.

APPROPRIATIONS COMMITTEE

Mr. CANNON of . Missouri. Mr. Speaker, I ask . unanimous consent to proceed for 1 minute.

The SPEAKER. Is there objection? There was no objection. Mr. CANNON of Missouri. Mr.

Speaker, we are today closing the books for the session and the calendar year 1943. It has been a strenuous ses­sion and a strenuous and eventful year. In the last two sessions the Committee on Appropriations has handled more

· business, been in more continuous ses.­sion; and disposed . of more work than any Committee on Appropriations in the history of the Congress in any like per-iod of time. We have reported out more money· and more appropriation bills than any previous committee of this or any other country in the history of the world. We have reported out a greater percent­age of reduction in Budget estimates on some bills than any previous committee. And we have devoted more time, more work, more detailed and painstaking re­search into the budgetary needs of the Government than any previous commit­tee. It has been a work in which all members of the committee have partici­pated, the minority. and the majority alike, and I want to pay particular trib.;. ute to my colleagues on the majority side and to the. indefatigable labor and co­operation of the gentleman from New York [Mr. TABER] and ,his associates.

The work of the committee has not been done in a corner. The record speaks for itself. It is written in docu­ments that all may read. A complete record is found in the printed hearings and in the debate-on the ftoor as reported in the CONGRESSIONAL RECORD and iS available to all. At the most critical time in the history of the Nation, the com:mittee has met every emergency and supplied every need effectively, efficient­ly, and promr·tly. No department of the Government has found occasion for complaint, and the armed forces in par­ticular have testified to the t imely and adequate manner in which funds have been supplied for the war program. The records of the committee are open to the public, and at th.e' beginning of a year in which the shafts of political criticism will try every rivet in the armor of every governmental agency we invite in­spection and evaluation of our work from any source.

Preparation has already begun o~ the supply bills for 1944-45, and we expect to report the first early in January. The program of the committee calls for final disposition of all departmental supply bills in time for an early adjournment next year. ·

The SPEAKER. The time of the gsn­tleman from Missouri has expired.

COMMANDER MALCOLM ARNOLD

Mr. MAGNUSON. Mr. Speaker, I ask unanimous consent to address the House for 1 minute. ·

The SPEAKER. Is there objection? . There was no objection. Mr. MAGNUSON. Mr. Speaker, I

think it is proper at this time to call the attention of the House to the heroic con­duct of a member of the United States Naval Medical Forces. Last week there was an unfortunate railroad accident in North Carolina. Commander Malcolm Arnold was a passenge·r on that train. He was back home aft'er 18 months of active sea duty in a combat area. After the wreck he spent 8 hours, clad only in his underwear, in temperature 10 de­grees above zero, until medical assistance arrived, aqministering to the injured, and he saved many lives. He did one of the most heroic things that has occurred. His corps and all of us are proud of him. I think it is a fitting tribute to pay him for bravery on the home front.

The SPEAKER. The time of the gen~ tleman from Washington has expired.

EXTENSION OF REMARKS

Mr. BURCHILL of New York. Mr~ Speaker, I ask unanimous consent to place in the RECORD, a splendid article en renegotiation of contracts that appeared in a Washington paper today.

The SPEAKER. Is there objection? There was no ·objection. Mr. BURCHILL of New Yor!r. Mr.

Speaker, I ask unanimous consent that my colleague the gentleman from New York [Mr. BARRY] may place in the REc­ORD an article by Damon Runyon, which he seriously recommends to his Demo­cratic colleagues. -

The SPEAKER. Is there objection? There was no objection.

10966 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 Mr. ROBINSON of Utah. Mr. Speak­

er I ask unanimous consent . that not­withstanding the estimated cost which is $120, that I be permitted to extend -my remarks by including a speech by Judge . Charles A. Graham.

The SPEAKER. Is there objection? There was no objection. Mr. PRIEST . . Mr. Speaker, I ask

unanimous consent to extend my remarks on the subject of aviation legislation.

The SPEAKER. Is there objection? There was no objection. (By unanimous consent, Mr. CoCHRAN,

Mr. MILLER of Connecticut, and Mr. GATHINGs were granted permission to ex­tend their own remarks in the RECORD.)

Mr. BUFFETT. Mr. Speaker, .I ask unanimous consent to extend my re­marks in two instances, and in one to include an editorial from the Minne­apolis Star-Journal.

The SPEAKER. Is there objection? There was no objection. Mr. CUNNINGHAM. Mr. Speaker, I

ask unanimous consent to extend my re­marks· and include a resolution by the Iowa State Commerce Commission. · ·

'The SPEAKER. Is there obJection? There was no objection.

TffiRD WAR LOAN DRIVE

Mr. ELLIS. Mr. Speaker, I ask unani­mous consent to address the House for 1 minute.

The· SPEAKER. Is there objection? · There was ·no objection. Mr. ELLIS. Mr. Speaker, today I tak-e

great pleasure in calling to the attention_ of the Members the fact that West Vir­ginia is the unchallenged winner in an undeclared war between the States- to aetermine which would oversubscribe its quota during the Third War Loan drive by the largest number of percentage points. West Virginia bought 177 per­cent of its quota.

The population of West Virginia, ac­cording to the Sixteenth Census, was 1,901,974.

I know you will be interested to know that during this year-1943-West Vir­ginia will have produced 160,000,000 tons of bituminous. coal, which is 27 percent of the national production, and 250,000,-000,000 cubic feet of natural gas, the major percentage of which is produced in my district. Our lumber mills will have cut 600,000,000 feet of hardwood lumber.

While West Virginia is not' a. · farm State in the sense of some of the great Western States, being very mountainous, we do make an important contribution to the food supply of this Nation. The Fourth Congressional District contains many of the great farm counties of the State.

During this year we will have raised 670,000 head of cattle, 5,000,000 hens ·and pullets, 450,000 sheep and lambs, and 850,000,000 pounds of milk. We have furnished ·our full quota to the armed forces.

Down in West Virginia you will find patriotic American citizens who are always ready to make their contribution in peace or in war.

PERMISSION TO ADDRESS THE HOUSE

Mr. FOGARTY. Mr. Speaker, I ask unanimous consent to address the Ho.use­for 1 minute.

The SPEAKER. Is there objection? There was no objection. Mr. FOGARTY. Mr. Speaker, our be­

loved President and Commander in Chief ·has just returned from a meeting, which Adolf Hitler hoped would never take place; a meeting· which has helped cement the ties of the great Allied Na-

. tions; a meeting at which military plans have been laid to eliminate fascism and nazi-ism. I believe it is largely due to the great personal qualities of our President that this meeting has finally taken place.

Among his great qualities are his far­sightedness, his courage, his abiding faith in democracy, and his willingness to assume the duties of a wartime Presi­dent. Not the least among those quali­ties is his quality to take things in his own-time. Patience-that great quality, because he gains his ends and our ends step by step. Oh, I know, Mr. Speaker, he probably does not take those seven league strides that some of our news­paper columnists and radio commenta­tors would take were ·they in his place, but at the same time he gains his ends and our ends step by step. We should be proud that we have today in the White House as President, and Com­mander of the armed forces, a man of his great character and ability.

The SPEAKER. The time of the gen­tleman from Rhode Island has expired.

EXTENSION· OF ~EM-ARKS

Mr. GATHINGS. Mr. Speaker, I ask unanimous consent to extend my re­marks and include a radio address made by me this morning on the Blue Network.

The SPEAKER. Is there objection? . There was no objection.

GENERAL LEAVE TO EXTEND REMARKS

Mr. McCORMACK. Mr. Speaker, Ire­new my request that all Members of the House shall have the privilege until the last edition authorized by the Joint Com­mittee on Printing is published, to ex­tend.and revise. their own reina'rks in the CONGRESSIONAL RECORD on more than one subject, ·if they so desire, and may also include therein such short quotations as may be necessary to explain or complete such extension of remarks; but this or­der shall not apply to any subject mat­ter, which may have occurred, or to any speech delivered subsequent to the ad­journment of Congress.

The SPEAKER. Is there objection to the request of the gentleman from Mas­sachusetts [Mr. McCoRMACK]?

There was no objection. Mr. RANKIN. Mr. Speaker, I have no

objection. Mr. COCHRAN. Mr. Speaker, a par­

. liamentary inquiry. The SPEAKER. The gentleman will

state it. Mr. COCHRAN. Mr. Speaker, that re­

quest having been granted, is it neces­sary to secure permission in order to ex­tend our own remarks in the RECORD, individually?

The SPEAKER. Not a Member's own remarks; no. If a Member desires to include. anything extraneous, he will have to get consent.

EXTENSION OF REMARKS

Mr. WICKERSHAM. Mr. Speaker, I ask unanimous consent tc extend my re­marks in two instances.

The SPEAKER. Is there objection? There was no objection. ·

LET US HIGHLY RESOLVE

.. Mr. FOLGER. Mr. Speaker, I ask unanimous consent to address the House

· for 1 minute, and to revise and extend my remarks.

The SPEAKER. Is there objection? There was no objection.

· Mr. FOLGER: Mr;· Speaker, I trust the Speaker will allow . me to impinge upon the rules of the House and to ad­dress particularly the membership of this body.

Last night I heard the address of our Speaker, a great-oration, over the-radio. I hope it went to every home in the United_ States of America and to every other land possible. ·

That speech was delivered extempo­raneously originally in the House of Representatives. In my opinion, it has been one of the greatest contributions made to the winning of this war and the early conclusion of the struggle, since the war began. I desire to say further, in view of our early adjournment, that the speech of our Speaker should and will lead ·us to a sense of our own re­sponsibility, . The Congress has passed a· resolution that it will adjourn today. Three· days after we ·shall have adjourned we shall commemorate the birth of the Prince of Peace. Notwithstanding this, we are in the· midst of the most horrible war the world has ever seen. Men are fighting on the land, on the ' sea, .and in the air. Someone has forgotten or despised that commandment which says: "Thou shalt not kill." What is the trouble? Where is the blame to be? It cannot be said that the hand of the Lord ·is shortened that he cannot save. The blame can­not be laid at the door of America, nor England, nor Russia, nor China. These countries made every effort for peace and, in some instances,- probably delayed too long preparations for self-defense.

I recall the disinclination of Prime Minister Chamberlain · to let England prepare and stand her ground. Many of us became impatient with our own Con­gress that it did not sooner prepare for the worst, though we knew we were hop­ing- for the best. vVe had already suf­fered for China that she did not want to fight but had to fight. Do we not re­member that Russia was stabbed in the back, nnd in utter disregard of a 'com­pact of nonaggression between that country and Germany? We will re­member that Japan sneakingly made war on us while we ·were continuing in an attempt to arrive at an understanding that might stay the awful hand of war. We will remember that immediately af­ter the attack on Pearl Harbor, Japan

1943 CONGRESSIONAL RECORD-HOUSE 10967 and Germany declared war ·against the United States. The fault lies at the door of Germany and Japan. ··France had not gone in . willingly with the Axis Powers, but was forced in. Italy. under that arrogant, unworthy Mussolini, had joined with Germany to carry on an un· holy war of conquest against the world. It is not believed that the people of Italy, other than Mussolini and his cocon­spirators in crime, desired to make war. Many nations were ruthlessly overrun through absolute meanness and without any justification.

Great Britain, America, Russia, and China were left to bear largely the bur­den of the defense of the world against tyranny and oppression and to save the world for peace and good will. We are most fortunate and; I sincerely trust, very thankful that our South American neighbors, save one, joined with us in this ba£tle for right.

To be somewhat brief about the matter, I am about to say that it must be recog­nized that the great sinners against hu­manity and against right and peace and good will are Germany and Japan, sup­plemented only by the unworthy leaders in another country or two. It is probably reassuring that nationally and interna­tionally we have so many allies in this cause for freedom and for right living in the world.

Surely everyone will desire to take his definite stand alongside those who are fighting to preserve tb'e good things of life and to put down, we hope, for once and for all, the influences that are un­willing to recognize the dignity of man and th_e value of good will and peace on earth.

A great concern to all of us-meaning l;>y "us" those within ·our own borders and our allies-is that this terrible con­flict, which must result in complete vic­tory, may be ended as early as possible and with the least loss of life. Some may find, being seekers of such, some ad­verse· criticisms with respect to the ·man­ner of our own operation and conduct of the war. Some may be willing to seek an opportunity to make some complaints with respect to our allies, or some of them. These are but things that tend to prolong this war and to · subject our own soldiers to the dangers of · needless death, as well as to jeopardize the lives of the brave soldiers of our allies. If ever it were true, it is now, that "in unity there is strength," and arso that "united we stand and .divided we fall." Our mili­tary forces are doing well. Shall we de­vote ourselves to fault-finding, or shall we devote ourselves to the establishment and the maintenance of fellowship and good will, as that must be applied among nations as well as among the people of the United States themselves. I regret to have to bring the indictment · against some in our own country that it is not true that the main objective is to aid at every point the effort being made to ac­complish a speedy victory. I know there are always protestations of devotion to this ideal and to this cause, but not everyone who professes this loyalty gives proof of it by his daily conduct and

speech. There are things by comparison altogether inconsequential placed above the will to win this great battle for free­dom, and we might as well recognize it. This applies to people of our own country and to too many· people within our own borders. Every day we hear complaints, denunciations, unrestrained, bitter criti­cisms against men who ought to_ be ac­cepted as ioyal soldiers, even though not at the front. Such as this can have only one effect-to prolong . the war and to cause needlessly the death of many of our own men.

We ought to be glad that we have as Allies in the great cause and struggle for freedom Great Britain, Russia, China, and other nations who stand ready to offer themselves in sacrifice to the ac­complishment of peace on earth and good will among men. For the.se we should have too great a love and too much gratitude to exe:.t ourselves in seeking for some seeming ground for complaint. We should not be striving to measure whether we are doing the most and they the least. I think this is a t ime and the occasion is such as to make us glad to say, "Here am r, send me." If I give myself to a disposition of complaint and fault-finding in relation to some act of someone in my own country or in rela­tion to some fancied position or act or word of some of our allies, and thereby prolong this war 1 hour, I shall have probably caused the needless death of one or more of our soldiers, or, indeed, many liv.es of the soldiers of our own country and those who are fighting with us in this great cause. This contempla­tion should cause each one of us to be very careful what we say and what we do. If I am guilty of prolonging this war 1 hour by anything I say or do, knowing as I must know that thereby lives are needlessly sacrificed, even the lives of our own men, I shall . confess that I am not guiltless and must ac­knowledge my wrong. What a contem'­plation!. How careful then ought I to be of my behavior! .

I trust that each one of us will resolve that we will do everything possible to the accomplishment of a glorious vic­tory, and at the -earliest time that may be; that we will put nothing in the way; that we will do nothing and will say nothing that might prolong this struggle.

I cannot close my observations with­out acknowledging that I have observeQ too much concern for political advantage and too little devotion to a grand states­manship, which is love of country; and now a most sincere concern for our men in arms. The United States of America is composed of 48 States. To me, the terms "North" and "South" have no sig­nificance except a geographical one. We are one, and should be, in spirit and in truth . . Everyone ought to be a ·soldier and a 'loyal one.

These things are addressed particu­larly to those who are regarded as of the home front. I do not apprehend that our men fighting on the fields of battle stop to argue as to which State one coines from, what party he belongs to, or -that there is any comparison made

by them as to which one is doing the most; but together they fight, each willing to die for the other. I offer the suggestion that if this spirit may obtain among us in the proportion that it ought to, the war will be sooner won and many will live to come home who would other­wise die. SO THEY WROTE :rHEI R WILLS IN BLOOD

Mr. vVICKERSHAM. l\1r. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks.

The SPEAKER. Is there objection? There was no objection. . Mr. WICKERSHAM. Mr. Speaker, a

large group of railroad leaders and. work~ ers have planned. a rail strike December 30, thus tying up transportation facili­ties at a time when same are so vital to the prosecution of the war effort and our civilian economy.

The railroad brotherhoods have one of the best records of all groups. If it is determined that the workers are entitled to the 8 cents per hour raise, then it should be given, but in no event should a strike be called that would literally freeze the movement of goods and mate­rials during the war.

This is no time to strike. Many men are anxiously watching the timetables for an opportunity to spend a few hours with their loved ·ones. Hundreds . of thousands of others on the far-flung battle fronts are fighting with all their might and anxiously await goods, wares, and merchandise from America and messages from the lov~d ones at home.

I have concrete evidence that seven servicemen who lay dying in Japanese prison camps recently wrote a final letter to their loved ones shortly prior to their death, each signing his name in blood. One write his will, using his own blood, giving final instructions to his loved ones.

Stop, look, and listen railroad leaders and workers and heed the warning. This Christmas time-a time when dying servicemen are writing their wills in their own blood-is no time to strike!

EXTENSION OF REMARKS

Mr. COFFEE. Mr. Speaker, I ask unanimous consent to extend my own remarks in the Appendix or' the RECORD on two topics; in one to include a resolu­tion adopted by the Seattle Chamber of Commerce, arid in the other to include a radio address;

The-S?EAKER. Without objection, it is so ordered. ·

There was no objection. Mr. MONRONEY. Mr. Speaker, I ask

unanimous consent to extend my own remarks in two particulars; in one to in­clude two excellent editorials against in­flation published by the lola Register, a Republican newspaper of more than 50 years' standing in lola, Kans.; and in the other to include a letter from ex-Senator Robert L. Owen regarding world literacy and a brief comment on a book review by him. ·

The SPEAKER. Without objection, it is so ordered.

There was no objection . .

10968 CONGRESSIONAL RECORD~HOUSE DECEMBER 21 Mr. RANDOLPH. Mr. Speaker, I have

two requests by· the gentleman from Louisiana [Mr. HEBERT] that he be per­mitted to extend his own remarks in the RECORD and include therein a letter which he addressed to the editor of the New Orleans States. ·

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. ANGELL. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the Appendix on two subjects and to include in each a radio 'speech prepared by me . for transcription in my district.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. WOODRUFF of Michigan. Mr.

Speaker, I ask unanimous consent to ex­tend my own remarks in the RECORD and to include therein a recent decision by the Emergency Court of Appeals.

The SPEAKER. Without objection, it is ·so ordered.

There was no objection. Mr. WOODRUFF of Michigan. Mr.

Speaker, I also ask unanimous consent to extend my own remarks by printing in the Appendix an article by Mr. Clif­ford A. Prevost, of the Detroit Free Press.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. WOODRUFF of Michigan. ~ Fur­

ther, Mr. Speaker, I ask unanimous con­sent that I may be permitted to extend my own remarks in the RECORD and to include therein ~ne editorial and two short newspaper articles.

The SPEAKER. Without objection, 1t is so ordered.

There was no objection. Mr. KNUTSON. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the RECORD by inserting a communication from a gentleman in Texas enumerating the number of new bureaus that have been created in the past 10 years. The number is so great that it may exceed the limit usually al­lotted to Members for extraneous mat­ter. Notwithstanding this I ask unani­mous consent that it may be printed in the RECORD.

The SPEAKER. Without objection, it is so ordered. ·

There was no objection. Mr. POULSON. Mr. Speaker, I ask

unanimous consent to extend my re­marks in the RECORD and to include therein a publication issued by the Pub­lic Relations Department of the Com­monwealth of the Philippines.

The SPEAKER. . Without objection, it is so ordered.

There was no objection. THE A. A. A. PROGRAM

Mr. POULSON. Mr. Speaker, I ask unanimous consent to address the House for 1 minute.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. POULSON. Mr. Speaker, I would

like to call at tention ·to a letter I · in­serted in the RECORD yesterday. This

lett.er contained a direct charge to the effect that the men in charge of the A. A. A. program. were by coercion com­pelling farmers in California to sign up for the program or be refused the prior­ity they had to have for much needed machinery. It contains the exact names and the circumstances. It is a very grave charge.

EXTENSION OF REMARKS

Mr. STEFAN. Mr. Speaker, I ask unanimous consent to extend my own re­marks in the Appendix of the RECORD and include therein a statement on rub­ber in South America by Douglas H. Allen.

The SPEAKER. Without objection, it is so ordered.

There was no objection. INHUMAN TREATMENT OF DISABLED

VETERANS

Mr. STEFAN. Mr. Speaker, I ask unanimous consent td address the House for 1 minute and to extend my own re­marks by including therein a statement on the treatment of disabled veterans, by Art Thomas, on the Voice of the Peo­ple program.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. STEFAN. Mr. Speaker, in these

closing moments of the first session of the Seventy-eighth Congress I feel that I cannot refrain from again saying some­thing of the plight many of the disabled veterans of World War No. 2 find them­selves. I know every Member of this House is anxious that these disabled war veterans get the best possible treatment and attention. That has been the anxi­ety of so many of those of you who are present here today. But I am continu­ing to receive complaints, Mr. Speaker, to the effect that under the present sys­tem of discharging these disabled vet­erans there may be something inhumane in the way they are being treated. I feel that we have passed some helpful legis­lation, but there must be additional legis­lation. I feel that perhaps we should have not adjourned until this legislation and some mustering-out legislation was passed, but that is now an impossibility because in a few hours this session of Congress will adjourn sine die. How­ever, Mr. Speaker, I believe that some warning should be sounded here which may reach the ears of those administer­ing for the war veterans. The gentle­woman from Massachusetts, the Honor­able EDITH NOURSE ROGERS, ranking mi­nority member of the Veterans' Commit­tee, who is present today, has done much valuable work. She has sounded the warning so many times. She takes the floor so frequently to tell of her concern over the conditions faced by these dis­charged disabled war veterans. I am glad to join with her iii doing what I can to be of assistance. There should be no suffering among these discharged dis­abled veterans. Just now I have a copy of a broadcast made from a radio sta­tion in my home town-Norfolk, Nebr.­which indicates great concern among the people at home over what is happening to these unfortunate disabled war vet- '

erans. This broadcast was made by the manager of that station, Mr. Arthur C. Thomas. This broadcast was made on a program known as The Voice of the People. It is a very popular program. It comes from one of the pioneer radfo stations of our country. The station is owned and operated by the Norfolk Daily News, which newspaper has the rare dis­tinction of being known as the world's greatest country daily newspaper. The Voice of the People program is heard in nearly every part of the Third Con­gressional District, which I have the honor to represent. This broadcast con­tains much concern over the treatment of our discharged disabled war veterans. It must have been heard by thousands of people who have sons in the service and by thousands whose sons perhaps are numbered among those disabled and discharged soldiers, sailors, and marines. For that reason I will include in my re­marks the text of this broadcast in order that all Members may read it and, also, that the Veterans' Administration may have the benefit of its contents. Mr. Speaker, although we have passed some helpful legislation, I feel that we should, before we adjourn, have some word from some member of the Veterans' Committee in order that some explanation can be made as to prompt remedies. I will yield to the distinguished member of the Vet­erans' Committee; the gentlewoman from Massachusetts. ·

Mrs. ROGERS of Massachusetts. It is largely a matter of administration, I may say to the gentleman from Nebraska. Some legislation is needed, but most of it is a matter of administration. I think the Army and Navy are trying to be more cooperative, and am glad to say that at long last the Veterans' Administration is placing boards in the hospitals ·to rate the men and contact men to assist the men in settling their claims, but tha't will not be sufficient, in my opinion. The gentleman from Nebraska was standing beside me when he and I were voting against adjournment until a mustering­out bill should be passed.

Mr. STEFAN. I thank the gentle­woman from Massachusetts for the ex­planation and for the constant work she is doing for the veterans.

Mr. Speaker, the remarks of Art Thomas referred to follow:

The directors of the Norfolk branch of the American Red Cross, speaking as individuals, are personally unanimous in believing that the present system of discharging disabled veterans of World War No. 2 is very inhu­mane. They believe that they, as individuals, should call this to the attention of Congress and do everything possible to secure correc­tive legislation, but they have been told by a paid employee of the Red Cross that they must not mention their Red Cross connection in participating in legislative matters. Well, here is one director of the Red Cross who will not be silenced by them, ·and they can kick me out if they want to. If necessary, I will conduct a one-man campa!gn to try to cor­rect these inequalities. Let me tell you the facts, gained from debates in the Senate and House, about the need for legislation to help take care of disabled · veterans discharged from hospitals before they are ready or able to resume normal civilian life.

So far 600,000 servicemen have been dis­charged and they are being discharged at the

1943 CONGRESSIONAL RECORD-HOUSE 10~69

rate of 2,000 a week, and this wm increase as the war proceeds, especially after the Euro-pean invasion. · · ·

Under present Federal law some of these disabled veterans are entitled to disability compensation, but to get it they· must go through voluminous red tape and wait 1 to 7 months to get their first payment.

Unlike convicts they are not even furnished with civilian clothing when they are dis­charged. They are furnished transportation to their homes. If they need money, they must appeal to their Red Cross. In fact, com­manding officers and Red. Cross workers in camps and hospitals tell them to go to the Red Cross and even suggest the amount of money they shall ask for .

Warren H. Atherton, national commander of the American Legion, has submitted to Congress a survey of 1,535 cases of disabled men showing that there is a conside ble de­lay from the time these men were released from the service, file their claims, and re­ceive their first check. Some have been pend:­ing from 3 to 7 months and are still un-settled. . .

Many Congressmen have cited specific cases. Congressman O'KoNSKI, of Wisconsin, says he has 50 such cases in his district alone.

Congressman · McCoRMACK, Democratic leader of the House, says he is shocked at the number of such cases.

Representative MILLER of Connecticut said the Veterans' Assoc~ation should put con­tact men in .hospitals and veterans should not be sent home in a confused condition. Mrs. ROGERS, of Massachusetts, told of a boy who said, "I am just coming out of a haze. I am just beginning to realize that I am alive again, but I cannot focus my mind on things." She agreed with MILLER that such things ShOUld not be allowed to continue. MILLER said no man should be discharged until his records are complete in every respect. Some men have medical records about their cases scattered all over the world. Some of these records were destroyed at Pearl Harbor.

Congressman RANKIN, Democrat, of Mis­sissippi, said when a man comes out of serv­ice disab~ed, the burden of proof should be on the Government that he was not in that condition when he was taken into the serv­ice, RANKIN said that was the presumption Congress wrote in the present laws and must be carried out.

There are several bills before Congress which, if adopted, would correct this situa­tion. I am not recommending any particu­lar one, but let me tell you about the reso­lution introduced in the House by Repre­sentative BRooKs, Democrat, of Louisiana, as an example of what might be done. It would accomplish these purposes.

1. Grant a discharged veteran a furlough of about 3 months, with pay and allowance, during which he may arrange h is affairs and prepare to return to normal civilian life.

2. Give the Government time to assemble h is service and medical records and have them available for use at time and point of discharge.

3. Return him at end of furlough to a point where all his records have been assembled, so that be may receive his final discharge examination, and receive proper clerical and technical assistance in filing applications and claims.

4. Provide ·that the Veterans' Administra­tion process and adjudicate claims before final discharge.

I am going to send a copy of these remarks to Congressman KARL STEFAN and Senators BUTLER and WHERRY. If you listeners would like to join me in thiS one-man crusade, please write me for a free copy. Please tell me if you agree or disagree. Your name will not be used on the air. Let me read your views over this Voice of the People program. We helped correct the sugar for canning situ­ation. We helped get batteries 'for radios.

We helped get overalls for farm children. Why not help our disabled veterans? Here is how you can help: Talk to your local news­paper editor and solicit his · cooperation. Write other radio stations and ask them to study the problem. My effort is strictly non­political.

JOINT ACCOUNT CONTRACTS PROVIDE - A SOUND FLEXIBLE METHOD OF UN-

DERTAKING AMERICAN POST-WAR COMMITMENTS

Mr. DEWEY. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my own remarks.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. DEWEY. Mr. Speaker, House

Joint Resolution 207, regarding which I am about to speak, is not only germane but indispensable to all matters of .re­

. habilitation and reconstruction, because it will bring all such efforts under a single supervision; hence, the American people will know at all times the extent of their commitments in the post-war period.

Let us briefly review the record to date. On April 7, 1943, the Secretary of the

Treasury made public a proposal for sta­bilizing international currencies, entitled "An International Stabilization Fund of the United and Associated Nations," with an initial capital of at least $5,000,000,000. On July 10, 1943, a revised draft of the proposal was issued. In the foreword the Secretary stated that it had had con­sideration by finance ministers and ex­perts of nearly 30 countries, but had not received the official approval of the United States Treasury itself. Evidently it is a sort of trial balloon.

Under the date October 4, 1943, the Secretary of the Treasury published a second proposal, entitled "Guiding Prin­ciples for- a Proposed United Nations Bank for Reconstruction and Development," with a capital of $10,000,000,000.

On November 15, 1943, Congressman BLOOM, of New York, introduced House Joint Resolution 192, to enable the United States to participate in the work of the United Nations relief and rehabilitation organization. It is generally understood that the share of the United States in this undertaking will be $1,800,000,000.

It is not my intention to discuss the details of the first two mentioned proj­ects, they are many _and very technical. In both proposals, however, it is start­lingly evident that the taxpayers of the United States will provide the major part of the capital, but will not receive an equivalent voting power on the board of directors that operates either the cur­rency stabilization fund or the interna­tional bank. Such a disproportionate voting power might place the representa-. tives of the United States in the em­barrassing position of either having to recommend a complete withdrawal from either or both, or of "going along" with policies that were not equitable as far as our country might be concerned.

The third proposal for internationaf cooperation now being discussed is for our participation in the United Nations Relief and Rehabilitation Administra­tion. In this case we are a cosignatory

in the agreement with 43 other nations, although the United States will again provide the major proportion of supplies and of the cash that will be expended.

When it comes to the question of gen­erosity in extending a helping hand to a friendly nation in distress, the record of the American people speaks for itself. There can be no question of our willing­ness to supply even more than our equita­ble share of food, medicine, and cloth­ing, and in doing so we know currently just what we ourselves will have to do without and can plan accordingly. On the other hand when we sign an agreee­ment with 43 other governments to do rehabilitation work in devastated coun­tries, even if only collateral to reiief pur .. poses, we may discover that 'Ne· have made a commitment that will be embar­rassing to fulfill. I nQd among these re­habilitation provisions the same threat to our national solvency and our con­tinued friendly relations with other na .. tions, due to inability ·of carrying out agreements little understood at the pres• ent time, as I do in our responsibilities in the stabilization of international cur­rencies an·d reconstruction of the world, as proposed by the Treasury.

With these thoughts in mind, I have introduced House Joint Resolution 207, to provide for a central reconstruction fund to be used "joint account" with for­eign governments for rehabilitation, sta­bilization of currencies, and reconstruc .. tion. It has been referred to the Com­mittee on Foreign Affairs. I believe House Joint Resolution 207 is germaine to, and should be accepted as an amend­ment to, House Joint Resolution 192, which is broad enough in scope to do about anything.

It will be noted particularly that the central reconstruction fund provided in House Joint Resolution 207, which I am about to describe, can do everything pro­posed by the Treasury stabilization fund and reconstruction bank: It also co­operates with that section of the United Nations Relief and Rehabilitation Ad­ministration attempting any rehabilita­tion work. It can do all these things in joint account, that is by specific contract agreement, with other interested nations. Each national project will stand on its own feet with all the facts known, and with the ultimate liability established, the United States will at all times be in con­trol of its own sovereignty. Going joint account with a group of friends in the financing of some project, is typically American, we know in advance just what· we are getting into,. and can stay out of a particular project if we feel the risk is too great. It is my belief we should ap­proacli the post-war international prob­lem in the same manner.

House Joint Resolution 207 establishes a central reconstruction fund. This central reconstruction fund has the au­thority to go joint account with other nations within the. amounts annually appropriated by Congress, or limits to which the fund may be permitted to ob­ligate itself for rehabilitation, currency stabilization, anl long-term credits or credit guaranty. ·

10970 CONGRESSION-AL RECORD-HOUSE DECEMBER 21 The central reconstruction· fund should

be the office through which all interna­tional financial operations must pass. 'l'he enabling act should contain the fol­lowing provisions:

The board of governors to be composed of two members of the State Department appointed by the Secretary, two members of the Treasury Department appointed by the Secretary, two directors of the R. F. C.-one of each political party­appointed by the Chairman, two Mem­bers of the Senate-one of each political party-appointed by the President of the Senate, two Members of the House-one of each political party-appointed by the Speaker, two governors of the Federal Reserve Board-one of each political party-appointed by the Chairman. One of each group to serve 4 years, the other for 2 years; thereafter the term to be 4 years. · The chairman of the board to be also senior executive officer of the fund to be appointed for a term of 4 years, by the President of the United States with the advice and consent of the Senate, but the President shall reserve the right of dismissal.

There shall be also appointed by the President two vice chairmen either to serve in lieu of the chairman in his ab­sence cr to perform such other executive duties as may be designated by the board

· of governors. There shall be an executive committee

to be presided over by the chairman, composed of one member of each group of the board of governors, which member shall serve on said committee for 6 months. The remaining members of said committee shall be the senior officer of each main division of the organization of the fund.

'The fund shall not maintain an inde­pendent research division. A manager with such assistants as are required shall have made available for the work of the fund all information contained in statis­tical and research divisions of existing departments and ·bureaus. ,

The fund shall be divided into three main divisions:

a. Short and intermediate credit for financing seasonal operations an_d;or support of currencies tinder speculative or economic pressure.

b. Long-term construction or wealth­developing credits.

c. Financing of rehabilitation require­ments of United Nations Relief and Re­habilitation Administration.

The board of governors· of the fund, established by this joint resolution, through its chairman, may use the amounts in the revolving fund account to participate in joint account, to the extent of not more than 50 percent of the total cost in the case of any one risk, with any other government or governments­or · with any duly authorized agent or agents thereof-for the purpose of pro­moting the economic welfare of any na­tion through, first, extensions of short­term and intermediate credit .for financ­ing seasonal operations, and/or support of currencies when under speculative or

economic pressure; or, second, extensions of long-term construction or wealth­developing credits.

Such action shall be taken by the Board upon such terms and for such period or periods as may be agreed upon, but only if the general purpose of the ex­tension of credit is for sound economic objectives, and only if the government receiving the credit will authorize the super7ision of the use of the credit by a representative of a government par­ticipating in the joint undertaking, other than its own represenk tive.

The Board is authorized and empow­ered to assign, sell, or terminate its par­ticipation in any such undertaking, in whole or in part, upon such terms as the Board may deem to be to the best in­terests of the United States and other-wise equitable. · · The moneys appropriated to the fund by the Congress shall be deposited in three accounts:

a. The revolving fund, which shall re­ceive an initial deposit of $500,000,000 by the assignment of that amount of the existing stabilization fund now under the direction of the President of the United States and the Secretary of the Treasury. The rev"lving fund to be em­ployed exclusively for undertakings with governments of other nations in joint account.

b. The administration account to re­ceive moneys appropriated for the ad­ministration expenses of the fund.

c. United Nations Relief and Rehabili­tation Administration account, this ·ac­count to receive moneys appropriated by the Congress and earmarked in the an­nual budget of the Director General for rehabilitation activities. No disburse­ments shall be made from this fund with­out the certification of board of gov­ernors of the fund, acting thro·ugh their chairman that such disbursement is not in conflict with ·the furid's activities in joint account,

The first sessions of the Council of the United Nations Relief and Rehabilitation Administration was held in Atlantic City.,. The Journal-part II-of Novem­ber 3; 1943, sets forth as Resolution No. 12, policies with respect to rehabilitatio~, and so forth. Paragraph No. 11 of this resolution reads in part, as follows:

The task of rehabilitation must not be con­sidered as the beginning of reconstruction­it is coterminous with relief-

It is for the express purpose of main­taining this policy that House Joint Resolution 207 is being offered as article XI to the U. N. R. · R. A. bill. As pro­vided in House Joint Resolution 207, all funds appropriated for rehabilitation work by U.N. R. R. A. must be earmarked and deposited with the central recon­struction fund. Once deposited, they will not be ·released unless the governors of the central reconstruction fund and the authorities of U. N. R. R. A. have had a meeting of minds and decided that no competition or duplication of effort exist .. in the same project. Any person having experience with relief, rehabilita­tion, and reconstruction work after Wor1d War No. 1 knows only too well of

the . possibility of temporary relief .re­habilitation growing into permanent re­.construction.

With all the good will in the world to cooperate, it behooves the United States to make haste slowly,

EXTENSION OF REMARKS

Mr. WIGGLESWORTH. Mr. Speaker, I ask unanimous consent to extend my own remarks in the RECORD and to in­clude therein a letter from the Director of the Office of Defense Transportation.

The SPEAKER. Without objection, it is so ordered.

There was no objection. RENEGOTIATION OF EXCESSIVE WAR

e PROFITS

Mr. CASE. Mr. Speaker, I ask unani­·mous consent to address the House for 1 minute.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. CASE. Mr. Speaker, if this Vic­

tory Congress permits the making of ex­cessive and unconscionable profits on war contracts, the act will haunt U$ forever. Some of the amendments proposed to the renegotiation statute since it left the House might have that effect. Every Member who has told his people that he would do what he could to pre­vent war profiteering should do some home work on ·this subject during the holidays. He should study the amend­ments now proposeq and determine their actual effect by applying them to specific cases. Some of the proposals look nice on the face, but in · operation they could convert the Nation's distress into a prof­iteers' paradise. That, Mr. Speaker, will not only injure the war effort today by discouraging hard-working men and women who are scraping to buy War bonds, but ·it will damn American busi­ness for a generation in the eyes and minds of the soldiers who return.

I ask unanimous consent, Mr. Speak .. er, that I may extend my remarks on this subject by an anaJysis of the effect of some of the amendments now proposed to the renegotiation statute and include certain figures obtained from the War and Navy Departments.

I further ask that I may insert in the Appendix the transcript of my statement and the ensuing questions and answers when I appeared before the Ways and Means Committee during their hearings on this subject.

The SPEAKER. Is there objection, to the requests of the gentleman from South Dakota. ·

There was no objection. EXTENSION OF REMARKS

Mr. BENDER. Mr. Speaker, I ask unanimous consent to extend my own remarks in the RECORD and to include therein an article from the Toledo Blade and editorials from the Cleveland News and Cleveland Plain Dealer.

The SPEAKER. Without objection, it is so ordered.

There was no objection.

1943 CONGRESSIONAL RECORD-HOUSlJ 10971 THE NORTH CAROLINA TRAIN WRECK

Mr. SAUTHOFF. Mr. Speaker, I ask unanimous consent to address the House for 1 minute.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. SAUTHOFF. Mr. Speaker, I have

talked ~)ersonally with two gentlemen who rode oo one of the trains that was in the recent wreck in North Carolina. Their condemnation of the railroads in question was most emphatic. I feel therefore that a subcommittee of the Committee on Interstate Commerce should make an investigation and I should like to suggest to them that they consider the advisability, the feasibility, the practicability of installing short­wave sending and receiving sets on these streamlined trains.

