APPENDIX TO THE CONGRESSIONAL RECORD Vitally important as our actions abroad are, both along military lines and in strengthening the economies, widening the liberties, and helping raise the standards of living of the rest of the free world, the decisive part of the answer lies in what we do here at home, in three different areas: First, we must keep our defense forces strong, with liberal appropriations for sel- entific research and development of new weapons. This does not mean, however, that we should become a “garrison state’? or spend excegsive billions in overbuilding planes that would be obsolescent before they were com- pleted and probably obsolete before a hot war, if any, ever arrived. Nor does it mean that we should weaken our present military unification law and return to the wastes and dangers of three separate, largely unccor- dinated, military services. Second, we must follow policies that will keep the United States financially solvent and will stimulate a steady expansion of our over-all productivity. In the event of hot war, our hope of sur- vival would largely depend on our produc- tivity. In peace, we can only raise our own citizens’ and others’ standards of living by enlarging the output of goods and services. Third, we must intensify our efforts to translate all our idealistic phrases about equality of opportunity in America into living realty. Then, and only then, will all segments of our population have such complete devotion to our country and to the philosophical and spiritual and economic principles that have produced it as to ke totally immune to the seductive half-truths in Communist propa-~ ganda. Only then will we be psycholcgically strong, which 1s as important as being mili- tarily and economically strong. Probably our worst domestic danger is that of excessive governmental spending. That leads to one of two results, either of which destroys the mainspring—individual incen- tive—which has been primarily responsible for the greatness and flowering of America. If tax rates are too high, incentives for workers to put in longer hours, or for indi- viduals to risk their savings in new busi- messes or in new machinery that increases output, are extinguished. That danger point has been exceeded in Britain. We are perilously close to it, if not already there, here in the United States. Yet if tax revenues in periods of high-level em-~ ployment and prosperity are not large enough to equal the government’s spending, inflation inevitably results. The manifestations of such inflation can be temporarily disguised through govern- ment controls—OPA, etc.——but only at the expense of suspending the freedom of indi- viduals to make economic decisions, and even then only for relatively short periods if our system of free enterprise is not to be fundamentally altered. Most self-styled liberals grossly underesti- mate the dangers in excessive government spending. They urge large appropriations as a cure for all evils. They contend that opponents of vast Government spending and of crushing taxes are reactionaries who would. block all progress. Actually, if our officials wanted to practice genuine thrift, the United States Govern- ment could, without raising taxes, eliminate entirely its huge cash deficit and still pro- vide adequate funds not only for defense and foreign aid but for all the essential needs of the Government and for more ac- tual social welfare than is now provided. The Hoover commission recommendations, which are being largely distorted or ignored by the Administration, point out ways for saving several billions a year through gov- ernmental reorganization. “Boather bedding” is also rampant through~ out the Government. Senator Doveras, of Tllinois, an intelligent liberal, is conspicuous in being one of the few Fair Deal Senators who appears to comprehend the dangers of our present course. We can, if we will, make our democratic system stronger and more equitable in many basic ways without spending billions doing it. Grant, for example, that 8 or 10 Southern States which have large Negro r-wi.*ior* are financially unable to provide wnt. 7 Cf yale weer) cae: 62 v “au all American ‘ -* instead of the Federal Government’s pro- posing an elaborate system of Federal aid to education for all 48 States, with all the dan- gers of thought control which that entails, why not simply appropriate one-fifth of that amount of money for those few States which because of the:r peculiar problem have a special need for 1t? We can, if we will, greatly improve job and housing opportunities for our Negroes without huge Federal expenditures. Why should any individual or corporation pe lent or given funds by any Government agency, whether a mortgage loan on a real- estate construction project or RFC financing, if he practices dicoriyeenetens policies against anyrace‘::¢ -..?) We m.stn’t forget that 10 percent of our American citizens are col~ ored, along with a billion more on other continents. Our main task here at home 1s to keep our social system fluid, our economic system pro- ductive, our Government solvent. Ten years ago a great American stumped the country repeating, “Only the productive can be strong. Only the strong can be free.” It is equally true today. If we will just be wise enough to keep our incentive system unimpaired and, at the same time, speed our progress toward our goal of equality of opportunity for all cit- izens, we, and not Russia, will be the magnet that attracts the areas of the world which are now 1n the twilight zone. Americans have the genius to find new ways of providing more welfare for our cit- izens, and within the framework of free in- stitutions, than Russian communism can even dream of attaining. Perhaps some day in the distant future the Russian people will come to realize it. Refusal of Communists To Acknowledge Membership in Communist Party EXTENSION OF REMARKS HON. EDWARD MARTIN OF PENNSYLVANIA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. MARTIN. Mr. President, I ask unanimous consent to have inserted in the Appendix of the Rrcorp an editorial entitled “Why Wo Answer?” which ap- peared in the Evening News of Harris- burg, Pa., on May 1. There being no objection, the editorial was ordered to be printed in the Recor», as follows: Wur No ANSWER? Senator Typines, head of the committee poring into the McCarruy charges of espion- age in the State Department, announces that he will ask his committee to cite for con- tempt two witnesses who refused to answer questions. One of the questions was, “Are you a member of the Communist Party?” The witness grabbed the Constitution and refused to answer. Why? If there is noth~ A3423 ing infamous, no moral turpitude, no dis- grace in membership in the Reds, why hesi- tate to confess membership or keep mum about it? Men who believe thoroughly in America and its system of life are not embarrassed by such a question. They answer with a roar- mg “No.” They do not wrap themselves in the Constitution. Such persons know the Constitution was drafted for those who be- lieve in America. Polish Independence Day EXTENSION OF REMARKS HON. THOMAS J. LANE OF MASSACHUSETTS IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. LANE. Myr. Speaker, under leave to extend my remarks, I wish to include the following address which I delivered at the Commemoration of Polish Inde- pendence Day, United Polish American Organizations of Lynn, Mass., on Sunday, May 7, 1950, at St. Michael’s Hall, 21 Elmwood Avenue, Lynn, Mass., under the sponsorship of Rev. John A, Dronzek, of St. Michael Archangel Church, Lynn, Mass.? One hundred and fifty-nine years ago, the free people of Poland adopted a democratic constitution. That was only 2 years after the adoption of the American Constitution. Almost at the same time and with the same spirit Poland and the United States led the way in establishing representative gov- ernment which should be the servant and not the master of the people. Our two Christian nations were the real pioneers in opening up the field of oppor- tunity to all people, and to the protection of their fundamental religious, political, and economic rights. Tt is no wonder that this kinship of ideals and practices has ripened through the years and has developed such a strong affection between the Polish and American people. It explains why so many of your anc2stors came to this country where freedom would not be endangered by powerful and envious neighbors. ‘Tvansplanted to the United States, your people have made good with a will, Through intermarriage, they have brought good health and religious faith and steadfast courage into the making of that fine, new race that we call American. But you are properly concerned with the fate of your relatives in the homeland and ask yourselves what you can do to help them in this their hor of need. The Communist tyranny under which they suffer, also reaches out to threaten us. It is a@ powerful, clever, and merciless foe, that will not be defeated easily. It has conquered smaller nations through fear and treachery. It can and will be overthrown in the long yun by a combination of political, economic, and spiritual strength and the greatest of these is faith in God. This quality, your people have in abundance. It is the rock against which the tide of atheism will finally break and fall back in confusion upon itself. The Communists betray their fear of re- ligion. With their own puppets in control of the Government of Poland and with their own powerful armies on the spot to make armed revolt impossible one would think that they would feel sure of their iron grip. But they are not. As long as there is a strong bond petween the church and the faithful, they cannot feel
A3424 secure. During the war they were obliged to make temporary religious concessions to the Russian people so that they might have something more inspiring to fight for than the poverty-stricken materialism that has been their lot under communism. And so, even now, they are persecuting the Catholic Church in Poland because they know that the teachings of the church which preclaim the dignity of man under the fatherhood of God is the last obstacle in the way of complete Communist domination of the bodies, the minds, and the souls of men. . The church and the faithful in Poland know that they are not alone. In spite of the iron curtain, there is communication with the Vatican and the free western na- tions. They know that evil always gains the first advantage but never the last. The greatest weapon m our arsenal is truth, and our job 1s to find a way to get it through to the Russian people themselves. For this is the one thing that communism fears most of all. That fear was revealed when they shot down four of our Navy planes in the Baltic. We do not yet know all the facts of that tragic incident, but one does emerge clear and revealing. The Russians are jittery when anyone comes near their false fron- tiers. Why? Is it because the news of this will leak through to the enslaved people and thereby expose the lies of Soviet propaganda? Those in chains will be encouraged when they learn that the United States is still in Europe and has no intention of leaving it until the Communists also withdraw to their own original frontiers. If the Reds took a little time out to study history, they would discover that our peoples have experienced the benefits of liberty for many years. We know that it is good for individuals and for nations. We will not surrender it to the deceptive promises of the cruel tyranny that overthrew a lesser tyranny in Russia only 33 years ago. When World War II ended, we made con- cessions to Communist Russia in the hope that this, in turn, would win corresponding concessions from them and enable the na- tions of this world to live in peace, if not in complete agreement. That policy has failed, and in the process Russia has taken over other nations by con- spiracy and by betrayal of the people con- cerned, It is a poor rule, however, that does not work both ways. Russia has made quick and fradulent gains but not without paying a heavy price. The schemers in the Kremlin have out- witted themselves, for they have lost the confidence of the free world. This does not seem much to them at the moment. But as their internal troubles, and those with their restless satellites increase, they will have to come forward with a genuine proposal for peace whicr will fall on deaf ears. And then communism will learn the hard way that it will have to give up each and every one of its ill-gotten gains and retire to its own ample territory, before it can earn the right to be considered as a trust- worthy member of the family of nations. We will not wait for the inevitable to happen. We must hasten its coming. So far we have been on the defensive, try- ing to arrange a working arrangement with Russia, but have been rebuffed on every issue. That phase is past. We are definitely on our guard. We are helping to restore the war-shattered economies of western Europe and in that respect we have saved France and Italy from Conamunist-inspired revolu- tions from within. Now we are arming our= selves and providing military assistance for the Atlantic Pact nations. The time is near when we must seize the initiative. The truth must be brought home to the Russian people that we have no desizns on them. We must prove to them that their worst enemy is communism itself which is breaking their backs to produce arms while wt hoists? from them the good things of ine .° 4. aber might produce and enjoy in a world at peace. We must show them that they are the principal victims of Communist propaganda which keeps them in fear and ignorance of their fellow human beings in the free world. This is the weak spot of communism and it must be our target. How can we reach it? We have the greatest advertising brains in the world. Let’s give them the tools to work with on the biggest selling job in all history. I suggest that the Congress appropriate enough money to set up the most powerful radio transmitters in those nations which are friendly to us and which are located near Russia. From western Germany, Italy, Greece, Turkey, Iran, the Philippines, and Japan, let these experts beam the unvar- nished truth to the Russian people anu all those who sweat under the Communist yoke. The undeviating truth which can be backed up by facts of freedom—this can crack the Communist structure of les and open the way for the rout of tyranny as it is caught in the confusion of its own making. The time for gentle diplomacy is past. We need an all-out campaign to win this struggle for the minds of men with the weapons of truth and justice and faith in ourselves and what we have accomplished. It is amazing to me that our Government has not pushed such a policy to the fullest extent possible. To my mind, it is the one, bold, imaginative program that has any hope of defeating communism short of the dread possibility of war itself. On this observance of Polish independence day, we recall the glories of your motherland. We know that yours was the first nation in eastern Europe to fight for freedom. That Js proof of its sturdy faith. The sad fact of the moment is that liberty has been forced underground by the fanatical power of communism. It is not dead. It lives on, like a prayer that gathers de- votion with repetition, in the hearts of all Polish people and the millions of others who believe as they do, that the spirit is stronger than the sword. . Today we do not merely pay homage to the past. From it we turn to the future resolved to work for the restoration of Polish inde- pendence. As crusaders for peace and freedom we must reach through the unnatural wall which imprisons the Russian people. We must establish contact with them as fellow human beings and prove that we come to share and not to take. Once they are enlightened, I am confident that they themselves will overthrow their ruthless masters. And when the top-heavy structure of communism is undermined the Polish people and all other captive peoples will rise again in the full dignity of a civilized world. Simplification of Our Customs Practices EXTENSION OF REMARKS HON. ABRAHAM J. MULTER OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. MULTER. Mr. Speaker, on April 27 I introduced a bill in this House call- APPENDIX TO THE CONGRESSIONAL RECORD ing for the simplification of certain of our customs laws and practices. On May 1, the Washington Post published an editorial Customs Simplification, dealing with certain phases of the cus- toms laws. In response to these com- ments, I wrote to the editor of that news- paper calling his attention to my bill and emphasizing the need for making the de- sired changes in our customs laws, as suggested in his editorial and in my bill. My bill is now before the Committee on Ways and Means. For the benefit of the members of that distinguished com- mittee and of all of my colleagues, I am placing in the REcorD my letter to the editor, published in the Washington Post today, and the editor’s original edi. torial of May 1. I trust this material will help bring about early action to im- prove our customs practices. Customs SIMPLIFICATION I was interested to read your May 1 edi- torial, Customs Simplification. Four days prior to the publication of your editorial I had introduced a bill in the House dealing with the very same subject. I agree wholeheartedly with your descrip- tion of our customs procedures as “anti- quated and unnecessarily complicated.” ‘You cite interesting examples of confusing and arbitrary classifications, such as carpets with or without fringes, earthenware ash trays, etc., which make it difficult to ascertain what tariff rates are applicable. Permit me to point out another phase of our customs procedure which is not only complicated but which is injurious to manu- facturers and businessmen in this country and harmful to exporters in foreign countries. I am referring to the practice of our cus- toms Officials to impose, retroactively, 1n- creased import duties as a result of delayed reclassification of goods, sometimes many months after the American manufacturer imported these goods at prices established on the basis of the duty imposed. Here is a case which came to my atten- tion recently: A New York firm purchased from a Canadian company certain wooden carrying cases which it uses for its ma- chinery. Before entering into agreement to import these cases the manufacturer showed them to the appraiser’s office at Ogdensburg, N. Y¥., and furnished all the necessary par- ticulars, including the cost of production. After careful examination, the United States customs officials at Ogdensburg decided that these cases could enter under the customs law at a stipulated import duty. The rep- resentative of the New York firm was fur-~ ther advised that if any change was made in the classification of these cases the firm would be notified within 4 or 5 weeks. Between the months of June and Decem- ber 1949, the firm imported approximately 2,600 cases from Canada. No notification of a change in classification was received until December 1949. The American importer was notified of a reclassification and retroactive Increase in duty of $1.85 per case was im- posed. This increase made importation of this article unprofitable, thus putting an end to all further imports. In addition, the increase was made retroactive on the 2,600 cases already imported, all of which was charged to the American importer. None of it could be recouped from the ultimate con- sumer. It required a good deal of time and effort to bring this matter to the attention of our customs officials and to convince them of the harmful effect on business in this country such arbitrary decisions have. In this par- ticular instance the reclassification was nul- lifed, but what about the many instances where no relief was granted?
