CONGRESSIONAL RECORD - SENATE

contractor actually earned a profit of

$34,202.86 on the entire contract. The

audit report also discloses that this contractor earned a profit of $392,329.15 on

all other Government business for the

years 1944, 1945, and the first 5 months

of 1946. Its commercial business during

the same period also operated at a substantial profit.

My approval of this bill would establish

the undesirable principle of Government

underwriting any wartime losses incurred

by contractors providing goods and services to the Government, regardless of

the fact that such contractors did not

sustain a net loss. I am unable to perceive any circumstances which would

warrant preferential treatment for the

claimant to the detriment of other wartime contractors. I am satisfied that it

is my duty to oppose this bill.

Although my examination of the record

In this case does not lead me to believe

that there is an equitable basis for this

claim, it is possible that a court through

judicial processes might be led to determine otherwise. In complex situations

like this one, it is my opinion that judicial rather than legislative remedy

should be sought. I would, therefore, be

willing to give my approval to a jurisdictional bill waiving the bar of any

statute of limitations against the claim.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, August 31, 1954.

On September 1, 1954:

MRS. MERLE CAPPELLER WEYEL

S. 45. I am withholding my approval of

S. 45, a bill for the relief of Mrs. Merle

Cappeller Weyel.

-This enrolled enactment would pay

the sum of $5,437.21 to Mrs. Merle Cappeller Weyel in full settlement of her

claim arising out of the death of her husband after his release from active duty in

the Navy in 1948.

The husband of the beneficiary of this

bill was recalled to active duty in 1947,

after having been retired following the

completion of 30 years of service. Prior

to his release from this tour of duty, he

was given a particularly thorough physical examination because of indications

that he might be suffering from highblood pressure. However, a board of

medical survey determined, as a result

of this examination, that he was physically qualified for release from active

duty, and he was accordingly again returned to his retired status in February

1948.

Subsequently, this officer was treated

and X-rayed by a private physician in

September 1948. The X-ray disclosed

that he was suffering from a malignancy

which caused his death in December

1948, after two unsuccessful operations

in private hospitals.

This deceased officer's case was twice

considered by the Board for the Correction of Naval Records, which was established by statute to correct records where

this was necessary to remove an injustice. It was contended by the beneficiary that the malignancy should have

been discovered at the time her husband

was released from active duty and that.

if it had been discovered, he would have

been kept on active duty until his death.

On the basis of this, it was further contended she was entitled to be paid the

usual death gratuity, the difference between her husband's active and retired

pay for the period between his release

from active duty and his death and the

amount of private medical and hospital

expenses incurred on his behalf. The

present measure is based on these same

contentions.

After twice reviewing the case, the

Board concluded that it was to be presumed that the malignancy had existed

at the time the decedent was released

from active duty and that, had its existence been discovered, he would not have

been released at the time he was. However, the Board concluded that the decedent would not have been kept on active duty until his death, but in all probability would have been retired for physical disability not later than July 1948.

I can perceive no justification for the

payment which the bill would make on

account of the cost of private medical

and hospital care incurred on behalf of

the decedent. He was, at all times, entitled to such care at facilities operated

by the Navy Department. There is no

showing that any attempt was made to

take advantage of these facilities. But,

on the contrary, it appears that, for personal reasons, the decedent elected to be

treated privately. If the Government is

to establish medical facilities and make

provision for the care of servicemen and

veterans, as it has done, it cannot, at the

same time, be expected to undertake reimbursement of such personnel when

they decide, for personal reasons, to obtain care at their own expense from private physicians and hospitals.

Another reason why I am unable to

approve this measure is that, as enacted,

it is either unfair to the beneficiary or

to the Government. This results from

the fact that the bill excludes payment

of the death gratuity of 6 months' pay

which was originally claimed by the beneficiary but recognizes and authorizes

the payment of the difference between

active duty pay and retired pay for the

entire period between the date of the

decedent's release from active duty snd

the date of his death. It is obviously inconsistent to exclude the one and recognize the other. If the decedent is to be

considered on active duty for the entire

period in question for pay purposes, he

certainly should be so considered with

respect to the payment of the death

gratuity. On the other hand, if his ac- tive duty is considered to have ended

prior to the date of his death, then it is

equally obvious an adjustment should be

made in the pay differential award. In

all fairness, it would appear that this

inconsistency should be resolved one way

or the other.

It should be stressed that notwithstanding disapproval of the bill, the benefficiary can now have her claim settled

administratively. Since the time when

the case was last reviewed by the Board

for the Correction of Naval Records, legislation has been enacted which permits

administrative settlement of claims

based on changes in records made by the

Board. Reconsideration of the beneficiary's claim under such legislation

would result in an award which, I am

confident, will be equitable from the

standpoint of both the beneficiary and

the Government. In this connection I

should like to express my belief that the

Board should take into account, in its

reconsideration of the case, the possibility that had it been discovered prior

to his release from active duty medical

treatment of the decedent's condition

might very well have led to his retention

on active duty until the date of his

death.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 1, 1954.