MERRY CHRISTMAS

Mr. SULLIVAN. Mr. Speaker, I ask unanimous consent to address the House for 1 minute.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. SULLIVAN. Mr. Speaker, as a

freshman Congressman, serving my first year in this great deliberative body, I take this opportunity to thank all the Members for -the courtesies extended to me and to wish you, Mr. Speaker, and my other colleagues a merry Christmas and a very happy New Year.

We all appear happy here today and it ·leads me to believe that what we all need is a better understanding of each other, more faith in humanity, less fear and despair. Try to be kind to the world and your fellowman and the odds are great that both in return will be kind to you.

·If in spite of all, dark days intervene, Keep in the race, do not lose your head; Don't be a quitter, be a thoroughbred. Fortune's rarest favors wither fast But those who have felt the genial warmth of

April, May, and June Should summon strength to meet unmoved

the frosts and snows Of bleak December that cover all at last.

EXTENSION OF REMARKS

Mr. CHURCH. Mr. Speaker, I ask unanimous consent to extend my own re­marks in the RECORD and to include therein an editorial from the Chicago Daily Tribune of December 20 on the Vursell bill.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. BRADLEY of Michigan. Mr.

Speaker, I ask unanimous consent to extend my own remarks in the RECORD and to include therein a radio address delivered jointly by myself and the gen­tleman from Missouri [Mr. SHORT].

The SPEAKER. Without objection, it is so ordered. .

-There was no objection. MUSTERING-OUT PAY

Mrs. ROGERS of Massachusetts. Mr. Speaker, I ask unanimous consent to ad­dress the House for 1 minute and to re­vise and extend my own remarks.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mrs. ROGERS of Massachusetts. Mr.

Speaker, we cannot turn our heads away from the question the gentleman from Nebraska [Mr. STEFAN] asked regarding the discharge of the soldiers. It has been an inhuman way that the veterans have been discharged before their cases have been properly rated. I would say to the gentleman and to the Members, every one of whom now on the :floor agree with ml~, that we should pass some sort of mustering-out pay before we adjourn. I find that not only the veterans but the country as a whole feel that the Congress has been extremely callous because noth­ing has been done. The reason given now is that the chairman of the committee, the chairman· of the Military Affairs Committee, the gentleman from Ken­tucky [Mr. MAY] is in the South b~cause of the death of a nephew. We regret that very much, but I feel that there will be veterans who-die in this country be­cause they have no money after their dis­charge. There are other members of the Military Affairs Committee in Wash­ington who could bring a bill to the :floor. They are ill, they are cold, and they are unable to take care of themselves. The chairman of the Military Affairs Com­mittee is away, it is true, but there are other members of that committee in Washington today. It is not too late to do somethLlg now, Mr. Speaker.

The SPEAKER. The time of ·the gen­tlewoman from Massachusetts has ex­pired.

EXTENSION OF REMARKS

Mr. PETERSON of Florida. Mr. Speaker, I ask unanimous consent to ex­tend my own remarks in the RECORD and to include therein two letters from Maj. E. T. Keenan.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. FERNANDEZ. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the Appendix of the RECORD on the subject of consumer subsidies and to include therein an article published by Raymond Clapper.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. PRIEST. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the RECORD by including a

. brief excerpt from an article by Mr. Frank Waldrop, of the Times-Herald.

The SPEAKER. Without objection, it is so ordered.

There was no objection. Mr. RABAUT. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the RECORD and to include therein a symposium of the speeches given at the testimonial dinner in honor of Orville Wright recently in Washing­ton.

The SPEAKER. Without objection, it is so ordered. ·

There was no objection.

UNSUSPECTED FRIENDS

Mr. RABAUT. Mr. Speaker, I ask unanimous consent to address the House for 1 minutt! .

The SPEAKER. 'Without objection, it is so ordered. ·

There was no objection. Mr. RABAUT. Mr. Speaker, I rise on

the :floor of the House today with mingled feelings of joy and suspicion. I have in my hand a card which I received this morning addressed to me at the House Office Bt!ilding:

Wish you a Merry Christmas and victory in 1944 at home and abroad. The board of directors, the Wayne County Republican pre­cinct organization.

So I want to encourage my colleagues on the majority side by telling them that all that bristles is not so tough, that we probably have more friends than we even suspect; and I wish to say to those on the Republican side who saw fit so to recommend me to the folks back home that I am deeply grateful.

EXTENSION OF REMARKS

Mr. HAYS. 1\.fi'. Speaker, I ask unani­mous consent to extend my own remarks in the RECORD and to include a state­ment by a national Boy Scout executive.

The SPEAKER.. Is there objection to the request of the gentleman from Arkansas [Mr. HAYS]?

There was no objection. Mr. HARRIS of Arkansas. Mr.

Speaker, I ask unanimous consent to ex­tend my own remarks in the RECORD and to include therein an editorial.

The SPEAKER. Is there objection to the request of the gentleman from Ar­kansas [Mr. HARRIS]?

There was no objection. Mr. SPARKMAN. Mr. Speaker, I ask

unanimous consent to extend my own remarks in the RECORD in two respects, in the first to include two brief newspaper articles regarding the exploits of some of our boys on the battle fronts and, in the second, to include an article by Walter Lippmann entitled "Taxes, the Best So­lution."

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

There was no objection. Mr. \VIDTE. Mr. Speaker, I rise to

propound three unanimous-consent re­quests to extend my own remarks in the RECORD; in two of them to include certain excerpts from newspaper publications, and in the other to include a communi­cation in the form of a letter.

The SPEAKER. Is there objection to the request of the gentleman from Idaho [Mr. WHITE]?

There was no objection. Mr. J. LEROY JOHNSON. Mr.

Speaker, I ask unanimous. consent to extend my own remarks in the Appendix of the RECORD and to include a report made by myself on a trip to South America. .

The SPEAKER. Is there objection to the request of the gentleman from Cali­fornia [Mr. J. LEROY JOHNSON]?

There was no objection,

10972 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 Mr. HOFFMAN. Mr. Speaker, I ask

unanimous consent to revise and extend the remarks heretofore made and to have them printed in the Appendix of the RECORD.

The SPEAKER. Is there objection to the request of the gentleman from Mich­igan [Mr. HOFFMAN]?

There was no objection. Mr. KLEBERG. Mr. Speaker, I ask

unanimous consent to extend my own re­marks in the RECORD and to include a resolution from American Legion posts in the State of Texas.

The SPEAKER. Is there objection to the request of the gentleman from Texas [Mr. KLEBERG]?

There was no objection. RESOLUTION OF AMERICAN LEGION POSTS

IN TEXAS

Mr. KLEBERG. Mr. Speaker, I ask unanimous consent to proceed for 1 minute.

The SPEAKER. Is there objection to the request of the gentleman from Texas [Mr. KLEBERG]?

There was no objection. Mr. KLEBERG. Mr. Speaker, under

unanimous consent to include with my remarks some resolutions from American Legion posts in Texas, I take this 1 min­ute to call the attention of the member­ship to this matter, which has had long study and which has been revolving in the minds of men who served in the last war for some time and who, therefore, have had some experier~ce in what a bit­ter conflict and the aftermath means.

I commend the readinr of these reso­lutions to the membership of the House in view of the fact that they are essen­·~ ially American in concept, and I believe they are very worthy of your attention before we meet again.

I hope you will find things satisfactory at home and I trust you will enjoy your recess. I pray, Mr. Speaker, that never again may this fair land witness another wartime Christmas.

I have had occasion in the past to dis­cuss the proposal c~ntained in this reso­lution with Mr. L. W. Dirks, of Tuleta, Tex., and with Mr. Louis Lea, of Beeville, Tex., members of the American Legion, and inasmuch as the resolution speaks for itself and contains an expression of h ighest American ideals, founded upon the American way of doing business, I take this opportunity to call again to the attention of my colleagues in the House the importance of giving this resolution and the proposal it contains earnest and prompt attention immediately on our re­tu ·n from this short recess.

I feel perfectly sure that out of the sug­gestion contained in this resolution may well come a solution looking toward the end of bonus payments and so · forth, which after all, are somewhat like sub­sidy payments and affect the recipient of the benefits paid out in this. fashion with a sense of inferiority and in many cases of outrage.

From my personal assay of American · men who offer, and in many cases giv~. · their all in service of their country the ·

_proposition o.l an insurance policy does .

not contain the somewhat besmirching impact of a suggestion that Americans are interested in extra pay for doing their duty in answer to a call to arms in defense cf our country. The resolution follows and again I bespeak your earnest and careful attention to its contents:

The American Legion, department of Texas, at its annual convention held in Fort Worth, Tex., in August, adopted the following reso­lution:

"Be it resolved by this convention, That the American Legion, department of Texas, rec­ommends that the national organization of the American Legion appoint a committee composed of persons skilled in the knowledge of life insurance and social-security benefits to study and prepare a plan to ·be submitted to Congress for legislative action embodying the following principles:

"1. The issuance of a policy of term life insurance to be issued at the time of dis­charge to each veteran of the present war who receives an honorable discharge from service, said policy to be issued to such vet­eran and to provide for sickness, accident, and unemployment benefits; said policy to run for a period of 20 years after date of issuance thereof."

In line with the resolution adopted at Fort Worth, we submit to you a tentative plan or program, based upon 10,000,000 men and women to be demobilized, as follows:

1. Every individual, upon receiving an hon­orable discharge from any of the armed serv­ices, shall be issued a $3,000 20-year-end life­insurance policy, the premium to be paid by the Government; the policy to supersede and take the place of present Government poli­cies. If at the end of · 20 years the veteran is still living, he shall have the right or privi­lege of continuing this policy, at his own cost or expense, at rates set by the Govern­ment.

2. In the event of unemployment, caused either by his inability to secure work or by his inability to worlr because of ill health, the veteran shall have the right to draw $40 monthly until he is able to secure employ­ment or until he is able to work again-the maximum amount to be paid any individual under this provision to be $3,000. At the end of 20 years the difference between $3 ,000 and the amount drawn under this provision shall be paid to the veteran at the rate of $40 monthly until fully paid .

3. The veteran shall have th~ privilege or right to borrow money from the Government for specific purposes at the rate of 5 percent. The money thus loaned shall be additionally secured by the $3,000 life-insurance policy hereinabove referred to.

It is estimated that the cost of this pro­gram to the Government would be about $15,000,000,000, which would be about $600,-000,COO annually during the time the program is in operation. To finance this program, it is suggested that Congress appropriate the $15,000,000,000 now and charge it to the war program. The total amount to be paid out under the program should be about $30,000,-000,000. It is estimated that the interest received under the loan feature of the pro­gram would be sufficient to make up the difference between the . cost to the Govern­ment of the program and the total amount to be paid out.

The program as roughly outlined above has several distinct advantages, some of which are as follows:

1. The per capita cost to the Government of this program should not be excessive.

2. The additional cost of administering this program should not be great, for it could and should be coordinated w.ith existing agencies, such as the Veterans' Bureau and the unem­ployment-insurance agencies of the Govern­ment.

3. It provides an immediate means to re­habilitate our service men and women as they are discharged from the armed services.

4. The veterans will, to a great extent, help finance their own program.

5. The program should forestall any future demands or claims by veterans for bonuses or additional help from the Government.

6. It would tend to further stabilize indus­try and the veteran during periods of de­pression.

REPORT OF COMMITTEE ON MILITARY AFFAIRS ON MUSTERING-OUT-PAY BILL

Mr: COSTELLO. Mr. Speaker, I ask unammous consent to address the House for 1 minute, to revise and extend my own remarks in the RECORD, and to in­clude letters from veterans' organiza­tions.

The SPEAKER. Is there objection to the request of the gentleman from Cali­fornia [Mr. COSTELLO]?

There was no objection. Mr. COSTELLO. Mr. Speaker, the

House Committee on Military Affairs is filing to~ay with the ~ouse a report on the subJect of mustering-out pay. In that report we are attempting to review the other related problems dealing with the veterans of the present war particu­larly the various proposals that have been made to provide special benefits to the returning veterans. I trust that the Mem~ers will take the time to get a copy of this report and to study it because I believe it contains some very useful information regarding the problems that confront this Congress in relation to the various matters having to do with the veterans.

The estimate as to the cost of various proposals and the types of benefits that have already been provided for the dis­abled veterans are set forth in this repqrt. . I a~ sure it will be very helpful to Y'_ou m trymg to determine what this Congress should do when we return in January in regard to mustering-out pay and other forms of legislation regarding the veterans of the current war.

In considering these proposals, it is well to keep in mind that during the First World War there were four and a half million men in the armed services while in this war we anticipate not les~ than 12,000,000 persons. Should the war continue through 1945, we may enroll ~s many as 15,000,000 persons in all the branches of the service. As a result the cost of each of these dif­ferent proposals quickly runs into the billion-dollar figures. For example, a flat ~300 for each discharged veteran as mustering-out pay will cost at least $3,-600,000, which is as much as the so-called bonus for World War No. 1 cost the Gov­ernment, and over which so much con­trov~rsy raged. Likewise the veteran of World War No. 1 received only $60 as mustering-out pay, which proved to be an inadequate sum for effectively provid­ing the cost of the transition from mili­tary to civilian life. The amount now proposed is 5 times the muster-out pay of the first war, in addition to which one must remember that it will be paid to nearly 3 times as many people.

1943 CONGRESSIONAL. RECORI)-HOUSE 10973 Six hundred and thirty-five tl:;J.ousand

persons have already been discharged from the Army and 130,000 persons from the Navy, so that there are now eligible for any benefits to be provided a total of 765,000 persons, and this total is increas­ing monthly by 70,000. The proposal al­ready passed by the Senate makes a dis­tinction as to the place of service in de­termining the amount to be paid. Actually it makes no difference where a person has served insofar as the ex­penses to be incurred at the time of dis­charge are concerned. The transition to civilian life is just as costly for the soldier who served within the continental limits as for the one who served outside. Such a distinction should not be made in this legislation, if it is actually intended to be mustering-out pay simply.

The suggestion has been made that the merchant marine should also be in­cluded in this proposal, although they cannot properly be considered as a part of the armed services, nor are they in fact to be mustered out, as it is to be hoped that we will be able to maintai~ our merchant marine in considerable size following the war. Consequently many of the present seamen will continue to follow their vocation in peacetime, in spite of the fact that they will not then be entitled to the increased pay they now receive due to their travel through war zones. Moreover the merchant ·sea­men are paid at a much higher rate than are the members of the armed services, some of whom serve on the same ships as gunners but receive far less monthly pay.

It has been suggested that educational opportunities should be provided for the veterans following the war, in addition to the vocational training program al­ready provided for the disabled veterans. This proposal would entail an expense estimated at $4,000,000,000. Social-se­curity benefits as well as unemployment compensation have been recommended. These proposals are estimated to cost well in excess of five billions additional. Added to all this is the suggestion that adjusted compensation should be pro­vided for all persons serving in our armed forces. This proposal is made in spite of the fact that the pay for the enlisted personnel has been greatly increased during this war, as well as the allotments and other benefits to which they are en­titled. One proposal of this kind, in:­stead of following the figures of the First World War, would provide double amounts-namely, $2 for each day of service at home and two and a half dol­lars for service overseas. It is estimated that the cost of adjusted compensation on the same basis as for World War No. 1 veterans would total fifteen billions.

Because of the enormous cost of each of these proposals, the Congress should not rush into this question blindly, but should determine carefully what the full program should be and exactly how gen­erous we can afford to be in regard to each of the items of such a program. Excessive payments made to the able and physically fit veterans of this war might readily lead to a future economy drive. Such an economy drive would not affect

any of these proposals, but would of necessity · be aimed at current expendi­tures of that period, which means the economy would be directed against the disabled veterans and their dependents, those who are most deserving of any generosity we are prepared to display.

While speaking of the disabled vet­erans, I wish particularly to call atten­tion to that part of the report which sets forth information regarding the various benefits to which the disabled are now entitled. You will see that the Congress has endeavored to discharge its obliga­tion to the disabled veterans of this war and has provided for proper care and attention for those who suffer disability in this conflict. In spite of the picture which has been given to the public, the Congress has not been negligent in this regard, but has been most diligent. Un­fortunately, delays have occurred in some cases so that some disabled veterans have not been promptly rated as to the degree of their. disability. This is being rem­edied as quickly as possible, and might be remedied even more speedily were it possible to obtain the additional employ­ees needed by the Veterans' Adminis­tration. Unfortunately, the Veterans' Administration has been placed in the fifth, or lowest, category of Government agencies, whereas they should be placed in the same category as any other . war agency, thereby entitling the Adminis­tration to have priority in seeking and obtaining employees.

For the benefit of the Members I am including as a part of my remarks the statement of Millard W. Rice, which sets forth some suggestions made by the Dis­abled American Veterans. I also include the statement of Omar B. Ketchum, of the Veterans of Foreign Wars, which statement was addressed to the mem­bers of the Military Affairs Committee: STATEMENT OF MiLLARD W. RICE, NATIONAL SERV­

ICE DIRECTOR DISABLED AMERICAN VETERANS

Gratifying as was the generous gesture of the United States Senate last Friday in unanimously passing a bill (S. 1543) to pro­vide for mustering-out payments, in amounts ranging from $200 to $500, depending upon t~'le length and place of service, for members of the armed forces of the United States who have served actively during the period of World War No. 2, nevertheless, we, of the Disabled American Veterans, feel impelled to call attention to the fact that such legisla­tion would not lessen the responsibility of Congress to provide adequately for those who come back with service-incurred or service­aggravated disabilit.tes.

Neither should any such mustering-out payments in any way lessen the obligation of the Congress to provide other post-war ad­Justments for discharged service men-ac­crual of credits based upon length of active service for unemployment compensation and old-age and survivor's Insurance purposes, post-war educational opportunities, and placement into suitable gainful employment, as recommended by the President, as well as adjusted compensation based upon length, type, and place of service.

The D. A. V. agrees with the President that first things should come first 1 · Men now . in servrce, as well as those already discharged therefrom, also heartily concur, we believe, with such a policy.

Inasmuch as practically all of those now being released from active service are being

discharged becaus~ of disabilities or inabili· ties, it is of first importance that those who have equitable claims for pension, or other benefits, should be enabled speedily to estab­lish their technical entitlement to any such benefits as, under certain circumstances, they may be legally eligible for.

Unwarranted delays in the adjudication of just claims, because of the non-receipt of certified copies of official service records from the war Department or Navy Department, can be obviated by the requirement-by a reso­lution of the Congress if necessary-that no person in the armed forces who has any kind of a disability or inability shall be discharged from such service until aft er all of his offi­cial service and medical records have been assembled and are made available to the ex­amining doctors at the time of his or her final pre-discharge exan;1ination, and that im­mediately after such discharge he or she should thereupon be extended the opportun­ity to ap:pear before a rating board of the Vet­erans' Administration -located at such de­mobilization center.

The immediate adoption of such a proce­dure, jointly between the Veterans' Admin­istration and the War and Navy Depart­ments-already inaugurated at the Walter Reed Hospital of the United States Army in Washington, D. C., last Wednesday-would remove the impelling rush for the enactment of a bill to provide for mustering-out pay­m..,nts, untU after such proposals have first been coordinated with the other equally im­portant post-war adjustments for discharged servicemen.

Bad defects in existing laws to provide rights and benefits to America's disabled war veterans, and their dependents; ought, moreover, to be given priority consideration.

It would be most regrettable if too hastily enacted mustering-out payments should sub­sequently create the false impression that the Nation had thereby taken care of its obligations to all dischargees. If mustering­out pay turns out to be inequitable, its equi­table adjustment thereafter might be found to be impracticable. If mustering-out pay­ments should turn out to be more expensive than anticipated~ the enactment of other more essential legisl~tion, fo?: \he service disabled, or for unemployed discharged serv­icemen, might then be found to be much more difficult to secure. ·

r:ven though conflicting congressional committ~e jurisdictions make it exceedingly complicated and difficult, nevertheless it is highly desirable, from the standpoint of America's disabled war veterans, if not also for the long-view welfare of all of America's veterans, that America's adjustments for its war veterans, immediately preceding and fol­lowing their discharges from active service, should be coordinated with each other, so that they may be properly balanced with each other, and made equitable and workable.

DECEMBER 20, 1943.

VETERANS OF FOREIGN WARS OF THE UNITED STATES,

Washington, D. c., December 18, 1943. To all members of the House Committee on

Military Affairs: The Senate has taken action on a bill iden­

tified as s. 1543, to provide so-called muster­ing-out pay to members of the armed forces serving in the present war. It is now up to your committee and the House to determine if S. 1543 shan.l prevail, or whether some other form of action shall be taken.

The national legislative committee of the Veterans of Foreign Wars of the United States, composed of Paul C. Wolman, chairman, Maryland; Lyall T. Beggs, Wisconsin; Merle Hopper, Michigan; Alex M. Miller, Iowa; H. T. Kern, Tennessee; R. K. Christenberry, New York; and J. R. Klawans, California, while meeting in Washington on December 17 and

10974 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 18, is of the opinion that the Senate has gone beyond the idea of mustering-out pay and is now in the field of adjusted-service pay or bonus. They feel that the Senate bill is in· equitable and arbitrary in the amounts pay­able and the periods of service for such pay­ments. · For example, under the Senate bill scale of payments, a difference in 1 day, either in for­eign or home service, could penalize or reward a discharged veteran to the extent of $100. While it provides higher pay to those who have overseas service in some instances, it fails to recognize long home service prior to foreign service. Typical among thousands is the case of Staff Sgt. R. L. Ashworth, a claims officer in the Washington, D. C., office of the V. F. W., now discharged for combat disabili· ties, who was in home service for 21 months before going overseas. He was overseas for 8 months, being severely wounded in the Tuni­sian campaign. His total service amounted to 34 months. Under the Senate bill he would receive $300, or the same amount pay­able to one who had 12 months of home service only.

The national legislative committee is not opposed to strictly mustering-out pay, but when the Senate moves over into the realm of adjusted-service pay, such legislation should be based on sounder premises with equity for length ·and type of service.

It is the committee's belief that the only fair way to establish equity in adjusted-serv­ice · pay is to allow so much for each day served, with a premium on overseas service, and set a minimum and maximum in each category.

The committee suggests an allowance of $1 per day for domestic service and $1.50 per day for overseas service, to be combined where both types cif service were had, with a fair minimum and reasonable maximum for each type.

The SPEAKER. The time of the gen­tleman has expired.

AMENDMENT TO NATIONALITY ACT OF 1940

Mr. DICKSTEIN. Mr. Speaker, I ask unanimous consent for the present con­·sideration of the conference report on the bill (H. R. 2207) to amend the Na­tionality Act of 1940, and I also ask unanimous consent that the statement of the managers on the part of the House may be read in lieu of the full report.

The Clerk read the title of the bill. The SPEAKER. Is there objeCtion to

the request of the gentleman from New York [Mr. DICKSTEIN]?

Mr. MICHENER. Mr. Speaker, re­serving the right to object, as I under­stand it, this conference report has the approval of the Immigration Committee and the conferees?

Mr. DICKSTEIN. It has the approval of both Immigration Committees of the Senate and House and is reported unani­mously by the conferees. It is a bill that is necessary and has been urgently re­quested by the War Department, the Navy Department, and the Marines. This legislation has been asked for, and I was called upon to try to have it adopted at the earliest possible moment because of its urgency.

Mr. MICHENER. There are a number of Members present who would like to have a general idea of what the bill does before consent is given.

Mr. DICKSTEIN. Mr. Speaker, the Army, the Navy, and the Marines came before our committee in executive ses-

sion and portrayed a peculiar picture: I am not going to say how many, but there have. been a number of desertions in both the Army and Navy at the war front. These men were court-martialed and stripped of their citizenship and civil rights under the War Act, and they can­not return to the war front unless we can restore the citizenship that was destroyed by these courts martial.

Practically all of these deserters are now appealing to the War Department, the Navy Department, and the Marine Corps to go back to the front, but the heads of those services cannot take them back because of these courts martial.

This simply restores back to them their citizenship; their status quo is restored to them as before the desertion.

Mr. MICHENER. This bill simply makes it possible for the military services of the United States to restore citizen­ship to a man who has served in the serv­ice and deserted?

Mr. DICKSTEIN. That is right. Mr. MICHENER. Who was appre­

hended, court-martialed, and punished, but who cannot be accepted in the serv­ice again without this legislation?

Mr. DICKSTEIN. That is correct. Mr. MICHENER. Mr. Speaker, I

withdraw my reservation of objection. Mr. ROWE. Mr. Speaker, reserving

the right to object, may I inquire, is this limited exclusively to that type of citizen­ship?

Mr. DICKSTEIN. That is all. Mr. RANKIN. Mr. Speaker, reserving

the right to object, do these men have to go· back into the service before their citizenship is restored? ·

Mr. DICKSTEIN. No. If this bill is enact€d into law and the general of the Army says, "We will take them back," then their citizenship can be restored as before their desertion, but if they do not want to take back one or two, they stand as an alien or a person without citizen­ship or without civil rights.

Mr. RANKIN. I am trying to find out whether or not they must return to their former services before their citizenship is restored.

Mr. DICKSTEIN. They must be ready to return to the front or to the armed services and be accepted by the War De­partment, the Navy Department, or the Marine Corps.

Mr. RANKIN. I am not willing to leg­islate on those words "be ready." I want to know if they have to return to the service before their citizenship is re­stored?

Mr. DICKSTEIN. They cannot very well return as aliens to the Army until the Army says that it is ready to take the men back and put them in the serv­ice or wherever it is, and in that way re­store to him the rights . that he had be­fore the desertion and before the court martial.

Mr. RANKIN. I do not want to re­store citizenship to some fellow who does not go back to the service. I want this contingent upon his going back to the service.

Mr. DICKSTEIN. ! .think that is cor­rect. The conferees are of the same thought and it is entirely up to the armed

services. We have nothing to do with it except to give the Armyr the Navy, and the Marine Corps the machinery to bring this about.

Mr. CURTIS. l\1:r. Speaker, reserving the right to object, I would like to ask the gentleman, is it not also true that all vie do in this bill is grant discretionary authority to the armed services? They do not have to act if they are convinced that the individual is really of bad char­acter? · Mr. DICKSTEIN. That is true. · · Mr. CURTIS. It gives them authority

to act in a meritorious case? Mr. DICKSTEIN. The gentleman is

correct. I may say further that in ex­ecutive session we were told that the ma­jority of these boys and young m'en had made a mistake. Some of them went off

. the handle, or for some other reason which I do not care to disclose, and they are ready to go and fight. They made a mistake. When they were court-mar­tialed they were stripped of that right.

Mr. · RANKIN. Will the gentleman yield?

Mr. CURTIS. I yield to the gentle­man from Mississippi.

Mr. RANKIN. These are not natural­born American citizens, are they?

Mr. DICKSTEIN. Most of them are native-born. ·

Mr. RANKIN. None of them are nat­ural-born American citizens. -

Mr. DICKSTEIN. A lot of them are natural-born citizens.

Mr. RANKIN. That does not add up because they would not be deprived of citizenship in the United States. ' Mr. DICKSTEIN. Under· the War' Act when a man is court-martialed, and I do not agree with the distinguished gentle­man from Mississippi, if a man is born in this country, and he is court-mar­tialed, having deserted, under the War ·Act he is stripped of his civil rights.

Mr. BULWINKLE. Mr. Speaker, re­serving the right to object, may I ask the gentleman, this applies only to that class of deserters who deserted durtng tjme of war?

Mr. DICKSTEIN. That is right. · Mr. BULWINKLE. Why should we

want to take a man back who has de­serted in time of war? . Mr. DICKSTEIN. The answer to that is this, as explained by the War Depart­ment, by the heads of the War Depart­ment, the Navy Department, and the Marine Corps: They were young boys; some of them went off on a tangent be­cause they were misled by some other groups, but they are all loyal Americans aside from the mistake that they have made; they are willing to · fight. They have done something that they want to be excused for.

Mr. BULWINKLE.' This takes into consideration every deserter?

Mr. DICKSTEIN. Not necessarily. Mr. BULWINKLE. Whether he de­

serted in time of battle or not? Mr. DICKSTEIN. Oh, no. Mr. BULWINKLE. Oh, yes. It is not

limited at all. It just says th~t if he is a deserter in time of war, then we are going to turn around and glve him ·his citizenship back.

1943 CONGRESSIONAL RECORD-HOUSE 10975 Mr. DICKSTEIN. No; in certain cases

the armed forces will use their judgment. Mr. NORRELL. Will the gentleman

yield for a question? Mr. DICKSTEIN. Yes, but I want

to explain this. This is not my doing or the committee's doing. The War Department and the other departments have portrayed a picture which I do not think it is necessary for me to explain which we of the committee felt there was some equity or some justice in allow­ing these young men who did not know better and deserted the armed services to have their rights restored. They come along and appeal to their commanding officer to be restored back to the war front or firing line or whatever the case may be, but the War Department and the commanding officer, rightfully so, says, "You have been court-martialed, you have been charged with desertion, you have been stripped of all your civil rights, and unless we can get the Con­gress to give us the right to restore your civil rights again we cannot take you back." All of these good young men · did not intend to desert. They were misled in one form or another. Those are the facts as given us by the War Department and the other departments.

Mr. BULWINKLE. I realize what the gentleman is up against, but in this very bill that the -gentleman is attempting to have passed here today, we say to every­·body in the Army, "You can go on and desert, we will give you ~ chance to get back again."

Mr. DICKSTEIN. Will the gentleman listen to -this? The answer is that there are a number of them, one or two or whatever it may be, I do not care how many they are. ·It is up to the Army to say whether they will take tllese men back, it is up to the Navy Department to say whether they will take these men back, or the Marine Corps. They may not take anybody back. There are a number of good young men who have made an honest mistake and in order to give them a chance to go back to the fighting units and do their duty as Americans, we present this bill.

The SPEAKER. Is there objection to the request of the gentleman from New York [Mr. DICKSTEIN]?

Mr. WADSWORTH. Reserving the right to object, perhaps the House will bear with me just a moment. For the first time in our military history, as I understand it, the War Department-­and I assume the Navy Department­is endeavoring to recover the services of young soldiers who have violated the rules and have been guilty · of one kind of offense or another. They are trying to bring them back to their senses, to point out to them the error of their ways. In that effort certain camps or schools have been established at which these young men who have been convicted of military offenses are gathered together, the more promising of them, and are put through-and it must be borne in mind that they are still under sentence-they are put through a very severe course of training; educational work is done amongst them and it turns out that an

overwhelming majority of those selected for tha ·; recovery work, if we may use the term, mend their ways, recognize the errors they have committed an.d become excellent soldiers again. Some of them indeed have been graduated from those camps and have almost immediately been made sergeants or corporals. It is a new undertaking and thus far it has proved exceedingly successful. I assume we must trust the Army to see to it that only those men are retrained, as it were, who show signs of being ultimately reli­able soldiers. And we must trust the Navy to select those bluejackets who have gotten themselves into trouble in one way or another, who may be trusted after retraining to be good sailors.

Mr. DICKSTEIN. That includes the marines also. They have asked for it also.

Mr. WADSWORTH. Yes. The point is that we are recovering a lot of men who have seen the error of their ways and are responding to an appeal. Be­lieve me, the course of training they go through is very severe. It demands of them every atom of their energy and of their thought. They have to make good all over again, and even to a greater degree than would be the case had they never offended.

Mr. DICKSTEIN. I think the gentle­man has stated the facts as they are and as they have been definitely stated by the heads of the various Government agen­cies.

Mr. WADSWORTH. Now, there are some instances where the offenses have been such that under the new War Act they cannot be returned to active duty. This bill leaves it within the power of the War Department and the Navy De­partment to take cognizance of what the man has accomplished in the way of retraining and gathering himself to­gether again and establishing his relia­bility. In that case he may be returned to active duty and the old charge against him wiped out.

Mr. DICKSTEI~. I thank the gen­tleman for his contribution.

Mr. ROBSION of Kentucky. Mr. Speaker, reserving the right to object.

Mr. NORRELL. Will the gentleman yield?

Mr. DICKSTEIN. I yield. Mr. NORRELL. ·This is a short bill

which is being presented to us and for the information of the House I ask unan­imous consent that the bill be read. I think that will be the end of the argu­ment.

The SPEAKER. Is there objection to the request of the gentleman from Ar­kansas? The gentleman from Arkansas asks that the text of the bill be read for the information of the House.

Mr. ROBSION of Kentucky. Mr. Speaker, that does not waive our right to object?

The SPEAKER. No; it does not waive your right to object at all.

Is tnere objection to the request of the gentleman from Arkansas?

There was no objection. The Clerk read the bill.

· Mr. RANKIN. Mr. Speaker, reserving the right to object--

Mr. ROBSION of Kentucky. Mr. Speaker--

Mr. RANKIN. Mr. Speaker, this seems to· me to be a rather dangerous piece of legislation. It not only covers the ones who have deserted now but holds out hope to those who desert in the future. In my opinion, if such legisla­tion were going to be passed at all it ought to be passed only with reference to those individuals that have heretofore gone back into the service and made good and manifested their patriotism.

Mr. BULWINKLE. I will say this to the gentleman: You cannot get back into the service if you are dishonorably dis-charged. ·

Mr. RANKIN. I understand that. Mr. BULWINKLE. He could do it

upon the recommendation of the Secre­tary of War as to which ones should come back.

Mr. RANKIN. I am not willing ·to write this into the statute books to cover all future cases. · It is bad enough for Congress to take upon itself to pass leg­islation of this kind with reference to cases that have already occurred.

In answer to the gentleman from New York [Mr. WADSWORTH] he said this is the first time. I want to say to the dis­tinguished gentleman from New York that during the War between the States we had ·many deserters on both sides. Some of them deserted when they saw t:_e blood on the battle lines for the first time and some of them deliberately de­s.erted. Many of them came back after they deserted and they made good soldiers. But they did not come to Con­gress and ask Congress to pass a law nor did they go to the Confederate Congress and ask them to pass a law in advance to take care of future desertions. So if this law is going to be passed at all it certainly ought to be limited to those individual meritorious cases that have occurred up to this time.

Mr. CURTIS. Mr. Speaker, will the gentleman yield?

Mr. RANKIN. I yield for a question. Mr. CURTIS. Without this legislation

they cannot go back and fight. That is the reason this legislation is here.

Mr. RANKIN. · I will say to the gentle­man from Nebraska that the ones who are going to desert in the future do not need this legislation now and they do not need for us to hold Gut this hope to them. This conference report ought to be limited to cases that have occurred up to th_is time. I am not very strong for it at all. I rather doubt the advisability of Congress usurping the prerogatives of the executive department to review and pass upon and confirm or reverse these con­victions. I think we are going far afield.

Mr. CASE. Mr. Speaker, will the gen­tleman yield for a question?

Mr. RANKIN. I am not going to ob­ject to the Members talking, but I am going to ask that it be carried over until those safeguards are thrown around it. I will not do so at this time, but I will wait until the other Members get through.

10976 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 Mr. ROBSION of Kentucky. Mr.

Speaker, reserving the right to object-­The SPEAKER. The Chair intends to

ask for regular order pretty soon if no-body else does. . .

Mr. ROBSION of Kentucky. I heart­ily agree in the program of the War and Navy and Marine branches of the service in setting up these rehabilitation of sol­diers and sailors and marines that have been convicted of some offense and per­haps discharged from the service, to give them an opportunity to rehabilitate

. themselves. But if I understand it, this deals solely and only with desertion cases; is that right?

Mr. DICKSTEIN. At the present time.

Mr. ROBSION of Kentucky. I would like to inquire how many cases does it cover; I mean, up to this tirrie?

Mr. DICKSTEIN. I have the infor­mation, but I think it would be to the best interest of this country if we did not make any statement dealing with the number. I want to say to the gen­tleman now, this deals with nobody other than the boys or persons in the present situation, in the present war. This legislation deals with nothing but the present war. It does not deal with the matter of desertions outside of the area, but it deals with one particular question which is so vital to the armed forces to rehabilitate the men. I could not make my statement more strongly or plainer than has the distinguished gentleman, my friend from New York.

Mr. ROBSION of Kentucky. It not only covers past desertions--

Mr. DICKSTEIN. It takes care of all desertions during the war period.

Mr. ROBSION of Kentucky. But it covers future desertions.

Mr. DICKSTEIN. If you will read the bill. '

Mr. ROBSION of Kentucky. I think it is too broad. I shall object to the conference report in its present form until it is limited.

Mr. CASE. Mr. Speaker, regular order.

The SPEAKER. Is there objection to the request of the gentleman from New York [Mr. DICKSTEIN]?

Mr. ROBSION of Kentucky. Mr. Speaker, the gentleman from Kentucky objects to the conference report in its present form.

The SPEAKER. Objection is heard. Mr. RANKIN. Mr. Speaker, I ask

unanimous consent to address the House for 1 minute and to revise and extend my remarks.

Mr. MAGNUSON. Mr. Speaker, I ob­ject.

The SPEAKER. Objection is heard. Mr. RANKIN. Mr. Speaker, I merely

want to make a point of order that no quorum is present.

Mr. MAGNUSON. I withdraw my ob~ jection.

Mr. RANKIN. Then, Mr. Spe~:~,ker, I withdraw my point of order. I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks.

The SPEAKER. Is there obj ~ction? There was no objection.

Mr. RANKIN. Mr. Speaker, it has been announced that the Committee e-n Election of President and Vice President is to be called together immediately after we return after the holidays, for the pur­pose of considering the bill providing for absentee voting for our men in the armed forces.

I think I can assure the House, and the country, now that an overwhelming majority of the members of that com­mittee are ready to report out the Sen­ate bill, with some minor amendments, and pass that measure that would give everyone in the armed forces an oppor­tunity to vote in the coming P.lection, not only for President and Vice Presi­dent and Members of the House and Senate, but for State, county, and loral officials.

Governors all over the ·country are already assuring us that they are ready to call extra sessions if necessary of their legislatures in order to straighten out their absentee voters' laws. I saw a letter this morning from the secretary of state of the State of Ohio, indicating that Governor Bricker of that State is getting ready to call an extra session for that purpose. The same report comes from the State of Iowa, and from Georgia, and from many other States.

Instead of depriving the soldiers of the right to vote by the passage of this bill, we will enable them to vote, and with the assistance of the States, we will permit them to vote in the coming elec­tion in a legal, constitutional election.

The SPEAKER. The time of the gen­tleman has expired.

AMENDING THE NATIONALITY ACT OF 1940

Mr. DICKSTEIN. Mr. Speaker, I ask unanimous consent to address the House for 1 minute.

