APPENDIX TO THE CONGRESSIONAL RECORD it does not necessarily have to be the de- termining factor. Many times there aro more important things than taxation to be considered. There are favorable labor con- ditions, and we have them. There is low local taxation to be considered; and in most of our industrial areas in Pennsylvania we offer more in that respect than do surround- ing States. As the center of a great popu- lation area, we have rich markets at hand, We have the best transportation facilities in the country to make those markets easily and speedily available to our industry. We have an outstanding program of State health assistance to help keep your workers healthy and happy. We are cleaning our streams. That is a boon to industry. And with all this, when we consider taxes at all levels, from State level downward, our tax situation respecting industry is a favorable one. One reason for this is that a large share of the burdens of local governments carried locally in other States, are assumed by the State government in our Commonwealth, That lowers local taxes on industry. For instance, the State carries the entire public assistance burden—thus relieving localities of this charge. The State carries a very high percentage of the cost of schools. The State government has taken over local burdens on highways which in many other States are paid for by the counties. There is still another itlustration where our counties are exempt from cost that nor- mally is shared elsewhere. Here, the State provides for the care of mental patients. These are some of the major ways in which the State relieves local governments. As a result, local taxes are comparatively low, either because of a low tax rate or because assessments are low, extremely, and often- times ridiculously low. That in itself is an invitation to industry not only to come into Pennsylvania, but to those here to expand. When you take our whole tax picture into consideration, State and local, we compare most favorably with the States around us. This favorable picture your administration will be most reluctant to alter. We are, of course, still working on the State budget and upon the tax program. It is taking longer than ordinarily necessary to work these out because of certain im- ponderables which the emergency propounds. It was delayed, too, by family illness, which 4s daily being bettered We do not yet know what our civil defense program is going to cost. We will take every step necessary to properly and adequately protect our people against the possible rav- ages of war which might strike this Com- monwealth. We are going to insure within our collective abilities that our industries are protected against sabotage and external attack. But we are not going to go overboard by providing unnecessary money for this pro- tection. We are not going to throw money away. We are going to get back in protection the value of every dollar we put into it. Up to this moment we have pursued the policies and reorganization directives as drawn by that self-sacrificing American and outstand- ing Pennsylvanian, Gen. Richard K. Mellon. Yet, with civilian defense as one of soveral imponderabies before us, I can say to you now that the budget for State government for this biennium, outside of obligations four meeting the soldiers’ bonus, mandated sal- aries for teachers, State authority rentals, and education appropriations required under existing law, will not be more than 3 percent over what was needed for the last biennium, This will be true despite increases in costs of State government, in salaries, wages, State purchases, and the like. We will see to this by paring the budget wherever it ts possible to economize without losing efficiency. We have started the pruning, and we are still continuing the process of pruning. While I have not yet made my final recom- mendations for additional revenue, I feel XCVII—App.——76 confident that the share that industry will be called npon to bear will not be larger pro- portionately that: at present. True, we may find it necessary to defray a part of needed additional revenues by slightly increasing the corporate tax. If we can avoid the im- position of further taxes on industry, we will do so. If not, you may rest assured the iu- creage will be light. I think we have gone as far as we can safely go at this time in im- posing taxes on industry in Pennsylvania, particularly in relation to taxes levied by surrounding States. Nevertheless, we must recognige that the time is fast approaching, in fact not far distant, when the tax base in Pennsylvania will have to be broadened. Our present attitude on taxes places re- sponsibilities upon both of us. I have to see to it that industry in Pennsylvania—in- deed Pennsylvania itself—is not hampered in its productive potential by excessive taxation. You have the responsibility of adjusting yourselves and your business to quickly ex- panded production, Next to our spiritual strength, our produc- tive capacity makes us a great Nation. The men who Orst came to our shores came here looking for God—not for gold. Their spir- itual blessings were woven into the fabric of our Government. That is why we are will- ing to fight, if need be, to preserve freemen from subjugation by the Godless. But we have to implement that faith and that will- ingness to fight with weapons to translate our ideals into realism. That is where you come in with your productive capacity. There are those Godless people who cannot evaluate spiritual and moral values but who are fearful of our ability to produce every- thing we need. Our production is our big- ness. You and I recognize that. It is this production which may thwart evil men, de- stroy the Godless, and save religion itself. Yet, we have in this country high-placed officials who in peacetimes condemn as evil, industry because it is big. There is no in- herent wrong in bigness itself any more than there ts virtue in smallness. Business, big or small, depends on how honestly and how morally it is conducted. We need to be big to produce big, to ac- complish big things. The prospect on con- filct to save mankind, in which we would have to lead, dictates bigness not only in our production of materials to wage that prospective conflict, but in our viewpoint of how, why, what, and under what conditious we produce, Our preparations to meet the challenge must be all-out preparations. Upon the industrialists of the country may largely rest decision whether we have war or peace. Meet the crisis with the produc- tion of which American industry is capable; provide the tools and implements to fashion the style of peace, and Americans every- where, fortified with a crusading spirit born of moral and spiritual values, will be fully prepared for peace without war, or a war for peace. Reforms in Federal Communications Commission Procedures EXTENSION OF REMARKS HON. EDWIN C. JOHNSON OF COLORADO IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr. JOHNSON of Colorado. Mr. President, I ask unanimous consent to insert in the Appendix of the Recorp an editorial entitled “The Plotkin Thick- A201 ens,” from Broadcasting magazine of. March 5. It deals with the McParland FCC procedural bill. Undoubtedly this very vital bill will shortly be worked out between the Senate and House. There being no objection, the edito- rial was ordered to be printed in th Recorp, as follows: ‘ Tse PLOTKIN THICKENS It’s happening again. The FOO majority, stilt hypnotized by its brain-trust lawyers, has authorized action that would sabotage the McFarland bill (S. 658) to institute des- perately needed reforma in FOC procedures. ‘The bill has been approved by the Senate for the third time—-with no open FOC opposi- tion, It is in the House that the FOC legal cabal is at work, It is using practically the same script as a year ago, but with a defense twist. The FCO lawyers want no new legislation that will wrest the control they hold over all FCC polictes—engineering and economic, as well as legal. The McFarland bill would halt ex parte maneuvering, and place re- sponsibility where it belongs—-with the Pres- identially picked and Senate-confirmed Commissioners, In closed House hearings a fortnight ago, the FCC resubmitted its model bil. It saw no need for legislation along the lines of the McFarland bill, It wants merely three or four changes in the present act at this time, It blandly selected palatable parts and talked down changes in substantive provisions that would take away its gun (and the lawyers’ powers). As always, greatest secrecy surrounds the FCC's suggestions. The hearing was held behind closed doors—at the FCO's behest. But the model bill, which we reported in detail tn our issue of January 30, 1950, is about as secret as yesterday's CONGREASION«L Recorp. Things have changed since the FCC lawyers did the machete job on the McFarland bill last year. Representative Sadowski, who in~ troduced the FCC bill tn January 19650, is now Mr. Sadowski, citizen. Senator Mc- FarLanp, who was a member of the Senate Interstate and Foreign Commerce Committee last year, is now the majority leader—No, 1 party man in the upper Chamber. House Committee Chairman Crossz, who last year was told the McFarland bill was a radio version of the Taft-Hartiley bill (he's a prolabor man) now knows the facts. Of course, the Cottone-Plotkin-Goldman- Solomon quadrumvirate of FCC legal lights still has in its vest pocket the House commu- nications expert, Mr. Kurt Borchardt. It was his collaboration last year that aided the FCO lawyers in thwarting remedial legisla- tion, keeping inviolate the FOC's record of blocking any changes In the substantive law since 1984, It is our guess, however, that the strategy won’t work this time. The FCO wants, and perhaps needs, the authorization for new monitoring station facilitles. It covets 4 radio-fraud law, similar to the postal-fraud law. It wants other sugar-coated provisions of the McFarland bill. Its device ts to get them plecemeal, thereby kicking the bill tn the teeth. What will the Benate do? Communications bills automatically go to the Interstate Com- mittee, headed by Senator Bia Eo JoHNSON, and of which Mr. MoFaRLanp remains the ranking majority member. While we do not have the confidence of these distinguished atatesmen, we surmise they will see to it that these piecemeal amendments will be at- tached to the thrice-approved McFarland bill, and shunted hack to the House. In fact, this happened Wednesday on the monitoring amendment. Thua, if the FCC wants its monitoring money, or its sugar candy, it will have to
A202 take them hand-cuffed to the clipping They can pley shuttle-cock that way all year. How long this tre mot know. It ts our feeling, however, that, & few well-timed speeches on te House floors, laying bare the artifices of FOO's legal minions over the years, yield the essential resulta, i : 8 Grain for India EXTENSION OF REMARKS HON. WILLIAM BENTON OF CONNECTICUT IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr. BENTON. Mr. President, I ask ttinanimous consent to have printed tn the Appendix of the Recorp the text of a statement issued by the social welfare committee of the Catholic Association Yor International Peace, supporting the program of grain for India which I have joined in sponsoring. The statement concludes with the recommendation that “the Congress pass legislation without delay granting to the Government of India the food grains required and that it take this action without attaching to it political conditions of any nature.” There being no objection, the state- ment was ordered to be printed In the Recorp, as follows: Gratn For Inpta The issue of food grains for India breaks down into three questions of fact: Does India actually face a sericus grain shortage? Can the Indian Government obtain such grain tmports as may be needed through commercial transactions, either in the Far East or elsewhere? Should the United States, in view of its current and prospective heavy demand for grain, make sizeable shipments tor India from its reserves? The Indian Government requests 2,000,000 tons of food grains from the United States aa the minimum to continue the ration in 1051 at the level prevailing in 1950 to build back India's depleted grain reserve to @ minimum safe level. The Indian Govern- ment bases this request for aid on the con- tention that summer floods, earthquakes, and fall droughts have critically reduced domes- tic grain supplies. So far as can presently be ascertained, summer floods in some areas did wipe out grain reserves held by Indian farmers and destroyed seed stocks as well, Earthquakes did destroy some villages and otherwise hampered production. But moet importantly, in some of the prin. etpal rice-growing provinces, autumn rain- fall was far below normal, with very serious effects upon rice production, The evidence on these points appears to be conclusive. So, too, is the evidence that the people of India are faced with a vanger- ous grain shortage unless aciditional Imports are provided—though there is tack of full agreement as to how bad the aituation ac- tually is. It would appear to be significant however, that the per capits daily grain ra- tion has been reduced by 25 percent in Bom. bez and other ration areas. Regarding the second question of fact, wether the Government of India can ob- @ileges that it has already arranged to !m- port all of the grain for which {t can make Hinancial arrangements. In the absence of reasonable evidence to the contrary, it would seem that this contention should be accepted, With reapect to the third question of fact, while United States reserve supplies of grain are not as large in relation to current and prospective demand as seemed to be the case a few months ago, nevertheless, the United Btates entered 1951 with about 996,000,000 bushels of wheat in all storage positions, a stock exceeded only twice before in our his- tory. The Nation's carryover of corn, 860,- 000,000 bushels last October 1, was an all- time record. There is little doubt, therefore, that this Nation can spare the quantity of grain re- quired, under present estimates, to tide India over this emergency, particularly since any deficiency tn wheat supplies available for shipment could probably be made up out of barley, corn, and grain sorghums. We should undertake this humane act in the spirit of Christian charity. We shall not jeopardize ourselves in any way. The Social Welfare Committee of the Cath- olic Association for International Peace urges, therefore, that the Congress pass legialation without delay granting to the Government of India the food grains required and that it take this action without attaching to it political conditions of any nature. « Award to Lorenzo Lee Bean, Jr. Ee emnanaamnnmnennd EXTENSION OF REMARKS HON. HARRY FLOOD BYRD OF VIRGINIA IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr. BYRD. Mr. President, I ask unanimous consent to insert in the Ap- pendix of the Recorp, a statement issued by the Virginia Junior Chamber of Com- merce with respect to the award made to Lorenzo Lee Bean, Jr., of Arlington County, as Virginia's outstanding young man of 1950. This is a well-deserved honor, and fT commend the Virginia, Junior Chamber of Commerce for their custom of making a selection such as this each year. There being no objection, the state- ment was ordered to be printed in the Recorp, as follows: Wruitamervng.—Lorenao Lee Bean, Jr., 3¢- year-old Arlington attorney, was named Vir- ginla's outstanding young man of 1960 and presented the Virginia Junior Chamber of Commerce Distinguished Service Award at @ banquet here last night. Presentation was made by Dr. John E. Pomfret, president of the College of William and Mary. The banquet was attended by Jayoees from throughout the State who are meeting this week end for a quarterly work conference, Also present were the four national win- ners of the Voite of Democracy contest, sponsored by the United States Junior Cham- ber, National Association of Broadoasters, and Radio Manufacturers Association. Bean was awarded the honor for his many civic contrhiutions and for donating his legal services to @ number of public-spirited organteations. Foremost among the Distinguished Service Award winner's civic ents was Arlington's his work in helping to Anderson Orthopedic Hospital, which will be ed in April, The iden for the #400,- 000 ital was originated by Dr. O. Ander- APPENDIX TO THE CONGRESSIONAL RECORD Engh, Arlington orthopedic surgeon Bean, who was s pollo victim while in college. adopted as a project by the Arlington Junior Chamber in the spring of 1049. The chap- ter was a year oid at the time. ; Under guidance of Bean, the site for the building was’ cleared by Arlington Jaycees. Land was donated by Dr. Engh. Nearly all labor and materials were contributed by several building unions and contractors as- soclations, mainly the Northern Virginia Contractors Association. The hospital project earned « first-place national award from the United States Junior Chamber. Other civic contributions which the Young Man of the Year made in 1950 in- clude service as: A board member of the Community Ohest campaign, a director of the Arlington ‘YMCA, legal adviser and trustee of the Anderson Hospital, a director of the Family Service of Northern Virginia, and president of the Arlington Junior Chamber of Commerce. Bean was also during 1950 active in mis- sion church work, member of the Legal Aid Bureau of the bar association, and executive director of the Democratic Council of Ar- Ungton, He has taken the leadership among young- er members of the bar in urging them to do- nate their legal services to welfare groups and to participate in community Life. After studying prelaw at Hampden Sydney College, Bean was graduated from the Uni- versity of Virginia Law School in 1941. He passed the bar a year before graduation, Accepting # position with the United States Department of Agriculture, he became Chief of the Litigation Section of the Rural Hlectrification Division. He has been in pri- vate practice since 1947. Nominations for the distinguished award were open to the public. Any Virginia man between the ages of 21 and 35, inclusive, ‘was eligible. Judges this year were Dr. Pom- fret, William 8. Trapnell, vice president and general manager of the Chesapeake & Poto- mac Telephone Co., of Virginia, and Lynn W. Franklin, retired United States consul gen- eral, Bean was nominated by Charles R. Fen- wick, Arlington patent attorney. Closing Tax Loopholes EXTENSION OF REMARKS HON. NOAH M. MASON Or ILLINOW IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. MASON. Mr. Speaker, H. R. 8900, the Revenue Revision Act of 1960, had a provision that closed a certain tax loophole then prevalent. It was a loop- hole indulged in by Charitable Trusts and Educational Institutions that en- gaged in unrelated business activities in com,etition with taxpaying business or- ganizations. For example auch as own- ing and operating macaroni factories, piston ring factories, and so forth. The net income received by these charitable trusts and educational institutions after January 1, 1950, from unrelated business activities is to be taxed under the provi- sions of the 1060 tax act on the same basis a4 corporations are taxed. The following article, taken from the Pebruary 6, 1961, issue of a national mag- azine, the Reporter, and entitled “Yhe
APPENDIX TO THE CONGRESSIONAL RECORD Financial Wizard of Omaha,” is a graph- ic picture of the loophole in question that was closed. We hope the tax bill of 1951 will close other glaring tax loopholes, and put a stop to the taxdodging adventures of other tax exempts that are so preva- lent today. Tre FINANCIAL WizZaRD OF OMAHA (By Wiliam S. Fairfield) This is the story of an operator. His name ig Gordon W. Diesing. That he is not better known may be just another tribute to his ability as an operator. Diesing is an Omaha, Nebr., citizen who has never lived or worked on a farm, But until recent events slowed him down, he was well on his way to bullding a vast farm em- pire of which he would have had sole con- trol by 1054. He started from scratch less than 8 years ago. In 1948, Diesing was just another lawyer— @ tall, easygoing bachelor whose receding but thick black hair and whose physique, only slightly gone to fat, belied his 42 years. Up to that time he had been practicing law for almost 20. One day Diesing came across an article in Fortune magazine describing how many of our biggest charitable, religious, and edu- cational foundations had bought and were operating private business tax free. Behind the practice, the article said, was a specific Internal Revenue Code exemption for such organizations. . Late in 1948 Diesing began to charter non- profit foundations under Nebraska laws, Within a few months he had eight different foundations to his credit—some educational, some religious and charitable. They ranged in title from the Crusade for Freedom to the Sacra Coeur Foundation. In financial structure, they also varied from strictly nominal capitalization to no capitalization at all, Diesing, faithful to the tradition of oper- ators, didn't plan to spend much of his own money in any event. The largest amount at which any one foundation was capitalized was $10. To be assured of complete control, Diesing appointed himself not only president of each foundation, but also treasurer, socretary, resident agent, general counsel, and chair- man of the board of trustees. The charters stipulated that all activities should be man- aged and controlled exclusively by the presi- dent and the treasurer. Diesing'’s next step was to put in a long- distance telephone call to Thomas D. Camp- bell, @ man whose farm operations had earned him the title of “Wheat King of the World.” Had Campbell, Diesing wanted to know, ever thought of selling his 65,000- acre farm in Montane? Campbell hadn't, but he was willing to start. A meeting was arranged. Diesing arrived at the meeting armed with little more than photostatic proof of his tex exemption and a few cogent figures. To Campbell, it sounded then like the craziest deal in the world. It still does. But Diesing’s figures proved very persua- sive. Campbell’s farm probably averaged a profit of about $400,000 a year, But since the farm was incorporated, 38 percent of this amount, or @152,000, went to the Fed- eral Government in corporation taxes. Out of the remaining $248,000 came State taxes and individual income taxes, the latter es- pecially onerous for a man in Camphell’s income bracket. After all these taxes, Camp- hell was left with possibly 650,000 out of his corporation’s original profit. If Campbell were to sell his farm to one of Diesing'’s tax-exempt foundations, how- ever, the $152,000 in corporation taxes could be completely saved. Moreover, stnce the foundation had no stockholders clamoring for dividends, the entire $400,000 would re- matin intact, As for his foundation, Diesing would be satisfied with possibly 15 percent, or €60,000-——thus leaving $340,000 to be re- turned to Campbell each year as an install- ment on the sale. True, Campbell would lose ownershtp of the farm and with it $50,000 annually in take-home profits. Also, he would have to pay 25 percent of the sales price in capital- gains taxes. But Diesing was prepared to compensate for these factors. He offered Campbell #2,- 000,000 for the farm, a figure Campbell has compared to the million and a quarter he’d have been lucky to get on the open market. The margin of €750,000 would cover not only the 500,000 in capital-gains taxes but also Campbell’s $50,000 income for 5 years. And at $340,000 a year, the sale would be paid off in approximately the same amount of time, Also, Diesing offered to retain Camp- bell as manager of the farm at 12,000 a year until the sale was completed. In the spring of 1949, Campbell signed the papers. Diesing had taken title to one of the Nation's biggest and best farms with- out paying a nickel down, according to Campbell. “Diesing's exemption from corporation taxes is the key,” Campbell has explained. “Without it, there would have been no deal.” But conversion to a position to cupital gain was also a prominent consideration. “Any financler will tell you that the only way to pile up large sums of money today is through capital gains.” And Campbell wanted large sums, he has said, to expand another of his farm holdings, a 48,000-acre ranch in New Mexico. A month after the Campbell transaction, another of Diesing’s tax-exempt foundations bought a 80,000-acre cotton plantation in California for 4,078,000. The plantation had been owned by Russell Giffen and 12 other stockholders. As might be expected, the method of payment was much the same. Giffen did insist on a small down payment, the balance to come from the farm's net profits. Diesing’s foundation was to receive 15 percent of these annual profits until the sale price was paid. When the Campbell and Giffen purchases were made, Diesing made the mistake of bragging about his activities to friends, The news leuked out locally, and Diesing dis- covered the meaning of a bad press. He also learned a lesson; any more recent deals tout may have been made through his eight foundations remain unknown. Dtesing himself now claims that except for the Camphell and Giffen farms his foundations are all dormant. What Diesing himself gets out of all this 4s difficult to discover. Officers of founda- tions generally receive an annual token fee for accepting the responsibility involved. Several independent foundations have quoted $1,000 as a quite modest token. Nebraska law specifically forbids the pay- ment of auch a fee to only one class of foundation officers—the trustees. Implic- itly, then, Diesing is left with a total of 40 positions—-5 in each of 8 foundations~-for which he legally could accept money. If he were to recelve the above-suggested $1,000 for each poattion, Diesing would obviously be enjoying an annual “token” income of $49,000. On the other hand, Diesing may expect no earthly reward. Soon after the Campbell and Giffen deals, Diesing’s troubles began. First, it was his initial trustees: three female Benedictine and three male Trappist orders. Venerable Mother M. Dolorosa, primate-general of the Benedictine Sisters of Perpetual Adoration in this country wrote: “We became trustees [in September 1948} in the first place only after much pressure had been brought to bear {by] Mr. Diesing, who had long been a friend of our com- munity. * * *%” Whether or not Diesing himself later hinted at his real plans, the various trustees did get wind of them, even before the Camp-~ bell and Giffen purchases. On January 21, 1949, Mother M. Dolorosa resigned for the Benedictine Sisters. The Trappist groups all followed suit within the next few monbha. However, on April 25, Diesing wrote Mother M. Dolorosa, advising her of the Campbell deal and asking her to reconsider the Bene- dictine resignations. According to Mother M. Dolorosa, Diesing’s letter continued: “If you expect me to ase sist in paying your debts, I most certainly think the divine law of charity insists that * * * you consent to again be trustees. Your refusal will mean immense loss of filuanctal assistance in future years to your convent.” On May 7, Mother M. Dolorosa replied, con- firming the resignation as final. “Our bishop," she said, “highly disapproved of our being connected with any business enterprise which involves a tax exemption of this na~ ture.” By June 8, all six former trustees had thus positively reaffirmed their resignations, but Diesing continued to use their names. Finally, all six were forced to take their cases to the office of the secretary of state at Lin- coln, Nebr The letter from Father M. Robert, abbot of the Trappist-Olsterclan Abbey at Conyers, Ga., was typioal: “I stipulate that neither my name nor the name of (my abbey) should be used in any further connection with * * * any foundation or any cor- poration of which Mr, Diesing might be named president or chairman of the board.” All during early 1949, Diesing had also re- ferred to Francis P. Matthews, who is now Secretary of the Navy, as a trustee. But Matthews, & prominent Catholic and an old Omahr. friend of Diesing’s father, was not to become a trustee until summer. “Gordon had told me something about what he was doing and had been after me a long time,” Matthews recalls, ‘Finally, I agreed to do anything I could to help the Trappists.” Matthews became a trustee on July 21. What Diesing evidently had not told him was that the last Trappist group had '‘com- pletely disassociated” itself from Diesing's help some 6 weeks before. Matthews lasted less than 2 months, Then, on September 16, he too resigned. “I had understood that Gordon waa forming a foundation to help Catholic orders invest thelr money,” Matthews explains. “Then I found out they didn’t have any money to invest.” Nebraska law requires every nonprofit foundation to have a minimum of three trustees. But at several] points Diesing was down to one—himself. He finally solved this problem, after Matthews’ resignation, by appointing two laymen-—men he per- sonally has described as “close friends.” Diesing’s next trouble came from Noab M. Mason, Republican Congressman from Ilt- nois. On the same day the last Trappist group gave Diesing its resignation Mason had introduced a bill one of the provisions of which called for taxation of the “business income” of all charitable, religious, and edu- cational foundations. Such a measure, of course, would have completely sealed off Diesing's loopho: :. Less than 10 days after Mason's first apeech on the bill the stubby Congressman received & letter from Diesing: “I read an article in the Chicago Tribune stating that you gave & splendid speech in the House attacking the tax exempt. * * * Kindly send me several copies of your excellent speech, and send me several copies of the bil. you in- troduced.” Mason complied. On July 9 Diesing wrote again, thanking him: “I would appreciate tt very much if you would advise me as to the progress of your splendid bill through the {Ways and Means} committee and the House.”
