CONGRESSIONAL RECORD - HOUSE

Mr. PRICE. M'. Speaker, in his television appearance last Sunday before

his takeoff on his South American trip,

President Eisenhower put his finger on

the exact spot where the missile gap

began to appear.

You will recall the President stated

our present missile potentiality began

"from a standing start 5 years ago."

President Eisenhower has been in office

for shortly over 7 years. From his

speech on Sunday, we may gather that

the missile lag was the first 2 years of

the Eisenhower administration when

everything in the defense program was

practically at a standstill while the new

administration took a "new look" at our

defense picture.

We might also recall, as the new administration came into power in 1953,

there was a program attempting to coordinate our missile program and to

expedite it. This program was under

the direction of Kaufman Thuma Keller,

who had been selected by former President Truman as an overall director of

the missile program. The new Eisenhower administration regarded this program so lightly that Kaufman Keller, our

missile program expediter, was one of

the top officials who was allowed to

leave Government service. There was a

long period thereafter when there was

considerable lack of coordination in

pushing our missile program.

In this connection may I present for

the enjoyment of my colleagues in the

House a few lines that occurred to me in

relation to the Secretary of Defense's invention of the phrase "gap-deterrent":

Mr. Gates, what are these antics

That provide defense through pure seman- tics I

Unwilling, of course, to take the rap,

For what you call the missile gap, You concede that such may be apparent

But invent a strawman-"gap-deterrent." This you steadfastly Insist

Simply, friend, does not exist

Where we count one, you count three.

Ah I the magic of budgetry.

But may I ask if a cheery whistle

Is much defense against a missile?

STATE DEPARTMENT MEDDLING

Mr. GROSS. Mr. Speaker, I ask

unanimous consent to address the House

for 1 minute and to revise and extend

my remarks.

The SPEAKER pro tempore. Is there

objection to the request of the gentleman from Iowa?

There was no objection.

Mr. GROSS. Mr. Speaker, the State

Department, which attempts to dictate

to all agencies of the Federal Government, including Congress, has now stuck

its long nose directly into the affairs of a

State.

It provided the crutch on which a

weak-spined politician leaned to stay the

execution of an habitual criminal-a

sexually depraved wretch-a scourge to

any civilized society.

Why this shocking intervention by the

State Department into the affairs of a

sovereign State? Because it was reported that a bunch of Communist inspired students in Uruguay would stage

an anti-American demonstration on the

occasion of President Eisenhower's visit

to that country. This means that the

State Department has again succumbed

to the worldwide Communist pressure

apparatus.

Assistant Secretary of State Rubottom

says he consulted his superiors before he

sent his telegram of intervention.

. Mr. Speaker, Assistant Secretary of

State Rubottom ought to be fired for this

act and those superiors who approved it,

no matter who they may be, ought to be

fired with him.

SUBCOMMITTEE ON LIBRARIES

Mr. ALBERT. Mr. Speaker, I ask

unanimous consent that the Subcommittee on Libraries of the Committee on

House Administration may be permitted

to sit today during general debate.

The SPEAKER pro tempore. Is there

objection to the request of the gentleman

from Oklahoma?

There was no objection.

FEDERAL WATER POLLUTION CONTROL ACT-VETO MESSAGE FROM

THE PRESIDENT OF THE UNITED

STATES (H. DOC. NO. 346)

The SPEAKER pro tempore laid before the House the following veto message from the President of the United

States:

To the House of Representatives: . I am returning herewith, without my

approval, H.R. 3610, an enrolled bill

"to amend the Federal Water Pollution

Control Act to increase grants for construction of sewage treatment works, and

for other purposes."

The bill would authorize an increase

In Federal grants to municipalities for

assistance in the construction of sewage

treatment works from $50 million to $90

million annually, and from $500 million

to $900 million in the aggregate.

Because water pollution is a uniquely

local blight, primary responsibility for

solving the problem lies not with the

Federal Government but rather must be

assumed and exercised, as it has been,

by State and local governments. This

being so, the defects of H.R. 3610 are apparent. By holding forth the promise

of a large-scale program of long-term

Federal support, it would tempt municipalities to delay essential water pollution abatement efforts while they waited

for Federal funds.

The rivers and streams of our country are a priceless national asset. I,

accordingly, favor wholeheartedly appropriate Federal cooperation with

States and localities in cleaning up the

Nation's waters and in keeping them

clean. This administration from the

beginning has strongly supported a

sound Federal water pollution control

program. It has always Insisted, however, that the principal responsibility

for protecting the quality of our waters

must be exercised where it naturally reposes-at the local level.

