1950 reestablish the two-thirds rule that the Democratic Party eliminated some years ago. In other words, they can have the veto power over the Democratic candi- date. The northern Democrats are supposed to be happy with the innovation be- cause it would mean, of course, that the smaller States 1n the South, voting over- whelmingly for one party, would more than counterbalance in influence the northern States, with the result there would be no Republican elected Presi- dent for a good many years to come. Mr. EROWN of Ohio. Mr. Speaker, will the gentleman yield? Mr MARTIN of Massachusetts. I yield to the gentleman from Ohio. Mr. BROWN of Ohio. It works out, based on the iast two elections, that as far as Ohio is concerned 1t would have about four-tenths of one electoral vote while Mississippi would have 90 times as much influence in the electoral college as Ohio, and Mississippi alone would offset the votes of six large north- ern States—Ohio, Indiana, Illinois, Mich- igan, Minnesota, and New Jersey Mr. RANKIN. Mr. Speaker, will the gentleman yield? Mr. MARTIN of Massachusetts. I cannot yield at this time Mr RANKIN. After all that confu- sion, I would like to correct the gentle- man. Mr MARTIN of Massachusetts. I do not yield. The liberals will profit by this resolu- tion, so it is claimed, because 1t would encourage the development of so-called splinter parties with the result that we might have an election where no one would have a majority of the votes. This would destroy the two-party system of Government. It would be the first step toward proportional representation and easier to dnft into state socialism. The Republicans are told that they will win more Presidential elections in the future because by some shght of hand, some legerdemain, numerous Re- publican votes will appear overnight in the South and will be counted propor- tionately under the proposed electoral system. Verily, this is a political Pandora's box—if you can believe all that 1s claimed for it. Just how all these righly con- tradictory things can happen by adopt- ing this amendment I fail to see. Laying aside the merits or demerits of this proposed amendment for a mo- ment, I would like to discuss the method by which we are considering this meas- ure. For years this great legislative body of which we are Members has been under constant fire for alleged lack of thorough- ness in its operations, alleged lack of statesmanship in its deliberation, and alleged lack of knowledge of what it was doing. The critics of Congress have laid down their barrage of criticism in the hope of destroying legislative government in this country, Now what are we doing today? Under suspension of the rule with only 20 min- utes of debate on each side, with only e total of 40 minutes in all, we are at- tempting to amend the greatest political instrument in the world—the Constitu- tion of the United States, a document CONGRESSIONAL RECORD—HOUSE that has only been amended 21 times in the 163 years of its existence and then only after the most serious deliberations, extensive debate, and years of public dis- cussion, And why do we propose to amend it? The answer is that we are going to change, to completely revamp, to dras- tically alter the entire election machinery by which we have successfully filled the highest office in this land for 163 years. And this House has been asked to do this in 40 minutes. I say to you that if we take this far- reaching step today, with only 2 or 3 days’ notice and with the outrageous limit of 40 minutes.on deliberations and debate, we will have done more to under- mine the integrity and respect of this Congress than anything that has ever been said, uttered, or written by the So- cialists, Communists, and other enemies of representative government My pride in the House and loyalty to representative government cannot permit me to believe we will act so hastily. I would vote against this suspension if for no other reason than the contemp- tuous fashion in which it has been brought before the House. In my 26 years of service I never saw the right of suspension used to amend the Constitu- tion of the United States. In my remaining few minutes I want to, giscuss this propésed amendment it- se I want to address my remarks to Re- publicans, to northern Democrats, and to southern Democrats alike. I want you to weigh the effect of what you are doing to this country if you adopt this amendment. This amendment proposes that we abolish the existing electoral college sys- tem and substitute for it a proportional counting of the votes cast for the Presi- dent. First. By the very wording of this pro- posed amendment it would noi only be possible but highly probable that in the near future we would have Presidents occupying the White House who had been elected by a minority of the total popu- Jar vote. This amendment, by virtue of a provision which requires the winning candidate to receive at least 45 percent of the popular vote, is implicit in its implications that majority elections will eventually almost disappear. As this proposed system is constituted the electoral votes now cast by the great States of Massachusetts, New York, Pennsylvania, Ohio, Tilinois, Michigan, New Jersey, Minnesota, Wisconsin, Cali- fornia, and others with comparable pop- ulations, and with the two-party system fully in effect, would be virtually neu- tralized. For example, the great State of Ohio, which would retain its 25 elec- toral votes under this proposal, would in reality actually lose approximately half of them. Let us see how it would work. A plu- rality of 100,000 or 150,000 votes is con- sidered large in Ohio where the Repub- lican and Democratic Parties are almost equally balanced. Now let us suppose that the Republicans carried Ohio by 125,000 votes. Under the amendment the Republicans would get approximately 13 of Ohio's electoral votes and the Demo- 10425 crats 12, and Ohio would cast one elec- toral vote for the President. In the South where the two-party sys- tem is all but nonexistent, the effect would be exactly the opposite. A State like Alabama would in all probability cast all 11 of its electorial votes for one candidate, or at the best 10 of them. Thus Ohio with a population of 8,000,- 000 would cast one electoral vote, while Alabama with a population of about 2,800,000 would cast 10 or 11 electoral votes. This example can be carried out almost across the entire North. It has been cal- culated that had this system been in effect President McKinley, although he had a majority of the popular vote, would actually have lost to William Jennings Bryan, the Democratic nominee, because the southern vote under the amendment would have far outweighed, few as they were, the heavy pluralities piled up by McKinley in the North. The truth is that under this proposed amendment the election of our Pres- {dents in the future, at least until there is a vigorous two-party system in the South, will be decided in the South and solely in the South. I would like to ask the Members of this House, and particularly those from the Northern States, how they can go home and say that with only 40 minutes of deliberation, they changed the method of electing the President of the United States. To the southern Members of this House I want to say this tf there is merit in this proposed amendment, its merit {s completely de- stroyed by the existence of the one-party system in the South, If the South really is sincere in its support of this amend- ment. it must realize that it has the cart before the horse It must realize that tle proposal could have a place only ina two-party political structure. We must just organize a two-party system in the South to maintain equal representation. I do not hold to any fetish and belief that the existing electoral college cannot be improved. In fact, I will welcome the day, and I hope it comes soon, when by virtue of the operation of the two-party system in every one of our 48 States, we shall be able to consider a more enlight- ened and a more workable method of electing the President of the United States. But do not today in a 40-minute ses- sion without the opportunity of any real debate cast the die that could lead to the loss of our two-party system of govern- ment. Our two-party system has pre- served the essential balance in our rep- resentative form of government so neces- sary to the freedom, dignity and happi- ness of every single American. It must be preserved. You can help preserve it by voting against the suspension of the rules. Mr. Speaker, I believe this amendment would make it impossible for the election of a Republican President for a good many years. I want to say to those who claim this is a part of the Republican platform that I had the privilege of be- ing permanent chairman of the last Re- publican National Convention. I know what was in that platform. We never
10426 said we favored this particular bill. We said we would amend the electoral college in order to make it more responsive to the popular vote of the Nation. That was the Republican pledge, and we who believe in keeping our party pledge can vote against this resolution today in good faith. If its purpose is to amend the electoral college system, I say bring in the legislation in the right way and not under suspension of the rules where we cannot dot an “1” or cross a “t” The SPEAKER. The time of the gen- tleman from Massachusetts has expired. Mr. GOSSETT. Mr. Speaker, I yield such time as he may desire to the gentle- man from New York [Mr. CELLER]. Mr. CELLER. Mr. Speaker, I say to the gentleman from Massachusetts who has just addressed the House that the Committee on the Judiciary tried to get a rule from the Committee on Rules. We have been struggling with that committee for months in order to per- suade them to grant a rule, but they were adamant and refused to give us a rule so that we could debate this most momentous question leisurely, unhur- riedly, and adequately. Mr. MARTIN of Massachusetts. Mr. Speaker, if the gentleman will yield, now you are going to ask the House to do it when you could not get a rule. Mr. CELLER. What choice was left to us? Mr. CASE of New Jersey. There were about five other choices, including the 21- day rule. Mr. GOSSETT. Mr. Speaker, I yield such time as he may desire to the gentle- man from Georgia |Mr. Cox]. Mr. COX. Mr. Speaker, in fairness to the Committee on Rules, I think it ought to be said that the understanding within the committee has been to the ef- fect that whenever the supporters of this proposal reached the conclusion that it would be felt safe to submit this ques- tion to the House for action, that the panmittes would grant a rule on the Mr. GOSSETT. Mr. Speaker, I yield 1 minute to the gentleman from Missis- sippt (Mr. Ranxr]. Mr. RANKIN. Mr. Speaker, of course, I am opposed to this resolution. The country is not suffering because of the Constitution; that is not what is wrong with it. It is suffering more from the lack of applying the Constitution. I wish I had time to comment on the statements that have been made in this debate; but my time is very limited. I believe the gentleman from New Jersey (Mr. Case] arrived at the right conclu- sion, but he gave more wrong reasons for it than any other man I ever heard speak the same length of time on this floor; and the gentleman from Ohio (Mr. Brown] went far afield in his ref- erence to Mississippi. The South would not profit by the pas- sage of this resolution; and I douht if it would be approved by the legislature of a single Southern State when they understood it. It would only tend to bring about confusion; and would prob- ably result in such political chaos and demoralization as the South went through during the dark days of Re- construction. CONGRESSIONAL RECORD—HOUSE As I said, we are getting along very well so far as the Constitution of the United States is concerned. Let us try to get back to the Constitution, and not get any further away from it, or try to change it every time some fellow imag- ines he has a bright idea, and wants to try something new. This provision of the Constitution, rel- ative to the electoral college, was worked out and adopted by the wisest group of statesmen the world has ever known. It has been accepted by our predecessors for more than 160 years. To change it now by the adoption of this amendment might result in chaos and confusion, the lack of which we have not seen during your lifetime and mite. I hope the resolution is voted down. The SPEAKER. The time of the gen- tleman from Mississippi has expired. Mr. GOSSETT. Mr. Speaker, I yield such time as he may desire to the gen- tleman from South Carolina [Mr. Bryson]. Mr. BRYSON. Mr. Speaker, after thorough study, I find myself in accord with Senate Joint Resolution 2 as pre- seuted to the Senate by the Republican Senator Lopce, of Massachusetts, and House Resolution 2 as now pending be- fore the House, having been introduced by my colleague, Representative Ep Gos- sEtT, Democrat from Texas. I sincerely hope that the House..will soon pass on this all-important question so as to give the States the opportunity to indicate their wishes. One of the most interesting institu- tions of American Government is our much-discussed electoral college. Even though there are many citizens who are not sufficiently dissatisfied with its op- eration to support its abolition or even the fundamental reform of its structure and functions, yet there is today a strong belief, both in and out of the Congress, that