The SPEAKER. Is there objection? There was no objection. Mr. DICKSTEIN. Mr. Speaker, I

really regret that the gentleman from Kentucky saw fit to stop the passage of this urgent and necessary resolution and conference report, which was agreed to by both major parties and at the solemn request of the heads of the War Depart­ment, the Navy Department, and the Marine Corps. I think the gentleman from New York has ably presented the case of the War Department. As chair­man of this coll)mittee, I could not pos­sibly give the numb.er of desertions, or other facts, because I do not think it ·would be-very proper to let the enemy know that such conditions are existing. All of those men are citizens, and they are willing to go back and fight. They will make good soldiers, if given an op­portunity. It would be up to the War Department to take them back after checking on their records.

The SPEAKER. The time of the gen­tleman from New York has expired.

Under previous order of the House, the gentleman from California [Mr. VooR­HIS] is recognized for 15 minutes.

SOLDIERS' BENEFITS

Mr. VOORHIS of California. Mr. Speaker, I asked for this time for a dif-

ferent purpose, but I would be less than honest if I did · not reply briefly to the statement just made by the gentleman from Mississippi [Mr. RANKIN] by simply saying that it is my earnest hope that the Congress of the United States · will, at least, do its primary duty with regard to providing opportunity for men in the armed forces to cast a ballot in the next national election. Ours is a Federal army.and navy and not a State army and navy. Men were drafted under Federal law and not under State law. Our re­sponsibility is not State elections, but the election of Federal officials. I hope · that we will provide in the most simple and direct way possible for ballots to be delivered to those men and for those men to have an opportunity to cast them, and for that to be done under such super­vision of a bipartisan nature as will make as nearly certain as possible every man called upon to fight for his country will · have opportunity to vote if he wants to exercise it. My own belief is that a bill similar to the Green-Lucas bill should be passed. But I simply point out that under the terms of the bill introduced by the gentleman from Texas [Mr. WoRLEY] if any State, or any locality, should really want to disqualify any ballots cast by its citizens in the armed forces, it would still have it within its power to do so. I cannot see how any further recognition of States' rights or voting qualifications could possibly be asked for. And yet the Worley bill has been attacked as roundly as the Green-Lucas bill. Why?

The thing I wanted to speak about to­day, Mr. Speaker, is legislation for the benefit of veterans of this war. Consid­erable d1scussion has been had on· 'that subject in recent days. Before this a mustering-out pay bill should have been enacted. And the only reason that such a bill has not been enacted, as I under .. stand it, is because a great mariy other matters of evident importance and jus­tice to men in the armed forces have been presented in the course of discussion of this proposition.

A mustering-out pay bill there ought to be, but so ought there to be some provision for a reasonable period· of eco­nomic security for men coming out of the armed forces; some provision where­by over a period of time there will be periodic payments to those men, at least, under conditions where their own earn­ings do not exceed such periodic pay­ments as Congress might allow. These are questions of the greatest importance, and it is the evident duty of the Con­gress to attend to them at the earliest possible moment. But I am of the opin­ion they ought not to be mixed too much together. Mustering-out pa.y is one thing, veteran security is another.

Mrs. ROGERS of Massachusetts. Mr. Spe~ker, will the gentleman yield?

Mr. VOORHIS of California. I would prefer to go ahead a little if I may, and then I will yield later.

The question that I want to discuss first is this :

There have been apparently some cases of men who have· been discharged even with disabilities, without-those men being cared for as provided by the laws already

1943 CONGRESSIONAL RECORD-HOUSE 10977 on the · statutes books, enacted by the Congr~ss . In my judgment, every one of those cases is a real tragedy and never should have been allowed to take place. But the problem is one of administration, not one of law. The laws are already on the statute books.

I made a speech a few days ago and stated that, in niy judgment, the first necessity was to be sure that every man at the time of discharge had in his pos­session a simple statement of his rights and benefits and everything to which he was entitled under laws enacted by the Congress, and before his discharge he should be fully informed· about such matters.

A few days later I received from the office of the Under Secretary of War a release from that office, stating that such a piece of literature was being prepared and would be put into the hands of every single man before his discharge ·from the Army. I do not know how far along this job is. I do not know whether, as of today, every man is getting this in­formation in printed form, which the War Department describes in this re­lease, but I earnestly hope that every one of them is.

Mr. Speaker, I would like to ask unani­mous consent to include this War De­partment release with my remarks at this point in the RECORD.

The SPEAKER pro tempore <Mr. SHEPPARD). Without objection, it is SO ordered.

There was no objection. The release is as follows:

RIGHTS, DUTIES, PRIVILEGES EXPLAINED TO DISCHARGED SOLDIERS

In furtherance of its policy to facilitate the return of the discharged soldier to his proper place in civilitm life, the War Department an• nounced today it has adopted a single docu­ment which not only clearly informs him of

- his rights, duties, and privileges but also is designed to give . adequate information to those governmental agencies which can help him.

The new form, called Report of Separa­tion, replaces seven forms and five letters hitherto required. The soldier receives one copy while others go to the Veterans' Ad­ministration, the State director of Selective Service for his State for the information of his local board, the reemployment commit­tee man of tliat local board, the veterans' em­ployment representative in the iocal office' of the United States Employment Service and The Adjutant General's Office of the Army.

The soldier's copy is certification of his status as a veteran. It informs him that if he is registered under the Selective Training and Service Act of 1940, he must report to his local board that he has been separated from the armeq forces .. and that if he has not registered he must do so. He is reminded that as a civilian he has the same obligations under the act as any other.

The soldier is advised that if he desires his former employment and is entitled to it under the provisions of the Selective Training and Service Act, he must apply to his former em­ployer within 40 days after his discharge. The certificate also points out that if he saw active military service on and after December 7, 1941, and has been honorably discharged, he has the right to apply to the Veterans• Administration for hospitalization and domi­ciliary care, dis~bility pension, or vocational rehabilitation, if entitled to them under the law. ·

LXXXIX--692

For his assistance and advice the following information is given:

"There is a reemployment committee man attached to eveFy local Selective Service board 'who will act as your personal representative ln your home community and aid you in re­establishing yourself after discharge. He will assist you either in getting your old job back or in getting you a new job if your old job is not available. He will act in your behalf with the other Government agencies concerned.

"Army Emergency Relief has been estab­lished by the War Department to furnish temporary emergency financial ai(i and ot her services to soldiers and their dependents. Assistance is extended to all eligible military personnel, including persons discharged since September 16, 1940, regardless of rank, grade, branch, or component and to their depend­ents, irrespective of relationship. A. E. R. officers are located at posts, camps, airfields and in most principal cities. You may apply by mail or in person to the A. E. R. officer at any of these places.

"The United States Employment Service maintains contacts with employers and will assist you in securing work if you have had no previous job, or if for any valid reason your old job is not available. In each local U. S. E. S. office, you will find a Veterans' Administration employment representative.

"The Veterans' Administration maintains hospitals for the care of men incapable of rehabilitating themselves for civil life. They handle your pension claims and your service­connected vocational rehabilitation.

"The Vocational Rehabilitation and Train­ing Division. of the Federal Security Agency, which operates under the State department of education in each individual State, will assist you in your training and education if it is necessary for you to learn a new trade or profession before returning to civil life.

"You may obtain information concerning Federal employment at any post office or any civil-service office. .

"The American Red Cross is the official medium of communication between the peo­ple of the United States and the Army. Its field directors .at Army camps and hospitals and chapters in every home community will assist you and your family in solving your personal and family problems. They will arrange temporary :flmincial assistance when you require it and will help you in :flling and presenting claims for pensions or other Gov­ernment benefits.

"On your request the United States Armed Forces Institute will undertake to provide records of courses taken by you while in the service for submission to civilian educational institutions, employers, and other properly intere·sted agencies. In addition, the Armed Forces Institute will give you, on applica­tion, special examinations which wm serve as a basis for. the granting of academic credit by civilian schools and colleges, and will provide reports of the results of these examinations. For either or both of these servic~s you are required to pay the Insti­tute's regular membership fee of $2. No other payment is required. Inquiries should be addressed to the Commandant, United States Armed Forces Institute, Madison, Wis."

The discharged soldier is . advised to keep in force all of l}.is Government insurance which he can, as one of his most valuable assets. Full instructions are given to him on the subject. ·

The report of · separation gives pertinent information about the individual. It in­cludes considerable. personal data, his char­acter at discharge, his military and civilia!l occupations, the cause of his separation from the service, and the · type of his discharge.

The present procedure was arrived at through experience during the present war and in the World War. It is recognized that

modifications in procedure may be necessary from time to time in the light of changing circumstances.

Mr. VOORIDS of California. In the next place, the Disabled American Vet­erans issued a release a short time ago, which the gentleman from Louisiana [Mr. BROOKS] put in the RECORD, and which pointed out a new policy on the part of the Veterans' Administration which seems to be of sufficient importance so that it should be spoken about on this occasion. That policy is one of adjudicat­ing benefit claims of veterans before they are discharged from hospitals; while they are there to go over their case, to bring in their records and to go over the records and find out what their entitle­ments are, and to grant those men their compensation before they leave the hos­pital. If that could be done with regard to every single man who is hospitalized, it would answer a great percentage of their problems. I want to congratulate the Veterans' Administration on this move.

I myself happen to have been the au­thor of .a bill in the last session, which was enacted by the Congress, which pro~ vided in brief, that a man who had been in active service and the circumstances of whose service could logically be as­sumed to have led to the disability from which he now suffered, would be assumed to be suffering from a service-connected disability.

The reason that bill was necessary.....:. and I do not think it has led to nearly the results I had boped for-but the reason that bill was important, was pre­cisely because this policy was not fol­lowed to anything like the extent it should have been, namely, the policy of adjudi­cating veterans' claims before they left the hospitals or, at any rate, before dis­charge.

Mr. Speaker, we have got to have legis­lation of a far-reaching character for the benefit of men in this war. . ·

Mr. RANKIN. Mr. Speaker, will the gentleman yield right at that point?

Mr. VOORHIS of California. I yield. Mr. RANKIN. Let me say to the gen­

tleman from California, that the Veter­ans' Administration now is carryin'g out

-the policy to which he has just referred, and when these men are discharged and it is indicated on their discharges . that their disabilities occurred prior to their service, the Veterans' Administration is following out the policy that we pre­scribed, of placing the burden of proof on the Government to show that their disabilities were incurred before . their service, or that they were not aggravated during their service. So that is the pro­vision which the gentleman has referred to.

Mr. VOORms of California. I know, and I think it is a tremendous forward step. I thank the gentleman.

Mr. RANKIN. I think so. Mr. VOORHIS of California. I think,

if generally ·applied, it will answer a great many of the problems that veterans would otherwise face.

Now, Mr. Speaker, I want to go for­ward froni this poin.t and say that the thing that every man coming out of

10978 CONGRESSIONAL RECORD-HOUSE .DECEMBER 21 this war will want more than anything else, is to have a real opportunity to make his readjustment to · civilian life, with a good job as the basis. That is the thing, after all , that counts for most. I t is the thing that every one of them is going to be entitled to by every right in the world.

Mr. Speaker, when we think about it · from that point of view, we have got to recognize the fact that jobs for 11,000,-000 men · can only be assured if we also do the fundamental things neces­sary to assure our entire Nation of eco­nomic -health, full production and gen­eral full employment. For more than 3 years, I have been appealing to the Con­gress that we should set up an outstand­-inG commission, of not only Members of Congress, but of leading men in . all walks of American life, . to tackle in broad fashion the greatest problem of economic readjustment . that any nation has ever known.

Mr. Speaker, in a brief 15 minutes, I cannot give a complete prescription as to .just · what we need to do to make cer­tain that these 11,000,000 men will come .back to a Nation where there . will be hope for all.

Mr. ROWE. Mr. Speaker, will the .geptleman yield just for an observation~

Mr. VOORHIS of California. I yield briefiy.

Mr. ROWE. A primary element to the bringing about of that must of necessity be that some of the so-called selfishness .that is now evident ori. alf sides must first be eliminated? ·

Mr. VOORIDS of California. I agree with. the gentleman. I will say that one reason I set up my proposed commission like I did ,was because I· was hopeful that on a commission of that kind, represent­atives of industry, listening to repre­sentatives of agriculture, and labor, and the churches, and education, and veteran groups, and so on, might go back from those meetings to industry and tell in­dustry the very message the gentleman has just suggested. I was hoping that representatives of labor might do like­wise, and representatives of agriculture and every other group; for Americans, after all, stand or fall as one people. Our Nation is one, not many, and .that. Nation will stand or fall together.

I want to issue one or two warnings about this matter as we look ahead. A tremendous drive is going on against the back drop of Government regulation such as this Nation has never dreamed of, the ultimate effect of which may be to discredit government, as such, in the minds of the American people. Nothing more dangerous than that could be done. After all, there is a vast difference be­tween poor administration-if it hap­pens, in certain instances-of a neces­sary measure of wartime control, on the one hand, and the fundamental job of Government of guaranteeing justice and hope to the American people as a whole, on the other. Some of the attacks that are being made are not discriminating enough to make this distinction clear to the people.

·In the next place, I want to warn to this effect: Never in all . ~he history of this

country was the hand of private monop­oly as strong as it is today. Those who seek a · truly free America, one with a basic security for the common man, must remember that the net effect of the mo­nopoly and the cartel inevitably is to take an inordinately large share of the buying power of the people for itself, at the same time restricting, . artificially, what otherwise might be abundant pro ... duction. You cannot have freedom, you cannot have hope, you cannot solve the unemployment problem or the problem of low agricultural income as long as monopoly grips your Nation.

I have a speech in the RECORD last Saturday in which I described a bill re­garding patents which would prevent the use of patents as a means of monop~ olistic control. That bill wcmld have given us enough synthetic rubber, it would have solved a lot of the problems of war production, if it had been on the statute books.

If we believe in freedom '"e have to be thoroughgoing. One job of government is to see to it that no private group has the power of denying similar freedom to any other group of citizens. A tax pro­gram could be used to combat monopoly. If, for example, the percentage of deduc­tion that is allowed one corporation on income received from dividends from an­other corporation were reduced from 85 to 50 percent, it would be more effective in breaking up holding-company control than anything .! know of. This is only one brief suggestion, of course.

A little while ago I spoke about co­operatives. · Cooperatives of farmers and other groups of American citizens have been one means whereby the common citizens of this Nation could take hold of the monopoly situation and beat it with their own strength. But there has · to be effective legislation, too.

There has to be, finally, recognition of one basic job on the part of govern­ment, a job which must be done and done well if jobs for returning fighting men are to me assured. Government need not, in a free democratic state, con­trol and direct the economic activity of its citizens~ but it does have the definite responsibility of guaranteeing that the home market for the goods of industry ·and agriculture never fails.

In other words, it is the economic job of government to see· that over-all con­sumer demand for goods does not fall below the potential power of industry and agriculture to produce at the level of full employment. I submit these things as being some of the things that, while we are thinking about veterans of this war, we mu$t consider as well as the essential matter of discharge pay, of provision for a period of economic se­curity for these men, hospitalization, and the other things that should be assured to every veteran before. he leaves the armed services. .

Mr. HOBBS. Mr. Speaker, will the gentleman yield?

Mr. VOORHIS of California. I yield. Mr. HOBBS. I am sure the gentle­

man is one or the most sincere and hon­_e$t 1\Ie.mbers of thi.s House.

'·

Mr. VOORHIS of Califorl}ia. I thank the gentleman.

Mr. HOBBS. And, therefore, I want to ask him with the high regard that I have for him if he has read the Worley bill.

Mr. VOORHIS of Caiifornia. Yes; I will say to the gentleman I have.

Mr . . HOBBS. Does the gentleman then feel that it is no impingement upon the rights of States with regard to regis..; tration and poll-tax requirements of cer­tain State constitutions? It seems to me that the exception in the Worley bill does deprive the States of those two rights.

The SPEAKER pro tempore. The time of the gentleman from California has expired.

Mr. ROWE. Mr. Speaker, I ask unani­mous consent that· the gentleman from California may proceed for 1 additional minute.

The SPEAKER. pro tempore. Without objection, it is so ordered.

Th.ere was. no objection. Mr. VOORHIS of California. Mr.

Speaker, I do not set my~elf up as being as good a . constitutional lawyer as the gentleman from Alabama. Indeed, I ani · not an attorney at all. I see what the g_entleman :rpean&, but I sincerely feel that neither registration nor poll-tax payment should prevent soldiers from voting. I frankly feel that it is a Fed­eral responsibility at the bottom anyway.

Mr. HOBBS. I will say the gentleman from Texas [Mr. WORLEY] does believe that these exceptions deprive the States of certain rights.

Mr. POULSON. Mr. Speaker, will the gentleman yield?

Mr. VOORHIS of California. I yield. Mr. POULSON·. I merely wanted to

commend my colleague from California because he has brought out some funda­mental facts and principles which we must face if we are to solve these press­ing war problems.

Mr. VOORHIS of California. I am much obliged to the gentleman for his kind comment.

Mr: ROWE. Mr. Speaker, will the gen­tleman .yield?

Mr. VOORHIS of California. I yield. Mr. ROWE. I just wanted in this con­

nection to point out the fact that the gentlewoman from .Massachusetts [Mrs. RoGERS] has been giving her attention to this pro_blem of mustering-out pay and the treatment of the soldiers as they have been discharged, continuously now for a matter of weeks.

Mr. VOORHIS of California. Yes; I know she has. . The SPEA~ER. The time of the gen­

tleman from California has again ex­pired . .

The SPEAKER pro tempore. Under the previous order of the House the gen .. tleman from Florida [Mr. SIKES] is rec .. ognized for 15 minutes. THE GOVERNMENT ALSO HELPS TO WIN

THE WAR

Mr. SIKES. Mr. Speaker, there is at present in this body, and among some 'organizations and groups, a tendency to blame all of the war's domestic unpleas­antness on the agencies created at the instance of the Democratic adminis~ra~

1943 CONGRESSIONAL RECORD-I-IOUSE · 10979 tion as necessary aids to a successful war effort. To hear some of our own worthy Members, and to read some of the cur­rent articles and advertisements in the press and periodicals, which, in sub­stance, call for the elimination of all Federal controls and planning, you get th€ impression that Government activi­ties are the cause of all our present dis­comfort on the home front. The fact that we are at war is given no part in it.

There seems to be the feeling that we should be able to engage in the greatest war of all time, equip and prepare ten to twelve million fighting men and send a large proportion of them abroad with­out any serious dislocations .at home. Even with our great resources, our great agricultural and industrial systems, we are expected to do this and continue with great profits, high wages, low prices, no shortages, and the minimum of suffering and hardship. We are to wipe away a tear with one hand for those who have gorie down in glory, and grab for every­thing we can with the other.

It is to be regretted that such is the sentiment of any person. Fortunately, they are few, for if democracy in this Na­tion means anything, and I know that it does, there must be a widespread willing­ness to share what privations the war brings.

Two years ago when we looked at the terrific problem· confronting us. at the size of the forces opposing us. and at the woeful state of our own forces, many in this country were in a state bordering on panic. But we rolled up our sleeves and went to work. And because this is a democracy, it was the Federal Govern­ment's job to carry the ball and to expect teamwork and support.

The fact that today we stand assured of victory, even though we r 3alize it is riot yet close at hand, is due in no small measure to the planning and coordinat­ing functions of the Federal Government. And I include in that term the Congress. the Federal agencies, the Government employees, the local rationing boards, and all the others who do the hard, the unglamorous, and often the thankless tasks of a nation at war.

Day after d~y we see charges of con­fusion and incompetency in Government. Certainly there has been confusion and incompetency. To deny that would be to say that the United States and all of its people are perfect. But would any of you say there exists no confusion and incompetency in industry, among labor, or within agriculture? I defy anyone not to find within any emergency mobilized organization some of the elements of confusion. That is only human nature. And the weeding out of these, as well as the constant striving for improvement, are legitimate aims.

But appraise, if you will, the job of industrial conversion to war, the over­whelming production job that has been accomplished, and the great militaty mobilization that has taken place in this country since the war began. Of this, the Federal Government was the plan­ner, the forcing agent, at times the pleader, and always the disburser of the funds to do the job. And no nation has

ever accomplished more in such a little time.

There are, of course, some in Govern­ment who seek to promote their own self­interests, or to secure benefits for the particular group they previously repre­sented in private life, or to put special interest above the national interest. Thank God, these are very much in the minority. But strangely enough, tilis minority is not included among those who are castigated day after day for the inconveniences of war.

The greater part of the present crit..: icism of legitimate governmental opera­tions springs from the same old disgrun­tled sources which are so well known to us. And while these sources today cre­ate a smoke screen of criticism against the hypothetical powers of the Govern­ment, they admit the general necessity for over-all Government planning and direction in wartime. Thus, what they say means this: "We admit that Federal coordination and Federal controls in cer­tain fields are essential in wartime. But those things are for other people. They must not apply to us."

As a part of the criticism of govern­ment, the Federal employee has been blanketed with ridicule. Yet I think we should remember that Federal employees are human beings like the rest of us. Many of them have unpopular duties to perform, duties which are also unpleas­ant to the worker. We may not like their methods, but we must admit they stick to the task assigned them. They know it is all a part of the ugly business of war.

I have read some of tpe statements which currently praise free enterprise for the job it has done in this war. Free enterprise has done a great job and it should receive full credit for its accom­plisl!ments. Yet, I note that many of these statements carry bitter criticism of the necessary and legitimate acts of the Federal Government, and demand a return to the old days of real free en­te~prise. There is inconsistency in these arguments. First they do not indicate that Gnvernment is a part of free enter­prise and that democratic government makes free enterprise possible. Second, all of the credit for accomplishing the miraculous conversion to war production and mobilization is claimed for industry or other private activity. The part that the Federal Government and this Con­gress took in planning, hastening, and making possible the conversion, mobili­zation, and production job is considered unimportant and negligible. If that be true, and the job has been done entirely by industry, there is no need to return to anything. Sound thinkers in industry do not fall into this error. They know that Government and industry and labor and agriculture are all required to do a part in this great undertaking, and that there is credit enough for all to share.

There is no question but that we want and wilr have free enterprise in this country. Let us not forget, however, that government is a part of the system of free enterprise. None of us wants too much interference by Government. That is the way we are constituted. But

we can make the best of a situation that the Japs and the Germans-and not our own Government-made necessary. We can work together and we can work with our Government until our job of winning the war is done, and while we are doing that let us take out our hate on Hitler and Hirohito.

This Nation is justly famous for its organizing ability. It is this genius, plus the facilities and resources we for­tunately possess, that has enabled us to arrive at our present powerful status. The Federal Government is a part of the Nation-wide organization, and an expression of that organizational ability which is now devoted to winning the war, to fighting it. as efficiently as pos­sible, and to keeping the domestic econ­omy operating.

When the morale or effectiveness of any part of the Nation-wide organization is undermined by untrue and caustic castigation-which, .after all, is some­times a scarecrow thrown up for other reasons than winning the war-it indi­cates a breach in our fundamental unity of purpose.

I like to see talk backed up with work. There has been more talk than work on the subject of going all-out to win the war as soon as possible. Obviously, the necessity for an all-out war effort has failed to get home to many. Perhaps some -of the critics are included in that group, yet I seek to be fair to the critics because every reasonable person knows there are serious home-front problems before us. I do strongly make the point that cooperation, hard wm·k, and under-­standing can solve those problems. But criticism and distrust only add to the difficulty of the job. Anyone can tear down a plan or .a reputation. It is the ability and the wiU to build them that counts.

Let us get down to brass tacks. Have · the critics produced anything that could be described as a coherent, considered, and intelligible policy on domestic is­sues? What is their position on the con­trol of inflation, on control of prices, on control of wages, on what to do · about excess purchasing power? What is their position on demobilization, on reconver­sion of industry, on disposition of war plants and surpluses, on how to bridge the gap between war and civilian em­ployment for the demobilized soldiers and the war workers? What is their position on the place in post-war econ-. omy of our huge merchant marine, of our vast aviation industry; of our greatly ex­panded industrial facilities, on the re­construction of international trade, on the tariff structure, on our world trade and financial policies? You see, it is easy to tear down, but we must have builders to win wars, or to win the peace that follows.

This . administration has a program. This administration is doing a job. With what shall we replace its program, and its accomplishments?

Today we are engaged in the greatest free enterprise job of all time, the demo­cratic mobilization of all our resources toward final victory in the severest test democracy has yet experienced. Let us

10980 co-NGRESSIONAL RECORD-HOUSE DECEMBER 21

look to our sights. Let us keep them clear and sharp. And let us keep them trained on the real target-the enemy.

Mr. MURDOCK. Mr. Sp~aker, wlll the gentleman yield?

Mr. SIKES. I yield. Mr. MURDOCK. Mr. Speaj.{er, I want

to congratulate the gentleman on his splendid statement. I agree with him that our material accomplishments in this war have been the greatest of this or any other nation in human history. I also agree with the gentleman that all factors contributing thereto have not been duly appraised, as I see the picture. A stool or any other thing that requires support must have more than one leg. It must have more than two legs. I can· not conceive how a physical object can be supported by less than three legs or supports. This great objective of turn· ing America into the arsenal of democ· racy which we have been attaining has had the support of three great groups of citizens, including management under free enterprise, as the gentleman has so well pointed out.

In saying this good word for manage· ment; I would not detract one bit from the credit we ought to give our army of labor and Government. We find these last two factors are usually neglected of mention by the apologists or by those who laud the total accomplishments of American war production. I think the gentleman has made a splendid state· ment today and he has given a fair over· all picture. I believe with him that we ought to regard with equal appraisal the part which has been played by Govern· ment and also that part which has been played by labor along with free enter· prise of industry in .total war production.

Mr. SIKES. I appreciate the gentle· man's statement, for I know his judg· ment is sound and highly respected in this House:

SPECIAL ORDER

The SPEAKER pro tempore. The Chair recognizes the gentleman from Michigan [Mr. HOFFMAN].

Mr. HOFFMAN. Mr. Speaker, I ask unanimous consent to revise and extend my remarks in the RECORD and to include newspaper articles.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Michigan [Mr. HOFFMAN]?

There was no objection. Mr. KEFAUVER. Will the gentleman

yield? Mr. HOFFMAN.. I yield to the gentle·

man from Tennessee. Mr. KEFAUVER. Mr. Speaker, I ask

unanimous consent to extend my own re­marks in the RECORD and to include a brief speech.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Tennessee [Mr. KEFAUVER ] ?

There was no objection. Mr. HOFFMAN. Mr. Speaker, during

the last few months we have been told on . the floor almost every day that the country is at war. The parents and relatives of those who have gone to war certainly know that we are at war, and . we in Congress ought to know it by this

time and act accordingly. I want to ask, Is it not about time that the Congress itself acts upon the assumption that we are at war and insist that all others do the same? That observation is made be­cause just recently, within a week, some 1,300,000 men, upon whom the trans. portation of war materials depends, have announced that they intend to strike un· less they get a $3 a day increase in pay, some of them, and the others a few cents an hour in increased compensatibn.

Everyone knows that the men up in. the front line cannot do the fighting un­less they get the material to fight with. Everyone knows, of course, that unless the transportation system here at home continues in operation they cannot be supplied with guns and ammunition, to say nothing of the food and clothing which enables them to fight. Yet we are told that unless they get these increases in pay they will go on strike December 30. If my recollection serves me cor­rectly, it was on the 14th day of Novem­ber 1941 that the President told the country that no man would be forced to join a u.nion in ·order to hold his job. That was at a time when John Lewis was telling us that we could not have &.ny coal unless certain concessions were made to the United Mine Workers.

New York Times of November 14, 1941, quoted Roosevelt as stating:

The Government of the· United States will not order, nor will Congress pass legislation ordering, a so-called closed shop.

Talking face tci face with Lewis, Mr, Roosevelt said:

The Government will never compel this (remaining) 5 percent to join the union by a Government decree. That would be too much like the Hitler methods toward labor.

According to the New York Times of Monday, December 8, 1941, the preceding night, the three-man arbitration board appointed by the President, by a 2 to 1 vote, gave John Lewis the closed shop in the captive coal mines. The dissenting member, Benjamin F. Fairless, president of United States Steel Corporation, said:

In my opinion the Congress in these days of nat ional emergency should alone under­take to change a long-established open shop into a closed shop, or a closed shop into an open · shop. Furthermore, deliberate and wise act ion on a complicated and contro­versial issue camwt be expected when all of . u s a1·e, or should be, straining every effort to attain our paramount objective, namely, complete national security and the destruc­tion of Hitlerism.

From that day to this the administra­tion has followed a policy of appease­ment. It has on each occasion, as I read the record, surrendered to the demands of the labor politicians, who were and are, its political allies. Sometimes it has sur­rendered directly, at other times the sur­render has been in a roundabout way but always the same end was reached. The taxpayer, the individual worker, the consumer, one or the other, or all, were made to pay the cost of the yielding. I have no comment to make on the merits of the demands of the miners. They may have been justified in . asking for mo.re pay. The significance of the thing

is that ever since that day, down to the present moment, if some group wanted to enforce a demand they threatened a strike which would retard the war effort, they made the granting of that special privilege a condition precedent to their participation in the war effort and to our shame, be it said, the administration yielded.

How much longer will the Congress permit the administration to play with these pressure groups on this question of supporting the war effort? ·when any man or group of men says or say that he or they will not transport materials in this country to the seaports, materials to be sent across the seas to help the men fight, unless then can get $3 or 3 cents more per day, then what are they doing? There is no use disguising the issue. There it is. The boys who are called by the draft boards go and when they are selected and sent into the armed forces they go, and they go where~ ever the Government sends them. And; they die by the thousands far, far from home and country. But today men who are drawing as much as $484 for 11 days' work in one month, that is engineers on a fast run between Washington and New York, I repeat, for 11 days' work in 1 month, say that unless they get so much per day "We will not turn a wheel.!' Railroad men threaten that they will n'.lt transport needed supplies to the front lines unless they get additional dollars or cents.

What are we going to do about it? Are we, as a Congress, going to support t:1ese men we sent across the seas or are we once more going to let the President get away with thi:::; idea that every time a pressure group controlling votes makes a demand he can in some roundabout way, by portal pay or lunch-time pay or overtime pay or pay and a half or double pay or through some other subterfuge, give them what they ask as a sop, as a payment for their patriotism, or pay for support of their sons or brothers who are doing the fighting-for their effort to support the men who are doing the fight­ing? That is the issue I intend to talk about when I get home. That is an is .. sue I intend to present to the wives, the fathers and mothers, the brothers and sisters of the fighting men, the WAVES and the WAC's who are across the sea. That is an issue that the men and women, too, when they come back from overseas are going to talk about and they are go­ing to ask the Members of Congress, "How come that you did not do some. thing about that?" If some major bat:­tle across the seas is lost, if men die be­cause of our failure to demand that these men shall do their duty, ~eep the sup­ply lines running, then no one can be blamed but the Congress itself. They will ask, "What did you do about it?"

Some time ago a bill was introduced by me which provided that when the men in essential war industries quit their jobs, they had 10 days to get another job in some other essential industry. I would not try to make a man work at any particular job if he did not WaBt to, but I would say to him, "Listen, brother, if you do not Uke that job, then you get

1943 CONGRESSIONAL RECORD-HOUSE 10981 another one and you get another one within 10 days. If you do not get an-

. other one in 10 days, Uncle Sam .will give you one at soldier's pay," not necessarily in the fighting line, because many of these men are too old and their physi­cal condition will not permit them to fight effectively. But they would get a job a.t Government pay and be put to work or in the fighting line by the com­mander of the military district in which they lived. It is my judgment that we all get in this war and support it, that those who will not willingly do · so be forced to do it, or else that we cease to demand that others die for us.

ONE-YEAR MEN ENTITLED TO REST

Many letters have come to me--some from the men themselves, more from the relatives of men who have served overseas a year or more. Some have been wound­ed; some have been · sick and ill; soine have suffered for months from malaria. Those men and their relatives want to know why they should not be sent home for a furlough. They want to know why others cannot come to take the places which they have filled when they have become exhausted by long months of fighting or of illness. ·

Far be it from me to set myself up as a judge of when men should be relieved from duty but I do know that the ex­hausted, disease-ridden soldier is not the most efficient fighting man. · I do know that the other day in the papers appeared a notice that more than one million and a half pre-Pearl Harbor fathers were to be drafted. I do know that about the same time around a million, three hun­dred thousand railway workers gave no­tice that they no longer would carry on by transporting munitions of war or any­thing else for that matter, to our sick, disabled, disease-ridden . soldiers across the seas or to the men who in the South Pacific, were losing their lives in attempts to take a beach head, unless they re­ceived additional pay. · ·

The threat · to strike, to me, does not make sense, nor does it seem sensible that those who have served for months, for a year or two, should be held relentlessly to their jobs until in the course of time they die in the battle line in an effort to lessen the burden of those who have not made sacrifices.

I have today introduced a bill calling, if possible, for the granting of furloughs to those who have served a year or more, to those who are serving in disease-ridden districts. The bill is not perfect, it is but the expression of a thought, which the general staff should take up and work out to a reasonable solution.

AGAIN THE SMEAR

A great deal has been said by those who have endeavored to smear Congress about the loyalty of Members of Congress and about the loyalty and patriotism of the Congress as a whole. One of those who has been most vocal is the gentleman from New York, Walter Winchell. It is my purpose today, r .. ot to prove it because everyone knows it already, but to put in the RECORD where all can read the evi­dence that Walter is dirty and nasty, the evidence that Walter is untruthful and

the evidence that he is not smart.. I will start with the evidence which shows the last statement to be true .

WINCHELL IS NOT SMART

Permit me to read fron a report from Frank Knox dated February 9, 1943, which accompanied H. R. 95, sent to the Naval Affairs Committee which contained this statement: INFORMATION AS TO STATUS OF WALTER WINCHELL

Question 8. (a) During. the month of Janu­ary 1943, was Walter Winchell an officer in the United States Navy? And, if he was, what was his rank?

Answer. Yes. Lieutenant commander, United States Naval Reserve.

(b) If Walter Winchell was an officer in the United States Navy during January 1943, did he, on J~nuary 31, 1943, in a radio broadcast, or in hi's column as printed, in substance refer to American citizens who voted for cer­tain Representatives in Congress as "damned fools who voted for them"?

Answer. Walter Winchell was an officer In the United States Naval Reserve with the rank of lieutenant commander on active duty on January 31, 1943, and, according to a. transcript of his broadcast given a.t 9 p. m., Eastern War Time, over the Blue Network on that date, made the following statement:

"You bet I'm prejudiced against those in high office who guessed so wrong before Pearl Harbor. They're still guessing wrong. I am not in the least comforted by their confes­sions of ignorance. What worries me most are all those damn fools who reelected them."

Winchell is talking about the great body of American voters who returned Members of Congress here in the Novem­ber 1942 E:lection. The gist of his re­marks is that not only are those voters fools, and damn fools at that, according to his statement, but they guessed wrong and the P.;lOple who reelected them guessed wrong.

To show you how smart Walter thinks he is and how utterly mistaken he has been, let me quote from Walter's column which appeared in the New York Daily Mirror on April 11, 1939. This has been p_·intef in the RECORD before but Walter is now pushing the sale of the Armenian's Pagnanelli book, Under Cover, which condemns all who opposed war. This is Walter Winchell speaking. He said:

Once again Europe is rolling the loaded dice of destiny.. Once again her miserable diplomats are pointing down the one-way street to war-as the only avenue to peace. And' once again America is asked to play her role of the great international sucker.

The time has come for us to pause and consider. If we must have another unknown soldier, let us not ask him to die for an un­known reason. And just what will be ac­complished by dying in the mud? He will not increase America's resources; the last war nearly ruined the Great Plains. He will not increase America's wealth. In the last war we loaned our gold and were gold-brickea in return. He will not increase our liberties­for no man may protest slaughter after it starts. The truth is that external disaster never solved internal trouble. We must de­velop our youth-not sacrifice it. America must learn that her sons abroad will bring monuments to her glory, but her sons at home are a monument to America's common sense. The future of American youth is .on top of American .soil-not underneath Euro­pean dirt.

Well, Walter, you later became a war monger and now American youth is being ·

put under European dirt by the thou­sands. May God forgive you, Winchell, and may you sometime still your slan­derous and vile tongue.

How smart was Walter, any smarter than anyone else?

In fact, Winchell was mistaken so often that back in July 13, 1940, an arti­cle appeared in the New Yorker which took up some of Walter's brain chil­dren, and I am going to print it in the RECORD, where it shows that Walter is right in his statements over the radio and in his column just 41 percent of the time. That statement is as follows:

PROFILES

GOSSIP WRITER

V-Flash-is it true what they say? "Accuracy! Accuracy! Accuracy!" wrote

Joseph Pulitzer in a commanding style. It was his cardin -.1 rule of journalism, a practi­cal code, in his judgment, as well as an ethi..: cal one. If Walter Winchell had · gone over to the World from the Evening Graphic around 1926, when he was invited to do so by the World's executive editor, there is a question whether he would have been able to abide by the founder's vehement dictum. Pulitzer believed that inaccuracy. will out. He reasoned that inaccuracy in joUrnalism is instantly recognized by readers and that a journalist soon loses his readers if he fails m stick at least reasonably close to the facts. H~ worked all this out before gossip writing like Walter Winchell's had become an ac­cepted feature of American journalism. Winchell has humbled Pulitzer on three counts. ·He has flagrantly disobeyed the great journalist's command of "Accuracy! Accuracy! Accuracy!" He has kept his read­er3 and increased them many times over. And, as far as can be determined, his readers possess to this day an unshakable faith in Winchell's often reiterated claim that he is fiendishly and uncannily accuratf,l.

A large number of the fiat statements Win­chell makes in his column and on the radio are impossible to prove or disprove for a r~a­son which is scientific and philosophical but sound. Many of the married people whom he accuses point-blank of being "on the verge'' or "readying a flash" do not themselves know at the time of the item's publication whether it is accurate or not. This also is true of young and middle-aged unmarried · couples who are reported by Winchell to be "that way" or "blazing." In many cases, of course, Winchell appears to be proved accurate by subsequent events: A divorce action is in.:. stituted, or a Stork Club romance flowers Into marriage. But love is tricky; It is a treacherous and unpredictable phenomenon which the cautious Pulitzer would nevEr have allowed himself to become tangled up with as a journalist striving for accuracy. Had Mr. and Mrs. John Doe, who got · di­vorc.ed after Winchell said they ware ready­ing a flash, finally and definitely decided that they were incompatible before they read Win­chell's item? Or was that simply the last straw? Who knows what perverse thoughts and emotions mingled in the secret souls of Mr. and Mrs. John Doe, who had loved once, presumably, had stood before an altar, had perhaps raised children together? Do Mr. and Mrs. John Doe know about these things themselves? Their gossipy friends? Win­chell? How many couples have talked of divorce, then buried their secret ·and ' lived on together till they died? How many lovers have loved and then decided that they hadn't been "blazing" or "that way" about each other at all? Were their first or second .thougi1ts

. on this rna tter correct?