compited again, saying he didn't eupect to press for passage of his bill until the. a session. Diesing’s next letter to Mason, s month the matter as promptly as possible,” wrote. Also, in connection with three or- ganizations named in Mason's speech, Dies- ing wanted te “know in detail how they own and operate such a business and not pay any income tax.” Possibly because of the reference to the bar association, Mason considered this let- ter im: enough to turn over to the National Associated Businessmen, which was solidity backing his bill. And on August 26, Mason received from Loring A. Schuter, head of the NAB, a two-page “suggested answer to Mr. Dtesing.” It may be assumed that this answer satisfied Diesing's purposes, for lie wrote no more. However, he didn’t have much more time to write, for a month later Mason discovered the true nature of Dies- ing’s interest in the bill, On October 6, Mason notified his Nebraska correspondent of this discovery by exposing the 8-month- old Campbell deal to the House. “I think it’s the funniest thing I ever heard of,” said Mason's secretary, Mrs. Eve. lyn Krupp. “He acts ike he approves of the bill, then organises everything he can ley his hands on.” But “the boss doesn’t think it’s funny at all,” according to Mre. Krupp, In fact, she says, Mason >lames her because it wae her idex to answer nonconstituents’ matt, The Ways and Means Committee, after extensive hearings, shelved the Mason bill last summer, and Diesing was apparently in the clear. He had two trustees bo could count on. He had letters of detailed infor- mation from a Congresaman—lettera that much more than offeet any harm that same Congressman's dead bill could do him. And he had his own ability to cope with situa- tions as they arose. Perhaps his career had only begun. Campbell had said: “If I had 8 Geal like that, I'd buy up the whole world.” But when I vistted Diesing in Omaha last fall he looked and acted like a tired business- man. His manner of speaking wee consid- ered almost phiegmatic—though his chain smoking hinted at an inner tension. His answers were as evasive ae I had anticipated, if not as skillful. When cornered, however, he had a perfect comeback: “It would only be personal vanity for me to talk about it.” The interview was singularly uninformative, if Diesing appeared more worn than usual during this pertod he had good reason. He had just returned from two disheartening Weeks in Washington, 1¢ looked as if the leg- islators, in one game at least, were finally catching up with the operators. With the Korean situation had come a de- mand for more money. Congress over on @ tax law. And although the Mason bill iteelf wasn't drageed off the shelf, one of its segments was. Inafuded in the final dvaft of the Lew bill was the exact provision Dies- ing dreaded, a provision specifically denying nonprofit foundations tax exemption on any iicome from business enterprises unrelated to the exempt purposes of the organizations, Dieaing’s loophole was gone, His founda- tions no longer enjoyed any tax exemption. Rte tmmediate goal wae to salvage what be could. Both Campbell and Giffen had eon- sidered the loophote wrang from the begin- ming. Amd, expecting a change in the law, they had demanded escape clauses in their contracts. Diesing, of course, marshalled all his tO prevent thease clauses from. being invoked. “We spent a lot of time on the phone those days," Campbell recalied recently. The details of these long-distance confere Lad some pirsuccive re..oaa for continuing the transaction, even without bis tax exemp- tion. In the first place, as Campbell was no doubt reminded, the new tax law had not altered the capital-gains aspect of the deal. In fact, by im corporation taxes 15 pereent and high-imcome individual rates se much as 13 percent, the new act actually strengthened this particular phase. Because of these increases, Campbell would now be enjoying only about $25,000 out of his farm's $400,000 income—as opposed to the 850,000 he got previously. And on the horizon was an excese-profite tax that might cut his take even further. Then, too, Diestng had already paid one $340,000 installment, end would be able to pay @ second before the new tax law took effect. Roughly, a third of the sales price, perhaps more, would be paid under the orig- inal agreement. And finally, the installment payments could be continued, though the loss of tax exemption would n-cessitate a lower rate. Even under the original deal, the payments were to come out of the farm's profits, But Diesing's foundation could pay the new, much higher corporation tax on those profits and still have nearly €200,000 a year left to turn back to Campbell. And with about $700,000 of the $2,000,000 already down, it en would take Diesing only 9 years to pay off. Campbell's only alternative was to go through the legal entanglements of repos- sessing his farm. Such a process would not only be messy but also, in the case of so sizable a piece of property, very expensive, Camptell decided to play it Diesing's way. “The deal is still on,” he says. “Now that it's gone this far, {t's better to go the rest of the way.” But, as Campbell had previovsiy said, “It would never have started without the tax exemption.” Giffen evidently made the same decision. His lawyer wrote: “I wish to state that no change whatsoever has been made in the original transaction, and that the * * © stockholders expect the organization which Mr. Diesing represents to perform its agree- ment in accordance with the terms thereof.” The “terms thereof,” however, call for “as minimum payment that must be met each year.” Osampbell's contract no doubt can- tains a similar stipulation. And ft is pos- sible that without his tax exemption, Diesing has trouble meeting these minimum payments. Thus, he may be paying off debts for a considerably longer period than 9 years. Obviously, the new tax law has ended Diesing's dreams of expanding. He hae his bands full. In Dtesing's particular game, the legts- lators have come from behind to tie the score. But other games are already in prog- ress, in the oil fields and in the commodity exchanges, to name but two places. And where there are loopholes, such as deptetion allowances and speculative freedom, there will be found the Gordon W. Diesings. The Army’s Contradictory Manpower Statements EXTENSION OF REMARKS HON. ALLEN J. ELLENDER, SR. OF LOUMIAMA IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 ‘unanimous. consent to have printed in the Appendix of the Racoap an editorial APPENDIX TO THE CONGRESSIONAL RECORD published in Vivian's Cackio Citizen, of Vivian, La., on Pebruary 22, 1961. There being no objection, the editorial was ordered to be printed in the Recorn, as follows: The Army is doing a bang-up job cf con- fusing us poor civilians. Statements issued by the Pentagon are continuing to be con- tradictory and :1aking the men who are in the Armed Reserves tear their hair out by the roots. 4 few months ago, the Army called for mobilisation of all Air Force Reserves, and they emphasized that the need for man- power was so great that they felt the draft- ing of alt 18-year-olds was imperative tf the Nation hoped to survive an imminent war with the Russians. A few weeks later they decided that the Reserves were not needed. A few weeks ago the same thing repeated itself, this time actual orders went out to practically the entire Reserve Corps, telling them that they had 30 days in which to straighten out thetr affairs before reporting for duty. This time they said they weren't fooling. 80 what happens, these men who re- cetved these orders started preparing to become Army men again. In a few cases which we actuality know, they scold their homes, quit thetr jobs, or in one case a man who was in business, after trying to sell and failing, hired a man to run his establish- ment. Now they say once again, “We are just fooling, we don't meed you.” They are even planning to discharge some of the men who are already tn service. The same thing hap- pened with the National Guard. Men high in guard circles definitely stated that every- thing pointed to practically all guard units being called to active duty by the middle of January. Now they say, they won't call any more National Guard units and pian to dis- charge the ones already in service at the end of 22 months, Now, if they have no use for the men they already have in service and ere not interested in the men who are already in the Reserves, why in the name of heaven do they want to draft the 1-year-olds? Why can’t they wait until they reach the age of 10, and then induct them into the armed services? Personally, we can’t figure this all out, and we are sure & great number of you are a iittle amazed at the shenanigans going on at the Pentagon. We have almost made up our minds that men in the Pentagon themselves don’t know what is going on. We hope they don’t fight battles the axme way. Proposed Liquidation of Reconstruction Finance Corporation EXTENSION OF REMARES HON. JAMES P. KEM Or Migsoual IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1961 Mr. KEM. Mr. President, yesterday I introduced in the Senate a joint res- olution to Mquidate the Reconstruction Pmance Corporation effective June 30, 1961. I am convineed a mere reorgani- zation will not provide a cure for the pomical paralysis which hes RPC in ite Appen- dix of the Recoas an editorial in tcday’s
APPENDIX TO THE CONGRESSIONAL RECORD New York Times entitled “Reorganiza- tion—Or Burial?” There being no objection, the editorial was ordered to be printed in the Recorp, as follows: REORGANIZATION—Or BURIAL? While Senators dredging in the records of the Reconstruction Finance Corporation yes« terday were bringing new evidence to the surface of the intimate tie-up between finance and politics in its affairs, a Member of the Senate was demanding the outright abolition of the agency. He is Jamzs P, Kem, Republican, of Missourl, Proposals to reorganize the RFC, said the Missouri Sena- tor, didn't go to the heart of the problem, ‘The Government lending agency, he declared, has become a “political grab-bag of White House favorites.” Even Congress, he added, “can’t legislate honesty or good manage- ment,” Whatever their views may have been pre- vious to the present hearings, many persons, we believe, will go 8 good deal of the way,, at least, with Senator Kem. For our part, our mind is not closed to arguments for keeping the RFO alive temporarily as a strictly emergency instrumentality, with all nonemergency activities to be liquidated without any unnecessary delay. But in the light of recent revelations, the burden of proof even for this limited continuance of its activities has been shifted to the shoul- ders of its friends. As to reorganization, that has become a matter for discussion only after the more basic question has been decided. The RFC was originally created in Febru- ary 1932 as a temporary organization (with a life of 1 year) to help shore up distressed banks and other financial institutions, to keep the Natton’s railroads out of receiver- ship and to provide agricultural credit. In the conduct of its affairs in those days no such scandals developed as those whose de- tails fill the news columns today. Was this a matter of personnel and organization? No doubt {t was, in some measure. Certainly the country was fortunate to have as the directing heads in those early years such able financiers and administrators as Eugene Meyer and Jesse Jones, But a more basic consideration, we suggest, was the fact that the RFC, in those days was functioning in an economy which was at the outset in a state of shock and in the later years still convalescing. The Corporation's job, basi- cally, was that of a stand-in for other in- stitutions whose functions had been partly paralyzed by the crash of 1929 and the de- pression which followed. Contrast that with the peacetime octopus into which the agency had grown in the early postwar years—a gigantic Government hold- ing company with a string of subsidiaries that put to shame in number and variety the corporate offshoots of our most far-flung public-utility giants before the dissolution of these monsters. But worst of all, the RFC had now hecome a great lending insti- tution, with no emergency to justify ita lend- ing. And what tg more natural than that such #n agency, with no basic economic jus- tification for its banking activities, should find its particular justification in politics? By this we don’t mean the acts of political collusion which are now coming to the sur- face; we are thinking rather in terms of the numerous lending fields into which the nat- ural process of bureaucratic proliferation had drawn it. As Jesse Jones said a year ago in recommending “a decent burial” for the Cor- poration (a recommendation seconded by the task force of the Hoover Commission), “Gov- ernment lending in competition with private business is not a proper function under our private enterprise system.” Statement of George J, Burger EXTENSION OF REMARES or HON. WILLIAM S. HILL OF COLORADO IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. HILL. Mr. Speaker, on February 20, 1951, Mr. George J. Burger, vice president of the National Federation of Independent Business, appeared before the Ways and Means Committee of the House and made a very interesting state- ment. Myr. Burger expressed a definite fear that with increasing taxes and the tendency to give war contracts to the larger firms would result in closing up and probably bankrupting many of the small business operators throughout the Nation. Mr. Burger quoted from letters his organization had received from many small independent manufacturing firms throughout the country, each stating the fact that they were afraid of the impact on their firm if careful consid- eration was not given not only on taxes but in the letting of contracts and the supplying of raw materials to them dur- ing the war effort. I am sure you will find this statement well worth reading and I commend it for your serious con- sideration, It follows: In his Economic Report to Congress this year, President Truman said: “In a defense emergency, all those on the home front should serve, to the limit of their ability, in the kind of work for which they are best Atted.” The 98 percent of all our businessmen who own and operate emall and independent firms are ready and eager for this service. In World War II, when they were per- mitted to use only a fraction of their poten- tial, they provided almost 27 percent of the value of all war production. Today they are accounting for 24 percent of a much smaller defense production total. As our Nation goes further into the de- fense program, more and more of these small and Independent businessmen will be called on. Many of them will be required to ex- pand their facilities, Their service, and constant readiness to serve, will provide our Nation with a great safety factor, as En- gland learned in World War II after its centers of concentrated, giant production had been bombed out, and that nation forced to turn to its thousands of small and independent factors for needed defense pro- duction. But, as matters stand today, many of these small and independent businessmen May be unavatlable when the need for them arises. Their decentralized plant may be In Qisrepair, their pool of skilled labor dis- persed, their magnificent productive poten- tial completely lost. For today literally thousands of these independents—some of them likely right in your own congressional districts—are rush- ing down the road to ruin. Not because of their own ineptness or mistakes, Rather because they are being squeezed to death between operation cut-backs caused by ma« terials shortages and rapidly increasing costs, of which mounting taxes are part onuse, Let us illustrate by quotes from four of the hundreds of letters received from amall and independent members of our federation within the past 30 days. Hear what these businesamen have to say! or that kind of money. A mail and independent plumbing manue facturer writes: ‘The owners of this com- pany contribute substantially to the United States Treasury in the payment of taxes, However, due to its inability to obtain steel, copper, lead, and sinc, this contribution is about to cease unless materials for essential products are made available, We are holding urgent orders from jobhers requiring more than 40 tons of metals, which we cannot obtain, Military orders are being held, due to refusal of extendible ratings.” A amall and independent plastics manu~- facturer writes: “We have a new plastics factory * * * completed late in 1048. It ts equipped with one of the largest in- jection presses in the Middle West. We have floor space and modern, up-to-date equip- ment and could handle a prinre contract for the mobilisation program. Our inability to secure plastic molding materials is very per- turbing to us as we have thousands of dql- larg in molds and other materials, and unless we Can secure Government work or get ma- terials for our items for the civilian market, we will have to close our $150,000 plant.” A small and independent farm-implement manufacturer writes: “The usual sources of steel supply for the small manufacturer com- pletely dried up by middle September, and the gray market operators moved in to mar- ket the available supply—at a price. By late December, this price had risen to 20 cents per pound for certain steel items such as sheets, effectively closing the door on this, our last source of supply for sheet and strip steel. We could not hope to meet this price level. Our products elmply would not sell It ig obvious that we cannot long remain in our present statio position and simply mark time. If we are not soon able to obtain sufficient matertals to maintain our manufacture the only alter- native is complete and permanent closure of our plant.” A small and independent tire retreader writes: “We have been under the impression from news releases and bulletins that the rubber manufacturers have been instructed by our Government to channel a greater por- tion of their production to camelback. From the manner in which orders are being re- ceived in tread planta it appears that there has been a considerable reduction rather than an increase. We have been unable to secure any camelback whatsoever for 30 days. No operator can keep open and save valuable tires on such a basis.” Some of these businessmen are individual proprietors or partnerships, others are incor- rated. Consider that the unincorporated usinessmen were the last to receive tax re+ lief after World War II, that they have al- ready taken one tax increase, and are facing a second in the President's proposed tax pro- gram. At the same time, the incorporated firms who were, 1 year ago, paying 21 percent on the first $5,000, 23 percent on the next $16,000, and 26 percent on the next $8,000 are all paying 25 percent today, and are being asked to pay 33 percent in the President's proposed tax program. More than this, the so-called tax speed-up adopted in the last Congress ts causing them to pay, temporarily, relatively greater amounts of taxes in rela- tively shorter periods of time, : What, we ask, would your outlook be as o businessman in the face of these increasing taxes and mounting materiale shortages? Undoubtedly many of you, just as many of these businesamen, would be facing extinc- on. In addition, for many years difficulty in securing financing has been a serious deter- rent to the formation of new small and inde- pendent business enterprises and to the con- tinuation and expansion of these enterprises, once founded. Our sales representatives contacting thousands of small independents at their places of business dally see evidence of this problem, The files of the House arid