this extraordinary method of choosing our Chief Executive is far from satisfactory. The strongest evidence of the attitude of the Congress and the public has been offered during this ses- sion by the passage by the Senate of the proposed constitutional amendment— Senate Joint Resolution 2—and by the strong popular approval of this action. We now have this resolution before us, and it is my firm helief that we will be strengthening our form of government and carrying out the wishes of the peo- ple of the country if we act favorably upon it before we adjourn. Too much of the discussion concern- ing the resolution has gotten away from the one real question which we must an- swer: Does the proposal offer assurance that a better method of electing a Pres- ident and a Vice President will be insti- tuted? All other questions—even though some of them raise important issues— are secondary. The effects on the two major parties, the effects on potential candidates in the 1962 election, the shifts in power between the various sec- tions of the country, the changes in influence of conservative and liberal ele- ments within each of the major parties, the potential creation of splinter parties holding balances of power which they do not possess under the present electoral college system, these. and other aues- JULY 17 tions, are being discussed at great length. In fact, they are distracting our attention from the main issue and I wish to draw debate in the Congress back to it. We need to consider only the one point: does the proposed amendment promise a better method of electing a President than our present unsatisfactory process? The American Presidency is an office with peculiar characteristics. It is an interesting coincidence that the two most powerful single officers in the two great democracies, the United States and England, are chosen indirectly. In both cases, however, the direct influence of the voter is closer in fact than it appears to be in the constitutional provisions for the choice of the Chief Executive. A short time ago England held an elec- tion. Atlee and Churchill ran as can-~ didates for seats in the Parliament repre- senting single member districts, as you and I do. Yet, it was no secret to any voter in any constituency that he was actually choosing between two parties, headed respectively by Atlee and Church- ill, even though he expressed that choice only by voting for a member of one of the two parties running for the seat in Parliament representing the voter’s own constituency. Thus a vote for a Labor Party candidate in any district was po- tentially influential in making Atlee the Prime Minister; a vote for a Conserva- tive candidate worked in the direction of giving that office to Churchill. The American system of choosing a President is also indirect in theory. We vote for lists of electors nominated by the political parties in the several States, but we do this to express a choice be- tween party candidates for the Presi- dency. How many voters there may be who understand their own action, no one knows. How many times have you heard @ campaign speaker plead with voters to cast their ballots for Republi- can or Democratic electors? All the speeches I ever heard asked for votes for Roosevelt or Truman or Dewey or Landon or some other candidate. I know that voters believe that they are voting for these persons as, in fact, they are. This very extraordinary process, re- ferred to as “the myth of the electoral college,” has no place in the American system of government. You know the story of its origin in the fears of the authors of the Constitution that the peo- ple could not be trusted to act directly in their choice of a national chief execu- tive. That those fears were groundless has been demonstrated by our history. If we were to draft a new constitution for a Twentieth Century United States there is no doubt in my mind that we would provide for some form of direct election for president. Why would we continue the use of a process which is so difficult for citizens to understand? Why confuse voters unnecessarily when it is already far too much for most of them to understand the operations of our complex government, the policies of our several] political parties, and numer- ous candidates for office? The burden of proof falls upon the advocates of a formality such as the present constitu- tional provision for election of the Presi- dent. Uniess thev can demonstrate that
1950 it 1s not a mere formality, but that it has life and is effective in operation, we should not continue to complicate the situation to no purpose. But the present electoral college meth- od of electing the President is not merely obsolete and confusing to voters. In my thinking on this problem, there is a far more important reason for adopting the proposed amendment now before us. The Democratic philosophy has no place in it for the winners-take-all method of determining the electoral college of a State. We claim to believe that minority parties and groups, although they may be outvoted on a particular measure, have the right to recognition. Yet not a single Democratic vote in Maine and not a single Republican vote in Mis- sissippi is counted for the Demrocratic or the Republican presidential candidate at the present time. Even worse is the loss of the great minorities—sometimes Republican, sometimes Democratic—in such “close” States as New York and Ohio and California. It is very easy to correct this fault and the new amendment does it by the well-established method of giving pro- portional weight to the majority and mi- nority voters. If we really believe in what we repeat so emphatically and so frequently—that the two-party system is an essential part of our form of govern- ment—we cannot logically support any practice which tends to weaken that sys- tem. Both of our great parties claim to be “national” parties, not urban or rural, not northern or southern. Yet this per- sistent discouragement of the minority party in the several States operates pow- erfully toward the establishment of re- gional parties, and we have known this for a long time. An important byproduct of this sit- uation is lack of voter interest and par- ticipation in States which have been com- pletely controlled by one party Over a considerable period of time. Why should a Maine Democrat bother to vote? Is it surprising that in most Southern States relatively few members of either party vote in the general election? After the southern Democrat has helped to nomi- nate the presidential candidate of his party through his selection of delegates to the Democratic nominating conven- tion, he knows that the majority of voters in his State will vote for the Dem- ocratic candidate and that its entire elec- toral vote will be cast for that candi- date. The Republican Party member in a Southern State has little incentive to participate in a presidential election. ‘We have all witnessed the tremendous interest of voters of both parties in Siates where party strength is closely balanced, and the presidential campaigns are addressed almost entirely to voters in those States. There can be no defense of this situation and the certainty that it would be improved under the new amendment is one of the strongest ar- guments in its favor. The Senate, through a bipartisan vote, has expressed approval of Senate Joint Resolution 2. Comment throughout the country is running strongly in ita favor. If the House also takes affirmative action, the proposal will go to the people of the several States as they are represented in CONGRESSIONAL RECORD—HOUSE their legislatures. Whether or not ac- ceptance by the necessary three-fourths of the State legislatures can be obtained to make the amendment effective in 1952 is uncertain, but we are not concerned with a single election. Our vote now in the House should be based on the wider considerations which I have stated as being my own reasons for urging its adoption. Each of us must weigh the measure to determine whether or not it is more democratic in fact and in theory than our present method, and whether it will strengthen our two-party political system. If we conclude that these de- Sirable ends will be furthered—and I do not see how any other conelusion can be reached—then it fellows without doubt that we will have greatly improved our process of choosing a President. In the long run such a contribution to our in- stitutions of Government must inevitably benefit not only the individual voter, but also the parties themselves, and the en- tire Government. The American Presi- dency is of such fundamental importance that to strengthen and improve it can only produce beneficial results of a wide- spread character. Mr. GOSSETT. Mr. Speaker, I yield such time as he may desire to the gen- tleman from Ohio [Mr. McSwWreney], Mr. McSWEENEY. Myr. Speaker, I feel that I truthfully can say that my voting record of the:five terms which I have served in the Congress of the United States would show that I have not been sectional in my attitude toward national problems However, I must oppose the Lodge-Gossett bill which pro- poses an amendment to the Federal Con- stitution which would change’ the method by which the President of the United States is to be elected. I do so for a few-——to me—basic rea- sons. In the first place I am for a direct election of the President. I want every voting citizen to have his or her vote properly recorded directly for the person whom each citizen may choose. This would abolish the electoral college which was set up in our Constitution by that wise, patient, patriotic, and for- ward-looking group of men who drafted our Constitution. However, the Lodge- Gossett bill does not really abolish the electoral college, we still stand in the shadow of it. We still have the ghost of it. In other words this bill provides for each person to be able to vote for the President but his State vote is still reported on a proportional basis. Here is where I temporarily become sectional. I want to protect the basic interest of my own State of Ohio. We of Ohio have been generous. We have helped with national highway programs; we support reclamation programs for other States, and a really unfair share of the burden of such programs fall upon a State like Ohio which pays a tremendous tax through its corporations and personal incomes, but we should not be asked to give up our rights on a basis of population. May I illustrate. Let us take the election of 1048. If the Lodge-Gossett plan were in opera- tion during that election Ohio would have just a fraction of one electoral vote. Let us assume that President Truman had carried Ohio by 10,000 votes, and 10427 that the total vote had beeh 8,000,000, These figures minimize rather than exaggerate the actual situation. The re- sult can be shown by the following equa. tion: $,000,000—the total vote—is to 10,000, the President’s majority, as 25— the number of Ohio's electoral college— is to z, 3,000,000z will equal 250,000, thus x will equal one-twelfth. So Ohio would in reality have one-twelfth of 1 electoral vote. Since the vote cannot be divided it would mean that Ohio had 1 electoral vote. In the 1948 election it figures the same for New York State, Illinois, Cali- fornia, and other large States. I can pick five large States whose total electoral vote would have been 6, while Mississipp! alone would have 9 votes. Is this repre- sentative democracy? Our Constitution provides the finest balance of power among its component geographical divisions which we call States of any other confederation or fed- eration which has ever existed. We give to our States proportional representation on the basis of population in our lower house of our bicameral legislature, and equal representation, or two senators each, in the upper house or senate. What could be more fair. The Lodge-Gossett proposal would upset this time-honored balance, No matter as important as a proposed amendment to the Federal Constitution should be considered lightly. It is too serious, However, for this very impor- tant matter only 40 minutes was per- mitted for discussion. I hope that the people of our Sixteenth District and of the State of Ohio generally will feel as I do on this important matter and will approve my voting against it. Mr. GOSSETT. Mr. Speaker, let me say in conclusion, in submitting this to the States it takes the votes of three- fourths of them before {t can become a part of the Constitution. We simply give them the right to pass on this mat- ter. I wish I had time to refer to the many eminent persons who have writ- ten in support of this resolution. The House should follow the example of the Senate and vote to submit this funda- mentally important reform to the States. The SPEAKER. The time of the gen- tleman from Texas has expired. Mr. FULTON. Mr. Speaker, a parlia- mentary inquiry. The SPEAKER, state it. Mr. FULTON. Under a motion to sus- pend the rules it is not possible to amend the resolution in any way, is it? The SPEAKER. It is not. The question is, Will the House sus- pend the rules and pass the Joint reso- lution? The question was taken; and on a di- vision (demanded by Mr. Gossgrr) there were—ayes 79, noes 141, Mr. GOSSETT. Mr. Speaker, I de- mand the yeas and nays. The yeas and nays were ordered. The question was taken; and there were—yeas 134, nays 210, not voting 86, as follows: The gentleman will [Roll No. 204} YEAS—134 4 Beckworth see? Pacer Bennett, Pia. rt Barden Andorson, Calif. Battle Bennett, Mich.
