CONGRESSIONAL RECORD - HOUSE

quests. As a result of a' provision of

Federal law designed to prevent tax

avoidance, such State taxes in turn give

rise to increased Federal tax liabilities.

H. R. 6887 is intended to relieve charitable bequests in these situations to the

extent that Federal legislation can do so.

I am sympathetic with the objectives

of both portions of the bill. However,

I am informed that there are three defects in the part of the bill dealing with

the estate tax, which are sufficiently serious to require my disapproval.

First, this legislation would often increase Federal tax liabilities on estates

containing bequests to charity.

Second, the legislation would, in certain situations, accrue not to the benefit of charity but to other heirs.

Third, it would disturb existing wellestablished relationships between Federal and State inheritance and estate

tax liabilities based on the credit against

Federal tax liability allowed for taxes

paid to States since 1926. Since the

State tax on the charitable bequest is

deductible under the bill, it would no

longer be counted in determining the

amount which may be claimed by the

estate as a credit for State taxes paid

against the Federal tax liability. However, the tax imposed under the socalled State pickup laws, which are designed to absorb the full credit allowable against the Federal estate tax, is

based upon the total State tax otherwise

levied (including the tax on the charitable bequest). Consequently, many

State pickup laws would not pick up the

full amount allowable as a credit. Enactment of this bill would probably

stimulate State legislation to enlarge

the credit for taxes paid to States.

In view of these defects in the legislation, I must reluctantly withhold my

approval from the bill, H. R. 6887.

My reluctance would be greater, however, had I not been advised that the

defects in section 2 of the bill can be

remedied and that section 1 and section

2, appropriately remedied, can be enacted so as to apply retroactively without any serious difficulty.

DWIGHT D. EISENHCWER.

THE WHITE HOUSE, August 12, 1955.

REERVOIR PROPECTS IN TEXAS

H. R. 7195. I have withheld my approval from H. R. 7195, to provide for

adjustments in the lands or interests

therein acquired for reservoir projects

In Texas, by the reconveyance of certain

lands or interests therein to the former

owners thereof.

The bill would authorize the Secretary

of the Army to make adjustments in the

land holdings of the United States acquired for five Texas reservoir projects

(Belton, Benbrook, Garza-Little Elm,

Grapevine, and Whitney Reservoirs) by

reconveyance of certain lands to former

owners, or the grantee, devisee, or successor in title of a former owner of contiguous property.

The Secretary has no authority to adjust land holdings where title has been

acquired by purchase. T,_h bill would

provide the Secret-7ri with authority to

make such adjustments through reconveyance of lands or interests in lands to

former owners at what the Secretary deCI----823

termines to be the original purchase

price, adjusted to take into account improvements, damages, or interests retained by the United States.

However, H. R. 7195 goes further and

requires the Secretary to determine

whether the rights of a grantee, devisee,

or successor in title of a former owner

of contiguous property are equitably superior to the rights of the former owner

himself. The law reports are replete with

decisions which disclose the problems

with which courts have been confronted

in giving just recognition to asserted

equitable interests in title to a tract of

land. Moreover, in such cases the courts

have enjoyed the historic cautionary

benefits of the judicial process, such as

notice and hearing, rights of intervention, the rules of evidence, and judicial

precedents in a particular jurisdiction

with respect to the application of equitable principles. The bill does not provide, and the Secretary of the Army does

not have, comparable cautionary benefits

for an administrative proceeding in

which he would be required to engage in

the subtle problems involved in weighing

justly the equitable superiority or inferiority of the rights, on the one hand

of a former owner of a tract, and, on the

other hand, of those of the grantee or

successor in title to a contiguous tract of

property.

This provision would unjustly expose

the Secretary to a series of burdensome

and time-consuming administrative proceedings which are entirely alien to his

statutory responsibilities. It would inevitably subject him to criticism from

unsuccessful contestants. These unnecessary burdens and the attendant criticism can, and should, be avoided.

It is my firm opinion that, except for

the return of lands or interests directly

to the former owners or their heirs in

cases of this kind, lands no longer required for project purposes should, if

determined to be excess to the needs of

the Department, be reported to the General Services Administration for disposal

in accordance with general legislation

providing for the disposition of excess

and surplus Government-owned property. I see no reason for establishing

a new and special category of priority

holders based on a chain of title from a

former owner of contiguous property.

I have approved legislation authorizing similar adjustments by reconveyance

of lands to former owners (or their

heirs) upon application by them at Demopolis lock and dam, Alabama, and at

Jim Woodruff lock and dam, Florida and

Georgia, because I am convinced of the

soundness of the principle behind the revised reservoir land acquisition policy of

the Departments of the Army and the

Interior.

I recommend that the Congress reconsider H. R. 7195 and enact a bill along

those lines for the five reservoir projects

in Texas to which the bill is applicable. DWIGHT D. EISENHOWER.

THE WHITE HOUSE, August 12, 1,5.

on August 14, 1955:

AMENDING DOMESTIC MINERALS PROGRAM EXTENSION ACT

H. R. 6373. I have withheld my approval of H. R. 6373, an act "To amend

the Domestic Mincrals Program Extension Act of 1953 in order to extend the

programs to encourage the discovery,

development, and production of certain

domestic minerals."

This bill, by congressional action,

would direct the continuation of the

existing domestic minerals purchase

programs under the Defense Production

Act for certain minerals after defense

needs have been met. Moreover, it would

continue such purchases at prices considerably in excess of market price. It

would direct the establishment of two new manganese buying depots and the

reopening of a third. It would commit

an additional $150 million for the purchase of double the original program

quantities of these minerals.

Pursuant to the Defense Production

Act of 1950, as amended, certain purchase programs were established for

these minerals during the Korean hostilities. Public Law 206 of the 83d Congress extended for 2 years the termination dates of these programs. H. R.

6373, in effect, would direct the expansion of these programs so as to require

the Government to buy far greater quantities of these minerals than are necessary for defense purposes. As a result,

Government assistance to the producers

of several minerals will be continued

under the guise of defense needs vwhen

such needs do not exist.

Furthermore, the fiscal arrangements

that are provided for in H. R. 6373 are

unsound. The bill would bypass the

usual budgetary processes and the customary review by congressional committees. It would direct the use of the defense borrowing authority conferred by

the Defense Production Act.

Finally, the provisions of H. R. 6373

would apply to only a small segment of

the domestic minerals industry and

would not reach the fundamentals of the

problem. Indeed this bill would make

solution of the overall problems of the

industry more difficult.

I am conscious of the desirability of

developing a long-range minerals program for the United States to assure an

adequate mobilization base and to preserve a sound minerals economy. The

Advisory Committee on Minerals Policy

so advised and the Office of Minerals

Mobilization has been established in the

Department of the Interior to determine

and recommend such a program. The

funds to make the necessary studies have

just become available, and work toward

the development of a long-range program has begun.

The interests of the domestic minerals

Industry will be better served by proceeding with the careful development of

a long-range minerals program than by

approving a stopgap measure extending

substantial Government aid to only a

segment of the industry. Meanwhile,

with the exception of a single manganese

depot, the existing domestic minerals

procurement program remains uncompleted, and sales by domestic miners to

the Government will continue under the

provisions of the regulations now in

effect.

DWIGHT D. EISENHOWER.

THE WHITE HOUSE, August 14, 1955.

1955 13083.