Polluted water is a threat to the health

and well-being of all our citizens. Yet,

pollution and its correction are so closely

involved with local industrial processes

and with public water supply and sewage

treatment that the problem can be successfully met only if State and local governments and industry assume the major

responsibility for cleaning up the Nation's rivers and streams.

The Federal Government can help, but

it should stimulate State and local action

rather than provide excuses for inaction,

which an expanded program under H.R.

3610 would do.

The following are steps which I believe

the Federal Government should take so

that our rivers and streams may more

rapidly be relieved of the pollution blight.

First. I am requesting the Secretary

of Health, Education, and Welfare to

arrange for a national conference on

water pollution to be held next December. This conference will help local taxpayers and business concerns to realize

the obligation they have to help prevent

pollution.' It is unconscionable for one

town or city deliberately to dump untreated or inadequately treated sewage

into a stream or river without regard to

the impact of such action on the lives

of downstream neighbors. Local taxpayers should be willing to assume the burdens necessary to bring such practices

to a halt. Businessmen and industrialists must face up to the expenditures

they must make if industrial pollutants

are to be removed from the Nation's

waters. In short, the proposed conference will provide a forum in which all.

concerned can confront and better appreciate their mutual responsibility for

solving this pressing problem.

Second. Where the issue is of an interstate nature and the problem is beyond the powers of a single State, or

where it is otherwise appropriate to assist State enforcement actions, the Federal Government should have authority

to move more quickly and effectively in

directing the application of control

measures that will swiftly correct such

intolerable pollution. In accordance

with the 1961 budget message, recommendations will be submitted to the Congress for strengthening the enforcement

provisions of the Federal Water Pollution Control Act.

Third. The Federal Government should

continue to provide modest financial assistance for the administration of control programs by States and interstate

water pollution control agencies. Because such programs rest upon a solid

foundation of local cooperative action,

they properly merit Federal encouragement and assistance. An extended life

for this program is recommended in the

1961 budget.

Fourth. The Federal Government,

through research and technical assistance, can be of material help In contributing to our knowledge of water pollution-Its causes, its extent, its impact

and methods for its controL Increased

1960 3257
CONGRESSIONAL RECORD - HOUSE February 23

Federal effort in this respect is also provided for in the 1961 budget.

These measures will provide Federal

authority that accords with the proper

Federal. State, and local roles in water

pollution abatement. I urge their early

consideration by the Congress.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, February 22, 1960.

The SPEAKER pro tempore. The objections of the President will be spread

at large upon the Journal, and, without

objection, the bill and message will be

printed as a House document.

There was no objection.

Mr. ALBERT. Mr. Speaker, I ask

unanimous consent that further proceedings on the President's message be

put over until Thursday next.

The SPEAKER pro tempore. Is there

objection to the request of the gentleman from Oklahoma?

There was no objection.

INTEREST RATE RESTRICTIONS

ON U.S. BONDS-COMMITTEE ON

WAYS AND MEANS

Mr. MILLS. Mr. Speaker, I ask

unanimous consent that the Committee

on Ways and Means have until midnight

Monday, February 29, to file a report on

H.R. 10590, relating to interest rate re- strictions on bonds of the United States.

That request also includes any minority

or supplemental views.

The SPEAKER pro tempore. Is there

objection to the request of the gentleman from Arkansas?

Mr. PATMAN. Mr. Speaker, reserving the right to object, will the gentleman state what the bill contains?

Mr. MILLS. Yes. The bill that has

just been ordered reported by the committee has four provisions. The first

provision relates to authority in the area

of advance refunding so that advance

refunding may occur even though the

yield on the new bond exceeds 41/4 percent ceiling would still apply to the

coupon rate, however.

The second provision authorizes the

Secretary of the Treasury with respect

to the issuance for cash or in exchange

at maturity date of bonds to exceed the

44 percent presently in the law within

limitations, to the extent of 2 percent of

the public debt upon a finding by the

President with respect to each offering

that the national interest requires such

action.

The restriction of 41 percent is eliminated with respect to Government bonds

that the Government trust funds invest

in. Then there is a provision allowing

the President to direct the Secretary to

exceed the 4/4 percent with respect to

savings bonds whenever he deems that

the national interest requires it.

Mr. PATMAN. Mr. Speaker, if the

gentleman will yield further, it does

then permit the increase of the interest

rate on long-term bonds?

Mr. MILLS. The Secretary of the

Treasury may do so, as I stated, upon a

finding by the President that the national interest so requires.