10982 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 . Winchell himself has admitted that "blaz­ing" is indefinable. On August 24, 1931, he wrote: · "Mrs. J. Loose, who has more money than

her Loose-Wiles plants have biscuits, and Vice President Curtis are blazing."

Four days later he explained: "The line on Monday about Vice President .

Curtis and Mrs. Loose of the biscuit company "blazing." Well, the Trib yesterday refuted it by saying that Mr. Curtis denied he was engaged or gotng to marry. Who said any­thing about engaged or marriage? Can't a Vice President get that way about a girl with­out marrying her?"

Then there are people like Mr. and Mrs. So-an~-So. They were reported to be Reno­bound and never went, either of them. They are stili. married and just had another child. What of this? Was Winchell right? Was Winchell wrong? Were you really on the verge that time, Mrs. So-and-So? You, Mr. So-and-So? Do you know how you felt then? How you feel now? What you will do today? Tomorrow?

This state of affairs baffles and upsets Win­chell continually. He is sure he is right, but subsequent actions of citizens who don't seem to know their own minds seem to suggest that he is wrong. "It burns me up," he once said passionately, referring to this situation. There are hosts of people in New York whom he has reported on the verge who have never yet gone over it . There are hosts of others who have told him personally that they are not on the verge and have gone over it with­out so much as a word .to him. The same sort of thing is true of stories about births, critical illnesses, changes of employment, industrial machinations, political · jockeying, international affairs, and a number of other things. For example, on February 14, 1938, Winchell wrote complacently:

"Henry Ford is contemplating retaining title to all his cars and renting them on the drive-yourself plan . That's one of the big­gest stories in years boiled down to less than two lines."

B1,.;.'~ is it accurate? Did such an idea cross Mr. Ford's mind? If it did, was he contem­plating it or 'just toying with it? Who knows? Winchell has been outwitted in such matters time and time again by the human element. It is something he has never been able to get a firm grasp on, and neither has science or philosophy.

Winchell prints many flat statements which are in a less dreamy realm and the ac­curacy of these items may be determined .either by general knowledge or research. "E. B. W. is Elinor Wylie's brother," he once informed his readers. Inaccurate. In Sep­tember 1938, Winchell said over the radio:

"Flash! Buran Fitts, district attorney of Los Angeles County, is reported to have boarded a ship for an unlmown destination. There is another report that he is doing a Justice Crater."

Mr. Fitts was surprised to hear this. He was sitting at the home of a friend with nine Los Angeles judges listening to Win· chell's news broadcast. Inaccurate.

Reports on Ambassador Bullitt's marital in­tentions belong in the dreamy rather than the verifiable cat egory of Winchell items, but in view of the time that has elapsed and the prominence of the people involved, the ac· curacy of some statements Winchell made about him may be judged by general knowl­edge. In 1934 he reported:

"Ambassador to Russia William Bullitt and Margie Le Hand, Roosevelt's personal secre­tary, still deny blending reports, but she's over there now!"

Two years later (people are so slow!), on September 7, 1936, Winchell wrote:

"The newly appointed Ambassador to France, William Bullitt, will marry soon. Marguerite Le Hand, the President's girl Friday?"

Another year another nudge from Winchell: "Ambassador Bullitt's return to Washing­

ton brings him closer to F. D. R.'s confiden­tiaJ girl, Friday, Marge Le Hand.''

The sands of time! June 19, 1939: "The Ambassador Bullitt-Beth Leary merg­

er talk is taken seriously by her chums, but not by his." ·

Finally, desperately, but with a quip on his lip, Winchell writes on September 11, 1939:

''Society suspects Beth Leary is Ambassa­dor Bullitt's secret bride, but she wouldn't do such a thing to Cholly Knickerbocker, would she?"

General knowledge may also be used to check Winchell's announcements about the former King of England. The June before the abdication of King Edward VIII, Winchell reported that he would 1;1ot marry a Danish princess at all but the daughter of a German prince.

There are innumerable instances in which general knowledge may be applied in judg­ment of Winchell's accuracy. A great many inaccurate items have appeared in his column through the years. They have touched on almost every field of human activity. Some of these items follow:

Hollywood: "The Mary Pickford-Buddy Rogers 'bunk' is just that," he wrote in 1934. This referred to reports in other newspapers that these two were to be married. Motors: "The Cadillac firm has shelved building their 16-cylinder." This was in 1931; Cadillac · is still building its 16-cylinder. Dentistry, September 7, 1931 : "After having her ·molars fixed so that they would photograph better, Barbara Stanwyck will make no more flick­ers." Cellophane: "Rigid cellophane will re­place shatterproof glass in . windshields in a year at one-third the fee of safety glass." This innovation should have made its ap­pearance in 1933: not a word of it to date.

Back in Hollywood, October 10, 1932: "The orb operation on Joan Crawford is gradually blinding her!" Domestic politics, Novem­ber 7, 1932: "Norman H. Davis of New York will be Secretary of State if Roosevelt wins." Diplomacy, August 12, 1935: "The Vincent Asters probably will replace the U. s. Am­bassador in Paris any day now.'' Haber­dashery, September 2, 1935: "William Fox, who once owned so much of the flicker in­dustry, will open a chain of haberdashery shops in Greater New York.'' Royalty, Jan­uary 17, 1937: "England's next sensation will be the separation (pending divorce) of Ma­rina, Duchess of Kent, from George, Duke of Kent. It is anticipated within a pair of fortnights.'' International politics, March 29, 1937: "Adolf and Benito have phffft! The. break will be officially announced soon enough.'' Hoover (Herbert), August 1, 1938: "Herbert Hoover starts colyuming soon-in 250 gazettes." Television, September 18, 1938: "The lvcal stores will be selling tele­vision sets for as low as $3.95 by October 1." Hungary, March 20, 1939: "Those who like to salute the Hungarian flag better do it within the next few weeks.'' Wall Street, March 27, 1939: "The new chairman of the Securities and Exchange Commission will be President Hutchins of the University of Chicago." Magazines, May 22, 1939: ''S. S. McClure will revive 'McClure's (once America's leading maga'21ine) in about 4 months." Commu­nism, June 19, 1939: "Litvinoff, Russia's best brief case carrier, will arrive here in the fall with Stalin's blessing." Greece, August 28, 1939: "If Hitler marches into Poland, a dozen hours later Italy will march into Greece, led by Field Marshal Badoglio." And so on.

Taking a Winchell item which looks ac­curate, and then going to the source to find out whether it is or not, is more illuminating and more fun than simply picking out items which everybody knows to be wrong. This procedure has been followed in the prepara­tion of this article. For example, on April 29 last, Winchell printed this item:

"Sometime agq we ran the denial of Doro­thy Thompson after we heard that Mon­signor Sheen (who · converted Heywood Broun) was giving her instructions. We challenged the source again last week after he insisted our denial was bum reporting. He replied: 'Her name is still on the list of those taking instructions,' and when the good

· padre was asked point-blank whether the report was true about Miss Thompson chang­ing her faith, he answered beautifully: 'Maybe she isn't changing her faith-perhaps she is just finding it.' " -

Monsignor Sheen, in reply to a letter asking whether this item was accurate or not, said he was not giving instructions to Dorothy Thompson and that he had told Winchell he wasn't.

Then there was this item in the same month of April:

"Sue Brewster has Steve Hannagan?s ring­so it looks like the merger is any day."

Inquiry into this statement revealed the fact that Sue Brewster had had Mr. Han­nagan's ring since the previous November, in which month she was married to Mr. Hannagan.

Another example is the following Winchell item:

"Stockholders are battling Standard Oil. Henry Stimson against John W. Davis. The defendants are willing to settle for 25 mill. But, nh-nh, the plaintiffs want a mere 65."

Mr. Davis writes: "The statement is only partially true.

There never was any suggestion by any of the defendants to settle for 25 millions, or any other sum. By and large, I think it may be said that the paragraph you quote was substantially incorrect."

Even when writing about residents of Harlem, where Winchell's column is ex­tremely popular, Yvinchell 'is often at least partially inaccurate. In April he printed this item:

"Ethel Waters of Mamba's :Paughters and Richard Wright, author of the best seller, Native Son, are in high. He's a leader of the intelligentsia in the mahogany-skinned set."

"Absolute rot," is the comment of Paul Rey­nolds, Mr. Wright's literary agent, who spoke on behalf of Mr. Wright. Mr. Wright was in Mexico at the time and Miss Waters was in New York. Mr. Wright, Mr. Reynolds pointed out, is happily married and has met Miss Waters a few times at parties attended by himself and his wife.

In order to estimate how often Winchell is right, how often he is partially wrong, and how often he is wholly wrong, all five of Winchell's Monday columns for the month of April were clipped out of the Mirror and dis­sected. In these five columns were 239 sepa­rate items. Of these, it was discovered that 108 were unverified because they were what gossip writers call ·~blind" items, in which no names are mentioned, or were expressions of opinion, or were items which the persons concerned refused to confirm or deny. Thus, 131 items of the 239 were verifiable. Of these, 53 were completely accurate, 24 were partially inaccurate, and 54 were completely inaccurate. The percentages are as follows: 41.2 percent completely inaccurate, 18.3 per­cent partially inaccurate, 40.5 percent com­pletely accurate. In other words, Winchell was not quite half right in the month of April.

The item concerning Mr. Wright is classed as partially inaccurate because "in high" is indefinable and may simply mean that Mr. Wright has met Miss Waters, which he has. Similarly, the item concerning the Standard Oil Co. is classed. as partially inaccurate be­cause there was a dispute, although no offer ·of settlement was involved.

Here is an example of a completely inac­curate item:

1943 CONGRESSIONAL RECOED-HOUSE 10983 "Richard Whitney, the Stock Exchange

biggie, has become Sing Sing's most popular prisoner. Because he found jobs for nearly 100 released intimates he met there."

According to Warden Lawes, who is pro­fessionally acquainted with all of Mr. Whit­ney's act ivities, Mr. Whitney secured a job for one ex-convict.

Here is another: "The real reason Stokowski is feuding with

the Theater Authority is that its agent shouted at him: "How do you know? Some day they may have to run a benefit for you, and then you will need us'."

Mr. Stokowski writes: "The statement of which you write is com­

pletely untrue. I have never had any 'feud' with Theater Authority. I have never had any dealings with them of any kind. No agent from them has ever 'shouted' any­thing at me. There never has been any ques­tion of my conducting a benefit for tl:1e Theater Authority. I belong to the American Federation of Musicians but I do not belong to the Theater Authority because I am not an· actor but a musician."

Here is another: "Mrs. Harrison Williams, often the leader

of the 'best dressed' lists, is definitely headed for a cancelation."

Mrs. Williams writes: "I am not quite sure what 'cancelation'

means, but suppose it means divorce; 1! this is true, it is completely inaccurate."

Just one more: "Jean Parker, the lovely actress, and Val

Olman, La Martinique's batoneer, are cupid-1ng via air mail. What fun is that?"

Miss Parker says ·the name is Doug Daw­.e;,n, not Val Olman.

Winchell has told his readers over and over again in his column that he has a high regard for accuracy and that inaccuracy in his own column or in other gossip columns causes him intense pain. "Take it from one who is sensitive about his accuracy,'' he wrote in 1932, "when you find you've made a boner in reporting something, the blood rushes to your cheeks and you get a little 111. That, it seems to me, is the most severe punishment--finding out you are wrong." It was in that year that he was \vrong about, among other things, the rigid cellophane for windshields~ Joan Crawford's approaching blindness, and Norman H. Davis' becoming Secretary of State. In that 'year, too, he wrote that Miss Frances Perkins would not become a Cabinet member.

If one accept::; Winchell's rather incredible claim that he is sensitive about accuracy, Winchell must simply be put down as a. man in an occupational quandary of stupendous magnitude. He seems at times to be vaguely aware that his dislike of finding himself wrong and his passionate fondness for gossip cannot be reconciled; it may be this circum­stance which has led him on occasion to set down prophetic items every which way on a coming event, like a man betting on all the horses in a. race. On the question of a third term for President Roosevelt, for example, he has written at various times as follows:

"F. D. R.'s choice for President in 1940 is Senator BARKLEY C1f Kentucky.

"You can safely wager that r. D. R. posi­tively will not run in 1940.

"If Roosevelt decides not to third term it Justice Sam Rosenman will resign and open a law office which F. D. R. will join after 1940,

"Insiders say that if the President doesn't run again he will connect with a New York evening paper as editor.

"F. D. R. will run a third term. "F. D. R. up to now is ignoring his personal

doc's advice against a third term." Whatever happens, Winchell will probably

be able to claim remarkable foresight. Next to accuracy, which comes first with

Winchell, it is his journalistic scoops he

is proudest of. Some of these he considers historic. The three most widely accepted triumphs of Winchell's in this category are outside the field of gossip writing, or are supposed to be outside it. They have to do with two crimes and with the surrender of · a known criminal: the killing of Mayor Cermak, of Chicago, by Giuseppe Zangara in February 1933; the Hauptmann case; and what has come to be referred to in other papers as Winchell's capture of the gangster Lepke, who was wanted by the New York police and who chose to turn himself over to J. Edgar Hoover, using Winchell as a ·go­between.

The Lepke episode is remarkable in every way and can reasonably be compared, as Damon Runyon and other journalists have compared it, to the finding of Livingstone by Stanley. It was a less difficult but more practical action all round on the part of Winchell and Lepke than the Stanley-Living­~tone affair was. Whereas Stanley had to go to Africa. and organize a safari in order to find Livingstone, Winchell simply received a. telephone call from Lepke. Lepke did not wish to be prosecuted by District Attorney Dewey, who had sent Winchell's friend Lucky Luciano to prison for from 30 to 50 years. He therefore arranged to be turned over by Winchell to Winchell's friend, J. Edgar Hoover. He met Winchell by appointment and Winchell turned him over to Hoover. There may be a question about whether Hoover actually wanted to be mixed up in all this or not; on the one hand it was a. triumph for the G-roen over the New York pollee, but on the other hand, it served somewhat to minimize the efficiency of the G-men in the public mind, since they had been looking for Lepke, too, and got him only when Winchell delivered him to them. In any case, Hoover could not refuse to accept Lepke from Winchell once Winchell had Lepke. The meeting of the three was dra­matic and historic. "This 1s Lepke,'' was Winchell's phrase, flung into the annals of journalism beside the more tentative "Dr. Livingstone, I presume?" of Stanley's. Hoov­er made an achingly guarded statement afterward and has never said much more about the matter, "Mr. Winchell,'' he said, "was of considerable assistance to the F. B. I. in leading to Lepke's apprehension."

Lepke's strategy in turning himself over to the Federal authorities was shrewd but futile . Mr. Dewey brought pressure on the Department of Justice and Lepke was even­tually surrendered to the local authorities. He was convicted and sent to prison for from 30 years to life. Thus the actual result of the Winchell-Lepke triumph 1s comparable to the futility of the Stanley-Livingstone feat. After Stanley had found Livingstone, it turned out that Livingstone was not lost and did not want to do anything but stay where he was. ·

The extent to which Winchell's capture of Lepke was due to superior journalistic prowess on Winchell's part 1s open to ques­tion. It is the sort of question that has come up before in journalistic history. In 1925, two or three dozen reporters were trying des­perately to interview Floyd Collins, trapped by a falling rock in a cave in Kentucky. The story of Collins in the cave was a national sensation. It was difficult to obtain an in­terview with him because the one crevice through which a reporter would have to squeeze in order to get near Collins was ex­tremely 'narrow. Only one reporter was slim and small enough to crawl through. He won the Pulitzer prize that year for the best example of a reporter's work. Winchell could argue that he had a more reasonable claim to last year's prize, on the ground that it was he, of all the journalists, whom Lepke chose to act as his go-between.

As a scoop for Winchell, the Lepke tri­umph did not really work out. When he telephoned the Mirror to give his paper what is called the flash, the news had already reached the Mirror from the reporter covering the office of the F. B. I. Then, too, the News got to the newsstands with the story some 5 minutes before the Mirror.

What Winchell calls his Zangara scoop was not as sensational as the Lepke episode, or as widely acclaimed by his fellow-journalists • . It was more of a feat of conventional jour­nalistic prowess, though. Winchell was in Florida at the time, and rushed to the jail as soon as he heard about the shooting. There he talked to the sheriff, saw Zangara, and obtained some details which other re­porters, at the scene of the shooting itself, had missed. The other reporters were later barred from the jail, so Winchell actually had a scoop when he left and rushed to a tele­graph office. There the Associated Press man and other news-service men, who had direct wires to New York, were dictating their stories to telegraph operators. Winchell came in, got a typewriter, wrote his story all down, and gave it to a clerk to file. It was put ~m a pile of outgoing telegrams, to be sent when a. wire was clear. Steve Han­nagan, the Florida publicity man, who was writint; the A. P. story in the emergency, was able to pick up Winchell's story, glance through it, and include its facts in his own story. Taking their cue from Hannagan, the other news-service men did the same thing. All the news services thus scooped Winchell on his own scoop. The Mirror printed Winchell's story when it came along, but played it down, giving the news-service story a more prominent position. The bitterest pill of all was that the Mirror thought so little of Winchell's story that the manage­ment insisted that he pay the telegraph tolls for his own scoop, which he did. Wincliell forgets such details. He has a .romantic at­titude toward journalistic feats of the kind portrayed in plays like The Front Page·, and he always refers to the Zangara. affair in his column and in conversation as "My Zangara. scoop."

It was on the liauptmann case that Win­ehell was given an opportunity to display his talents as a reporter of an actual news story. 'He wrote close to 70,000 words on this case. After it was all over he took careful stock of what he had accomplished. He devoted one whole column to scoops which he claimed he had made. This column was headed proudly, "No. 13 on the Jury,'' and it reprinted each scoop from previous columns and news stories and noted under each one the date on which his item had been confirmed by other reporters in other newspapers. This column listed 19 of what Winchell unequivo­cally claimed to be scoops. · Two of Winchell's nineteen scoops possess most of the characteri:;;tics of scoops and have aspects which are mildly interesting. The first was an item printed by Winchell on September 12, 1934, 7 days before the arrest of Hauptmann, beginning as follows:

"The Federal men are convinced that they will break the. most interesting crime on record-the Lindbergh snatch."

The same item went on to talk about a trip Winchell had made through the new Depart­ment of Justice building in Washington, told what it was like, and discussed some angles of prohibition enforcement. Thus an ele­ment of coincidence might be said by the captious to have entered into the matter. The Federal men had, of course, been con­vinced for months past that they would even­tually break the case, and this had been printed by every paper in the country. When Winchell reprinted this item at the top of his column of scoops, he inserted the word "soon," which was not in the original 1tem but made 'it sound more like a scoop,

10984 CONGRESSIONAL RECORD~HOUSE DECEMBER 21 The secot}.d scoop was claimed by Winchell

as follows : "For the first time in a year Lindbergh ran­

som money bobbed up in local banks last week. So .sappy were the bank tellers, you'd think they would have detained the passers. From here. September 17, 1934.

"Bruno Hauptmann arrested! From all p apers; September 20, 1934."

It is not true that the ransom money which appeared during t he week before September 17, 1934, was the first that had appeared in a year. Banks had turned over bills to the police as recently as December 1933. Then; too, this item should perhaps be considered in connection with other similar notes which Winchell printed: · "They've . found $2,000 of the Lindy ransom coin in local restaurants. ·

"Nearly 30 of the Lindy ransom $5 bills were picked up in the same Forty-second Street cafeteria." · These items were false.

The third scoop claimed by Winchell -was in t.he Times 4 days before Winchel~ printed 1t. The fourth scoop claimed by Winchell was that he reported on October 1, 1934, that -"scientists will battle to save Hauptmann from the . chair. They argue that anyone ·guilty of the world's most monstrous crime should be put und-er a glass like a bug for ~cientific. study ." Winchell claimed ·confirma­tion of this scoop by the World-Telegram, but the only thing in the World-Telegram-which .could conceivably be called confirmation was .a· story . whic4 reported that "a leading .psychiatrist" had said that "Hauptmann is not legally insane but he is a distinct mental case." Winchell misread or misinterpreted this in his claim of confirmation as "He is not lega:lly sane." · In any case, insanity was not Hauptmann's .defense and it .has not been l'e<lorded that a battle was fought by scientists to save him -from the chair so that they could study him. This would seem to have been no scoop.

The next seven stories claimed by Winchell as his · own scoops were in either the Times or the Herald Tribune or both, either the £arne day Winchell printed them or earlier. One of these was in the Herald Tribune the .same day and one was in the Times the same day, in edit ions which were on the street an hour or two after the Mirror. Of the others, one· was in the Times 4 weeks earlier, one 5 weeks earlier, one 6 weeks earlier, and two 7 weeks earlier.

The remaining eight scoops cla~med by Winchell cannot ·be considered as scoops in the accepted sense of the term, because they were (a) an irrelevant piece of evidence offered by h im but not used by the State; (b) an allegat ion that Colonel Lindbergh h ad attempt ed t o int erfere with the police investigation, which the police denied and .which was never mentioned at the trial or _elsewh ere; (c ) a matter of opinion as to .what particular piece of evidence convicted Hauptmann; (d ) an admission by Winchell of h is own inaccuracy in another scoop; (e) .a statement that if he had been the father of the Lindbergh child, he could not have sat in the courtroom as Lindbergh did, which was consciously or unconsciously paraphrased by the prosecutor later; (f) and (g) two editorial comments of Win­chell's; and (h) an editorial comment made by the late Arthur Brisbane, then editor of the Mirror, which was reproduced by Win­chell as follows:

"Walter Winchell reports that he has much Inside information that he cannot print, but he is sure Hauptmann is guilty of the Lind­·bergh kidnaping. Winchell probably is right.-A. Brisbane, October 24. · Hauptmann F~und Guilty! From all pa-pers, February 14, 1935."- ·

What Mr. !Brisbane wrote was: "Walter Winchell writes that inside infor­

mation, which to his sorrow he cannot print, shows him that Hauptmann is guilty of the Lindbergh kidnaping. Winchell probably is right. But before executing Hauptmann, somebody should be sure that he is guilty."

Winchell's claims as a reporter on the Hauptmann case thus boil down to this: Of the 19 scoops, there were 2 scoops with quali­fications; 1 scoop which, since it was never confirmed, is hardly a scoop; 2 scoops printed the same day by other papers; 6 scoops which had been printed 4 days. to 7 weeks earlier in the Times; 7 scoops which cannot be con,­sidered as scoops in the accepted meaning of the word; and 1 scoop in which he mis­quoted his own · editor.

ST. CLAIR J,\1CKELW A y.

WINCHELL DOWN TO DATE - Now to bring it down to date and to show that the truth is not in him at the present time and that he is hard up for somebody to talk about, here is one in the Mirror of December 2, 1943:

C::ICAGO. DEAR WINCHELL: The following isn't im­

portant enough for your column, but might give you a cnuckle. Your admirer in Con­gress, CLARE HoFFMAN, owns a small cot­tage at the edge of the little village , of Grand Marais, Mich., on the shores of Lake Superior, where he has not endeared himself to the inhabitants. When HoFFMAN arrived this summer there was a new captain at the life-saving spot-pardon me, Coast Guard. But HoFFMAN didn't care anything about that-just his own pleasure. He pro­ceeded to go fishing without going through any permission formula; and so on. The c'ap~ tain there sent for HOFFMAN. He had him brought in. Unexplained boats are not wanted on Lake Superior, he was told. The great obstructionist, HoFFMAN, was furious.

You gentlemen know just how mad I _can get. But in 10 years here you never -saw me angry.

Didn't the captain know who he was? He was Congressman HoFFMAN,, by .heck, he could do as he pleased. Such an insult to him, etc., etc., ad infinitum, blah, blah.

The captain listened in silence, and the more insulting HoFFMAN got, the cooler be­came the Cap. Then, with one softly spoken sentence, the captain did the . trick. He cooed: "Wouldn't Walter Winchell enjoy knowing this?" That 's all, brother. HoFF­MAN actually became polite. Having stirred up so many waters till they were troubled, it seemed as if you might be pleased to learn of one time when you-

That is Walter now-acted as the oil that _ smoothed them down.

If you want to know more about the incident, see the Appendix of the CoN­GRESSIONAL RECORD, page A5462.

The fellow Winchell was pretty hard up when he had to go and refer to a pi'ivate individual's conversation about so trivial a matter, where an individual, according to Walter, had a row with some man in the Coast Guard, or may have quarreled with the fish that got off the hook. So I thought I would prove once more that dear Walter was still without veracity. I know Walter is a!­untruthful, but I want to be sure he was untruthful this time, because by acci­dent he might have told the truth. You can never tell -what might happen. So I wrote the commandant of· the· Coast Guard down here and I asked him what happened up there. Under· the date of

17th of December I got a reply. This is the reply from the Coast 'Guard at Grand Marais. I quote:

Headquarte~·s is advised that the facts are as follows: . La~_t J:UlY a ·patrol, on his regular rounds, stopped a launch proceeding ·out of Grand Marais channel into Lake ~uperior on a fish­ing trip. When the patrol discovered that the operator of the launch did not have the usual Coast Guard identification, he was es­<(Ort~d to the lifeboat_ station. Congressman HoFFMAN was informed of the regulations governing such cases and was furnished the necessary credentials. In Mr. Winchell's ar­t~cle the following quotations are untrue. "Didn't the cap'n know · who he was? He was Congressman HoFFMAN, by heck! He could do as he pleased. · Such an insult to him! etc., etc., ad infinitum, blah, blah. Wouldn't · Walter . Winchell enjoy knowing this?" The Congressman said no such thing.

Until headquarters l~tte'r was received by me, I . ~ad . no intimation that the visit of Congressman HoFFMAN at the Grand Marais Lifeboat Station was· known to any others than myself and the men stationed ~ there. I ha\'~ no id~a of how such a twisted account could have em'anated fr<?m this --~ccU:rnince.

Members may remember when we had to show our identification cards around here· to get in, even though we had· been here 10 or 15 years. ·You still had to show your cards to get. into your own office. building. . . .

That letter was written by Ensign Stan­ley E.· Plastner, ·United States Coast Guard, who was then in command at Grand Marais. Of course, they . stopped me. I was going out in a· lifeboat that son;te of Fred Bradley's friends gave me, I di~ not know anything about the reg­ulatiOns for they had either been put into effect since last I had · visited the port or the former commander who knew m~ and my boat, had been transferred: The m:;tn on duty stopped ine' and took me over to the office and I was llever tre-ated any finer in my life. The captain of the Coast Guard even made a:r:tangements for ~e to go br?ok trout fishing at the Sauble Light StatiOn some 7 miles away. All that I cite this incident for is to prove that Walter not only did not have the truth in him and would not tell the truth b~ck there when the New Yorker wrote him up and for years previously but that he has not reformed. He does not get any better .

UNDER COVER

Here . is something more along the same lme._ Here is this book, Under Cover. In 1t are many statements known to . be false long before the book was wntten. That is a book that Walter recommends. The author smears some 100 or 150 Members of Congress, Sena­tors and Representatives, in that book, not Walter, but John Roy Carlson. · Here is Walter's column:

There was a squib in the paper the other day reporting that the U. S. A. liad bought 5,000 copies of John Roy Carlson's exciting book, Under Cover. These were to be sent to spots where a reading of them could do the most good-and it can do plenty-Carl­son's book is a diary of his hobnobbings with the Government wreckers .. · · · ·

He does not name any wrecker. Wal­ter; of course, is a wrecker of .unity when you get right down to it,·

1943 . CONGRESSIONAL RECORD-HOUSE 10985 I quote Winchell: The ·names he names aren't especially

new, since many of them have made the papers and the police blotters lots of times. But his general pictures of the plotters plant­ing their hates and their subversive stink bombs around the country makes a whale of ~ piece of reading. It is a pleasure to report that it is a best seller in all the key cities. It is a sell-out in spite of-or maybe because of-some efforts to crack down on it. The antis talked tough to the publisher, who kept his upper lip stiff, and to some merchants .who crawled. But the good old public kept shelling out its moola and now the author and publisher ean chortle, "Thanks for the adv." ·

Here is something more along the same line, another column of October 31, which reads as follows. I am quoting Winchell now:

Recently the newspapers told of an Army colonel in the East, who had ordered all ·copies of the best-seller Under Cover ~aken from American soldiers. Your reporter (that is Walter · Winchell speaking), in an

·open letter, asked Secretary of War Stim­son's office, under what law or Army regula­tion, could the Army deprive any soldier of that expose of alleged sedi.tionists in the

. United States. I was notified within 48 hours that Congressman CLARE HoFFMAN, of

-Michigan, JUade that request to Col. James M.' Roamer. Hm-Roamer. Congressman

·HoFFMAN is mentioned a lot, unfiatteringly · in Under Cover. The War Department, · however, told newspapers ihat there is no law _by which a soldier could be deprived o;f

. his own property although he could be told to keep undesirable property off the military

· post. · In short, ladies . and gentlemen, read · Under Cover-soldier or civilian-read it, · and see why so many frightened question marks are trying to keep you from finding

. out all that is going on.

Walter, working for Jergens, tells a lie, · then quotes it as his authority. Most o{ the above is untrue-as a reading of the written .statement of the War De­partment will show.

· I never asked the War Department or : any officer, to stop the sale of Under Cover cir any other book.

Then here is more along the same line. Here is something under date of Novem­ber 7:

Last week I told you about an attempt to stop servicemen from reading the best seller Under Cover. Over 400,000 copies sold to date, by the way, and how Con­gressman HoFFMAN, of Michigan, persuaded Col. J ames Roamer to issue a bulletin to

· Army bases and camps about that book. This is to add that a spokesman for the War Department has told me that such an ord~r is illegal-that any Army officer who deprived any soldier of his personal property was violating the Articles of War and could be subjected to the severest military dis­cipline. In short, ladies and gentlemen, no officer in our Army can stop any soldier from reading Under Cover, and any officer who tries to do so is without authority from the war Department. If you know of any officer who has taken away a soldier's book, please let me know so that I can submit the fact to the Secretary of War.

I never persuaded, I never asked Col. James Roamer to issue a bulletin to Army bases and camps about Under Cover. · The above quotation is an ex­ample of how the untruthful Winchell will make a false statement, in fact man-

ufacture it, quote it and then build up an insinuating, derogatory paragraph around it.

As a creator, a disseminator of the stinking falsehoods, Walter Winchell is a master . and Jergens has certainly picked one who knows not the truth. If what he says about their product is no more reliable than what he says about people, everyone should be sure of the merit of what they purchase, before ac­cepting Walter's recommendation.

Now, what are the facts? First, Walter says the War Department "had bought 5,000 copies of" Under Cover. Then he says I asked the Army to deprive sol­diers of that book. The Army officially states it did not buy 5,000 copies of that book and it also proves Winchell to be a liar by showing that no request to de­prive soldiers of it was made by me. Here is what happened. It is in writing. On September 14, I wrote to The Ad­jutant General, as follows:

Will you kindly advise me whether the .war Department has purchased any copies of the book, Under Cover by one who calls himself John · Roy Carlson?

Have there been any negotiations looking toward the purchase of any copies of this 'book? ·

Thanking you in advance for . your reply, ·I am.

. . This is his answer under date of No­_vember 4, 1943.

·MY DEAR MR. HOFFMAN: This is in further reply to your letter of September 14, 1943, )nquiring as to the accuracy of the allegation that the Army has purchased 5,000 copies of the boo!{ Under Cover for distribution to our soldiers.

R-eports from the field just now available to me reveal that in response to requests emanating from among some 5,500,000 sol­diers, a 1lotal of 363 copies of this book has been purchased for post libraries from ap­propriated and non-appropriated funds, and that 107 additional copies are on order.

I am indeed sorry for the delay in trans­mitting this information to you but know that you understand, since it had to be com­piled by military agencies distributed over the entire Nation, some delay was unavoid­able.

It is hoped this information will meet your purposes.

Now~ do you see what that fellow did? He just-pardon me, is it permissible? He just lied when he said 5,000 copies were being distributed. Now Walter

· advertised that book over the radio night after night and he induced less than 500 men in the service to ask for a copy of it. Any soldier, any WAVE or WAC can write to the Army Post Library and ask that certain books be put in the library and if the librarian thinks favorably of the number of requests, then from ap­propriated, or non-appropriated or do­nated funds, the book is purchased and put in the library. That is the way it gets in there and that is all there is to it. There were not 5,000 books. There were less than 500.

If Jergens Lotion does not get along any better in selling its .stuff through

- Walter's advertising they had betterjust cross him off as a. liability. And if their

. merchandise, their lo~ion, . and their creams, Jergens, I mean, if that stuff

smells like Walter's broadcasts, I do not see how anyone but a skunk could use it because you couldn't stand the odor from it. And why those people continue to use thaj; man as their advertising agency, a man who is doing more to stir up disunity and ta create disunity than all the other agencies that are putting out propaganda, how they can continue to spend their money, good or bad, is more than I can understand. I do not know why they do it. They must think that anything that brings the name of the Jergens Lotion Co. before the public is good. Millions of people are begin­ning to believe anything Winchell advo­cates is rotten.

Then, with reference to the other statement there, Walter says that I tried to get the Army to stop it. You heard me read the letter. The reason I asked the Army how many copies had been sold was to find out just how big a liar Walter was.

There are 5,500,000 men and women in the service, and I do not know how many million outside he has appealed to to buy that book. I do not know what his percentage is from the sale of the book. I do not know how it is split, if it is split. And all he was able to sell. as I said a moment ago, to the arm~d force of 5,500,000 was less than 500. Whether he. persuaded the 470. out of 5,500,000 to buy it out of curiosity no one knows. And there was no attempt to stop the sale to the Army, the Army did not issue any order. Nobody asked them to issue any order to stop the circulation or purchase of the book. Walter had to have something to say .

Walter makes us thinl{ of the little bad boy in the neighborhood. There is al­ways in every community one little bad boy who runs around with a dirty face. He is all the time throwing rocks at the windows in some vacant building. He is all the time, if he can catch a dog, tying a tin can to its tail, and throwing stones at the cat. He is doing every mean thing he can. He will run along in front of a flower bed and pull up a handful of flowers. He will do everything he can to make trouble. He is a little boy who all the time should have a handkerchief to wipe h is nose. Walter would break a rotten egg just to smell it. He is like a . dog which finds carrion, rolls in it, then runs around among other dogs thinking how sweet he smells. So Walter, like a little kid who has the name of ·being a bad boy, must every day thinl{ up something new, something dirtier, something nastier 'than what he said the day before, or he must say it about some individual he has not slan­·dered before. Now, I said I would show you that Walter was nasty and that he was dirty. I will.

Listen to this. This is ·walter's col­umn. Now listen to this. I quote:

That you shouldn't score your kids for poor ·marks at school. G. B. Shaw was a dunce too. A Shaw article asserts Joan of Arc had no sex appeal.

That is Walter Winchell. This man who advertises jer.gens lotion. The Jer­gens Co. employs a man who slanders

10986 CONGRESSIONAL RECORD-HOUSE DECEMBER 21

a woman who gave her life for her country. Jergens employs this fellow who makes that kind of a statement, and they know he made it because it has been put in the record before.

The fact is-

And I am not talking about Shaw. I am talking about Walter who said or wrote this-I quote:

The fact is, according to an authority of Joan, too much sex appeal forced her to dis­card her dresses for male apparel, and too much sex appeal forced her to fasten them down with plenty of buttons.

. A woman who was burned at the stake, who led the armies of France, and along comes this fellow, along comes Walter Winchell, digs down into a grave that has been closed more than a hundred years and comes up in his column with words in his foul mouth which question the virtue of a woman who by many has been looked upon as a saint.

Now you know Walter for what he is­no smarter than the average but so dirty, nasty, and untruthful that some folks listen to learn if next week he can be worse than he was the week before.

The SPEAKER pro tempore. The time of the gentleman from Michigan [Mr. HoFFMAN] has expired.

EXTENSION OF REMARKS

Mr. BROWN of Georgia. Mr. Speaker, I ask unanimous consent to insert in the remarks I made this morning the letter and part of the evidence of Mr. Leo T. Crowley before the Committee on Bank­ing and Currency on the 17th of this month.

The SPEAKER pro tempore. Without objection, it is so ordered.

There was no obje'ction. The SPEAKER pro tempore. Under a

previous order of the House, the gentle­man from Ohio [Mr. RAMEY] is recog­nized for 30 minutes. NEW CONGRESS SHOULD TAKE UP MOST

SERIOUS PROBLEMS FIRST

Mr. RAMEY. Mr. Speaker, at this particular time after approximately 1 year's service here, I am constrained to join in the sentiments of perhaps the most dignified Member of this House, the gentleman from Nevada, Hon. MAURICE J. SuLLIVAN,· a perfect gentleman, a man who always has a smile, a man who criticizes no one. But this morning he brought to my mind just what we should do on this particular day.

I am grateful for the acquaintance of every Member of this House, both men and women. I am grateful for the leadership on both sides. There are times when we come to the House of Representatives, after receiving two or three hundred letters, some that are sent because of the emotions of folks that are stirred up, or are misled, and maybe we are hypersensitive. Being hypersensi­tive we criticize the Members of this body on both sides in a manner that, of course, we do not mean. There is not a man or a woman in this House who would not give everything he has for the world and for his country.

I was unusually -impressed the other day at the floor lea<;lers on both sides, at

the time of the voting on adjournment. While I did not vote for the adjournment, I was impressed with the sincerity and patriotism of both men~ They promised that when we return they will consider the most serious thing first, veterans voting. And they were sincere. There was no Alphonse and Gaston about it. They were just big men, patriotic men, and sincere.

It was Benjamin Franklin who said that experience is valuable because it is the lamp by which our future steps can be guided. The history of this great Nation of ours has its , golden pages of growth, development, expansion, and prosperity, its blood-stained pages of war and destruction, and its dark pages of economic dislocation, strife, panic, and depression; generated from this historic dynamo of our national life is an ever­glowing light-the lamp of experience­shedding its rays· across the path of each succeeding generation to help guide its future footsteps. And so as a Nation­as a people-we are not unschooled, we are not amateurs, because in the harsh school of experience we have learned many costly and valuable lessons from which we may profit, or which, foolishly, we may disregard; unfortunately, there are some signs that our course is set in the latter direction.

In these days of planners and super­planners, when such a vast mass of pan­aceas, nostrums, predictions, warnings, and schemes-many of them in direct conflict-are being shoveled out for pub­lic consumption, it is small wonder that the public mind, long suspect of the planners, is beginning to develop an atti­tude of suspicion and cynicism toward the hodgepodge· of · proposed post-war plans by which the economic structure of the country is not only to be rescued and saved but improved and, indeed, even perfected.