Hagen Hays, Ark. Abbitt Addonizio Alien, Calif, CONGRESSIONAL RECORD—HOUSE Hoerlong Potter Herter Poulson Hobbs Preston Hoeven Priest Hoffman, Mich. Rains Hope Ramey Horan Redden. Bull Reed, I. Jacobs Rees Jensen Richards Jones, Ala. Robeson, Jones, Mo. Rogers, Fla. Jones, N. O. Scrivner Judd Scudder Kerr Sikes Kruse Smathers Lanham Bmith, Kans. Larcade Smith, Va LeCompte Smith, Wis. Lodge Steed Lucas Stefan McMillan, 5 CC. m c: je ‘eague Mahon Thomas Marsalis Thornberry Underwood Martin, Iowa Velde Merrow Walter Michener Wheeler Miles White, Calif. Miller, Nebr. Whittington Morris ick Morton Williams Moulder Wilson, Okla. Murdock Wiison, Murray, Wis,  W. Nixon Withrow Norblad Wolverton ‘cod Patten Young Peterson Zablocki Poage NAYS—210 Fiood McGregor McGutre Forand McKinnon Fult n Mack, Il} on . ¥urceolo Mack, Wash. Gamble Macy Garmats Madden Gavin Magee Golden Mansfield Goodwin Marcantonio Gorski Martin, Granahan Mason Granger er Green Miller, Calif. Hale Mills Hall, w Multer . Murphy Halleck Nicholson Hand Noland Harden Norrell Hardy O’Brien, Il. Barrison O'Brien, Mich, Hart O'Hara, Minn. Harvey O'Konski Havenner O'Neill Hays, Ohio O'Sullivan Heffernan e Heller Patterson ton eifer, Hoillfiela Joseph L. Holmes hin Howell Phillipe, Calif. Huber Plumiley Jackson, Wash, Polk dames Powell Javits Price Jenison Rabaut Jenkins Rankin Karst Reed, N.Y. Earsten Rhodes Kean Rivdicoff Kearney Bich Keating Rie =) oe Pe Rodino Kelly, N. ¥ Rooney Keogh Roceevelt Ei Bt Get ing George Slein Kunkel Lane Soott, Hardie Latham t, LeFevre Hugh D., J. Lind crest Linehan er XL <a snelMy McDonough @hort McGrath Simpeon, Wi, Bimpeon, Pa. Tollefson Whitaker Bmith,Obio Trimble Whitten Staggers Van Zandt Widnall Stanley Vinson Wier Stigler Vorys Stockman Vursell Wilson, Ind. Sullivan Wadsworth foicott Button ‘Wegner Woodhouse Taber Walsh Woodruz Tauriello Weichal Yates Taylor Werdel NOT VOTING—66 Allen, Ti. Gordon Monroney Allen, La. Gore Morgan. Andrews Gregory Morrizon, Al 1 Hall, Murray, Tenn, Edwin Arthur Nelson Barrett, Wyo. sy Norton Biemiller Harris O'Hara, M1, Biackney Hébert Passman Boggs, La. Hedrick “ Patman Boykin mil 4 Perkins Breen. Hinshaw Pteiffer, Brooks Hoffman, 1, Bulwinkle Irving Phillips, Tenn. Carroll Jackson, Calif. Pickett Case,8.Dak. Je! Quinn Cavalcante Johnson Regan Chatham Jonas Rivera Christopher Kearns Babath Cole, Kans, Keefe Sadowski le, N.Y, Kennedy Sasecer Comba Kilday Sime Cooper Kirwan Spence Davis, Tenn Lichtenwalter Tackett Davia, Wis Lovre Thompeon Dingell Mocarthy Welch iy Engel, Mich. McConnell Wante, Idaho Frazier MoMillen, D1, ig Gillette Miller, Md. Gilmer Mitchell So (two-thirds nof having voted in favor thereof) the bill was rejected. The Clerk announced the following pairs: Mr, Mitchell with Mr. McConnell. Mr. Dawson with Mr. Kearns, Mr. O'Hara of Illinois with Mr, Lichten- walter. Mr. Sabath with Mr. Gillette. Mr. Biemiller with Mir. Towe. Mr. Hébert with Mr. Jonas. Mr. Breen with Mr. William L. Pfetffer. Mr. Carroll with Mr. Miller of Maryland. Mr. Regan with Mr. Allen of Illinois. Mra. Norton with Mr, Barrett of Wyoming. Mr. Irving with Mr. Cole of New York. Mr. Sadowski with Mr. Hoffman of Illtnots. Mr. Hedrick with Mr. Lovre. Mr. Cavalcante with Mr, Angell, Mr. Frazier with Mr. Cole of Kansas. Mr, Morrison with Mr. Davis of Wisconsin. Mr, Welch with Mr. Engel of Michigan. na Thompson with Mr. Edwin Arthur Ail, Mr. Sasscer with Mr. Jackson of California. Mr, Gregory with Mr. Hill. Mr. Harris with Mr. Jennings. Mr. Gordon with Mr. Johnson. Mr. Gilmer with Mr. Phillips of Tennessee. Mr, Tackett with Mr. Blackney. Mr, Andrews with Mr. McMillen of Dlinois. Mr. Boggs of Louisiana with Mr. Hinshaw. Mr. Cooper with Mr. Case of South Dakota. My. Passman with Mr. Keefe. Mr. Gross changed his vote from “nay” to “yea,” The result of the vote was announced as above recorded. A motion to reconsider was laid on the table, EXTENSION OF REMARKS Mr. MASON asked and was given per- mission to extend his remarks and in- clude an editorial. Mr, SMITH of Wisconsin asked and was given permission to extend his re- marks in three instances and include extraneous matter, Jury 17 Mr. BYRNES of Wisconsin asked and was given permission to extend his re- marks and include an editorial, Mr. RICH asked and was given per- miasion to extend his remarks and in- clude an editorial from the Washington Times-Herald. Mr, HUGH D. BCOTT, JR., asked and was given permission to extend hia re- marks in two instances and include ex- traneous matter. Mr. DAGUE asked and was given per- mission to extend his remarks and in- clude an editorial which appeared in the Datly Republican of Phoenixville, Pa. Mr. GAVIN asked and was given per- mission to extend his remarks and in- clude a newspaper story from the Wash- ington Evening Star. Mr. H. CARL ANDERSEN asked and was given permission to extend his re- marks and include an address delivered by Mr. Alan C. McIntosh, of Luverne, Minn., at the rededication ceremony at Plymouth Rock, Mass. Mr. LANE asked and was given per- mission to extend his remarks in two instances and include extraneous mat- ter in each. Mr. LYNCH asked and was given per- mission to extend his remarks and in- clude a@ letter from a constituent. Mr. WOOD asked and was given per- mission to extend his remarks and in- clude an address delivered by Mr. Charles A. Collier, vice president of the Georgia Power Co., before the National Citizens Conference on Planning for City, State, and Nation, recently held in the city of Washington, Mr, WHITAKER asked and was given permission to extend his remarks and include a resolution of a tobacco associa- tion in his district. Mr, ALBERT asked and was given permission to extend his remarks and include an address by R. W. Frasier, pro- fessor of government and history of the Southeastern State College, Durant, Okla. Mr. SECREST asked and was given permission to extend his remarks and include an editorial from the Cambridge (Ohio) Daily Jeffersonian. Mr. HUBER, asked and was given per- mission to extend his remarks and in- clude two editorials, Mr. PLUMLEY asked and was given permission to extend his remarks in two instances and include extraneous matter in each. Mrs. ROGERS of Massachusetts asked and was given permission to extend her remarks and include an article by Paul Kennedy appearing in the Boston Herald of yesterday. Mrs, ST. GEORGE asked and was giv- en permission to extend her remarks in four instances and include in each an article by Mr. Frank C. Waldrop. Mr, BENNETT of Michigan asked and was given permission to extend his re- marks, Mr. D'EWART asked and was given permission to extend his remarks. Mr. GOODWIN asked and was given permission to extend his remarks in two instances. Wy, HESELTON asked and was given permist:on to extend his remarks and in-
1950 chide a statement made by him before the Committee on Appropriations, to- gether with some additional statistics. Mr, MEYER asked and was given per- mission to extend his remarks, Mr. CANPIELD asked and was given permission to extend his remarks and in- clude some newspaper comments on ci- vilian defense, . PUBLIC HEALTH SERVICE ACT Mr. PRIEST. Mr. Speaker, I ask unan- imous consent to take from the Speaker's table the bill (S. 2591) to amend the Public Health Service Act to support re- search and training in arthritis and rheumatism, multiple sclerosis, cerebral palsy, epilepsy and blindness, and other diseases, and for other purposes, with House amendments thereto, insist on the amendments of the House and ask for a conference with the Senate. The SPEAKER. Is there objection to the request of the gentleman from Ten- nessee? [After a pause.) The Chair hears none and appoints the following conferees: Messrs. Priest, BYEMILLER, Wrson of Oklahoma, Wo.verron, and Huon D. Scott, Jr. COPPER IMPORT-TAX SUSPENSION Mr. DOUGHTON. Mr. Speaker, I move to suspend the rules and pass the resolution (H. J. Res. 502) to suspend certain import taxes on copper. The Clerk read as follows: Resolved, ete., That the import taz imposed under section 3426 of the Internal Revenue Code shal] not apply with respect to articles (other than copper sulfate and other than composition metal provided for in paragraph 1667 of the Tariff Act of 1930, as amended, which is suitable both in its composition and shape, without further refining or al- loying, for processing tnto castings, not in- cluding as castings ingots or similar cast forms) entered for consumption or with- drawn from warehouse for consumption dur- ing the period beginning July 1, 1950, and ending with the close of June 90, 1961, The SPEAKER. Is a second de- manded? Mr. WOODRUFF. Mr. Speaker, I de- mand a second. Mr. DOUGHTON. Mr. Speaker, I ask unanimous consent that a second be con~ sidered as ordered. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. Mr. DOUGHTON. Mr. Speaker, House Joint Resolution 502 would extend for another year, or until June 30, 1951, the import tax on copper. The import tax of 4 cents per pound on copper was passed in 1932, and then under a recipro- cal trade agreement was reduced 60 per- cent, to 2 cents per pound. Our com- mittee held two full days of hearings on this bill, We heard representatives of five de- partments of Government: The Depart- ment of Defense, the Department of State, the Treasury Department, the Department of the Interior, and the De- partment of Commerce. They all rec- ommended the extension of this exemp- tion of the import tax on copper for 2 years, but this bill provides for an ex- tension of only 1 year, from June 30 of this year until June 30, 1951. XOVI-—657 CONGRESSIONAL RECORD—HOUSE The testimony before our committee, in my opinion, proved conclusively not only the importance, but the necessity, for the extension of the suspension of this tax for another year. According to the testimony, which I believe was not disputed, the domestic supply of copper is only about 74 percent of the domestic demand. The Committee on Ways and Means heard, as I said, not only the heads of these Departments, but we heard the domestic producers, we heard Members of Congress, and those engaged or in- terested in the industrial use of copper. The testimony, I repeat, indicated clear- ly that the domestic supply is not equal to the domestic demand, and even with what imports are coming in now, still the supply is hardly equal to or adequate to meet the demand. There is nothing in the evidence to indicate that the price of copper would be seriously affected or that the supply would exceed the de- mand, if the suspension of the import tax is continued. The testimony showed that the price of copper has gone up during the time this import tax has been suspended, until it is now, with one ex- ception, the highest it has ever been. The price has increased from 16 cents a pound in 1949 to the present price of 22% cents per pound. This shows that the price of copper has not been serious- ly or adversely affected by the suspension of this import tax. I know of no reason why, and, in fact, no reason was assigned which satisfied our committee, this extension should not be granted. The domestic supply for the present year is estimated to be 300,000 tons short of the domestic demand. You can all readily understand that, owing to the foreign situation, with which you are all famiilar, the demand for copper is go- ing to increase rather than decrease. Not only will there be a demand by the com- mercial consumers of copper, which is constantly on the increase, but the Gov- ernment itself will be in the market for increased amounts of copper to meet the foreign situation. Nevertheless, our committee wanted to go slow on the matter. We did not want to extend this act for 2 years, as was first proposed, and in order to be careful and not do anything seriously to affect or lower the price of the domestic copper or interfere with full production of domestic copper, in which we are all interested, we agreed that it should be ex- tended only 1 year. Copper mining is now at a high level of