APPENDIX TO THE CONGRESSIONAL RECORD My bill will stop such practices. It pro- vides that any reclassification of import du- ties previously determined and approved by our customs authorities shall apply only to future imports and is not to be made ret- roactive to such goods and have already been imported or are in the process of being imported. In line with the suggestions, contained in your editorial, for a simplification of our customs operations, I submit that early adop- tion of my bill and its incorporation into the tariff laws would go far in allaying the fears of many business firms abroad con- cerning the obstructions in our customs pro- cedure and it would convince them that we are seriously interested in fostering freer trade practices, ABRAHAM J. MULTER, Representative from New York. WASHINGTON, [From the Washington Post of May 1, 1950] CUSTOMS SIMPLIFICATION Our antiquated and unnecessarily compli- cated customs procedures have acted as a sort of invisible protective tariff by discour- aging foreign exporters from entering the American market. Customs classifications are confusing, highly detailed, and often ar- bitrary, making it difficult for exporters to ascertain what tariff rates are applicable to their goods. For example, carpets without a fringe are subject to import duties of 25 to 30 percent. Carpets with fringes pay a duty of 45 percent. And a manufacturer exporting earthenware ash trays to the United States is not sure whether these goods will be classified as household articles (duty 15 percent) smoking requisites (duty 80 percent) or luxury earthenware (duty 50 percent). Labeling and packaging require- ments are also needlessly complex and some- times involve cost that make them equiva- lent to a ban on shipments. The practice of valuing goods for assessment of customs duties at the wholesale price at which they are offered to domestic buyers in the ex- porting country is another cause of com- plaint, as well as the stiff penalties imposed for unwitting undervaluation of imports and undue delays in appraisal. Although the Treasury has made some re- forms in procedure, many of the practices that give rise to complaints are required by law. <A bill amending the administrative provisions of the tariff act has, therefore, been sent to Congress by Secretary Snyder. It is designed to reform and simplify cus- toms procedures along the lines of the Geneva Tariff Convention of 1947 and the ITO. While present methods of classifica- tion are undoubtedly in need of reform, changes in the classification system would create controversy and impair the chances for enactment of a less ambitious program. Wisely therefore, the provisions of the bill are restricted to administrative and proce- dural matters. It aims to make valuation formulas more equitable, to eliminate special marketing requirements, abolish undervalua- tion penalties in cases where the importer is not at fault, and speed up appraisal of merchandise. The bill, based on recommendations from customs Officials, representatives of other Government departments, private trade groups, and a firm of management con- sultants, is the product of prolonged expert study. This strong backing, together with the facts that the proposed legislation would not reduce the protection now accorded do- mestic industry under the tariff laws and would lower the cost of customs operations, ought to commend it to Congress. If this reasonable simplification program should be rejected, it would confirm the suspicion of many foreigners that our obstructive cus- toms procedures are deliberately designed to exclude imports and that Congyess is op- posed to the freer trade practices that this Government is pledged to foster and has urged other nations to adopt, An Excellent Eulogy by an Ex-Classmate EXTENSION OF REMARKS Or HON. THOMAS J. LANE OF MASSACHUSETTS IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. LANE. Mr. Speaker, under leave to extend my remarks, I wish to include the following article from the Lynn Tele- gram News, Lynn, Mass., Sunday, May , 1950: MONSIGNoR GALLAWAY’s Work Is LAUDED BY Ex-CLASSMATE Following is the eulogy of Rt. Rev. Francis X. Sallaway, 8S. T. D., delivered Saturday in Sacred Heart Church by Rt. Rev. Thomas F. Markham, P. P., P. A., pastor St. Peter’s Church, Lowell, as solemn obsequies were held for the beloved local pastor. Mon- signor Markham was a classmate of Mon- signor Sallaway at the North American Col- lege in Rome as they prepared for the priesthocd. “To one of his servants the lord gave five talents, and to another two, and to another , one; to everyone according to his proper abil- ity: and immediately took his journey. After a long time the lord of those servants came, and reckoned with them. And he that had received the five talents coming, brought other five talents, saying: ‘Lord, thou didst deliver to me five talents; behold, I have gained other five over and above.’ “His lord said to him: ‘Well done, good and faithful servant: because thou hast been faithful over a few things, I will place thee over many things; enter thou into the joy of thy lord. (St. Matthew, ch. 25, verses 15, 20, 21.) “Your Excellency, Rt. Rev. Vicar General, Rt. Rev, Monsignori, Very Rev. and Rev. Fa- thers, devoted religious friends in Christ Our Lord, ‘Let us praise men of renown,’ says the Holy Book, ‘for their glory shall not be forsaken.’ Ecclesiasticus 44. Msgr. Salla- way was a man of great renown, and before we consign his lifeless body to the earth whence it came, let us dwell briefly on his talents and the use he made of them. He was born on St. Cecilia’s Day, the heavenly patroness of music, in the year 1890, of a deeply religious father and mother. He en- joyed the comforts and refinements of a Cath~ olic home and training. He studied under the Sisters of Charity in St. Peter’s Parochial School in Dorchester, at Boston College High School, and graduated with honors from Bos- ton College in the class of 1918. While at college he excelled in his studies, was fa- mous as an orator, was an outstanding de- bater on his college team, and was the first editor-in-chief of the Sub Turri, the yearly class book of Boston College. “In the fall of that same year he began his immediate preparation for the priesthood at the North American College in Rome. Here he soon became a universal favorite, for his was a genial soul, and his friendliness was ever manifested in his happy smile and a cheery good word. His talents were devel- oped in this center of catholicity, and the grandeur and the beauty of the church’s liturgy made an indelible imprint on his truly artistic soul. The plain chant of the Gregorian music sung in monasteries as well A3425 as the music sung by the Sistine Choir gave him a deeper insight to the richness of churzh music, and enlarged his knowledge of this gift of singing, an art that men share with the angels. He already played the piano and the organ. Truly he developed his tal- ents according to his proper ability. “His studies he pursued during the trouble- some days that existed before World War I, when the entire world was filled with rumors of war, and finally with war itself. On De- cember 2, 1917, he was ordained friest and on the next day, the feastday of St. Francis Xavier, Rev. Francis Xavier Sallaway, from Dorchester, Mass., said his first mass at the shrine of St. Francis Xavier, in the city of Rome, in the great church of that eternal city. Six months later his professors de- clared him worthy of high scholastic honors, and they awarded him the degree of doctor of sacred theology. Then came his departure from Rome, across the seas filled with mines and submarines, for World War I was still raging in its fierceness, his return to his family, to his mother and sisters and broth- ers, but not to his father—who died shortly before he left Rome. “You know well the rest my friends—of his days as an assistant in St. Mary’s Parish, West Quincy—in St. Mary’s Parish in Ded- ham—in the Parish of the Immaculate Con- ception in Revere, and of his first pastorate in the parish of Our Lady of the Assumption in Lynnfield, and finally of his years here as your pastor, in this parish dedicated to the sacred heart. “With all his talents it is not surprising that he used the newest means that man has devised to spread the truth—the. radio. The deep, mature tones of his well-trained voice have been heard on the Essex County Catholic radio program broadcasting for God and country. The sound of his voice has been heard all over the land for he spoke frequently on a national hook-up. He was chosen president of the National Association of Catholic Broadcasters, and his name and fame were well known in the field of radio. Plans he made also for the new medium of television, but another must carry out those plans. Our beloved archibishop, realizing the good that could come from the exercise of Dr. Sallaway’s talents, appointed him diocesan director cf radio activities and pre- sented his name to the sovereign pontiff, with the recommendation that the head of the church would show to the world his approval of the various activities of this talented priest. “The holy father graciously accepted his excellency’s recommendation and proclaimed your pastor a domestic prelate with the title of right reverend monsignor, “Priest, professor, pastor, prelate—so runs his life story. For him, as for all men, the paths of glory lead to the grave. But the poet tell us that— “‘Tife is real. Life is earnest. And the grave is not its goal; Dust thou art to dust returnest, Was not spoken of the soul.’ “For him and all others, life is everlasting. However, the light that shines around the throne of God reveals the slightest imper- fection. In the presence of God no man is justified. Pray then, my friends, that any fault that he may have committed may soon be washed away. “As one who was at his side on his ordaina-~ tion morning, and as one who shared his joys and sorrows for nearly 37 years, I feel that I bespeak the minds of all those who knew Monsignor Sallaway when I express to his sisters and brothers our heartfelt sympathy on the loss of their brother. Separation is al- ways difficult to bear, but with tears in our eyes and sorrow in our hearts, we say what the church has always taught us to say: ‘God
A3126 knows best. His holy will be done.” That, I am sure, will be their prayer also. “Because thou has been faithful, good and faithful servant, enter into the joy of thy Lord. Singer of His praises here below, sing and sound, thou annointed one, His praises forever and ever. Amen.” Address by Hon. Joseph R. McCarthy, of Wisconsin, Before Midwest Council of Young Republicans EXTENSION OF REMARKS oO HON. JOSEPH R. McCARTHY- OF WISCONSIN IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. McCARTHY. Mr. President, I ask unanimous consent to have printed in the Appendix of the Record an ad- dress which I delivered before the fifth annual convention of the Midwest Coun- cil of Young Republicans at the Hotel La Salle, Chicago, Tl., on May 6, There being no objection, the address was ordered to be printed in the Recorp, as follows: Ture Puony Frtzs To Be Usen mn Opzrarions WHITEWASH What a relief it is to come out here tonight to speak to you young people and to breathe the fresh, clean air of the great Midwest and for at least a few hours to get away from the battle I have been having in Washington, I would like to give you a brief picture of some of the infighting. The President 2 days ago on the eve of his “nonpolitical” junket across the Nation suddenly and very generously decided to give the committee files in a number of cases. Mr. Tyrprncs said 81 cases. However, White House spokesmen immediately corrected him with the statement that they would only give those files and only those parts thereof which had been seen in 1948 by a House committee. Perhaps the Senator was relying on hearsay that all 81 cases had been pre- viously investigated. Three weeks ago it was a matter of high principle with the President to keep the files inviolate. He cited numerous precedents which, in his opinion, made it absolutely mandatory to keep secret the record of Com- munists and fellow travelers. Now, 3 weeks later, this is no longer so. Part of the files—the part that will make his cross-country junket less embarrassing—sud- denly become unsecret and Mr. Truman can- cels out his high principles. The files which Mr. Truman is so gener- ously giving at this time can perhaps best be described by quoting from the report of the chief investigator of the House Appro- priations Committee—the report which, ac- cording to Mr. Tyrprnos, cleared all of those investigated. This report refers to an FBI survey and report criticizing the State Department for the incompleteness of its files because of the slipshod manner in which they are handled. On page 37 of the investigator's report we find the following: “It was also determined that there were file jackets for which there were no cases in the files, and jackets were out of file without charge-outs. These failures or errors can largely be attributed to the fact that apparently most everyone and anyone in the State Department has access to the files—removes files and replaces them with very little regulation cr control.” On page 38 the following is found: “In reviewing the security files on numer- ous occasions, papers were missing from the files which obviously belonged there because other papers in the files would refer directly to them. * * * Further, in this connec- tion it may be stated at this point that there is an over-all laxness in the entire Depart- ment of State in the handling of documents.” This is what I had in mind when I warned the committee time after time that this job could not be done with only the skinny rib pones of the files. Now if a job is to be done, all of the files must be broken open. We must have the files of the Federal Bureau of Investigation, the Civil Service Commussion, the Central Intelligence Agency, Army Intelligence, Navy Intelligence, and the Secret Service. To make these skeleton files of even less value, Mr. Typrncs has decided to keep them secret from his own staff of investigators who are supposed to be experts and could detect how badly the files were rifled. Certainly the Senators themselves have not been trained in this kind of work. This is another long step forward in the famous Lucas-Tydings-McMahon Operation White- wash. We have already had a good example in one case of what the Tydings white paper will undoubtedly contain. You will recall that I suggested to the committee that if they could not get the files in the more than 100 cases given to them, that, as a test case, they get the files of Owen Lattimore and thereby determine whether I was cor- rect or not in my statement of what that file contained. The committee did not get the Lattimore file, but got a 14-page résumé of what it contained. You will recall that shortly thereafter Senator Typrnces, in the proper setting before the news reels and movie cameras, made the solemn statement that he owed it to the Nation and to Mr. Lattimore to inform him that in the opinion of the four Senators, J. Edgar Hoover, and the Attorney General, the files cleared Mr. Lattimore absolutely. However, Mr. Typrnes grossly misjudged J. Edgar Hoover and Attorney General Mc- Grath, two honest men, for Mr. Hoover and Mr. McGrath would have no part of him on that deal. Attorney General McGrath promptly made the statement (1) that Typ~- Incs had no right to speak for him or J. Edgar Hoover; (2) that both he and Mr. Hoo- ver had been very careful not to indicate how they felt about the Lattimore case, so that Mr. Typrncs could not possibly have known whether they thought the files proved or disproved the charges against Lattimore. Mr. HICKENLOOPER, one of the members of the committee, promptly stated that Typ- InGcs’ statement was completely unwarranted. Mr. Lopez, another member of the commit- tee, stated that Typmines had no authority to speak for him; that he could not and would not make any decision on the Latti- more case until he had seen all of the evi- dence. Even the other two members of the committee, even McManon and Green, who had been going along with Typrnes 100 per- cent up to that point, could not stomach this and when called upon by the press to confirm Mr. Trpines, stated “No comment.” I cite this case to give you an idea of what you can expect from the Tydings examina- tion of the purged files. How much of this nonsense does the ad- np stration think the American people will uy? How much deceit and dishonesty must we be subjected to before we can get some hon- est action? This is serious business. It is not the time or the situation for politicians to play a fraudulent political game. There are Communist traitors on our Federal pay= APPENDIX TO THE CONGRESSIONAL RECORD roll. The American people have a right to demand that they be routed out. Now I have a suggestion for Mr. Truman— the only alternative to his making all these files available. It will help clear away the litter of deceit that has collected about the administration on this Communist issue. Mr, Truman, call in FBI Director J. Edgar Hoover, call in the head of the Secret Serv- ice, call in the Director of the Central In- telligence Agency, and call in the men who head our miulitary intelligence agencies. These men will reverse Loyalty Board fum- bling, and will give America the benefit of the doubt. Tell them, Mr. President, that you are ask- them to perform an unusual duty for their country. Tell them to compile a list of names of men and women in the Government who in their opinions are dangerous to the secu- rity of the country. Tell them to study the list, use tough standards, cut them to fit the cloth of Communist treachery, and tell you who to fire. Take their word for it, Mr. President, not McManon’s, not TypbINncs’, not Earl Browder’s. Let these experts in their line rid the Nation of its spies and traitors. lLet’s clean house, with decency and honesty. Let’s for~ get petty politics and do for America a job that is long overdue. Americans are honest people, with pride and decency woven throughout their mode of living. Let’s match this honesty, Mr. President, without political conniving. There is strength in truth, even among politicians. Now getting back to this phoney offer of phoney files. This is 1950, Mr. Truman. Why are we offered 1947 and 1948 files in- stead of 1949 and 1950? In the case of John S. Service, for instance, seven supplementary reports have been sub- mitted in 1949. Why won’t you even trust your political puppets, Typrncs and Mc- Maxon, to see those files? Now let’s take a quick look at what we are getting for the $25,000,000 Federal loyalty program. First of all, it permits each department to investigate its own people. These doing the investigating know little or nothing of Communist techniques—even less about how to conduct an investigation. In countless thousands of cases the departmental loyalty investigators accept statements from others in the department as all the clearance nec- essary. In dozens of cases, for instance, recommendations from Alger Hiss on State Department employees was all that was needed to completely clear them. It is-like accepting a recommendation from John Dil- linger in hiring a bank clerk. Those cleared by the Loyalty Board in- cluded William Remington, John S. Service, George Wheeler, and others I have mentioned previously. Did the Loyalty Board take note of the two Communist Party organizers who said Remington was a member of the party? It did not. You will recall that a former State Depart- ment employee by the name of George Wheeler recently retired behind the iron curtain after making typical Communist name-calling statements, damning and curs- ing the United States. This man, George Wheeler, who had been assigned tremen- dously important work by the State Depart- ment, had first béen given a clean bill of health by the Loyalty Board, even though his file would have convinced anyone who could add two and two that he was a full- fledged Communist. Another example of how the Loyalty Board operates and a good reason why we must have all the files—not up to 1948, but up to May 7, 1950—is being demonstrated today in the case of John Service,
APPENDIX TO THE CONGRESSIONAL RECORD Mr. Service, you will recall, was picked up by the FBI in connection with the Amerasia ease. This, you will recall, involved the theft of a vast number of top-secret, confidential, and other classified dcecuments from the State Department, Navy, Army, and other Government agencies. The papers carried the story at that time that J. Edgar Hoover stated that this was a 100-percent air-tight case of espionage. However, Mr. Service was not indicted or tried, but was reinstated and under Mr. Acheson was promoted and put in charge of placements and promotions of per- sonnel in the far eastern area. The FBI, however, continued its investigation of Mr, Service. During last year the FBI gave the State Department reports on Service on the following dates: February 18, 1949, March 10, 1949, April 4, 1949, May 11, 1949, August 9, 1949, September 7, 1949, and September 21, 1949. Nevertheless the State Department’s Loyalty Board gave him a clean bill of health again last year, although the Review Board disapproved his clearance. And incidentally, the State Department, which is about to hear Mr. Service, is now busily giving Mr. Service’s lawyer the secret documents which the President has denied the Senate. This so that he can properly defend Service. Does the Loyalty Board use Elizabeth Bent- ley, Whittaker Chambers, Louis Budenz? It does not. But the FBI, the Secret Service, the CIA and committees of Congress do. And they expose Communists. : The Tydings-McMahon subcommittee, on the other hand, pays the fare of Communists to come to Washington and dispute the testi- mony of those witnesses who are responsible for putting the Hisses and the Communist Party officials and their lawyers in jail. There are those who very honestly say, “Oh, we think you are on the right track, McCaRTHY, and we like the results you are getting, but we just don’t like your methods. You should have done this secretly. You should not have done it in public and em- barrassed the United States before the world.” Ladies and gentlemen, take my word for it. There is no way on earth this could have been done secretly. People have been trying to do this with kid gloves for the past five years and have gotten nowhere. Either I had to do a bare- knuckle job or suffer the same defeat that a vast number of well-meaning men have suf- fered over past years. The depth that the festering rot had eaten made it necessary to cut painfully deep. Ladies and gentlemen, I have faith that the American people can stand the pain so that when we are through, this Nation will be cleansed of this cancerous, Communist growth. When President Truman refused to make available the great wealth of information in the files, I decided to hire the best in- vestigators I could find to produce enough evidence, even before a hostile committee, to convince the Senate and the American people of the dangerous situation, with the hope that public opinion would force the President to crack those files. These men are the best former FBI counter espionage agents I could find. Perhaps you would like to have a brief review of some of the evidence produced. Let us take the case of Philip Jessup, the State Department’s Ambassador-at-Large. Now he was really a great joiner—especially of Communist front organizations. In case you care to see them, here are photostats of documents of five Communist fronts proudly bearing the Jessup name. Now let me make it clear that when I refer to a Communist front, I do not refer to an organization that McCarruy has listed as a front for the Communist party. I am referring to organizations which the Presi- dent’s own Attorney General and congres- sional committee have labeled as agencies of the Communist Party. But his proclivities as a joiner of Communist fronts is not what concerns me most. The evidence shows— and listen to this if you will—that this man, Jessup, our Ambassador-at-Large, upon whose judgment we are supposed to rely in carrying our fight to the Communists, was largely in charge of a publication known as the Far Eastern Survey—the publication of the American Council of the Institute of Pacific Relations. He was in charge at the time when the Communists launched their all-out campaign to take over China and, of course, there was no secret about that cam- paign. We find that this publication spewed forth the perfumed Communist Party line sewage and was financed to a considerable extent by Communist money. Now it is easy to make such charges, so let’s have the proof here tonight. I have, therefore, brought with me and they are here on the desk photostatic copies of checks representing thousands of dollars of Communist money paid to Jessup’s organization. The checks were signed by Frederick Van- derbilt Field, who brags that he is the Na- tion’s leading Communist and who has.spent Millions of dollars for Communist causes. T have asked the Tydings-McMahon com-= mittee to subpena the bank account of Mr, Field. They did not do that, but they did call Mr. Field as a character witness for Mr. Lattimore and to prove that Mr. Budenz was @ liar, When this was called to the attention of Mr. Truman, he took immediate action. He promptly gave Mr. Jessup top secret clearance to A- and H-bomb secrets. Then there is another man whom you may have heard about—Owen Lattimore. Mr. Lattimore, as the Nation knows, has long been referred to as the architect of the State Department’s Far Eastern policy—the archi- tect whose shadow lingers over