E. S. BERNET

S. 46. I have withheld my approval

from S. 46, entitled "For the relief of

E. S. Berney."

This bill would pay to E. S. Berney the

sum of $4,750 as compensation for damages allegedly sustained by him as a

result of certain representations made

by a representative of the Navy during

World War II.

It appears that in the summer of 1943

a representative of the Navy discussed

with the beneficiary the potential use of

his Nevada ranch and certain adjoining

ones as a bombing range. Although the

evidence on this point is conflicting, it

appears that such representative indicated that he expected the Navy to begin

operations that fall and that, prior to

the beginning of such operations, all

livestock would have to be removed from

the land. The beneficiary alleges that

on the basis of this information he disposed of his cattle and other property

and vacated his ranch early in the fall.

It developed, however, that the Navy did

not need or begin to use his land until

the following spring.

In subsequent condemnation proceedings, the court refused to recognize any

damages occurring prior to the time

when the Navy began using the land in

question in the spring of 1944. On this

premise the court awarded the beneficiary $766.67 for damages occurring after

use by the Navy began. The present

bill was designed to afford compensation

for damages which were excluded by the

court and which the beneficiary alleges

were due to the premature vacation of

his land.

Conceding the facts in this case to be

as stated by the beneficiary, it still does

not follow that he is entitled to the

award proposed here. It has not been

established that the damages allegedly

sustained by the beneficiary were due to

a reasonable reliance upon the representations of the Navy representative.

There appears to have been no such reliance on the part of other ranch owners

whose land was taken under similar circumstances and whose statements appear in the committee reports in support of some aspects of the beneficiary's

claim.

In addition, there appears to be confusion as to the basis for measuring the

damages which the beneficiary allegedly

sustained. He made an unverified claim

of damages in the amount of $12,000.

Part of the damages so claimed are

covered by the $766.67 condemnation

award. The Congress reduced the claim

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CONGRESSIONAL RECORD- SENATE November 8

to $4,750, with no indication as to how

this sum was arrived at.

From the foregoing, it seems to me,

that the record in this case is inconclusive both with respect to the merits of

the beneficiary's claim and as to the

damages which he may have sustained.

These uncertainties compel me to withhold my approval from this bill.

I would, however, be willing to approve legislation which would permit

adjudication of the case by the appropriate district court. Such legislation

should authorize the payment to the beneficiary of such damages as the court

might determine to be reasonably attributable to his reliance upon the alleged representations made to him by

the Navy representative. I believe that

only by such means can the rather obscure elements of this case be considered and resolved in a manner fair to

both the Government and the beneficiary.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 1, 1954.

ELEPHANT BUTTE DAM

S. 417. I have withheld my approval

from S. 417, a bill conferring jurisdiction

upon the United States District Court for

the District of New Mexico, to hear, determine, and render judgment upon certain claimsarising as a result of the con- struction by the United States of Elephant Butte Dam on the Rio Grande.

Under S. 417, jurisdiction would be

vested, notwithstanding any statute of

limitations or lapse of time, in the United

States District Court for the District of

New Mexico, "to hear, determine, and

render judgment upon any claim against

the United States for compensation for

the taking of or for damage to real or

personal property as a result of the construction by the United States of Elephant Butte Dam on the Rio Grande."

The bill does not identify the persons

to whom it would open the doors of the

district court. It does not identify the

date or dates on which the alleged taking of property or damage occurred. It

does not identify the events which might

be alleged to have caused the damage or

the taking. Its only requirement is that

Suit be filed within 2 years from the date

of enactment of the bill.

Construction of Elephant Butte Dam was commenced by the Interior Department in 1912. Approval of the bill would

thus be an open invitation to anyone

who believes that he has, at any time

over the last 42 years, been injured in

his property by the construction of this

dam to bring the United States into

court, no matter how stale his claim may

be.

It appears that the cases around which

the hearings on the bill principally

turned are those of a number of persons

who believe that the existence of the

dam, taken in conjunction with the se- vere floods that descended the Rio

Grande Valley in 1929, resulted in the

permanent seeping or swamping, from

and after that year, of their lands in the

neighborhood of the now abandoned

town of San Marcial. I am aware of no

showing, however, that these landowners did not have an adequate opportunity to pursue their legal remedies

within the period prescribed by general

law or that there were sound reasons

for their failure to do so. Still less am I aware of any reasons for including

within the coverage of the bill not only

these landowners, but also all others who,

regardless of time, attribute a damaging

or destruction of their property to the

construction of Elephant Butte Dam.