production. The price is high. When the price of any commodity is high, that of course stimu- lates production. If the price is low, it has the effect of decreasing production. Taking everything into consideration, as our committee did, we felt that the extension of the suspension of this tax for 1 year, or until June 380, 1951, is es- sential, if the domestic consumers are to have an adequate supply. Of course, the Government needs must be supplied. At the same time, we feel certain there is nothing in the situation to cause any alarm or uneasiness on the part of do- mestic consumers as to the price of copper, because the supply is so much Jess than the demand for copper. It is reasonable to assums that the price will ‘10429 not be seriously affected by a reduction in demand in the near future. We must remember that the import tax on copper was suspended in the Eightieth Congress on account of the supply not filling the demand, and this suspension was continued during the first session of this Congress until June 30, 1960. There is greater reason now why this suspension should be extended an- other year than there was either when Congress suspended it in the Eightieth Congress, or continued the suspension in the first session of the Eighty-first Con- gress. For these reasons among others, Mr. Speaker, I hope the House will vote over- whelmingly to approve this House joint resolution. Mr. WOODRUFF. Mr. Speaker, I yield 5 minutes to the gentleman from Iowa [Mr. Martin]. Mr. MARTIN of Iowa. Mr. Speaker, this is quite a serious issue in the matter of our national defense. I am opposed to the suspension of these import taxes because of the adverse effect it will have on the health of our mining industry in this country. I cannot subscribe to the argument just made that the price of copper has recently increased from 16 cents to 22% cents, and that that should take care of the situation, when from April 1, 1949, to July 1, 1949, the price of copper was pushed down from 23% cents to 16 cents and then back up again dur- ing the past 13 months. Therefore, it has not been a matter of the lifting up of the price of copper from 16 cents, but it was a temporary and manipulated de- pression in the price. It is my contention that the suspen- sion of this excise tax will have a dev- astating effect on the production of cop- per by those mines that are marginal mines which cannot produce copper ad- vantageously on a depressed market and in competition with foreign imporis. My only hope is that I can be of some help in building a healthy, vigorous do- mestic mining industry because no pro- ponent of this suspension has yet been able to assure me that any part of the larger imports will be stockpiled by in- dustry for use in an emergency, The present price of copper, the present situ- ation, the for finished industrial products is such that it is little wonder that the industrial reserves of copper in this country at the present time is at the lowest level that it has ever been since 1944. That is a terrible thing to contemplate. That is the effect of this suspension, which has been in operation Guring the last 2 or 3 years, and with the wave of hysteria and war buying which is now going on, a further depres- sion of our copper reserves will be even more devastating. There is not one proponent of this suspension of the copper tariff who can assure you that one pound of copper can be delivered to ws from foreign mines efter the shoot- ing starts in any future war. I say, tf you have got your mind on national defense at all, you will do one of two things: Either build up an adequate stockpile industrially, or provide for a healthy local mine production of copper, because you cannot promise us that you can import foreign copper in wartime,
10430 not against the snorkle submarine. That is my position on this matter, and I am very much opposed to the suspen- sion of the copper tariff. The proponents of this legislation are of three general classes. One class is made up of industrialists who need copper for their industrial pro- duction. Obviously they want cheap raw materials for their factories. A second class is made up of large do- mestic producers of copper who have foreign mines also. These mine inter- ests want the tariff removed on their for- eign production in order to help them as much as possible in their competition with other domestic producers. The third class of proponents of this legislation is the State Department of our National Government. Their inter- est is the promotion of maximum foreign trade, and they obviously look to free trade as a means to build up the vol- ume of our foreign trade. They have evidenced no concern over the effect of their free trade policy on our domestic production of strategic and critical materials. Just after the end of World War II our American industrialists who use cop- per and our American mining interests who have foreign copper mines, appealed to Congress for help in the rehabilitation of our peacetime economy and they asked specifically for a temporary sus- pension of the tariff on copper to help them attain that end. Congress enacted legislation to suspend the copper tariff temporarily in the hope that such sus- pension might be helpful 1n increasing our supplies of copper to meet our peace- time demands. The demands for peace- time production have exceeded the sup- plies of copper available. Consequently, notwithstanding the suspension of the tariff on copper the past 3 years, our stocks of refined copper have shrunk to the smallest supply held since October 1944. At the end of June of this year the stock of refined copper held by do- mestic producers was only 50,327 tons and was equal to only a little more than a@ week’s supply based on the tonnages of metal shipped during June, Stocks of copper held by foreign producers to- taled 136,483 tons at the end of June. Total domestic production was 96,334 tons in June, and total foreign copper production during June was 107,920 tons. Obviously the suspension of the copper tariff during the past 3 years has not enabled industry to create industrial stockpiles of copper to meet any war emergency. I submit that the industrial users of copper and the American own- ers of foreign copper mines requested the suspension of the tariff on copper main- ly for the acceleration of peacetime in- dustrial production and not as an in- surance of our wartime self-sufficiency. The reduction of our stocks of refined copper indicates that the price of cop- per products in the peacetime economy and the margin of profit on that trade have been prime incentives to the own- ers of foreign copper mines and the in- dustrial users of copper. If prepared- ness for war had been one of their prime objectives they would have made some effort to avoid reducing their copper re- CONGRESSIONAL RECORD—HOUSE serves to the low level at which those re- serves stand today. Tt is a strange turn indeed that the pro- ponents of this legislation now come be- fore Congress to urge the continued sus- pension of the copper tariff in order to secure a larger supply of copper from foreign sources as a national defense measure when the total stocks of avail- able copper have been and will continue to be swallowed up in the production of peacetime products even to the extent of diminishing our reserve stocks of cop- per. So long as the stocks of copper on hand domestically and in foreign lands remain at present levels and the demand for peacetime products stays at present levels or moves higher with the wave of hysterical buying that has already mani- fested itself, I predict that not 1 ounce of increased imports of foreign copper will be used for national defense unless the Federal Government steps in with rules and regulations channeling such materials to national defense industry. I predict further that the present low level of copper reserves in this country will not under present conditions be 1n- creased to meet our defense needs with- out specific direction by our Federal Government. Even during this period of frenzied anticipation of possible war and while our sea lanes are still open, I am not im- pressed very strongly by the tactics of our industrial users of copper and the American owners and producers of for- eign copper when the suspension of this tariff is requested as a national defense measure. Furthermore, most certainly no American industrialist or owner of foreign copper mines has been able to assure me that an adequate supply of foreign produced copper can be shipped into our ports after any shooting war with a major power should get under way. My own great interest is in building the self-sufficiency of this Nation to withstand the impact of war with a major power. I have guarded and pro- tected with all the ability at my com- mand the productive capacity of our American mines. I have also taken long and active interest in the building by our Federal Government of adequate stock- piles of strategic and critical materials. There is a practical limit to the size of our stockpiles and at the time of writing Public Law 520 of the Seventy-ninth Congress we set in motion a 5-year pro- gram to attain stockpiles of the size deemed advisable. In the past 4 years the stockpile on hand has grown to only 38.4 percent as of June 30, 1950. That fact together with the low ebb of our in- dustrial stockpiles of copper emphasizes our need to rely upon a healthy and vigorous mining industry within our own borders if we are to approach self-suf- ficiency for our Nation’s defense in war. Even though we had 100 percent of our stockpile reserves, I would still place great emphasis on our own domestic mine health for adequate national de- fense, but with a Government's stock- pile of $8.4 percent and with our copper industrial stocks at the low level they are today we should do everything within our power to build maximum JULY 17 production of all strategic and crit- ical materials within our own land. From that point of view the question here in this legislation resolves itself to whether the suspension of the tariff on copper will encourage domestic produc- tion of copper or whether it may dis- courage or even reduce such production. It is my firm opinion that the continued suspension of the tariff on copper can- not possibly encourage American do- mestic production of copper. We should defeat this measure and continue the duty of 2 cents per pound on imports of copper. If that encourage- ment to our own domestic mines is not adequate, I ask for the appropriation of funds to increase our Government stock- piles and for the enactment of legisla- tion to extend governmental help for re- search, development, and exploration, and even to subsidize the production of critical materials such as copper before it is too late. The SPEAKER. The time of the gen- tleman from Iowa [Mr. Martin] has ex- pired. Mr, DOUGHTON. Mr. Speaker, I yield 5 minutes to the gentleman from New York (Mr. Lyncu]. Mr. LYNCH. Mr. Speaker, in reply to the gentleman from Iowa (Mr. Martin], my distinguished colleague on the com- mittee, he has pointed out that there is a deficit of copper production. If there is a deficit of domestic copper produc- tion, how can we ever stock-pile it? Ac- cording to the estimate of the Bureau of Mines, 1,200,000 tons of copper will be consumed in the United States during 1950. The estimated production in the United States is 850,000 tons, or a deficit of 350,000 tons during this year, and without looking forward to any possible military needs that we may require with- in the next 6 months, and if the situation gets worse our position insofar as cop- per is concerned will also be worse. There is only one consideration that we should have at this time, and that is whether or not we have sufficient copper in this country to take care of our do- mestic situation as is, and the possible war situation that may arise. I believe it to have been the opinion of the Ways and Means Committee that they would not, under ordinary circumstances, have extended this bill, As you have been told, the original bill called for an ex- tension of 2 years. We thought that an extension of 1 year at this time would give us a better chance to take a look at the whole sftuation, so that if the Korean situation became worse we would not put ourselves in the position of cutting down the supply of copper. Let me point out that this will not bring down the supply of domestic copper, Mr. BENNETT of Michigan. Mr... Speaker, will the gentleman yield? Mr. LYNCH. LI yield to the gentleman from Michigan. Mr. BENNETT of Michigan. The tes- timony before the Ways and Means Com- mittee was undisputed, I think, that sus- pending the tariff would not bring any more copper into this country. Mr. LYNCH. I think it fs fair to say that we did not have any testimony be-