Sepate Ball Business Committees, and of the problem. Ali three commrittess have held extensive investigation: into the problem. ‘The reseon for this difeulty ts easily de- termined. Even in normal times the returns available are not suMelently attractive for individual investors. The costs of stock flo-~ tation are prohibitive. Inability to build sufficient reserves prevesits internal financing. Now, even before any further increase in taxes, all of these stumbling blocks to con- tinued small and independent business are greatly magnified. Where, then, if anywhere, are these small and independent business- men to turn for @ solution to their pressing Bnancing probiema? How are they to con- tinue in existence? Congress could, if tt will—and as we hope it will, help smooth the extremely rough path these independents must travel if it will do any one or more of the following: i, Refuse to raise taxes on small and independent business or to raise them to the confiacatory levels stiggested ao far; or, 2. While raising the tax level, either— (a) Permit tax deductions for plant ex- pensions or improvement, or (b) Permit greater retention of earnings for reserves, or (c) Eliminate double taxation of divi- dends, perhaps with some ceiling attached. We recognize that any one of these sug- geations will leagen the total revenue taken in by Government. Against this we sre aure you recognize that if something ts not done many of these businesses will no Jonger be a source of tax revenue; their pay- ments to the Treasury will stop once and for all, More than this, we are sure you yecognive that the easter Congress makes !t for small and independent firms to secure private Anancing and to finance themselves, the smaller will be the demand for Govern- ment gasistance, and the smaller will be the total tax bill Government will have to pre- act now, by giving up a little at the present in order to gain more in the future in the way both af taxpaying competitive enter- ise and national security. Beyond all thia, the loss caused by en- actment of any one or more of these sug- gestions could be overcome, in great meas- uve, by complete elimination of nonessen- tia) Govermment spending in both the de- fonse and nondefense fields, and by closing b by eliminating all subsidies to business and agriculture, so far as is possible. We told the committee that in # period such as this of great business activity end high income, promoted largely by Government spending for defense, curtailment and elimination of these can be made without en- Gangering the Nation. On the other hand, as we recommended also to the joint committee, Government tax revenues can be increased by fair taxation of presently tax exempt organizations which compete daly with independently owned and operated unincorporated and corporate businesses. We refer here specifically to the eo-called cooperatives, which should be teased in the same manner as their inde- pendently owned and operated titors. In thia connection you will recall that ap- parently reliable witnesses before your com- mittee laet yenr estimated that during the years of World War Il, cooperatives escaped payment of some 6855,000,000 in Federal taxes. Since that time, the volume of bual- Ress dane by cooperatives has increased tre- mendously. Soa, obviously, has their tax ad- vantage, We need not remind you that a question greater than that of raising additional reve- nue—vital as that is—is here involved. President Truman put it well when he told ‘the Congress, January 12: “Sacrifices nrust be shared fairly.” Small- and independent- business men urge that Congress consider this principle when working on the prob- lem of taxing cooperatives. All other con- siderations aside, it simply is not fair when e0-ops do not have to pay the same taxes ae their unincorporated- and corporate-bust- ness competitors. As a matter of fact, it might be said that the unincorporated- and corporate-business men are being coerced into paying the freight for their competi- to rs. Before we close, gentlemen, let ws make one point very clear; as we told the Senate Finance Committee, December 8, 1950, amall- and independent-business men are quite willing to assume thelr full tax burden. They do not desire to have anyone carry the toad for them. They have never asked for any unfair shift of the burden from them- selves to any other class of taxpayer. But they realize as well as you that ruined businesses netther pay taxes nar contribute otherwise to national security. They know, too, that any expansions to fill the gap caused by thetr elimination will not provide Government with the same amount of rev- enues as it is now recetving. Remember, many of these enterprises &s you have seen by their own teatimony-— are now close to rutn. Further tax in- creases, at least to the levels suggested in the Preaident's suggested program, may push them over the brink to complete disaster, Donaldson’s Shocking Antilaber Tactics Cause Employees and the Public To Suffer EXTENSION OF REMARKS HON. GARDNER R. WITHROW OF wisconsin IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. WITHROW. Mr. Speaker, under leave to extend my remarks in the Rro- oan, T include therein an editorial which spokesman for the American Federation APPENDIX TO THE CONGRESSIONAL RECORD of Labor unions in Detroit and Wayne County, Mich.: Irs Toes To Gur a Rew Postmaster Grn- mear—Domanpeon's Smocnina AWTILAROR Tactics Cause EMPLOYEES AND Tux Pusiic To Burren (By Frank X. Martel, president, Detroit and Wayne County Federation of Labor) Never in the history of the Post Office Department has any Postnaster General put into effect as many administrative policies that adversely affected the welfare of the employees as bas the present head of the Post Office Department. Since his perma- nent appointment he has made no recome- mendations that would improve the lot of the omployees. Despite bia high-handed actions toward the rank and file, the Post- master General has been most generous in recomme increases for ranking depart- mental officials of the Post Office Department, and extremely generous in recommending in- creases for the American railroads. He vigor- ously fought a sorely needed slight wage in- crease for World War IT veterans. His record toward the employees has been a shocking one. A recital of a few of the many actions taken by the Postmaster General lowering employees’ standards follows: 1. The Cougress by law provided for the payment of 90 cents an hour or 7 cents a mile to special delivery messengers for the use of their automobiles. On the strength of this legislation, many messengers went into debt to purchase new cars, The Post Office De- partment, under General Donaldson, disre- garding the intention of Congress, has leased automobiles from private contractors in many of the large cities, leaving the special delivery messengers holding the sack. 2. On October 27, 1949, the Postmaster General issued a down-grading order. He as- aigned a number of the duties that had been performed by skilled clerks in the post offices and by postal transportation clerks to mail handlers, at a lower rate of pay. This order also provided that all extra clertcal and car- rier work during the Christmas rush would be performed by temporary mail handlers. This action is comparable to using a laborer to do the work of a skilled journeyman. 3. With the advent of streamlined trains, the Post Office Department agreed to give a time differential to all postal transport clerks serving on apeed trains, aimilar to the dif- ferential granted to railroad employees. This apeed differential remained in effect from 3986 until June 30, 1950, when Postmaster General Donaldson abolished it. 4. The postal classification law provides two classes of postal transport employees— class A and class B. Class A employees are clerks on the minor branch lines. Matn-line employees and those on the heavier branch lines are in class B, Based on the volume of work, clerks in ¢lass B are given @20f a year himself waz @ letter carrier for a very short period of time 40 years ago. With the reduc- tion of deliveries, carriers are required to remain on the street far 644 hours and more without restroom facilities and withowt proper places to eat. Everyone ts aware of
APPENDIX TO THE CONGRESSIONAL RECORD. the Postmaster General, letter carriers are compelled to carry much heavier loads, They have longer rotites—with perhaps several hundred additional patrons to serve. Their routes are sO heavy they seldom see their job completed, They must listen to patrons’ endless stream of compleints without being able to solve them. 6. Congress made Armistice Day a national holiday. In the past, it has been the prac- tice to permit postmasters to give sorvice on holidays In cases where service may be neces- aary. However, when Armistice Day 1050 came around, the Post Office Department is- sued a flat order to deliver on Armistice Day. There waa no latitude given to the postmas« ters. The order was absolute. The empltoy- ees who worked on Armistice Day were not given double time for holiday service; they were not given time and one-half-—-they were given time off on a straight-time basis within the next 5 days. The holiday was taken from the men largely because mai) was piling up and the Postmaster General was vainly try- ing to keep the real facts from the public. It'S TIME FOR A NEW POSTMASTER GENERAL All in all, the actions listed above have re- sulted in little or no saving to the American taxpayers. They have, however, made the Post Office Department—-once the pride of the Government—the despair of the public and the postal employees. It ig ironic that the employees of an agency of Government in an administration that prides itself on ita liberal attitudes should have to put up with the whims of an administrator whose sole response to the challenge of managing a big department ts to issue orders ruining the service and wrecking the morale of the em- ployees. The President of the United States should immediately seek a competent admin- istrator to head the Post Office Department, The longer the change is delayed, the more difficult it will be for a competent man to bring order out of the present chaos, The President should find a man who understands morale, administration, and public welfare— one who is sympathetic to the employees. The bleating explanation by Donaldson that economy drove him to it is rather hollow in view of the recent agreement by the Post Office to pay the railroads an additional $312,- 000,000 for transporting the malls for the period February 19, 1947, through December 31, 1950. It is unfortunate that the Post Office De=- partment, in an administration that boasts of its friendship to labor, is now headed by @ man who knows hostility to the Isbor principles insisted upon by President Tru- man, In October 1950, the National Post- master General Donaldson attended the con- vention. The Postmasters’ Association is presumably an independent organization. Dan L. Gibson of Albany, Ga., was a candi- date for president and was the almost unant- mous choice of all the postmasters for the position, When the postmasters arrived in St. Louls, they were informed that Donald- son insisted on Barney Dickmann of St, Louls for the position. Departmentel offictals put the pressure on postmaster delegates. At least one acting postmaster was informed that failure to support Donaldson's choice would result in failure to secure a perma~ nent appointment. The newspapers told the story—the disappointed defeated candidate complained publicly. He stated that he kuew he was defeated—he had tt “from the horse’s mouth.” Congresaman Grorcs M. Ritopes of Penn+ sylvania, introduced in the Righty-first Con- gress @ bill to firmly establish labor regula- tions in the postal service. Donaldson would have none of it. Company union procedures were more to his liking. In a letter to Cone gtessman Tom Muaray, chairman of the Post Office and Civil Service Committee, dated July 10, 1949, he declared: DONALDSON OPFOSES ORGANIZED EMPLOYER REPRESENTATION "This measure would provide for repree sentation of members of employee organiza- tions only, and might possibly force all em- ployees to join an organisation in order to obtain the same consideration and treat- ment in dealings with administrative offcials, * * & “The present law recognizes the right of employees ta become members of employes organizations and provides necessary pro- tection to such employees incident to legiti- mate activities therein. During the many years this law has been in operation the Department's relationship with employee organizations has on the whole been amica- ble. The Department and its representatives are always willing to discuss problems in which responsible employee organizations have an interest at any time the repregent~ atives request such a discussion. Because of this it is in my opinion that H. R. 3702 is superfluous and its enactment would serve no useful purpose. * * * “Legisiation of this nature will so en- croach upon the administrative functions and responsibility of the Department, post- masters, and others charged with the admin- istration of the postal service, that it would very seriously hamper the economic admin- istration of this service, “In view of the foregoing, this Department ig strongly opposed to the enactment of this measure.” The Department recognizes unions on its terms only. The action of the “Career Post- master General” at St. Louis indicates the nature of those terms. Discussion when the Postmaster General wants it, and numerous weak voices rather than a few strong ones, are much preferred by the present head of the Post Office Department. The Postrnas- ter General and the Deputy Postmaster Gen- eral when it served their purposes have re- fused to see representatives of the em- ployees. The General is busy with the budget Is the favorable excuse. Recently, in an examination for the posi- tion of Post Office Inspector, an applicant was interrogated at length on hia union ac- tivities and his attitude toward the curtall- ment order. In the Post Office Department these days, there is much talk about loyalty to the Postmaster General—loyalty not to the postal service, but to its temporary head. What Mr. Donaldson demands, however, is not loyalty, but subservience. Men, evan in high position, who give loyal, intelligent— but unwelcome—advice, are quickly shunted from authority. Servile submission—not loyalty—is the demand of Postmaster Gen- eral Donaldson, Statement of Belt-Wide Cotton Producers Committee on Price Control for Cotton EXTENSION OF REMARKS HON. E. C. GATHINGS OF ARKANSAS IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr, GATHINGS. Mr, Speaker, un- der leave to extend my remarks, I in- clude the following statement by the Belt~Wide Cotton Producers Committee on price control for cotton: It is obvious that only increased te tion ean correct the world-witie acarcity of cotton. The world price at 70 to 75 cents s pound is almost 30 cents a pound above the United States price with present governs mental proposals for ceilings. Cate: trols elimiziating possibly 2,000,000 bales of the potential market for the American ¢ot- ton grower are the reasan for most of the difference. ‘ In apite of the effort for price adjustments through export controls, the very high miii- tary and domestic demand is such that many people are advocating ceilings on raw cotton, Unfortunately ceilings would not work at any price level. There are approximately $68 different staples and qualities in addt- tion to weight considerations involved. The operating spot and futures markets have proven themselves to be the most efficient check and balance system for marketing the most complex commodity the farmers have to offer, Ceilings would inevitably mean biack- market operations in qualities and weights and would mean the substitution of a new and wasteful distribution system at a time when we cannot afford to waste manpower and resources, Furthermore it is inconceivable that prices paid the grower could be closer than 8 cents & pound to the ceiling during the height of the season, October, November, and Decem- ber. This fact would oome from a situation in which cotton buyers meeting mill and ex- port needs would discontinue their normal practice of buying large supplies during the height of the farmers’ marketing, realising full well that the market could not go up much and they could buy their require~ ments on a week-to-woek basis through the year and the grower and his banker would be left to Nnance the crop. It must be recognized that the congrese sional mandate given to the Economie Stabil- ization Administration is to protect the con- sumer against run-away prices. Therefore the American cotton growers recommend a ceiling on cotton textiles, with the removal of ceilings on raw cotton. This would make it possible to reopen both the spot and futures cotton markets under the guidance of a market administrator to be appointed by the Secretary of Agriculture. With the appropriate use of many influences affecting prices, the average cost of Middling 15/16 cotton to the United States textile mills during the calendar year of 1951 would not exceed an average price of 45 cents a pound, unless a crop fatlure occurred. Several steps, which the market adminis- trator could take to avoid skyrocketing prices would include the following: 1. Announcement by CCC of the sale of its remaining stocks as spon as the market reopens, 2. Announcement by the USDA that no further cotton export allocationg would be made in the immediate future. 8. Announcement should be made by ‘he ECA that no further cotton procurement au- thorizations will be issued in the immediate future and that authorizations which expire March 31 will be extended to permit ship- ment after that date if necessary, 4. Export licenses for the ttme being should be limited to those requested which were available at the Department of Commerce when ceilings were invoked. 5. Urge cotton exchanges to agree to raise margin requirements on all new speculative accounts in March, May, and July positions to a minimum of 50 percent of market value. If this is not sufficient to control excessive speculation then this margin requirement can be progressively raised to 100 percent. 6. Require the exchanges to reexamine all hedge letters so as to provide that no holder of a hedge letter could be actually net long the market in March, May, and July 1961, positions, All brokerage houses should be requested to notify their customers that within a 30-day period all exteting open credit
tor hedge necounts wilt be canceled and set- isfectory. not to be effective before May 1 and to end July 31, 196, will be on all contracts. or Prohivit any speculative cotton futures In ‘nthe old crop months except in i ee or and prokfbit purchases of March, May, or July against sale of inter de- livertes ms @ speculative straddle except in 8. Limit @aity fluctuations on cotton fu- tures exchanges on the spot month to the same limit applicable to other months. o Ri Ssh org sanc tees Madllsananat dre arveie not deemed absolutely necessery until after 1, 1861, and to make such pur- ohaecs on (on cali bests) tenth after such Gate 10. In order to prevent a disastrous break in the cotton market which would prevent the production of 16,900,000 bales so badly needed, it ls recommended that all of the abore requirements be automatically lifted if and when the price of middling 16-16 inch goes below the price at which it was selling when the exchanges were closed on Friday, 2. 11. Ef tifting of above requirements does not stop dectine, issue ancuncement increas- ing export allocations. 19. Announce the intention of USDA to stockpile cotton through open-market pur- chases in normal trade channels whenever the anticipated domestic demand plus an- ticipated exporta plus reasonable cazry-over is exceeded by the anticipated supply. The American cottom farmer is ready to make his decision as ta the size of his acreage for 1951, He cannot have confidence tn a market structure which will refiect arbitrary Prive ceilings, He must have the opportunity to recelve prices for hie product refiecting the supply he produces tn relation to the tvaliabie It would be disastrous for growers to pitch @ 16,000,000-bale crop, them encounter poor growing conditions on top of high costs and have only 13,000,000 bales to market at the price level he would have gotton for a 16,- 000,000-bale crop. Resolutions of New York State Civil Defense Commission EXTENSION OF REMARKS on HON. ABRAHAM J. MULTER OF NEW TORK IN THE HOUSE OF REPRESENTATIVES Monday, March 5, 1951 Mr. MULTER. Mr. Speaker, I am pleased to direct the attention of my colleagues to three resolutions which have been adopted by the New York State Civil Defense Commission. In ac- cordance with the suggestion contained in the second of these three resolutions, Iam preparing and will introduce a bill Whereas the volume of correspondance aud informational material to he Gletriimted Wherrss the present mat! ling procedure tov civil-defense materials te aude impeding the civil defense informational and stamping, weighing, counting, wise complying with postal requirements; Whereas the success of the national ciyil- Gefonse program requires the tuliest possible dissemination of instructions end informa- tional material throughout the several States, Territories, and District of Calumbla: Be it Resolved, That this conference requests the Federal Civil Defense Administrator to or ommend to the Congress the extension of the Federal franking privilege to all States and local offices of civil defense and to the offpes of civil defense in the Territories and the District of Columbia for their official correapondence and the mailing of informa- tional material, and to further recommend that e Federal appropriation be made avall- able to the Post Office Department to cover the additional operating expenditures which this extendon of the franking privilege would entail. Resolution 2 Wheress the recruiting of civil-detense vol. unteers is being hampered in many States by the retuctance of chtimens to expose them~ selves to danger without adequate insurance protection against injury or death sustained in civil~<defense training and operations; and Whereas the burden of such insurance protection is great; and Whereas the overcoming of the effects both materiel and financial, of enemy attack and the preparation of civil-defemse forces to minimise such effects is a matter of national and mot merely local concern: Be it Resolved, That this conference requests the Federal Civil Defense Administrator to rec- ommend to the Congress the enactment of suitable legislation to provide adequate in- surance protection to officially enrolled ciyll- @efense volunteers throughout the Nation against injury or death sustained in active Givil-defense training or in operations. Resolution 3 ‘Whereas the laws of the Federal Govern- ment and of the various States require the prompt establishment of an effective civil @efenee organtastion in the individual States; and Whereas the Federal and the State plens recognize the necessity far procuring certain eesential ttema of organtsational equipment (including communication and air-raid- warning equipment) as promptly as posai~ ble; and Whereas the Federal Civil Defense Admin- istration will recommend to the Congress that Madera] appropriations be made availa- ie, 0 Gefray Ratt the cost of such stems; Whereas it ts desirable that actual pro- curemant not be delayed until the Federal appropriations are available; and Whereas it is felt that the States who have shown initiative and foresight in procuring such e prior to the availability of Federal funds for such purpose should not be tor thelr forehandedness: Be it ary 12, 195, APPENDIX TO THE CONGRESSIONAL RECORD Outraged Democrats EXTENSION OF REMARKS or HON. CLARE E. HOFFMAN OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 HOFFMAN of Michigan. Mr. Rooker Oo mepublicals usee the milder forms of a Democratic candidate's proce- dure at election me, the loser screams to high heaven. Under permission granted there is inserted herewith, as an Mustration of what is meant, a discus- sion by Pulton Levwts, Jr., in his Wash- ington Report of March 5, wherein he states: Wasutncrox Reront (By Fulton Lewis, J.) Stave hic 43,000-vote defeat at the polls in Millard Maryland, ex-Genator has Gacorered that one of his constituents (who did nat vote for him, by the way) was taken ry midnight ride in an argu- satisfied with telling this story be- ittee 4 months after he had been licked at the , ex-Senatar Tyctings ts franking copies of his hysterical Gescription of the alleged midmight ride at taxpayers’ expenses to Maryland votera. 4 defeated Bonet or has the privilege of mment expense any words of wisdom he oe Oe tote nent, fae plaining his defeat, or on other subjects, for ia dumped by ter he this may seem tke un- mecessary kindness for @ defeated politician, but in Tyding's case it has its value. Each ii ti L : 3 ‘i 4 Mr. Fried's presence in the story 1s some- what curious in itself. Other than being 5 neighbor of Fedder's and having brought him to Tydings, there is noth: on the record explaining the subcommittee’s need for his services as an investigator. Nor can much be learned about his investigative back- ground, If any, He runs a garage and park- ing lot in Baltimore, next door to Fedder’s printing shop. For a spell, Tydings had membem of my own sta involved in the ki epivode, which now turns out to have been a ride moana Baltimore coll: Butler-for- Senator post, cards so they could be mailed befare ay fs say ahop wan Nobody i) mm: aber (avons. and Tyaings Analy be to adrntt it, with a sort of offhand apo! ‘The the enboom-~ mitten enters are after 16 for port corés wed & tabioia ‘whith showed Tydings hes, guarantees payment of $1 000: of this sum. Tt was given to Fedder
