CONGRESSIONAL RECORD - SENATE August 12

"SEC. 104. Extension -of tine for making- re- fufid of overpayments of income

tax resulting from erroneous inclusion of certain compensation

for injuries or sickness.

"In the case of any overpayment of income

tx resulting from the in,:lusion of an item

of gross income of any amount which was

excludable from gross ncme under section

22 (b) (5) of the Internal Revenue Code of

1939 (relating to compen.;ation for injuries

or sickness) as an amount received, through

accident or health insura:ace, as compensation for personal injuries cr sickness, if claim

for credit or refund of such overpayment was

filed after December 31, 1951, and within the

time prescribed by law, the period prescribed

by section 3772 (a) (2) of Euch code (relating

to time for commencing suits for refunds)

shall not expire prior to I year after the

date of the enactment of this act."

After line 16, to insert:

"SEC. 105. Amounts received by certain motor carriers in settlement of

claims against the United States.

"Notwithstanding the provisions of section

42 of the Internal Revenue Code of 1939, an

amount received in settlerment of any claim

against the United States arising out of the

taking by the United StEtes (pursuant to

Executive Order No. 9462, dated August

11, 1944 (3 C. F. R., 1943-48, p. 322)) of

possession or control of ny motor carrier

transportation system owned or operated by

the taxpayer shall, at the election of the

taxpayer, under regulationc prescribed by the

Secretary of the Treasury or his delegate,

be deemed to be income which was received

or accrued in the taxable yoars during which

such motor carrier transportation system was

in the possession or control of the United

States. The election referred to in the preceding sentence shall be made, under regulations prescribed by the Secretary of the

Treasury or his delegate, within 1 year after

the date of the enactment of this act, and,

if made, shall be irrevocable. The period for

assessment of any deficiency attributable to

the inclusion of income in any taxable year

of the taxpayer by reason of the application

of this section shall not raxpire prior to 1

year after the date on which the taxpayer

makes the election referred to in the first

sentence, notwithstanding the provisions of

section 275 of the Internal Revenue Code of

1939 or any other provision of law or rule

of law which would otherwise prevent such

assessment."

And, on page 227, after line 19, to insert:

"SEC. 106. Reasonable caue for failure to

file return.

"The second sentence of vection 106 of the

Internal Revenue Code of 1939 (relating to reasonable cause for failure to file a return

in cases involving certain c aims against the

United States) shall apply with respect to

taxable years ending after December 31, 1942,

in any case in which an amount is received

in any taxable year ending after such date

by a taxpayer in settlement of a claim arising under the same contract as a claim the

settlement of which resultc'd in the receipt

in a subsequent taxable year of an amount

to which section 106 (b) of such code applies. If refund or credit of any overpayment resulting from the application of the

preceding sentence is prevented on the date

of enactment of this act, or at any time

within 1 year after such da';e, by the operation of any law or rule of law (other than

section 3760 of the InternEl Revenue Code

of 1939 or section 7121 of the Internal Revenue Code of 1954, relating to closing agreements, and other than section 376I1 of the

Internal Revenue Code of 1939 or section

7122 of the Internal Revenue Code of 1954,

relating to compromises), re:'und or credit of

Such overpayment may, nevertheless, be

made or allowed if claim therefor is filed

within 1 year after the date of enactment

of this act."

EXTENSION OF PROGRAMS ESTABLISHED UNDER DOMESTIC

TUNGSTEN, ASBESTOS, FLUORSPAR, AND COLUMBIUM-TANTALUM PRODUCTION AND PURCHASE

ACT OF 1956-VETO MESSAGE (S.

DOC. NO. 116)

The PRESIDING OFFICER (Mr. TALMADGE in the chair) laid before the Senate the following message from the President of the United States, which was

read, and, with the accompanying bill,

referred to the Committee on Interior

and Insular Affairs, and ordered to be

printed:

To the Senate:

I am returning without my approval

S. 3186, "To extend for 1 year certain

programs established under the Domestic

Tungsten, Asbestos, Fluorspar, and Columbium-Tantalum Production and

Purchase Act of 1956."