the corpse of China. To give you some picture of the importance of Lattimore’s backstage operations, let me quote to you from a news story in a Wash- ington paper, August 14, 1945: “Finally, in order to convince Truman, Acheson asked him to discuss the matter with Owen Lattimore, one of the foremost American authorities on China and former adviser to Chiang Kai-shek. “Lattimore talked to Truman for 30 minutes just 2 days before he departed for Potsdam.” And so that you will have a full picture of the extent to which Lattimore shaped our dismal policy of failure in the Far East, I eall to your attention a secret document which he furnished the State Department in August 1949, a document which the State Department itself labeled as a guide for Am- bassador-at-large Jessup. But to understand that document fully, it must be compared with the official Com- munist program for Asia. I have with me copies of the Lattimore secret document and @ brief of the Communist official program for Asia for any of you who care for them. Let me give you a brief résumé of the of- ficial Communist program for Asia: (1) De- stroy the armies of Chiang Kai-shek; (2) get the United States out of Korea; (3) force the withdrawal of the United States forces from Japan; (4) prevent the formation of a Pacific Pact against Communist aggression. Now what does Lattimore tell Jessup our policy for Asia should be? And listen to this if you will: (1) Abandon Chiang Kai- shek; (2) get out of Korea; (3) get out of Japan; (4) deny the need of a Pacific Pact. Just to give you a more complete picture of this State Department adviser and archi- tect of our far eastern policy, let me quote to you briefly from a script prepared under his supervision while he was head of the Pacific Division of OWI—a radio program A3427 beamed to the Chinese people on July 23, 1944, “The Chinese Communists have established 4 colleges. Education is compulsory behind Communist lines. The schools are free. Once this was a poverty-stricken region. To- day everyone works or fights. There is no opium traffic. There is little vice. There are no laggards, for only those who believe in the cause of Chinese liberation are here. This is the Chinese Communist government. The Communists have worked out the prob- lems of all the people, living, working, and fighting together. * * * If we are to succeed we must organize the workers polit- ically. The Chinese Communists want political rights for themselves and all the people. They want a thorough going democracy.” Now let’s discuss the State Department. Let me first give you one example of why at this moment we are a Nation without honor among other nations of the earth. Some 18 months ago, Sgt. Elmer Bender of Cincinnati, Ohio, of the United States Ma- rine Corps, and Chief Machinist Mate Wil- liam C. Smith of Long Beach, Calif., of the United States Navy, were captured by the Chinese Communists. That was 18 months ago, ladies and gentlemen, and they are still prisoners of the Communists. Not 18 days, but 18 months. What is being done about it? I can tell you in one word— nothing. But perhaps that is being unfair to Mr. Acheson. He has sent some notes. In fact, I believe he is employing some total diplomacy. We find Secretary of State, Dean Acheson, who would not turn his back on Alger Hiss, turning his back upon two of our young men in uniform—two young men who are being held by the Communists— the same Communists whom the traitor, Hiss, was serving. Now are these two young men worth more than Harvard-accented notes and powder puff diplomacy—-those men who were cap~< tured while proudly wearing the uniform of this Nation? The answer is “Yes.” Mr. Truman says there is nothing wrong in the State Department; that everything is just fine; that if anyone hears of anything wrong, just call him collect and he will per- sonally take care of things. Mr. Truman, your telephone is ringing. A sailor and a marine are calling——calling from a prison somewhere deep inside of Com- munist China. They’re homesick, lonely, and maybe a little afraid. Answer your tele- phone, Mr. Truman, it will be interesting to hear what you have to say. They haven’t heard an American speak for 18 months. Mr. Truman, they are getting a busy signal on your line. They will call again—when you are through with Acheson, Jessup, Lat- timore, and Service. During Teddy Roosevelt's first term of of- fice a Tangiers bandit named Raisuli cap- tured an American citizen named Perdicaris with the apparent approval of the Tangiers Government. Teddy Roosevelt ordered his Secretary of State to send the following mes- sage: “Perdicaris alive or Raisuli dead.” Ladies and gentlemen, that kind of a policy would regain our lost prestige among the nations of the earth and would actually insure peace. Why is it that wherever it is in the world that our State Department touches the red- hot aggression of Soviet communism there is heard a sharp cry of pain—a whimper of confusion and fear? ' Others in the world have ears to hear with as well as those of us in America. And it must be to them, as it is to us, the sound of a whining indecision that echoes around the world and robs us today of the great heritage of courage and might that your an- cestors and mine—and you in a recent war— established with grit and guts. Why must we ke forced to cringe in the face of communism? What has happened to
A3428 our courage, our determination, and our intellizence? That is not what America wants. We are not soft, nor are we afraid. What we need in Washington is someone to express the resolute determination of the people of the United States to back down no further, to fight back with the weight of skill, intelli- gence, courage, and the truth that is ours. We can as a country no longer stand idle as the prancing mimics of the Moscow party line sell us short. The days of dilettante diplomacy are running out on Mr. Acheson and his fancy comrades of the Kremlin. Sugared phrases in a British accent are fine for Washington teas, But this is not a tea party. Put some men with grass-roots com- mon sense in charge of the State Department and then watch America go. It is peace we want and peace we can have. Peace with courage and with honor. But we cannot have that peace if the policy of this Nation continues to be shaped by those who are either disloyal to this Nation or half-hearted in their loyalty—and remem- ber that a Communist-minded individual strategically placed in a State Department position is much more dangerous than an A-bomb. An A-bomb will kill thousands of people, but a Communist-minded State De- partment officer in a key position whose dis- loyalty is hidden by Presidential fiat can enslave this Nation. Curtailment of Postal Service EXTENSION OF REMARKS HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of . Wednesday, March 29), 1950 Mr. LANGER, Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an editorial entitled “It’s Time To Cool Him Off,” published in the Lancaster (Pa.) Intelli- gencer Journal of April 19, 1950. There being no objection, the editorial was ordered to be printed in the Recorp, as follows: Ir’s Time To Coon Him OFF We predict hard sledding for Postmaster General Donaldson, and rightfully so, His order, of yesterday, cutting mail serv- ice is ridiculous, to say the least. The simple fact of the matter is that Mr. Donaldson has a mad on at Congress, and so he’s going to take it out on all the*people. He may get away with it, but we doubt it. We look for mail service to be restored to normal, posthaste, as soon as Congress has a chance to get into action, as well as the citizens. It seems to be a well-established fact that the Post Office Department has not been, in recent history at least, efficiently run. There is no evidence that Mr. Donaldson has done any better in this respect than his prede- cessors. So Mr. Donaldson asked Congress to in- crease rates, to take care of the Department’s deficiency. Congress in effect has said thus far, put your house in order before you ask for increased rates. Then Mr. Donaldson sought to erase the deficit through a deficiency appropriation, which has been the usual procedure, Con~ gress balked again, as it did in considering the appropriation for the 1951 fiscal year. Now Mr. Donaldson is mad. He’s going to show Congress. And the people, too. . We are for economy in Government. And we are against those who preach economy, and then holler their heads off when some one in the Government economizes. We may seem to be doing that very thing right now. But we are not. ‘We are complaining because Mr, Donaldson has chosen to reduce mail service rather than reorganize his department and, in so do- ing, put it on a paying basis. For it is & business, a big business, a monopoly, if you please, and as such, in these times, at least, it could and should be made to operate evenly, if not show a profit which, it would seem, would be legitimate in view of the serv~ ices rendered, up until yesterday. Another thing we do not like, and do not think 1s good business, is cutting service when the need is for greater service. The bus companies seem to have the idea, here- abouts, that the way to get business is to reduce service and raise fares. But it won’t work, we feel certain. In the case of the Post Office Department, the reduced service will undoubtedly turn postal business to the telegraph and tele- phone companies. And that will happen without a rate increase. So, as we see it, Mr. Donaldson is cutting off his nose to spite his face. What Mr. Donaldson should do is re- organize his Department on a businesslike basis, increase service and reduce rates, and he wouldn’t have to go running hat in hand to Congress every couple of days for defi- ciency funds, And he soon would be breaking even, or showing a profit, if he chose to do so. Fy Congressman Dollinger’s Preliminary Report to His Constituents EXTENSION OF REMARKS HON. ISIDORE DOLLINGER OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, May 8, 1950 Mr. DOLLINGER. Mr. Speaker, the half-way mark of the second session of the Eighty-first Congress has been reached. At this time, I wish to make @ preliminary report to my constituents, and at the close of the session, I shall make a complete one. My efforts for a strong Federal rent- control bill have been unceasing. In November 1949, I wrote the President, urging that he make a recommendation in his next message to Congress that rent controls be extended at the expira- tion of the present law in June 1950. In that letter I stated: “Rent controls are a vital necessity to us, and to end such controls in 1950 would cause dire hardship and extremely disastrous re- sults.” The President thereafter recom- mended extension of the Federal rent- control law. When. the plan for the New York State rent control law was announced, I spoke out against it, saying that it would be only another spineless attempt by New York State to regulate the vital matter of rent control, and would not provide adequate safeguards against in- creases and evictions. We find that the APPENDIX TO THE CONGRESSIONAL RECORD New York State law indicates that no increases can be applied for before De- cember 1, 1950. This provision sticks out Jike a sore thumb, and we know it might possibly mean that increases will be granted and tenants exploited. It also shows that there is still great need for Federal rent control. Recognizing the need to give tenants the protection they must have, I shall continue to do every- thing within my power to assist them, The question of extension of Fedcral rent control is now before the House Committee of which Iam a member. I will make my views known and urge such extension. I believe that a strong Fed- eral rent control law is essential to the welfare of the people, and shall con- tinue my efforts toward passage of the pill. FEPC has been one of my strong ob- jectives, and I have fought for it, not only this year, but for many years past. I need not reiterate my stand, for you know that I firmly believe in the prin- ciple that all people are entitled to em- ployment, and that discrimination is un- American. On February 22, 1950, when the measure finally came up for debate in the House, I was present to fight for FEPC. .I hoped for the long-awaited vic- tory. However, the McConnell Amend- ment, sponsored by a Republican from Pennsylvania, was introduced. That substitute bill was bad enough, but then, due to the coalition of Dixiecrats and Republicans—amendment after amend- ment was offered to further cripple the bill. The measure that was finally before us for a vote was such a spineless, worth- less, toothless thing that it made a mock~ ery of FEPC. I could not compromise a principle nor rest short of the goal I had aimed for during the years. The friends of FEPC know who has stood the test. I pledge that I will continue the struggle until the American people have a strong FEPC which will assure equal opportunity in employment to all— without discrimination because of race, color, religion, or national ancestry. My efforts in behalf of our postal workers continue. The orders of the Postmaster General, curtailing delivery and other essential postal services have caused grave concern both to postal workers and the people of the Nation whom they serve. I sent a vigorous pro- test to the President and the Postmaster General, demanding that the orders be rescinded at once. I stated: Our postal employees deserve commenda- tion—not threats to their livelihood, when we consider the fine record they have achieved through the years. TI pointed out that there was no justi- fication for this destruction of our fine postal system, and that a rescission of the orders was imperative. I am very anxious that our veterans receive from our country all the benefits, care, and consideration to which they are entitled. I was pleased to have the opportunity to vote in favor of the bill providing for 16,000 additional beds for veterans’ hospitals. I have strongly pro- tested cuts in Veterans’ Administration hospital staffs and other services, and
APPENDIX TO THE CONGRESSIONAL RECORD will always have our veterans’ welfare at heart. The arms race in the Middle East has been a serious problem to all of us who wish to preserve peace—for we have learned that a conflagration in any part of the world today endangers all na- tions. As soon as the news broke that England was rearming the Arab States, I protested to the Secretary of State, pointing out that our assistance to Eng- land made us an unwitting participant in the threat against the new State of Israel. I maintained that the threats of a “second round” were very real, and that Israel was the potential target of the Arab States; that the United States must make it clear that the security of Israel is our concern, and that we will insist upon it. Thereafter, in a personal interview with Secretary Acheson, I protested the lack of action by the State Department. Reporting on that meeting, Drew Pear- son in his column of April 2, quoted me as follows: “If arms shipments keep up, the Arabs will eventually have a preponderance, and that will mean war,” said Representative Doiiincer of New York. “Unless the British stop, the United States should lift its em- bargo to Israel.” . The new state of Israel, fighting for its life against terrific odds, needs our help as a democracy, and I shall con- pinue to ask necessary protection for er. The people of Ireland should be al- lowed to govern themselves, and should be independent. I introduced House Resolution 529 which would assist the people of Ireland to establish their com- plete independence, and be given the op- portunity to settle, by a majority vote of her people, how she wishes to be gov- erned. ‘Thereafter, I spoke in commit- tee urging favorable consideration of the legislation before it in this regard. My interest in democracy is sincere and deep, and Ireland, who helped us so much in our fight for freedom and in the building of our own great Nation, must be given proof that we are stand- ing by her at this critical time. Claiming that the Government of the United States has permitted the resur- gence of German fascism, antisemitism, militarism and cartels, and has failed miserably in promoting democracy in Germany,.I introduced House Resolution 413. This provides for a full and com- plete investigation and study of the American military government in Ger- many and the civilian administration which succeeded it, with particular ref- erence to the extent to which they have permitted or encouraged the reestablish- ment of cartels, the resumption of power by former Nazis, the resurgence of fas- cism and antisemitism and the rebuild- ing of German military strength. There is no excuse for the failure of United States High Commissioner for Germany—John J. McCloy—to delay the execution of death sentences of the top Nazi war criminals imposed at Nurem- berg. I have called upon him several times, to obey the mandate given him, insisting that a further delay is a trav- esty upon American justice. Our failure in this regard is a shining example of how quickly we are forgetting the un- speakable crimes of the Nazis. I know that excise taxes are strongly objected to by my constituents, and I am doing all I can to bring about their re- peal. Iam hopeful that we will soon be given the opportunity to vote for the re- peal of all of them. There are many others matters in which you are interested, which are too numerous for me to cover in this report. I wish that it were possible to discuss them all. The problems and opinions of my con- stituents are of primary interest to me. So that they may receive proper atten- tion, I maintain a congressional office at 938 Simpson Street, Bronx, which is open daily, where the people of the Twenty-fourth District of New York are welcome to discuss matters of interest to them. It is my wish to serve them to the best of my ability, and they may rest assured that my earnest efforts in their behalf will continue. Curtailment of Postal Service EXTENSION OF REMARKS oF HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Appendix of the Record an article regarding the curtailment in postal serv- ice from the Idaho Falls Post-Register. There being no’objection, the editorial was ordered to be printed in the REcorp, as follows: As THEY Look—Anp as IT Looxs to THEM Question of the week: “Do you believe re- ducing postal expenditures is the right step towards Government economy?” Dean C. Ekstrom, 169 East Eighteenth street: “I don’t think so. The postal service is the most important part of the Govern- ment. It not only helps the people in the United States but is a great comfort and necessity to our people overseas.” Bud Jensen, 1353 June Street: “They should never change postal service, specially now that it’s doing more good than ever before. It would upset the whole business world, because all business houses are set up as to be dependent of postal service.” Jay Griggs, 1275 Sage Avenue: “If the Gov- ernment cuts the postal service 1t will put men out of work. People out of work is one of the first signs of depression. There should be a way of cutting expenditures without taking jobs.” Ada Baker, Irwin, Idaho: “I think there are ‘many other places that would be more suit- able to cut expenditures such as having less Government employees. It wouldn’t really bother me but so many people depend on mail service.” Mrs. J. D. Lowder, 143 North Third West, Rigby: “The postal department is one part of the Government functions that should be A3429 left alone. This service causes no unneces- sary expenditure as far as I can see. Iam on a new one delivery a day route now and would sure hate to see any less service.” Mrs. Jack Hart, Rigby: “I would rather they cut postal service than have to pay more for stamps and money orders. One delivery is all they get in the country and is all that is necessary.” Danger in the Middle East EXTENSION OF REMARKS HON. ARTHUR G. KLEIN OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, May 3, 1950 Mr. KLEIN. Mr. Speaker, under leave, I am inserting in the REecorp an editorial from the May 1950 issue of the Jewish Forum, a magazine of wide circulation published in New York, which discusses the dangerous situation in the Middle East realistically: A DraBoLicaL SCHEME AND OUR STATE DEPARTMENT The Economist of London, a weekly review, stated in an article on Jordan, Israel, and the Arab World, that it was most likely that the Hashamite Kingdom of Jordan and Arab Palestine would eventually become one and that, as King Abdullah always relies on the Arab Legion to maintain himself in power, without its support, he could not keep his throne for a week and realizes that he owes his position to the British “who are responsi- ble for building up, training, maintaining, and financing the legion.” Hence, it is obvious that the so-called peace negotiations, almost reaching fruition, be- tween Jordan and Israel, were merely a blind to learn how much Israel was ready to con-= cede in order to attain peace, so that British Bevin might estimate how much to demand of Israel by way of the threat of the British concocted and controlled Mufti’s Arab League and of the heavy armament Great Britain has been introducing among the Arab States that might be prepared for the second round, in the hope of recapturing all of Palestine and the Arab world under British suzerainty. All else is camouflage. Abdullah’s surrender to the Arab League was a foregone conclusion as soon as Britain thought the time ripe. Handing over “Arab” Palestine to Abdullah is tantamount to turning it over.to the British. Is there any legal or logical reason why Jordan should be permitted, by a mere unilateral declaration, in view of the UN resolution of November 29, 1947, or any sub- sequent events, to annex “Arab” Palestine and thus become a constantly threatening thorn in Israel’s sides? The chief disappointment, however, is the agreement with this diabolical scheme mani- fested by our State Department. When will it recognize that America’s acquiescence to the British Foreign Office conspiracies is entirely out of harmony with American interests? These demand a strong, democratic, and industrialized Middle East, not a Middle East éroded and milked dry by the greedy appetite of British colonialism. The willingness of certain influential mem-= pers of our State Department to follow the British line wherever it happens to lead, surely is as fit a subject for congressional investigation as was the activity of those other men who were fascinated by the Com- munist idea and who have done so much
