CONGRESSIONAL RECORD - HOUSE August 30

importer and all other persons, Including

the United States. This provision, like

other statutes of limitations, is desirable

to permit the final disposition of cases in

an orderly manner. . The importer had a legal means to

contest the classification decision but

failed to do so within the terms of the

statute. To grant relief in this situation

would be inequitable and would discriminate against the hundreds of other importers who have paid duty based upon a construction of the law which the courts

have subsequently decided would be erroneous.

For these reasons, I return the bill

without my approval.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 7, 1957.

PHILIP COOPERMAN, ARON SHRIRO, AND

SAMUEL STACKMAN

I-I. R. 1733: I am withholding my approval of H. R. 1733, for the relief of

Philip Cooperman, 'Aron Shriro, and

Samuel Stackman.

The bill would provide that, for the

purpose of determining the individual

liability for income taxes for the taxable

year 1951 of Philip Cooperman, Aron

Shriro, and Samuel Stackman, the elections of said Philip Cooperman, Aron

Shriro, and Samuel Stackman, sole

stockholders of Queens Syndicate, Inc.,

which was liquidated pursuant to a plan

of complete liquidation adopted on the

first day of September 1951, to have the

benefits of section 112 (b) (7) (A) of the

Internal Revenue Code of 1939 would be

considered to have been filed within 30

days after the date of adoption of such

plan. The bill states that the benefits of

section 112 (b) (7) were denied to the

stockholders because the mailing of the

elections was delayed, without negligence or fault on the part of the stockholders, until after the 30th day following the adoption of the plan of complete

liquidation.

Section 112 (b) (7) provides a special

rule in the case of certain complete liquidations of domestic corporations occur- ing within 1 calendar month for the

treatment of gain on the shares of stock

owned by qualified electing stockholders.

The effect of this section is to permit

deferral of tax upon unrealized appreciation in the value of the property distributed in liquidation. An election to be

governed by section 112 (b) (7) must be

filed by the shareholder or by the liquidating corporation with the Commissioner of Internal Revenue on or before

midnight of the 30th day after adoption

of the plan of liquidation. Essentially,

H. R. 1733 would waive this requirement

for the named taxpayers.

The records of the Treasury Department disclose that it was not involved in

the untimely filing by these taxpayers

of the elections. These records show

that on September 1, 1951, Queens Syndicate, Inc., adopted a plan of complete

liquidation. On November 18, 1951, elections on Form 964, signed by the electing

shareholders, were received by the Office

of the District Director of Internal Revenue, Brooklyn, N. Y. Accordingly, the

filing of the elections was delayed for

more than 6 weeks after the 30-day period prescribed by law for the filing of

such elections.

The granting of special relief in this

ease would constitute an unfair discrimination against other taxpayers similarly

situated and would create an undesirable

precedent which might encourage other

taxpayers to seek relief in the same

manner.

Under the circumstances, therefore, I am constrained to withhold my approval

of the bill.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 7, 1957.

FEDERAL EMPLOYEE SALARY INCREASES

H. R. 2462 and H. R. 2474: I am withholding approval of H. R. 2462 and H. R.

2474, bills providing increases in salary

rates scheduled under the Classification

Act of 1949, as amended, and the Postal

Field Service Compensation Act of 1955, as amended, and providing salary in- creases for other Federal employees.

H. R. 2462 would increase salaries,

under the Classification Act, by about

11 percent, and would make the increases

applicable to all except the most responsible jobs. H. R. 2474 would increase

salaries in the Postal Field Service by

$546. The increases would range downward from about 19 percent for the less

responsible jobs to about 3.5 percent for

the most responsible jobs.

I cannot approve these bills because,

first, they are not justified by considerations of equity; second, they would materially accentuate existing disparities in

the pay scales; third, they would increase

total Federal expenditures so as to make

large supplemental appropriations nec- essary; fourth, they would increase the

rate of Federal expenditure so as to re- quire in all probability an increase in the

statutory debt limit; and fifth, they

would contribute unnecessarily to existing and incipient inflationary pressures

in our national economy.

First. The claims that the increases

provided for in these bills are justified

by increases in the cost of living have not

been sustained. From July of 1951, the

effective date of the 1951 pay increases,

to March of 1955, the effective date of

the 1955 pay increases, the cost of living increased by slightly more than

3 percent. Yet the 1955 pay increases

amounted to an average of about 8 percent for postal employees and about 7.5

percent for classified employees. Since

March of 1955 the cost of living has gone

up a little over 51/2 percent, or a total

increase since July of 1951 of about 8.9

percent. Against this increase of 8.9 percent in the cost of living, approval of

these bills would result in there having

been granted since 1951 to postal em- ployees increases in pay averaging about

20.6 percent and to classified employees

increases in pay averaging about 18.5

percent. During this same period, fringe

benefits have grown substantially-lowcost life insurance, unemployment com- pensation, liberalized retirement, and

survivor benefits. By no standards do

the equities of the situation justify the

increases provided for in these bills.

Second. Federal employees have the

right to expect fair and equitable wage

treatment in relation to each other and

in relation to employees in private business. These bills disregard that fundamental principle. Both would widen existing pay discrepancies within the Federal establishment and aggravate existing inequities, and it has not been demonstrated that generally the present conditions of Federal employment are out of

line with those of the millions of other

citizens working in private industry.

Third, in the absence of any compelling

justification on the merits, great weight

must be given to the serious fiscal and

economic implications of these bills. The

bills would increase annual expenditures

by about $850 million for increased base

pay and increased benefits computed on

base pay. To meet these increased costs,

either drastic curtailment of postal services and programs covered by the Classification Act, or large supplemental appropriations would be necessary, notwithstanding our firm efforts to operate

these Federal programs within existing

resources.

Fourth, the bills, by increasing the rate

of Federal expenditures in relation to

receipts, would press the public debt upward to a point so dangerously close to

the statutory debt limit that an increase

in the limit would appear unavoidable.

The undesirable economic consequences

of such action are apparent.

Fifth, these increased expenditures

and the threat of increased public debt

which they pose would have the effect of

adding to the upward pressures on the

prices of things Americans buy. I am

firmly convinced that our people want

orderly economic growth with reason- able price stability. The attainment of

this goal lays heavy obligations upon us all. Of the Federal Government it demands fiscal integrity, however hard the

choices such a course may impose. There can be no doubt, moreover, that the

health of our economy and the defense

of the dollar require economic statesmanship of employers and workers, public and private alike, in determining how

much we as a nation pay ourselves for

the work we do. Government cannot in

good conscience ask private business and

labor leadership to negotiate wage adjustments with full regard to the whole

Nation's interest in price stability while

at the same time approving the enactment of these wholesale salary-increase

bills.

My decision to withhold approval of

these bills is made with firm belief that

the Government's salary position must

support recruitment and retention of

able employees in the thousands of different occupations essential to our Federal operations. An inquiry into the need

for adjustments in the structure of ex- ecutive branch pay systems has been

undertaken at my direction. In the

event this inquiry demonstrates the need

for logical, fair, and discriminating adjustment, recommendations for appropriate action will be made early in the

next session of the Congress.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, September 7, 1957.

KNOX CORPORATION

H. R. 2904: I have withheld my approval from H. R. 2904, for the relief of

the Knox Corp., of Thomson, Ga., for the reason that it provides for a return by

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