1950 foré our committee to indicate that the suspension of the tariff would bring more copper into the country. But the impor- tant thing is that, under the present sit- uation with which we are confronted, do- mestic copper has risen in price 25 per- cent—from 16 cents to 2244 cents, which is the second highest price for copper on record in recent years. When that in- crease came about we had a suspension of the tax. Under those circumstances, I cannot see where the suspension of the tax has in any wise curtailed domestic production. Mr. PATTERSON. Mr. Speaker, will the gentleman yield? Mr, LYNCH. I yield. My. PATTERSON. In answer to the gentteman’s question, the reimposition of this tax on copper will act as a deterrent in providing an adequate supply to meet our domestic demand. Mr. BENNETT of Michigan. That is the gentieman’s conclusion, but there was no evidence presented before the Ways and Means Committee—and I listened to all of those hearings—to show that the imports in copper would be affected one fota by the lifting of this tax. | Mr. LYNCH. It would seem to me if the position taken by the gentleman from Jowa is correct that the continuance of this tax would cause a decrease in pro- duction. I think that has been clearly refuted by the testimony before the Ways and Means Committee, for the reason that the price has risen for domestic production in 1949 and 1950 by 26 per- cent. That in itself, according to the testimony, was sufficient to keep the mar- ginal mines in operation. The price reached 22 cents when we had the sus- pension of the tax. That being so, it seems to me under those circumstances quite clear that if we continue the ex- emption of the tax it will not bring about adverse conditions to the copper indus- try. The SPEAKER. The time of the gen- tleman from New York has expired. Mr. DOUGHTON. Mr. Speaker, I yield five additional minutes to the gen- tleman from New York. Mr. MARTIN of Iowa. Mr. Speaker, will the gentleman yield? Mr. LYNCH. I yield to my colleague on the committee. Mr. MARTIN of Iowa. I will ask the gentleman what the price was on April i, 1949. Mr. LYNCH. Ido not know. I know that from the gentleman’s experience he would probably be able to tell me. Mr. MARTIN of Iowa. It was about 23% cents, and it was depressed from that to 16 cents in the period of about 2 months’ time. So let us start from April 1, 1949, and try to do better. Mr. LYNCH. I am not starting from April 1, 1949; I am starting from the time when it started to rise while we had this exemption. ‘Why do you go back to April 1949 when what we are concerned with now is what is happening during the last year, that since June 1949 the price has one up 25 percent? . % SFIHLD. Mr. Speaker, will Mr, MAN the gentleman yield? Mr, LYNCH. I yield, Mr, MANSFIELD. Is it not odd that this committes and this Congress is so CONGRESSIONAL RECORD—HOUSE anxious to allow the importation of cop- per and at the very same time refuses to do anything to help the high-cost do- mestic producer of copper and other metals? Mr. LYNCH. Let me say that our committee has handled every bit of the copper legislation that has come before it. We feel that by doing this we are certainly aiding the industry in our coun- try. We believe that this is not the time under any circumstance for Congress to take action that will bring about a pos- sible deficit, because we know that un- der the estimates of the Bureau of Mines that we can expect only 850,000 tons during 1950, and the lowest conservative estimate of need is 1,200,000 tons. Mr. PATTERSON. Mr. Speaker, will the gentleman yield? Mr. LYNCH. I yield. Mr. PATTERSON. I think the gen- tleman should show at this*point that the amount of copper imported is in- sufficient for stockpiling and meeting our domestic demand. Mr. LYNCH. They say that we are stockpiling at the rate of some 20,000 tons a year. I cannot under any cir- cumstances see how we are going to stockpile with the situation as it is; and I honestly would ask any of the gen- tlemen who have been interrogating me: Do you or do you not wish our country to have sufficient copper on hand in casé of a military necessity? If any gentle- man will take the floor and say, “I do not care about the military; I do not care whether our troops have what is neces- sary in the line of copper; I do not care anything about anything else except that these mine owners out West are going to try to keep this tax exemption on for their own selfish interests; I am abso- lutely opposed to this bill”—— Mr. MARTIN of Iowa. Mr. Speaker, will the gentleman yield? Mr. LYNCH. Will the gentleman say that he is in favor of the reimposition of the tax even if it is shown that we have not got enough copper for military needs? Mr. MARTIN of Iowa. I will be glad to answer that. The gentleman knows I want all the copper we can get and I want it held for military needs. But you are not doing that in the industrial field today. Your reserves are lower today than they have been since 1944 and at the same time your domestic mine pro- duction last year was reduced down to 741,000 tons. I hope I have answered your question. Mr. LYNCH. The gentleman from Yowa is the strongest advocate for stockpiling of strategic material. How- ever, the gentleman knows that under the estimate for the first 5 months of this year the average has been, I think, 84,305 short tons per month and it is es- timated we will have 850,000 tons this year. Under that situation and with the possible need for military purposes, does the gentleman ask that copper controls be placed upon the industry in the United States? Mr. MARTIN of Iowa. In any war emergency the present low reserves of copper and the inadequate domestic pro- duction will undoubtedly call for con- 10431 trols. 1 believe we are in agreement on at. The SPEAKER pro tempore. The time of the gentleman from New York has expired. Mr. WOODRUFF. Mr. Speaker, I yield 8 minutes to the gentleman from Michigan (Mr, Bennett]. Mr. BENNETT of Michigan. Mr. Speaker, the suspension of the import tax on copper last year had a very dis- astrous effect on a large segment of the copper mining industry. There is no necessity for any further lifting of the tax and it is time we looked to our own sources of supply of this critical metal in order to have it available during any protracted national emergency. Last year when the import tax on cope per was suspended, and the bottom dropped out of the market, the Michigan copper mines were forced to close down for more than 4 months. During that same period nearly 300,000,000 pounds of copper came to the United States from foreign countries. While a whole community of more than 50,000 people in northern Michi- gan suffered, with thousands of copper miners unemployed, the Chilean and African miners continued in their em- ployment. Jobs of the copper miners in Chile were secure at a time when our own miners were walking the streets without work, Is it not time that we took action to prevent the recurrence of a similar tragedy? The testimony before the Ways and Means Committee on this resolution was undisputed that putting the import tax back on copper would not affect the im- portation of copper into this country one way or the other. That is a very signifi- cant fact. The people who are advocating this suspension are arguing all around the bush, evading the realities of the situa- tion. The truth is that Mfting the tax on copper is not going to bring one more pound of copper from Chile or elsewhere abroad, than we are getting today. Here is what happened 15 months ago: When the tax was suspended at that time the price of copper was approxi- mately 2314 cents per pound. The pro- ponents of this legislation said then that the demand for copper in this country exceeded the supply; that we could not get along without foreign copper. They said, “Let us take the tax off for an- other year.” We took the tax off. What happened to the price of copper? It immediately declined in a short space of 2 months from 234 cents to 16 cents per pound. What did that show? It showed that the copper fabricators who are advocat- ing this legislation did not need all the copper they were talking about, so the demand sloughed off and the price sloughed with it. Exactly that same thing can happen again, We all realize that we need copper to fight wars, but let us not use this suspen- elon of the tax on copper as a subter- fuge. We have a tax on lead. We use that to fight wars. We have a tax on zinc. We use that to fight wars. No- body is talking about taking the tariff off of those minerals, or many other
10432 strategic ores which now have protec- fon, If we get into an all-out war where are you going to get the copper? Are you going to get it from Chile or Africa or are we going to get it from the mines in the western part of the United States and from the copper mines in the State of Michigan? ‘You know what the an- swer is. The Government will take over domestic production and supply. That is what we did in World War II. We are not relying on these imports from Chile or from Africa or elsewhere to fight our wars. The argument that the suspension of the copper tax is neces- sary in the interest of the national de- fense is nothing but unadulterated sophistry. Mr. CURTIS. Mr. Speaker, will the gentleman yield? Mr. BENNETT of Michigan. I yield to the gentleman from Nebraska. Mr. CURTIS. I am opposed to this Jegislation because I believe it is against the best interests of our national de- fense. The healthy condition of the mines of Our country Is absolutely essen- tial to the defense of this country. This tax is sought to be removed because the people importing copper want to be re- lieved of the obligation and nothing else. The failure of this legislation will not stop copper from coming into this coun- ry. Mr. BENNETT of Michigan. That is right, The SPEAKER protempore. The time of the gentleman from Michigan has expired. Mr. WOODRUFF. Mr. Speaker, I yield the gentleman one additional minute. Mr. BENNETT of Michigan. Mr. Speaker, it is said by the State Depart- ment that we ought to suspend this tax on copper because of our friendly rela- tion with Chile. I want to disabuse your mind on that. It is undisputed that 96 percent of the copper produced in Chile is owned by two monopoly copper mines in the United States, namely, the Ana- conda Copper Co. and the Kennecott Copper Co. So, this suspension of tax has nothing to do with the Government of Chile at all. It simply would require the Anaconda Mining Co. and the Ken-~ necott Mining Co. to pay 2 cents per pound to import the copper which they have produced down in South America with slave labor. This tax is necessary to equalize the differential in wages that ‘are paid to the American miners and the wages that are paid in those slave-wage labor camps in Chile. Mr. RICH. Mr. Speaker, will the gen- tleman yield? Mr. BENNETT of Michigan. I yield to the gentleman from Pennsylvania. Mr. RICH. The gentleman hit the nail on the head when he said that if you take the tariff off of goods coming into this country that you take jobs away from the American workingman. Mr. BENNETT of Michigan. Just