APPENDIX TO THE CONGRESSIONAL RECORD when he was squawking about not bein paid for helping to distribute the cards and tabloids. Fedder later was paid by Butien’s cam- paign finance director, co this leaves the sub- committee about where United States Code, title 2, paragraph 248, comes in. It says: “Money expended by a candidate to meet and discharge any assessment, fee, or charge made or levied upon candidates by the laws of the State in which he resides or expended for stationery, postage, writings, letters, printing (other than for use in billboards or in newspapers) or for distribution of let- ters, circulars, or posters shall not be in- cluded in determining whether hia expenses have exceeded the sums in paragraph 1 or 2.” For your information, paragraphs 1 and 2 set forth an outright election spending limit for the candidate of 610,000, or a sum of 3 cents for éach registered voter, not to exceed $25,000. As to the picture Tydings is fuming about, it might be better for him to relax. Repub- licans on the subcommittee have quite a collection of pictures taken the day Browder testified before the Tydings subcommittee that whitewashed the Communtst-in-Gov- ernment charges made by Senator Joszrn R. McCartry. They will be exhibited in connection with the question of just how close Tydings and Browder did get their heads together. Actually, what the shooting ts all aimed at is to embarrass Senator McCartuy. He hurt the Democrats as they've never been hurt before, and the Democratic National Committee knows it. So the big pitch is to fix 1 so McCartur won't be useful to any other Republican candidate for a Senate seat, or to the GOP Presidential nominee, in 1952. McCarty, in the Butier-Tydings came paign, rigged up the postcard idea and helped with the tabloid. The Democrats and Tydings know !t only too well. But not in all sections and branches of the Democratic Party are the stand- ards of fair dealing, as is indicated by an editorial from the Washington Star of last week, which reads as follows; Miyx-Coar STANDARDS OF HONOR The Star does not know whether Donald Dawson, the President’s atde on personnel matters, intends to appear voluntarily before the Fulbright committee and give his own version of the tnfluence he is alleged to have exercised with the RFC Board. He may yet intend to do so. If he does, it will be a creditable act on his part. If he does not do so he ought to be fred, In the Star’s opinion a failure to demand an opportunity to testify and tell his own story, especially in the light of the ugly mess already being developed by the Fulbright committee, will render him unfit for service in the White House or anywhere else in Gov- ernment. Furthermore, his continuation in White House service under such circum- stances would be an affront to public morals. Mr. Dawson has not been charged with any illegal act. But that ts not the point. The point is that here is a man, occupying 8 position as one of the President's intimate advisers on personnel, who has been pub- licly charged by a responsible committee of the Senate with having apparently exercised considerable influence over certain directors of the RFC in its business of lending public funds. According to certain moral standards of honor and public service, which are felt rather than defined by decent people, this unwritten code would compel Mr. Dawson to demand the right on his own initiative to testify under oath before the committee and to explain in complete detail the nature of his relationship, uf any, with the RFC. The fact that he has not done so, and in the present atmosphere at the White House it does not seem likely that he will, raises the cynical thought that Mr. Dawson js not fol- lowing the old code of public service but is guided by what seems to be a new code, of which there is much dismal evidence in pub+ le life today. Under this code a woman assistant secre- tary at the White House can accept a $9,500 natural royal pastel mink coat from her husband who, according to his own story, not yet complete, is already in debt to lawyer who has been active in business be- fore the RFO, and who arranged for the purchase of the coat. Under this code, Maj. Gen. Harry Vaughan, military aide to the President, can continue to serve at the White House after being named by anothar investigating committee of the Senate as the man who made pos- sible the “nefarious activities” of John Mar- agon, an “outright fixer,” who subsequently has been convicted of perjury. Under this code a woman alien from Aus- tralia can be brought to the United States and admitted to residence by & special act of Congress, approved by the President over the protest of the Department of Justice, which could not find in the record “any facts which would justify” the legislation. She turns up, too, at the White House, as the secretary of General Vaughan. Under this code the President's press sec- retary, Joseph Short, can explain that the President “knows of no evidence of ilegal influence on the RFC by any member of the executive branch or the legislative branch * * © a3 if the “legality” of influence had anything to do with what js worrying the Senate comrmittee—and the country. Under this code it is the legality of con- duct, rather than integrity of conduct, which assumes importance. Loss of honor js ac- cepted as perhaps the inevitable accompant- ment of “politics,” which the public is ba- ing taught to believe 1s without honor. A double standard of morality for public of- fice and private life is beginning to be cyni- cally accepted as one of the facts of life. If it becomes finally so accepted, the Rus- sians and their masses of infantry are one of the least of the things we have to worry about. Rural Manpower EXTENSION OF REMARKS HON. E. C. GATHINGS OF ARKANSAS IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr, GATHINGS. Mr. Speaker, under leave to extend my remarks, I include the statement of the Under Secretary of Agriculture, Clarence J. McCormick, on rural-manpower situation, made before the House Agriculture Committee on Monday, February 26, 1961: I appreciate this opportunity to talk with this committee about the more essential aspects of the farm-labor-supply situation in relation to the national manpower pic- ture. ' We all agree, I’m sure, that in order to safeguard our American way of life, the Na- tion has no choice but to make the beat possible use of its available manpower. Making the best possible use of our man- power involves, first, providing sufficient and walified personnel for our Armed Forces. 6 is an obvious fact that needs no slabo- ration, Mor do I need to elaborate on an- other obvious fact, namely, that farm, people want to make their full contribution to meeting this phase of the present emergency, But, as President Truman pointed out in his memorandum of January 17 to the heads of executive departments and agencies, “the needs of mobilization also require a vigorous civillan economy. The manpower necessary to defense production, to civil defense, to agriculture, and to the production of. essen» tial civilian goods and services and to sus. tein our commitments of ald to other na- tions, must be considered as integral parts of a balanced mobilization program.” Confusion sometimes arises from the fact that when people talk about the manpower situation they aren't always talking about the same thing. The manpower situation in terms of all-out war Je one thing. The man- power situation in terms of less than all-out war—in terms of mobilization for what may be a 10-year-long or a generation-long pre- paredness effort—is something else. As the President has pointed out, the manpower measures of the present situation should be consistent with and should contribute to the most advantageous use of our manpower should full mobilization become necessary, But the situation we now face is stil] some- thing less than full mobilization, In agriculture, we are gearing for a long- pull effort. The Nation needs inoreased farm production in 1961. But it may need even greater production next year, the second year, the third, fourth, or tenth year, We are not in 8 one-shot situation. We can't afford, therefore, to neglect the fer- tility of the land, nor the conservation of farm equipment, nor the preservation on farms of sufficient skilled workers. Our agriculture has always been a vital part of our national strength. But during and after World War II, the Nation learned anew the importance of food as a national asset. We learned that food is as essential to victory as planes, tanks, ships, and guns. It is precious in the same way as ol] and steel are precious. It determines in large part the effectiveness of the fighting man. It largely determines also the productivity of the civillan worker. In periods of mobill- gation, American producers, whether in Mnanufacturing, mining, transportation, or agriculture, work longer and harder. Conse- quently, they want more faod, and they have the money to buy it. Demand for food rises rapidly. Price pressures increase. Abun- dant farm production 18 necessary to lessen the dangers of runaway inflation, Besides these contributions to our na- tional strength, the American farmer con- tributes as an indirect producer of ammuni- tion, tanks, aircraft, parachutes, and pattle- ships. From his soll come the fiber and oil-producing crops which are used in the production of some of our most important ‘weapons of war. Cotton is one of the best examples. Cot- ton linters are used in making smokeless powder, plastics, and photographic film. A 600-pound bale of cotton linters (chemioal grade) will provide enough smokeless powder for 100,000 rounds of rifle ammunition, over 20,000 rounds of machine-gun ammunition, 2,700 antiaircraft shells, or 85 rounds of heavy tank ammunition. Long-staple cotton is used to make light, strong, wind-resistant, and water-repellent fabrics, yarns, and thread. It goes into the making of airplane and balloon fabrics and parachute cloth, Agricultural raw materials provide the basic fabrics in the fighting man’s clothing. It was estimated during World War II that clothing « soldier for a year takes all the wool of 26 sheep. I could go on to show you the importance to preparedness of such other agricultural crops as hemp, fax, peanuts, castor beans,
Al210 soybeans, But for reasons of time T wit amenly t out that agricuttural prod weta are not only t but basic elements in gut antionsl defense effort. We have recently proposed acreage guides for 1981 designed to bring about the biggest agricultural production in our entire history. That statement has much more than ordi- nery ficance when it is recalled that our agriculture in 9 of the past 12 years has either set a new record for production or nas equalied the record then existing. In 1948 and 1949, baer oo + ap ave ran about 40 percent above the average. In 1980 output dropped off somewhat but was still about 87 percent above prewar. hia year we are shooting for production about 45 percent above the pre-World War IZ level. The acreage guides call Yor a very large increase in cotton—approximately 53 per- cent above 1950. We need substantial in- creases in the total acreage devoted to corn, wheat, and rice. The target for corn fs an increase of about 6,000,000 acres, for spring wheat about 8,000,000 acres, with a smalier increase suggested for rice. The Department has also suggested in- creasing the acreage of vegetables for proc- easing 22 percent above the total planted in 1950. On the whole, these targets for 1061 farm Production sre encouraging—but there is a catch In them. A figure on paper, no matter how carefully it has been arrived at, ts not fiber in the warehouse, nor is it Tood on the table, As the members of this committee know, food and fiber are not produced by land alone. A great many elements besides land and water resources go into farm produc- tion—machinery and equipment, fuel, tires, and repair parts, fertiliner, livestock, bulid- Ings, and plenty of disease-resistant and weather-resistant seed, But above all, food and fiber produced by the skill, sweat, and planning of farm operators and farm work- era. The millions of skilled people who work on farms are the Nation's most valuable agricultural resource. In 1049, the Nation's agriculture produced about 40 percent more food and fiber than the 1935-39 average, using about 1,938,000,000 man-doys of labor in the process, Last year, we produced about 87 percent more than the 1935-89 average, and used 1,829,000,000 man-days of labor to do the job. This year, shooting for a production target about 45 percent above the prewar average, we estimate agriculture will need about 1,836,000,000 man-daps of labor. In other words, to realize the hoped-for production we expect to need almost as man-days of labor as were utilized in 1949—and nearly 6 percent more than were used last year. ‘We have deliberately based thts comparison on man-days rather than on the number af farm workers involved, for the reason that in periods of national emergency requiring heavy farm output, farmers have already worked harder and longer than under nor- mal conditions, You will note that the esti- mate for 1951 anticipates greater efficiency bres larger output per man-hour then In 1949. Tho fact remains, bowever, that farmers, this year, are being called upon to produce considerably more food and fiber with con- siderably tezs manpower. During 1990, the number of workers on farms decreased sharp- ly and seme of these farm workers were ab- sorbed in nonfarm employment. The average Cash farm wage in 1950 was about 56 cents an hour, While this was more than three times the average ‘wage for the 1995-89 pe- rhod, ft was still onty 36 percent of the aver- preven Operate not only against the return of these workers to agriculture, but will draw still more upon the remaining supply of farm workers. While it is true that a growing number of tractors, milking machines, combines, corn pickers, and other machines together with greater use of electric power have enatied agriculture to increase production, despite the declining supply of farm labor, these gamo factors have brought about a situation in which skill and experience are more Jm- portant in farming today than ever before. We are proud of the fact that farm output pet man-hour 1s now approximately 50 per- cent above the 1935-30 average. But we are keenly aware aleo that the lose of one skilled operator today is equivalent to the loss of one and one-half skilled farm operators in the pre-World War II period. e There just isn't any substitute for expe- rience and skill on the farm. If I may speak about this in terms of my own farm- ing experience, I think I can show pretty plainly what I mean. Like a Int of other farmers in the Midwest Ive gpent a good bit of time in raising hoge. I think I can spot a sick hog a long ways cif. There’s some- thing about the way an animal's ears droop or his tall hangs when he's alck that an expe- rienced hog raiser can see at a glance. That's the Kind of skill that just can’t be picked up overnight. It takes a lesser amount of skilli—but nevertheless a good bit—to handle a tractor or a milker or any of the dozens of machines that you find on the average well-equipped farm today. These machines cost the Jarm- er a lot of sweat and toll. He knows how to handle them. His sons know how to handle them. But when a fellow without know- how gets to fooling with this equipment he's not only taking a chance on rulning valu- able property, he's often taking a chance on his own limbs and life. Beoawuse, as this committee knows, farming is a hazardous industry. All—or nearly all—farm ma-« chines have moving parts that are danger- ous—kalves or cutters, gears, chains, rota shafts, fywheels, and so on. They're safe to be around when a fellow's body le on the farm but his mind is in the city. It is absolutely essential that agriculture retain enough key men to provide the skills needed for planning farming operations, operating farm machinery, and directing the ‘work of inexperienced laborers. Tt 1s necessary aleo to recruit additional workers into the agricultural labor force in order to meet seasonal needs. Inasmuch as @ good many experienced seasonal agricul- tural workers either Mave already been—or will be—absorbed by industry and the ‘~med Forces, it will be necessary $0 obtain workers from new and additional sources in 1961 if production targets are to be hit. Obviously it 1s of great importance to the Nation's egricutture that the local sclective- service boards understand the particular Problems invotved tn the agricultural man- power situation, Many farm workers in the lower age groups are, in tire truest sense of the word, skilled or key men. They have learned by watching and doing throughout thelr years on the farm. Many of them have added to thetr farm skills by agricultural courses in high school or even in college. The Department thet many Yocal selecttve-service boards heve actuality met this problem. We belfeve that ferm workers, on the whole, have been treated very realistically. However, we have recetved some 8 ly well-founded complaints about existence of great variations tn the practices and standards adopted! by vari- ous focal boards, Agriculture shoukt contrivute—entt i¢ will contribute—men to the armed services, ‘The problem before the locat boarde—and before the Nation as well—ts one of deter- TMining which are the troty trreplecesbte farm men, and which are those who would APPENDIX TO THE CONGRESSIONAL RECORD perhaps try to use agrivnitural deferment as & way of avotding their obligation of mifit- tary service, It is vital, too, that local boards take into consideration the large ntmnber of famiiy- type farm unites producing substantial quan- tities for market Which are operated by one or two min, for example, a father and 8 son in his early twenties. The mobilization ef- fort demands that we keep eat least one abie- bodied man on each of these family farms. Are We Fulfilling Our Obligations Under the Displaced Persons Act? EXTENSION OF REMARKS HON. ABRAHAM J. MULTER oF NEW YORE IN THE HOUSE OF REPRESENTATIVES Tucaday, March 6, 1951 Mr. MULTER. Mr. Speaker, I am introducing today a joint resolution calling for the extension of provisions of section 3 of the Displaced Persons Act of 1948, until final action shall have been taken on all applications which may have been filed under the act by June 80, 1951. The Displaced Persons Act, as amended last year, will expire on June 30 of this year. By then it will have been on our statute books for 3 years, during which time close to a quarter of a million DP"s will have entered the United States under this act. In the troubled and hectic years which followed World War TI, we proved to the whole world that the United States is still a great humani- tvarian country, notwithstanding the vicious propaganda attacks by our enemies who would make the rest of the world believe that we are blood-thirsty Larmongers and money-mad imperial- Our example, set nearly 3 years ago by the enactment of legislation to admit several hundred thousand homeless European DP's, was followed by several Mr. Speaker, you will recall that under the DP Act, as amended in 1950, a total af 341,000 DP’s were to be admitted to the United States, not including the so~ called ethnic German or Voalksdewteche which ocme under a different category.