It seems to me that the time is more opportune than ever to bear in mind a few homely but vital truths. May I suggest· that, try as the planners might, the fundamental economic laws cannot be repealed-they can be temporarily abridged, sidetracked, and even briefly ignored, but so long as two plus two equals four these laws will continue to operate-despite any attempt to distort them-in their own unrelenting, immov­able, and inexorable way and will, event­ually, bring to bay and defeat any flag­rant violation of them. The admitted and well-established penalty for losing sight of this fact is disillusionment, dis­appointment, failure, and, finally, chaos. So it is important that we face facts, distasteful and difficult as many of them are, that we be realistic, and that we stay within the bounds of reason in dealing with solutions of the economic problems which now loom on the horizon of the post-war period.

It is axiomatic that true progress is an evolutionary process, that the milestones that mark every gain in human affairs can be seen only along a road that is tor­tuous, steep, slow, and upgrade every foot of the way; notwithstanding all the glowing and glib discussion we are hear­ing from some quarters just now about

a new and shiningly prosperous worl(l that suddenly is to spring into being in that post-war period, we will do well to remember that the millenniumls still not within sight, that now, as always, it is merely a mirage, and that our post-war problems will be met and truly solved only by the same means that our victory is surely but gradually being won­through the sacrifice, sweat, and efforts of a courageous and determined people.

To this list of obvious facts I would add that the future is never wholly pre­dictable and that always there are some bridges that cannot be crossed until they at least come within hailing distance or, indeed, have been· reached. Likewise, there are some answers that cannot be given until · the questions are fully evolved and correlateP,-as, for example, the disposition of the synthetic-rubber industry in the United States after the war; is it to expand into a great, inde­pendent, and nationally self-contained industry, absorbing huge supplies of do­mestic grain alcohol and oil, or, in the interests of world trade and harmony, will the synthetic-rubber industry be stifled and relegated to the laboratory while we resume purchasing and im­porting raw or natural rubber from the Far East? Or with tens of thousands of young Americans, trained as pilots, navi­gators, ground crews, all thoroughly aviation-minded, returning home from the world battle fronts, will the avia­tion industry in the next 40 years par­allel the economic importance and 'ex­pansion of the automotive industry of the past 40 years? What will be the sum total of the discoveries made, as a byproduct of war and as . yet undis­closed, of new and more efficient .mate­rials and mechanical devices that can be used or converted to peacetime needs and improved standards of living? These are just a few of the as yet uri­answered questions-just a few of the bridges that cannot be crossed by to­morrow evening.

With that brief preface on the impC\r­tance of discarding the "baloney" and keeping our feet on the ground in deal­ing with the complex problems that defi­nitely we know will confront us when the guns cease firing and military victory is ours, we can take a look at the score to date-incidentally, drawing from it much satisfaction and encouragement­and scan the plans now being · formu­la ted and as yet only dimly taking shape to meet and solve the problems of the post-war period.

On the score to date, Raymond Moley recently commented that as long as men thumb the pages of history they will ponder the miracle of America's produc­tion achievement in the 2 years just fin­ished, marveling over the unparalleled strength and resourcefulness of this economy of ours which has produced so much so soon, surviving, as it has, any and all errors of judgment, meddling, and interference from a fumbling, con­fused bureaucratic Government, but in­stead ignoring the unnecessary and ar­tificial handicaps placed upon it and forging ahead to increase the Nation's normal production 250 perc~nt in a short

1943 CONGRESSIONAL RECORD-HOUSE 10987 2 years on the industrial front, and on the agricultural front-after a 10-year pursuit of a will-o'-the-wisp scarcity theory designed and staged by WALLACE. I · have no criticism of Mr. WALLACE; I have never a criticism of any man. I have always maintained that no_ man has a right to criticize another man as a man. I concede perhaps that he is a great metaphysician. He has visited the cults of India and I believe that he will see his mistakes. Any man has a right to make mistakes but we are looking at a 10-year period of a will-o'-the-wisp scarcity theory designed and staged by a man upping food production 30 per­cent over 1939. Summing up America's gigantic-war industrial record, a national publication recently called attention to the fact that the mountaintop of pro­duction has been reached, with the "ar­senal of democracy" now one long, clanging, smoothly operating assembly line, throwing out weapons of death and destruction in such prodigious quantities that quotas have been surpassed-to such an extent that there are now on hand

·more than enough guns, bullets, and mu­nitions to annihilate the last Jap and the last German. Glowing tribute to the American production miracle was paig by Marshal Stalin when he said at the recent Teheran conference: "Vlithout American production the United Nations could never have won the war." Da­spite the constant bickering that goes on between them, American management and labor jointly share the praise, but let us remember that this unprecedented record is first of all the product of a system based on freedom of economic ef­fort, of scientific inquiry, and of political expression, and stems from the inherent vitality. of a still free and unhampered people-a people who neither desire nor know how to reSpond to unwarranted governmental interference or bureau­cratic regimentation.

With the fortunate turning of the war­tide in our favor and the glorious rays of victory faintly beginning to stream across our horizon-even though we know the road to Berlin is as yet a long, muddy, and bloody one,· and the watery route to Tokyo still must be made by patient fighting and heavy casualties from one insect- and disease-ridden is­land to another-we are hearing more and more talk about the controversy at­tendant on the renegotiation of war con­tracts, the dislocation that the outright cancelation of war contracts will cause, the reconversion of our national economy from a war to a peace basis~ cushions and shock absorbers to tide over man­agement, labor,-and agriculture during the transition period, the disposition of Government -owned industrial plants and the Gavernment's tremendous real­estate holdings ·acquired during this emergency period, and ways and means to bridge these changes with the least jar and hardship to the Nation as a whole, but at this juncture I feel con­strained to sound a distinct warning, the end of this colossal global struggle in which we are engaged is not yet in sight.

Permit me to digress at this point to explain that I am fully -aware that all

"smart" candidates for public office should be perennial harbingers -of good news, perpetually optimistic in their pre­dictions, and seemingly oblivious to any and all obnoxious facts.

That formula, my friends, must be abandoned because the crisis through which we are passing is too perilous, too dangerous, and too much hangs in the balance for any responsible public offi­cial, having at heart the interest of, first, our gallant men on the fighting fronts, the people at home, and the Nation as a whole, to play politics-and that should go from the master politician who occupies the White House on down through the ranks to the newest and greenest Member of Congress, which in­cludes your humble servant.

Only a matter of weeks ago, General Marshall and a staff of military experts from both Army and Navy, some of whom had just returned from the battle fronts, came . with their maps, charts, and motion pictures to address a closed ses­sion of the Members of Congress; any Member who attended that meeting, and I did, can assure you that no responsible military expert in the armed services holds out any hope for a speedy conclu­sion of the war-despite the measured feeding out and long-delayed reports of our losses both in men and equipment or all the coloring done by the Office of War Information of the war news for home consumption, the American people should be under no illusions as to the task still ahead. The expectation does exist that Germany will collapse first, and there are various guesses-they are more than guesses, there are good rea­son to believe-that the happy event may occur anywhere from 6 months to 2 years hence; but take note of this fact, the official text of the Cairo Conference clearly states that Japan must be not merely defeated, but that the Japanese Empire must be crushed so as to render it impotent to conduct war again in the Far East, which means that we must continue to persevere in the serious and prolonged operations necessary to pro­cure the unconditional surrender of Japan.

Two years have elapsed since the at­tack on Pearl Harbor, and we are not yet on the outer line of Japan's main de­fenses, although in the light of all the facts, we have made some substantial progress against Japan, but there is ample reason to heed the warning that the struggle in the Pacific may prove to be a slow, gruelling war. With the aid of the British Army, Navy and Air Forces, with the help of a revived and quickened spirit in the Chinese Armies, and with the eventual aid of Russia, victory in the Pacific, and the unconditional surrender of the Japanese Empire may be accom­plished by the end of 1946.

Charles E. Wilson, Vice Chairman of the War Production Board, speaking at the annual convention of the National Association of Manufacturers early this month, said: _

Too many people are trying to position themselves for the post-war period, long be­fore the country is out of danger, and long before our fighting men have any chance to position themselves.

· With the United Nations now on the offensive and rapidly to move into large­seale aggressive operations, the Vice Chairman of the War Production Board has called for an over-all increase of at least 20 percent in war production dur­ing 1944.

On the basis of the cold, stark facts, there is ,more than a possibility of our being a bit premature in concentrating too heavily just now on the problems of demobilization and the post-war period, indeed, on the record of the facts, it would be more propitious, fitting, and wise for us to continue to keep our "eye on the ball"-on the business of winning the war-and bracing ourselves for greater effort and more and more sacri­fice; and I believe every Member of Con­gress is doing just that.

In other words, let our paramount con­cern be the attainment of military -vic­tory-until that has been accomplished it would be unsafe to divert too much at­tention on the plans and problems of one post-war period. Let first things be first.

However, glancing ahead to the tre­mendous problems of readjustment and reconversion of the post-war period, I be­lieve that the first fact-and it is one that is not generally recognized because we continue to think and talk in terms of free enterprise-to be squarely faced is this: our present economy is on a totali­tarian basis, and unavoidably so during the past 3 years. Under the pressure of involvement in a war against totalitarian aggressors who had marshaled all their resources, human and material, we our­selves were compelled to ado~)t similar methods-we and our allies would not have been able to produce what it took to palt the march of Berlin and Tokyo had we not established practically com­plete authoritarian control of the use of our men and materials-but there would be little point in blinking the fact that the utilization of these resources.. has been directed from Washington without regard to its effect upon the post-war period or upon civilian business and our system of competitive free enterprise.

While few would argue the necessity of the process adopted during the past 3 years, or discount that during periods of emergency the main functions of gov­ernment of necessity must be regulation, taxation, and control, an examination of what has transpired during the past 3 years, with Government the chief buyer and the big boss, as well as of what transpired from 1933 to 1940, can leave little doubt as to the coming struggle for the restoration of the normlil system of free enterprise under which this country developed, thrived and prospered, afford­ing to more people a higher standard of living than any other economic · system devised by man. During the 7 years prior to our entry into the present world conflict, our system of free enterprise un­derwent certain fundamental changes, beginning with the enactment of the so­called National Industrial Recovery Act and the agricultural adjustment law, both so shocking in their monopolistic and strait-jacket controls that they were unanimously declared unconstitutional by the United States Supreme Court;

10988 CONGRESSIONAL . RECORD-HOUSE DECEMBER 21

subsequently, however, the pieces were picked up and, as we know, parts of these laws were reenacted and put into opera­tion with varying degrees of success, and with their enforcement began the era · of a loosely "pla~ned" national economy and the drift toward more rigid Govern- · ment control and the inevitable regi­mentation that goes with it. The struc­ture of a . wholly free system of competi­tive enterprise was slowly being thwarted and weakened from 1933 to 1940, and the war crisis of the past 3 years has been the means of completing the span to a wholly "planned" and controlled economy. Al­ready there are signs that the battle lines are being drawn . between the advocates of arbitrary private power in the field of commerce and industry and the ad­vocates of arbitrary Government power for control of the post-war system-if the public interests are to be served, neither will score a complete victory. Indeed the magnitude of the post-war readjustment and reconversion problems cannot be overstated, and if these prob­lems are to be solved in the interests of all the people the full cooperation of all groups and the complete coordination of every resource and potential capacity at our disposal will be required-private capital will have to be accorded full and fair opportunity and incentive to recon­vert and exercise its initiative to expand and create jobs; the States and local gov­ernments must assume the responsibility of working out, properly timing, and executing · constructive programs of needed public improvements, thus creat­ing employment; and the Federal Gov­ernment must concentrate on placing its economic house in order, intelligently expanding educational opportunities for the youth of the Nation, extending and

· strengthening the Social Security System for the benefit and well-being of our citizenry as a whole, and temporarily bridgjng such gaps as may be necessary in order to attain the highest possible level of employment

There are now several congressional committees studying the problems of de­mobilization and reconversion, with the Bureau of Labor Statistics, the Depart­ments of Commerce and Agriculture, the War · Production Board, the National Housing Administration, and other Gov­ernment agencies making coordinated studies and cooperating with the con­gressional committees in the over-all in­vestigation of the facts. Independent studies of the same problems are being made by such organizations as the United States Chamber of Commerce, the National Association of Manufactur­ers, the American Bankers Association, the two major labor organizations, the American Society of Civil Engineers, the Forest Products Association, the Brook­ings Institution, as well as by industrial concerns such as General Electric, Gen­eral Motors, and last, but by no means least, Mr. Bernard M. Baruch, Chairman of the War Industries Board of World War No.1. .

Among the specific problems under study are: Disastrous inflation and the controls necessary to avoid it. Empty stock bins of civilian consumer goods.

Demobilized military personnel and war workers-the percentage of military per­sonnellikely to be required for a stand­ing army or world military police duty, the percentage of women war workers likely to return to their domestic duties in the home-jobs for all workers who will be available and need work. Timing of employment opportunities and area maladjustments. Disposition of war plants and supplies. Post-war problems of agriculture. A mass of statistics and opinions is being accumulated in order to assemble a complete and detailed pic­ture of the entire problem, but so far only one unanimous opinion has emerged-"war to peace is much more complicated than peace to war"-:-and only one clear-cut suggestion has been · voiced, "the agency that wound up the United States economy for war should unwind it"-meaning the War Produc­tion Board-said Mr. Baruch recently.

The first concrete step being taken to­ward that "unwinding" is :the legislation, already passed by the House, making provision for smoother, fairer, and more efficient renegotiation of war contracts, the enactment of which is directly aimed at eliminating many of the causes of complaints over existing procedure.

The next important step to be accom­plished will be the formulation of a clear ruling granting Government buying agencies authority to settle war contracts promptly, whether a prime, sub, or sub­sub contract, thus .. enabling any con­tractor to get his. money back out of war jobs without undue delay. Getting paid for materials could easily be a matter of life or death to many companies with more money tied up in inventories than . their entire businesses are worth-as war contracts are canceled many concerns will need money fast, and in order to avoid unnecessary hardship or even seri­ous difficulty a plan is now under con­sideration to pay the contractor, without the delay of a Government audit, up to 75 percent of his claim, the remaining 25 percent to be held in abeyance as a back­log, pending a detailed Government audit and final settlement.

That the dismantling of our war in­dustrial machine will be a gradual proc­ess will be a factor in favor of orderly procedure and will contribute to the ease of industrial reconversion, and that the demobilization of our armed forces will also be a gradual process will likewise serve to mitigate the proportions of post­war unemployment problems. With the defeat of Germany, an appreciable num­ber of war contracts will be canceled and a definite start toward industrial recon­version will be made, but Government spending will continue at a high level as long as Japan is in the war, which fact will be a major cushion durir:g the first period on the road back to peace. Dur­ing this period total war production will taper off, but will not dip sharply, and civilian production will inch up as war production· inches down; conversion can be quick in those lines of industry that are used for war but not made especially for war, such as textiles, clothing, uphoi'­ster"y ~ household linens, shoes; and· so forth.

It is obvious that the second period, following the defeat of Japan, will pe one of considerably sharper economic ad:­justments, with the wholesale cancela­tion of war contracts and the demobiliza- · tiori of military personnel on a big scale. Industry will be only partially recon­verted to civilian production, but the heavy lines of industry, such as automo­biles, trucks, refrigerators, electrical sup­plies and equipment, whose parts are not made in one plant but in hundreds of subsidiary factories, ~ll of which will have to be retooled and converted, will require time to swing back into full peacetime production. While some in­ternal shock and unavoidable temporary dislocation appears to be inevitable at that stage, immediately available will be muster-out pay to returning military personnel, Government payments to dis­abled veterans, to the dependents of our heroic dead, to persons retiring under old-age insurance, and to those entitled to unemployment benefits. Under the test that private enterprise will_ face, it can be counted on to speed toward a creditable performance to meet the long­starved demands for durable consumer goods such as automobiles, . trucks, elec­tric refrigerators, washing machines, vacuum cleaners, radios, and general household equipment, as well as indus­trial equipment, railroads, locomotives, cars, rails, and so forth; pub~ic utilities, telephone, electricity, water, sewers, and so forth; and new equipment, for laun­dries, cleaning and pressing establish­ments, garages, hotels, and the like, most of which by 1946 or 1947 will "be limping along on thin; shabby, and dangerously worn equipment.

With the attainment of victory and the rekindling of hope throughout the world that peace will bring, the work of rehabilitation will get under way in the bombed and devastated countries of both Europe and Asia, and America will be the workshop from which some five to ten billions of dollars worth of b:idustrial and farm equipment and other needed supplies will stream across the oceans for constructive and humanitarian purposes.

My friends, there are difficult and heartbreaking months immediately ahead of us in this war-torn world, and in the distance there are grave and seri­ous problems of social and economic readjustment, but as our burdens are great so are our opportunities great. We have met the challenge of war; we know that it is only a question of time until Hitler will throw in the sponge· and Tojo will, too, shortly after we really get going on him-and by the same token we will meet the challenge of the post-war period. ·

Once more an impression of a new man: I had heard a great many things about Congress before I reached here, and I felt somewhat inclined to agree with some of the criticisms. While per­haps I did not find as much ability in Congress as I expected, I did find far more sincerity. I have not found ·an in­sincere man in this House on either side. Most of the Members have sons' fighting in the armed forces. A great many of the M.embers are heroes. They may have

.1943 CONGRESSIONAL RECORD-HOUSE 10989 different techniques, some may have ·a superiority of technique, but everyone is determined to do right as · he sees it. Nine or ten Members have lost their lives here this very year because of the strain. There is not a man here but what is willing to give his every ounce of devo­tion. Every Member here realizes the seriousness of the times.

Mr. McMURRAY. Mr. Speaker, will the gentleman yield? ·

Mr. RAMEY. I yield. Mr. McMURRAY. Mr. Speaker, I

should like to congratulate the distin­guished gentleman from Ohio for one of the finest; most humane, and most de­cent statements I have heard on this floor in this my first session in the House of Representatives.

Mr. RAMEY. I thank the gentleman very much.

The SPEAKER pro tempore. The. time of the gentleman . from Ohio has expired.

EXTENSION OF REMARKS

Mr. McCORMACK. Mr. 'speaker, I ask unanimous consent that the gentle­man from New York [Mr. PFEIFER] may be permitted to extend his remarks in the Appendix of the RECORD by _including a Christmas message to the people of the diocese of Brooklyn and Long Island by His ; Excellency, the Very Reverend Thomas E. Malloy.

The SPEAKER. Without objection, it is so ordered.

There was no objection. The SPEAKER pro tempore. Under

the previous order of the House, the gen­tleman from South Dakota [Mr. MuNDT] is recognized for 25 minutes. UNITED NATIONS RELIEF AND REHABILI·

TATION ADMINISTRATION

Mr. MUNDT. Mr. Spe~ker, during the past several weeks, the Ho11se Commit-· tee on Foreign Affairs, of which I am a member, has been holding almost daily hearings on House Joint Resolution 192, which has as its purpose the authoriza­tion of appropriations and authorities whereby the United States can partici­pate in the work of the United Nations Relief and Rehabilitation Administra­tion-usually referred to as U. N. R. R .. A . .:_wliich was tentatively set up dur­ing the recent conference in Atlantic City, with a potential membership of 44 nations. We have spent many, many hours in committee hearings with Dean Acheson, representing the State Depart­ment; with Governor Lehman, Director General of U. N. R. R. A.; with Leo Crow­ley and Oscar Cox, representing the For­eign Economic Administration; with Congressman SMITH, and the gentleman frm Illinois, Congressman DEWEY, speak­ing as Members of Congress, and with other witnesses. The hearings will be resumed immediately after Congress re­turns from its holiday adjournment.

In my opinion, U.N. R. R. A. has much to commend it, and I believe those rep­resentatives of the United Nations who met down at Atlantic City a short time ago developed a list of resolutions and agreements which have been carefully thought out 1n most instances and which

aim at the direction 'of the activities arid the scope of the United Nations Relief and Rehabilitation Administration in a commendable manner. Many of these · resolutions are wisely and carefully drawn and demonstrate that they have been carefully thought out. Some of the reso­lutions, however, present problems of in­terpretation which are perplexing and which call upon us to give careful atten­tion from the standpoint of working out appropriate definitions· of their meaning, and as yet some of these definitions have not been made clear to the committee.

WHAT IS TO BE DONE AB_QUT INDIA?

One of my personal disappointments, Mr. Speaker, growing out of a study of the resolutions contained in the U. N. R. R. A. set-up; and I believe one of the disappointments shared by many of the members of the committee is the apparent indifference of the Atlantic City confer­ence to the pitiable plight presented by the starving millions of people in India.

In answer to a direct question by me· during the committee proceedings which I propounded to the Assistant Secretary of State, Dean Acheson, concerning the status of India under U.N. R. R. A., Mr. Acheson replied that under the scope of u. N. R. R. A. as written into the present resolution it would be impossible to in­clude the people of starving India in the benefits growing out of the relief and rehabilitation operations of the organiza­tion. It appears that by some strange type of strained and labored reasoning, the Atlantic . City conference decided that India did not come within the scope of relief and rehabilitation as conceived by U.N. R. R. A. because its sorry plight was "not directly attributable to the war'' or because "its food-producing areas had not been overrun or destroyed by enemy action."

As nearly as I can follow the language legerdemain presented to the House Com­mittee on Foreign Affairs with regard to the Indian situation, Mr. Speaker, the foregoing represents the reason for leav­ing India out of the relief and rehabilita­tion picture. Frankly, the reasoning is so curious that I am not sure that I am able to follow it. I am quite sure, how­ever, that I cannot agree with it on the basis of any evidence submitted to our committee up to this moment. n· occurs to me that by any normal and usual type of logic India's starving millions are victims of this war precisely the same as the unfortunate people starving in other lands because of the cruel operations of this global conflict.

It is true that Nazi hordes and Japa­nese troops have not overrun Indian ter­ritory, but it is also true that Japanese armies have occupied and retained pos­session of areas upon which India nor­mally depends for a large portion of its food supply. To me, Mr. Speaker, it is neither logical nor humanitarian to bar India from the anticipated benefits of the United Nations Relief and Rehabil­itation Administration by the strained in­terpretations which have been drawn to distinguish between a hungry people starving because 'their food lands are occupied by the enemy and a hungry peo-

ple starving because their food supply normally comes from lands outside their national domain but which have in turn been occupied by the enemy. It seems to me it matters very little to a starving people whether their storehouses have been taken over by the enemy or whether the farms from which their storehouses are supplied have been taken over by the enemy. To me it would seem that re­gardless of which situation obtains, the victims of starvation are still the victims of this war.

It may be argued, Mr. Speaker, that India was left out in the cold because she is not fighting as an independent bellig­erent on the side ol the United Nations; however, if news reports are correct, it is true that India has supplied many thou­sands of volunteers for fighting and bleeding and . dying alongside of the soldiers of this country and the soldiers of the other United Nations in the defeat of a common enemy. If this does not make India a belligerent on our side, it is certain that India has not become a belligerent on the side of the Axis. It is also certain that it is essential to our success that India does not become even a partial partner of the Axis. It is my opinion that India today is definitely one of our allies. At best it seems to me this distiJ::lction is not significant enough to bar India from assistance which she might otherwise expect from the opera­tions of this all-purpose and all-inclu­sive world-wide attempt to decrease suf­fering, hunger, and starvation among the· people arrayed as our allies in this war.

To include India among the areas to be benefitted by U.N. R. R. A. could by no stretch of the imagination do anything to alienate the present sympathy which India is manifesting to our side in this fight. To exclude India most assuredly· can add nothing to her devotion to our cause nor to her respect for our fair­mindedness or our good intentions. It is for these reasons, Mr. Speaker, that I take this occasion today to plead for the inclusion of India among the nations and the peoples for whom the relief and re­habilitation activities of U.N. R. R. A. are to be made available. To do less would be to work a great injustice on a long­suffering and patient people who have proven to be mighty good friends of the United Nations in this war and whom, in my opinion, it is neither just nor right nor honest to discriminate against.

I expect to do what I can, Mr. Speaker, to amend House Joint Resolution 192 and/ or the interpretation of the At­lantic City resolutions upon which it is based so as to provide for the inclusion of India among the beneficiaries.

While it may be possible by congres­sional action to amend or modify House Joint Resolution 192 in order to bring India back into the family of nations in­sofar as the benefits of U. N. R. R. A. are concerned, and while I propose to make the effort, if it becomes necessary, such a procedure for directing the activities of U.N. R. R. A. would be extremely awk­ward, to say the least, I feel that there may be better procedures. During the next 3 weeks while Congress is not in session I hop'e these other procedures

10990 CONGRESSIONAL . RECORD-HOUSE DECEMBER 21 will be attempted so that by the time Congress votes its decision on U. N. R. R. A. it will have before it a proposal for relief and rehabilitation which does not slam the door of charity_ squarely in the face of one of the great­est and most patient and long-suffering nations' from famine and disease which the world has ever known.

In order that there may be no excuse for not trying the other procedure first, Mr. Speaker, and for- coming to Con­gress and opposing my suggested amend­ment to llouse Joint Resolution 192 on the basis that it comprises an awkward approach to a serious problem, in order that that situation may not develop, I have today written identical letters to Governor Herbert Lehman, Director General of the United Nations Relief and Rehabilitation Administration, and to Dean Acheson, Assistant Secretary of

. State, the American representative on the U. N. R. R. A. council. In these let­ters I am suggesting that either the lan­guage of U. N. R. R. A. be redefined in· less labored terms so that India may be included in the benefits of the organiza­tion or that an amendment to the U. N. R. R. A. agreement- be submitted to the member nations immediately so that India may be included among the beneficiaries by such an amendment.

Incidentally, Mr. Speaker, if Governor Lehman and Dean Acheson agree with the millions of Americans who feel that India should not be excluded from the table and denied access to the larder -ef U. N. R. R. A., and I am inclined to be­lieve they do, this situation affords a unique and immediate opportunity to test the influence which the United States is going to be able to exert in di­recting the activities and scope of U.N. R.R.A.

It will be interesting and informative to learn how the other member nations react to the American suggestion for including India, if such a suggested amendment is proposed. ·I cannot con­ceive that the United States will refrain from at least making an earnest and spe­cific effort to attain such inclusion. I expect, if you please, Mr. Speaker, such a response to the letters I have addressed to Governor Lehman and Assistant Sec-retary of State Acheson. ·

Throughout the hearings on House Joint Resolution 192 our Foreign Affairs Committee has received assurances piled one upon another that since the United States is to l;>e by far the largest con­tributor to the U. N. R. R. A. budget it will also exercise a great influence in determining the activities and scope of the organization. For that reason, Mr. Speaker, I feel confident that the United States Government and its representa­tives on U. N. R. R. A. can work out agreements between now and the time House Joint Resolution 192 comes before Congress for action whereby India will be included among the areas to be eligi­ble for the benefits to be made available through this organization.

Mrs. ROGERS of Massachusetts. Will the gentleman -yield?

Mr. MUNDT. I yield to the gentle­woman from Massachusetts.

Mrs. ROGERS. of Massachusetts. i commend to the House the hearings that took place before the Foreign Affairs Committee on U.N. R. R. A. The gen­tleman from South Dakota is one of the most able cross-examiners that we have in the Congress or in the country. I would like to ask the . gentleman why he thinks India was left out, because to most ·people of . the country there seems to be no excuse for it.

lY.J;r. MUNDT. I may say to the gen­tlewoman from Massachusetts [Mrs. RoGERS] that I prefer to think India has been excluded by an accident of language. I hope that is the case. It may develop there are other reasons. If there are other reasons, they should be made public. But I prefer for the time being to think that perhaps it is through an accident of language. Regardless of the cause, the cure is apparent; it is clear, it is available, and I hope that the Members of the Congress will insist upon the cure, regardless of the cause.

Mrs. ROGERS of Massachusetts. The gentleman feels that the greatest suffer­ing from starvation is taking place today in India, while many East Indians are fighting with us and for us?

Mr. MUNDT. In the New York City Herald Tribune of December 12 the re­port comes to us that the people of India are dying from starvation and disease and pestilence at the rate of 50,000 peo­ple a week. Certainly it is a deplorable and a serious situation, one which we can get aid to without delay if the U. N. R. R. A. will adopt the respon­sibility.

May I a'dd one further word, to point out that the Washington Times-Herald for this morning contains a full-page spread of pictures of actual cases of gaunt starvation taking place in Mother India today. ·

Mr. STEFAN. Will the gentleman yield?

Mr. MUNDT. I yield to the gentle­man from Nebraska.

Mr. STEFAN. Did I understand the gentleman to say that a New York paper had some figures. indicating the death rate from starvation in India to be at the rate of 50,000 a week?

Mr. MUNDT. That is correct. Mr. STEFAN. Does the gentleman

have any information as to how those deaths from starvation compare with the death figure from starvation in normal times?

Mr. MUNDT. I am sorry, I do not have that information. I might point out, though, that star.vation in India has become more acute now due to the fact · that much of the fooP, that was normally imported. came from Burma. Burma has, of course, been·occupied by the Japanese, consequently shutting off part of the normal food supply of .India, which to me, eyen more clearly than al}ything else, emphasizes that those people in India who are victims of starvation are victims of the war, · because it was as a result of the war that the Japanese Army took Burma, which formerly served as part of India's breadbasket.-

Mr. STEFAN. The gentleman realizes that even in normal times the death rate from starvation in India is gigantic?

Mr. MUNDT. That is correct. India has been a long, patient sufferer. But today her situation has become acutely worse.

Mrs. ROGERS of Massachusetts. Does it not Eeem to the gentleman it would be better to have two bills, if you please, one bill for feeding, clothing, and so forth, a real relief bill, for the Allies, and an­other, a separate bilL for reconstruction? I fear that the real idea of relief will be lost in the reconstruction program, and . that it may go very far and be very devastating to the economy of our own country. ·

Mr. MUNDT. I appreciate the gentle­woman's apprehension about the scope of U. N. R. R. A. I do not . want to be diverted into a discussion of that mat­ter today, however, because I am simply pleading for the inclusion of India on the same basis as the other starving pea-· · ple of the world and the other nations for whom relief will become essential.

A distinction between a relief rehabilf­tation, and reconstruction p~ogram is something to which the committee will

. devote additional attention and about which the Congress will want to be very careful when the final decision is to be made.

Mr. H. CARL ANDERSEN. Mr. Speaker, will the gentleman yield?

Mr. MUNDT. I yield to the gentle­man from Minnesota.

Mr. H. CARL ANDERSEN. May i' compliment the gentleman from South · Dakota upon his bringing to the atten:. ­tion of the Nation this very inhumane treatment, may I say, of the people of India today. ·

Mr. MUNDT. I thank the gentleman. Mr. H. CARL ANDERSEN. May~ say

also that I believe if the gentleman from South Dakota were not a member of the Foreign Affairs Committee he might perhaps become more specific and. explain in a little different language --the ­reason for the exclusion of the people of that country from the provisions of this act.

Mr. MUNDT. Of course, the Foreign A~airs Committee has a great many d~plomat~ appe.~r before it and perhaps d1plomat1c tact 1s rather infectious, I am not sure.

May I point out, sir, that U. N. R. R. A. proposes to be the world's greatest ad­venture in charity and good will. For such a great benevolent enterprise to start off with such a malevolent bias as to exclude long-suffering India from its benefits does not augur well for the fu­ture. Let us eliminate the black spot from this light of charity even before the current is turned on, which we hope will reach so far in bringing light and laugh­ter to the world.

I trust that either Governor Lehm~n or Dean Acheson or both together will secure remedial action in response to the letters I have sent them today. How­ever, if they try and fail or if they fail -to try, I shall do what I can in a parlia• mentary manner when this proposal comes before the committee and the Con­gress for action to eliminate the injus­tice which I feel is Incorporated in an agreement which blinds itself to the star­vation . and suffering in India while pur-

1943 CONGRESSIONAL RECORD-HOUSE 10991 porting to be a world-wide crusade of relief and rehabilitation.

.As further evidence in support of my position, Mr. Speaker, I include with these remarks a copy of a letter which I have just received from President J. J. Singh, of the India League of America, and a copy of a letter which Mr. Singh wrote under date of November 22 to Mr. Dean Acheson, chairman of the United Nations Relief and Rehabilitation Con­ference, held recently in Atlantic City:

Mr. Speaker, I ask unanimous consent at this time to incorporate those three letters as a part of these remarks.

The SPEAKER pro tempore. Is there objection?

There was no. objection. Mr. M'(TNDT. I hope that a way will

be found for including far-:off India among those who will be benefited from the operations of. U. N. R. R. A. and from the many thousand .millions of dollars which the United States ·will contribute to the functioning of · this set-up if it meets with the approval of Congress when the matter comes before us for action early in January. · India is being asked by U.N. R. R. A.

to contribute to its support and to its budget.

Mr. Speaker, I want to emphasize at this point, India is being asked by U.N. R. R. A. to contribute to its support and .its budget. If India is important enough to include as a . contributor, In~iia Js im~ portant enough to include as a bene­ficiary as well. Let us insist that :this is don~ · ..

I would like to read now the letter which I am today sending to Gov. Her-bert Lehman and to Dean Acheson: ·

DECEMBER, 21; ·1943. Gov. I:!ERBERT LEHMAN,

Director G~neral, United Nations · Relief 'and ·Rehabilitation Administration., washington, D: a:

-DEAR QOVERNOR LEHMAN: In studying the resolutions and agreements prepared at At­lantic . City when the United Nations Relief and Rehabilitation Administration was being established and for which Congress is asked to authorize money and membership in House Joint Resolution 192, presently before our House Committee on Foreign Affairs, I have been disturbed and disappointed to find that India is not to be included among the areas to be benefited by U.N. R. R. A.

In order to be sure that I was not in error in this conclusion, I interrogated Dean Ache­son about this matter. when he uas before our. committee and he. responded by stating that India was not considered eligible for benefits through U.N. R. R. A. due to the fact that her territory had not been occupied by enemy troops ·and that conse-quently she would not be considered a liberat ed are·a. To me, this interpretat ion of the scope of U. N. R . R. A. which would compel it to ignore the starva­tion and suffering of one of the United Na­tions' most populous and patient associates is both cruel and unjustifiable.

Since I have great respect for Dean Ache..: son's knowledge of what U. N. R. R. A. ·in­cludes and how it will function , I must of course accept his interpretation of the intent and scope of the organization. I feel very definitely, however, that the exclusion of India whether by intent or by accident of language . is highly unfortunate and entirely uwarranted, It is an omisston .whi.ch, in my opinion, ca'1 anq should be corrected.

I am of the opinion that the correction of this omission either by amendment or by

placing a more generous interpretation on the present language of U. N. R. R . A. would bring House Joiht Resolution 192 more closely in line with what the Foreign Affairs Commit­tee, the Congress, · and the country desire. · I am addressing the House on this subject todaY and the reaction to my remarks may provide a test of sentiment indicating whether I am correct or incorrect in this opinion. I hope that between now and the end of the con­gressional recess you will take the necessary steps to have U.N. R. R. A. amended so as to bring India into the list of countries eligible for its benefits. I believe the influence of the United States in U. N. R. R. A. is great enough to secure this desired change whether it be through interpretation or by amend­ment.

With best wishes~ I am, Cordially yours,

KARL E. MUNDT, Member of Congress.

Mr. JUDD. Mr. Speaker, will the gen­tleman yield?

Mr. MUNDT. I am happy to yield to the gentleman from Minnesota, Dr. JUDD, who has a profound knowledge of the situation and conditions -in the Far . East growing out of his personal experi­enc~ .

Mr. JUDD. Did either of these gentle­men in their appearance before the Com­mittee on Foreign Affairs give any sug­gestion as to the reasons why India has not been included other than the reason that it has not been invaded? Of course, we all know India has been bombed. A most disastrous bombing took place th'e . other· day in Calcutta.. She has not had an actual -occupation of any of her -major · cities, but she has been constantly sub­jected to the terrors and disasters of ·war: r am curious to know. There must be some reason why this action, which

· seems arbitrary, has been taken . . Mr. MUNDT. As suggested to the gen­

tleman's colleague from my neighboring district just across the South Dakota line, over in Minnesota [Mr. ANDERSON], the emissaries before our Committee were very tactful and very diplomatic and the best information that we could get from them was just that unfortun­ately India did not seem to conie within the interpretation of the language that was drawn at Atlantic City and we were unable to pry behind that to find whether there was any reason or motive for such omission or whether it was simply an ac­cident of language. I hope it was just an accident of language. I proposed in my letters to Governor Lehman and Mr. Acheson that, if it was an accident of­language, it can be corrected, and if it was done deliberately with some motive, the reason can be exposed, I think, and exploded. Certainly the Congress and the country have a right and a responsi­bility to learn why India who needs help so badly was excluded from the proposed benefits of U. N. R. R. A.

Copy of letter from President J. J. Singh:

Exe-cutive Committee: Sirdar J. J. Singh, pr~sident; Dr. J. Holmes · Smith, vice presi­dent; Hemendra K. Rakhit, secretary; Dr. Anup Singh, director research bureau; Roger N. Baldwin; treasurer; Nibahu--R. Checker; A. Chaudry; Frances. Gunther; . Sidney· Hertz-. berg; Mirza Jaffer; Dr. S. R, ¥~ndal; l'Y,Irs. Kamala Mukerji; S. S. Sarna; Rustom D. Wadia; S. J. Wynn.

Advisory Board: Dr. Sudhindra Bose, Louir' Bromfield, Godha Ram ·Channen, Dr. M. N. Chatterjee, Dr .. Ananda K. Coomaraswamy, Dorothy Canfield Fisher, Dr. John Haynes Holmes, Dr. Syud Hossain, Dr. John H. Lath­rop, Profull~ C. Mukerji, Dorothy Norman, Pierre van PaassEln •. Prof. James B. Pratt, Victor G. Reuther, Vincent Sheean, Norman Th~mas, Oswald G. Villard, Dr: J. Max 'weis, Dr. Lin Yutang.

INDIA LEAGUE Oli' AMERICA, New York, N.Y., December 18, 1943.

Representative KARL E. MuNDT; House of Representatives Building,

Washi'f!,gton, D. C. MY DEAR REPRESENTATIVE MUNDT: I am tak­

ing the liberty of enclosing herewith a copy of my report on famine in · India, as well as a copy of my letter to Mr. Dean Acheson, Chairman· of the United Nations Relief and · Rehabilitation Administration.

· Famine in India continues. Hundreds of thousands of people are dying. ·

Some ·of the presS'" reports that have been received in the past 2 or 3 weeks would indi­cate that the conditions in· Calcutta have im­proved. The re~son for such reports is clear. The Government has forcibly removed the · starving people from the streets pf fashion­able Calcutta and have sent them 'back into the interior of the province.

. Thus, tli~- American newspaper correspond­ents see less . of starving men, women, and children on the streets of Calcutta and hence the reports that the situation is getting bet­ter.