A3430 incalculable harm through their influence in the making and carrying out of Ameri- can policy. Whether consciously or uncon- sciously, a subversion of our policy in favor of the British is quite as dangerous to our welfare as one in favor of the Communists. This entire issue ought to be brought out into the open for discusison on the floors of Congress where it would be brought to the attention of the country that these British gifts to the Arab feudal lords are actually being paid for by the tax moneys of Americans. Surely our citizens have a right, through their elected representatives in Congress, to know what is transpiring and to demand an accounting. Is it not unfair and even fantastic to expect the innocent citizens of America to pay taxes ultimately to be used for the support, by arms, of Arab chauvinism or British colonialism? Seaway Run-Around EXTENSION OF REMARKS HON. CLARENCE E. KILBURN OF NEW YORK IN THE HOUSE CF REPRESENTATIVES Tuesday, May 9, 1950 Mr. KILBURN. Mr. Speaker, under Jeave to extend my remarks, I wish to include the following editorial from the Watertown Daily Times of May 6, 1950: SEaway RUN-AROUND We are in the process of another hearing on the St. Lawrence seaway project in Wash- ington. This time the hearing is before the House Committee on Public Works. This is the former Rivers and Harbors Committee. We can recall back in the early 1920’s, when Wallace Dempsey, of Lockport, was chairman of the Rivers and Harbors Committee, it was holding hearings on the St. Lawrence sea- way. ‘The late Luther W. Mott then repre- sented this district in Congress. Death takes its toll but, other than that, the cast that appears each year for the sea- way hearing, whether it be before 2 Senate or a House committee, is very much the same. Of course Cabinet officials change so far as personnel is concerned but their posi- tion is always very much the same. They are for the seaway. The arguments ad~- vanced each year do not vary greatly. Most of the committee members, Senators and Congressmen, have heard them often before. Although we dislike to say it, the chances are they will hear them often again. The current hearing is being held in the last few months of the Eighty-first Congress. No one expects that a seaway measure can be passed this year. So the current seaway pill will die with the EHighty-first Congress. That means that they must be introduced once more in the Highty-second Congress. And that means another hearing, perhaps two more hearings, one before the Senate committee and another before the House committee with most of the same witnesses and most of the same testimony. We are optimistic enough to believe that the St. Lawrence seaway will sometime be- come a fact. We «.ppreciate that these hear- ings, year after year, at least have an educa~ tional value. Certainly we detect increas~ ing support for the project. But if Mr. Tru- man is so strong for the seaway as he indi- cates he is, we wish he would do something about it. There may be something to the Dewey charge that the Truman administra- tion is strong on talk but weak on action. Curtailment of Pestal Service EXTENSION OF REMARKS HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an editorial entitled “Adroit Maneuver’, published in the Cleveland Plain Dealer of April 21, 1950. There being no objection, the editorial was ordered to be printed in the Rrcorp, as follows: AvDROIT MANEUVER We have preached economy in the opera- tion of government just as earnestly and in- sistently as we Know how. So we are in no position to yelp, now that the head of the big service department of the Federal Government, Postmaster Gen- eral Jesse M. Donaldson, has announced an economy move which will affect the conveni-« ence of practically every citizen and the con- duct of a great many businesses, but which the Nation can withstand without any peril. In fact we would applaud Donaldson’s ac- tion in ordering reductions of postal services, including mail deliveries, if we thought for e moment that this was a genuine, sincere economy measure, and would be a lasting one. But we don't tink it was. ; We doubt that Donaldson’s order will be put fully into effect, or if it is, that it will stay very long in force. We think Donaldson’s action was a bu- reaucratic squeeze play, pure and simple. From the timing of the Postmaster General’s order, and because any resultant economies will not be proportionate to the service re- auctions ordered, it is apparent that this maneuver was designed to put pressure on Congress to restore Post Office Department budget cuts. That’s an old and transparent bureaucratic trick, cutting governmental services in the very way that will affect the public most di- rectly and most adversely when the heat 1s on for economy in Government. We think a couple of circumstances sup- port our viewpoint in this matter. Notice, if you please, that Donaldson’s order for re- ductions in mail deliveries to homes and businesses went beyond the reductions sug- gested by the House Appropriations Commit- tee when it recommended cuts in Donaldson’s budget. The scope of the service reductions ordered by Donaldson amounted almost to an arrogant taunt of the House committee, as if it didn’t know what it was talking about in the field of Post Office Department finances. Note, too, that the Post Office Department admitted yesterday that it could not estimate how much money could be saved by the service reductions Donaldson ordered. If the Postmaster General’s order had been a simon pure economy move, it would have been based squarely on an intelligent calculation of how much money needed to be saved and of exactly how much would be saved by the stipulated cuts in service. If the Post Office Department were as deeply concerned with economy as it would like to have people believe, it would start by overhauling the notoriously wasteful, in- efficient and outdated internal management of the Department. The pattern for making sound and lasting economies wr iaid down by the Hoover APPENDIX TO THE CONGRESSIONAL RECORD Commission. But little or nothing has been done to bring about the adoption of the Commission’s recommendations, And for that Congress must accept its share of the blame, for ' ougress has shown no zeal for fundamental economies and substantive im- provements in the Post Office Department operations. We will cheerfully accept reductions in mail service if the Post Office Department, as an earnest of good faith, will make the internal economies it so badly needs. Evena privately owned business which Mr. Tru- man’s socio-economic planners have labeled as @ monopoly couldn’t stay out of the red over one fiscal year if its management policies and operating practices were no more progressive than those of the Post Office, Too Clever EXTENSION OF REMARKS OFr HON. RALPH A. GAMBLE OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. GAMBLE. Mr. Speaker, under leave to extend my remarks I insert what I consider a very pertinent editorial which appeared in the New York World-, Telegram and Sun on Saturday, May 6, 1950, entitled “Too Clever,” dealing with and exposing the President’s con- troversial Reorganization Plan No. 12, which would abolish the office of the National Labor Relations Board’s inde- pendent General Counsel. The President’s purpose is an attempt to repeal a portion of the Taft-Hartley Act, under the guise of the Hoover Com- mission recommendation. The Hoover Commission’s reorganization of the Gov- ernment made no such recommendation. The editorial follows: Too CLEVER A number of the 21 Government reorgani- zation plans President Truman sent to Con- gress on March 15 are in serious trouble. That is regrettable. I¢ Congress rejects any of these plans for picayune political rea« sons it will be a blow to hopes for economy and efficiency through the good work of the Hoover Commission. But Mr, Truman can’t put all the blame on Congress. He, himself, introduced considerations other than efficiency and economy into some of these plans—notably, the controversial plan No. 12, That’s the one which would abolish the office of the National Labor Relations Board’s independent general counsel and divide his functions between the Board and its Chair- man, who would become chief administra- tive officer of the NLRB. There, in effect, Mr. Truman is making @ too-clever attempt to repeal an important section of the Taft-Hartley Act, Congress, in that law, made the general counsel inde- pendent, on the sound theory that the NLRB’s judicial and prosecuting functions should be separated. The Hoover Commission did not recom- mend abolition of the general counsel’s office. The nonpartisan Citizens’ Committee for the Hoover Report has refused to take a posi- tion on plan No. 12, pointing out that it “raises issues which are not wholly organi-
APPENDIX TO THE CONGRESSIONAL RECORD zational, but are matters of national, polti- cal, and economic policy.” In fact, the citizen’s committee gave out- right approval to only 9 of the President’s 21 plans, asserting that some of the others fall short of 7“oover Commission objectives and that a few go beyond them. Plan No. 12 is due to come up in the Senate on May 10. It seems probable that at least 49 Senators—the constitutional majority re- quired——will vote to kill it. If so, Mr, Tru- man can thank himself and the labor-union leaders who are backing this scheme for partial Taft-Hartley repeal under the guise of reorganization. Soil Conservation Service Commended for Work in Wisconsin EXTENSION OF REMARKS HON. GLENN R. DAVIS OF WISCONSIN IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Myr. DAVIS of Wisconsin. Mr. Speaker, it often falls to our lot as representa- tives of the people of our respective dis- tricts, to prod or criticize various agen- cies of the Federal Government. On this occasion 1t is a real pleasure to do just the opposite—to give credit where I be- lieve credit is fairly and honestly due. Recently I received a letter from my friend, Marvin F. Schweers, State Con- servationist for Wisconsin, who is in charge of the work conducted by the United States Department of Agriculture Soil Conservation Service in my State. That letter presented a picture of real cooperative accomplishment. It related that 61 of Wisconsin’s 71 counties have, in accordance with State law, been cre- ated as soil conservation districts. These 61 districts have undertaken a wide va- riety of projects under expert guidance to control and prevent soil erosion, thus preserving the precious topsoil of Wis- consin farms. I was pleased to note that every one of the five counties in the Second Congres- sional District of Wisconsin is organized and actively functioning as a soil con- servation district. The soil conservation work has “taken” in an effective and healthy manner. Farmers are respond- ing to an all-important effective educa- tional program. There is no coercion. The work is entirely voluntary. The pri- mary responsibility rests with the farmer himself. This sound approach unques- tionably accounts for the encouraging progress which has been made. Last year, under the direction of Mr. Schweers and Charles Skaife, district conservationist for my home county of Waukesha, I had the opportunity to view some of the projects in progress first- hand. It was a worth-while experience, which I hope to be able to repeat else- where in the Second Congressional Dis- trict this year. Accompanying Mr. Schweer’s letter to me was 2 copy of his statement to his soil conservation district supervisors, commenting on their reports to him and reviewing the progress of the conserva- tio program in Wisconsin during 1949, I submit it herewith in order that it may be available to my colleagues and to other interested persons: DEPARTMENT OF AGRICULTURE, Soin CONSERVATION SERVICE, Madison, Wis., May 1, 1950. To: Soil conservation district supervisors. From: M. F. Schweers, State conservationist. Subject: 1949 soil conservation district an- nual reports, Rather than acknowledge each of your 1949 annual reports individually we are again sending you a general statement in heu of separate letters. In this we are reviewing progress made in 1949 as it relates to you supervisors and the Soil Conservation Serv- ice and touching upon your plans for 1950. We would also like to comment on some events of this year which have a direct bear- ing on the affairs of your district. REPORTS FOR 1949 HIGHLY INFORMATIVE In general, last year’s district reports top those of previous years in terms of interest and completeness. Many were muimeo- graphed. We understand copies were sent to district cooperators, agricultural leaders, and others interested in soil and water con- servation. A number of the reports contained excel- lent statements from the supervisors. In some instances the chairman or secretary wrote the introduction while others con- tained brief letters written by each member A3431 of the governing bodies. Some of the phi- losophies expressed presented entirely new ideas on how to develop in more people an appreciation of our land and water resources and persuade them to do something about it. Another interesting feature of the reports was the indication that supervisors are defi~ nitely formulating policies and directing ac- tivities in their districts. That’s your job and more power to you. ACCOMPLISHMENTS, 1949 During the past 3 months either Assistant State Conservationist Raymond Brown or Edwin Hill, with field personnel of the Service and others, met with each of the district governing bodies in the State. At these meetings you reviewed accomplishments made in your district during the year. You compared these attainments with goals you had set for the year at a meeting held dur- ing mid-winter of 1948-49. Some districts went over the top on their goals while others fell a little short. In all district reports you indicated you were more than satisfied with production for 1949. The goals set for the year were ambitious ones. We realize that everyone worked hard enough and would have topped them had weather and soil conditions been right. Following is a table showing State goals for 1949, the year’s accomplishments, the percentage of goals attained, and totals to date: Activity Land capability inventory. Contour farming_-.... Temporary structures. Waterways and outlets_ ~ Farm plans and replans.-.......-.---..--- wnne- do Linear feet... Number_-...- Accom- Total to Goal plished Percent date 485, 100 583, 725 120 8, 208, 301 4, 970 7, 910 159 174, 770 68, 685 66, $28 97 431, 346 16, 129 16, 175 100 65, 320 5, 390 6, £52 122 42, 519 1, 486 I, 851 125 14, 649 561 6 18.0 92 , 746. 748, 580 688, 913 92 2, 089, 820 251. 4 86.9 114 733. 5 10, 076 16, 187 161 128, 876 17 24 141 229 7 346 73 1, 856 896, 690 1, 005, 318 112 3, 448, 089 a) 2 6 19, 087 As you fully understand, we do not main- tain detailed records on practices such as changes in land use; influence on farmers to increase purchases of liming and fertilizing materials; improved rotations; etc. How- ever, these are considered at the time con- servation plants are developed with the farm family and are written up as part of the speci- fications. Furthermore, these soil-conserva- tion measures in general do not require on- the-farm assistance in their establishment. According to your reports service person- nel worked with the Extension Service on numerous education and information activi- ties. They appeared on programs for tours, demonstrations, and general and special meetings. They prepared news stories and presented radio broadcasts. We were pleased to note the extent of the informational program as it affected groups other than farmers. The homemakers’ soil- conservation project in the Green County soil-conservation district is something en~ tirely new. Tours of editors, clergymen, and bankers appeared very effective. Talks before civic clubs, PTA, etc., should also make a definite contribution. Virtually every report contained some in- formation on the youth-training program being carried out in districts of the State. Credit for this fine showing goes to the county superintendents of schools, teachers, 4-H Club leaders, the State soil-conservation committee, and all others who have con- tributed to the program. We in the Service were pleased to cooperate in this work. We commend I, O. Hembre, of the State com- mittee staff, for his capable and enthusiastic leadership in spearheading this activity on the State level. GOALS FOR 1950 Before setting 1950 goals, you supervisors appraised the total amount of work farmers of your district are ready to put into effect this year. To provide farmers with necessary technical assistance, it was estimated that it would take up to five times as many tech- nicians per district as we can make available. This relates only to the type of assistance furnished by the Soil Conservation Service. You supervisors indicated in virtually all annual reports that the first work priority should be laying out planned practices on the land. This work is very seasonal and in view of limited manpower available you devéloped your work plans so that all Service person- nel will devote full time to it during the spring and fall lay-out seasons. There were some differences of opinion regarding second priority work. In most cases follow-up services to district coopera- tors was placed in this category. This serv- icing job involves calling upon your district cooperators to assist them in planning their layout program for the year; encourage them. to speed up the application of practices; ad- vise them on how they can get into the pro- gram; and help them determine how best to expend budgeted funds for lime, fertilizer and seed. With acreage allotments now coming into the picture, there will probably be more demands for assistance in arranging cropping systems to coincide with these con~ trols. With regard to allotments, quite a number of supervisors have suggested that
A3432 land capability inventories be the governing factor in determining these acreages rather than the historical bases. You gave both second and third priorty to farm planning for new cooperators and replanning farras which have been sold or on which acreage changes have been made. We agree with your viewpoints that cooperators should assume more of the responsibility of getting their plans into effect. How to do this job presents a real problem. Whatever your decision on priorities might have been, your goals for the year were set accordingly. We all appreciate that condi- tions, particularly weather, will alter the best of plans. However, we feel that by set- ting goals the local staff has something to aim toward. In our opinion each district should hit at least 100 percent of its goals. SOIL CONSERVATION DISTRICT WORK PLANS FOR 1950 We are very much interested in your dis- trict work plans for 1950. These were by far the best we have ever had an opportunity to review. We were especially pleased to note that these plans will permit our men to spend the maximum amount of their time working directly with farmers on the land. A minimum amount of their time will thus be spent in working with you supervisors, the Extension Service and others on admuin- istrative matters, in conducting field demon- trations, in preparing news stories, in pre- senting radio broadcasts and im completing records and reports. By so doing, your local staff is relieved of virtually all responsibili- ties other than planning and application. We are also gratified to note the number of agencies which are now participating in the district movement. In addition to the SCS and Extension Service, references are made in your reports to the Wisconsin Con- servation Department, State soil conserva- tion committee, vet trainers, FHA, vocational agriculture, PMA, and schools, Most of you supervisors have planned am~ bitious educational programs for 1950. As we see it, this is as it should be. These pro~ grams vary in accordance with interest with~ in the district. Where a large number of applications for farm conservation plans is on file, supervisors generally are not giving emphasis to securing additional ones. More attention in these districts is given to meth~ od and result demonstrations. Where ap~ plications are limited 1n number, efforts will be made to increase this backlog. Most work plans revealed a definite trend toward having service personnel work with and through neighboring groups. With your encouragement and active participation we feel that working with neighbor groups pro~ vides a medium whereby the soil-conserva- tion program can be stepped up. Our per- sonnel who have used this approach find it very effective. It may not immediately reduce time spent in farm-conservation planning but these men definitely report that farmers have a better understanding of thelr farm plans as a result of working to- gether as a group. Then, too, a group of neighbors working together in an area where soil and water conservation practices have not as yet been accepted can become much more enthusiastic about adopting progres- s:ve methods, than can a single isolated farm family. In thinking of neighbor groups we believe the greatest benefit in using this approach will come in applica- tion of practices and in follow-up. We sin- cerely hope you will personally follow through on this procedure and offer supges- tions on improving it. COOPERATION WITH PMA As you no doubt know, the 1950 appro- priation bill for the Department of Agricul- ture, in the section dealing with the agricul- tural conservation program, administered by the Production and Marketing Administra- tion, contains the following statement: “That the county agricultural conserva- tion committee in any county with the ap- proval of the State commuttee may allot not to exceed 5 percent of its allocation for the agricultural conservation program to the Soil Conservation Service for services of its technicians in formulating and carrying out the svrioilyccl ecnservation program and the :u-.: ‘4 > ot: shall be utilized by the Soil Conservation Service for technical and other assistance in such county.” There are three types of assistance PMA and SCS officials have agreed upon as being desirable in this cooperative undertaking. They are: (a) Furnishing needed data—especially about physical land conditions and the ef- fectiveness of various conservation prac- tices—for formulating and carrying out the agricultural conservation program for the county. (b) Laying out and supervising the in- stallation of conservation practices approved for assistance under the 1950 agricultural conservation program. (c) Assisting in training committeemen and association employees. Nineteen PMA county committees asked for assistance either of the “‘b” or “‘c’* types. A representative of the State PMA office and a member of our SCS State office staff met with these committees. With the exception of two counties, one or more of you super- visors sat in on each of the 19 meetings held. Seventeen of the PMA committees completed agreements with the Service under the above authority. These are: Type “b”: Pepin, Pierce, Washburn, Hau Claire, Price, Rusk, Fond du Lac, Green Lake, Kenosha. Type “c”’: Monroe, Sauk, Taylor, Clark, Calumet, Waukesha, Lincoln, Crawford. (All of the above are soil conservation districts excepting Kenosha County.) We feel that this cooperation with the PMA offers some real possibilities. The ‘b” type of program appealed to most district su- pervisors since it provides extra assistance to farmers without taking any time of local staffs for training purposes. The “c” type program will require additional time of serv- ice personnel in instructing PMA trainees as to the “why’s, wherefore’s, and how’s” of various practices. However, most of this time is on-the-job training and productive accomplishments are thus made during the training period. In our opinion, the help contributed by PMA trainees plus the use of PMA funds for hiring local aids offsets the time utiluzed in this extra training work. Supervisors in general welcome the extra as- sistance in districts. Most of the training plans call for instruct- ing PMA employees on methods of determin- ing soil-erosion losses; familiarizing them with land capability inventories and the po- tentialities and limitations of various soils in the district; acquainting them with the various soil conservation practices; and plan- ning and laying out less complex practices such as grass waterways, strip-crop systems, etc. In a few instances, PMA employees are b ‘ng trained to plan, stake out, and su- pervise installation of simple drainage and terracing systems, . Several supervisors expressed concern over the possibility of this program becoming a single practice affair. We assured these su- pervisors that we will make every effort in our training program to acquaint PMA em- ployees with the fact that a practical, effec- tive, and lasting conservation program must consider the entire farm as a unit. Various practices such as terraces or strip cropping, which influence the flow of water from one field, can have a direct bearing on what hap- pens to adjoining lands. In the same way, laying out a single field in a strip-cropping system without considering the entire farm could throw the cropping system, the fer- tility, the soil-erosion control, and the water retention or disposal programs out of bal- July 1, APPENDIX TO THE CONGRESSIONAL RECORD ance for the rest of the farm. No one prac- tice can give the farmer protection against undue loss of soil and water. Full conserva- tion can be reached only through a com- bination of the practices needed according to land use capabilities and for the entire farming unit. EQUIPMENT Section 66 34 of the Wisconsin Statutes has been of real benefit toward stepping up ap- plication of certain soil-conservation prac. tices where heavy equipment can be used to advantage. As this act is rather short we are quoting 1t for your convenience: “66.34. Soil conservation; private roads: Any county, city, village, or town by its gov- erning body or through a committee desig- nated by 1t for the purpose, may contract to do soil-conservation work on privately owned lands, but no such contract shall in- volve more than $200 for any one person.” Many district governing bodies have taken advantage of this legislation. Supervisors have contacted town chairmen and governing bodies have met with highway commuttees and made orve~cvarents whereby equipment will be mace. + ! "ye o farmers during lay- out seasons. Several county boards have appropriated funds for the purchase of motor patrols for use in soil-conservation work, These units, when not in use on so1l-conser- vation work, are used by the highway depart- ment in their regular road program. By virtue of having trained operators and because of the fact that road patrols are particularly well adapted to terrace and di- version construction many more miles of these practices can be installed through the use of this equipment. Quite a number of contractors have also become interested in soil-conservation work. This should be an inducement to stepping up production. MEETINGS OF SUPERVISORS A majority of district governing bodies in the State hold regular meetings; either on &@ once-every-2-months or a monthly basis. A number of supervisors have told us that at one time they thought the amount of district business would not justify regular meetings. These same individuals have since been attending scheduled meetings and now wonder how they are going to get the job done without convening more often. Tooks as though a supervisor’s job is never one. Just a few words about the recent series of area meetings of district supervisors. The programs were set up with the idea of free- for-all participation. We were surely pleased at the response. Joint meetings of district governing bodies, where carried out on 2a work~group basis, have the enthusiastic sup- port of participating supervisors. These are called for the purpose of exchanging ideas and experiences with the primary objective of improving district administration and stepping up the establishment of planned soil-conservation practices on the land. OUTLOOK FOR STAFFING DISTRICIS IN 1950-51 At this time we are in no position to make any commitments regarding the staffing of districts for the next fiscal year beginning Our plans will be regulated by our 1951 appropriation. Four soil-conservation districts not pre- viously staffed will have completed their memoranda of understanding with the De- partment and the Soil Conservation Service by July 1. We know that they are expecting some assistance. ' Irrespective of what our appropriation may be, we will continue to provide the max- imum amount of assistance for funds ex- pended. Our personnel will be assigned in accordance with workloads. We shall total the workloads for all soil-conservation dis~ tricts ‘in the State and then pro rate our manpower according tq needs for each district.