APPENDIX TO THE CONGRESSIONAL RECORD those whose religious affiliation is not known-—1 percent. From all indications, then, it appears that probably no more than 240,000 DP’s—~and possibly less than that—will have entered this country by the time the act expires at the end of June. This would leave approximately 100,000 visas, authorized by the act, as unused, voided, and totally lost. It would mean that the extra 100,000 DP visas, for which we fought so strenuously last year will not be used and despite our legislative vic- tory of last year, the fight to gain ad- mittance for a larger number of DP's will have been in vain. Mr. Speaker, I believe if we allow the law to lapse without taking the neces- sary precautions to admit the number of DP’s as prescribed by the law, we will have committeed a grave injustice to those homeless people who have been waiting all these years for an oppor- tunity to reach the United States. I believe that the folly of such an act will reverberate throughout Europe and cause untold injury to the prestige and the good name of our country. It will be said that the great democracy of the United States refuses to abide by its own jaws and to fulfill the provisions pre- scribed therein. In the resolution which I am introduc- ing today I aim to forestall this injustice and to provide for the fulfiliment of our promise and obligation to admit the number of DP’s as prescribed by this Congress. My resolution provides that the issuance of immigration visas to DP’s under the amended DP Act “shall remain in effeet until final action shall have been taken on all applications which shall have been filed on or before June 30, 1951, and the applicants found ad- missible, as provided by law, have had @ reasonable opportunity to enter the United States of America.” Instead of the law expiring on June $0, 1951, and all our responsibility and obligations ending on that date, my amendment provides that all eligible DP’s who file for admission to the United States by that date and are subsequently found admissible under our immigra- tion and security laws should be granted the long-awaited opportunity to come here. Thus we shall make it possible for most of the 100,000 DP visas to be used in accordance with the law. This is the least we should do. Only in this way will we be able to claim that we have faithfully fulfilled our obligations in helping to solve the DP problem. Se aeienaennneeenaeeeecnssneeenenmnemmannatl Justice for Reservists EXTENSION OF REMARKS or HON. CHARLES A. WOLVERTON OF NEW JERSEY IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr, WOLVERTON. Mr. Speaker, there is considerable complaint arising from reservists with respect to the con- ditions under which they are recalled for service. In many instances they claim to be doing only ordinary service that could be well performed by young men who have had no training, and, who should have such training. Further- more, it is claimed that no considera- tion is given to the fact that the reserv- ists have already given service to their country in time of war, and since the war have become married and have children dependent upon them. These and many other complaints are being made. The following letter is an illustration of the numerous letters being received by Members of Congress at this time: Wrstmont, N. J., March 3, 1952, Hon, CHaaues A. WOLVERTON, House of Representatives, United States Congress. HONorABLE Sm: I am the mother of a World War II veteran who has been recalled to ace tive service in the Navy through his con- tinued service in the Naval Reserve. This has caused him to break up his home and to try to live in furnished rooms with his wife wherever it is possible to do so. He also had to leave a good position at home and, as is always the case, will probably find some younger man has stepped around him while he has been away. Is this the American way of life? I know of many young men who are unmarried and with practically Mttle or no responsibilities, who attend Naval Reserves drill each week and are trained as much as my son, who anxiously await a chance to get into the Navy but who are told there is no room for them at present at the receiving stations and the boot camps we now have opened are too full and insufficient to take care of them. Couldn't something be done to give mar- ried war veterans a better deal than they are now receiving? With their broken-up homes and their married life damaged, couldn't they be replaced with the nonveteran Re- serves who really are being held back. Their rates of pay are even greater than the non~- veteran Reserves, thereby effecting 4 savings to the Government. My son is a holder of the Purple Heart and the Good Conduct Ribbon from World War II proving he has stood his turn and would like to resume his interrupted married life. Surely it 1s only just that he be given this chance and I know he will serve just as faith- fully in the inac.ive service of the Reserves by helping to train further the younger men who could replace him. You would be better versed in the ways and means to rectify this unrest and un- happiness. Wouldn't you please take the necessary steps to correct this condition. Thank you. Respectfully, Mrs. ETHEL P. TURNER. Mr. Speaker, it is hoped that the Armed Services Commitee will give con- sideration to complaints such as the above to the end that a more equitable system of calling to service may be adopted. The Traman-Snyder Inflationary Program EXTENSION OF REMARKS HON. FRED L. CRAWFORD OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. CRAWFORD. Mr. Speaker, for extension in the Recorp, I herewith sub- mit copy of a radio address delivered AYi1 to the good people who have given me the honor to represent them in the House of Representatives, Perhaps the two greatest disturbances which daily aggravate you consists of: First, the declining buying power-of your wages and your accumulated savings: and second, the contributions you have to make in the form of human flesh and blood and money to the war effort. At the outset let me emphatically say that since 1933 the policy of the previous and present administrations has been directed toward a higher cost level, a higher wage level, and a higher selling price on the goods and services which you purchase. This fact cannot be successfully denied by anyone, In making these presentations it will be necessary occasionally to use a few figures, as much as we dislike to be burdened with them. As citizens we cannot escape the fact that the sheer management-~and here I am not referring to the payment—I repeat, the sheer management of the present Federal debt of $256,000,000,000 presents economic forces which, at times, literally guillotine your personal capital structures, and your buying power. At this very moment President Truman and Secretary of tho Treasury, Mr. Snyder, are pursuing an inflationary policy, with respect to managing and financing this devastating Federal debt. This inflationary program, sponsored and administered by Messrs. Truman and Snyder, is so inflationary and highly destructive that you cannot rely for adequate relief on the other program of price controls, rationing, and alloca- tions. Price controls and rationing cannot possibly offset the damage of the infla- tionary program. I urge you not to be misled by political statements which 50 often come to you to the effect that price controls will make your economic pathway one easy to travel. Too much of this Federal debt, to which I have referred, was sold by the Federal Treasury to the Federal Reserve banks and the commercial banks of the country. Too much of this debt consists of short-term paper. Too much of this debt consists of what is known as call paper, By this I mean to say that all of you who hold savings bonds can take those bonds to the banks and cash them any time during business hours. Thus you can call upon the Treasury to pay the savings bonds upon your option. Thus you determine the due date. You make the call on the Treasury. And the Treasury must stand ready to answer when you call, The administration and the Treasury foliowed an unsound and dangerous fiscal policy in financing this cebt in such a manner, Against this dangerous policy I have for years protested. I am here protesting again. As & matter of fact, Mr. Truman and Mr. Bnyder have, just recently, estab- lished a policy which literally converts the Federal Reserve Banking System and the commercial banks into an engine of inflation.
Al2z12 Therefore, the buying power of your daily. amavings declines . This is a terrible fact which you now face. This is a fact you must under- stand. This is a fact you must help change, or we face financial disaster in this country such as other countries have suffered. Not only do these constantly ad- vancing prices feduce the buying power of your liquid savings and your current wages and salaries, but in addition the dolar value of your life-insurance pol- feies are being destroyed. Furthermore, here !s another terrible fact: Everything the Federal Govern- ment purchases in connection with the defense program, or otherwise, carries a premium in price due to inflation which you, a8 taxpayers and bond buyers, must Yr, President ‘Truman and Mr. Snyder ex- euse their action on the basis that they are holding down to a low level the in- terest rate on the Federal debt. g pay antually $25,000,000,000, or more, as citizens purchase i gi a a8 a y ts not a clash of now, today, and which is of far greater importance to you than the position of any individual involved, is the buying power of your dollar, Whether or not you have confidence in the american dollar at this moment is of supreme importance, Do I need to tell you that the purchas- destroyed. When that day arrives public credit will like- be destroyed, ir when public credit ia destroyed in this try, our individual enterprise system or capitalist society is done for. Then, you may rest assured, whether we like it or net, that we will move into some kind of a tightly regimented socialistic This calendar year many billions of dollars of the Federal debt mature. The Treasury does not have on hand tax dollars with which to meet those matur- or the commercial banks, or to the indi- vidual citizens? If these refunding bonds are sold to the banks at a very low interest rate in conformity with the policy of the Presi- dent and Secretary of the Treasury, you will witness more and more inflation, regardless of the price-control program. But on the other hand, if the public— that means you—have little faith in the purchasing power of the dollar—ite real measure of value—do you believe that the Secretary of the Treasury can sell to you and other private citizens forty or fifty or sixty billion dollars’ worth of those bonds this year? In no way do I mean to influence you against puying Federal bonds. Let me say that I, too, have some of these bonds—both marketable and savings. I have seen the “hound of inflation” eat up the buying power of my savings just as you have. We should invest our savings in Gov- ernment bonds to help finance what we believe is sound, But in turn, Mr. Tru- man and Mr. Snyder should have great respect for the rights of the citizens and be dead sure they advocate and support & sound fiscal of Government so that we will have faith in those bonds and so that our investment therein will not disappear through inflation. Just why are you running away from the ownership of dollars into the owner- ship of goods? Simply because each day the dollar buys less, And for this good reason you hesitate in purchasing long-term Government bonds at a very low rate of interest because the experi- ence of the past 10 years teaches you that your dollars buy less when your bond matures and you receive back your money, than it would buy when you bought the bond. Thus the destructive hand of inflation writes on. President Truman and Sec- Reserve banks and the member banks of that system. The net results of such a policy allows for vast sums of speculattve loans made by banks to individuals and corpora- tions with which to go into the market place and bid up the prices on basic and manufactured goods raw materials, . of all kinds, foodstuffs, fats, and Abers. Thus, the whole banking system be- comes an engine of inflation—and protest. . Oscar cotton farmers of the South, the other day observed that-~ APPENDIX TO THE CONGRESSIONAL RECORD by Goating a Government pondea debt with our monetary aystem, The building of a price control dam down stream is no cure. * * * The morale of this Nation is the lowest in {ts history, with the loss of confidence in the dollar. The Treasury is now paying off its 10-year D sav- ings bonds. The $75 investment is receiving $100 that will buy, as of date of investment, about $55 of goods, which is a loss of @20 of the original investment, plus the 625 interest, The Washington Evening Star in com- menting on this policy of Messrs. Tru- man and Snyder only a few days azo had this to say: It is interesting, however, that a group of economists from the Universtty of Chicago tainly have been largely or wholly avoided * © df the Rederal Reserve System had kept ite holdings of Government securities unchanged instead of adding to them by In conclusion, let me remind you that years ago the Congress approved the Federal Reserve Act and brought forth the Federal Reserve banks designed to regulate the credit structure and to pro- vide the necessary flexibility in our sup- ply of money and credit to meet the eco- nomic . Congress lent agency and intended that the system be free of polit. ical domination. The system is charged by law with the duty of promoting com- Merce and industry, of conducting its operations with a view to the broad in- terests and needs of the national econ- omy as a whole. This recent attempt of the President to dominate the system is the boldest attack yet presented by any Chief Executive since Congress ap- proved the original law. Let us hope that the President and the Secretary of the Treasury will immedi- ately withdraw their demands and dis- continue the policy which so many experts charge as being responsible for the destructive inflationary forces that now eat into your savings so disastrously. Business Week in its editorial headed ‘Down the Inflation Road” had this to gay: The Federal Reserve System is at a criais point. Contrary to the intent of the Fed- eral Reserve Act, the Federal Reserve Board faces the loss of its independence to the executive branch. It has three courses open to it: (1) Tt ean eequiesce; (2) it can re- sign in protest; (8) it can seek to get a pub- lic review of the issue. My fellow citizens, I think the board should get the pub means you~ to review the issue. That is why I am presenting this case to you. I agree with Business Week when it says: What is at stake ts no lees than the pres- ervation of our economy from the ravages of inflation.
APPENDIX TO THE CONGRESSIONAL RECORD Controls Hamper Government's Revenue Intake EXTENSION OF REMARKS or _ HON. E. C, GATHINGS OF ARKANSAS IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. GATHINGS. Mr, Speaker, under leave to extend my remarks, I include a statement by William C. Hope, legisla- tive and market analyst of Robert Moore & Co., New York City: Conrso.s Hamers GoveRnMEntT’s REVENUE INTAKE (By William ©, Hope) A glaring example of how controls mill- tate against one of the Government's major objectives at a time of international stress— that of increasing its revenue—is furnished by the cotton industry, an industry second only in importance to that of steel. Some 14,000,000 people are dependent upon cotton for a livelihood. Therefore, one can well imagine what will happen to an overwhelm- ing majority of these people should the ESA adhere to its plan of placing a ceiling on raw cotton or should 1t fail to clarify its present freeze order on cotton—~an order that has resulted in chaos and a complete stag- nation of the cotton industry, It is a recognized fact that the merchan~ dising system applied to raw cotton ts the most complex and intricate one in our eco- nomic structure, This is due primarily to the fact that hundreds of different grades and staples have to be dealt with. There- fore, any kind of control over this commod- ity—other than one at the mill level, accom- panied by a liberal escalator clause—resulte dn confusion and stagnation. Such stagna- tion prevails at present. Everyone in the industry—including grower, shipper, mer- chant, and futures broker—has remained bewildered and immobile since the promul- gation of the ESA freeze order on January 26, The only sales reports received from the 10 southern spot markets since the institution of the freeze order show a total of merely 93,000 bales changing hands, compared with 776,000 bales changing hands in the month immediately preceding this order. (Decem- ber 27, 1960-January 26, 1051.) Furthermore, due to the hundreds of grades and staples concerned should a ceil- ing be placed on the raw commodity, we would be confronted with one of the most stupendous black markets ever witnessed in the annals of the United States. Thousands of taxpayers would be eliminated from the tax rolls while, at the same time, the United States Treasury would lose millions of dol- lars through these black-market operations, > As mentioned above, the cotton industry fs so complex, it 18 doubtful that it could be successfully controlled, even after years of study on the part of the would-be con- trollers—be they men of the industry or be they politicians grasping for a higher rung on their own political ladder. The present ESA freeze order reminds the writer of the sane advice given by Con fucius when he stated: . “The men of old, when they wished thetr virtues to shine throughout the land, first had to govern their atates well. “To discipline themselves, they first had to eet their minds in order, “To get their minds in order, they firat had to make their purpose sincere. “To make thetr purpose sincere, they first had to extend their knowledge to the utmost. “Bince knowledge ie acquired through careful investigation of things. “For, with things investigated, knowledge becomes complete. “With knowledge complete, the purpose becomes sincere.” Exa the present situation in the light of the above rationalization, no reason 4s found to challenge the sincerity of the ESA freeze order on cotton, aa it is fully realized that it was promulgated with the intent of placing a damper on inflation, However, there is ample reason why the method should be challenged. As long as the United States Treasury insists on a low interest rate of 24 percent on Government bonds, the price of goods will be bid up to and above any line established by a wage- price freeze. There is also reason to ques- tion the knowledge upon which the ESA freeze order, naofar as it applies to cotton, was based. When the end product of such knowledge results in the complete stagna- tion of a major industry while, at the same time, posing a threat to ample production in that industry, lt is time for the economic stabilizers to stop, look, and listen, Justice for Poland EXTENSION OF REMARKS HON. PHILIP J. PHILBIN OF MASSACHUSETTS IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 195! My. PHILBIN. Mr. Speaker, under leave to extend my remarks in the Rec- orp, I include therein an excellent and thoughtful radio address recently de-~ livered by Mr. Eugene Lyons, roving edi- tor of the Reader’s Digest, under the auspices of the Polish-American Con- gress for western Massachusetts, This speech and this sponsorship offer striking proof of the unylelding deter- mination of the advocates of the cause of a free Poland never to give up the fight for Polish freedom until Justice has been done and Poland's freedom re- gained, I shall continue to be in the vanguard of that fight. The add.ess follows: Ladies and gentlemen, most of you, I'm sure, have heard of the strange new game called Russian roulette. In a pitch-black room, men shoot at one another—and some- times someone is killed. They do it Just for the fun of the thing, to titillate their nerves. But let me tell you of another such game of chance, which we might call “Russian roulette for freedom.” It is far more dan« gerous—and it is not played for fun. 1 refer to the grim game that hos been going on since the end of the war in 1945—in which liberty-loving men and women stake their lives for the chance of winning freedom. This tragic yet inspiring gamble goes on day after day along 2,000 miles, of land and water frontiers that divide Stalin’s part of Europe from the rest of that Continent, Every one of those miles is fortified and guarded, by border police, electrified barbed wire, pollce dogs, speedhboats. But deapite all barriers of danger, thousands ped os en0 Poles and Germans, Hungarians Buma- nians, Baltic nationals, and even Soviet citt- petts—take the gamble of attempting to escape. ‘They koow when they start that the odds against them are frightening. According to refugee officiala who have watched the grue- some business, only 1 in 12 can expect to make it in the Balkan areas; only 1 in 6 in the Baltic areas. At best, in the German and Austrian occupation gones, where. the attempt ts easter, the chances of winning that ts to say, of getting safely thraugh the iron curtain-~ere about 60-60. And the penalties for losing are concentration camp, torture, and most often death. Nevertheless, there are no lack of players, The awful game that began 6 years ago is still under way. From two to three thou- and escape every month from under the fron heel of Red deapotism. This means that at least eight or nine thousand make the try—and fail, Singly or In groups of two or three, these men, women, and children yes, even children—match their courage and ingenuity againat the terrific might of Stalin's secret-police and frontier-guard ‘orces, To reach the world of freedom-—the world which you and I accept as a matter of course—these refugees from communism have crawled through swaraps and trudged through forests. They have cut a path through barbed wire and hovered between life and death for days on Aimsy rafta or in rowboats. It is for thess heroes of our world in chaos that Iam here to speak. In staking thelr livos for liberty, they have given proof of the grandeur of the human spirit. They have established a powerful claim on our conscience. In simple truth they are fighting not only their own but our battles in the world-wide atruggle between human fres- dom and totalitarian slavery, Every one who succeeded in escaping has behind him a nightmare journey across hun= dreds of miles bristling with machine guns, booby traps, police dogs, informers, But what do they find when they reach our side of the iron curtain? The sad fact ts that after surviving the Russian roulette for freedom, those people generally face another nightmare. They face the ordeal of finding themselves homeless, hungry, unwanted surplus humenity—part of the huge army of wretched victims of total war who have come to be called dis- placed persons. For the hope of a new life in freedom they have thrown away their native land, their language, thelr career, their worldly possessions. They imagined that the demo-~ cratic peoples would make them welcome and give them a helping hand. Now they dis- cover, in despair, that they are not re« garded as comrades in a common fight, but as a distressing nuisance, They find them- selves interlopers in Germany or Austria or Italy—areas already suffering under @ great load of refugees and DP's. Worst of all, the gates of democratic nations are almost en- tirely closed against them. These thousands of escapees whom I have described are only part of the vast and suf- fering displaced population. They join the hundreds of thousands who have been in a similar plight for years. They join the hordes of victims of German concentration camps— the veterans of Hitler's gigantic slave-labor forces—the fugitives from # hated commu- nism who followed the retreating Germans to avoid being overrun by Stalin's Red armies, At the end of the war, literally millions of men and women who had been dragged ainto the German slave-labor battalions, or who languished in German prisoner-of-war camps, were liberated. Those from the west-—from Belgium, Holland, Prance, the &andinavian countriee—returned horne, “ny azd joyously. t most of those from the east, alas, had no real home to return to. Thetr native
