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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CONGRESSIONAL RECORD - SENATE

Finally, the bill requires the Court of

Claims to use a specific method of computing invested capital-assuming the

taxpayer has overpaid his taxes-to be

based upon an amount arrived at in

settling the controversy before the Board

of Tax Appeals for the years 1918

through 1920. The year 1917 was not

involved in that settlement, nor, as the

Court of Claims indicated in its 1939

decision, "does the action taken with respect to subsequent years constitute conclusive proof as to 1917." Even assuming the desirability of granting jurisdiction to the Court of Claims for this year,

it does not seem desirable to preclude

the court from determining the correct

tax liability for the year.

Since the proposed legislation would

be discriminatory and would single out a

particular taxpayer for relief from the

statute of limitations without adequate

reason therefor, and since it would preclude the Court of Claims from determining the true tax liability, I feel constrained to withhold my approval of

S. 3304.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 1, 1954.

On September 2, 1954:

CONTRACTS BETWEEN GOVERNMENT AND COMMON

CARRIERS

S. 906. I have withheld my approval of

S. 906, to establish the finality of con- tracts between the Government and

common carriers of passengers and

freight subject to the Interstate Commerce Act.

This legislation provides that rates

cstablished under the provisions of section 22 of the Interstate Commerce Act,

when accepted or agreed to by the Secretary of Defense, the Secretary of Agriculture, or the Administrator of General

Services, or by any official or employee

to whom the authority is delegated by

them, shall be conclusively presumed to

be just, reasonable, and otherwise lawful, and shall not be subject to attack,

or reparation, after 180 days, or 2 years

in the case of contracts entered into during a national emergency declared by

Congress, after the date of acceptance or agreement upon any grounds except actual fraud or deceit, or clerical mistake.

The determination of what is a just,

reasonable, or otherwise lawful rate on

interstate shipments is now vested in

the Interstate Commerce Commission.

All shippers, including the Government,

are bound as a matter of contract to

pay the agreed rate, whether it be in

the form of a tariff rate or a section 22

quotation. This contractual obligation

is subject, however, to an overriding

right of the shipper to appeal to the

Interstate Commerce Commission to determine whether the agreed rate is lawful. The statute of limitations for such

action in the present law is 2 years. This

act would require the Government to determine the lawfulness of the rate, with

finality, and through agencies other than

the Interstate Commerce Commission,

within 180 days at ordinary times, or

within 2 years during a national emergency declared by Congress. Whereas

the commercial shipper could contest the

rate while It Is in effect, the Government

would apparently be required to cancel or refuse the rate and pay higher charges

during any test of the lawfulness of the

rate.

I am therefore unable to approve this

legislation, which relegates the Government in its role as a user of transportation services to a position inferior to that

of the general shipping public and re- stricts its access to the Interstate Com- merce Commission, the body of experts

authorized by Congress to determine the

reasonableness of rates.

I see no reason why the Government

should not be subject to the same limitations on retroactive review of its

freight charges as the commercial shipper. That result could be accomplished

equitably by an amendment to section

16 (3) of the Interstate Commerce Act

specifying that the Government shall be

subject to the 2-year limitation presently applicable to commercial shippers. The Government would then be on exactly the same basis under that sec- tion as all other shippers, and existing

inequities in the present ratemaking relationships between the Government

and the common carriers would be re- moved. I recommend that such legislation be enacted at the next session of

the Congress.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 2, 1954.

T. C. ELLIOTT

S. 1687. I am withholding my approval

from S. 1687, "For the relief of T. C.

Elliott."

The purpose of this enactment is to

pay to T. C. Elliott, of Daytona Beach,

Fla., the sum of $15,000 as compensation

for his services in preparing and furnishing certain information to Members of

Congress. The bill provides that payment authorized shall be free of Federal

income tax.

This bill is faulty for two reasons. First, the exemption of the award from

all Federal income taxes is totally un- warranted. Second, it is stated in the

enactment that the payment is "compensation for services rendered." The

record demonstrates that the sum to be

paid is not true compensation, but a monetary award for special services..

The claimant, T. C. Elliott, was an em- ployee of the Federal Government from

November 1, 1900, until his retirement,

January 31, 1944. During this period of

employment Mr. Elliott was an auditor in

the Navy Department, the Treasury Department, and the General Accounting

Office. In such a position he became con- versant with freight rates and transportation problems and furnished data on these subjects on many occasions to

individual Members of Congress and to

various committees of the Congress.

It is conceded that MA'. Elliott, in addition to performing h2s regular duties,

rendered valuable service to Members of

Congress. His efforts undoubtedly con- tributed to a saving to the Government of

large sums of money, but the record is

also clear that these services were ren- dered by Mr. Elliott voluntarily, after

office hours, on his own time, or on his

leave time, and were completely aside

from his official duties or the requirements of his office. Mr. Elliott, like

thousands of other devoted Government

employees, is to be commended for the

unselfish manner in which he made his

knowledge of freight rates available to

others.

Each year there accrue to the Government the beneficial results of extraordinary services rendered by interested

private citizens and organizations who

volunteer much useful information and

experience to the Congress, to its individual Members, and to the executive

branch agencies as well. I do not believe that claims for compensation for

such volunteer services should be encour- aged. Approval of legislation for that

purpose would ratify an irregular and

unformalized employment relation, and

would also place the Congress and the

executive agencies in an unacceptable

and unbusinesslike position. If such

services are to be on a regular or recur- ring or even a sporadic basis, formal ar- rangements for employment should be

made. There are numerous alternatives.

A regular full-time or part-time appointment, appointment as a consultant

at a per diem or an hourly rate, and per- formance of work by contract are the

most common. If the service is per- formed outside of a formal employment

relationship, whatever recognition may

be given to it should not be considered

compensation.

I do not want my action in withholding approval of this bill to be construed as derogation of Mr. Elliott's services or as criticism of recognition by the Congress of special services afforded to its

Members. While I cannot approve the

bill in its present form for the reasons given above, I shall be glad to approve a bill which is by its terms an extraordinary monetary award for special serv- ice and which removes the tax-free

status of the award.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 2, 1954.

FOREIGN-PRODUCED TROUT

S. 2033. I am withholding my approval

from S. 2033, relating to the labeling of

packages containing foreign-produced

trout sold in the United States, and re- quiring certain information to appear in

public eating places serving such trout.

The bill would amend the Federal

Food, Drug, and Cosmetic Act by making

its criminal sanctions-imprisonment up

to 3 years or a fine up to $1,000, or both-and certain civil sanctions appli- cable to the sale, offering for sale, possessing for sale, or serving of foreign- produced trout in violation of special

provisions which the bill would add to

the act with respect to such trout, ex- cept a certain species of lake trout

largely imported from Canada. (These

special requirements would be in addition to. any of the other requirements

of the act and to any applicable requirements of State law.)

These special requirements-none of

them applicable to domestic trout-are as follows:

1. Foreign-produced trout would have

to be packaged and, if the package is

1954 15843