THE BILL WHICH HAS BEEN ORDERED TO BE

REPORTED IS AS BAD AS OUTRIGHT REPEAL OF

THE 41/4-PERCENT CEILING ON GOVERNMENT

BONDS-IT WIPES OUT THE DISTINCTION BETWEEN THE TWO POLITICAL PARTIES AND THUS

DENIES THE AMERICAN PEOPLE ANY POLITICAL

CHOICE

Mr. PATMAN. Mr. Speaker, as I understand from the explanation which the

distinguished chairman of the Ways and

Means Committee, the gentleman from

Arkansas [Mr. MILLS], has given, and

also from his press release which I have

just read, the bill which the Ways and

Means Committee has ordered to be reported is worse than a bad compromise.

It appears to me to be a complete, 100

percent surrender insofar as retaining

any protection, safeguard, or restraint on

interest rates is concerned.

As I understand the first section of the

bill, this section alone rolls back the ceiling as wide as the blue heavens themselves. In this case the further exemption provided in section 2 of the bill, as

to 2 percent of the amount of the debt

outstanding, is merely surplus verbiage.

Under section 1, if I correctly understand it, the entire national debt-every

penny of it--could be refunded with securities paying effective yields of 5 percent, 6 percent, 10 percent, 20 percent,

or any other percent that the Treasury

and the Federal Reserve System see fit

to have them pay.

If the Federal Reserve, under this administration, sees fit to tighten money

to the extent that a security running,

say, 1 year to maturity, Is driven down

to a market price of $50, then the Treasury could sell a 10- or 20-year bond at

an equal discount, and place a 4 percent coupon on it in addition.

Why is this bill regarded as a com- promise? What is the difference between repealing the interest rate ceiling

outright and what the bill will, in practice, permit?

There is none that I can see.

Does the committee have any assurance whatever from the Federal Reserve

people as to how high they will drive

interest rates after this bill is passed? If

the committee has any assurance, the

distinguished chairman has not said so.

I suggest that the committee has none;

and I suggest further that in the absence of such an assurance, this bill will

permit the Treasury to bind the American people by contracts over 20, 30, or 40

years to whatever interest rates the Federal Reserve System decides we are to

be bound to by its actions between now

and the time this administration goes

out of office.

As to the point that discounting would

be permitted only in the case of securities exchanged for outstanding securities, it provides no limit, no safeguard,

and no restraint whatever. We are dealing here with marketable securities. The

same people, the same banks, the same

insurance and other financial companies

now holding the outstanding marketable

bonds are the same people and the same

companies which would buy the new

bonds in any case. But this exchange

provision would not exclude any new

would-be owners from obtaining the new cutrate bonds, and the provision would

not encourage any investor to keep his

funds invested in Government bonds,

any more so than the new interest yield

would encourage him to buy such bonds anew. This could have been accom- plished in exactly the same way by re- pealing the interest rate ceiling outright, as the President asked.

I cannot see that the flimsy effort to

shift the responsibility for what is to

happen onto a President who cannot

succeed himself, at the same time the

Democratic Congress gives the President

powers to do what his administration

wants to do, provides any kind of escape

from congressional responsibility for

this matter. Nor do I think that the

overwhelming majority of the American

people who will be hurt by this action

will be fooled into believing that Congress has clean hands simply because it

tries to shift the blame over to the President. The American people will be paying for this action, if Congress passes

the bill, long after President Eisenhower

is gone to his deserved retirement.

Nor do I see any possibility that the

Congress can successfully escape the

blame by trying to shift the blame to

the Federal Reserve System. The Federal Reserve System must help to do

what is about to be done, yes. It must

stick the first knife into the backs of the

American people because only the Federal Reserve System can do it. Only

the Federal Reserve System can decide

what interest rates shall be today, tomorrow, and next year.

But Congress itself will be responsible

for a very large part of the increase in

interest rates which will be made if this

bill is passed. The moment we pass the

bill, or even give serious consideration

to passing it, we will cause the whole

financial community to expect higher

interest rates, and this expectation will,

itself, drive down the prices of Government securities and drive up interest

rates.

Last year the Senate and the House

passed a resolution requesting the Joint

Economic Committee to make a thoroughgoing investigation of our eco- nomic system, of monetary policies, of

interest rates and related matters. One

of the primary tasks assigned the com- mittee was to find out what the effects

of high interest actually are. Last fall, when the House was acting on the bill to raise the rate on savings

bonds, the question was then put to the

House whether to act also on the President's request for higher rates on mar- ketable bonds. The leadership and the

overwhelming majority of the House

then took the position that we should

wait for the conclusion of the Joint Economic Committee's investigation and

recommendations.

That investigation has been completed

and the committee's recommendations

have been made. Everything that the

committee learned and everything it rec- ommended is Just contrary to what the

Ways and Means Committee now proposes to do.

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