priocmner~ai. cage. bad wo choine St to ceturm bo thelr temifiies in ‘toe Bovtet homeland. Meany wther—to owr eternal shame-~were forced to go Rank e& the potrt of Ammetioan and Gritith beyo- wets and mackine guns, in ecoortance with en ‘Sntemens esoret covemmit with Bostin anate wt Teta, The rest, es we know, chose Qreetioen. “They wid se knowing thet ‘they woudl! ko hemedlem and sometisnss hanted vagrants #n wrenge and vt 00 hospitanie Yoet@tiete and practical heip. That obtiga- ‘Yon dees not Test on soclety In the abstract, nor even on govettimenta. Jt casts on in- dividual Americana. aA exosll but vital step was taken dy the United Sines Congress 2 years age, when * pamet 2 law emary of Bb 800 ‘Tike pear the lew was 8 dommetic epuieal of cur watty tn the camse of freedom. 320,000 ¢ii- movil foe vien the Sroeuigretate metactt ‘be Ontimstetel plant, or ac a priientanel warker, @apemnes on your willingness to aeteener thet Swo pears ago, even a year ago, there was ettne justified fear of smemploymest. Yo- @ay that pintere bes clamped, for the mead of mare and mare working ands hee fae- come great emi t growing more acute, Whatever the outcame in Korea, our coun- try will aememedily scostémue the program rearming on which it is launched. That's a good omen for the Ghemands seeking, and entitled under the law, to add their muscle power and thelr brain power to/our common American poul. The last excuse for not sponsoring them has ‘been removed. But I @o mvt want te mest tits plea for your cooperation merely on economic self- interest. The challenge ts to our every in- stinct «f Amerionn -devaecy «nd gportsman- ship and Christian charity. The neoessery sssurances are being aos ‘otestant, Catholic, Littuantem, Bhungertens, We must Koop faith with those who died that a better world might be barn. One im- Imetitate way to to this Is to open for sonre Victims of the war a sew bortwon of Bife aint hope in our blessed America, We shel tn-~ deel be urmertiey ef sur wehens we show the will to share them. Seaetery Acheson Cansinces a Marine That the United States las To Fight in Koren SXTENSION OF RAMARICS BGA. PAGL CT. JONES ‘or woraevnt IX TRE NOUSE OF REPRESENTATIVES ‘young & letier to hils father serfbed the state of confusion and drwe- APPENDIX TO THE CONGRESSIONAL RECORD tration az tise shonibas exial- ing in his own mind, which I think is typical of that in the minds of thou- sands of peapie who are honestly and sincerety asking, ‘Why are we tn Keren?” I think it is sigeiificant that, upon reading the letter of Seoretary of State Acheson, this young marine corporal, who had previousty written that he and h think so.” It is unfortunate, In my opinion, thet vur leaders have not taken the tevitie- Mr. peaker, I would three letters, te one fram the marine te dis fatiner, from the fadher to Mr. the “Undter the leave granted for the exten~ sion of my remarks, J am incuding eve- with the teetereen Seare- tary of State Acheson and Mfr, Mouhete, amistent ‘te the mayor of Camden, K. J. Str. Movkette bad avked Acheson to hetp hiten reply ‘to a letter be bad recetretl from his sm, Corp. John B Mouhette, TEMICR, Camp Cakf. The tollowing is the text of Sec- Acheson's letter, tapethear with Bér, Aivulbctte and ®, | . i i a {iy 3 rity i if Hy iH f | t j 4 if iH it rif if § ZH ey is tt #4 Hh au # ads git. vl ee je‘} qi) Wi THe He i i Hie lit At i
APPENDIX TO THE CONGRESSIONAL RECORD work, honesty, and fairness. To all of them opened the opportunity for happy and son. structive lives, their own homes and fami- lies, work to do, @ part to play in the come munity in a hundred ways. They saw no problems, here at home, that would not yield to effort, ingenuity, and the give-and- take of people who believe in the same right values. Now, just at the moment when they were about to enter fully as grown men in this world, its promise is dashed. In its place, they find hardship, loneliness, uncertainty, danger, They are separated from family and friends. Even worse, they are denied the natural development of their lives. The fact that this happens to them because some distant and shadowy figures in the Kremlin, controlling millions of people far from them, are setting out to make impose sible euch lives as they had evary right and hope to have, does not help their frustration and bitterness. This agony of spirit, so understandable and right, makes it hard to believe that so monstrous an evil can exist in a world based upon infinite mercy and justice. But the fact is that it does exist. The fact is that it twists and tortures all our Uves. And, I believe, to each of us in this case as in eo many others, the great thing is not what happens to us but how we bear what happens to us. For our country, and for most of us as individuals, the period which has passed since VE- and VJ-days has been one of cruel disappointment: slowly forming resolution, and, finally, great determination and effort. The high hopes, for which great sacrifices ‘were made during the war, did not come to ready fruition, That did not mean that these hopes—for peace, and for a good life for all—were wrang, or that the principles of freedom and justice on which they were based were not worthy of these sacrifices. ‘What it did mean was that it was going to be a good deal harder to build the kind of world we wanted, than we thought it was going to be. ‘We started out, even before the war had ended, building the foundation of the struc+ ture of peace, of law and order in the world, in the United Nations. We hoped that all nations would work together in bringing this about, We came very close to realizing this as- piration, An international organization has been started functioning, and in some Cases, it has performed extremely successfully. The role of the United Nations in the disputes in Palestine and in Indonesia suggest that, far from being discouraged, we should be heart- ened by the progress that has been made. However, as it became clear that the rulers of the Soviet Union not only were not in- terested in cooperating with us, but were challenging the survival of our free institu- tions, and the independence of all nations, we have been obliged to build up our strength again, all of us. In some ways, this is an ancient problem, Our forebears on this continent had !t cruelly impressed upon them that the Hberty we en- Joy is not won and preserved without unre- mitting effort, without sacrifice, without “eternal viglance.” But we had for so long enjoyed the blessings of freedom, that we had come to accept this condition as auto~- matically assured. It has fallen to us—-to your son's generation, and to ours—to take up again the defense of freedom against the challenge of tyranny. In other words, this isa new problem. Our country, which has risen to a position of unprecedented power and eminence in the ‘world, ts seeking to use that power in such » way ue to help bring about a peaceful inter- national order. This means that we have to be doing two things at once: While we move ahead in our efforts to build the kind pf a world in which we can all live together peace- fully and in common helpfulnes, we are at the same time protecting ourselves from be~ ing overrun by the tyranny which is run from Moscow. I have sometimes compared this two-pronged effort as being like the way our ancestors had to have some men drilling and keeping watch from the blockhouses, while others went on, tilling the flelds. In a sense, we are standing with one foot in the world of our hopes for a future order among nations, and the other foot in the world of power, Both of these are part of the present reality. Unless we are strong enough—we and the other free nations—to prevent the Soviet rulers from extending their control over the entire world, then we shall never have the chance to help build the kind of a world we all want. There are many terrible heartbrenks tn this course of action, but there is no easier way to a peaceful world. ‘Your son asks in his letter whether Korea proves anything. ‘That he is heartsick over the loss of life and the destruction in Korea is right and good, and refiects what must be the in- atinctively humane feelings of good men everywhere, But I hope he will come to see that Korea proves~has already proved— & great deal. In Korea, the men and the nations who love freedom and who believe in the United Nations have made it clear that they are willing to fight for these things. By standing firm against aggression 4n Korea, we are doing our best to prevent the world from following the road which led us, twice in recent times, to world war. The herole sacrifices which are now being made in Korea may enable the world to pass through this time of hostility and tension without the catastrophe, the greater destruc- tion, and the immeasurably greater sacrifices of a world conflict. I know that these thoughts I have written to you will not answer all the questions which you have touched on in your thought- ful letter, or which your son has mentioned. These are hard and complicated problems, for which there are no easy answers, and which a short letter could not deal with adequately, What I am concerned about is not that your son should feel that I, or the administration, or the Government is right on any particular issue. It is good that he should question whether the steps we are taking are right or are wrong. But what is important is that he feel, and that all our young people feel, a strong fatth in the validity and the reality of the ideals on which this country was founded and on which it now endeavors to guide its actions. So long as our young people are steadfast in this faith, we can be assured of the vitality of our society, and its ability to go on meeting the challenges of the future. Yours sincerely, Dean ACHESON, Campen City Crvi. Darensr Councr, Camden, N. J., January 19, 1951, Hon. Draw Acimson, Secretary of State, Washington, D. C. My Deag Sm: Enclosed, is a letter I re- cetved from my #on this morning on my arrival at my office. I am sending it to you, since it 1s a letter which reflects the loose thinking on the part of many of our legisla. tors and publishers—it is a letter filled with answerable questions, but questions which require much in knowledge, substantial qualifications which can and should be made understandable—eince the American pecple a8 a whole are a provincial lot. This lad of mine is 24 years old, a corporal fn the Marine Corps at Camp Pendleton, Calif. He served with the Firat Division from 1944 to August 1046, Last September, he was hoping to enter Cornell University to take bis courses in hotel management... In- stead, he went back in the Marine Corps, a Reserve, He was then, and I euspect now, - bitter about it all. It so happens that Jin September 1949 I warned him not to pub too muoh stock in his future, since I was positive we would be tnvolved somewhere in the world before another year was out. He, my wife and many of my friends made life miserable for me, since they said I was war- mongering, when I waa onty evaluating the news as i¢ was brought to me by 4 world preas. Thig lad has been raised in the traditions which have been prevalent in this country since colonial days, his schooling is that of the average public-school pupll, and he has had the advantage of booke, magazines, news~ papers from all over the world: he his trave tled widely for his age, working on tramp ateamers and tankers, and the United States is as his backyard at home, he knows it fram personal visits. The tenor of his letter about “foreign pol- icy" leaves me cold and my reply to him will be an explanation that foreign policy is al~ ways fluid, that it must be so and has been 80 since 1914 because of certain inescapable facts. I will explain that we are a gullible people, that we won (or helped win) two wars and lost both times the peace, because we regarded winning wars in the same manner ‘we regard winning a football match, I will tell him something of the different mores of various people, of their hatreds, their jJealousies. I will tell him that the broad policies of our foreign policy is laid down in the Constitution of the United States, in the convictions of our people, and their atti- tudes toward all peoples, all over the world, I will send hitn a copy of an address of mine, which he said was too deep for him to understand when he read it in ite formative stage. I will try to open his eyes to an understanding of the forces about him which are inimicable to the general good of our people, to the powers which can be wielded to destroy a man, no matter how sincere and true he has been. I will cite the case of Fore restal, of Hiss, of others who were earnest Americans of good understanding. I will in- dicate to him that the American people in their utter provincialism are tremendously jealous of their rights and prerogatives as free-born Americans, that they want the frults thereof, but detest its responsibilities; that there are many men to advance their own interests against the interests of the whole people, take advantage of the aitua+ tions brought about by the general mis- understanding which have been rostered by a press which is venal, What I am going to tell him of foreign policy will be my experiences in most of the countries of the world, where I have seen my own countrymen reflect the worst of their natures, since they were of the opin- jon that they were a race apart, I will tell him something of the spread of the common law throughout the world by the British, whom he had been taught by a venal press to despise, and it has heen hard to offset his distrust of the British even though he has close blood relatives in England, and more of them in Denmark and France. Mr, Secretary, I have written you a long letter about a letter, but, what actually was also a motivation was a telephone cell I re- ceived this morning from one of the prin» cipals of one of our high sohools. He related to me that his teachers absolutely refused to take civil defense seriously, that it was 3 tempest in @ teapot, and anyhow it was the figment of the administration's imagina- ' tion that caused all the furore—that we would never be bombed or otherwise at~ tacked, note the remarks of various Senators and en, and anyway, what was it you read in the press?
A1216 ''Z have had members of my own party dis- eount the sincere efforts of the President of the United States, simply because they wished in thet way to resist the necessity of tacing Up to a world that is becoming In- ereasingly more atavistic and reprehensible. Mr, Secretary, I have lived on every con- tinent, worked tn most of the countries of the world, or visited them, and I have & knowledge of 10 languages, none of them taught to me academieslty but which 2 have iearned because I needed them. I eee about me so many things which are left undone, which should be done, and I want more than anything else te wake my coun- trymen up to the necessity of realizing we are not Hving in a chocolste-coated world, but one that ie armed to the teeth againet us by and through ectuel armor or armed against us in propagating the belief that we have only a nickel under foot to motivate our activities. I know of personal knowledge that most of the peoples of the world heave a sneaking respect for us, that they like we fairly well tor ourselves alone, that they fear us far more than we fear them, but all of whom could be turned against us simpiy because they are jeslors of our way of life which we have earned for ourselves by hard work and ingentwity. I hope you will help me with this Jetter to my son. Sincerely yours, CLARENCE RB. Moviuerrs, Assistant to the Mayor. Jawvary 16, 195}. Deas : I fust finished reading from the Loe Angeles Etaminer the impeachmend resolution against Dean Acheson which was introduced into the California State Senate by State Senator Jack B. Tenney, Republi- can, from Los Angeles. I can't belp but think that the American people, Democrat aud Republican alike, are fed up with the ation and its foreign policy. The way Truman is appropriating money is outrageous, It ie my belief that he is tak- ing anyone’s word for it and spending money uselessly and - At present he is eeking Congresa for §$71,600,000,000 which would cost each American $468, Do you not think that our foreign policy is fouled up a bit? What right have we to Tefuse Red China entry inte the United Nations? I think she (Red China) has a right to voles her opinions about what is to take place in the Far Bast. After all, is she not a country out there just as Venesuela or Brazil js in our hemisphere? I say, “Let Red China into the UN and let her voice her vote and her opinions on what is to take Place in the Far East.” The needless waste of life im Koren, on both sides, is shameful to the human race, Fighting will not settle anything. The only that I can see is being proven in Koreas is: * Ht over what may be right," Red China being the might. Tha problem of Red China versus the world, or the beat part of it, haa to be settled at the round table and eventually {t will be. Hed China will be ad- mitted to the UN. 80 the UN will have lost the first round. We did better in the Boxer Rebellion. T thought that only Congress could de~- dlare war. Why doesn't Congress either de- clare war agsinat Red China or stop Truman from sending American troops throughout the world? Why should we take the brunt of it ali? If the other countries in the UN won't supply the needed men and money then we ahould pull out of Korea and if need be, out of the UN and adopt something eimilar to what Hoover suggests. The morale of the fighting man is very low. Mainly because the American people aren't behind him. Here at Pendleton most of these men know what war is or what. ita after-effects are and will he. Just last night st the “slopshute” (beer-hall) the men, nob one or two, but the majority, were complain- ing about the way we were tricked inte this, Everyone seems to have nothing but disfa~ vorable thoughts and remarks sbout the foreign policy. These men aren't afratd to fight, it’s just thet they bave no cause to fight. If ordered to, we will but onty because of the obligation we have to each other, I guess it's & form of “Brotherty Love.'* Our only hope ts that men our age throughout the world feel the same way and with state so to their leaders. By rebellion or other ways. After the loss of life, and property from the last wat, everyone should want only peace. I believe that the people of our level want only peace but that the leaders (including Truman) are afraid to admit they are wrong and are ashamed to admit it for fear they will lose face, It looks that way, Dad! I guess I've tired your eyes by now so I'll aecure for now. Good luck tn your defense Job. Love, JOHNNIE, P. &—I may be a rebel but thease are my own thoughts and convictions. Northwest Power Situation EXTENSION OF REMARKS HON. WARREN G. MAGNUSON OF WaSRINeTron IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr. MAGNUSON. Mr. President, I ask unanimous consent to have printed in the Appendix of the Rrcoap, a radio broadcast entitled “Northwest Power Situation,” delivered by Rudy Block over Station KOMO, Seattle, Wash., on Monday, February 19, 1951, There being no objection, the address ‘was ordered to be printed in the Rxcorp, as follows: Nogrmwezst Powrn SITvaTIon (Radio broadcast by Rudy Block) Bo great haa been the spontaneous and Organized pressure against Congress voting to spend ¢6,000,000 next year to link the electric power grids of California with the Bonneville Power Administration grid in Oregon and Washington that it appears certain the money will not be voted. Actually the only possibility of bullding the controversial tie-in would be if the Joint Chiefs of Staff of the Army, Navy, and Air Forea teil Congress that as a na- tional defense safeguard the power connec- tion between California and the Pacific Nosthweat ta vital. Tn the meantime Congress has been @wamped with letters and bers of commerce throughout the Pacifie Northwest, the public utility districe and private power companies are Hned up against the tie-in. Sven in the Department of Interior itecif the tie-in should take place and the reau of Reclamation and the Buresu of the Budget where the project was screened be- fore Preakdent Truman included % in the $'71,000,000,000 “gtand out as the only proponents at this time. When he was tn our Nation's Capitol last week to appear before the House Appropria- tions Committee regarding next year’s ape APPENDIX TO THE CONGRESSIONAL RECORD propriations for Bonneville Power Adminis» tration, Dr. Paul Raver, the Bonneville Ad- ministrater, said he saw little bope for Congress to O, EK. the tie-in item. As In the cose af all comtroversios between private aud public advocates the Administrator in the case of the in . Raver sald. “Por example, tf we have sur- plus Bonneville power and sold it in Call- fornia it would help preserve of] for national defense,” At the same time the Bonneville chief said he appreciated the position cf those on both the California and Pactile Northwest side of the proposed hook-up who fear the loss to their own industries which might arise if needed power were being sold to a far-away area. The power situation continues to be s hot topic these days and besides the tie-in con- troversy the power fight is raging over the sluminum program and aleo over the Wash- ington State squabble in connection with the proposed sale of the Water Power Co. and public-wtility districts. This latter fight has centered at the State legislature but its- Washington, D. C., angles include the decision lust week by the Se- ourtties Exchange Commission that field hearings in the State would be held before the Commission acts on the proposed deal, Another power controversy ts the matter of where the Aluminum Co. of America will locate anether aluminum production plant in the Pacifie Northwest. Privately Alcoa is apparently hoping that {t will set up its new plant near McNary Dam, but from re- oent conferences with Government power of- Acials tt became virtually certain that this Plant will be located at Wenatchee. Until Alcos signs its power contracts with Bonne- vile and the PUD, however, the deal is not set. In the meantime the town of Coulee Dam hopes it will get the Alcoa plant, but this appears to be a forlorn hope as Wen- atohee has the inaide track. Incidentally, once Wenatchee does get the Alcoa plent or any other new industry using Bonne-~ ville power, it will quiet a long-drawn come Plaint which see Wenatchee residents un- happy over the fact thet their city ts so near Grand Coulee Dam, but the big Bonne- ville transmission limes running through Wenatchee carry the dam’s power to distant places. The eastern newspapers have published lttie newa about the important power aitua- Hon, but last week Washington Representa- tive Huo Mircuet. attained widespread publicity when he made public his letter to Becretary of Interior Oscar Chapman charg- ing discrimination against the Pacific North- west by the Defense Blectric Power Admin- tetration. Mr. Mitchell's biast was aimed at a re-