However, the havoc continues in the hinter­land and thousands of people are dying of . starvation eyery week. The latest report says_ 50,000 per week. (Herald Tribune, De­cem_b~r l~.) . . _

Disease which usually accompanies and , follows famine. is sweeping the Province of

Bengal. In Kandi-population, .400,000-about 75 percent 1 of the people are suffering from malaria.

In . Faridpur-population -2,888,000--more-· than 50,000 1 have died of malaria in 3 months. · ·

At a meeting of the Calcutta City Munici­pal Corporation a week ago; it was ·brought ' out thafdeaths from malaria for 1 week only, · ending November 20, reached 566,1 ag·airist the yearly average for the last 5 years of 651.

The mayor of Calcutta reported that 10,0001 . have died out of the total population · of 40,000 in Kutubdia, a district of Chittagong.

As you will notice 'in my letter to Mr. Acheson~ I have requested that the famine- . stricken areas of · India should be brought under the jurisdiction of U. N. R. R. A.

I have pointed out that according to clause 2 (a) of article I, U. N. R. ·R. A. is required to give relief to victims of war in areas under the control of any of the United Nations.

And I have further pointed out in that letter that the famine conditions in India are directly the result of war and, therefore, the starving people of India are victims of war.

There is another point that I would like to bring to yout: notice. Almost a million refugees from Burma are toda y living in India, most of them in the famine-stricken area (Bengal). According to the terms of agreement of U. N. R. R. A., these refugees come under the jurisdiction of U.N. R. R; A. How can U. N. R. R . A. distribute relief to them and not give relief to millions of others dying very next door to these refugees?

India has been asked to contribut.e $35 ,-0QO,OOO as her share toward U. N. R. R. · A.· funds. The starving people of India would ask . why 'they are being requested by U. N. R. R. A. to give money for the relief of suffering people · in other parts of the

1 ~A'hese figures were taken from the New York Times, December- 1:6, 1943.

10992 CONGRESSIONAI.:. RECORD-HOUSE DECEMBER 21 -world when U. N. R. R. A. is not considering giving any relief to the victims of famine in India.

I most earnestly beg of you to make recom­mendation to the House that relief to famine­stricken areas in India be brought under the jurisdiction of U.N. R. R. A.

Sincerely; INDIA LEAGUE OF AMERICA, J. J, SINGH, President.

Copy of letter from J. J. Singh to Mr. Dean A.cheson:

NovEMBER 22, 194~. Mr, DEAN ACHESON,

Chairman, United Nations Reli ef and Rehabilitation Administration,

Atlantic City, N . J. MY DEAR MR. AcHESON: I acknowledge with .

thanks your kind letter of November 15. I have read the contents very carefully and

· I have been greatly disturbed to note that in your opinion the Indian famine situation does not come within the competence of the council.

I quote here below ~rour paragraph in full: "You will note that, under the agreement

signed on November 9, 1943, whereby the United Nations Relief and Rehabilitation Ad­minist.:-ation was established, the scope of activities of the Admi- istration is limited in substance to the relief of victims of war in areas liberated by the armed forces of the United Nations. The Council of the Admin­istration which is now in session here has no power to amplify the scope provided for in the agreement. Consequently, I regret to inform you that the unfortunate situation that you refer to in your letter is not within the competence of the council to discuss at this session." ·

I have also read the revised text of the draft agreement referred to by you in your letter.

Though in the preamble of the agreement tt is stated "that immediately upon the liber­ation of any area by the armed forces of the United Nations or as a consequence of re­treat of the enemy the population thereof shall receive aid and relief-," yet, clause 2 (a) of article I bas the following definition for the purposes and functions of U. N. R. R. A., "to plan, coordinate, administer, or arrange for the administration of measures tor the relief of · · 1tims of war in any area under the control of any of the United Na­tions through the provision of food, fuel, clothing, shelter, ,and other basic necessities, medical and other essential services."

Along with this I have· read with great Interest and encouragement the message of · the President of the United States to the Congress, . recommending the enactment of the legislation authorizing appropriations for the work of the U.N. R. R. A.

In this message-of November 16, President Roosevelt said "U.N. R. R. A. will be able to make only a beginning in the vast task of aiding the victims of war."

The President also said, "They do not want charity. They' seek the strength to fight and to do their part in securing the peace. Aid to the liberated peoples during the war is thus a matter of military necessity as well . as of humanity." ·

It would seem to me then, that if we were· to" follow the spirit of the draft agreement and· the President's message, then famine relief in India does fall within the com­petence of the Council.

You will no doubt agree that the present famine in India is directly the result of war. If the United Nations Relief and Rehabili­tation Administration's task is "to plan, co­ordinate, administer, or arrange for the ad­ministration of measures ;for the relief of' victims of war • • • ," then there can be no question that the first practical step of the Council to administer relief should be

to render relief to India's famine-stricken · areas.

The famine in India is certainly the result of war:

(a) Stoppage of imports of almost 2,000,000 tons of rice per year from Burma-result of the war.

(b) Export of huge quantities of Indian · wheat to armed forces in the Middle East (exports of food grains · exceeded imports 1942-43 by 361,000 tons)-result of the war.

(c) Military requirements have brought tremendous pressure on railways and other transportation facilities in India, thus dis­rupting the norq1al means of transport a­tion-result of the war.

(d) Lack of available bottoms to transport wheat and other foodstuffs from different par ts of the world-result of t~e war.

Thus, you will see, sir, that though India is not a liberated country, yet the present cat astrophe is the actual result of war.

President Roosevelt said, "They do not want charity They seek the strength to fight and to do their part in securing the peace. Aid to the liberated peoples during the war is thus a matter of military neces­sity as ·-en as of humanity." ·

This most eminently fits the India situ­ation. We do not want charity. We want food to give us strength to fight against the common enemy. This is a matter of "mili­tary necessity" as well as of "humanity."

Furthermore, 1f U. N. R. R. A. turns down India, the Japanese propagandists will most . gleefully jump upon this new vehicle to sow the seeds of poisonous propaganda amongst the peoples of Asia. The Japanese once again will tell the peoples of Asia that Western powers are not solicitous of the welfare of the Eastern peoples.

Any such fuel that we may supply for Japa­nese propaganda will lengthen the war and will require greater sacrifice of men and ma­terial.

There is yet another point to be considered. According to recent reports from India under · the leadership of Brig. Gen. Haydon L. Boat­ner, Lt. Gen. Joseph W. Stilwell's chief of · staff for China's combat troops in India­Burma sector, our forces have already thrust into upper Hukawang Valley from the source of Chindwin River in the Naga Hills and up to November 3, they had already cleared out the Japanese from that territory for about 40 miles.

Thus, according to strict interpretation of the draft agreement, people in this recon­qqered area will be entitled to U.N. R. R. A. benefits and yet the starving people 30 or 40 miles west of this area will be denied those benefits. That would be most impracticable and confusing to say the least.

In the end, I wish to repeat that from a military strategic point of view' and propa­ganda and humanitarian point of view, the United Nations must find a way to prevent· deaths by starvation of hundreds of thou­sands of Indians in areas where our most important military bases are situated.

I most respectfully suggest, sir, that if it is necessary to amend the draft declaration to cover aid to starving . India, as a result of war, then an amendment to that effect be adopted in accordance with article 8, section C of the draft agreement. ·

Hoping that this matter will receive your immediate and favorable consideration, I remain, sir.

Yours very sincerely, INI;IIA LEAGUE OF AMERICA,

J. J. SINGH, President.

CRITICISM OF THE ADMINISTRATION

The SPEAKER pro tempore. Under previous order of the House, the gentle­man from Pennsylvania [Mr. EBER­HARTER] is recognized for 5 minutes.

Mr. EBERHARTER . . Mr. Speaker, it has become the. fixed policy of some Members to use every ·opportunity to criticize the administrative . and execu­tive agencies; to refer to all of the patriotic war workers thus employed as "bumbling bureaucrats''; to sell the American people the idea that Washing­ton and the Federal Government is a generator of nothing but confusion. Such Members seem to be unaware of the fact that their course is not harm­ing the present administration as much as it is the war effort; is not undermining faith in Democratic leadership as much as it is undermining faith in the entire Federal Government of which this Con­gress is a component part.

The fact that the vast majority of the accusations of mismanagement, of overstaffing, of inefficiency, and of all the other wild charges are not true is not the important point. The important and vicious element is the fact that this smoke screen has been thrown up in many instances by factions deliberately wishing to undermine the Government, wanting a weak government so that their special interests can better be promoted. Some Members of this House have ap­parently subscribed to this method ·of attack. There is no other conclusion that can be drawn from the constant and repeated attacks. made by such Members against the executive agencies which are carrying out the various war programs.

Have they forgotten that they too · are a part of the Federal Government? That this Congress is a part of the Fed­eral Government? That should the people lose faith in the Federal Govern­ment, they will also lose faith in this Congress which is a part of it? No part escapes. Do they realize that the 'Un­founded suspicions of the Federal Gov• ernment which ·exist in · some people's minds, and which these Members helped put there, is also directed against this Congress? Do such Members realize that they are helping to undermine the people's faith in the Federal Govern­ment as a whole at a time when that instrument of the people should hold the. confidence of all, and when its record 'in waging this war, as shown by the results to date, entitle it to have the respect and confidence of all? Do they also realize that every unfounded criti­cism and untrue castigation weakens this Federal Government in the eyes of the people, when it should b~ receiving every assistance in welding a strong· structure to cope with the weighty prob­lems of peace, of world relationships, of _ employment, of national building, and of all such problems which only the Fed­eral Government, working in the inter-· ests of all the Nation, can solve?

Criticism when made, particularly in these trying days, should be construc­tive. The object should be improve­ment-not criticism that only produces a greater uncertainty and division. _

The SPEAKER pro tempore. The· time of the gentleman has expired.

I l943 CONGRESSIONAL . RECORD-HOUSE 10993

EXTENSION OF REMARKS

Mr. JUDD. Mr. Speaker, I ask unani­mous consent to extend my remarks in the RECORD and include therein an edi­torial from the Minneapolis Star Jour­nal.

The SPEAKER pro tempore. Is there objection?

There was no objection. The SPEAKER pro tempore. Under

previous order of the House, the gentle­man from California [Mr. RoLPH] is rec­ognized for 15 minutes. HEARST PUBLICATIONS ADVOCATE ADE­

QUATE MUSTER-OUT PAY

Mr. ROLPH. Mr. Speaker, last Wednesday, December 15, 1943, the dis­tinguished chairman of the Military Af­fairs Committee, Hon. ANDREW J. MAY, addressed this House on the subject, Care of World War Veterans.

At the time I had a colloquy with Rep­resentative MAY. It reads as follows:

Mr. RoLPH. Will the gentleman yield for a question?

Mr. MAY. Yes. Mr. RoLPH. I am wondering when the Mili­

tary Affairs Committee under the gentleman's chairmanship will report out the bill that carries an immediate pay for these men who are being mustered. out of the service? . · Mr. MAY. Does the gentleman mean mus-ter-out pay? ·

Mr. ROLPH. Yes. Mr. MAY I shall answer the gentleman very

gladly by saying to him that within 2 or 3 days after the bill was referred to the House Military Affairs ·Committee I proceeded to go into action to do something about it. I notified all of the agencies concerned and asked them for reports of their favor or op­position to it.

1 then called the committee together and started hearings. We conducted hearings an last week, a.nd at the end of the hearings I set aside a day for Members of Congress to be. heard and we heard all who came, in­cluding the gentleman from Missouri [Mr. PLOESER]. In addition to that, we find that most of the difficulty and the misinforma­tion that is going out to the country which brings pressure upon the House of Repre­sentatives and the Senat.e goes out because of the fact that there are some hardship cases in the country where neglect perhaps has been found to exist, where hardship has been incurred by some of these disabled veterans.

Mr. RoLPH. Does not the gentleman think lt should be brought out on the floor and that all those things should be cleared up?

Mr. MAY. We were going to bring it out yesterday when lo and behold the veterans' organizations on the outside that spend their time in peacetimes as well as in wartimes looking after the interests of the veterans of . all our wars, the Veterans of Foreign Wars, Disabled American Veterans, and American Legion, asked for further consideration. We even met yesterday in a subcommittee to hear them. One of the representatives came before us and said ·they did not think we ought to consider simply muster-out pay but that we ought to take up a:t this time and consider the whole problem of muster-out pay and adjusted C{)mpensation, the latter of which will amount to some fifteen or sixteen billion dollars. We thought that was a rather large order just now.

Mr. RoLPH. Does not the gentleman think it would be advisable to consider muster-6ut pay to take care of these men that are being discharged at ·the present time? -

Mr. MAY. There are many considerations that enter into that picture. The Senate

LXXXIX--693

has already reported for . consideratio.n, or, at least, the Military Affairs Committee of the Sen ate has reported for consideration what is act ually an adjusted-compensat ion bill. We felt if we passed out some bill now and it was passed hurriedly, it might go to the Senate and be treat ed perhaps as un­necessary, that the Senate might pass a dif­ferent bill, send it over here, it would come here and we might deal with it.

In view of all of the major problems in­volved we ought to give it more considera­t ion and bring out a real bill perhaps, that Will serve the whole purpose if that can be done, especially in view of the fact that out of 635,000 men already discharged-! believe 900,000 all told-there is hardly a man of them who bas not a go.od job already. There are jobs hanging on the bushes for every man who comes out who is able bodied and the Veterans' Administration is standing by with its billions to take care of those who are disabled. Congress has already done ev­erything within its power to provide for the sick, disabled, and wounded. - Mr. RoLPH. I am receiving many, many

communications from my district urging that this legislation be considered at once.

Mr. MAY. The gentleman is not the only Member of .the House who is receiving them. I get them myself.

Mr. Speaker, I want the country to know of the unselfish, devoted efforts be­ing put forth by Mr. William Randolph Hearst and the Hearst publications in aiding the cause of those who are being mustered out. Mr. Hearst was born in San Francisco. He first became identi­fied with newspaper publishing in my home city. One of his ablest editors, · the late Fremont Older, of San Fran­cisco penned it thusly:

William Randolph Hearst came back to San Francisco from Harvard in 1887, a gay, laughing, fun-loving youth, and took charge of the San Francisco Examiner. ·who could have prophesied in a few short years he was destined to change the attitude of mind of millions of people? .

Mr. Hearst is among the most distin­guished and dominant personalities in contemporary American life.

Mr. LEMKE. Mr. Speaker, will the · gentleman yield? · Mr. ROLPH. I yield to the distin­guished gentleman from North Dakota, who has been acting as chairman of this group in their endeavor to get adequate and immediate pay for these men who are being mustered out.

Mr. LEMKE. Does the gentleman agree with me that but for the patriotic service William Randolph Hearst ren­dered to the Nation by calling attention to the deplorable and unfair treatment that we are giving to our protectors who had been discharged, the Congress would not have been_ fully aware of what was going on?

Mr. ROLPH. Exactly, Mr. STEFAN. Mr. Speaker, will the

gentleman yield? Mr. ROLPH . . I yield to the gentleman

from Nebraska. Mr. STEFAN . . I would like to i:nter­

ject also that the gentleman from Cal­ifornia, Hon. ToM RoLPH, has done a wonderful job in attempting to be -of service to discharged, disabled veterans of World War No.2. The gentleman said something -_ about William Randolph. Hearst, and the gentleman referred to some of his editorial writers. Will the

gentleman permit me to say that one of his most able editorial writers got his . start in my congressional district, Mr. Charles Ryckman, a wfnner of the Pulit­zer prize?

Mr. ROLPH. Yes; and he is now on the editorial staff of the San Francisco Examiner.

Mr. STEFAN. We in Nebraska think a great deal of him.

·Mr. ROLPH. And we in San Francisco think a great deal of htm. I thank my colleague for that excellent observation. I appreciate it.

Daily the San Francisco Examiner and ·san Francisco Call-Bulletin have beeri urging immediate and adequate re­lief. Daily these papers carry articles headed "Write your Congressman," one of which I quote:

DECEMBER 14, 1943, Hon. THOMAS RoLPH;

Member of Congress, Capitol Building, Washington, D. C.:

I herewith call upon you, as my Repre­sentative in Congress, to support legislation guaranteeing mustering-out pay, adequate clothing, hospitalization, and all the neces­sities of life to discharged servicemen of World War No. 2 from the hour of their re-

. lease. I call upon you to prevent, through any

legislation that may become necessary, any neglect whatsoever of any man rendered un­fit_.:.temporarily or permanently, through service in World War No. 2-to care for him­self. after he has been ~ischarged from any of the various branches of our armed forces.

I call upon you to .make this guaranty permanent, or active until such time as every man Who fought in this war is capable of taking care of himself without the humilia­tion of accepting private aid.

This is urgent. Please act now, -Sincerely,

------. · Those of us who are working on the

proposition were gratified last s ·aturday when . the majority leader assured the minority leader that this meritorious leg­islation is almost a "must" when we re­convene. We hope his prediction will be fulfilled. We hope that the Military Af­fairs Committee will act promptly. We sincerely hope the bill will come to the House for a vote . by January 15, 1944: However, I ·feel that section 2 in the bill should be amended to read:

SEc. 2. The Secretary of War and the Sec­retary of the Navy are hereby directed and authorized to pay $100 as mustering-out pay and to continue the regular pay to any vet­eran, as herein defined, that has been or may hereafter · be honorably discharged from the· armed forces on the basis of the pay of a 1\ private in the Army, or an apprentice sea­man in the Navy, as follows: A veteran who· has served for less than 3 months, for an additional 3 months; one who has served· for less than 6 months but more than 3 months, for an additional 6 months; one who h~ served for less than 9 months but more than 6 months, for an additional 9 months; one · who has served 9 months 'or more, for an additional 12 months.

We lose not a minute voting huge sums for people in other lands. Why should we be hesitant with our own? Fellow Americans have offered their all for our country. Simple justice demands they be treated fairly. God bless and help these patriotic loyal countrymen of ours.

10994 CONGRESSIONAL RECORD-HOUSE DECEMBER 21

Mr. Speaker, I shall make a part of my remarks a list of those who have been working under the chairmanship of the gentleman from · North Dakota [Mr. LEMKE] in this very meritorious and worth-while effortt

The SPEAKER pro tempore. Without objection, it is so ordered. · There was no" objection.

WILLIAM LEMKE, North Dakota; THOMAS J. LANE, Massachusetts; JoHN M. COFFEE, Washington; HAROLD C. HAGEN, Minnesota; ;FRANK B. KEEFE, Wisconsin; CoMPTON -I. WHITE, Idaho; BERTRAND W. GEARHART, Call­fornia; JOHN H. TOLAN, California; FRED E. BusBEY, Illinois; GERALD W. LANDIS, Indiana; CHARLES M. LAFoLLETTE, Indiana; J. GLENN BEALL, Maryland; PHILIP J . PHILBIN, Massa­chusetts'; JosEPH P . O'HARA, Minnesota; WILLIAM C. CoLE, Missouri; KARL STEFAN, Nebraska; UsHER L. BURDICK, North Dakota; J. HARRY MCGREGOR,' Ohio; VICTOR WICKER­SHAM, Oklahoma; KARL E. MUNDT, South Dakota; CHESTER GROSS, Pennsylvania; MER­LIN HULL, Wisconsin; A. M. FERNANDEZ, New Mexico; CHARLES B. HoEVEN, Iowa; HARRY SAUTHOFF, Wisconsin; MARION T. BENNETT, Missouri; KARL M. LECOMPTE, Iowa; STEPHEN A. DAY, Illinois; WALTER E. BREHM, Ohio; En­WARD J. HART, New Jersey; THOMAS ROLPH, California; En. V. IzAc, California; WILLIAM J. MILLER, Connecticut; J. HARDIN PETERSON, Florida; WILLIAM A. RowAN, Illinois; MARTIN GORSKI, Illlnois; FRED C. GILCHRIST, Iowa; GEORGE G. SADOWSKI, Michigan; WILLIAM A. PITTENGER, Minnesota; CARL T. CURTIS, Ne­braska; A. L. MILLER, Nebraska; HowARD J. McMURRAY, Wisconsin; FRANK A. BARRETT, Wyoming; RAY J. MADDEN, Indiana; WIRT CoURTNEY, Tennessee.

The SPEAKER pro tempore. Under a previous order of the House, the gentle­man from Missouri [Mr. CANNON] is rec­ognized for 20 minutes.

INVESTIGATORS FOR COMMITTEE ON APPROPRIATIONS

Mr. CANNON of Missouri. Mr. Speak­er, sound legislation is based on sound information. Too often faulty legisla­tion is the result of inaccurate or inade­quate information. From the beginning of the Congress, committees have been handicapped by lack of essential data and have sought practical methods of supplying the deficiency. As early as 1792, a special committee on investiga­tion was appointed and from that time down to the present, thousands of inves­tigations have been authorized and mil­lions of dollars expended in conducting them, the larger part of which may be said to have been utterly wasted.

The Committee on Appropriations has especially felt the need of an agency for research and investigation which could be relied upon to supply data to supple­ment that submitted by the departments in their annual hearings on the general 29ppropriation bills. It is an old problem and one to which a great amount of thought has been given. There has not been a Congress in, recent years in which a number of bills and resolutions have not been introduced with a view to pro­viding some practical and dependable means of meeting this long-standing need.

The first approach to a solution of the problem was made in the Sixty-fourth ·Congress when the subcommittees of the Committee on Appropriations began to

avail themselves of· the facilities sup­plied by the Bur.eau of Efficiency which assigned operatives from its staff for de­partmental investigations. The plan was singularly successful and was re­sorted to by the subcommittees with in­creasing frequency until the discontin­uance of the Bureau, and was the basis for the plan now in use by the com­mittee.

The present system was adopted after long study and the consideration andre­jection of a number of alternatives. Per­haps the most frequently discussed alter­native was the establishment of a per­manent staff of investigators on the pay roll of the House, under the direction and control of the committee. A careful study disclosed many difficulties incident to such a plan. In the first place, the staff necessarily would be appointed by the committee-presumably by the chair­man of the committee, or chairmen of subcommittees, who inevitably would be guided largely by personal considerations in their selections. It follows .that such a staff would be made up of friends or acquaintances of lOcal importance and would be chosen consciously or uncon­sciously on a basis of political influence rather than an impartial and scientific appraisal of qualifications.

In the second place, such employees would be placed on such intimate asso­ciations with the members of the com­mittee that it would be only a matter of a few years before their salaries would be advanced through successive increases to the maximum-and out of all proportions to their real usefulness.

And as their familiarity with the .com­mittee and their salaries increased, their interest and enthusiasm for the work would wane until it became in effect a matter of routine. They would in a short time be on amicable terms with the departments they investigated and a com­radery would be established which would not be particularly conducive to rigid re­trenchment in the offices investigated. Most objectionable would be the perma­nency of tenure on the staff. There is a tendency to retain technical employees of the .House and Senate indefinitely. That is as true of the Committee on Ap­propriations as of the other committees of the House and Senate. Regardless of the adaptability and fitness for the work, such appointments amount to lifetime assignments. Iri keeping with this long­established custom, a misfit once selected would be a fixture on the staff the rest of his life. So the plan of a permanent staff was rejected.

The second proposal was the creation of a permanent staff in one of the de­partments, as in the General Accounting Office, the Department of Justice, the Bureau of the Budget, or the Civil Service Commission. But here again most of the same objections applied, and that plan was likewise rejected.

The plan eventually adopted is subject to none of these objections. It provides for the assignment of operatives from any· department of .Government for the use of the committee on requisition. '

The first step in the adoption of the plan was taken by the introduction of

the resolution, House Resolution 69, which was approved by ·the House, as follows: .

Resolv.ed, That the Committee on Appro­priations, acting as a whole or by subcom­mittee or subcommittees thereof appointed·

· by the chairman of such committee for the purposes of this resolution, is authorized to conduct such studies and examination of the organization and operation of any executive department or any other executive agency (including any agency the majority of the stock of which is owned by the Government of the United States) as the committee may deem necessary to assist it in connection with the determination of matters within its juris­diction.

For the purposes of this resolution, such committee or any subcommittee thereof is hereby authorized to sit and act during the present Congress at such times and places within the United States, whether the House is in session, has recessed, or has adjourned, to hold such hearings, to require the at­tendance of such witnesses, and the produc­tion of such books or papers or documents or vouchers by subpena or otherwise, and to take such testimony and records as it deems necessary. Subpenas may be issued over the signature of the. chairman of the committee or subcommittee, or by any person designated by him, and shall be served by such person or persons as the chairman of the. committee or subcommittee may designate. The chair­man of the committee or subcommittee, or any member thereof, may administer oaths to witnesses.

Recommendation of the resolution to the House was supplemented by the adop­tion by the committee of the following memoranda: ·

. JANUARY 22, 1943. If the House should pass the suggested

resolution giving the committee authority to conduct studies and examinations of the or­ganization and operation of executive agen­cies, the following procedure is recommended:

1. A temporary staff should be set up im­mediately within the limits of such funds as the Committee on Accounts recommend and the House approves and such other per­sonnel as the committee may obtain by ex­ercise of any other authority it has under existing law with respect to the use of ex­ecutive agency personnel. Any such staff to be under the general direction of a special subcommittee appointed by the chairman of the full committee. Such special subcommit­tee should be authorized to exercise on be­half of the full committee any authority under existing law to call upon any agency for staff assistance.

2. Such studies and examinations to be in­itiated upon the written request of a sub­committee or subcommittees of the full com­mittee and shall be reasonably specific a:nd definite in character and shall be initiated only by a majority vote of the subcommit­tee with the chairman of the subcommittee and the ranking minority member thereof participating as part of such majority vote. When so initiated such request shall be filed with the clerk of the full committee for submission to the chairman and ranking minority member of the full committee and their approval shall be required to make the same effective. Notwithstanding any ac­tion taken on such request by the chairman and ranking minority member, such request may be approved by a majority of the full committee.

3. Any request approved as provided in para­graph (2} shall be immediately turned over to the staff provided by paragraph (1) for action.

4. Any information obtained by the staff shall be reported to the chairman of the subcommittee requesting such study and ex-

l943 CONGRESSIONAL RECORD-HOUSE 10995 amina tion and to the chairman and ranking minority member of the full committee, shall be made available to the members of the subcommittee concerned, and shall not be released for publication until the subcom­mittee so determines. Any hearings or in­vestigations which may be desired, aside from the regular hearings of appreipriation items, when approved by the full committee, shall be conducted by the subcommittee having jurisdiction of the matter.

Following the adoption of the resolu­tion the House agreed to a report from the Committee on Accounts appropri­ating $100,000 to carry out the provisions. of the resolution.

Under this plan any member of the committee, or any Member of the House, may apply to the subcommittee having jurisdiction of the subject matter for any investigation within the perview of the authority granted under the resolution. The request when reduced to writing is submitted to the subcommittee and ap­proved by majority vote. It must then be approved and signed by the chairman and ranking ·minority members of the subcommittee and the Committee on Ap­propriations. · This precludes any at­tempt to use the agency for personal or political purposes. To protect the right of the committee to investigate, the veto of a· recalcitrant chairman or ranking member may be overruled by a major­ity vote of the whole committee. It is interesting to note, however, that al­though the system has been in contin­uous operation. since its adoption there has been no case in which all four of the requisite signatures were not attached to the application. As a matter of fact, there has never been any suggestion or intimation of politics or partisanship in any of these investigations. ·The Com­mittee on Appropriations is a bUsiness committee and the fact that there has been no attempt to use this system for partisan purposes-and that there has been uniform approval of all applica­tions for investigations by the members of the committee and its subcommitte·es, is conclusive proof both of that fact and 'of the efficacy of the plan of investiga­tion.

The investigation having been author­ized, the application is transmitted through the clerks of the subcommittee and the committee to the staff where it is processed and a report returned in writing. Except in exceptional instances the members of the Committee on Ap­propriations · do not see the men who make the investigation. . The office of the staff is located in one of the House Office Buildings but I have never been in the office and no member of the staff has ever been in my office. I would not know one of them if I should meet him in the street. In fact one of the ad­·vantages of the system is that the staff ·changes constantly and the same in­vestigator may not be on duty twice in the same sessiop. In this way the serv­ice is wholly impersonal.

The advantages of the system are: First. It is economical. The employees

are on the House pay roll only as long as needed. If· a permanent staff were employed the entire force would be draw­ing salaries whether the committee was

conducting an investigation or not. But under this system a man is called from the department and placed on the· House roll, at the same salary he is drawing in his present position. As soon as the as­signment is completed he is returned to the department and goes off the House roll and back to his original roll. His salary cannot be raiseti by the committee and he is not paid a day longer than required for the assignment.

Second. Men especially qualified for the particular investigation involved are secured. In some investigations an audi­tor is needed, in some a lawyer, in some a chemist, in some an efficiency expert, in some a detective, and so forth. Accord­ingly, the man best fitted for the assign­ment is requisitioned. If an auditor is needed the General Accounting Office is asked to supply the man. . If a chemist, the Bureau of Standards; if a lawyer, the pepartment of Justice; if a civil-service expert, the Civil Service Commission; if ~ detective, the Federal Bureau of In­vestigation or the Secret Service of the Treasury Department; and so forth. No_ other system yet suggested will . so promptly and so exactly supply just the exact character of qualification needed for any specific investigation.

Third. The system is elastic. It sup­plies 1 man or 10 men on short notice. There are 10 subcommittees. If only 2 order an investigation, a . half dozen men will suffice. But if all 10, or any considerable number of the 10, si..; multaneously request investigations, the requisition jumps to 50 or 60 men. Then during vacation, when only 1 or 2 sub­committees are investigating, the num­ber drops again. But for any investiga­tion or number of invest;gations, this system meets the emergency. It supplies JUSt -the number needed and no more­and for the time required-and no longer. · Fourth. The system supplies men of rare qualification~ For such investiga­tions the depart'ments assign their best operators. These men are experienced. They are trained. They are tried and tested. They have come up through the ranks. They have demonstrated their fidelity and ca})acity. There are among them no tyros or amateurs. They are the ablest and most dependable men that are to be secured and incom­parably superior to the men to b'e had by political selection of a permanent House staff. Furthermore, they are active and alert. Men on permanent staffs grow ·old and inert with the passage of the ·years, but the departments are a never failing fountain of youth and energy, · Fifth. The constant change in opera­tives sends into the departments men un­known and unacquainted in the bureaus which they investigate. They have ·had no opportunities to establish cordial re­lations. They are new faces and new brooms-and they sweep clean.

Sixth. The only interest of the opera­tor is to secure the facts as quickly and as economically as possible and get back to his · own office. Under the ·average committee ·of investigation· the employee is likely to be swayed by two dominant interests: First, he wishes to prolong and

· perpetuate his job. He is drawing a bet­ter salary than he can get anywhere else and he wants to make it last as long as conditions permit. Second, he feels that he must justify his employment by

· "making his case" and "getting his man." There is no such incentive under this

system. Congressional committees of in­vestigation now operating have expended vast sums-as high as half a million dol­lars-with little visible results. The Committee on Appropriations conducting investigations in many departments for the larger part of the year has spent less than · $20,000 and secured invaluable results.

Seventh. The system cannot be used for the publicizing or aggrandizement of the chairman or any member of the com­mittee. Requests submitted by the sub­committees are for facts. Opinions are not admitted. The investigators receive written assignments and make written reports, and from those facts reported the members of the committee deduce their own opinions. Results of the in'.. vestigations are not released to the news­papers. The Department which has been investigated does not itself know what the investigator has reported and as a result must be ·on its toes ready for any development when its representa­tives appear before the committee in the hearings on the Budget estimates.

Eighth. On the other hand, the system cannot be used as an instrument of per­secution. The fact that a department is investigated is in no way to its discredit. Investigations are routine and are ex­pected and as a rule welcomed by the de­partments. While many instances have been reported which justified heavy re­trenchments, there have been occasions when on the basis of the reports sub­mitted by the investigator the appropri­ation was increased over the Budget esti­mate. The system makes for efficient administrat ion as well as economical ad­ministration. And it is effective even when not in use. It is like the shotgun behind the door. The very knowledge that it is there is a deterrent-even though not in use. The mere fact that Congress can investigate, and is supplied with effective machinery for investiga­tion, exerts a salutary influence.

On the whole, the system has proven remarkabiy successful. It has met ·every requirement. In fact, it is difficult to imagine a system which would be more responsive to our needs and more eco­nomical and effective in its operation and . results.

The surprising feature of the system is that it has met with no criticism from any source. Every member of the com­mittee, both of the majority and mi­nority, approves of it without reservation. Even the departments which have been investigated uniformly express apprecia­tion·of the tact and courtesy with which the investigations have · been handled, and have cooperated with the committee. It has not only been comparatively inex­pensive but through the information deduced the subcommittees have been able to make material retrenchments.

Mr. JUDD. Mr. Speaker, will the gen­tleman yield? ·

10996. CO-NGRESSIONAL. RECORD-. HOUSE DECEMBER 21 Mr. CANNON of Missouri. I yield to

the gentleman from Minnesota. Mr. JUDD. What happens to the work

these individuals are doing in one of the Government departments when they are up here helping in an investigation? Does it go undone?

Mr. CANNON of Missouri. All these departments have a mobile force suffi­cient in number to enable them to sup­ply the men1 needed for the short time we require their services on an investiga­tion.

Mr. JUDD. The savings therefore might not be quite as real as it would appear because while it saves on this end it might increase a certain amount on the other end.

Mr. CANNON of Missouri. Up to this time it has not increased a dollar on the other end.

Mrs. ROGERS of Massachusetts. Mr. Speaker, will the gentleman yield?

Mr. CANNON of Missouri. I yield to the gentlewoman from Massachusetts.

Mrs. ROGERS of Massachusetts. I wonder how the gentleman would feel about having a fairly large group to work along for the Congress?

Mr. CANNON of Missouri. That would be subject to all of the objections I have enumerated.

Mrs. ROGERS of Massachusetts. I did not mean just for the investigation; I mean to look up statistics for us, things that are nonpartisan, nonpolitical.

Mr. CANNON of Missouri. When we need statistics we get a man who is versed in statistics, a statistician. If we had a permanent staff, when you wanted a statistician, you might get a policeman, certainly a politician.

Mr. H. CARL ANDERSEN. Mr. Speak­er, will the gentleman yield?

Mr. CANNON of Missouri. I yield to the gentleman from Minnesota. ·

Mr. H. CARL ANDERSEN. I believe my chairman will agree with me that when we hold our hearings before our various Subcommittees on Appropria­tions the Members on those particular subcommittees are more or less in the po­sition of sitting as a member of a jury, having the defense come before us, but absolute!~ no prosecutor to protect the Treasury's interest.

Mr. CANNON of Missouri. That is true; that has been our difficulty. In other words, the proceedings have been largely ex parte. The Department ask­ing for the money was the plaintiff and presented its case, and the defendant, the United States Treasury, had no one to appeal' in its behalf. This system sup­plies that deficiency; this gives us wit­nesses and testimony for the defense to offset the arguments advanced by the plaintiff.

The SPEAKER pro tempore. The time of the gentleman from Missouri has expired.

Mr. CANNON of Missouri. Mr. Speaker, I ask unanimous consent to pro­ceed for 5 additional minutes.

The SPEAKER pro tempore. Ther~ being no objection, it is so ordered.

There was no objection. Mr. STEFAN. Will the gentleman

yield? · ·

Mr. CANNON of Missouri. - I yield to my colleague on the committee from Nebraska.

Mr. STEFAN. Mr. Speaker, as a Member of the House Committee on Ap­propriations, I want to thank my dis­tinguished colleague from Missouri, Mr. CANNON, chairman of the Committee on ~ppropriations, for giving the House and the public the benefit of our effort to save money and to check on the purse­strings of our Government through this program of investigation. If the gentle­man will permit, I would like to make an observation. I was very much impressed in the closed hearings of the various subcommittees to find the chairman coming in, sitting down with us and list­ening to the hearings and justifications offered by the various department chiefs when they came before us to justify their appropriations. I do not know if that is the regular function of the chair­man of the Appropriations Committee or not, but I do want to assure my col­leagues that the present chairman of the House Committe~ on Appropriations is a hard worker. Besides working on the Deficiency Committee, the Agricul­tural Committee, and many, others, he finds time to come to our sessions and listens in and keeps in close touch with what every subcommittee is really doing. I pay this compliment to my chairman and I thank him for making it possible for me to serve under such a distin­guished hard-working colleague of this House.

Mr. CANNON of Missouri. Mr. Speak­er, I am glad to have this opportunity to express appreciation of the invaluable services rendered in the committee by my distinguished colleague from Ne· braska. He is one of the hardest work­ing and one of the most useful members of the committee and has contributed immeasurably to ·the work of the com­mittee in the sifting of evidence and the resulting curtailment of expenditures, especially during the current session. May I say that the success of our pro­gram this session is due not to the work of any two or three members of the com­mittee but to the cooperation Of all Mem­bers on both sides of the aisle.

Mr. ROWE. Will the gentleman yield? Mr. CANNON of Missouri. I yield to

the gentleman from Ohio. Mr. ROWE. I am a new Member and

I think it would be highly instructive to me if I could get the relationship of the Bureau of the Budget to the Appro­priations Committee. I think the distin­guished chairman of the Committee on Appropriations would be best able to ad­vise me on that.

Mr. CANNON of Missouri. Mr. Speak­er, the departments first prepare their estimates and submit them to the Bu­reau of the Budget, which in turn digests them and allows or rejects, in whole or in part, the requests for funds for each activity,

These estimates are then transmitted by the President to the Congress, which refers them to the Committee on Appro­priations.

Mr. Speaker, I understood that this was the last of the special orders and

for that reason asked for an extension of time. Had I .known that the gentle­woman from Massachusetts was to fol­low I would have resigned the floor at the conclusion of my time.

PERMISSION TO ADDRESS THE HOUSE

Mr. PATMAN. Mr. Speaker, I ask unanimous consent that at the conclu­sion of the special orders today I may be allowed to proceed· for 10 minutes.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Texas [Mr. PATMAN]?

There was no objection. SPECIAL ORDER

The SPEAKER pro tempore. Under previous order of the House, the gentle­woman from Massachusetts [Mrs. RoG­ERS] is recognized for 15 minutes.

Mrs. ROGERS of Massachusetts. Mr. Speaker, I, too, would like to pay tribute to Mr. Hearst for his fight to secure passage of a mustering-out pay bill and more care for the veterans; He has been extremely helpful. I am very sorry that anything of that sort has been necessary.

On Saturday of this week we will give thanksgiving to the birth of the Christ Child, a Child who grew to young man­hood, and then gave up His life in order that religion might live, in order that there might be truth, honor, justice, and a belief in God in all the world. ·

As we look forward to Christmas our minds are filled with those men who ar~ giving up their lives for us in the fox holes across the seas, those men who go down with their ships, and the men in the hospitals. We are· thinking what we can do to make the lot of the men in the hospitals easier, the lot of. their families better. Many Members of Congress have one, two, or three sons in tne service of their country, some of whom will give up their lives that others may live and that there may be religion and a love of peace in the world and a just and lasting peace.