APPENDIX TO THE CONGRESSIONAL RECORD Before taking action to reduce any staffs we will first discuss this matter with govern- ing bodies of districts involved. No matter what our appropriation may be, districts will still be short handed. We would like to suggest that farmers do more of this work themselves and that other agencies be called in to contribute wherever possible. As we see 1t, soil and water con- servation is the responsibilty and obliga- tion of many organizations, departments, and individuals. We in the Service hope that you supervisors wll n ‘de the leader- ship to muster and cccid:inire the many forces that are available to participate in this important and vital movement. IN APPRECIATION In preparing this report we have only high lighted many topics we would have liked to discuss in more detail. Still it has become overly long. In conclusion, we want to express our sin- cere appreciation for the many courtesies and splendid cooperation you have extended to us in the Soil Conservation Service. Sincerely yours, M. F. Scutweers, State Conservationist. Curtailment of Postal Service EXTENSION OF REMARKS oF HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an article re- garding curtailment in postal service, from the New York Journal-American of April 20, 1950. There being no objection, the article was ordered to be printed in the Recorp, as follows: Business Barriers Stas Iw Mar; Heavy Losses Frarnp Here New York businessmen today were prepar- ing to carry to Washington their fight against the impending slash in mail deliveries. Estimating that the drastic cuts would cause incalculable losses, representatives in the fields of publishing, printing, mail- order selling and direct-mail advertising were laying plans to appear at a Senate com- mittee hearing on postal rates. It was charged that the economy order of Postmaster General Donaldson was a po- litical maneuver to win support for a Post Oiice Department plea for new rates with an estimated yield of $150,000,000 per year, Concern over the delivery curb was ex- pressed by the Dress Manufacturers Board of Trade, Inc., 220 West Forty-second Street, which pointed out the garment district leans heavily on parcel post. Under the economy order to postmasters, no parcel post would be received at post of- fices after 6 p. m. At present, much parcel post is received from garment-area houses at the main post office, Eighth Avenue and Thirty-first Street, after that hour. Letter carriers have been thrown intd a “panic” by the economy order, according to Philip Lepper, president of the New York branch of the AFL Association of Letter Carriers. Lepper estimated that 10 to 15 percent of the letter carriers in the city would be fur- loughed or dismissed as a result of the econ- omies to go into effect July 1. That would mean some 4,300 to 6,450 car- riers would be laid off. The seven postmasters in the city today were hard at work fitting their organizations into the pattern imposed by the economy order, called “the most drastic in the his- tory of postal service.” In the Manhattan-Bronx-Pelham districts, presided over by Postmaster Goldman, it was estimated that a considerable number of temporary workers would be affected by the first cutbacks. Curtailment of Postal Service EXTENSION OF REMARKS HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an editorial and an article from the Wichita Beacon regarding the curtailment in postal service, There being no objection the editorial and article were ordered to be printed in the Recorp, as follows: Concruss SHOULD HAVE AVOIDED THE IMPAIR- MENT OF PosTaL SERVICE By OTHER APPRO- PRIATION ECONOMIES The Postmaster General, Jesse Donaldson, has been forced to lay off 10,000 employees of the postal service, due to lack of funds with which to maintain the service at its present high level. Congress failed to give the Post Office Department the appropriation for which 1t asked, The result of these layoffs for lack of funds will seriously affect the service. It will be slowed up materially. Congress should have given the Postmaster General the appropria- tion that was needed. Money could have been saved from other less necessary and less essential appropriations. The Marshall plan appropriation could have been cut. Less money could have been earmarked for housing. Less could be spent by reorganization of Government agencies and bureaus. We could give less money to Chiang Kai-shek and his Chinese National- ists. The United States postal service is the most efficient in the world. Postal employees give their lives to their work. They are underpaid. No Government employees are more faithful or render greater public serv- ice. Ten thousand of these conscientious workers should not be laid off to save money for less necessary purposes, We have the money. We do not appro- priate it wisely and rightly. Our postal serv- ice should be maintained at its present ef- ficiency and not be selected for economizing when economies could be made elsewhere without harm to the American public. Appropriation Committees can do as they see fit. They easily could have saved money in other ways, instead of refusing the Post Cfiice Department the money it needs to prevent layoffs of devoted postal employees and deprive the American people of the postal service they need and for which they are taxed. Mat, Service Is Repucep In WIicHITA Postmaster C. M. Fitzwilliam released a statement Thursday afternoon regarding changes in postal service, which are to be- come effective May 1: Window service at the main office will be provided between the hours of 8 a.m. and A3433 6 p. m., Monday through Friday. All sub- stations will offer window service from 8 to 5:80, except the airport branch and Plane-~ view which will close at 5 p.m. Saturday window service at all the sta- tions and main office will be from 8 a. m. to 12 noon, Cuts in carrier service from 2 daily deliv- erles to 1 in the residential area, and from 8 to 2 in the business area, will be an- nounced during the next 3 or 4 days. These changes will be put into efect dur- ing the next 80 days. Effective May 15, all bulk mailings of sec- ond, third and fourth class matter wiil be accepted for mailing only between the hours of 8a. m.and 6p. m. Third class matter having a time value no longer will be given preferential treatment unless it carries first class postage. Outgoing parcel post received by 6 p. m. will be distributed or dispatched promptly. Third class afver 6 p. m. Fitzwilliam explained that first class mat- ter will continue to be handled at night, put that the change eliminates such consid- eration for second, third and fourth class maail. Soviet Expansionism in Europe and Asia Since 1939 EXTENSION OF REMARKS HON. WALTER H. JUDD OF MINNESOTA IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. JUDD. Mr. Speaker, under leave to extend my remarks, I include the fol- lowing address given by Mr. William C. Bullitt at Georgetown University on March 31, 1950. No American has had amore brilliant record in diplomacy and especially in diagnosing the true nature of Soviet communism and prescribing the proper way to treat it. Tragically, our State Department ignored his advice and led our country and the world to its pres- ent perilous state. Nothing can be more useful, even at this late date, than to study the enemy we face, our own errors, and what to do now—under the guidance of a real master in the field of world affairs: SovieT EXPANSIONISM IN EUROPE AND ASIA Suvcz 1939 Soviet expansionism springs from the Communist creed: The Marx-Lenin-Stalin creed which denies God and claims to be based on science. It attributes all evil to private ownership of the means of produc- tion, It teaches that the establishment of Communist dictatorship throughout the earth and the abolition of private ownership of the means of production will end all war and so improve the nature of all men in all nations that “the state will wither away,” and all men will live without a state in per- fect freedom and happiness. This is the utterly unscientific faith which, in the name of science, Communist-controlled gov- ernments teach as absolute truth to the children they control. They prepare the chil- dren to live and, if need be, to die for it. A large percentage of the children, having no other faith taugrt them, become be- lievers in the Communist creed, and, as Communist believers, offer their lives for their faith as gallantly as did the early Christians. They believe that they are fight- ing for the emancipation of all humanity from all evil. They think they serve eternal
Asi34 truth. The Communist Party, to them, is a union of the faithful. Their old testament contains the books of Marx and Engels; their new testament, the works of Lenin and Stalin. Since the highest moral goal, ac- cording to their creed, is to achieve the de- struction of the state following the es- tablishment of Communist throughout the earth, the higot occ duty of man is to promote such dictatorship. This supreme moral end, they believe, justi- fies all means for its achievement, including the pledged word given and broken, char- acter assassination, torture, murder, and war. In the words of Lenin: “It is neces- sary * * ™ to uSe any ruse, cunning, un- lawful method, evasion, concealment of truth. * * * It 1s inconceivable that the Soviet Republic should continue for a long period side by side with imperialist states, Ultimately one or the other must conquer, Meanwhile a number of terrible clashes be- tween the Soviet Republic and the bourgeois states is inevitable.” The dynamo of Soviet expansionism is the Communist creed. Many older Communists become skeptical and disillusioned. But they do not dare to express disbelief. The penalties are too terrible. So the old, how- ever skeptical, render lip service. But the young believe. And while the old die off, the young come on forever. In consequence, so long as mighty races and resources are controlied by Communists, there will be no peace in this world. The aim of the Soviet Government and the other Communist- controlled governments will continue to be the conquest of the world for communism. The Communists will not stop. They can only be stopped. Stalin sits in the Kremlin with members of the Politburo, who compose his planning staff for the conquest of the world. He pre- pares his attacks on a world scale as care- fully as the commander in chief of an army prepares plans for his advances. He decides when and where to strike, and what forces will be needed to seize his objective. He is a@ careful and crafty leader who never takes great chances. He always remembers that the physical strength of the Soviet Union is the most important factor in the spread of communism, and he does not risk destruc- tion of that primary source of strength. In 1939, Stalin controlled about 170,000,- 000 persons. Today he directs about 800,- 000,000. The chief methods which he has employed in making this extraordinary ad- vance toward control of the entire human race have been the following: First. Easy war. For example, 17 days after Hitler had attacked Poland in 1939, when the Polish armies had been disrupted, Stalin attacked Poland and seized all of eastern Po- land. Similarly, in the Far East, after we had pulverized the military resistance of Japan, Stalin, only 4 days before Japan surrendered, declared war on Japan and seized Manchuria. Second. Occupation by the Red Army and gradual imposition of absolute Soviet rule. This was the method employed from 1945 onward in Poland, Rumania, Hungary, and, with slight variations, in Czechoslovakia, Its effectiveness is demonstrated by the simple fact that Stalin has now been able to install as commander in chief of the Polish Army a marshal of the Soviet Union. Third. The method of the camel’s nose. You all remember the old story of the camel who was cold one night in the desert and put his nose under his master’s tent and per- suaded his master to let him keep it there. Soon afterward, the camel was inside the tent and his owner was out in the cold. That method, in 1940, was used by Stalin in taking over Estonia, Latvia, and Lithuania. First, under threats of war and promises of peace, he persuaded the governments of those three little Baltic countries to accept the presence of Soviet garrisons at certain stra~ wets Cr rteteschtsy tegic points. The Soviet soldiers behaved themselves well, and many Balts believed their prospects for survival Were good. However, when Stalin considered that the moment had come to close his hand on those countries, he closed it. He murdered or deported to death at slave labor his political opponents of all classes. He finally reduced his victims to a terrorized mass of despair- ing individuals vhom he then compelled to go to booths and “vote” for Soviet-chosen candi- dates under penalty of losing their bread cards which were nothing more or less than permits to live. Fourth. Use of local Communist move- ments in areas where Communists have been strong enough to organize armed resistance to “existing governments. The foremost ex- ample of the success of this method 1s, of course, China. By turning over to the Chi- nese Communists all the arms captured from the Japanese Army in Manchuria; by send- ing afew generals who were masters of strat- egy and tactics to plan the attacks of the Chinese Communists, Stalin succeeded in bringing the whole of continental China under Communist control. When he at- tempted to use the same method in Iran and Greece he met such determined cpmosition from the United States that he a.iwed his local agents to be defeated—temporarily at least. Fifth. Communist control or infiltration of nationalist independence movements in colonial countries. At the present moment Stalin is advancing by this method in Indo- china and at other points in southeast Asia. Sixth. Psychological warfare. Under this heading must be included two different methods of deceiving victims. A. The pledged word of the Soviet Union given and broken. Stalin lulls his prospec- tive victims to sleep by entering into all sorts of pacts and agreements with them—and breaks the agreements as soon as it becomes convenient for him to do so. Stalin’s viola~ tions of the most solemn international agree- ments have exceeded in number similar viola- tions by Hitler. B. The deception of naive government offi- cials in all countries. We do not have to go further than our own country to observe Stalin’s notable achievements in this domain. Quite aside from Soviet agents in our Gov- ernment departments and atomic-energy or« ganization, we have had in Washington and throughout the world a number of Govern- ment officials who were not Soviet agents but served the Soviet Government as effectively as if they had been Soviet agents. You will all recall that from 1942 until 1947 our De- partment of State was bamboozled into treat- ing the Soviet Union as a “peace-loving de= mocracy.” Officials of our Government 650 described the Soviet Union in a long series of documents, The Yalta agreements—including the secret one by which we promised Stalin con~ trol of the great Manchurian ports of Dairen and Port Arthur and the Chinese Eastern Railroad—were signed during that period. They were one of the greatest triumphs of Soviet psychological warfare. Had we acted in accord with the national interests of the United States and of our faithful ally China, we would have done everything in our power to prevent the Soviet Union from entering the war against Japan, But our leaders had been bamboozled into believing that the Soviet Union would work with us cordially to produce a world of liberty and peace, and in addition had been fooled into believing that we would need Soviet help to defeat Japan. So we secretly sponsored Soviet domination of Manchuria and enabled Stalin. to arm the Chinese Communists with the vast armaments of the Japanese armies. You will recall that officials of our Depart- ment of State had also been persuaded by Soviet propaganda to believe that the Chi- APPENDIX TO THE CONGRESSIONAL RECORD mese Communists were “Mere agrarian re- formers who had no connection with Mos- cow.” Our Government, acting on their ad- vice, attempted to compel the Chinese Gov- ernment to take Communists into the Gove ernment, and when Chiang Zai-shek refused to do this, cut off all military supphes to him for a period of nearly 2 years. You will remember that we refused his repeated pleas for a top-rank American general to organize the defense of China in the same manner that top Soviet generals were organizing the attacks on Chinese independence. Thus we allowed China to slide into Stalin’s hands. Similarly, the Valta agreement with regard to Poland resulted in the present absolute control of Poland by the Soviet Government. Much ink has been used by apologists for the Yalta agreements in an attempt to prove that what was wrong was not the agreements themselves, but the fact that the Soviet Union did not carry out the agreements. This is as if a banker who had been appointed trustee of the fortune of a child should place the funds entrusted to his care in a Ponzi get-rich-quick scheme; and then when the money was lost, plead that the trouble was not with the trustees—who accepted Mr. Ponzi’s promise to pay 200 percent per year— but with Ponzi’s failure to carry out the agreement. The people of the United States hire officials to work in the Department of State because they need experts to handle complex world questions. The officials of that Department are trustees of the vital interests of the American people, and the most contemptible excuse that can be offered by or for them is that they meant well but were “played for suckers.” There is a great moral difference between traitors and Soviet dupes. Itis the same dif-~ forence that is recognized in law between a man guilty of murder and a man gulliy of manslaughter. In the case of mansln2uatltor, there is no intention to commit the crime. But in both cases the victim ends up dead. Soviet dupes may do as great harm to the United States as Soviet agents. Seventh. Infiltration of respected organ- izations: One of Stalin’s most effective weapons to reduce resistance to his attack is, of course, infiltration of educational in« stitutions, scientific societies, welfare organ- izations, and trade-unions by Soviet agents. He managed to use this weapon so effectively in both France and Italy that leadership of the great trade-unions of both of those coun- tries was seized by the Communists and for a time it seemed that both countries might be hopelessly paralyzed by Communist-led strikes. At the present moment, the non- Communist members of the trade-unions in France and Italy have set up their own or- ganizations; but the Communist-led unions are still able to organize strikes of huge di- mensions for purely political purposes. Fortunately for our own country, although for a time some of our labor leaders were as deceived as was our Government with regard to the Communists, our great trade~unions have either purged their ranks of Commu- nists or are in the process of purging them. Stalin is having little success in our trade- unions, and I think we should congratulate ourselves on the patriotic qualities of our top labor leaders. I wish I could say as much about our professors, somre of whom appear to be too educated for their brains. Eighth. The final weapon employed by Stalin to disintegrate opposition to Commu- nist advance jis fear. Now that Stalin has atomic bombs and plenty of bombers to de- liver them to any spot in Europe, Asia, or North America; now that he has China a8 an ally and is increasing his military power much faster than we are increasing ours; his propaganda has taken a new line—the line of warning his opponents of all classes in Europe and in Asia that power is on his side and that time is on his side and that, unless they de- sire to meet the fate which he accords to
APPENDIX TO THE CONGRESSIONAL RECORD defeated opponents, they had better leave the camp of the United States and join the Loviet side. The fear which he is thus able to engender has been vastly increased by revelation of the methods which are now used by the Com-~ munists to break down and destroy human personality. You have all read recently in the newspapers Shipkov’s statement of the relatively simple methods used to break him down and force him to make a false confes- sion to the Bulgarian Communist authorities. Far more sinister and horrible pressures are used when the individual presents more re- sistance. The final method is that of narco- hypnosis. The victim in that case receives quantities of drugs until he can be hypno- tized so deeply that he can be deprived of all memory of the actual facts of his past life and made to believe in a new set of facts invented by his hypnotizer. Human person- ality can thus be totally changed. No man can any longer say that he is master of his fate or of his own actions and thoughts. If he falls into the hands of the Communists, he can be reduced to a puppet with a new personality invented by his hypnotizer. This is a final horror—an unexampled triumph of satanism. To die in battle is nothing com- pared to the living death of personality un- der narco-hypnosis. Recently a French lady said to me: “We are all of us enjoying our- selves as much as possible in Paris since we know that within a few years we shall either be destroyed by Soviet atomic bombs, or raped, or hypnotized into new personalities.” That is the state of mind which is growing in western Europe. We have now glanced at the Communist creed which underlies Soviet expansionism, and at some of the methods employed by Stalin to achieve world conquest. Let us now look briefly at the attacks which armed Communists are making at the present mo- ment. As we have already noted, they are advanc- ing by open warfare in Indochina, or—to he exact—in the eastern portion of Indochina, which is known as Viet Nam. The war in Viet Nam is one of the saddest that has ever been fought, for three-fourths of the troops of Ho Chi Minh, the Moscow-trained leader of the Annamites, who are fighting the French, and the forces of the Emperor Bao Dai, are not Communists but simple patriots who believe that they can achieve complete independence only by throwing the French and Bao Dai into the sea. Yet, in truth, the only result of such a victory would be that the Annamites would exchange the yoke of France—-which has now become rela= tively light—for the terrible yoke of Stalin. The French, 8 years late, have given Viet Nam independence with the French Em- pire, retaining for themselves control over foreign relations and military affairs. To us, this seems a limited, almost nonexistent form of independence. Yet if the French were to withdraw now from Viet Nam, the country could collapse at once into the hands of the Communists. This is so because of the failure of the French to train Annamites for high administrative and military posts. The French reserved those posts for them- selves. They never built up in Viet Nam a native civil service comparable to the civil service which the British built up in India. In consequence, Bao Dai, if left to his own resources, could not find the men to staff efficiently the military and administrative services of his country. For a period, the Annamites, who are highly intelligent as well as patriotic peo- ple, will be obliged to rely on the advice and assistance of foreigners of