APPENDIX TO THE CONGRESSIONAL RECORD sion of the aluminum industry in the Pacific Northweet. Looking at the situation impartially it ap- pears from the testimony before the Celler committee investigating monopoly in the aluminum industry that new aluminum plants can be built quickly in areas where coal or natural gas are available. It is also a fact that such planta are cheaper than a power dam and that they can be built near centers of industrial production which are not as close to Soviet Russia as is the Pacific Northwest, However, from s military standpoint, it ig certain that in this age of aviation and guided missites no part of the United States is out of reach of Russian air power, just as no part of Russia or Europe is out of reach of American air power. And economically, while the first phase of & new aluminum plant might be cheaper if gas engines are used the maintenance cost and the ultimate increase in gas or coal due to depletion of resources, would make these plants costly to our national defense. In other words the low cost of hydroelectric power makes this type af energy the most economical for aluminum production. Alcoa, the giant of the aluminum industry, apparetitly realizes this or it easily could be planning its new plant in some other area of the Nation. But the problem of Representative Mrr- curt, and other Pacific Northwest Members of Congress to sell thelr colleagues and Gove ernment agency heads on the fact that hydro- power is the best power for aluminum pro- duction is not an easy one. The South holds the key positions in the Eighty-second Congress and it is the South- west and Texas where natural gas is plentiful. Eastern coal mine operators are also slert to the situation and see in the alumi um de- fense stockpiling o potential outlet for coal via steam plant. Turning now to another phase of the power situation Congress ts faced with the question of how much money to appropriate for new authorized dams. These dams, such as Ice Harbor Dam, would be added to the Bonne- ville grid and help meet the growing demand for power throughout the Pacific Northwest. Secretary Chapman is also the head man when it comes to Interlor Department re- quests for funds for new dams, His friends within the department are not too happy over his getting dragged into the controversy over whether the Federal Power Commission should tesue a permit to the city of Tacoma for new dams on the Cowlitz River in the Btate of Washington. The Fish and Wildlife Gervice within the Department opposes theese dams as killers of fiah while city of Tacoma boosters for the dams are not satisfied over Secretary Chap- man's holding back on a strong appeal for the dams to be built. : Behind the scenes when the Cowlitz con- troversy was hot and heavy last year eug- gestion was made by some of Secretary Chapman's advisers that the Government should have approved the Cowlits dams and then pass the controversy to the Washington State Legislature. The legislature, it was admitted would probably block the dame to protect the fishing industry, but at least the Secretary iy Chapman and his Department. C. Gtrard Davidson, the former Assistant Secretary of Intertor, ts a factor in the power controversy. This time it ts not over My. Davidson's pet OVA project, but the over all power situation which involves the alu- minum picture we heve tried to describe, © As a consultant for the Intetlor Depart- ment Mr. Davidson has been ‘working on His report ts expected to offset the sur- veys which are the reported basis for the Defense Electric Power Administration atti- tude that the aluminum program in the Pacific Northwest shoukl be halted. Inci- dentally, it will include a recommendation that three steam plants be built in scattered areas to help firm up the power pool, Manpower nee EXTENSION OF REMARKS HON. WILLIAM BENTON Or ConMECTICUT IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr. BENTON. Mr. President, I ask unanimous consent to insert in the Ap- pendix of the Recorp the statement given this morning by Mr. 8. Abbot Smith be- fore a subcommittee of the Sma}l Busi- ness Committee. This subcommittee, of which I am chairman, was set up by Chairman Sparkman to develop a report on the manpower problems of smaller independent business. I knew Mr. Smith during the war as a fellow member of the Committee on Small Business of the Committee for Economic Development and after the war as a fellow trustee of the Committee for Economic Develop- ment. He is past president of the Smaller Business Association of New England. Mr, Smith is an outstanding representa- tive of independent business and I am sure My colleagues in Congress will agree that his statement of this morning shows he {s not only well informed on problems arising from the current crisis but that he presents intelligent and constructive suggestions. I commend in particular the point illustrated by the two small companies in Connecticut which are troubled not so much by present ills as by the uncertainty which clouds their future, Businessmen operate largely on their guesses about the future. Obvi- ously smaller independent businessmen cannot do an enterprising job when they live in dally fear they will be put out of business, their working capital will be Jost, and their years of effort in building @ business to @ profitable point will be sacrificed. Mr. Smith’s leadership deserves the thanks, not only of the New England business community, but of businessmen everywhere. There being no objection, the state- ment was ordered to be printed in the Recorp, as follows: Srarzuenr oy 8S. Aspor Surre Berort Tam Sececr Cownrrrex ow Satar, Busieess, Unrren Srarzs Senate Soscommrrrex Hear- mo on Manrows, Mr, Chairman and members of the com~ mittee, my name is 8. Abbot Smith. I am president of Thomas Stzahan Co., a small concern manufacturing five wallpaper in Chelsea, Mass., 8 past president anti ati] a @irector of the Smaller Busiziess Aspociation of New England. I wish to thank you, gentlemen, for the privilege of appearing hefore you today and at the same time tell you how gied we small- Dusineas men are that yott are holding this hearing now in time to sacertain the facts and then we hape to devise manpower poli- cies which will avoid the mistakes and un- necessary disruptions of the last war. As ‘We all know too well, many skilled men were suthiessly plucked from their businesses and put inte uniform with dire resuite to their businesses and the economy, but with Mitte advantage to the Army beyond adding an- other man because their special skills were so seldom fully utilized. Our armed services must have men, but we also must maintain a strong and expand- ing economy for that ls basically our most potent weapon against Russia. This period of tension may, probably will, go on for years. We cannot afford to stop expanding and growing now. , The strength of our economy Nea in ita being a system in which everyone can go into business or out at will, It is a sya tem which automatically screens out the ineMficient. The survivors go on and grow, some become big. It is a system which fur- nishes leaders for the country in all fielde. If all-out war comes, then we must have total mobilization of all resources, inchud- ing manpower, But that time hes not yet come, Today it is more important to keep small companies going than just to get another man to swell the numbers in uniform and perhaps only to pound a typewriter at some base which in most cases could probably be done more effictently by a WAC or a WAVE anyway. Yet in many cases the taking of just those one ar two men if they are key men or specialists will wreck or seriously in- jure a small company. That is what we must avoid until the emergency becomes really acute and there is no alternative. Although this situation may and does occur in some of the larger “small com- panies,” J am thinking now more particu- Jarly of the really amaller companies, those we'll say employing 100 or less which make up more than 90 percent of the businesses of the Nation. Take the many cases where veterans of the last war have gone into business for themselves. They are the key men in those little businesses. Isn’t it better for the country in the long run to let those men grow and expand, to prove their mettle, per haps be amongst our top leaders 20 years hence rather than to pull them back into the Army and wreck the business they started with their savings, kept going with their sweat? It takes years to train many of our specialists and skilled workers. They can't be replaced in 8 months or 6 months ex- cept by enticing a similar worker from some other employer. Where ts the gain there? This brings up the whole question of labor pirating, a sore subject with many small companies, but with too many ramifications to take up now. At this point let us consider for a moment how these key men are pulled out of their small companies. First there is the draft. Bo far the draft calls have not been heavy and draft boards have been lenient in granting deferments. From all Indications, however, it appears it will be a different story by next fall as present deferments expire and the services need more men. Becondly, there are the Reserves and the National Guard. Here we have to make a Gistinction 1b seema to me between the Volunteer Reserves and the officers of the Inactive Naval Reserve. Many officers signed up for the Volunteer and Organized Re- serves seeing an opportunity to make some easy Money, Thus you can say there is no reason why they should not be called when wanted no matter what they may be doing. They went into it with their eyes open and the employer who hired them did likewise, Nevertheless, I still say that we are being
A1218 ny-wiee and pound-foolish” if the call« 4g of such men now means «@ small bus!- meses must fold up, In the oase of navel officers there is a difference heoause they were not allowed ‘to resign, but had to stay in the Reserves. There is therefore still more reason for not ealling them at this time if they wish to continue in the small business where they are presently employed. Many people will say we are creating a tempest in a teapot, that we are crying hefare we are hurt. In one sense that is true. Up to this moment not many Key men have been called but I can tell you positively there are thousands of small con- cerns in New England who are scared to death as to what is going to happen to them a little tater when present deferments expire, when draft boards needing more men become less lenient, when more and more of the Reserves are called back. I know one small company started since the war which is just getting into its stride after tough sledding and now doing valuak's military work. The business is entirely de- pendent on two young men both naval offi- cers in the last wer and still in the Reserves because they can't get out. Presumably the importance of the work they are doing will keep them where they are. But who Knows? We saw queer things happen in the last war when highly skilled men were put in fields completely unreiated to their training. I checked with a small company in Con- necticut last week and tried to get one of the partners to come down here today, but they are tremendously busy and couldn't take the time off. One of their key execu- tives ts in the Naval Reserve, he was deferred but the case comes up again in May. Their foreman is in the Alr Forces Reserve. They are terribly worried for fear they will lose these two men. I know of another case in Massachusetts where the master mechanic, the “set-up” man in a small company, was in the Naval Reserve and was called last December. He got a deferment, but the appeal board has turned down a request for indefinite defer- ment and they don't know what they’ll do. There is another small company in New Haven, Conn,, where the executives are tear- ing thelr hair because they and the superin- tendent are all in the Naval Reserve. They have had no calls yet but don't know when the lightning may strike. That is another bad feature of this man- power situation—the uncertainty of it all, the lack of a clear policy which everyone can know and plan on, Any number of young men have come to our plant looking for a job. In spite of the need for men, no one will hire them for they are elther of draft age or in the Reserves, Consequently, no one wants to hire them, spend time and money breaking them in, and then lose them just when they are becoming worth some- thing in the job. Over the radio the other morning I heard the announcement that Pratt & Whitney in Hartford is going to want 11,000 more work- ers this spring. That high lights another reason for letting the small companies keep thelr men—to avoid so far as possible the awful congestion we saw during the last war in the defense centers, Surely tt is ever so much better from every point of view to subcontract the work to the greatest extent possible to the small con- cerns in smaller towns where the workmen can live at home, where housing is already adequate and more housing does not have to be built, consuming additional critical labor and materials, where schools and pub- ie utilities are already available, rather than to close those small plants and force the men to move to already congested areas or at best spend unnecessary hours commut- ing long distances, Some of you may have seen in the February fesue of the American Machinist a ‘report on the speech made January 81 in New York by Herbert F. Jahn, president of the National Tool and Die Manufacturers Association, in which he sald that the Nation’s 3,000 con- tract shops are losing men to the armed services, and thus imperiling the rearmament effort through Selective Service Board failure to recognize that the supply of such crafts- men is short, about the same as 1941, and that it takes a long time to train them. This crisis has arigen in part, he said, because local draft board officials have sole power to decide if skilled workers shall be inducted. There is no single national office to which plants can appeal for release from further depletion of their vital manpower. When discussing this subject of manpower we usually think of manufacturing, but to my mind key men of small wholesalers, re- tailers, or service industries are Just as im- portant. They serve a local need or they wouldn't exist. Even though the business in question is not listed amongst the essen- tial industries I still think that until the emergency is more acute it is better for our economy in the long run to leave key men running those businesses, keeping our free- enterprise system alive and dynamic. Many will have to close anyway but insofar as possible we should avoid the wholesale clos- ings which took place during the last war when hundreds of thousands of small busi- nesses closed their doors, when the big be« came bigger and the small fewer. Please do not misunderstand me, the na- tlonal defense comes first, before every other consideration. Individuals and groups of individuals must be willing to make what- ever sacrifices may be necessary for the good of our country as a whole. I firmly believe they are and will be willing to make those sacrifices if they are told clearly and con- cisely what must be done and why. The armed services must have the number of men our experts decide is necessary. The only question is how can that number be obtained with the least damage to our over- all economy. This means considering the individuals themselves and the occupations from which they are taken. My personal feeling is that the draft should be lowered to 18, Those boys make good soldiers and after all they will be 19 before they get their full training. Having no established place in industry their draft- ing does less harm to thetr own future and to industry than does taking older men who have definitely started their careers, who in many cases have family obligations and who have already made a place for themselves in their businesses. One of the major differences between large and small business is that large business has many men in each department and over- lapping in their functions, while in small businesa there is usually only one man per- forming each function, if indeed the one man does not perform several functions, Take one or several men from the large bual- ness, there are others ready to cover up, but if one of these key men ig taken from small Dpusinesa it leaves a hole which cannot be filed and frequentiy means the disintegra- tion of the business. To suzn up, we need & clear national policy on manpower needs and the plane for filling those needs so that the individuals con- cerned both of draft age and in the Reserves and business know what to expect and can make definite plans accordingly. There must be provisions specifying that skilled workers needed for defense work will not be taken for the armed services uniess it ia certain their skills will be of greater use to the country in the armed services ‘than where now located and assuring that once inducted those skills are utilized to the APPENDIX TO THE CONGRESSIONAL RECORD full rather than not used at all as we saw happen all too often in the last war. There should be a definite policy imple- mented by draft boards and the armed serv~ ieea that short of all-out war key men are not to be taken from small businesses whether listed as essential to defense or not. At this point they are essential to our over- all economy and future growth. Income-Tax Exemptions for Members of the Armed Forces EXTENSION OF REMARKS HON. HERBERT H. LEHMAN OF NEW TORK IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legislative day of Monday, January 29), 1951 Mr, LEHMAN, Mr. President, I ask unanimous consent to have printed in the Appendix of the Recory an editorial published in the February 24 issue of the Army-Navy-Alr Force Journal. This publication, which has for so long dedi- cated itself to the interests of the Armed Forces of the Nation, makes some very cogent observations on S, 891, a bill which I and four other Senators intro- duced 2 weeks ago to grant special in- eome-tax exemptions for all members of the Armed Forces, There being no objection, the editorial was ordered to be printed in the Recorp, as follows: AuL-Service Income-Tax EXEMPTIONS Senator Herbert H. Lauman (Democrat- Labor, New York), acting for himself and a& group of both Republican and Democratic Senators, is sponsoring legislation to apply & special income-tax exemption for all serv- ice personnel to replace the present military deductions confined to those serving in the Korean combat zone, Senator Lraman would allow a special personal deduction of $600 a year to all commissioned and en- listed personnel with an additional #100 ex- emption for each dependent in addition to the spouse. This basic figure is only one- half of that allowed to service personnel dur- ing World War II and should be increased to at least that figure. However, the prin- ciple of special military exemptions is well founded and amply justified. Already the tax laws provide extra personal deductions for persons over 65 years of age and for blind persons, thus reaognizing the need for special exemptions to cover special conditions. Certainly the unsettled Mfe of service per- sonnel justifies special income-tax relief, Families are uprooted and moved from time to time. Additional expenses are incurred in educating children. Uniforms and equip- ment cost more than civilian clothing. Ownership and operation of a private car ig almost a necessity on most poste where distances from quarters to duty are great and where many live far from the post itself. The Senate Finance Committee and the House Ways and Means Committee should study this situation carefully. We feel that the facts not only will justify the principle advocated in Senator LetMan's bill but will show the need for a more substantial basic military deduction. Special compensation for the men actually tn the fighting zones can be handled better through the estab- Ushment of a system of combat pay such as that recommended by the Department and
APPENDIX TO THE CONGRESSIONAL RECORD now awaiting consideration by the congres- stonal coumnttbons. Both the over-all mili- tary income-tez deduction and ¢he hamard pay for service in combat gones should be permanent legislation. . Communism in the United States C cmmmmeaneened EXTENSION OF REMARKS HON. HUGH BUTLER OF MEBRABKA IN THE SENATE OP THE UNITED STATES Tuesday, March 6 (legtslative day of Monday, January 29), 1951 M:-. BUTLER of Nebraska. Mr. Presi- dent, I ask unanimous consent to have printed in the Appendix of the Recorp an article by William Fulton entiiled “Capitalist Money Helps Reds Carry Out Socialist Schemes,” published in the Washington Times-Herald on Sunday, March 4, 1951. There being no objection, the article was ordered to be printed in the Recoxp, as follows: Carrratrsy Monry Heirs Repos Carry Ovr Soctatzer Scrrsmes—Hrms or Eanty Mr.- LIOWAINES PLAY Roves as ANGELS ron MANY Lzrt-Wino Grovurs (By William Fulton) New Yorn, March 3.—One of the strangest developments of the drive to saddle com- munism on the United States is the recruit. ment of millionaires whose fathers or grand. fathers made their fortunes in a free, demo- cratic, capitalist soolety. Moat of these hybrid offapring operate here in New York where the atmosphere of “forelgniem” and “internationalism” suite them. Ever since the Bolshevik revolution, the Reds have cultivated idle men and women with money in this town. PLATTERED BY PINKOS Red organizers prey on the frustration these cafo society characters feel because they haven't achieved the fame of thelr an- cestorsa. They have been made to feel tm- portant by flattering offices in Red-front organizations, by betng hailed as “Iberals,” espousing causes of “social significance,” or “freedom,” or “democracy,” amzing names to petitions on behalf of Stalinold characters and numerous other tricks through which the Communist underworld carries on its propaganda. Pioneer patriarch of the Pinko flock {s Corlies Lamont. son the late Thomas W. La- mont, multimillionatre partner in the John Pierpont Morgan banking firm. Corliss, former chairman of Priends of the Soviet Union, boasts 46 separate citations for affitia~ tion with Red-frout set-ups in Appendix 9 of the reports of the spectal House Com- mittee on Un-American Activities. y Lamont, after preparing at exclusive Exeter Academy and being indoctri- nated at Harvard University, has been de- scribed as “the upper clase near-intelleatual driven perversely to assert himself by an ex- tremist past.” DEFEATED NREMLIN Lamont conducted affatre of Friends of the Shortly before the outhreak of World War TY, Lamont sponsored a lettver ng the Soviet Union on every count. js epistie, for which Lamont garnered 400 signatures, denied the “fantastic falsehood” that Rus- sia could have anything m common with Germany and onlled those who spread such & report “Fascists and thelr allies” out “to prevent a united aggresaton front,” Then came the Hitler-Stalin nonaggres- sion pact which opened the door for the invasion of Poland, Lamont allowed his Friends of the Soviet Union to disband without public announcement but he con- tinued personally to hew strictly to the Moa. cow line. REPRESENTS RED INTERESTH Paralieting the Lamont career ts that of Prederick Vanderbilt Field, mit!lionsire rep- resentative of Red Chine interests in this country, He refused to answer questions of congressional committees investigating Com~ munist activities and has been charged with contempt. Field is the great-grandson of Commodore Cornelius Vanderbilt, wealthiest financier and raflroad of his time. He ts the son of Mr. and Mrs. William Osgood Field, who are now dead, and grandson of Mr. and Mrs, William Douglas Sloane. The great-grandson of the doughty com- modore attended fashionable Hotchkiss tory School and then went to Har- vard. He also studied at the London School of Economica where he soaked up socialism at the feet of the late Prof. Harold Lask!. Field took out his Red card in the Socialist Party in 1828. Before the Second World War he bobbed into prominence as executive secretary of the American Peace Mobtflisa- tion, This Red-facade organization was con- atatently antiwar during the Hfe of the Boviet-Nazi pact but switched over after Hitler attacked Russia. Louls Budenzg, ex-Communist edttor, told the Senate that Field was a member of the American Communist politburo from 19386 on and was assigned to infiltrate the Ineti- tute of Pacific Relations. Meld became chairman of the board and Owen Lattimore, also accused by Budenz as a Communist agent, was editor of the institute's maga- gine, Pacific Affairs. Last fall Fleld registered as a foreign agent representing Red China financial interests. MARSHALL YIELD FORTUNE USED Another old fortune which has been poured into the left-wing propaganda stream in this country {8 that founded by Marshall Pield, the Chicago department store king. His grandean, Marshall Field 3d, suddenly faced to the left in the 1930's and became a votary of the Roosevelt administration. Educated at Eton and Cambridge in Eng- land, Field had gained prominence as an international playboy, racing stableman, grower of fancy fiowers, and host at fash- fonable grouse shoots. For an unrevesled reason Field went to Dr. Gregory F. Zilboorg, ® New York psychiatrist of Rusetean birth, for examinstion. From that time on Field sharply switched his course. He sinking several milifons in this venture he started the Sun in Chicago, it te said, at the behest of the late President Roosevelt. This paper also Sopped and was merged with the Another piece of the old J. P. Morgan Dpanking fortune is also finding ite way into the New Republic, which is etlited by the radical Michael Straight. The real ange! is his mother, Mrs. Leonard Eimhirst of Lon« don, widow of the late Morgan partner, Wil- tara . Bre. Rimihiret has. bankrolied the pinkish Mew Repubite to the tune of sev- eral milion dollars. A1219 Millions are aleo being funneled into Com- munist and left-wing drives vie the dig foundations, One of the meet notorions ia of Bamuel Untermoyer, left $1,584,000 in 1989 fer the cause of trade~ ‘unioniem, civil Hberties, and preservation of wildlife, DEFENDED RExINOTON Recentty the Marshall money went Into the defense of William W. , Com- merce Department economist convicted of perjury tn connection with spy-ring actiyi- ties. Other Marshall money has been con- tributed toward the Rev. L. M. Birkhead's Friends of Democracy, well-known smear outfit of patriotic Americans and organize- tions. Trustees of the Marshall Civil Liberties Trust include Roger Baldwin, who has been fdentified with organizations deemed sub- versive by the Government; Edwin 8. 