A good deal has been said about the neglect of the veterans. There has not been a neglect of veterans in the hospi­tals, as I have observed the situation. I understand that the care given the men at the front is much better than it has ever been, due to careful planning, to the use of plasma, the sulfa drugs, and pe­nicillin. Medicine is not an exact sci­ence. Some errors may have been made in the beginning, but the care now given at the front and on back to this country has been good. The foou has been good.

Mr. H. CARL ANDERSEN. Will the gentlewoman yield?

Mrs. ROGERS of Massachusetts. I yield to the gentleman from Minnesota.

Mr. H. CARL ANDERSEN. I want to uphold the gentlewoman in her state­ment concerning the fact that, in her opinion and in mine, there has been no neglect of the veterans in the hospitals, and I base that opinion upon visits every year for 22 years to see a brother of mine who is an inmate of one of those veterans' hospitals.

Mrs. ROGERS of Massachusetts. I am glad that has been the gentleman's ex­perience.

Mr. Speaker, the experience that men of the · World War had has helped tre~

1943 CONGRESSIONAL RECORD-HOUSE 10997 mendously in the art of caring for our present World War veterans. I know that the men who fight wars contribute a great deal toward the advance of med­icine. That is one of the contributions they make.

One of our great battles today is to see that there are enough Veterans' Admin­istration hospitals and doctors and nurses in those hospitals to take care of our war veterans. There is a shortage today. \Ve should see that the number of hospitals are kept up and that the number of nurses and doctors are kept up to care fpr the disabled when they are discharged from the armed services.

We should also see that the claims of the veterans are promptly and carefully handled. After many months contact men are now being placed in the hos­pitals to assist the men in establishing service connection for their claims. Vet­erans' Administration boards are being set up in the hospitals in order to help the men secure service connection for their disabilities wherever possible. Six­ty thousand claims have already been turned down, many, I believe, due to faulty research or faulty p:.•esentation of the claim.

I offered a bill that would require that a man be kept either in a hospital or on a terminal furlough until his claim is rated before -his service with the armed forces is severed in order that he may have the benefit of the pay he is receiv­ing in the Army or in the Navy or in the armed forces for that period. May I say that I have secured a promise from both the Army and Navy that they would do all they can to secure the records of the men, the clinical records, the hospital records, and the records of treatment, in order that they may aid in a speedy ad­judication of soldiers' and sailors' claims.

But we all know, for instance, at Pearl Harbor and at Tarawa, and in more re­cent engagements, that the records of these men are lost. Unfortunately many of our men have been lost also. But the records are lost and it will make the adjudication of the claims for widows and orphans much more difficult. The country has a great responsibility also in caring for these men, in giving them employment. But it does not seem to me that it is the responsibility of the civil­ians to give aid to the men when they immediately come out of the service. The Federal Government should give the men discharge pay to care for them for a while, while the civilian population and the Government are trying to secure em­ployment for the men, while the Veter­ans' Administration is giving the men training and arranging for the training of the men. Also that should be done in the hospitals where there is space. I should like to say that the Air Corps has done a very fine piece of work and is do­ing it in giving the men a sort of train­ing and rehabilitation when they are still in the hospital. It begins even with a sort of setting-up exercise before the servicemen are out of bed and then it goes on with training hikes and also with train-ing along air aviation lines that they love so much. I have seen the Army in their hospitals in the regular hospitals

taking up that same sort of training for the men. The Army is arranging to see that the men have the best, and well fitted, artificial arms and legs where they are needed, before the men are dis­charged. It is a very important part of the program that the men be taught to walk and use those artificial hands and legs before they are discharged. Nothing is too much to do for the care of the men before they are discharged. If the men want to go home and the hospital feels they are able to go, then thex should be given the terminal furlough with pay that I spoke about. But there are other men who, of course, will not have a serv­ice connection and perhaps may be dis­charged as perfectly well, and discharged without a penny except their fare home, with no money in their pockets and no chance of employment. Many of those men are discharged when they are not well. I have felt that it was, as it works out, a very cruel thing to those men, that we have not passed a mustering-out pay bill.

Mr. JUDD. Will the gentle lady yield? Mrs. ROGERS of Massachusetts. I

shall be glad to yield. I have not very much time. · Mr. JUDD. I would like to compliment

the gentle lady from Massachusetts on her unfailing concern for the best inter­ests of the soldiers and the veterans and for her effective efforts in that direction.

Mrs. ROGERS of Massachusetts. We are all interested-every Member here is interested. There is not a man or woman in the House who is not inter­ested.

Mr. JUDD. But some are in a position to use their efforts and energies to more effect than the rest of us. I want to agree with my colleague from Minnesota that the care of veterans, once they are in the hospital, is excellent. Does not the gentle lady agree that the major diffi­culty, insofar as there has been a diffi­culty, is in the matter of getting them so that they themselves know what their trouble is and into the hospitals where they can get themselves cared for? M~s. ROGERS of Massachusetts. Yes;

I have stated repeatedly on the floor that information be given to the veterans as soon as they enter the hospitals in order that they may plan. You know, many of them lie in bed wondering what is going to happen to them when they go out of the hospital. It is a great help to a veteran to know that he will have compensation or that his widow and children will be cared for, or that if he is going to be well when he goes out that he will have a sum of money that he can use until _the adjustment into civilian life is made. It is a great strain-it is a great shock-to those men to go out of the war and out of the hospital back into the normal flow of life. There are not jobs for the men today.

Mr. JUDD. I would like to inquire if the gentle lady does not agree that in some respects perhaps the Veterans' Ad­ministration should err on the side of leniency ratll..er than on the side of keep­ing strictly to the rules that had to be worked out during peacetime where a man's application had to go through the

local area and the regional area and had to come to Washington? And now does not the gentle lady believe it would be better to have a certain amount of de­centralization and a certain amount of local authority for highly skilled and responsible physicians and boards to be able to make some of those decision;;; without having everything referred to Washington where there is inevitably this delay? It seems to me in the matter of these men we should lean over back­ward a little bit, if necessary, and to depart from red tape rather than just adhere to the regulations which ordi­narily we expect and require from the Director of the Veterans' Bureau.

Mrs .. ROGERS of Massachusetts. I would say to the gentleman, then, the legislation we passed even recently would not be necessary if the Veterans' Admin­istration had been more liberal and had acted promptly.

Mr. JUDD. Yes. · Mrs. ROGERS of Massachusetts. Al­so, they should have a permanent med­ical staff.

Mr. JUDD. Yes. Mrs. ROGERS of Massachusetts. And

a nursing staff and . more personnel to rate the insurance cases. They should have more personnel in the contact sec­tion to help veterans with their claims and more rating boards. It is the kind­est and most humane way that the coun­try can spend money. ·It is a debt we owe the men and women who hav:e served. Everybody in the United States wants the veterans taken care of. It would be just inhuman not to. It would be one of the cruelest things that could be imagined.

Mr. JUDD. Like physicians, we have a r'outine of scrubbing up before we oper­ate. Ordinarily to go through it takes 15 or 20 minutes before they get on the operating table. But when a man comes in with an obstruction in his trachea we have to take out a penknife and do it right then without that 15-minute rou­tine, as valuable and important as it is under ordinary circumstances. We are in an emergency.

Mrs. ROGERS of Massachusetts. And take the nervous cases. Many of them cannot describe their feelings them­selves. There again the psychiatrists do not always agree whether a man's ner­vous disability comes from his service or not. This muster-out pay would help those cases very much if they do not establish service origin. I deeply regret the Committee on Military Affairs has not acted upon the mustering-out pay bill, even if it was not a large one, or not, perhaps, one that would seem ade­quate. They have had months and months in which to do something. It went before their committee, naturally. The chairman of the committee is away, but. the other members, many of them, are here in Washington, and I believe that something could have been done.

Mr. BISHOP. Will the gentlewoman yield?

Mrs. ROGERS of Massachusetts. Mr. Speaker, how much time do I have re­maining?

CONGRESSIONAL RECORD-· 'HOUSE DECEMBER 21 The SPEAKER ·pro tempore. One­

half minute. Mr. BISHOP. Will the gentlewoman

yield? Mrs. ·ROGERS of Massachusetts. I

cannot yield to the gentleman, but I 'would suggest that he put his question in the form of a unanimous-consent re­quest to put his question in my remarks.

Mr. BISHOP. Mr. Speaker, I ask unanimous consent that the gentle­woman's time be extended 3 additional minutes.

The SPEAKER pro tempore. The time of the gentlewoman from Massachusetts is extended 3 additional minutes.

Mr. BISHOP. Mr. Speaker, will the gentlewoman yield?

Mrs. ROGERS of Massachusetts. I yield.

Mr. BISHOP. Is it not true that this program, being so large, every State along with the Federal Government should take its responsibility? I bring to your attention that the State of Illi­nois has set up a rehabilitation program whereby at the present time throughout the State they are taking veterans who have been returned from the service wounded and .they -are now making it possible to extend employment and as­sistance when they return home?

Mrs. ROGERS of Massachusetts. And that is one reason I would say to the gentleman, why the men should be given their discharge at their homes instead of many miles away, in order that the communities and the States may help the men. Many States are doing the very thing that Illinois is doing, so that they may help the men with employment and with other matters. Massachusetts is very active. · Mr. Speaker, I do not like to ask this

because I believe that committees should have charge of bills, but the beneficiaries of this bill have been in a grim and hor-

. rible war and as the committee has not · acted, unusual method::: should be used. In order to secure a mustering-out pay, Mr. Speaker, I ask unanimous consent to take Senate 1543, a bill to ·provide for mustering-out payments to members of the armed forces and for other purposes, which was passed by the Senate, from the Speaker's table and move that it do now pass.

Mr. RAMSPECK. Mr. Speaker, will the gentlewoman yield?

Mrs. ROGERS of Massachusetts. I yield.

Mr. RAMSPECK. Mr. Speaker, I hate to say this, but if the gentlewoman per­sists in her request, I will have to move that the House do now adjourn.

Mrs. ROGERS of Massachusetts. I feel that every effort should be made. I feel very strongly about this, Mr. Speaker.

The SPEAKER. The Chair does not recognize the gentlewoman from M~s­sachusetts for that purpose. · The time of .the gentlewoman has expired.

Under a previous order of the House, the gentleman from Texas [Mr. PAT.MAN] is recqgnized for 10 minutes.

INFLATION

Mr. PATMAN. Mr. Speaker, our num­ber one problem is the winning of the

war. Problem .number two is preventipg inflation here at home. We have two departments of our Government that are concerned wit~J. fighting inflation. One is the Executive and the other is the legislative. The Executive branch of our Government has a good, consistent record in its effort to prevent runaway or ruinous or hurtful inflation. The President has done everything within his power to warn the people and Congress of the danger of inflation, and he has done everything within his power to per­suade Congress to give him the neces­sary weapons with which to fight infla­tion. Congress responded to the extent of passing the act known as the Office of Price Administration Act of October 2, 1942. That is a good law, and the Execu­tive has been making an effort to enforce that law in compliance with the will and wishes of Congress. That law contained a directive to the President to hold the line as of September 15, 1942. But Con­gress had not been carrying out. its part of the burden. We passed the law which, in effect, gave lip service to com­bating inflation but at the first oppor­tunity this Congress~ the first session of the Seventy-eighth Congress, we cut down the appropriation for 0. P. A. en­forcement thereby tying the hands of the President and making it impossible for him to properly and adequately en­force that ·law.

Next the Office of War Information was doing a wonderful job teaching the people of the danger o~ inflation ~nd se­curing their cooperatiOn and a1d and assistance in combating inflation. But the first opportunity Congress had in this first session of the Seventy-eighth Con­gress Congress absolutely wiped out entir~ly that whole division of the 0. W. I. that was doing such an excellent job against inflation.

In addition to that, this Congress is guilty of sins of omission ~s w~ll as commission in the fight agamst mfla­tion. On the question of subsidies, the President said there were certain se­lective items or articles and commodities that subsidies would help to keep down the cost of living in, and therefore rec­ommended subsidies be paid. At the same time the President said if Congress had an alternative he would gladly ac­cept it, but Congress, carrying out i~s sordid and almost scandalous record m failing to stop inflation ~r c~oper~te ·wi~h the President in combatmg mflatwn, ~ild not do anything in the way of offer~ng an alternative. It offered no alternatlve, but again attempted to tie the ha~ds of the President by refusing to permit the use of subsidies and offering no other alternative.

so this record is a sordid one, a scan-dalous one, almost.

FIRST CROP OF WAR MILLION AIRES ·

In addition to that, the best way to keep down inflation is by levying ade­quate taxes. The President asked that adequate taxes be levied to siphon off the excess purchasing power. At one time he asked for $16,000,000,000 additional. In­stead of that, the Seventy-eighth Con­g-ress, first session, passed a l~w which actually gave back to people seven and one-half billion dollars. That was the

No. 1 group of war millionaires in \Vorld War No. 2. That is a sordid record.

So instead of taking off .money as ex­cess purchasing power, we actually paid back more money, gave it to war con­tractors, many of whom had gotten rich during this war and by reason Of this war, notwithstanding the fact that the platforms of both parties have consistent­ly proclaimed against people making money out of the war and by reason of the war; notwithstanding the fact that the veteran organizations, year in and year out, have said "We will not have any more war millionaires"; but t~e Seventy­eighth Congress, first session, comes along and creates crop No. 1 of millionaires of World War No. 2. SECOND CROP OF WAR MILLIONAIRES COMING UP

In addition to that, we have another tax bill now, and there is a provision in it to change the Renegotiation Act that will make another crop of war million­aires. If that is successfully put through the House and Senate and becomes a law, that will be a crop of war millionaires No. 2, caused by the Seventy-eighth Congress, probably the second session, because it is not possible for it to go through this time.

So this Congress has a sordid record on combating inflation.

It is my sincere hope that all Members of this House will give earnest considera­tion to this vital question during the holidays, and that when we return we can have a more consistent record of fighting and winning problem No.2, sec­ond only to winning the war-:-that is, winning the fight against inflation.

Mr. MURDOCK. Mr. Speaker, will the gentleman yield?

Mr. PATMAN. I yield. Mr. MURDOCK. I have ,read that

through renegotiation, under a law we passed about 2 years ago to correct the war profits possible under the cost-plus system, there has already been saved between five and six billion dollars to the Treasury, · As I un~erstand . it, these enormous profits have voluntarily been cut down to reasonable size. Do I under­stand the gentleman to indicate now that there is a proposal in the new tax bill which will make it possible to open up all that matter and possibly require paying out of the Treasury as many billion dol­lars as we have thus far saved? The Treasury would not benefit much from a law which would yield $2,000,000,000 and lead to paying out $5,000,000,000.

Mr. PATMAN. · If the gentleman will read the statement that was issued by Mr. Morgenthau, Secretary of the Treas­ury, on yesterday, published in the papers this morning, I believe he will come to the conclusion that the public interest will greatly suffer if the proposed renegotia­t_ion amendment becomes law. The statement as contained in the New York Times this mornii,lg is as foliows: SEED OF A ScANDAL PUT INTO TAX BILL, SAYS

MORGENTHAU-RENEGOTIATION . CLAUSES HELD TO OPEN THE DOOR TO "TRULY ExTORTIONATE PROFITS"-CUT IN YIELD DENOUNCED-GOV• ERNMENT WouLD BE "AWFULLY BADLY OFF" BUT STILL BETTER OFF WITH No BILL, HE ADos·

WASHINGTON, D2cember 20.-8ecretary Morgenthau denounced Congress tonight for

1943 . CONGRESSIONAL RECORD-HOUSE 10999 batting down his new revenue bill to one­fifth of his recommendations and charged the lawmakers with opening the door to "truly extortionate profits" by war contractors.

The heated comment by the Secretary of the Treasury at a press conference immedi­ately raised the prospect of a request for a Presidential vet o of the entire tax bill.

Mr. Morgenthau held out one hope for his aims, a reversal of congressional opinion over the Christmas recess, which is not con­sidered very likely.

Two actions . by the House and by the Senate F inance Committee on the Treas­ury's $10,500,000,000 tax bill were de­nounced-the way it was cut down to $2,284,-000,000, and the amendments rewriting the act for renegotiation of war contracts to re­capture excess profits.

WOULD PREFER NO TAX BILL

As to the revenue yield provided now, Mr. Morgenthau said:

"The Treasury would be better off' with no tax bill-but on that basis we would be awfully badly off."

Of the liberalized renegotiation phases, the Secretary, biting off his words, asserted:

"They open the way to truly extortionate profits. I predict that if they are enacted into law they will come back to plague not only the Congress but the war-goods manu­facturers who get temporary gain from them.

"They hold the seed of a national scandal. "I refer to provisions such as those elimi­

nating from renegotiation the makers of so­called standard articles and the retroactive exemntion of subcontractors whose goods do not enter into the final products. Other pro­visions of the bill would leave final settle­ments under renegotiation open for years to come." . .

The "smartest thing business can do," Mr. Morgenthau said "is to leave the renegotia­tion law ·alone, unless business executives want to spend the rest of their lives on the Hill before investigating committees."

STANDARD ARTICLES EXEMPTED

The Finance Committee wrote in a clause completely exempting from renegotiation all contracts and subcontracts for standard com­mercial articles. Since such articles were de­fined generally as identical to those sold for civilian or commercial use prio- to January 1, 1940, it was believed that contracts for such things a~ blankets, lumber, bolts, electric mo­tors, and so on would become final, and not subject to repricing by the Government.

· Another Senate committee amendment ex­empts construction contracts let under com­petitive bidding. The House had written exemptions for contracts covering agricultural and d.airy products. In any case, if a contract involves less than $500,000 a year,it would not be subject to renegotiation under the amend­ed bill . The present minimum is $100,000.

Further, a new central price adjustment board, to be established under the act, would be required, in determining whether a con­tractor's profits are excessive, to give due consideration to his Federal taxes and the cost of reconverting his plant to peacetime uses. '

FIVE BILLIONS ALREADY RECOVERED

Renegotiation so far has recovered more than $5,000,000,000 from war contracts·.

In addition to the way Mr. Morgenthau feels about it, there are reports in the Senate that President Roosevelt himself may make an issue of the renegotiation changes if they finally are approved .

Proponents of the changes argue, however, that renegotiation has outlived its useful­ness and one Republican Senator observed: "If our Government officials have not learned to write a proper contract in 2 years of war they ought to give up."

On the total revenue side, Mr. Morgenthau protested that while the tax bill appears to promise about $2,100,000,000, the calculations

leave out of consideration the decision to freeze social-security pay-roll taxes at 1 per­cent. A resolution was adopted to do this, so that an automatic rise to 2 percent would not go into effect January 1.

This, the Secretary said, will mean reduc­ing social-security collections by $1,400,-000,000 (below expectations) next year and the effect will be to increase the amounts the Government will have to raise in future years.

Constitutionality of legislation authorizing the War Department to renegotiate war con­tracts was challenged in a petition filed today in the Supreme Court. ·

It was presented by the Alliance Brass & Bronze Co. of Alliance, Ohio, which wants the Supreme Court to prevent Secretary Stimson, of the War Department, from proceeding with the renegotiation of the company's 1942 con­tracts.

Charles F . Short, Jr., Chicago attorney for the company, contended that the renegotia­tion legislation is invalid because it confers on executive departments or administrative tribunals, the power to make final deter­minations of all matters in relation to what may constitute reasonable profits.

The controversy. Mr. Short said, is one which should be decided by a jury trial in a court.

Explaining that the Government had not claimed that the company had made any excessive or unreasonable profit, Mr. Short added:

"POINTS TO POSSIBILITY OF DEBT

"The threat is to reexamine the situation with the po,ssibility of a debt against the company, created by the uncontrollable ac­tion of the secretary, should this court deny the prayer of this petition, with no right of review of his decision even if rendered ex parte.

"The author of this brief knows of no place outside Nazi Germany where such an arbitrary · proceeding would be audacious enough to claim the blessing of legal or judicial propriety.

"A devotion to the concept that compli­cated matters of Government must increas­ingly be done through administrative agen­cies, is misguided if it leads in any degree toward the totalitarian goal of uncontrolled authority in any agent of Government."

Mr. Short filed his application directly with the Supreme Court without first going through the lower courts. Technically, he sought a writ of prohibition or . a writ of mandamus to compel Secretary Stimson to stop pending renegotiation proc~edings.

Now, what is the history of this law? I do not know all the history, but I do know that at one time people were mak­ing so much money on contracts involv­ing the making of oceangoing vessels, maritime vessels, that the Committee on Naval Affairs brought in a bill which was later enacted into law, which fixed the limit of profits at 10 percent that any contractor could make. When this war came on the business people themselves said, "We do not want any arbitrary limit of 10 percent such as you have al­ready fixed here as a yardstick. Let us have renegotiation. We know that we do not have the experience to make all these things. We will go ahead and we will take the contract and do the best we can. If we make too much money, we will give part of it back. Neither the Government nor the contractors have had any ex­perience in m!?.king the things necessary to be made."

So they wanted renegotiation. They wanted to get rid of that arbitrary fixing of profits. So after they got rid of that

and they got renegotiation of contracts; now they want to repeal the renegotia­tion feature. If it is done I warn Mem­bers of this House now that that will be recognized and branded, and properly so, as this Congress creating a second group of war millionaires in World War No. 2. We have already created one, against everything that all of us have said.

Mr. Speaker, I ask unanimous consent to insert in the RECORD at this point an editorial appearing in · the Hopkins County Echo, a newspaper published in my district, on the question of infla­tion limited; and also a statement by Secretary Morgenthau before the Fi­nance Committee of the United States Senate on November 25, 1943, on the question of the tax bill, and Mr. Mor­genthau's statement on renegotiation, and a speech that was delivered by Mr. Randolph E. Paul, general counsel of the Treasury, before the Providence Na­tional Association of Cost Accountants at Providence, R. I., on November 15, 1943.

The SPEAKER. Is there objection? There was no objection. The matters referred to are as follows:

[From the Hopkins County (Tex.) Echo of December 17, 1943] INFLATION LIMITED

Remember when the dollar was devalued back in 1933?

This means inflation. So many an econ­omist and editorial writer warned. But though often scheduled to make its appear­ance, this bogey did not reveal itself for 10 years. .

Todlly, most of us realize that we have a mild form of inflation with us. Moreover, most of the American civilians rather like it. Quite a number want to see a little more. Yet they all shiver at the prospect of getting it out of control.

Inflation is rather like fire. A small amount of fire in a grate is comfortable and cheerful. Too big a fire makes the guests push their chairs ·back. But when the fire spills out on the floor and the guests do nothing about it the house burns down.

We have defined inflation before simply as the declining power of our circulating medium (money and bank deposits) to secure merchandise and services in return. Or one might put it as the declining purchasing power of the dollar.

If the supply of dollars increases faster than the supply of things and services to buy, the dollars become cheaper. That is, it takes more dollars to buy what we think we 'need than formerly. People can't eat or wear dollars. In the final satisfaction of human wants groceries and clothes are more impor­tant than metal or paper dollars. When the supply of groceries and clothes becomes limited people with dollars in their pockets will bid up the price of the real necessities of life.

Yes, the supply of dollars is increasing­and rapidly. It is coming about primarily because of the deficit financing of our Na­tional Government. By the strange opera­tions of our credit system, when the National Government borrows a billion dollars from banks, it creates a billion dollars of new bank deposits on paper. But these bank deposits are identical for all purposes with an equal amount of the kind of money one puts in his purse.

Then why not borrow without restraint? Don't you have your cake and eat it too that way? Actually, some influential persons in the Nation believe and advocate just that.

Well, Germany after World War No . 1 is the answer. Bread came to be worth millions

lJ()OO CONGRESSIONAL RECORD-. HOUSE DECEMBER 21 of marks a loaf. In fact marks came to be worth exactly nothing save as waste paper.

And in the meantime the savings of the , people · in bank deposits, annuities, life in­

surance policies were wiped out--East Tex_as ma·gazine. · ·

STATEMENT OF SECRETARY MORGENTHAU BEFORE THE FINANCE COMMITTEE OF THE UNITED STATE1) SENATE, NOVEMBER 29, 1943 When I appeared before the Ways and

Means Committee of the House on October 4 to present the administration's suggest ions for increased war taxes, I gave to that com­mittee as best I could a picture of the finan­cial position of the Nation and its wartime revenue needs. I stated that the fiscal sit­uation required much heavier wartime taxa­tion and that it was our opinion that the people could pay additional wartime taxes of at least $10,500,000,000. The Ways and Means Committee and the House reached a different result and approved a bill increas­ing revenues by only $2,000,000,000. In view of this Wide difference on a matter so impor­tant to the present and future welfare · of this Nation, we have carefully reviewed the fiscal situation. I am appearing before you today to present our conclusions.

The outstanding fact- in our financial pic­ture is the stupendous bill which this war will leave behind. On that point there· can be no quibbling. We are accumulating debt at. the rat-e of over $150,000,000 a day . . L~st month (October 1943) the Federal Govern­ment spent $5,600,000,000 more than it col­lect-ed in revenue. In the fiscal year 1942 the deficit was $21,000,000,000, in 1943 it was $57,-000,000,000, and in 1944 it is expected to be $57,000,000,000 again. On the basis of any estimates we can now make, we foresee a public debt at the end of the present fiscal year of · about $200,000,000,000. On such a debt the interest charges alone will be close to $4,000,000,000 a year. As the war continues the debt, the interest, and the problem pf repayment will grow larger and larger.

In this situation if we pay in taxes any less than we can now afford to pay, we shall be unfair to those who must face the accu­mulated bill after the war has been fought and won. We shall be doing a particularly great injustice to the men who are fighting our battles on foreign soil. We shall not only be' asking the 10,000,000 members of the armed forces to give the most important years out of their lives to fight the war; we shall also be requiring them as a large body of future taxpayers to pay in taxes after the war what we 'could and should have paid while they were fighting.

It ·is clear that we are not paying all the wartime taxes that we can and should pay. We are not now fighting an all-out war on the fiscal front. All the estimates of n ational income, by whomever made, bear eloquent testimony to the fact that the abilit y of the American people to pay increased t axes is far from being exhausted. In the fiscal year 1939 individuals h ad incomes, after personal taxes, of $65,000,000,000. In the fiscal year 1944 it is estimated that individuals will have incomes of $126,000,000,000, after allowance for all present taxes. That is, aft er paying taxes, incomes of people in the United States will .have almost doubled since 1939. ·

The incomes of t he American people are not only ample to pay much higher taxes. The spending power of these incomes is so great as to threaten rapid and burdensome increases in the cost of living. About half of American productive effort is going into war equipment and supplies for our armed forces. These products are not available for civilian consumption. Yet our people are be­ing paid for all they produce. They thus. have far more money to spend than there are goods on which to spend it. In the fiscal year 1941 this surplus of income over goods is expected to amount to about $36,000,000,000

after payment of personal taxes. If those who hold this surplus income try to spend it on consumer goods the inevitable result will be black markets, ruptured price ceilings, and

· substantial increases in the cost of living, followed by tremendous pressures for higher wages and farm prices, which will set in motion further forces in the spiral of infla­tion.

Up to this point spending has been held down and we have avoided disastrous price increases. We have done this through a variety of measures. Price ceilings and ra­tioning, wage and salary stabilization, and the taxes already imposed have all had a restraining effect. The campaigns for the voluntary purchase of War bonds with their emphasis on saving have been a strong in­fluence in curbing spending.

But , we cannot expect these controls to hold indefinitely in the face of a continued large surplus of income over goods and a

, g.reat accumulation of spendable liquid war­: time savings. Day after day, the continu()us . pressure of spending power has been cracking our price controls a little here and a little there and threatens to produce a major break-down. We are courting danger if we do not do all that is possible through the tax mechanism to strengthen the foundations of

' our stabilization program. I have been told that the American people

do not believe in the dangers of inflation. 1 cannot believe that is true, but there may be a confusion of meaning. If by inflation is meant a situation where money becomes worthless, I agree that the danger now is not of that character. It is rather the danger of substantial and continuous and, at -least in part, permanent rises in prices that would undermine standards of living, reduce the value of investments, and impair the security we seek to achieve through savings and in­surance. Unfortunately, lack of belief in the danger of inflation does not remove that danger. There are few indeed who have fol­lowed with care the developments of the recent past who are not concerned over the possible break-down of the stabilization pro~ gram. Higher wartime taxes obviously can­not meet the danger alone, but they are nec­essary if it is to be met.

I have also been told that some people have a defeatist attitude toward our fiscal problem. They argue that, since the deficit is so large, the Government debt so huge, and the inflationary possibilities of surplus income and accumulated private savings so great, a few billion dollars .more or less will not make a great deal of difference and that therefore we might as well avoid the unpopu­larit y of imposing additional taxes. I think this would be a poor excuse · to give to the returning soldier who will be interested to­know what sacrifices we incurred at home to protect his future.

In fact, however, $10,500,000,000 of addi­tional t axes would have very important ef­fects on the deficit, the debt, and the in­fia tlonary pressure. In its direct effects on spending, in the renewed assurance it would · give that the elected and appointed repre­sentatives of the people take the problems of the public debt seriously, and in the sober­ing influence it would have on public under­standing of the true cost of ·the war, a $10,500,000 ,000 increase .in taxes would be im­mensely beneficial.

Perhaps the most superficially plausible and therefore the most insidious argument I have recently heard is that economy in gov­ernmental expenditures is a substitute for higher taxes. Economy is always an impor­tant objective and a tax bill makes· it neither more or less desirable. I . am in complete .and hearty sympathy with any measure that can be adopted to reduce governmental costs, to reduce even war costs so long as the reduc­tions do p,ot impair our . war effort. But . if we are to fight the war to a .speedy conclu- . sian we cannot relax our fighting or our pro-

duction for war. That means we cannot significantly relax· our spending. I am not in sympathy with any measures or any proposal to cut expenditures in any way that will make our total production anything less than an all-out effort.

At the time I appeared before the Ways and Means Committee, I said that "while it may be possible, and I hope it is; to curtail some governmental expenditures, even that will not lessen our need for getting at this time all that the American people can possibly give us in additional taxation." That is still

· my position. The Bureau of the Budget has just ·released

estimates that total expenditures for the · fiscal year 1944 which ends next June 30 will

amount to $98,000,000,000 instead of the · $106,000,000,000 in the estimate issued last August . . It is understood that this decrease in expenditures represents a combination of changes in the war prograin and a delay in

, reachil.lg the production goals of soine items. ' Revenues were estimated at· $41 ,000,000,000 , instead o'f $38,000,000,000. The over~all re.;.' -i sult of the revision is to reduce'the 'previously : expected deficit from $68,000,000;ooo to $57,-1 ooo.ooo,ooo for the fiscal year 1944.

. There is nothing in the new Budget figures in our opinion to warrant reducing our goal below $10,500,000,000 of additional wartime taxes. if no one had originally.' expected more than a $57,000,000,000 deficit for the fiscal year 1944, the amount would appear

. tremendous, which it truly is. It is no less so because it represents a reduction from a pre­viously estimated higher figure. Fifty-seven billion dollars is equal to last year's record deficit, and is almost three times the deficit of 1942. ·

The Budget revisions do not alter the fact that we can pay much higher taxes; they do not in any degree affect our moral obligation. to meet now all of the costs of the· war that can be met by current taxation; and they do not affect in significant degree the serious in­flationary dangers tbat face us for the bal­ance of this fiscal year, the succeeding fiscal years as long as the war shall last, and in the post-war period. Our tax goal, as I pointed, out to the Ways and Means Committee, was the amou.nt that we believed could . be fairly. distributed without undue sacrifice and nard­ship. From every point of view it is a mini­mum fiscal program in the light of the deficit, the accumulated debt, and the infla­tionary pressure.

In view of all these facts, the House bill, in my opinion, falls far short even of an at­tempt to meet our fiscal needs in a realistic or courageous way.

Let us bear in mind that an essential part of fighting a war is paying for it in the right way at the right time. There is no escape from the costs of war. It is a great fallacy to .suppose that we can fight history's great­est war to save what we hold most dear with­out financial sacrifice. Inevitably we shan· e::.perience much grzater financial sacrifice tlian we have thus far. Taxation now, during the war," is the easiest way to make that sacrifice.

In presenting our national fiscal problem to you, I have endeavored to perform the duty placed on the Secretary of the Treasury by law and tradition. I have endeavored to show you as objectively and as clearly as· I can that a tax program of not less than $10,500,000,000 is needed to safeguard the financial and economic future of this country during the war and after the war. ·.

WARTIME TAXES

(Address by Randolph E. Paul) It was very kind of you to ·invite me to talk

to you this evening about wartime taxes. And I was very glad to accept a~ invitation to speak in the home town of one of the House Ways and Means Committee's ablest

1943 CONGRESSIONAL RECORD-HOUSE 11001 members and hardest workers. This, I as­sure you, is not faint praise, for that com­mitteee is indefatigable. It has had me at the ropes many times; and while I may be expendable, I am not quickly exhaustible. It is a great pleasure to thank Mr. FoRAND for his never-failing courtesy in debate and for his patient understanding--even when he doesn't agree--of the Treasury's sincere de­sire to be of assistance to his important committee.

There is still another reason that I am glad to be here tonight. This is a pleasant re-

. versa! of usual procedure. I am accustomed to speaking before Mr. FoRAND at sessions of the Ways and Means Committee. But Mr. FoRAND always has the last word there.

In selecting the subject of the evening I shall assume that you had in mind some­thing more definite than the general subject of taxes in wartime, and that your title re­fers to the specific crisis confronting this country at this particular stage of World War No. 2. Since our time is necessarily limited, I shall not burden you with details which are not essential. I shall try to give you a picture of the forest. One misses the forest if he tries to see every tree. In taxation the whole is not always the same as the sum of the separate parts. A difference in degree merges into a difference in kind. What we need more than anything else today is a balanced vision of the whole.

THE . NECESSITY FOR INCREASED TAXES Early in the war the necessity of increased

taxes was clear enough. Even at the end of 1941 the Government was spending money at an unprecedented rate, $2,500,000,000 a month in December 1941. This governmen­tal spending was creating a purchasing power which made direct controls necessary. For­mal price cpntrol, which began in the spring of 1941, was greatly extended during the first half of 1942. A program of consumer ration­ing was instituted late in December 1941. At first it covered only rubber tires. Automo­bile rationing went into effect at the begin­ning of 1942. The rationing of sugar began in May, coffee late in November, shoes and proc­ess~d foods early in 1943. In October 1942 the President, through the War Labor Board and the Treasury, attempted the stabilization of wages . · THE ECONOMIC SITUATION IN THE SUMMER OF

1943

Suppose we pass on to the situation on our economic fron t last summer. We had been through nearly a year and a half of war. The military t ide was beginning to turn-our way. In 1942 Congress had enacted the longest and toughest revenue act in our history. By the middle of 1943 we had put our individual tax system substantially on a pay-as-you-go ba­sis. This new method of payment enabled us to collect more promptly taxes due upon the higher incomes rapidly being produced by the war. We had reached the point­somewhat late-where the Congress was free to t urn it s attent ion to a rate bill.

THE NATIONAL DEBT In 1942 only a few, chief among them

the President, were bold enough to dream that we would attain a record level of war product ion as early as 1943. Our success on the production front was recorded in a sen­sational rise in expenditures, which was re­fiP.cted in turn in a corresponding rise in the public debt . On December 7, 1941, our n a ­tional debt stood at about $55 billion. By Jm:e 30, _1943, it had risen to $136,700,000 ,000. It IS estimat ed that it will be about $206,-

. 000,000.000 at the end of this fiscal year, June 3~ , 1944. War expenditures, estimated at $100,000,000,000 for the fiscal year ending June 30, 1944, had reached the monthly level of more than $7,000,000,000 in August 1943 the second month of this fiscal year. Every month since last February we had spent more

money on war activities than we spent in the . entire fiscal year 1941. ..

PRICE RISES Prices had also risen. The r.mount of in­

fiation. registered by the cost of living index since It started to rise early in 1941 is now well toward 25 percent. Price increases have been heaviest for food and some of the basic necessities of life. A recent sam­pling of prices by 0. P. A. indicated that in many instances actual retail food prices were abov~ legal ceilings. Illicit trafficking in ration coupons, and the tendency of · meat, poultry, and gasoline to leak out of regular channels and into black markets, threatened price stability. We have been learning the hard way that infiationary money is not easily discouraged.

WE HAVE INFLATION In the summer of 1943 we had infiation.

True, it was only a moderate infiation. Some argue, and many more feel, that a little in­fiation would be a good thing. Let me reply as the President did: A little infiation is like opium; soon you want more; and then you have the habit.

THE 1944 BUDGET AND NATIONAL INCOME ~ heavy strain on prices was inevitable.

With taxes at a level of $40,000,000,000 for the fiscal year 1944, we were faced with a deficit of $66,000,000,000 for the fiscal year 1944 and an almost certain heavy borrowing from the commercial banks. Huge war ex­penditures had resulted in an increased na­tional income. The latest estimates put na­tional income for the fiscal year 1944 at $152 • 000,000,000, even more than that for the cai­endar year 1944. Direct personal taxes would reduce spendable income after taxes by only $21,000,000,000, leaving $131,000,000,000 of­disposable income, a figure about $50,000,000,-000 higher than national income before taxes in the halcyon year 1929. The war had proved a bonanza.

THE PARADOX OF FINANCIAL PROSPERITY AND SCARCE GOODS

Our war production has given us an eco­nomic shot in the arm and put a new fiush of prosperity on the Nation's face. The para­dox of the situation is that the cause which produces this unparalleled prosperity re­moves the possibility of satisfying with con­sumer goods the desire to spend, created by expe~ded income. About one-half of our pro­ductive capacity is marching off to war. The half that stays at home is producing no more than $89,000,000,000 of civilian goods at cur­rent prices. Disposable current income is more than $40,000,000,000 in excess of goods ~o be ~ought. We have developed an economy m Which only $10 of goods are available for ~ach $15 of disposable income. Yet the Amer­ICan people are spending an increased amount to eat, drink, and be merry. Comparing this year with the average of the typical pre­~ar years, 1936 to 1939, expenditures in eat­mg and drinking places have increased 143 :percent. Expenditures in clothing stores have mcreased 102 percent, and in jewelry stores 218 percent.

Is there any answer but inflation? That is America 's $150,000,000,000 question.