some sort. They would like to have Americans instead of French running their army and their ad- ministration; but no American speaks their language. The secondary language of Viet Nam is French, and so few Americans of first-rate quality speak French adequately that it is hopeless to expect that thousands of efficient, French-speaking Americans can be found to go to Viet Nam. The Annamites would also like to have American troops re= place the 130,000 French troops now resist= ing the forces of Ho Chi Minh. Quite aside from other considerations, we have no such number of troops to spare. And we should be thankful that the French Army is fight- ing Ho Chi Minh in Viet Nam, They wiil probably have to meet stronger attacks in the near future. For the Chinese Commu- nists have now reached the borders of Viet Nam, and are passing arms and munitions to Ho Chi Minh. In consequence, unless Indochina is to fall into the hands of Stalin, we shall have to -work with and through both Bao Dai and the French. If we fail to do so because some State Department dupe of Soviet psychologi- cal warfare takes the position that we must not give help to Viet Nam until all the French shall have left, we shall merely be handing the country by default to the Communists. If we let Indochina fall, Burma, Siam, and British Malaya—with its vast production of rubber and tin—will also fall. Then it will be India’s turn, At another point, the Communists are making small attacks preparatory to a great attack. The Chinese Communists for some time have been attempting to seize small islands on the way to the great strategic island of Formosa. Formosa is still being held by the Chinese Nationalist Army which, just 2 weeks ago, gave proof of its good morale by seizing a port on the mainland. If the Chinese Communists should capture For- mosa, Stalin’s forces would be within 250 miles of the northern Philippines, It was from Formosa that Japan attacked and cap- tured the Philippines. Our Joint Chiefs of Staff, headed by General Bradley, pleaded with President Truman to send munitions and equipment, as well as economic aid to Formosa, and a few American officers to ad- vise regarding defense. Secretary of State Acheson opposed our military leaders, and persuaded President Truman to decide that we would continue to give no support to the Nationalists, do nothing toward preventing the fall of Formosa. That is our present policy. For the Philippines, the Department of State is preparing another Bataan. Recently Secretary Acheson announced that we must wage “total diplomacy.” And in San Francisco he intimated that if the Chinese Communists should commit aggres- sions against the countries of southeast Asia, they would find themselves in trouble with us. But his “total diplomacy” does not in- clude Formosa. He and his closest associates and friends have a vested interest in their own mistakes with regard to China, In any European parliamentary democracy, a minis- ter for foreign affairs who had tossed a great ally like China into the hands of Stalin would have been dismissed from his post. Mr. Acheson retains his office and turns his back on Formosa. In the Near East, Iran, with its huge oil production which plays such a large part in British economic life, is again threatened by Soviet-directed revolutionaries of the Tudeh party. They have a fertile field in which to work. The poverty among the peasants of Iran is so grinding that they are close to revolt. Unless the Government of the United States moves rapidly to alleviate the suffering in Iran, Stalin may soon add that ancient country to his long Ust of satellites, These, for the moment, are the areas in Asia where Stalin is pressing his advance strongly. But we cannot congratulate our- selves that even the situation in western Europe is satisfactory. In Italy, more than 20 percent of the workmen are unemployed, and the Commu- A3435 nists, who gathered one-third of the votes at the last elections, are gaining in strength. In France, the government is far weaker than any French government before the Second World War, and its entire apparatus is riddled with Communists. Even the head of the French atomic research is a Com- munist. Great Britain is staggering toward another financial and economic crisis. In 1945 the British voted themselves a higher standard of living than, under existing world condi- tions, they could possibly earn. Today they can neither feed themselves nor defend themselves. Western Germany, under the pressure of unemployment, is beginning to listen to the Soviet propaganda which says: Side with the United States and you will have unem- ployment, underfeeding, shortage of raw ma- terials, a divided country and, finally, Soviet atomic bombs on your cities; side with the Soviet Union and you will have all the wheat and raw materials you want, no unemploy- ment, and a united Germany including the part that is momentarily Polish. Pastor Niemoeller, much admired by Americans, has now declared himself in favor of a united Germany even at the price of Communist rule. Moreover, the whole of western Europe is without defense, and everyone in western Europe Knows it. Its cities cannot ke pro- tected against Soviet atomic bombs except by our Air Force, which today is not strong enough for the task. To oppose the 125 Soviet divisions, the French have 6, the Brit- ish say they can furnish 1, the Belgians 1. To have a chance to stop the Red Army for a few months, the European democracies would need from 50 to 60 divisions. Modern equipment for such a number of divisions would cost from 10 to 20 billion dollars. And most military authorities agree that no western European defense system can be effective unless both the western Germans and the Spaniards are included in it. When we began to give Marshall plan aid, and when we signed the Atlantic Pact, our object was to make western Europe a strong ally. We have succeeded only in keeping alive 17 picturesque, compsting countries which cannot feed or defend themselves. If they would unite their economies by en« tering a European federation, they would be on the path to strength. But their govern- ments refuse to take any serious steps toward federation and our Government is making no effective effort to move them toward fed- eration. They feel confident that, even after 1952, we will not stop our doles to them. And, indeed, we do not dare to stop for fear that they will all collapse into the hands of Stalin and be organized as Soviet satellites for his final attack on us. When will such an attack come? To that question I can, of course, give no definite answer. But I can give you my own opinion and the reasons for it. Today Stalin has atomic bombs and at least 350 long-range bombers capable of car- rying them to any spot in the United States, We have no radar warning net to detect the approach of his planes. We have only a frac~ tion of the number of pursuit planes needed to make effective use of a warning net. The authoritative Finletter Commission in 1948 recommended as a minimum for national se- curity 70 air groups. We have 44. Stalin’s total air force outnumbers ours by about 3 to 1. His annual production of war planes is about 38 to our 1. He has 125 army divi- sions to our 10—among them, 30 armored divisions to our 1. In addition, he has ap- proximately 270 submarines—about 30 of the latest type against which we have not yet produced effective counter weapons. Fur- thermore, thanks to his agent Fuchs who
A3436 transmitted to him all our secrets for pro- duction of both A-bombs and hydrogen bombs, he may be ahead of us in production of H-bombs. Some officials in Washington who have ac- cess to most secret information believe that Stalin will attack us this year. They argue that by August 1950 he will probably have 59 A-Lombs—encugh to destroy our great ci- ties and our atomic production plant, and thus prevent effective American counter-at- tack. But my opinion is that Stalin will not launch shooting war until he is certain that he can defeat us easily. As I have said be- fore, he is a cautious and crafty leader who strikes only when he feels sure of quick vic= tory. This year his first surprise attack might not be successful. We might be able to strike back effectively. Therefore, it seems likely that he will not start bombing in the near future but will go on increas- ing his military strength faster than we are adding to ours, and seize more peoples, ree sources, and strategic areas, until he feels that his power is irresistible ‘We are allow- ing time to run on his side. And he knows it. What, then, is the real state of our defenses against Soviet expansionism? Our own mili- tary strength-is falling behind the growing military strength of Stalin. Asia is slipping into Stalin’s hands; the Near East is threat- ened; Europe is defenseless. The Soviet atomic bomb threat to our homes, our fami- lies, and our country is increasing each day. The Communists are advancing; we are re- treating. They are on the offensive; we are on the defensive. And no war, hot or cold, was ever won by forces which remained on the defensive. Why are we doing so badly? Because our Government has never faced the fact that Stalin will not stop, but can only be stopped. Our President has not understood that an over-all plan for defense, not only of our own country, but also of those countries which still remain outside Stalin’s domain, is essential. Not so long ago he said “I like old Joe.’ In consequenccr, the sys- tematic advances of the Communists, exe- cuted by carefully planned attacks, have been met for the most part either by American retreats or spasmodic and inadequate defen- sive efforts. Time is running against us; but at the present moment our Government is behaving exactly as the French Government behaved from 19386 to 1939. In that period, when the Nazis were preparing for war and work- ing 60 hours & week, the French cut their working hours to 40 a week. When the Ger- mans were producing seven to eight hundred planes a month, the French cut their plane preduction to 50 a month. They did this for much the same reason that we are now reducing our expenditures for our military forces and for support of our friends through-~ out the world. The people of France, like all other peoples, wanted a higher standard of living and leisure. They did not realize that a higher standard of living would soon give them a higher rate of dying. In 1940, Hitler destroyed the independence of France. Today we should be living hard, as our forefathers lived hard in the days of Valley Forge. We are living soft. Our President has staked his political future on a program of handouts for crop support, housing, edu- cation, and other projects which appeal to groups of voters. To get more tax money for the handout program which produces votes, he has cut down the defense program which might produce survival. Our tax money is being used to buy surplus potatoes instead of jet planes. In consequence, the balance of power in the world is swinging rapidly in favor of the Soviet Union. And our President, who is an entirely patriotic American, has not yet found within himself the intelligence and the spirit to take the offensive effec- tively against Soviet expansionism. Unless he will take the offensive, unless we—the American people—will let him know that we do not want to hear from him what we can get from our country, put do want to hear from him what we can give to our country, we shall suffer the fate that France suffered in 1940. We restored the independence of France. There is no nation standing behind us to re- store our independence. Is it too much to hope that we will find within ourselves the courage and the will to save our country and our Christian civiliza~- tion? It is not too much. It is late—very late. Itis not too late. We can begin today to take the offensive. We can increase vastly our cxyoond:tures for national defense and cut o7 espe di-ur23 for handouts We can take action to prevent Communist conquest of Formosa. We can help the Annamites and the French throw the Communists com- pletely out of Indochina—as we helped the Greeks throw them out of Greece. We can achieve the federation of western Europe and make that federation a strong ally. We can give effective economic aid to Iran. We can help the Albanian exiles to rescue Albania from the Communists and thus give new spirit to all the enslaved peoples behind the iron curtain. We can give far greater aid than we have been giving to the resistance forces in all the Soviet satellite countries. We can stand up with force to the threat of the Communists in eastern Germany who have had the effrontery to announce that on May 28 they intend to arrange an invasion of west Berlin by Communist-led bands from east Berlin. Those Americans who are still befuddied by Soviet psychological warfare will argue that such a course of action would produce an unbridgable chasm between the free world and the Communist world. That chasm al- ready exists. It was dug by the Communists. . There is no bridge, and there will be no bridge. We face today, not a struggle for security, but a struggle for survival. How- ever much we all wish and pray for peace, this is the hard fact which we cannot get rid of by wishful thinking. We can stop Stalin only by keeping him constantly con- fronted by superior force and by daring to use that force whenever and wherever he commits direct or indirect aggression. To- day we are the last strong power on the side of liberty and Christian civilization. We “ have.to find within ourselves the same cour- age and will that our forefathers found at Lexington and Concord. We have to be ready once more to give all that we have and all that we are to save the greatest adventure in human freedom that this earth has known—our America. United States-Israel Copyright Benefits EXTENSION OF REMARKS HON. ABRAHAM J. MULTER OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr, MULTER. Mr. Speaker, it is my pleasure to call to the attention of my May 4, 1950, by the President of the United States establishes copyright priv~ ileges and relationship with the State of Israel according to title 17 of the United States Code, section 9, entitled “copy- — rights,” as codified and enacted into law by an act of Congress, ; , ment. colleagues that a proclamation, dated . APPENDIX TO THE CONGRESSIONAL RECORD In his proclamation of that date Pres- ident Truman states that satisfactory official assurances have been received by our Government that since the establish- ment of the State of Israel, on May 15, 1948, United States citizens have been entitled to obtain copyright protection for their works in Israel on the same basis as accorded to citizens of Israel. As the same time, citizens of Israel have been accorded the same privilege and have been entitled to all the benefits of the copyright law in this country. I am happy to know that this reci- procity in the granting of copyright privileges and benefits between this country and Israel is now being formally realized into an international agreement. This is a further step in the direction of cementing the bonds of genuine friendship between the world’s largest democracy and the world’s youngest de- mocracy. ARN Some Comments on the Current Utility Scene EXTENSION OF REMARKS HON. LYNDON B. JOHNSON OF TEXAS IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. JOHNSON of Texas. Mr. Presi- dent, I have read with great interest a very fine address delivered by one of the newer members of the Securities and Exchange Commission, the Honorable Donald C. Cook. Mr. Cook’s address to the New York Society of Security Analysts presents an excellent picture of the success of the Holding Company Act and the great good that has been accomplished by it. I ask unanimous consent that Mr. Cook’s address be printed in the Appen- dix of the Recorp. There being no objection, the address was ordered to be printed in the Recorp, as follows: Some COMMENTS ON THE CURRENT UTILITY Scenz Iam glad to have the opportunity of meet- ing you and exchanging views on the utility industry. The electric utility industry was first sub- jected to intensive Federal regulation about 15 years ago, largely because this basic in- austry had been severely victimized by the high and low finance of the twenties. The ‘umerous bankruptcies and preferred-stock " arrearages among both electric-operating companies and holding companies in the thirties were primarily, if not exclusively, ' attributable to these financial practices, for the operating electric utility industry showed remarkable stability in the great depres- sion, I think it is easy to prove this state- Kilowatt-hours generated declined only 15 percent from 1929 to 1932, while in the same period, for example, the Federal Reserve Board index of industrial produc- tion fell 47.8 percent. We know, too, that the net operating income of private utility companies, before depreciation and taxes, ‘was greater in every year during the thirties than it was in 1928—~a year which itself was better than previous years. The industry’s
APPENDIX TO THE CONGRESSIONAL RECORD gross income was actually higher in 1932 than it was in 1928. This great industry was too important to the Nation’s economy to permit it to remain ensnared in the tangled web of frenzied finance. The Holding Com- pany Act, one of the great and enduring New Deal reforms, was soon forthcoming. The statute, drafted in the finest traditions of New England conservatism, was bitterly fought by interests standing for radical finance. Oddly enough, the act, which de- monstrably was a bulwark of our system of free enterprise, was branded, as the handi- work of wild-eyed and impractical Wash- ington visionaries, or—and even worse—col- lege professors. Eut that was before the professors built the bomb. Primarily, the Holding Company Act was intended to perform two major surgical op- erations upon the utility industry: First, to break up the nonintegrated holding com- pany systems and to create an industry pat-~ tern of (a) operating companies returned to local control or (b) regional integrated hold- ing company systems most of which, be- cause of thelr interstate nature, would re- main subject to the Holding Company Act; and, second, drastically to simplify corporate structures by eliminating pyramided hold- ing companies, trick securities, and exces- sive leverage. As you know, the ideal in this latter respect was a simple, understand- able, and well-balanced capital structure which would inspire investor confidence and permit public utilities to attract, on eco- nomiucal terms, the vast sums of new capital needed by them to finance their uninter- rupted growth. But in a relatively short time, as these things go, remarkable results have been achieved. Let me quote some late figures as to the extent of the progress made. From December 31, 1985, to December 31, 1949, 696 companies with assets of $9,106,000,000 have been removed from the jurisdiction of the act through divestment. Some of the prop- erties divested were sold to neighboring utili- ties who integrated them with their own cperations. In addition to the figures just cited, 250 companies with assets of $5,4'70,< 000,000 have been divested by holding com- panies but remain subject to the act by rea- son of their relationship to another regis- tered holding company. Comparable results have been achieved under the corporate simplification section. Many unnecessary holding companies and other useless but expensive corporate entities have been eliminated, and the pyramided holding company system is becoming as archaic as the Pyramids of Egypt. Practically all pertinent ratios reflect the tremendously improved financial health of this industry since 1935. More than $1,300,- 000,000 of sheer wind, or, as it is sometimes referred to, “balloon juice,” has been elimi- nated from utility property accounts. Ratios of depreciation and amortization reserves to gross property went up from 10.8 percent in 1987 to 21.7 percent at the end of 1948. Coverages of all fixed charges and preferred dividends went up from 1.9 times to 2.7 times. While total debt and preferred stock have increased about 10.8 percent since 1937 to December 31, 1948, generating capacity of privately owned utilities has increased by 42 percent and generation is up by 107 per- cent. Of course, much of this progress must be ascribed to better economic condi- tions. But I have seen too many of these improvements emerge from conferences at the Commission not to ascribe some of the accomplishments to the operation of the Holding Company Act. There has been another development in this industry which I want to mention. The capital structures and complicated corporate systems which flourished in the twenties re- flected, in part, the type of men who then Cominated this industry. Today,the utility XOVI—App.——217 tycoon, with his unresponsiveness to investor and consumer needs, is gone—or almost gone. In his place a new generation of utility ex- ecutives has grown up. The new generation executives recognize the social responsibility of management. In varying degrees, they tend to be aware that they stand in a sort of trustee relationship to their investors, consumers, and the areas they serve. These men also tend to feel obliged to consider the interests of the public in every impor- tant decision they make. To the extent that the management of any particular company contains such men—and many managements do—it has intangible assets of substantial importance. Under the old regime, by and large, finan- cial policy for most of the Nation’s operating companies, whether they were located in Maine or California, was determined by a small group of holding company executives and their affilated investment bankers in New York City or Chicago. Investment bank- ing business of individual utility cor narics tended to be monopolized by a 114.