6mitth, former member of the National Lebor Reia- tions Board and inter executive director of the National Council for American-Soviet Friendship; John F. Pinerty, lawyer for nu- merous pinko causes; Gardner Jackson, Roosevelt intimate and once chairman of the Council for Pan-American Democratio Union which ts on the Department of Justice list as subversive, and James Marshall, brother of the late Robert and member of the New York City Board of Education. Ed Allen’s Fireside Thoughts EXTENSION OF REMARKS HON. WILLIAM LANGER OF WORTH DAKOTA IN THE SENATE OF THE UNITED STATES Tuesday, March 6 (legtslative day of Monday, January 29), 1951 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Reconp an article entitled “Ed Al- len’s Fireside Thoughts.” There being no objection, the article ‘was ordered to be printed in the Recorp, as follows: Ko ALLEN’s Prreivn THOUGHTS Within the past few weeks I have had occasion to travel from coast to coast, visit- ing with many people along the way, Every- where I went, the people I talked to seemed to have one thing 1n common: fear. Of course, I do not say that my experience re- veals a true cross-section of the American frame of mind, but never in the darkest days following Pearl Harbor was I as con~ scious of such a Jack of confidence in our destiny as I find now. These fears were expressed In many ways: fear for the livea and future of ow sons and daughters; fear for the destruction of our economy; fear for a greater loss of our freedoms. In fact, fear for the lose of the American way of life, with alt that it tm- plies. It seoms strange to me that I have found little concern of the stomic bomb or, in fact, of Communist aggression. Since I have but little apace, I have tried to boll my tmpressions down to my aise and have come to the conclusion that these misgivings and fears have their origin tn the failure of our Government in its dealings with other nations. There is widespread Year of what our Government will commit the American people to next. % appears to me that people are afraid of Government, afraid of the wotid leaders
A120 Who ‘have, in one way of another, come into . he ‘position of domination over the lives and the acta of the great majority of the people of the earth, Today, it would appear that any one of several world leaders can wake up on the wrong side of the bed and, with a single gesture, set millions of people at each others throats. Recall] that but a few short days before the “police action” in Koreas, the American people were assured that Korea was considered indefensible and hot within our defense perimeter. What happened? ‘Did someone get up on the wrong side of the bed? So far as I know, neither the American people nor Congress have been given any explanation for the change in attitude. Is it possible that we have so degenerated into statism that we are not entitled to know? In one way or another, {t's certain that we have been pushed, led, frightened and driven into a national emergency of un- precedented gravity, calling for the drafting of our 18-year-old children, controls of wages, production, and texes until they hurt. Yet, strangely, there is no mention of vote- buying handouts here at home or the elimi- nation of tax-free spending money of Gov- ernment officials or, as a matter of fact, any real assurance that the new powers and money cannot be used so as to promote greater tragedies in the future. As I see it, our greatest and brightest bope is that the new Congress will rise to unprecedented heights of statesmanship, that it will possess the foresight, the wisdom, the judgment, the unselfishness, and the courage to lead this Nation back to the prin- ciples upon which it was founded, to a posi- tion where its citizens may look forward to e@ach tomorrow as we have in the past with dignity and confidence. It can be accom- Plished if the new Congress will lead the way. In Fairness to Government Employees ee EXTENSION OF REMARKS HON. HORACE SEELY-BROWN, JR. OF CONNECTICUT IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr, SEELY-BROWN. Mr. Speaker, under unanimous consent, I insert in the Recorp an article from the Wash- ington Evening Star of March 5, 1951, by Joseph Young. Mr, Young, a ataff member of the Washington Evening Star, is a recog- nized specialist on news concerning Gov- ernment employees, and his column, the Federal Spotlight, is widely read. It is pointed out by the columnist that the Civil Service Commission is plan- ning a crackdown on inefficient and wasteful personnel practices. This ac- tion, Mr. Speaker, is one that is long overdue, not only because big govern- ment has become one.of the most ex- pensive items in the tax bills which bears so heavily upon everyone of us, but Particularly because the faithty) and dil- igent Government employee frequently has been ‘placed at a disadvantage, and has had no alternative but to acquiesce silently in the vontinuarice of job prac- tices which would not be tolerated in private employment, ‘ The article is as follows: Tre Feopra, SPOTLIGHT (By Joseph Young) RAMSFECK PLANS TO CRACK DOWN ON WASTEFUL FERSONNEL POLICY A crackdown on inefficient and wasteful personne! practices wherever they are found in Government is planned by the Civil Serv- ice Commission under the leadership of Rob- ert Ramspeck. Mr. Ramspeck, who is expected to be con~- firmed soon as Commission Chairman, feels very strongly about the necessity of the Com- mission taking the leadership in seeing to it that the Government utilizes its own man- power to its fullest ability. Mr. Ramapeck tells friends that's one of the main reasons he resigned his $25,000 Air Transport Association job to take the $16,000-a-year Commission chairmanship, He feels that the full utilization of man- power is one of the Government's gravest problems and one particularly urgent right now in the national emergency, For many years, the Commission has hesi- tated to tell agencies how to run their per- sonnel operations, feeling that it did not have the necessary legislative or executive authority to do so. However, Mr. Ramspeck and Budget Bu- reau Officials feel that the Commission does have the authority and should take the lead in this field. Consequently, Commission investigators will probe the personnel operations of the various agencies to see if wasteful and in- efficient practices exist. Any such practices will be brought to the agencies’ attention, with an order to get.their house in order. If this ts not done, the Commission will report the condition to the Budget Bureau for ap- propriate action, and also to the proper com~ mittees in Congress. . This marks a radical departure from past Government personnel policy and conceiv- ably could lead to large economies and much greater efficiency in personnel operations. Veterans Subjected to Fraud EXTENSION OF REMARKS HON. J. CALEB BOGGS OF DELAWARE IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr. BOGGS of Delaware. Mr. Speake er, under leave to extend my remarks in the Recorn, I include an editorial en- titled “Veterans Subjected to Fraud,” published in the Washington Post, and reprinted as 4 public service by the In- ternational Latex Corp., of Dover, Del., in the New York Times of January 31, By pointing up an issue which is of such public importance as whether vet- erans are receiving adequate medical care in the veterans’ hospitals, the In- ternational Latex Corp. is rendering a distinguished public service. In order to understand a controversy of this kind, it is important that the public.be in- formed of the facts and of the different viewpoints about the controversy, The editorial follows: Varseaws Susyecrep ro Frayn The only consoling thing about the de- parture of Dr, Pawl B. Magnuson from his post as medical director of the Veterans’ Ad- APPENDIX TO THE CONGRESSIONAL RECORD ministration is that the reasons have been frankly stated. Dr. Magnuson refused to enter into the usual interchange of sweet nothings; instead, he asserts that he was fired—~and fired ag the result of a long-con~ tinued squabble with Veterans’ Administra~ tor Gray over whether doctors or politically inspired meddiers were to run medical serv~- ices for veterans. This candor from Dr, Mag- nuson at least gives the country a chance to see what is happening. From our standpoint it is unmitigated tragedy, notwithstanding the amiability and good intentions of Dr. Magnuson's successor, Vice Adm. Joel T. Boone. More than any other man, Dr. Magnuson is responsible for building Veterans’ Administration medical care from a fourth-rate, bureaucracy-ridden service to the best service available any- where, He has done this by earning the re- spect, cooperation and active participation of the medical profession. He has insisted on locating hospitals near medical schools, thus enabling veterans to enjoy the services of the best civilian doctors. He has resisted every effort by Members of Congress and others to determine hospital sites by consid- erations of patronage. A brilliant Chicago orthopedic surgeon and teacher, Dr. Magnuson has been singularly dedicated to the public service. A measure of this dedication is that he stuck to his job and refused point blank to resign despite a round of heckling, interference, and tndig- nity that would have discouraged most men. When Gen. Omar N. Bradley and Maj. Gen, Paul R. Hawley in 1945 undertook the her- oulean task of modernizing the VA to serve 15,000,000 new veterans, Dr. Magnuson was especially chosen to enlist the interest of the medical profession, He had the full sup- port of these two anchors of independence and succeeded to General Hawley’s job as medical director when the latter left in 1948, Even before General Bradley returned to the Army, however, he and his associates knew that they were fighting a losing battle. They had put too much faith in the loyalty of the top people they had inherited in thé VA—people who quietly bided their time in order to sabotage reforms, It was this group that never accepted the apparently novel concept that medical men should be allowed to run hospitals. The support which Dr. Magnuson enjoyed from Generals Bradley and Hawley has been conspicuously lacking from the present Ad- ministrator, Maj. Gen. Carl R. Gray, dr. Perhaps the most charitable thing that can be said about General Gray's performance 1s that he has tried to run the Veterans’ Ad- ministration as he used to run the Chicago & North Western Railway. He has allowed himself to become the prisoner of the VA old guard, he has deferred ostentatiously to congressional whims, and he has declined to go to bat for the doctors against unwarranted cutbacks in the quality and extent of med- ical care. - Basically the trouble is that General Gray and the men around him never have under- stood the requirement for independence of Medical direction. Dr. Magnuson has been further and further insulated fram the top by an army of assistant directors, and Gen- eral Gray has refused to make hospitals re- sponsible to the medical director. The crowning blow was the appointment of a three-man board for the selection of hospi- tal managers about which Dr. Magnuson ‘was not even consulted. Concurrently, of course, political influence in the location of hospitals has been seeping in again. This record makes the Gray explanation ehildish—that he acted on a previous resig- nation submitted by Dr. Magnuson. The tact is that Dr. Magnuson consistently re~ fused to compromise the welfare of his pa- t'mnte and never ‘ceased to fight the reingil- tration of red tape. For these reasons he
APPENDIX TO THE CONGRESSIONAL RECORD was ousted. The Administration and Mem- bers of Congress who have been justly proud of the VA medical record need to take a good look at the deterioration that has set in; perhaps a reawakening of interest will Admiral Boone the humilation that Dr. Magnuson has undergone. Dr. Magnuson’s indefatigable drive and salient personality will be a loss not only to official Washington but to the entire country. Most especially it will be a loss to the veterans. They have been outrageously defrauded. (Presented as a public service by International Latex Corp., Dover, Del.) Address cf Hon. Miles F. McDonald, Dis- trict Attorney, Kings County, N. Y. EXTENSION OF REMARKS HON. EMANUEL CELLER OF NEW YORE IN THE HOUSE OF REPRESENTATIVES Monday, February 26, 1951 Mr. CELLER. Mr. Speaker, under leave to extend my remarks, I include the following address by the Honorable Miles F, McDonald, district attorney of Kings County, N. Y., made before the Notre Dame Law Association luncheon on January 26, 1951: I am grateful to you far this opportunity of talking to you on a subject which I belleve ig of vital importance, not only to the tndl- vidual safety of the citizens of our country but also to the very existence of our country as a nation. Bills have already been introduced in the House of Representatives under H. R, 406 by Congressman Warmer and H.R. 470 by Con gressman Keartwa and H. R. 1947 by Con- gressman CELLER to accomplish the purpose which I suggest and I earnestly hope that you will give the matter your careful considera~ tion and, if you believe these bilis to be in the interest of your country, that you express your views to your Representatives in Oon=- gress. Fifty percent of my professional life has been devoted to public prosecution: I have been an assistant district attorney in the second most populous county tn the coun- try; I have been United States attorney in. charge of one of the busiest Federal districts in the country; and, for § years, I have been the district attorney of Kings County, which 46 more usually described as Brooklyn. In these years I have watched the ever- in-reasing power of the criminal combina- tion, the gangster and the racketeer. I have seen the power of the subversive forces work against our country—and I have come face to face with the insidious propa~ ganda machine that has been built up to foster legislation that will make it easier for these viclous forces to avoid just punieh- ment for their crimes. I have heard the cry of civil rights from lips of those who would destroy the very Constitution that guarantees these rights. This great shield of personal liberty has become fn largé measure the velvet glove that masks the iron fist of the dictator. While this insidious attack 1s made upon our people and our way of life, the honest men, the foyal Americans have stood silent- ly by unable to fight because they knew not where to begin. Today I want to show you a starting I want to encourage you to forge @ weapon with which the law enforcement of the United States can arm themselyes in your defense—-a weapon that we are denying to ouraelves at the cost of our own lives and Uberties. AL of you have read in the public press of the arrest and trial and conviction of Judith Coplin. Those who followed the trial carefully are aware of the various rulings made by the trial judge co evidence obtained by the interception of telephonic communica- ions. : Al of you must have been shocked that the appellate court found it necessary to reverse the conviction partially because the Government did not prove that its investiga- tion had not secured leads by the intercep- tion of telephone conversations. Despite the fact that the court held the defendant was clearly guilty of the crime charged, Judge Hand, in writing the opinion of the court, said: “For all the foregoing reasons, the convic- tion must be reversed; but we will not dis- mise the indictment, for the guilt is plain, and it is posstble on another trial that there may be more evidence of the likelihood of an escape; that the prosecution may decide to divulge the contents of the ‘taps’; and that the examination as to the confiden- tial informant may go fer enough to show that he was not a wire-tapper.” Some of you may be familiar with the work I have been doing in fighting organ- ized gambling and police corruption in the city of New York. If you are, you will know that our in« vestigation was largely successful because the law of New York permitted us to tap wires and that, during our supervision of the wires, the various subterfuges used by the gamblers and police to hide their cor- rupt agreements came to light. When you compare the relative impor- tance of my field of work with the impor- tance of the preservation of our country againet its enemies from within, you will see why I am of the firm opinion that we Americans must wake up and protect our~ selves if we are to survive. Let me make my position on this sub- ject quite clear. Iam not here to defend nor do I candone unlawful wire tapping by anyone and that includes public offictals, both State and Pederal. I do not propose nor do I urge that any Government sgency—State or Federal—or any law-enforcement office—police or Dis- trict Attorney—should have unlimited power to intercept the telephonic communications of others. I contend with the utmost sincerity—and I hope with equal logic and vigor-—that the right to intercept telephone communica- tions in certain cases is a vital necessity to Jaw enforcement and that, without such a right, the forces of law and order would be at such 8 disadvantage in the war against crime, subversion, sabotage and treason, that the peace and security, the property and the Hives of the individual citisens and the ex- istence of our country as a free Nation, could not be insured, My position on this question perhaps can be best stated in the words of former At- torney General Robert H. Jackson, now a Justice of the United States Supreme Court, when he stated in his report for the fiscal year ending June 30, 1940; “Wire tapping presents a problem of proper balance and aice adjustment as between adj ta. Let us go back through the years and try to determine the evils thet the drafters af our constitution sought to combat by their Pepe bition against uniswful and 80: ea. Azer I those days, when the Red Coats rapped their sabers onthe doors of the sleeping Wi+ lagers of Concord and Lexington, they ecught to punish wrongs allegediy scammitted against the Crown itself, not crimes against the life or property of the citizens of the Commonwealth. Further, the crimes they alleged dealt with the proprietary interest of the Crown itself. - In this I belleve will be found the historical basis for existence of the Federul rule. The majority of Federal crimes are crimes against the proprietary interests of the Gov- ernment iteelf, such as cases involving taxes and allied matters. There are but few crimes under Federal law which directly affect the welfare of the Indie vidual citizen, or life of the Nation. In the former class of cases—-cases involve ing the proprietary interest of the Govern- ment, I will agree that wire tapping might ‘well be prohibited or at least so carefully oircumecribed as to make {ts use impractical except in the most serious cases, cases in« volving large criminal combinations and the purveyors of illicit druge who, by their ac- tivities, imperil the health and iife of their victims. . On the other hand, in cases where the safety of the cifisens of the Nation.ie the prime concern, where tho very life and exist- ence of the Nation is at stake, the right to intercept telephone communications must exist. To act otherwise is sheerest folly. I firm- ly believe that treason, sabotage, espionage, and seditious conspiracy are such crimes. Remember, 99-8/10 percent of the people of the United States never engage in unlawful acts of this nature and need have no fear of any law that permits wire tapping for the purpose of securing evidence of crimes of that nature. By the same token, the stnall percentage of people who seek to destroy our country are attempting to create a statutory protection for their nefarious acts as a means of de- stroying the Government behind whose laws they seek to hide. The laws prohibiting unlawful search and seizure are based primarily upon the laws of fair play. But we are not engaged in a game, the Communists and Russians and their satel- lites are not going to fight according to any rule. They will take any dishonest advantage available to them. To combat them without the privilege cf wire tapping is like putting Joe Louis in the ring to fight Gargantua and insisting that Joe follow the Marquis of Queensbury rules, Would you propose a statute that would provide that any person attacked by a rabid dog must not defend himself with any weapon stronger than a fly swatter? Of course not, but that is what you seek to do when you tie the hands of the De- partment of Justice and the Army and Navy in cases of treason, sabotage, and espionage. Of course, we want to defend the rights of the citizen against his Government but, to do that, we must defend the existence of this Government as a democracy or we will have no rights left to defend. I am not aware of the provisions in the law in many of our States with regard to this matter but I can sey that if you do not permit your law enforcement agencies to avail themeelves of wire-tep evidence, you will never successfully overcome organized crime, In cases arising within the sovereign States am even more liberal rule should be estab- lished for the vast majority of the crimes ‘under State law are crimes against the in- dividual citisens. The prosecution is avenging not the State but the outrage perpetrated on the life and property of the law-abiding citizen of the community.