The very purpose of a statute of limitations-whether it relates to suits between private citizens or to suits brought

against the Government-is to avoid

stale claims and to procure a reasonably

prompt initiation of judicial action before records are lost or scattered, memories grow dim, and witnesses die or be- come unavailable. To say this is not

to say that compliance with the statute

must be insisted upon in cases where its

waiver would avoid a clear inequity. The

instant bill, however, is not in this exceptional category. On the contrary, the

controversies with which it deals necessarily involve the resolution of questions

of fact, of which some, at least, would require oral testimony from persons familiar with conditions as they were at

the time when the claims originally

arose. Thus, the nature of the claims

here involved emphasizes the justice and

wisdom of the general rule. Against this

background, nothing in the terms or history of S. 417 of which I am informed

offers any sound ground for the departure from existing law which the bill

would sanction.

Beyond these considerations there Is,

in my judgment, no more merit to waiving the statute of limitations in order to

permit the trying of cases which may

range over all the forty-odd years of Elephant Butte history than there would

be in the case of any other Federal rivercontrol structure. In other words, I am

seriously concerned that an exception

as broad as that which S. 417 proposes

to make in the case of Elephant Butte

would be a precedent for attempts to

secure similarly overgenerous legislation in the case of every other Federal

river-control structure that anyone believes has caused him harm, regardless

of how long ago the harm occurred.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 1, 1954.

CUBAN-AMERICAN SUGAR CO.

S. 3304. I am withholding my approval

from S. 3304, which would confer jurisdiction upon the Court of Claims of the

United States. to consider and render

judgment on the claim of the CubanAmerican Sugar Co. against the United

States.

The problem at the root of the lawsuit

and the private relief bills involves the

company's World War I excess-profits

taxes for the year 1917. The specific

facts in this 34-year-old controversy are

set forth fully in the report of the Senate Judiciary Committee (S. Rept. 1963,

83d Cong., 2d sess.). Basically, the taxpayer, for the year 1917, computed its

excess-profits tax liability on the invested

capital method. Some years thereafter,

it felt that its tax liability was excessive

and requested the Commissioner to com- pute the tax under the relief provisions

of the law. When this was done, additional taxes were found to be due, and were paid. Several years later, in 1927, a claim for refund was filed on the

ground that the tax computation by the

relief method was erroneous. This claim was rejected on March 15, 1933, although

later that year the taxpayer attempted to

amend it, claiming that the invested

capital method should be used. This

method had been used in a settlement of

the years 1918, 1919, and 1920, controversy with respect to which had been

going on concurrently. The claim for

refund filed in 1933 was rejected on the

grounds it was not filed within the statutory period.

The overall effect of the legislation

would be to direct the Court of Claims

to determine the 1917 liability of the

taxpayer by applying the invested capital method used in settling the years

1918, 1919, and 1920, before the Board

of Tax Appeals (even though sec. 3 of

the enrolled enactment states that nothing in the act is to be construed as an inference of liability on the part of the

United States) since, as the committee

report indicates, there is no question but

that the taxpayer's taxes were overpaid.

Since the bill grants relief from the

operation of the statute of limitation,

special equitable circumstances should

appear which require that this taxpayer

be singled out for special relief. It is

difficult to find such circumstances in

this case. Basically, the Senate report

urges that the taxpayer was denied a proper hearing by the Commissioner with

respect to this claim. Yet, as the Senate

committee report itself indicates, both

prior to 1921, and after 1927, the taxpayer and the Commissioner's representatives had numerous conferences

with respect to the taxpayer's 1917 liability. It would have served no purpose

to hold further conferences in 1933 on a refund claim which was filed after the

statute had run and based on another

method of computation.

It is also suggested that the Bureau of

Internal Revenue and the taxpayer

"agreed" to postpone any action on the

1927 claim for refund until the 1918,

1919, and 1920 cases were determined.

No valid evidence appears that there was such an agreement. Indeed, the

only information regarding any such discussion is, as the Court of Claims stated

in a decision rendered in 1939 on this

matter and involving this taxpayer that a representative of the taxpayer had

written a letter to the Bureau "purporting to confirm a conversation" with a representative of the Bureau that further

conferences on the year 1917 were to be

indefinitely postponed for the reason that nothing further could be done re- garding the special assessment question

until such question had been settled by

the Bureau or the Board of Tax Appeals.

This unilatetal statement not only does

not seem adequate evidence of such an agreement but illustrates the desirability

of a statute of limitations which disposes of stale claims and the necessity

for retaining or securing evidence with

respect thereto.

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