¢t oral banker. Competitive bidding was then a theory—not a reality. The breakup of cen- tralized control over utilities has given op- erating management the opportunity of do- ing 1ts own planning and of hiring banking, servicing, and other technical assistance of its own choosing, according to its needs and the requirements of its area. Iam not here primarily to talk about com- petitive bidding. As you know, however, it was designed, in part, to overcome the influ- ence of traditional relationships between banking houses and public utility companies, and its consequent deleterious effects on financing. But whatever else may be said about it, competitive bidding has diversified the management of security offerings. The Commission’s fifteenth annual report to Con- gress for the fiscal year ending June 30, 1949, contains a table covering 24 companies whose securities have been marketed at competitive bidding. on at least 4 occasions during the jast 5 years. The table shows the number of managing underwriters who have been successful in purchasing the securities of these companies. In only one instance was a single manager able to win all securities offered by a particular company over this 5- year period. This manager had not been that company’s traditional banker, and a number of other bids were submitted for each of the issues offered. Examination of the membership lists of underwriting syndicates also reveals that individual banking firms now participate in offerings under widely di- verse leadership. We at the SEC cannot help but believe that the diversification, in underwriting is healthy both for the utility company and for people in the securities business. Logically, one cannot profess to believe in the competitive free-enterprise system and yet insist on re- stricting the scope of its operations to only the other fellow’s business. But it seems that these hard-won gains must periodically be rewon. Not long ago, a partner of one of the largest investment banking firms in America, in a speech to a utility industry group, invited the industry to institute an arrangement with competent people to advise you with respect to your financing. In less euphemistic-language, the invitation was, of course, for a continuing banking relationship which, obviously, would not be limited to financial advice but would also include underwriting the company’s se- curities. I, for one, do not believe that the history of the past quarter of a century can be erased so easily. I think we have learned that a financial adviser to a com= pany should not also underwrite its securities. The two functions are inconsistent, for, as a buyer of the company’s securities, the un- derwriter-financial adviser has an immediate conflict of interest with the company—the A3437 seller. I believe we have also learned that, apart from combining the functions of ad- viser and underwriter, it is unhealthy for a company to enter into a tacit understanding whereby management of the underwriting of its securities is monopolized by a single firm. There are too many others in the investment banking business who, in any given case, may have fresher ideas or would otherwise be more enterprising, particularly as to price and spread. Once a utility, voluntarily or other-= wise, permits the management of its invest- ment banking business to be handled by a Single firm, the custom of the investment banking business is such that other bankers will notin any way compete for the business or in other respects infringe upon the tradi- tional banker’s relationship. The utility, therefore, must inevitably incur the h:gher costs and other disadvantages of monopoly price. Electric utility capital is turned over only once every 4 or 5 years; capital costs are, therefore, an important factor in the fixing of rates. The national public interest and the particular interest of consumers in low= cost power and the interest of utility com- mon-stock investors in maximizing their n- come require that the industry’s securities be issued and sold only on the most eco- nomical terms. Management, if it perseveres in its efforts to strengthen and preserve the private utility industry, must insist on fol- lowing this course. The electric-utility industry is now in the middle of a great construction program. In the 5 years since the war, 1946-50, new gen~ erating capacity totaling over 17,000,000 kilo- watts has been, or will be by the end of 1950, installed by the electric utilities. Excluding Federal projects, money expended, and to be expected, in the 5-year period totals over $9,000,000,000. While the rate of increase may now be declining, the industry is of the general opinion that installed capacity of all electric systems, including Federal, contrib- uting to the public supply will reach a total of about 92,000,000 kilowatts by 1955, as com- pared with about 68,000,000 kilowatts at the end of 1950. Obviously, this growth will ree quire going to the capital markets for sub- stantial sums. Of course, this construction program can continue to be financed successfully only if utility securities remain attractive to in- vestors. Earnings, naturally, are basic in this respect, and, while, to a considerable extent, the trend of earnings is beyond man- agerial control, there are many other factors which are within managerial control. These latter factors are sometimes not given suffi- cient weight, I think, in considering how to attain investor appeal. The main appeal of utility securities in the coming years will be, I believe, not to the speculative investor interested in large, quick capital gains, but to the investor attracted by the industry’s stability and prospects for growth over the years. The decline of inter- est rates, both governmental and corporate, and the many undesirable characteristics of preferred stocks, have forced “defensive in- vestors,” including institutional ones, into common stocks. Fortunately for them, a whole new field of relatively conservative in- vestment—as things go in these troubled times—-has now been opened—utility com- mon stocks. Primarily as a result of the Holding Company Act, highly leveraged and speculative holding-company securities have now been converted to the more stable com~ mon stocks of operating utilities. This is a major development in American finance. All of you are aware, I am sure, of the trend to change State laws to permit various types of institutional investors to buy common stocks. In some jurisdictions it is being done, in part, by extending the definition of “legals” to include stable utility equities; in other jurisdictions, including New York,
A3438 there is pending legislation to substitute the “prudent man rule” for the legal list—a sub- stitution which will permit trustees to invest in common stocks. Capital from savings panks, life-insurance companies, and per- sonal trusts is becoming available for invest- ment in this industry in ever-increasing amounts. The great growth which is now taking place in common-fund trusts, in in- vestment companies, and in indugtry pen- sion funds will increase the supply of capital for this industry. These great sources of capital, primarily in the hands of sophisticated investors, will gravitate toward those utility companies which best maintain the essential character- istics of this industry—stability and growth—and which treat the investor fairly. The company which does not attain and maintain a balanced corporate structure without undue leverage will not appeal to these investors and will be at a disadvantage in competing for capital. As to what proper ratios are, the minimum objective today, I think, should be definitely higher than the 25-percent minimum common-stock equity which the SEC spoke about in 1939. Obvi- ously, no one capital-ratio formula is suit- able for all the companies in this industry, but a more conservative pattern is clearly discernible. I want to mention a number of other fac- tors within managerial control which are important to investors. Most of the indus- try is fully aware that investor confidence can be retained only by a policy of full and current disclosure. The word “current” should be emphasized. By and large, the utility industry does a good job in keeping investors currently informed and is con- scious of the need of doing a better job. Many electric utility companies now an- nounce monthly earnings figures, and most companies publish quarterly earnings state- ments. However, there are still a few elec- tric companies and a number of gas com- panies who give general release only to semi- annual or even annual reports. While some of these companies appear willing to provide quarterly statements upon request, the ordi- nary investor looks in vain for this informa- tion in the major financial services. It is difficult to see why all utilities in the electric and gas industries should not, at a minimum, publish quarterly earnings data. Indeed, the time will come when utility in- vestors, some of whom are required to make important investment decisions almost daily, will demand monthly earnings data from these industries. Publication of quarterly and monthly data not only Keeps investors informed but also serves the additional func-~ tion of keeping management “on its toes.” One of the most important attributes of a utility company to investors is its dividend policy. In the growing utility industry, many companies find that they must utilize re- tained earnings to assist in financing con~ struction. Some utility companies, how~ ever, have attempted to finance their con< struction programs through a maximum of retained- earnings and a minimum of new common-stock financing. Our experience has been that it.is dificult to maintain or attain proper capital ratios in this manner because of the large amounts of new capital needed. It is well known that electric utility common stocks sell more on a yield basis than on an earnings basis. All other elements being equal, dividends paid, rather than income earned, is the most significant price-determining factor. A utility man- agement which relies too heavily on retained earnings is, therefore, consciously or uncon- sclously, cheapening the price of its stock, If it errs too much in this respect, it is unfair to the utility investor interested pri- marily in income rather than in capital gains, and it is to the investor for income to whom it must look for new capital. If its price-earnings ratios are too low, it ex~ poses itself to relatively severe dilution of earnings when it goes to sell common stock, and this in turn intensifies its reluctance for common-stock equity financing. Of course, dividend policy must vary for each company and must take to considera- tion numerous factors, such as capital ratios, the nature and volatility of the company’s load, size and history of the company, trend of earnings, rate problems, margin of safety of the proposed dividend policy, to mention only a few. I do not want to be understood by what I have said as urging general dividend in- creases. But there is an optimum dividend policy for each company, and I am express~ ing doubt that all companies have given full weight to all the factors involved. One may err, of course, on the high side as well as on the low side, considering the necessity of having balanced ratios and financing con- struction needs. We are now in the fourth year of the electric utility expansion program, During the first 2 years—1947 and 1948-—-many com- panies financed their expansion through heavy reliance upon senior securities, par~ ticularly debt money. It is estimated that common stock and retained earnings were only 24 percent of new-money financing, exclusive of intrasystem transactions, in the 2-year period 1947 and 1948, the palance being raised by 64 percent of debt and 12 percent of preferred stock. For the year 1948 alone common stock and retained earn~ ings were only 19.8 percent of the new money raised. ‘The common-stcck market had been very good in the first half of 1946, and, apparently, companies could not reconcile themselves to selling common stock at the materially lower levels prevailing in 1947 and 1948. As you know, of course, the market has been steadily rising since June 1949, and we have seen a substantial amount of common-stock financing for this indus- try in 1949. It is estimated that in 1949 common stock and retained earnings con~ stituted 33.38 percent of new money; exclu- sive of intrasystem transactions, the balance consisting of 53.6 percent debt and 13.1 percent preferred. The gamble that many companies took that markets would be better in 1949 paid off. But it was a gamble, and, considering the senior securities of the in- dustry, it was gambling on a margin of only 31 percent for the median publicly held company in the industry. Utility manage- ments should not be in the business of specu- lating on the stock market, and they do not, any more than you or I, have a crystal ball which can assure them that the market will be better next fall or the following spring. In many cases appropriate common-stock financing is postponed because of the ex- pectation that the next 6 months or the next year will see better earnings. Such a decision involves the assumption that the market will value those higher earnings on at least as favorable a basis as today’s earn~ ings. Of course, that is merely another way of betting on the market—which is not the business of an electric-utility company. It is time to abandon the view that new issues of electric utility common stock should be confined to “boom” markets. By and large, the capital needs of the utility industry should be financed on an as-you- go basis. Under this policy, and in the light of the company’s objective as to an optimum capital structure, permanent financing would always include common stock among the securities offered to finance expansion. In this way its capital ratios will be constantly maintained and it will assure itself of at- taining its ultimate objective as to capital structure, As W.F. Stanley, of Southwestern Public Service Co., recently pointed out, a financing-as-you-go policy is similar to the policy followed by insurance companies in investing their funds as they go. The averaging of prices inyolved in financing-as- APPENDIX TO THE CONGRESSIONAL RECORD you-go programs should result over the years in relatively low money costs. A financing- as-you-go program reflects the growing status of electric-utility common stocks as a rela- tively stable investment security and assigns to them a constant and major role in the financing of utility construction. As security analysts, your work has been greatly facilitated by the developments in the utility industry in the last 10 years. The elimination of “wind and water” from utility accounts and the simplification and integra- tion of holding company systems have now placed security analysis in the utility indus- try on arational basis. In the past, with few operating company equities available and with all the complexities and uncertainties surrounding holding-company securities, you could put only the speculative investor into securities of this industry—others had to be warned: “Danger, stay away.” Today it is possible for you to speak with relatively greater confidence—I emphasize relatively— about this industry than perhaps about any other. You, as security analysts, can play a dy- namic role in keeping utility securities a relatively stable investment. Your views tend to be reflected in the investment advice people receive in all parts of the country. Investment decisions made by a small local trust fund in Kalamazoo or a large insurance company in New York reflect your recom~ mendations. Utility companies should re- alize that, to the extent that their financial policies and other practices affecting inves- tors minimize investor appeal, you, as a group will divert funds to companies which treat investors more considerately and more fairly. I would urge you to speak out, both individu- ally and through the society, against unfair-~ to-investor practices. To the extent that you will reflect the long-run needs of the in- vestor as distinguished from the in-and-out speculator in utility common stocks, you can become the articulate voice of the owners of this - industry—its common stockholders. And don’t forget the consumer. His interest in a public service industry should be, and Is, parallel, and not antagonistic, to the inter- est of your clients’—and, therefore, your— interests. Fuel Resources and the National Defense EXTENSION OF REMARKS or HON. IRVING M. IVES OF NEW YORE IN THE SENATE OF THE UNITED STATES Tuesday, May 9 (legislative day of Wednesday, March 29), 1950 Mr. IVES. Mr. President, I ask unan- imous consent to have printed in the Ap- pendix of the Recorp the text of an address entitled “Our Fuel Resources and the National Defense,” delivered by Rod- erick Stephens, president of Roderick Stephens and Associates, Inc., public re- lations counsel, at the Eighth Annual An- thracite Conference of Lehigh Univer- sity, on May 4, 1950. I may add, Mr. President, that the address is most per- tinent, because it pertains to the recent coal crisis and the coal situation as a whole. There being no objection, the address was ordered to be printed in the REcorRpD, as follows: Our FUEL RESOURCES AND THE DEFENSE At the beginning of this century, bitum!- nous coal and anthracite were the dominant NArrionah
fuels of our Nation. The petroleum indus- try was in its infancy; the motor vehicle was still looked upon as a curiosity and the air- plane was no more than the inventor’s dream. Natural gas was not recognized as a major fuel resource. Bituminous coal powered the locomotives of the Nation’s rapidly growing network of railroads and except for the rapidly disap- pearing sailing ship, propelled our merchant marine, our infant Navy, and refueled the foreign-flag vessels that visited our ports to discharge and pick up passengers and freight. Anthracite was the dominant fuel for domestic purposes in its distribution area which then extended to the Mississippi River and included a large share of the market of eastern Canada. Then came the automobile, and with it the development of the petroleum industry. Its growth was predicated upon its fluidity which gave it a monopoly of the business of supply- ing motor fuel and lubricants to pleasure cars, trucks, busses, and farm equipment. Later, it fell heir to a similar monopoly of the fuel and lubrication requirements of the aviation industry. Had the petroleum industry confined itself to these areas we would not now have to face a serious defense problem. However, we all know that the technological skills and marketing vigor and resourcefulness of the petroleum industry soon led to an in- vasion of every phase of the fuel business. As a result, today, substantially one-half of the Nation’s energy needs once supplied by solid fuels are now furnished by liquid and gaseous fuels. The progressive substitution of liquid fuels for solid fuels in maritime and naval service has created a major supply hazard in the event of war. The extent to which our railroads have recently turned from coal to oil, creates an- other serious defense problem, for this means that another vital transportation service is now almost wholly dependent upon the petroleum industry. Remember, too, that these vessels and these locomotives cannot be converted to coal in the event of war. They must be sup- plied with oil or must be laid up. Obviously, they must be kept in service. Not only has the use of oil for all forms of transportation grown with the constant in- crease in the number of vehicles, planes, locomotives, and vessels in daily service, but oil has also become a major source of energy in stationary heating and power plants. The still more recent and rapid develop- ment of transcontinental pipe-line networks for the trensvcriation cf natural gas from southern telis .o cisic¢ sc markets has in- jected a new major competitor to both coal and ofl. Having a demonstrated appeal as a@ laborless automatic fuel, natural gas is popular, not only with the domestic con- sumer but with industry. On that basis, natural gas as such, or in admixture with manufactured gas or as an enriching agent in‘ gas manufacture, has become a major factor in the energy market, New and still more serious defense problems are thus being created, as to which the public is blissfully ignorant and the gas industry generally com~ placent. From the standpoint of national defense, there are two basic problems which relate necessarily to all fuels. Do we have sufficient reserves and is our productive capacity suf- ficient to supply the total fuel needs of our civilian economy and of our Military Estab- lishment, in the event of war? Also, do we know with any degree of exactitude, the ex- tent of the reserves of solid, liquid, and gase~ ous fuels upon which we must depend, in the event of war, and do we know what will be the total fuel requirements of the Military Establishment, in the event of another war? Perhaps it should also be asked here whether the possibility of war is sufficiently remote so that we need not concern ourselves with “ yeadily be reclaimed for war needs. the vechiom cf our fuel resources and the hone a ee The last question is one on which the most responsible and best-informed authorities are in substantial agreement. General Marshall gave his estimate of the situation in the phrase, “the chips are down.’ General Hi- senhower’s public statements make it clear that he believes the possibility of world war ITI cannot be disregarded. The recent re- establishment of bipartisanshin in the con- duct of our foreign relations is significant. The designation of W. Stuart Symington as head of the National Security Resources Board fills a post of vitel imnov*arec with a@ man of ability and exLorience, Tr also serves to fill out the nersonne’ of *he Na- tional Security Council veich vozeher with the Department of Defense, constitute the two key agencies jointly responsible for plan- ning, preparing, and organizing the Nation’s war potential, whether for offense or defense. Through these agencies and these leaders, we should be able to assume that our defense needs, in terms of fuel resources will be ac= curately estimated. In World War II, the armed forces con- sumed approximately f,750,000 barrels of oil a day. Of this amount something over a million barrels came from reserve productive capacity, about 200,000 barrels by forcing pro- duction beyond the maximum efficient rate, and about 500,000 barrels came from ration- ing. World War II taught us, however, that oil which has gone into commerce cannot It is certain that if war comes within 5 years the purely military needs for oil would have a stunning effect on our entire economy. In- dustrial users of petroleum products who could not convert to other fuels would, pre- sumably, be given high priority. Whether any liquid fuel would be left over for home heating can only be guessed now. Probably very little. Obviously, military needs will have top priority. We now come to a question that can be reduced to a factual basis. What do we know about the Nation's reserves of coal, petro- leum, and of natural gas? The answer is not reassuring, except as to coal. I assert, as a fact, that there are no data from dis- interested sources on reserves of petroleum or natural gas. What these reserves really amount to has yet to be determined with any degree of accuracy or assurance. Further, I assert as a fact that the data that are avail- able, all of which come only from interested industry sources, are so conflicting and con- tain such glaring discrepancies, that no sane person could afford to place any reliance upon such estimates in planning the Na- tion’s defense. The facts are that the na- ture of the deposits and reserves of oil and gas do not lend themselves to precise deter- mination, either of the extent of subsurface deposits or of recoverable amounts. Leading authorities on the subject agree that all such reports are estimates at best, which cannot be supported by evidence of the same validity as can be adduced for solid fuels. The data upon which the Bureau of Mines rely for their published estimates of reserves of bituminous coal and anthracite was ob- tained by a comprehensive survey of coal deposits made by the United States Geologic Survey. No similar survey of deposits of oil or gas has ever been undertaken by any gov- ernmental agency. Interested industry data contain glaring discrepencies on all types of liquid and gas- éous fuels. I shall cite several authenticated examples. Many more examples are avail- able. My first examples disclose discrepan- cles between figures published by the Oil and Gas Journal, recognized as an official publication of the ofl and gas industry, in which are reported estimates of so-called proven reserves of various liquid and gaseous fuels, and corresponding estimates made by committees of the American Petroleum In- stitute and of the American Gas Association as contained in official publications of these asscciations. PROVEN RESERVES OF TOTAL LIQUID HYDROCAR- BONS AND DRY NATURAL GAS IN UNITED STATES Example I: From Onl and Gas Journal, issue of Jan. 26, 1950, page 190: Change Crude oil, condensate | . Jaane gen dee aT ee iss 98,586 | 27,325 175, 187 11, 261 D . . ons of cupie feet). 178, 136 12,949 1Gain. From Official Reports, published jointly by American Gas Association and American Pe- troleum Institute, volume 4, Dec. 31, 1949: Increase 1949 ver- Dee 31, 1949 ss 1948 Dec. 31, 1948 Crude oi] and natural - 28, 378 180, 381 26, 821 178, 869 1, 557 6, 512 cupie 1eet) . enn eennnnen Example II: Same date from Oil and Gas Journal, issue of Jan. 27, 1949, p. 189: Jan. 1 Jan. 1 reid’ | “1gag’ | Change Creda ail ate, fralliang One we 1 27,825 25, 984 14,341 bry natural gas (pu- lions of cubic feet)_.--| 175,187 | 174, 279 1908 1 Gain. Same data from Reports of Petroleum In- stitute and Gas Association, vol. 3, Dec. 31, 1948: Increase Dee, 31, | Dec. 31, 1948 1948 1947 versus 1947 Cree an . tte fea Maan ' - 26, 821 24, 741 2,079 Natural gag (pulons Of cubic feet).-..-.----.- 178,869 | 165, 926 7, 942 Industry estimates of gain in reserves of crude oul, etc., exceed the estimates of the Journal by 23.5 percent for the year of 1949 and by 55 percent for the year of 1948. Greater discrepancies exist as to gains in natural gas reserves where industry figures exceed Gas and Oil Journal figures by 120 percent in 1949, and by 774.7 percent in 1948. Other examples disclose discrepancies in estimates of reserves of gas attributed to specific fields as published in the Oil and Gas Journal and as estimated by a geologist who qualified as an expert for testimony before the Federal Power Commission: Oyster Bayou field, Chambers County, Tex. Field total as at Jan. 1, 1950: Barrels Oil and Gas Journal__...... 60,000, 000 Geologist ~...------.-.-~-- 114, 272, 400 The geologist in question was Mr. David Hawthorne, a partner in Petroleum Consult- ants, Inc,, Houston, Tex. He testified before Federal Power Commission on January 31, 1950, for Piedmont Natural Gas Co., Docket G-1165, Exhibit 359 C, Fig Ridge field, Chambers County, Tex. Field total as at Jan. 1, 1950: Barrels Oil and Gas Journal......... 18,000,000 Hawthorne ...-.-----.-..- 23, 8'75, 000