SAVINGS Even thes~ staggering figures do not give

the whole picture. From the beginning of 1940 _to June 30, 1943-in 3¥2 years-the Amencan people saved $55,000,000,000. or~ this total $24,000,000,000 are in the · form of currency and checking accounts; $21,000,000,.:. 000 are in the form of redeemable or market­able bonds. It is a masterpiece of understate­ment to. call these savings volatile; from th·e s~andpomt of P<;>St-war infiation they are liquid dynamite. Assume a shickening of ?overnmental spend~ng at the e~d of the war 111 Europe, followed by a short lull in civilian

spending, and try then to imagine what will h~ppen when millions of people, impatient With wartime direct controls, try to spend these savings :to replace worn-out cJothes, ho_usehold eqmpment, automobiles,-all the thmgs they have been longing to buy for several y~ars. If we have the courage to im­pose additional taxes in time, we may be able to keep the post-war money fioodgates closed. If we delay, if we disregard the infiationary th~nderheads gathering in the form of liquid savmgs, there can be nothing but bitter economic weather ahead.

COMMERCIAL BANK BORROWING Cold figures make it clear that hot dollars

are also being created by commercial bank borrowing. War financing through banks is generally conceded to be dangerous. Bank purchases of government securities lead di­rectly to an increase in cash assets held by the public. . To the extent that bank de­positors lend their deposits to the Govern­ment by buying bonds, no new funds are created; funds are merely transferred from private to Treasury accounts. But when banks buy Government securities for them­selves, they have no right to make charges against their depositors' accounts; the re­sult is that new funds are created. In pay­ment .for Government bonds the banks cus• tomarily set up "War loan accounts" pay­able to the United States Treasury. As the Treasury draws on these accounts to finance· war expenditures, the new funds fiow into the pocketbooks and bank accounts of indi­vidual citizens and business firms.

During the fiscal year 1943 banks thus in­creased their holdings of Federal securities by about $30,000,000,000. This was the main factor in expanding by about 36 percent the tot~l of coin, paper money, and checking de­posits held by the public. These holdings are liquid fuel which is ready and waiting to feed the fires of infiation.

THE EVILS OF INFLATION The psychology of infiation is hopeful; its

symptoms are exhilarating; but its hideous effects beggar description. Infiation is the mortal foe of every bank deposit, every in­surance policy, and every War bond. It would increase the cost of the war and· the service charge on our post-war debt. Even more im­portant from the immediate standpoint would be the resulting inequitable distribu­tion of our scarce goods. The orders of the day would g~ to black and grey markets. Those with the most money and the least scruples would get the lion's share of the goods. People with low incomes would come out on the short end. People who worlt over­time would have the least opportunity to buy. The real cos~ of the war-not the money cost, but the cost m terms of the things we must do without-would be badly distributed over our population. I need not describe the effect such a maldistribution would have upon home-front morale. It is obvious that the war effort would be the first to suffer from infiation.

THE FUNCTION OF TAXES I have said that I would discuss the spe­

cific_ crisis confronting the country at this particular stage of the war. "Crisis" is a poor w.ord for what we face. Our problem is sec­ond . in importance only to results on the military front. And the answers we make to today's economic questions cannot fail to infiuence the shape of events on the military front. ·

What is the mission of taxes in this crisis? Ho~ can they help win the fight against in­flatiOn? The answer is siJ,nple. Taxes im­pound spending ·power. By taking away spen9-able income they reduce the strain on the defense line of. rationing and price con­tr~I. just as wage stabiliza'tion eases that strain. No one knows the ultimate break­ing point of these direct c.ontrol devices. -

11002 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 But we do know that they are now weaken­ing, and we also know that well-chosen addi­tional taxes may very well be the saving factor.

THE TAX LEGISLATIVE PROCESS

If this be true, one might well say: "Let's have some taxes in a hurry." Inflation waits for no body of men-not even the Congress of the United States. But tax bills take time. They aren't built in a day. The Constitution places the power to levy taxes in the Con­gress. All the Treasury can do in a time of crisis-or, for that matter, at any other time-is to place its recommendations before the Congress. Its first point of contact is with the Ways and Means Committee of the House of Repr7sentatives, which is the legis­lative body in which revenue bills must orig­inate. I do not know how many of you­outside of Mr. Forand and Mr. Picchione~ have ever seen with your own eyes the grind­ing of the legislative tax mill. I have had the privilege-and the pain-of close contact with it, and I should like to give you, by way of background, a picture of a revenue act as it goes through the mill.

A revenue bill usually starts with the sub­mission of recommendations to the Ways and Means Committee by the Secretary of the Treasury. The Secretary appears be­fore the committee, and he and his staff are questioned by most of the 25 members. This process may occupy 1 or 2 days. Pub­lic hearings follow. At these hearings we have what Justice Holmes once called free trade in ideas. Witness after witness, some appearing individually and others speaking on behalf of chambers of commerce, busi­ness organizations, ·labor unions, and other groups, espouse and press their interests; sometimes, I am bound to say, their very self­ish interests.

After 2 or 3 weeks of testimony the Ways and Means Committee shuts the door and goes into executive, or secret, session. In this session the recommenda-tions of the Sec­retary, and all other recommendations are discussed at length. Facts . and arguments are presented by members of the Treasury staff and the experts of the joint staff of the committee. Votes are taken on specific mo­tions and at long last a bill emerges from a thicket of obscurity. This bill is drafted, not by the Treasury, but by the legislative staff of Congress. The bill is then sent to the House floor, usually with a rule limiting amendments from the floor. A vote is finally taken, and a bill is passed by the House. This bill is sent to the Senate.

History repeats itself before the Senate Finance Committee. Again the Secretary and his staff appear personally. Again public wit­nesses testify in open session. Again there is a secret executive session. At length, a bill is sent by the F'inance Committee to the Senate floor. In the Senate there can be no closed rule, and amendments may be made on the floor in the course of debate. Finally, a bill is passed by the Senate. It may be a totally different bill from the House bill. The two bills are sent to the conference com­mittee for reconciliation. . The conference committee consists of the ranking members of the Ways and Means Committee and the Finance Committee. Its job is to compromise the differing House and Senate bills into one bill. New matter is not in conference. The sessions of the confer­ence committee are all secret. Every differ­ence between the two bills must be discussed in detail. Either the House or the Senate, acting through its group, must recede from the position of its principal. When all con­flicts are resolved, a · new bill is written, which must again be passed by both the House and the Senate. Customarily each of these bodies approves .the action of its conferees.

THE TREASURY PROGRAM

On October 4, 1943, the Secretary of the Treasury presented to the Ways and Means Committee the recommendations of the Treasury and of the · President for new 1943 revenue legislation. The total additional taxes recommended came to $10,500,000,000 for a full year of operation. Of this total, $6,500,000,000 consisted of additional individ­ual income taxes, some part of which might be made refundable after the war; $2,500,000,-000 of excise taxes; $1,100,000,000 of corporate

. taxes; and $400,000,000 of estate and gift taxes. In addition, the Secretary recom­mended . against a general retail sales tax, and agamst a tax on increased earnings of individuals.

In parentheses I might say that the Treas­ury's affirmative recommendations are dis­playing definite intimations of mortality.

. Putting things a little less poetically, the dog's tail is being cut off just behind the ears. The latest returns from the Ways and Means Committee showed a total of a little more than $2,000,000,000.

As I have said, part of the Secretary's program was negative. Before I pass on to a discussion of the proposed increases L1 taxes, I would like to give you the reasons for the Treasury's opposition to a Federal retail sales tax and a tax on increases in individual income.

THE SALES TAX

Since I am discussing wartime taxes this ·evening, I shall not stress the inequity of a ·Federal sales tax. The standard peacetime objection to such a tax is that it imposes a

·disproportionate tax load upon the low in­come groups. Thil;l objection is even· more cogent in wartime, since ·a. tax which in­

. fringes on an adequate standard of living cannot fail to impair workers' morale and hurt production.

In this particular war there are additional practical objections. A Federal retail sales tax would be a new tax. It would impose upon the Bureau of Internal Revenue an

.added administrative burden out of all pro-

. portion to the burden of collecting an equal

. amount of additional revenue from existing taxes. A 10-percent tax with no exemptions whatever would -produce about $6,000,000,000

. of revenue annually. It would have to be collected by ,IIJ.Ore than two and one-half million business establishments scattered throughout the United States. The 10 per­cent rate would stimulate evasion. All busi­ness establishments would have to be policed. Trained personnel, automobiles, tires, gaso­line, and accounting machines would be re­quired. It is at least doubtful whether an adequate force and sufficient facilities could be obtained. But assuming that they could, adequate enforcement of the tax would divert valuable manpower and equipment, which might better be employed in more fruitful endeavors.

Collecting the tax is not only a problem for the Bureau. Merchants would be re­quired to keep adequate records which would generally involve entries not needed for ordi­nary accounting or income-tax purpose. This burden, superimposed upon rationing and price-control duties, would be almost intolerable. Here again, valuable manpower would not be employed in its most productive capacity. It might be worth while to under­take this new administrative task if the sales tax were well adapted to our present eco­nomic situation. But it is not. While it is true that sales-tax dollars would absorb some disposable income, it is also true that the imposition of a sales tax upon all articles would immediately cause an increase in the cost-of-living index. The control of wages is geared to this index, and it would be almost impossible to resist demands for increased

. wages based upon an increased cost of living.

Directly or indirectly, the ceiling and sup­port prices of most farm products are linked to farm parity prices. This link means that these prices are relative rather than fixed, and that they respond to the party index. A 10-percent sales tax on a reasonably broad basis would increase that index by 6 or 7 percent. The operation of the parity form­ula would immediately raise parity prices for agricultural commodities by 6 or 7 per­cent. Ceiling and support prices of various products would probably have to be adjusted to take the change in parity into account.

Thus, if a 10-percent sales tax had become .effective on July 1, 1943, estimates indicate that there would have been ~n average in­crease of 6 percrnt in retail ~ood prices during

-1944, exclusive of the tax. When the 10-per-cent tax is included, this increase would raise food costs by approximately 16 percent. Mov­ing over from food prices to the over-all cost of-living index, which includes many items not subject to tax, and taking into account both direct price increases and indirect tax;.. induced increases in food prices, it is esti­mateu that the cost-of-living index would rise about 10 percent.1

TAX ON INCREASES IN INCOME

A tax on increases in income is no happie~ soluticn of our difficulty. The philosophy of such a tax would, of course, be extremely diffi­cult to defend. We would be saying J'hat two individuals with the same income should be payin;; a different tax. Moreover, we would be saying that the higher tax was payable by the person· who had · received less income in previous years. He might ·very properly reply that his ability to pay was less than that of the person who had received the greater in­come in previous years.

A tax on increases of income is objection­able on even more practical grounds. One has to find some normal standard · against which increases may be measured, say, income for the year 1939. Most of our millions of taxpayers . do not know their · income for previous years. The Bureau has received no returns· for earlier years from most of these taxpayers. Even if the amount of income for the base year were determinable, it would still be necessary to differentiate between normal and war increases. The modest in­crease in the salary of a postman, fireman, or a coll€ge professor, in accordance with an established promotion . schedule, is an ex­ample of a normal increase. Equitable dif­ferentiation between normal increa~es in in­come and increases directly connected with war profits would entail more relief provi­sions than are contained in the corporate excess-profits tax.

Finally, there is a compelling wartime ob­jection to a tax on increases of income. In­creases of income have been received in large part by persons who are working over­time and women who have gone into industry to help the war etrort and the family income. Where a son or husband has entered the armed services the family income is likely to be reduced, even though the wife or another member of the family receives a larger in­come now than in the base period. Many recipients of increases in income have moved to high-cost defense areas. If we imposed a substantial tax on these increases we would be impairing the incentive of many workers to continue in vital war production.ll

1 Further information on the sales tax may be obtained by writing to the House Ways and Means Committee for Part 11 of the Un­Revised Hearings on Revenue Revision of 1943.

2 Further information on taxation of in­creases in individual income may be obtaine<i by writing to the House Ways and Means Committee for Part I of the Unrevised Hear· 1ngs and Revenue Revision of 1943.

1943 CONGRESSIONAL RECORD-HOUSE 11003 ARGUMENTS AGAINST THE TREASURY ·I PROGRAM

Three principal arguments have been made against the Treasury's affirmative pro~ gram. I should like now to repeat these arguments for you and let you decide how well they meet thP. issue.-THE PROGRAM REACHES INFLATIONARY D6LLARS_

The first argument is that the Treasury program in its attempt to help control in­flation does not dip into the income brackets where inflationary dollars are most menacing. In his statement before the Ways and Means Committee the Secretary said: "Four.:.fifths of all the income of the Nation is going to people earning less than $5,000 a year." Con­sistent with this principle the Treasury pro­gram does call for substantially increased taxation of a large number of taxpayers with less than $5,000 a year. It does not, of course,· demand higher taxes from everyone receiving: less than $5,000. Some of these people liave incomes barely a:bove subsistence levels. Just because the Treasury program did not call for heavily increased taxes on everyone below $5,ooo; some critics have charged that it was inconsistent with the Secretary's statement. The sophistry of this charge must be self­evident. One might as well say that because people over 18 are eligible to apply·fordrivers' licenses, everyone over 18 should be per­mitted to drive a car. :

We should be careful to understand pre­cisely which individuals are treated lightly by the Treasury program. It is true that. the elimination of the Victory tax relleves 11,000,000 taxpayers from the burden of that tax. But the lowering of the personal ex­emption brought back into the fold about 2,000,000 taxpayers, leaving a net loss of about 9,000,000 taxpayers. They would have paid _a Victory tax of only about $300,000,000. Th1s is a very small part of the total ot $24,000,.,. 000,000 of individual income taxes. that would have been payable under the Treasury pro~ gram. The elimination of .the Victory . tax was recommended as a; simplification measure as well as on grounds.of equity. It is literally impossible to make .the -inc.ome tax sufficiently simple :t:or the average taxpayer without elim­inating the Victory tax with its disparate in­come tax base and exemptions. This makes it unnecessary to discuss the inequities of an increase in tax upon a married man with an income of less than $1,200 a year.

Of the increased income taxes proposed by the Treasury-$6,630,000,000 in total includ"' ing refundable taxes-$1,600,000,000 would have been paid by the income groups under $3,000 of net income; $3,500,000,000, or more than half of the total, would have been paid by income groups under $5,000 of net income. Taking additional corporate taxes, excise taxes, and estate and gift taxes into the equa­tion, $5,400,000,000, or about· one-half of the total additional taxes proposed by the Treas­ury, would have been paid by the income groups under $5_,000.

It is, of course, true that much of our increased national income has gone to per• sons with low or -modest incomes. But It is also true that the incomes of millions of families still fall far short of adequate living standards. The fact that a large proportion of the $157,000,000,000 of income payments estimated for the calendar year 1944 will go to persons with incomes of $3,000 and less does not mean that the taxpaying ability of these millions of persons is substantial. We must look behind aggregates to individual cases. When we do so we -find that the mar­gin of disposable income over and above wartime needs . is a narrow one for many families. Out of sixty-seven and three-tenths million income recipients, fifty-eight and two­tenths million receive incomes of less than $3,000. In the . aggregate these .persons- re .. ceive $96,200,000,000 before personal taxes. This appears to be a frpitful · source of addi­ti_onal taxes ·until we compute the number

of dollars per income recipient. That figure is about $1,650 per recipient before taxes, or about $1,500 after taxes. It does not leave much opportunity for inflationary spending.

To impose additional taxes so heavy that they would cut intlo this margin would be false economy. It would deprive workers of basic necessities and thus undermine their productive efficiency and morale. Moreover, we should not forget that individuals in these low-income brackets bear a disproportionate share of the existing tax load, both Federal and State.

ECONOMY AS A SUI!STITUTE FOR TAXES

Others · who oppose the Treasury's tax pro­gram assert that additional taxes are not necessary if we would curtail Government expenditures. They offer economy as a sub­stitute for increased taxes. They urge that a reduction in Government expenditures would completely obviate the need for addi­tional taxes . .

It should not be necessary for me to say that the Treasury is in sympath¥ V'Jith the objective of-curtailing all expenditures which. may safely be deferred until after the war. The Secretary has been ln the forefront work­ing for economy. From time to time he has made .recommendations for .cutting .gove,rn• · ' mental expenditures, many of whiCll have been 'PUt into effect. -- But being against waste. is like · being against sin. Non war ex­penditures, exclusive of interest, are at the low level of $4,000,000,000. Curtailments of magnitude are possible only in connection with war expenditures. Here possible reduc­tions~by "possible" I . mean curtailments which will not impair the war effort--do not loom very large. .

Froni the standpoint of inflation spendable income would still remain far in excess of ~vailable goods. Even a reduction i~ expend­itures of. $10,000,000,1:JOO would do no· m.ore · than give a $10,500,000,000 program a better chance to hold inflationary spending power and Government debt within manageable limits. It· would give us a. greater margin o{ safety in war finance, but it would not detract from the pr'essing need for additional taxes sufficiently to justify a · lower .program.

CAPACITY TO PAY

Finally, it is contended that the Amerl­.can people do not have .additional capacity to pay more taxes. But here are facts: .Com­paring the fiscal year 1944 with.1940, income payments to individuals show an increase of about $75,000,000,000; in the same period individual income taxes have increased only about $18,000,000,000 a year. In other words, the present tax system is absorbing only about one-fourth of the increase in annual income payments generated by defense and war activities. · The question is not whether the American people can afford to pay high­er taxes, but whether they can afford not to pay them.

In an attempt to prove that American taxes are too high it is argued that taxes in the United States are higher in terms of dollars per capita than in the United King .. dom and Canada. This . argument is, of · course, wholly fallacious. Per capita taxes are not an indication of rea,l burden. The proper test is the relation of taxes to the in­comes of taxpayers. The burden of Ameri­can taxes is lighter than the British · and Canadian loads in terms of what counts­income remaining after taxes.3

The argument against additional income taxes is dramatized in statements to the effect that our existing tax rates are con.; fiscatory when we combine their load with

sA mimeographed study, Comparison of Taxes . in the. United States, United Kingdom, and Canada, may be obtained from the Di­vision of Public Relations, Treasury Depart­ment, Washington, D. 0.

a required payment next March of uncan­celed 1942 liabilities and State income taxes. It is said that some of our most fortunate citizens would have to pay a tax amounting to more than their year's income and that at the end of . the year they would owe money for the privilege of living.

The most charitable word for such state­ments is that they are misleading. The ignored fact 1s that the Federal income tax: allows for the deduction of State income taxes in computing net income. No matter how high the Federal and State rate sched­ules may be, the combination of the two can never result in a tax on one year's in­come in excess of 100 percent of net income.

Those who received a cancelation of three-quarters of 1942 tax liability are in no position to argue that taxes talte more than 100 percent of income. The payment due· March 15, 1944, ' of part of 1942 uncanceled tax liability cannot fairly be used to prove' confiscation of 1944 incomes. This is a tax on 1942 income. If the taxes on the income of 2 or more years are added together· and compared with 1 year's income; it is of course possible to reach a tax of more than 100 percent of 1 year's net income. But if we take 2 years of taxes into the compa;rison we should · also take· 2 yeam. of·. net income. As a matter of fact, the can~ cel!i.tion of three-fourths of the tax on 1942 incomes was a windfall, making it easier, not harder, to pay tax on 1944 income.

INC~EASED CORPORATE TAXES

The Secretary's recommendations -to the Ways and Means Committee included addi­tional corporate taxes of one and one-tenth billion dollars. The proposal was that the surtax rate of small corporations be in­creased 4 percent and those of ' large cor­porations 10 percent, making for the large corporations a combined normal and su·rtax rate of 50 · percent. No additional excess­profits taxes were suggested. To promote post-war liquidity the Treas~ry also sug..; gested a procedure for accelerating the -pay­ment of refunds attributable to the loss carry-back provision. This la:st item would

. have been particularly helpful to small busi­ness, which is more apt to have post-war cash problems.

CORPORATE WAR EARNINGS

The argument has been made that these increases drain life blood of corporations. .This emotional argument ignores some start­ling figures which have been submitted to the Ways and Means Committee. Corporate profits (excluding dividends received) will reach the estim~ted level of twenty-two and six-tent h biilion dollars for the calendar year 1943. The estimate for 1944 is twenty-four and ·five-tenth billion: dollars. These profits are more than four times corporate profits for the year 1937, which vias one of the most prosperous years of the thirties.

Taxes have also risen, it is true; they have been multiplied many times·. Total corporate liabilities for income and excess-profits taxes amounted to slightly over one and one-fourth billion dollars for 1937. They have climbed to thirteen and one,.half billion dollars for the year 1943. But taxes, even of this mag­nitude, have failed to keep up with the mad pace of increased earnings. !<,or the year 1942 corporations will have left after taxes nearly eight and five-tenth billion dollars: and in 1943, nearly nine and two-tenth bil­lion dollars. In 1937 they had left less than $4,000,000,000.

Nor have our high war taxes substantially affected dividends paid. Tlie average of divi.; dends paid for the years 1936 to 1940 was $4,100,000,000; the highest figure was $4,800,­ooo,ooo in the year 1937. For the years 1941, 1942, arid 1943, 'dividends are estimated at $4,500,000,000, $4,1.00,0.00,000, and $4,000,000, .. 000,- respectively. Even af-ter taxes and divi~ dends are paid, the corporations of the coun.;, try, including loss corporations, will have

11004 CONGRESSIONAL RECORD-HOUSE DECEMBER 21 accumulated for the years 1942, 1943, and 1944 over $15,000,000,000 of undistributed corporate profits!

CORPORATE CASH POSITION

I have heard the argument that these high undist ributed profits are i~vested in brick and mort ar, and that they are not available as liquid funds to be used in post­war act ivity. However, recent studies show that liquid assets of corporations have risen even faster than retained earnings.

Nonfinancial corporations increased their holdings of currency, bank deposit s, and Unitci States Government securities by $12,-000,000,000 during the 2 years 1941 and 1942 according to an estimate prepared by the Securities and Exchange Commission. If the accumulation of liquid assets in the first half of 1943 should continue at the present rate through the year, the total increase would be $25,000,000,000 for the 3 years, 19.41, 1942, and 1943. A study just released by the Federal Reserve Board indicates that busi­ness deposits, both corporate and noncor­porate, totalled $30,000,000,000 on July 31, 1943.4 While all cf these deposits would not be fully available for conversion to peacetime operat ions, and to provide working capital needed to maintain a high level of peace­time employment and production, it is hardly stretching a point to say that they reflect a generally liquid condition.

CONCLUSION

I hope the facts I have placed before you this evening make clear an issue which has become blurred in much discussion. Seldom are the outlines of an economic problem so black and white. The question is not whether we shall have no taxes, or some taxes, or more taxes than that. The ques­tion is whether w~ shall do everything pos­sible to avoid inflation. I recognize that taxes cannot do the whole job. We ·need wage stabiliza~ion, rationing, price control, and other things. The fight on inflation is indivisible. I do not say that we can pre­vent runaway inflation. · But at this eleventh hour we still have a chance. I hope we will take that chance-that we will grasp the nettle before it is too late.

Mr. PATMAN. I ask the Members, if they_·wm be kind enough to do so, to read this statement by Secretary Morgenthau, who certainly should know this problem, as well as the statement by Mr. Paul, the general counsel.

The SPEAKER. The time of the gen­tleman from Texas [Mr. PATMAN] has expired. -

Under a previous order of the Hquse; the gentleman from Arkansas [Mr~ HAYS] is recognize~ for 3 minutes. ·

CHRISTMAS

Mr. HAYS. Mr. Speaker, we some­times lose sight. of the historic character of Christmas as a great religious festival; but if we grasp its true spirit this year we will strengthen our defenses where they have at times been weak. I refer to our need for faith and for the spirit of sacrifice which are necessary elements in. civilian as well as military endeavors. The .faith of our fighting men is superb. Some of the great literature of this war is in the personal messages· from them and has inspired the Nation. _

We have equipped our Army and Navy with the oest trained Chaplains' Corps in history. We .ha.ve been assured ·that the religious life of our armed forces

"' "Statistics of Deposit Ownership." -Fed­eral Reserve Bulletin, October 1943.

will be provided for, but on the home front we have too often assumed that selfish impulses are stronger than our capacity for unselfish action. Clever ad­vertising is all right, glamour is not objectionable in the various governmental appeals, but there is something deeper and finer in America that these devices do not reach. We should therefore meet head-on the forces of materialism and selfishness.

The real America is one we have seen accept in its devotion to religion the sub­lime statement which is at the core of the Christian's faith, "Neither count I my life dear unto myself."

This capacity for self effacement and sacrifice constitutes a great resource which has been only partially utilized. It is this quality in American life rather than the desire for material gain that will respond.

In that spirit our people can be counted upon to accept cheerfully their share of the inconveniences, to accept the in­evitable tax burdens, to waive some rights if by asserting them they cause unneces­sary irritations. This is the quality in our national life that will maintain unity and good will at home, and finally prove us worthy of those who fight our battles.

ENROLLED BILLS AND JOINT RESOLU- . TIONS SIGNED

Mr. KLEIN, from the Committee on Enrolled Bills, reported that that com­mittee had examined and found truly enrolled bills and joint resolutions of the House of the following titles, which were thereupon signed by the Speaker:

H. R. 1203. An act to limit private suits for penalties ap.d damages . arising out of frauds against the United States;

H. R. 1616. An act to amend the Coast Guard Auxiliary and Reserve Act of 1941, as amend.ed; · · ·

H. R. 2562. An -act -to authorize the Secre­tary of Agriculture to sell and convey to the State Hospital at Goldsboro, Goldsboro, N. C., a certain tract of land, situated 1n Wayne County, N. C.:

H. R. 3598. An act making appropriations to supply deficiencies in certain appropria· tio:ris for the fiscal year ending June 30, 1944, and for prior fiscal years, to provide sup­plemental appropriations for the fiscal year ending June 30, 1944, and for other pur­poses;

H. J. Res. 171. Joint resolution to permit the importation from foreign countries free of duty, during a period of 90 days, of cer­tain grains and other products to be used for livestock and poultry feed, and suspending for 2- months the increase in the tax .rates under the Federal Insurance Contributions Act;

H. J. Res. 209. Joint resolution extending until January 31, 1944, the provisions of the act of. April 29, 1943, making an appropria­tion to assist in providing a supply and dis­tribution of farm labor for the calendar year 1943; and

H. J. Res. 210. Joint resolution authorizing the printing and binding of a revised edition of Cannon's Procedure in the House of Rep­resentatives and providing that the same shall be subject to copyright by the author.

The SPEAKER announced his signa­ture to enrolled joint resolutions of the Senate of the following titles: ·

8. J. Res.103. A joint resolution continuing the Commodity Credit Corporation as an agency of the United States; and

S. J . Res. 105. A joint resolution fixing the date of meeting of the second session of the Seventy-eighth Congress.

BILLS AND . JOINT RESOLUTIONS PRE­SENTED TO THE PRESIDENT

Mr. KLEIN, from the Committee on Enrolled Bills, reported that that com­mittee did on this day present to the President, for his approval bills and joint resolutions of the House of the following titles:

H. R. 1203. An act to limit private suits for penalties and damages arising out of frauds against the United States;

H. R. 1616. An act to amend the Coast Guard Auxiliary and Reserve Act of 1941, as amended:

H. R. 2562. A..l'l act to authorize the Secre· tary of Agriculture to sell and convey to the State Hospital at Goldsboro, Goldsboro, N.C., a certain tract of land, situated in Wayne

'County, N. C.; H. R. 3598. An act making appropriations to

supply deficiencies in certain appropriations for the fiscal year ending June 30, 1944, and for prior fiscal years, to provide supplemen­tal appropriations for the fiscal year ending June 30, 1944, and for other purposes;

H. J. Res. 171. Joint resolution to permit the importation from foreign countries free of duty, during a period of 90 days, of certain grains and other products to be used for livestock and poultry feed, and suspending for 2 months the increase in the tax rates under the Federal Insurance Contributions Act. - ·

H. J. Res. 209. Joint resolution extending until January 31, 1944, the provisions of the Act of April 29, 1943, making an appropria­tion to assist in providing a supply and dis~ tribution of farm labor for the calendar year 1943; and

H. J. Res. 210. Joint resolution authorizing the printing and binding of a revised edition of Cannon's Procedure in the House of Repre­sentatives and providing that the same shall be subject to copyright by the author.

ADJOURNMENT

Mr. RAMSPECK. Mr. Speaker, in ac­cordance with Senate Concurrent Reso­lut~on No. 29, I move that the House do now adjourn. ;

The motion was agreed to. The SPEAKER. In accordance with

Senate Concurrent Resolution No. 29, the Chair declares the first session of the Seventy-eighth Congress adjourned sine die. ·

Thereupon at 4 o'clock and 23 min­utes 'p, m., the House adjourned sine ill~ .

BILLS AND JOINT Rll:SOLUTIONS AP­PROVED SU!BSEQUENT TO SINE DIE AD­JOURNMENT

The President of the United States, subsequent to the sine die adjournment of the first session of the Seventy-eighth Congress, notified the Clerk of the House of Representatives that he had approved acts and joint resolutions as follows:

. . On December 20, 1943: H. J. Res. 199. Joint resolution to extend

the time limit for immunity. On December 21, 1943:

H. R. 2641. An act to authorize the acqui­sition by exchange of certain lands for addi-tion to the Sequoia National Park. ·

On December 22, 1943: H. J. Res. 171. Joint Resolution to permit

the importation from foreign co~ntries free

1943 CONGRESSIONAL RECORD-HOUSE 11005 of duty, during a period of 90 days, of cer­tain grains and other products to be used for livest ock and poultry feed, and suspend­ing for 2 months the increase in the tax rates under the Federal Insurance Contri­butions Act.

On December 23, 1943: H. J . Res. 209. Joint Resolution extending

until J anuary 31, 1944, the provisions of the Act of April 29, 1943, making an appropria­tion to assist in providing a supply and dis­tribution of farm labor for the calendar year 1943;

H. J . Res . 210. Joint resolution authorizing the printing and binding of a revised edition of Cannon's Procedure in the House of Rep­resentatives and providing that the same shall be subject to copyright by the author;

H. R. 1203. An act to limit private suits for penalties and damages arising out of frauds against the United States;

H. R. 1616. An act to amend the Coast Guard Auxiliary and Reserve Act of 1941, as amended;

H. R. 2545. An act for the relief of Samuel J. D. Marshall;

H. R. 2562. An act to authorize the Secre­tary of Agriculture to sell and convey to The State Hospital at Goldsboro, Goldsboro, N. C., a certain tract of land, situated in Wayne County, N. C.; and

H. R. 3598. An act making appropriations to supply deficiencies in certain appropria­tions for the fiscal year ending June 30, 1944, and for prior fiscal years, to provide supple­mental appropriations for the fiscal year ending June 30, 1944, and for other purposes.

REPORTS OF COMMITTEES ON PUBLIC BILLS AND RESOLUTIONS

Under clt:~.use 2 of rule XIII, reports of committees were delivered to the Clerk for printing and reference to the proper calendar, as follows:

Mr. COSTELLO: Committee on Military Affairs. Interim report on H. R. 3742 and H. R. 3799, bills to provide for payment of mustering-out pay to members of the armed forces; without amendment (Rept. No. 982). Referred to the Committee of the Whole House on the state of the Union.

PUBLIC BILLS AND RESOLUTIONS

Under clause 3 of rule XXII, public bills and resolutions were introduced and severally referred as follows:

By Mr. RANDOLPH: H. R. 3891 (by request). A bill to provide

night differential for certain employees; to the Committee on the Civil Service.

Bv Mr . MILLER of Connecticut: H. R. S892. A bill to require that psychiatric

examinations be given to members of the land and naval forces · prior to their trial before certain courts martial; to the Com­mittee on Military Affairs.

By Mr. HOFFMAN: H. R. 3893. A bill to require granting of

furloughs to overseas servicemen; to the Committee on Military Affairs.

By Mr. MAAS: H. R. 3894. A bill to effectuate security of

radio communications on merchant vessels. during the war, and for other purposes; to the Committee on Naval Affairs.

By Mr. SCANLON: H. R. 3895. A bill to amend the act of Sep­

tember 16, 1942, which provided a method of voting, in time of war by members of the land and naval forces absent from the place of their residence, and for other pur­poses; to the Committee on Election of Pres­ident, Vice President, and Representatives in Congress.

By Mr. WHITE: H. R. 3896. A bill to establish Pacific stand­

ard time for that part of the State of Idaho

now on mountain standard time, for the period during which daylight saving time is in effect; to the Committee on Interstate and Foreign Commerce.

By Mr. OUTLAND: H. Con.' Res. 64. Concurrent resolution per­

taining to the extension of the 3-mile limit; to the Committee on Foreign Affairs.

PRIVATE BILLS AND RESOLUTIONS

Under clause 1 of rule XXII, private bills and resolutions were introduced and severally referred ac follows:

By Mr BONNER: H. R. 3897. A bill for the relief of Lee Gra­

ham; to the Committee on Claims. By Mr. CLASON:

H. R. 3898. A bill for the relief of Frank Gay; to the Committee on Claims ..

By Mr . GREEN: H. R. 3899. A bill for the relief of William

B. Scott; to the Committee on Claims. By Mr. SHORT:

H. R. 3900. A bill for the relief of Mrs. Nancy Ellen Satterlee; to the Committee on Military Affairs.

By Mr . SNYDER: H. R. 3901. A bill granting an increase of

pension to Annie M. Dill; to the Committee on Invalid Pensions.

H. R. 3902. A bill granting a pension to Flora Turner; to the Committee on Invalid Pensions.

H. R. 3903. A bill granting a pension to Hiram Russell Griffith; to the Committee on Invalid Pensions.

PETITIONS, ETC.

Under clause 1 of rule XXII, petitions and papers were laid on the Clerk's desk and referred as follows:

4154. By Mr. LYNCH: Petition of Capt. Edward L. Grant Post No. 1225, American Legion, Department of New York, urging hos­pitalization for honorably discharged vet­erans of World War No. 2, also civilian cloth­ing and mustering-out pay sufficient to main­tain them until such time as they can find employment; to the Committee, on Military Affairs .

4155. By Mr. MOTT: Petition signed by Daisy Hyde and 52 other citizens of Philo­math, Oreg., urging enactment of House bill 2082; to the Committee on the Judiciary.

4156. By Mr. MURDOCK: Petition of Teresa M. Sloper and 21 other citizens ot Clark­dale, Ariz., and vicinity, petitioning Congress to pass House bill 2082, introduced by the Honorable JosEPH R. BRYSON, of South Caro­lina; a bill to reduce absenteeism, conserve manpower, and speed production of materials necessary for the winning of the war by pro­hibiting the manufacture, sale, or trans­portation of alcoholic liquors in the United States for the duration of the war and until the termination of demobilization; to the Committee on the Judiciary.

4157. Also, petition of Florence B. Arm­·strong and 37 other citizens of Tucson, Ariz., petitioning Congress to pass House bill 2082, introduced by the Honorable JosEPH R. BRYSON, of South Carolina, a bill to reduce absenteeism, conserve manpower, and speed production of materials necessary for the winning of the war by prohibiting the manu­facture, sale, or transportation of alcoholic liquors in the United States for the duration of the war and until the termination of de­mobilization; to the Committee on the Ju­diciary.

4158. Also, petition of Olive Goodykoorjtz and 47 other citizens of Chandler, Ariz,, peti­tioning Congress to pass House bill 2082, in­troduced by the Honorable JosEPH R. BRYSON, of South Carolina, a bill to reduce absentee­ism, conserve manpower, and speed produc­tion of materials necessary for 'the winning

of the war by prohibiting the manufacture, sale, or transportation of alcoholic liquors in the United St ates for the duration of the war and until the termination of demobil­ization; to the Committee on the Judiciary.

4159. AlEo, petition of Mrs. J. T. Hartman and 373 other citizens of Phoenix, Ariz., and vicinity, petitioning Congress to pass ~ouse bill 2082, introduced by the Honorable Jos­EPH R. BRYSON, of South Carolina, a bill tO reduce absenteeism, conserve manpower, and speed production .of materials necessary for the winning of the war by prohibiting the manufacture, sale, or transportation of al­coholic liquors in the United States for the duration of the war and until the teJ:mi­nation of demobilization; to the Commit­tee on th" Judiciary.

4160. Also, petition of Carrie L. Hollen­beck and 166 other citizens of Glendale, Ariz., petitioning Congress to pass House bill 2082, introduced by the Honorable JosEPH R. BRYSON, of South Carolina, a bill to reduce absenteeism, conserve manpower, and speed production of materials necessary for the winning of the war by prohibiting the manu­facture, sale, or transportation of alcoholic liquors in the United States for the duration of the war and until the termination of de­mobilization; to the Committee on the Ju­diciary.

4161. Also, petition of Lorenzo D. Rhoton and 369 other citizens of Mesa, Ariz., peti­tioning Congress to pass House bill 2082, in­troduced by the Honorable JosEPH R. BRY· soN, of South Carolina, a bill to reduce ab­senteeism, conserve manpower, and speed production of materials necessary for the winning of the war by prohibiting the manu­facture, sale, or transportation of alcoholic liquors in the United States for the duration of the war and until the termination of demobilization; to the Cop1mittee on the Judiciary.

4162. Also, petition of- Paul V. McCaw and 32 other citizens of Tempe, Ariz., petitioning Congress to pass House bill 2082, Introduced by the Honorable JosEPH R. BRYSON, of South Carolina, a bill to reduce absenteeism, con­serve manpower, and speed production of materials necessary for the winning of the war by prohibiting the manufacture, sale, or transportation of alcoholic liquors in the United States for the duration of the war and until the termination of demobilization: to the Committee on the Judiciary.

4163. By Mr. SCRIVNER: Petition of sun­dry citizens of Bourbon County, Kans., urging Congress to reduce absenteeism, conserve manpower, and speed production of mate­rials necessary to the winning of the war by enacting House bill 2082, • to prohibit the manufacture, sale, or transportation of alco­holic liquors in the United States for the duration of the war; to the Committee on the Judiciary.

4164. By Mr. LYNCH: Petition of Max Wie­Sln and 59 other residents of the Twenty­second Congressional District; Bronx, N. Y., protesting against the enactment of any and all prohibition legislation; to the Committee on the Judiciary.

4165. By Mr. HAGEN: Petition of Emelia Erickson, Alma Erickson, and 27 other peti­tioners from Thief River Falls, Minn., advo­cating passage of House bill 2082, a bill pro­hibiting the manufacture, sale, and/ or trans­portation of alcoholic liquors for the duration of the war; to the Committee on the Judi­ciary.

4166. By Mr. ROLPH: Resolution of the San Francisco Labor Council, requesting the National Housing Agency to program alloca­tions to civilians' new homes and that the immigrant war wor rs' directive be set aside for these homes and that the War Production Board release materials and grant priorities for their construction in accordance with the civilian needs of metropolitan centers; to the Committee on Banking and Currency.