this other one thing, Mr. Speaker, I will tell you what is the matter with the people that are advocating the further suspen- sion of this tax. We have an import tax on lead, but we are getting all the lead we need. We have an import tax on CONGRESSIONAL RECORD—HOUSE zinc, but we are getting all the zinc we need, and we can leave this import tax on copper and we will get all the for- eign copper we are getting now. If we put a provision in this bill to suspend the tax on lead and zinc and watches and textiles and shoes and on hats, et cetera, I will say to the gentleman from Con- necticut (Mr. Parrerson], I do not think he or many other Members would sup- port this bill, and the reason they would not support it is because they would say that the wages paid by the foreign producers of those commodities did not justify the free importation of their products. There is no basis for protect- ing other commodities and singling out copper for free trade, It is an outra- geous discrimination, Mr. PATTERSON. Mr. Speaker, will the gentleman yield? Mr. BENNETT of Michigan. I yield to the gentleman from Connecticut. Mr. PA ON. Is the gentleman advocating that the consumer js to ab- sorb these taxes? Mr. BENNETT of Michigan. The con- sumer usually absorbs taxes placed on & manufacturer in the price he pays for the product. But the copper fabricator could very well absorb this tax. Mr. PATTERSON. And we also cer- tainly must import this very vital metal at this time, during this tremendous crisis. Mr. BENNETT of Michigan. The gen- tleman knows that this legislation will not increase copper imports from foreign countries. The tax would probably in- crease the price of copper by 2 cents a pound and thus protect the American copper miner from unfair competition from abroad. The increased price in the cost of products manufactured with cop- per will be small indeed compared to the benefits to be derived by thousands of American workingmen. For example: It takes about 80 pounds of copper in the manufacture of an automobile. At 2 cent per pound that might cost the pur- chaser of an automobile the tremen- dous sum of $1.60. The SPEAKER. The time of the gen- tleman from Michigan has expired. Mr, DOUGHTON. Mr. Speaker, I yield such time as she may require to the gentlewoman from Connecticut [Mrs. WoopHovseE]. Mrs. WOODHOUSE. Mr. Speaker, I should like to express my strong support for continuing the duty-free importa- tion of copper into the United States for the next year. There is at the present time a world shortage of copper. I am advised that our domestic production is able to meet only about two-thirds of the domestic demand. ‘The price of copper has risen from 18% cents per pound in April of this year to 2214 cents per pound in June. Restoration of the duty would bring an additional 2 cents per pound increase. The critical international situation de- mands that we stockpile as rapidly as possible every strategic material. Ac- cordingly, it seems particularly unwise to allow a 10 percent increase in the price of so important a material as copper. The United States, perhaps as never before, is vitally concerned in the eco- nomic welfare and stabilitv of the coun- JULY 17 tries of the Western Hemisphere. The principal exporters of copper to the United States are Chile, Peru, Mexico, and Canada. Chile is particularly de- pendent on the sale of copper to this country and on taxes paid by American interests there. She is already hard pressed by a dollar shortage. Restora- tion of the copper duty would add an estimated $5,000,000 burden. Manufacturers throughout the State of Connecticut are vitally concerned with this problem. Producers of sheet metal, wire rods, tubes, rolls, pipes, brass, bronze, cable, electrical products and ap- pliances, engineering, heating and refrig- eration equipment, hardware, and but- tons are all substantial buyers of refined copper or copper products for use in the manufacture of their finished articles. In my own district, the textile-finish- ing companies are large buyers of cop- per in the form of rollers for printing and finishing all types of textiles. The general economic condition of the entire New England area has been one of serious unemployment in many local. ities. In Connecticut the industrial pat- tern is generally that of one industry being the only enterprise in a small com- munity. Any factor which increases the cost of production for these small pro- ducers makes imminent the possibility of cut-backs in their labor force. Such an increase in textile manufacture costs particularly would have an extremely serious effect, since unemployment has been especially acute in that industry. Many industries in Connecticut that are large buyers of copper are also im- mediately faced with the correspond- ingly serious problem of proposed tariff reductions on imported goods that com- pete with their products. Any further in- crease in their production costs would have a doubly deleterious effect. In view of these facts, I strongly urge favorable consideration of the continua. tion of existing laws which allow the im- portation of copper, duty-free, into the United States. Mr. WOODRUFF, Mr. Speaker, I yield 2 minutes to the gentleman from Nevada [Mr. Barina]. Mr. BARING. Mr. Speaker, I am heartily in accord with the gentleman from Iowa [Mr. Martin] and the gentle- man from Michigan [Mr. BEnwert]. This is bad legislation, We should not pass it. I appeal to you Members here to- day, and especially to you Members from west of the Mississippi, not to support this measure, for it is the wrong type of legislation. It has been said that six of the Departments, from the Depart- ment of the Secretary of State on down, are in favor of this bill. It may be the popular thing to vote with the bureau- crats downtown, but it is not always right. Much United States capital has moved to Chile for the development of the copper mines, because of low wages and other low costs in foreign countries. There is no reason why we should de- atroy an essential domestic industry, for the purpose of providing greater profits for those who migrate their investment funds. No program of stockpiling can replace a going and healthy domestic mining industry in the event of war, and
1950 there is nothing more important to war- fare than copper and other strategic metais. Mr. JACKSON of Washington. Speaker, will the gentleman yield? Mr. BARING. I yield to the gentle- man from Washington. Mr. JACKSON of Washington. As I understand, the purpose of this legts- lation is to aid the national defense ef- fort by getting copper into the country. If that is the case, why cannot the Fed- eral Government go out and buy copper now without this authority? Mr. BARING. The Federal Govern- ment will not pay this 2 cents tariff. If the Munitions Board were to purchase copper for stockpiling, to whom would it pay the tax? To the Treasury Depart- ment. It would be a matter of taking the money out of one pocket and putting it into the other. The Government is not subject to this 2 cents tariff. There- fore, the argument presented by the opposition is groundless. Mr. JACKSON of Washington. In other words, without this legislation the Federal Government can go out and huy all the copper they want. Mr. BARING. They certainly can. Mr. JACKSON of Washington. With- out paying 2 tax. Mr. BARING. That is absolutely cor- rect. The opposition has challenged our patriotism on the floor here today. They have insinuated that we are against the war effort, and that we are guilty of selfishness and greed. This is not true, ‘We are merely trying to protect our own mining interests. I am in favor of 4 stockpiling program but we should be in 8 position to supply our needs from our own domestic sources. What would we do, in the case of war, if our sea lanes were cut? Then, what good would the foreign copper do us, if it were unob- tainable? That, gentlemen, is the point that we are trying to make understood. So far as patriotism is concerned, I will challenge enyone who would dare to accuse me of being unpatriotic. Iams veteran of World War I, having given 8 years of service to my country. My American heritage is a matter of tre- mendous importance to me, and I am as patriotic as any man on this floor. It is because I am a good American that I want to have an adequate supply of copper on hand, so that our boys will be adequately protected. However, the point that I am trying to bring out is that the reimposition of the tariff on copper will not prevent foreign copper from. coming into this country. It will protect our domestic mining industry. The only ones who do want a protective tariff are the big industrialists and fab- ricators in this country, who buy their copper elsewhere. Mr, BENNETT of Michigan. Mr. Speaker, will the gentleman yield? Mr, BARING. I yield to the gentle- man from Michigan. Mr. BENNETT of Michigan. The gen- tleman knows that the fabricators who are talking about this suspension of tax by raw copper. They sell the manufac- tured produce with copper in it. They want a tariff, and they have a tariff on CONGRESSIONAL RECORD—HOUSE manufactured copper, but they want to take it off the copper that they pur- chase, Mr. BARING. The gentiem:n is cor- rect, I earnestly hope that this legisla. tion is defeated. Mr. WOODRUFF. Mr. Speaker, I yield such time as he may require to the gentleman from Connecticut (Mr. Pat- TERSON). Mr. PATTERSON. Mr. Speaker, the resolution being considered by the House today is a compromise of a measure in- troduced by me to continue the suspen- sion of the import tax on copper. I am not thoroughly satisfied with the terms of the resolution, feeling that it would be more appropriate for Congress to enact a 2-year suspension as envisioned by H. R. 7151, but I am willing to accept the terms of the resolution as being bet- ter than no action at all. I can foresee no material change before 1952 in the present short supply of domestic copper which would justify imposing the 2 cents per pound tax again; and the l-year limitation in this resolution simply means that the first session of the Eighty-second Congress will again have to expend a goodly amount of time on hearings and debate which could be over- come if H. R. 7151 had been accepted by the committee. It might be well to trace the history of this legislation so that all Members who are not completely familiar with the background may be informed as to the necessity for the continued suspension of the import tax on copper. An import tax of 4 cents per pound was imposed in 1932 as the domestic supply of copper, at that time, was sufficient to meet the needs of domestic consumption. This remained in effect and in force until our entrance into World War II. Under the war powers granted to the President, Government purchases of foreign mate- rials were automatically exempt from taxes which had been imposed by Con- gress. Thus, all during World War IZ the Government purchased such sup- plies of foreign copper as were available without payment of any tax. In 1947 it became evident that this Nation had changed from a copper surplus producey to a copper scarcity situation. The supply of American copper was insufficient to meet the needs of the post- war period. I introduced legislation sus- pending for 2 years the 4 cents per pound tax. The bill was acted upon and was one of the first major pieces of business of the Eightieth Congress. In the inter- im, negotiations were undertaken under the Reciprocal Trade Agreements Act whereby the import tax was lowered the maximum amount of 50 percent-—mak- ing the tax 2 cents per pound. With the expiration of the 1947 act I introduced again legislation extending this suspen- sion in 1949. A compromise measure was reported out, extending for only 1 year the tax suspension and this became Pub- lic Law 38. The expiration date was June 30 of this year. I again introduced legis- lation suspending the tax for a further 9-year period. The resolution before us now ts a result