A3440 This figure represented Mr. Hawthorne’s estimate of the total capacity of that portion of this field owned by Sun Oil Co., approxi- mately one-half of the area, the remainder being owned by the Texas Co., which was not a party to the proceedings and which portion of the field was not included in Mr. Haw-~ thorne’s estimate. Above testimony was given in same proceedings as involved Oyster Bayou Field. In these two examples, the discrepancies are also startling. Mr. Hawthorne’s figures exceeded the Gas and O11 Journal’s estimates in the first field by more than 90 percent and in the second field, by more than 150 percent after equalization on an area basis. Evidence of inaccuracy or uncertainty of estimates of qualified, expert geologists could be multiplied, indefinitely, from the records of the Federal Power Commission. As typical, I cite from the record, estimates by nine qualified geologists, three testifying as to re~ serves in the San Salvador field and six testi- fying as to reserves in the Carthage field. As to the San Salvador field, the facts are: ith felinate : Estimate itle of pro- |¢trillions Estimator made ceeding of cubic feet) SAN SALVADOR, Ralph Davis.| Jan. 1,1945}] SEC.._..---. 14,59 Albert Bro- }..... do...-.... FPO Docket 14,32 kaw. . No. G-621. Ralph Graham| Notavailable;| FPC Docket 1,97 probably No. G-962. 1A different pressure base was used in each of the 3 estimates. For the purpose of comparison all 3 estimates have been converted to the same base (14.65 psia). The difference between the Davis and Gra-~ ham estimates is nearly two-thirds of a trillion cubic feet; between the Brokaw and Graham estimates, more than one-third of a trillion. The discrepancy is said to be ac- counted for by the discovery of a fault in the field which was not known to exist at the time of the Davis and Brokaw estimates. As to the Carthage fleld the record is as follows: Estimat Title of Cirillions : stimates ‘itle of pro- Tillions Estimator made ceeding of cubic feet) CARTHAGE E. 0. Ben- | Jan, 11,1945] FPC Docket 7.27 nett, No, G-621. ¥. 8. Kelly, | Apr. 28,1945 |... n-ne 8.00 r.! Neil Wil- | May 19,1945}... 4.23 hams.? John » | Dec, 25,1946) FPO Docket 5.35 Scopes. No, G-880 Ralph Gra-| Jan, 1,1947| FPO Docket 7.25 ham. . G-808, LI. Gardescu.| July 1,1948| FPO Docket v7 No, G-859. 1 President, Arkansas-Louisiana Gas Co, 2 Special writer, O1l and Gas Journal. The difference between the highest and lowest estimate for this field, which has been referred to as the third largest field in the country, is in excess of 3% trillion cubic feet. The Federal Power Commission's staff reported that the Carthage Field embraces about 300,000 surface acres, whereas Mr. Gardescu estimated its area at about 200,000 acres. Another factor that creates a very special defense hazard is the fact that this Nation is importing a substantial gallonage of crude and residual oil from abroad. Some of these imports come from the Far East, the balance from South America. The effect of these imports is necessarily to diminish domestic production and discqurage exploration for new pools. How. then can we hope to raise production in the event of war, if our do- mestic productivity has remained stationary? Remember that we must assume that enemy action against surface ships, such as tankers, will be no less effective in world war III than in World War If. Where then will we get the gallonage to replace the imported fuel? Where will we find the excess produc- tive capacity without which our war effort will be seriously impaired? Our national defense is in jeopardy for lack of authoritative knowledge of what our oll and gas reserves amount to, and how much of each will be required by the military and how much will be left for civilian usage. Without such basic information no intel- ligent estimate of the fuel situation can be made by our military authorities. Also, we had better not assume that “‘tide- lands oil” can be relied upon if war comes, for we have no reason to believe that off- shore production and transportation facilities can be protected against long-range bombers, snorkel submarines, rockets, guided missiles, or atomic bombs. For all these reasons, therefore, we will pe wise to encourage the adjustment of our civilian economy to a final pattern that will make it possible to meet the Nation’s needs for fuel, not only from within our shoreline, but from sources of supply known to be available and by production facilities known to be adequate. To say that is to stress again the need to know what supplies of oil and gas and hard coal and soft coal are actually available and what output of each can be relied upon in the event of war. It was with precisely such thoughts in mind that Senator Franors J. Myzrs from Pennsylvania introduced on the floor of the United States Senate by unanimous consent, on March 15 past, a resolution of inquiry which was referred to the Senate Committee on Interior and Insular Affairs. This resolu- tion, known as Senate Resolution No. 239, proposed that the committee (or a subcom~ mittee) shall inquire into “the available fuel reserves of the United States, with the aim of formulating an over-all domestic fuel policy.” Other proposals are also pending in the Senate and in the House to create com- missions to study and investigate the Ameri- can coal industry or to regulate the coal in- dustry. Senator Myrs’ resolution, however, seems not only to be almed at the heart of the problem of national defense, but seems also to be the one proposal with an excellent chance for speedy passage. In introducing his resolution, Senator Myers made reference to a parallel situa- tion which was faced and solved by American industry and ingenuity, working in harmony with the Federal Government at the outset of World War II. His reference was to the problem created when our principal sources of crude rubber were cut off by enemy action. We had to hastily improvise a synthetic- rubber industry, by which process we solved a situation that threatened our war machine and our civilian economy. To improvise a synthetic-fuel industry, however, on such short notice would be quite another problem. However there is one in- teresting fact, which is that we have the know-how to produce; in fact, we are al- ready producing synthetic oil, either in the form of fuel oil or Diesel oil or gasoline from natural gas and at costs competitive with the natural product. That fact has an important bearing on the problem of fuels for defense. It suggests that we should not casually assume that natural gas can safely be substituted in unlimited amounts, either for oil or for coal, whether anthracite or soft coal. Rather should we establish by authoritative evidence, that there is enough natural gas and to spare, to serve the domes- tic and industrial needs of the States where it is found; enough and more to supply mar- kets to which it is already committed for a 20-year period; and enough and more to sup- Ply new and distant markets, now being APPENDIX TO THE CONGRESSIONAL RECORD served by liquid or solid fuels. Also, we would do well to study the desirability of conserving a portion of our natural-gas re- serves for production of synthetic gasoline for defense. This proposed inquiry should be a matter of urgent concern to Senators representing States that must draw their fuel supplies from. outside sources. Many such States are already dependent upon long-distance pipe- lines for a substantial quantity of natural gas. Those States will be well served by the passage of the Myers resolution. The inquiry it proposes should disclose Just how much of the remaining gas reserves are already dedi- cated to pipelines now serving these areas, and for the usual 20-year contract period. Certainly no new lines should be permitted to tap those fields unless surplus reserves are proved to exist. Another such group of fuel-dependent States that should demand such an inquiry are the New England States, into which it is proposed to feed natural gas from the deep South. This gas will presumably displace coal and oil in homes and industries. De- spite high-pressure selling by promoters of natural-gas pipelines, Yankee shrewdness will discourage the buying of “a pig in a poke.” It won’t take long to find out for sure just how certain it is that the supply of natural gas is adequate to guarantee a defi- nite and substantial quafitity for an uninter. rupted period of 20 years. Until such as- surances are had, New Englind will be well advised to defer final approval of the project. The cost of converting coal- or oil-burning facilities to gas-burning facilities is sub- stantial. Also, it is by no means certain, in the light of recent developments, what actual savings will be realized. But, most important is it to be assured that New Eng- Jand homes and industries will not face the same distress suffered by industries and their employees, in the winter of 1947-48, when automotive plants in Detroit and elsewhere had to close, due to failure of the supply of natural gas. It must be remembered that conversion of fuel-burning equipment is costly and cannot be improvised. Some installations lend themselves to conversion; some do not. How- ever, conversion equipment is not the only problem. Equally important is it to be able to increase production of the fuel to be sub- stituted for the fuel that will be no longer available. Certainly coal production facilities cannot be improvised. It is also difficult and costly to maintain idle coal-production facilities on a stand-by basis. Even more difficult and costly is it to maintain an idle coal mine for any length of time in “moth balls.” It is literally impossible. That is another im- portant unsolved defense problem. Nor can we improvise the manpower needed to mine coal. There lies another problem with an important bearing on national de- fense, It also has an impact on public wel- fare that should not be ignored in time of peace. ° Rail transportation service and facilities are also directly involved in the problem of national defense. Transportation of men and material involves the military problem of logistics. There is no more important problem of logistics than the logistics of fuels for defense. Here, too, it is vital to recognize that we cannot improvise rail facilities and we will do well to determine what rail transportation needs will be in- volved if a widespread conversion of fuels will be demanded by defense needs. National security should not be left to chance or guess work. The Nation’s need for fuels should be definitely forecast and its re- quirements assured by intelligent provision, It does not appear feasible to stock-pile coal, or at least, not soft coal, which is subject to spontaneous combustion and which disinte- grates with exposure to the atmosphere.
APPENDIX TO THE CONGRESSIONAL RECORD Stockpiling of any coal is a costly process and should not be -tterntad mmless there is no other way to ~") «e %_ “ . a national fuel scarcity. Crude oil dan be stock-piled but it makes little sense to pump it out, then to force it back into underground pools from which it may then be withdrawn a second time. The same remark applies to natural gas. However, the purpose of this address is not to solve the problem but rather to state the problem and suggest how we should move toward a solution. Abraham Lincoln once said, “If we could first know where we are, and whether we are tending, we could better judge what to do and how to do 1t.” I know of no better way to accomplish this purpose than to pass Senate Resolution 239 and then proceed with the inquiry as authorized. The Senior Partner EXTENSION OF REMARKS HON. HAROLD D. COOLEY OF NORTH CAROLINA IN THE HOUSE OF REPRESENTATIVES Tuesday, May 9, 1950 Mr. COOLEY. Mr. Speaker, under leave to extend my remarks, I submit for the record a speech delivered by the Hon- orable Knox T. Hutchinson, Assistant Secretary of Agriculture, before the Na- tional Rivers and Harbors Congress, on March 24, 1950: THE SENIOR PARTNER I welcome this opportunity to appear be- fore the National Rivers and Harbors Con- gress. A richer, safer, and happier life will be as- sured for all our people when we have learned to use to best advantage all our resources in land and water. This is the goal of true conservation which we in the Department of Agriculture share in common with you. This is the reason, I presume, for inviting me to talk about the Department’s land and water policies. I must add—with all good will—that you were preeminentily wise in lim- iting me to 15 minutes. Nearly everything we do is connected in the long run with the conservation and use of those resources. My text, therefore, is one upon which we could dwell for many hours in going over the broad sweep of the Depart- ment’s work to advance the cause of con- servation, In research alone, we are pushing ahead with scores of projects which will give us a firmer hold upon our valuable topsoil. And I mean that in its most literal sense. Noth- ing short of a bulldog’s undying grip will preserve our heritage of soil for the America of tomorrow. The wide range of our research includes tillage, grazing, and foréstry prac- tices, the selection and breeding of superior varieties of grasses and legumes, and the ap- plication of lime, fertilizers, and other min- erals to the soil. More and more we are coming to under- stand that our research, like agriculture it- self, does not fit into neat little subdivisions. We must conduct our research so that the findings of all its visible parts can be use- fully applied in a complete farming opera- tion. This has logical appeal for farmers. Their farm work is often complicated by the difficult task of jigsawing the splendid recom- mendations of the specialists into a workable farm system. But, there is a far deeper reason for research which employs new discoveries and new methods in combination. Often there is a high degree of interaction among them which gives the separate practices added value in the right combination. The principle of in- teraction assures maximum benefits far ex- ceeding the results of piecemeal application. We must employ this same principle in our farm programs. It is the highroad to a satisfactory solution of the interrelated prob-~ lems of farm income, soil conservation, and family farm living. We cannot treat them in fragments with any genuine hope of per- manent improvement. This is true when we approach agriculture as the primary use of our resources in land and water. This is equally true when we view farming as the potential soft spot in the Nation’s economic welfare. In fact, there is a vital connection between these approaches. Let’s put it down—here and now—as a No. 1 fact that soul and water conservation prob- lems have economic roots. Rapidly plunging farm income is a storm warning. It tells us in unmistakable terms that erosion and fertility losses will rise with increasing speed. The unblinkable fact is grounded in the realities of farming. Let me illustrate. First, the ordinary reaction to falling in- come is to increase production by mining the soil. This is often the only recourse for farmers pressed with debts and fixed farming costs. By increasing their marketings, farmers can manage for a while at least to keep up their income. But this practice sets the spurs to erosion and fertility losses. You may well consider the farmer’s choice unwise. But let me speak for my fellow farmers, They are usually confronted with the bit- ter reality of making less and less income do the job of feeding, clothing, and caring for farm children, meeting interest and pay- ments on the mortgage, and paying out what cash they can to keep their farms operating. This skeleton of words fails by far to de- scribe all the hardships and sacrifices that go into the painful task of keeping the family on the farm. Second, conservation costs money in cash and often in temporary reductions in farm income. Even some of our stout-hearted conserva- tionists forget this fact and expect farmers to live up to their stewardship of the land without the cash and capital for the essen- tial work. This armchair attitude reminds me of the proverbial prize-fight manager who urged his battered and reeling contender on With these brave words: “We can lick him!” Farmers need real backing all the way to carry the main burden of the Nation’s efforts to retain its reserves in fertility and its re- sources in topsoil. Indeed, we have to get in and help them fight—when we can and where we can. A fair income for farmers rightfully should stand in the first line of defense which the National Congress of Rivers and Harbors has long endeavored to build and strengthen against floods and their choking tides of silt. For this reason, sensible and workable in~ come supports have a proper place in con- servation. But our programs should do more than protect farm income. Farmers should be encouraged to undertake the types of farming, especially livestock and grasslands enterprises, which are best designed to main- tain our resources as well as to feed and clothe the Nation. In our conservation, in our flood-control programs, in our resolute efforts to harness great rivers for navigation, irrigation, hy- droelectric power, recreation, and improved water supplies, we cannot safely ignore the sum, total of individual farming ‘operations which constitute the business of farming. A3441 Farmers have an interest in the utiliza- tion of land and water and the policies which influence such use. This interest must be clearly recognized if we are to achieve good farming every- where. In its fundamental sense, good farm~ ing, which is the basis of soil conservation is nothing more nor less than the use of those resources to the best advantage of the farmer, the community, and the Nation. The widespread failure to understand this fact has created a gulf which separates the pro- grams of the Department of Agriculture and the programs of other public agencies in land and water utilization. There is a world of difference between the methods employed 1n an engineering program of public works and the Department’s and— I must add—the farmer’s usual approach to the same problem on his land. In an engineering program, the Govern-~ ment acts as its own agent, uses public funds for all the costs, even when they are partially reimbursable, and carries forward the work on sites where the Government has estab- lished certain property rights. But a farm program can only advance when it has won the confidence and coop- eration of farmers. Their conservation work must dovetail with going farm operations which must pay their own way and yield returns over and above net out-of-pocket costs. Even when the Government offers reimbursement in part for conservation, the farmer’s share of the cost usually far outweighs the Government’s contribution. Conservation farming has to demonstrate that it offers a fair return on this investment. Nor can this return he figured in intangible benefits. The farmer is our partner in conserva- tion—-the senior partner at that. As a result of these interests and respon- sibilities, a basic understanding has grown up between the Department and the farm and livestock people. We put a high value on this partnership. The power of the Government’s conserva- tion dollars get a real boost from the dollars that the farmers put up. This is something worth thinking about. Here is a fund- matching system in which the private citi- zen—in this case, the farmer—puts his own money on the line on his own initiative. It has been the means of accomplishing many important jobs in which the vital in-~ terest and security of the Nation have been protected as well as the basic welfare of farm people. The dual objectives of production and conservation require a unified approach, On individual farms the treatment of crop- land, forests, and range forms one over-all farm problem. On large areas of forested lands, forestry improvements must be considered in the light of the need for grazing the same lands. In many areas in the West, the use of graz- ing areas is closely related to the produc- tlon of supplemental feed on irrigated land. Cutting across these separate problems and tying them together is the problem of the conservation, use, and control of water. On the individual farm, the relationship of water to land has primary importance whether the problem is erosion control, conservation of water for crop production, safe removal of excess water, or bringing water to arid lands. What we do on upstream forests and ranges has a bearing on flood control farther downstream, The impact of conservation on the farm goes beyond flood control and irrigation and influences our fish and wildlife resources, recreational opportunities, and water supplies for navi- gation and for domestic and industrial uses. This same unified treatment likewise ap- plies to the intimate interrelationships among all the segments of the Nation’s con- servation and land-use problems. The Nation is becoming increasingly aware of the pressing necessity for the develop- ment and conservation of all its natural