The bill would extend to December 31,

1959, the asbestos and acid-grade fluorspar purchase programs provided for by

subsections (b) and (c) of section 2 of

the 1956 act (Public Law 733, 84th Cong.).

The purchase programs authorized by

Public Law 733 were supported by the

administration for two reasons. First,

they offered the affected industries an

opportunity to maintain domestic production in the period of market uncertainty resulting from termination of

defense expansion programs affecting

the commodities involved, and second, it

was the hope that the purchase programs

would permit the domestic industries to

reorient their operations to normal commercial markets.

The Public Law 733 programs has satisfactorily maintained a high level of

activity on the part of the domestic acidgrade fluorspar producing industry. It

has not, however, achieved its objective

of reorienting the industry to normal

commercial markets. Because of the importance of producer-consumer relationships to the acid-grade fluorspar industry, a means whereby the close contact

between producers and users could be reestablished was included in the stabilization plan which is a portion of the

long-range minerals program submitted

to the Congress by the Secretary of the

Interior. The stabilization price being

considered for acid-grade fluorspar by

the Congress approximates that contained in Public Law 733.

A further extension of stockpiling of

acid-grade fluorspar beyond the original

term of Public Law 733 would further

separate domestic producers from their

normal markets and thus defeat the stabilization objective. The stabilization

program for acid-grade fluorspar, if enacted in this session of the Congress, will

go into effect on October 1, 1958, subject

to the availability of funds, just prior to

the termination date of the Public Law

733 program. The maintenance of two

programs for this commodity with con- tradictory objectives would be ill advised.

As regards asbestos, the enrolled bill

would simply extend the time limitation

of the program without increasing the

quantitative limitation. On the basis of

the present rates of delivery of this material under the Public Law 733 program,

the quantitative limitation will be

achieved prior to the termination of the

existing legislation. Sufficient funds are now available to accomplish all authorized purchases. For this reason, no purpose would be served by a simple time

extension of the asbestos program.

DwIGHT D. EIsENHOWER.

THE WHITE HousE, August 12, 1958.

PAYMENTS TO RAYLAINE

WORSTEDS, INC.

Mr. CARLSON obtained the floor.

Mr. HICKENLOOPER. Mr. PresidentMr. CARLSON. Mr. President, I

yield one-half minute to the Senator

from Iowa [Mr. HICKENLOOPERI.

Mr. HICKENLOOPER. Mr. President, during recent weeks, when the case

of Raylaine Worsteds, Inc., was under

investigation by the House Armed Services Committee, a number of press articles implied that Joseph Campbell, the

Comptroller General of the United

States, had been directly instrumental

in authorizing a payment of $41,000 to

Raylaine, and that the White House may

have contacted the General Accounting

Office on the matter. The published

hearings before the Armed Services

Committee show clearly that the action

taken in 1957 by the Comptroller General only placed the contractor in a position to have its appeal heard before

the proper authorities-which it was entitled to have, under the terms of the

contract, and by law. The Comptroller

General did not direct, recommend, or

even suggest that any part of the claim

be allowed. The decision to allow the

claimant $41,000 was not participated in

by the General Accounting Office in any

respect. The Comptroller General, in

appearing before the House Committee,

made it clear that there was no communication, telephonic or otherwise, concerning the case from any person, office,

or officer, other than the attorney for

the claimant, during the time the case

was under consideration by the General

Accounting Office.

I ask unanimous consent to have

printed in the body of the RECORD, as a

part of my remarks, the Comptroller

General's statement on the Raylaine

case, which he gave before the Subcommittee for Special Investigations, of the

House Armed Services Committee, on

July 29, 1958.

There being no objection, the statement was ordered to be printed In the

RECORD, as follows:

STATEMENT OF JOSEPH CAMPBELL, CoMPTROLLER GENERAL OF THE UNITED STATES, BEFORE

THE SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS OF THE HOUSE COMMITTEE ON ARMED

SERVICES ON THE CASE or RAYLAINE

WORSTEDS, INC.

Mr. Chairman and members of the subcommittee, we appreciate this opportunity to

appear before you to explain our part in the

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