of the House Ways and Means Committee's authorization to its cheirman to introduce a 1-yeer suspen- sion measure, 10433 The reasons for favorable action by the Congress are manifold and deserving. It must be noted that basically the copper mines of the United States cannot pro- duce sufficient tonnage to care for peace- time consumption. This is entirely with- out regard to the stockpiling program of this country, and without regard to any further military needs which may have been thrust upon us in the past few weeks. Domestic production from 1947 to the end of May 1950 has averaged in the neighborhood of 80,000 tons monthly, while the need is demonstrated to have been approximately 165,000 tons during this same period—making a deficit of 25,000 tons per month. With stepped-up production since May the deficit is even greater. Stockpile figures are not a mat- ter of public record, but it is safe to pre- sume that the needs will average 20,000 tons per month for this purpose alone. It can be seen, therefore, that there is no justification for excluding from our markets the copper which can be made available from other sources. Perhaps the greatest beneficiary of our imports is the nation of Chile. It will be remembered that Chile was a stalwart ally during World War I, and the Chilean Government has, since that time, alined itself very closely with the polictes of America in the war against Communist expansion. Domestic production, at the present time, approximates very closely its peak at any time during World War II, when drastic measures were taken to assure that every ounce of this most necessary metal was made available for our war needs. Any argument to the effect that continued suspension of the tax penal- izes the American miner is therefore without merit. Employment in our do- mestic mines continues at a high level and profits to the owners have been sub- stantiah—even with the tax suspension in force. Perhaps the greatest beneficiary of the tax suspension has been the individ- ual citizen. Many times he }s lost sight of in the struggle between one group and another in the pros and cons of leg- islative debate. If the tax ts to be levied on copper imports it simply means that the higher price will be paid by the con- sumer for the goods he buys in our re- tail outlets. Copper is a basic material in practically everything we use in our daily tife. The industries which pro- duce automobiles, refrigerators, electri- cal appliances, houses, home furnish- ings, and many other such necessary goods would all have to impose an ad- ditional burden upon the consumer by raising prices which are already, in many cases, beyond the purse of the individual. The onerous burden of price increases would overbalance the small amount which would be gained by the Treasury by continuance of the tax. The unprovoked attack on South Korea and the subsequent action of this country in supplying men and materials to prevent Communist domination of ‘the Par East indicates that on this basis alone cutting off imports of copper cane not be justified. We all realize the grav- ity of the Korean situation and can un- derstand the anxiety of our defense
10434 planners in making certain that a suffi- cient supply of copper is readily avail- able for our needs. Stockpiling must be increased rather than held at a mini- mum, and even greater supplies of for- elgn copper will be necessary to carry out this program. Practically every in- strument of war contains copper or cop- per alloy, and full production must be maintained if we are to keep faith with those who are so valiantly struggling against tremendous odds to stem the rush of communism in the Far East. It is essential that the House act with dispatch in adopting this legislation so that the normal trade in copper, which has been disrupted since the end of June, may be resumed without further delay. I ask that every Member of this body, in considering the legislation before us, think only in terms of the national in- terest rather than regional interest. Mr. SIMPSON of Pennsylvania. Iam opposed to House Joint Resolution 502. This bill would suspend for a period of 1 year from June 30, 1950, the tariff on imports of copper. I recognize the serious shortage of copper at the present time. Testimony before the committee indicated clearly that the sum total of our domestic pro- duction and our imports will do no more than approximate the amount of copper necessary for current industrial con- sumption. At the current rate of con- sumption this will not permit stockpil- ing for wartime needs. I therefore ap- proach this bill from the angle of deter- mining whether it will tend to increase the total available new copper for our industrial, national defense, and stock- piling neds. Testimony was definite be- fore the committee that further suspen- sion of tariff would not mean an increase in the importation of copper. Copper imports would continue about the same as at present. Accepting this fact then, there is no possible way of in- creasing our aggregate source of copper other than to increase our domestic pro- duction. The real question then is whether con- tinuance of the present tax of 2 cents per pound will tend to increase the present domestic copper production. On this there can be no substantial auestion.. Domestic production of copper is closely associated with the price of copper in the market. To the extent the duty will help keep the domestic price at or near the present level of 23 cents per pound, domestic production will increase. Marginal mines, those that can only be operated when the price is in excess of 20 cents per pound, will reopen and all do- mestic producers will expand their oper- ations as the management realizes that the Government is determined to pro- tect this major source of copper. I be- lieve that domestic production can and will be increased if the industry is given this protection. I am sure that it is the only possible way we can get more copper, for the importers state definitely that imports will not be increased. Domestic production is a flexible factor with re- gard to copper and we should give every encouragement to the domestic pro- ducers, CONGRESSIONAL RECORD—HOUSE Mr. MANSFIELD. Mr. Speaker, will the gentleman yield? Mr. SIMPSON of Pennsylvania. I yield to the gentleman from Montana. Mr. MANSFIELD. Can the gentle- man tell the House, in view of the ques- tion of military necessity which has been raised, how much of the imported copper is going into the national-defense stock- pile? Mr. SIMPSON of Pennsylvania. I cannot, other than to say that the testi- mony indicated very little, if any. Mr. RICH. Mr. Speaker, will the gen- tleman yield? Mr. SIMPSON of Pennsylvania. I yleld to the gentleman from Pennsyl- vania, Mr. RICH. If we permit this copper to come in without a duty, do the manu- facturers of this country who want to manufacture products in which copper is used want the manufactured articles to come in without a duty? Mr. SIMPSON of Pennsylvania. they want protection. Mr. RICH. Certainly they do. Mr. PATTERSON. Mr. Speaker, will the gentleman yield? Mr. SIMPSON of Pennsylvania. I yield to the gentleman from Con- necticut. Mr. PATTERSON. Does not the gen- tleman realize that if we do not have an edequate supply of copper to meet the domestic demand up in the State of Connecticut and all New England we are going to have a tremendous amount of unemployment, and in case of a real national emergency we are going to be stuck? Mr. SIMPSON of Pennsylvania. It is the over-all picture we must consider. If there is insufficient copper for national defense needs, copper will properly be taken for these needs and private indus- try will have what is left. The solution is to increase the sum total of domestic production and imports to meet all needs, industrial and defense. A study of the subject discloses the imports of copper are substantially the same regardless of the price of copper in the market. Thus when copper was sold gor 16 cents per pound in the American market, imports were about the same as now with the price at 23 cents per pound. On the other hand, domestic produc- tion took all the loss in production when the price dropped to 16 cents per pound. As the price increases, new American sources expand. It is this flexible factor we should encourage and which will be encouraged by the retention of the 2 cents per pound tax. In the interests of our national economy and our national defense, I hope this bill will be defeated. Mr. WOODRUFF. Mr. Speaker, I yield 8 minutes to the gentleman from Arizona (Mr. Murpocx). Mr. MURDOCK. Mr. Speaker, I ap- peared with other Western Congress- men before the Committee on Ways and Means on July 10 and 11 giving the best opposition we knew how to offer to this legislation. I do want to express my deep appreciation to Chairman DovucHtTon and the whole committee for the kindly consideration afforded the opposition. But before I begin what I had in mind to say, I want to nail one fallacy which No, JULY 17 I have heard expressed here today. It has been said in favor of this legislation that this is in the interest of national defense, That is a fallacy. We did not have this legislation suspending the excise duty during all the years of the Second World War and the foreign cop- per the Government got did not cost more because of the tax. Did we get copper during the Second World War? We did. We supplemented home war- time production with foreign copper without incurring the extra burden of an excise tax then on the statute books. We should retain this tax on foreign cop- per for industrial use while bringing in without that extra cost necessary for- eign copper for stockpiling purposes and for military needs. During the recent war we were not able to produce all needed copper within our own country, but it came in and the Government of the United States did not pay any 2 cents or 4 cents per pound on that copper. As several of my colleagues pointed out here, we can get this copper now as we did then, from Chile or from any place else and stockpile it or use it for military purposes, without paying the additional 2 cents. I am in favor of do- ing that. For 14 years I have struggled on the floor of the House and in my committee to see that we wisely and energetically stockpile strategic and critical material such as copper. That is why I love my friend from Iowa, because he has led that fight, too, The wise policy is to stockpile what we must from abroad and concur- rently produce what we can at home. We must see to it that we keep an active mining industry functioning in this country. Anything that tends to hurt that mining industry, as the suspension of this excise duty will cer- tainly do, is bad for the country. I am like Patrick Henry. I have no light to guide my feet, except the light of the lamp of experience. Our experience of 18 months ago warns against it. Eighteen months ago you did suspend the duty. What happened? Exactly what the gentleman from Michigan said. Two months after it was suspended the price of copper dropped from 23% cents down to 16 cents. What assurance have we or have you that it will not happen again right now? Mr. BENNETT of Michigan. Last summer when many of our mines closed down because the price of copper went from 23 cents down to 16 cents a pound, what happened in Chile? Every Chilean miner was working. Every Chilean miner employed by the American capl- talists that own the mines down there were working while 50,000 people in my community up in Michigan were dis- tressed with about 5,000 men out of work while the Chilean miners were working. That is exactly what the pro- ponents of this legislation are asking the Congress to do at this moment. Mr. MURDOCK. Exactly so. Mines all over the West closed down and those that did not close down curtailed their operations to 5 days a week and some to 3 days a week. That is what I fear you are looking forward to by the passage of this proposed legislation.
1950 ‘I'he mass of my people regard this tax as vital for about one-third of Ari- zona’s economy is built on the copper- mining industry, and I remember only too well a period after World War I when those mines were closed. I do not want to see another such period for do- mestic copper mining in our country, for such a situation is detrimental not only to the States involved, and to their people, but also to the best interests of national defense itself, Mr, WOODRUFF. Mr. Speaker, I yield such time as he may require to the gentleman from Montana [Mr. DEwarr] Mr. D'EWART. Mr. Speaker, I shall yote for House Joint Resolution 502 to suspend certain import taxes on copper for 1 year. Ordinarily I would oppose this resolution as not being in the best interest of my State or our country. However, these are not ordinary times. An editorial in today’s Washington Dally News begins with these words: Prepare. America stands today in deadly danger. Three weeks of the crisis that took violent form in Korea have made our country’s peril starkly plain. The committee report on House Joint Resolution 502 states: Your committee held two full days of hear ings on the subject of suspension of the import tax on copper in order to afford rep- resentatives of the Government departments, domestic producers of copper, and industrial consumers of copper, as well as other Inter- ested parties, an opportunity to present their views. Aocording to statistics supplied by the De- partment of Commerce on copper supply and domestic consumption, domestic production of copper 13 now only 74 percent of domestic consumption. For the first 6 months of 1950, domestic copper production on a smelter basis averaged 84,705 short tons per month, while imports of copper averaged 49,876 short tons per month. For the same period, the domestic production of primary copper, according to the Bureau of Mines, has averaged less than 75,000 tons a month. if that rate is continued for the remainder of 1950, the annual reduction of refined copper will be about 850,000 tons. For the game period, the Bureau of Mines estimates that the total requirement of primary re- fined copper for commercial purposes only will be at least 1,200,000 tons, indicating a deficit of supply of at least 300,000 tons to be filled from imports. Moreover, the Mu- nitions Board advised that steps have re- cently been taken to accelerate the procure- ment program for stockpile to the greatest extent possible consistent with available sup- piics and funds, This action tends to in- ease the market pressure, and creates a situation which minimizes the possibility of any surplus copper becoming available for the rebuilding of industry stocks for some time to come. Since June 1949 the United States price of copper, then 16 cents, has progressively in- creased until it is now 22% cents, within 1 cent of the postwar peak of August 1948 when copper reached 2844 cents per pound. Review of the testimony of witnesses at the committee hearings indicates that the avail- able supply of copper ie currently, and for the near future {s likely to be, less than demand. ‘Taking into account the present price of copper, it appears that suspension of the import tax on copper until the close of June 80, 1951, would not impair domestic production of copper, which ts now close to the highest level in history (except the 1940- CONGRESSIONAL RECORD—HOUSE 44 period). In view of the foregoing consid- ‘erations and of the probable heavy volume of domestic civilian and military require~- monts of copper over the next several months, it is the opinion of the committee that the suspension of the import tax on copper should be continued at least through June 80, 1951. Under these conditions I am compelled to vote for the resolution. If these were in any way normal times I would vote against this resolution. In view of the war situation and our country’s need for copper which cannot possibly be supplied by our domestic mines, I shall vote for this 1-year extension of the suspension of certain import taxes on copper. Mr. WOODRUFF, Mr. Speaker, I yleld such time as he may require to the gentleman from Utah | Mr. GRANGER]. Mr. GRANGER. Mr. Speaker, I am opposed to the suspension of the tariff on copper, as proposed by this bill. I never voted for it when it was suspended the last time. I think it is a bad bill. J think it is unfortunate that they should drag the war emergency into this, when 2 months ago, before they ever knew of the Korean situation, they intended to try to reduce the tariff even in peace- time. If we need any copper for any war purpose, the Government can obtain all it needs without this bill and do so with- out paying any tariff whatsoever. Mr, KEATING. Mr. Speaker, due to either inadvertence or design, both equally culpable, an import tax of 2 cents a pound or $40 a ton on copper went into effect July 1. This is not only contrary to the interests of the consum- ers of copper products and the thou- sands engaged in their manufacture in this country but, even more important, is injurious to our national security and well-being. Once again, we are forced by pressure from an organized bloc of special inter- ests—this time the Mountain States cop- per interests who want to advance the price on their product another 2 cents per pound. This 2 cents increase will have to be paid by our citizens twice, once as consumers when they buy finished prod- ucts made of copper, and again as tax- payers when the Government is forced to buy this higher-priced copper for the Nation’s stockpile of strategic materials. The United States consumes over a million tons of copper a year, which is 300,000 tons more than we produce do- mestically. This extra cost of $12,000,000 will, of course, be passed on to the con- sumers, in addition to the higher cost of domestic copper, making a total of over $40,000,000 increased cost of copper each year to the users. Already the specula- tors are having a heyday. As the power of the Mountain States contingent be- came evident this spring, the price of copper began to rise, adding even more to the hardships of homebuilders and other innocent bystanders. The increased cost of copper ore will undoubtedly hit hard those industries which manufacture copper products in competition with other metalwares. This, in turn, will cause unemployment all over the country. It will be acutely felt, Iam told, in my dis- 10435 district where a large number of plants are located which fabricate products consuming large quantities of copper. There is no possible excuse for reim- position of this import duty which was originally designed to rescue our copper industry during the depths of the de- pression when copper was 2 drug on the market and miners were unable to ob- tain work. Now, the situation is en- tirely different. Domestic mines are un- able to meet our requirements, and the industry is operating at top production. There is no immediate prospect for any diminution in this peak demand, In- deed, both industry and Government need all the copper they can get, and more. Furthermore, this short-sighted atti- tude is endangering our relations with copper-producing countries, particular- ly Chile, whose entire economy is so defi- nitely geared to copper and which vital- ly needs American dollars for internal stability. Nothing could be more fool- ish than to impose this import duty at the present time when we need all the friends we can muster and when the welfare of our domestic copper industry is in no way in jeopardy. There undoubtedly are situations where a tariff is needed on goods enter- ing this country in order to protect do- mestic industries and prevent unemploy- ment among our own people. But cer- tainly there can be no excuse for impos- ing these tariffs simply for the purpose of enhancing the profits of a few mining companies which are able now to sell their entire output at prices to yield handsome returns. This bill to continue for 1 year the duty-free status of copper ore should be passed at once as a matter of the high- est urgency, both industrial and stra- tegic. Mr, WOODRUFF. Mr. Speaker, I yield the remaining time, one-half minute, to the gentleman from New York [Mr. Reep]. Mr. REED of New York. Mr. Speaker, I simply hold up a paper for you to view. We are in war. Ihave been a protection- ist all my life, but when I see what 1s happening to our boys in Korea, and know that we must have copper to go into every shell, and when I know that we are 300,000 tons short, an amount that cannot be produced by our mines, the time has come for us to be realistic and measure that against the lives of our men. The SPEAKER. The time of the gen- tleman from New York has expired. Mr. CANFIELD. Mr. Speaker, I think the distinguished gentleman from New York (Mr. Resp] probably the best known protectionist in the House, has in his tersely cogent remarks empha- sized the necessity of the bill’s imme- diate passage. National defense de- mands it. Our boys are dying in Korea as they fight against terrific odds and no one can prophesy their needs a week or month from now. I led the House fight last year against yielding to the other body’s cut of $375,000,000 from stockpiling funds and I am glad that the final compromise involved only a
10436 loss of $100,000,000. It was a great mis- take and, as I insisted at that time, we cannot afford to gamble with American security now. The stockpiling of this metal is being accelerated. Industrial consumers are upping their require- ments and the Bureau of Mines sees a large deficit of supply unless we act promptly. Mr. SADLAK. Mr. Speaker, ‘House Joint Resolution 502, from the Commit- tee on Ways and Means, actually 1s the proposal of the gentleman from Con- necticut (Mr. Parrerson| with the ex- ception that extension of the copper im- port-tax suspension is recommended for only 1 year. Copper is the most vital of raw ma- terials used in the industries of the State of Connecticut. These industries, if the present Korean conflict or ramifications continue, will once again be called upon to produce the materials and matéricl which they provided for the arsenal of democracy. The proposed action to be taken today under suspension of the rules will, I am convinced, tend to pio- vide a continuous supply of copper and may possibly cbtain even more copper than is presently available. Actually, this resolution is an exten- sion of the first proposal made by Mr. Patterson in regard to the import of copper which passed the House on March 12, 1947. Earlier on that day the Pres- ident addressed a joint session of the House and Senate on the menace that threatened Greece, Turkey, and the Mid- dle East—the eravity of the outlined situation pointed up the need to take every action that would increase our sup- ply of copper. Today there is an anal- ogous combination of circumstances as we consider this resolution; impelling reasons why the action we shall take in passing this legislation are patently clear—after the message that will be de- livered by the same President to the House on Wednesday with reference to the Korean War, these reasons will be more compelling in the light of its con- tents and recommendations. Many industries in Connecticut, large and small; many fabricators throughout the United States cannot keep their workers at their joxs unless copper is available to them. I heartily endorse tl.e legislation, commend the earnest ap- plication of the gentleman from the Fifth Connecticut District to get an ex- tension passed by the House and urge the Members to vote, as I will, for its passage. Mr. PATTEN. Mr. Speaker, It would appear that it should not be necessary for me and my colleagues in the West, and others interested in the mining in- dustry, to find it necessary to again plead with the Congress of the United States concerning the excise tax on copper. However, to protect the citizens of Ari-~ zona and others who are affected by this proposal, we find it necessary to make every effort in bringing before the Con-~- gress the grave economic condition that will be brought about if further sus- pension of the excise tax is allowed. We need only to look back some 15 months to see a like condition which was brought about by these who urged and proposed the furviac. suspension of this tax, using CONGRESSIONAL RECORD—HOUSE as their arguments the inability of the domestic miners to supply the amount’ the market required and further dis- coloring the picture by using the argu- ment of diminishing surplus stocks and the great need for foreign material. All of these matters were proposed for the purpose of a further suspension. It is teresting to note that the pro- ponents of this line of thinking are the fabricators who desire competition among those who sell them low-priced materials and yet at the same time these same fabricators demand and get ample tariff protection on the goods they manu- facture. He wishes that there be no pro- tection on what he buys but he insists on their being protection on what he sells. We also have a second group to be con- sidered and that is those mining com- panies who own large copper mines abroad. They are able to use cheap labor where the standard of living is low and yet they desire unrestrained limit as com- pared with our domestic producers who have a high-cost production. A high- cost production is imperative if we are to maintain our standard of living as our workers know it today and certainly there is no one in this group that would desire that these standards be lowered, especially in favoring workers in foreign countries so that they may dispose of their produce on our markets, Yet this is exactly what happened some 15 months ago, and I am sure that it will and can happen again. Fifteen months ago the copper price f. o. b. Connecticut Valley dropped from 232 cents per pound to 16 cents per pound. This latter price was certainly far out of line with what the domestic producers must have in order to main- tain the present standard of living in the western copper camps. A glowing picture has been painted of how we make every effort to keep our standard of Hving and give to our laboring class a livable wage. Yet, following the last sus- pension the workers total weekly wage dropped from $72.83 to $58.34 and that included only those who were working full time, since the mines had to curtail by cutting down the number of days the miners were employed during the week, and in addition to this many were on half-time basis and many were unemployed. It is significant to note that in January 1949, when it was being considered whether or not to further suspend the excise tax on foreign copper, there were 298 unemployment checks totaling $5,774 issued to the unemployed copper miners in Arizona. However, in the month of August of the same year, when foreign copper was coming 1n freely, many of our mines were forced to curtail, and in some instances shut down, and in that month there were issued 3,055 benefit checks to unemployed copper miners totaling $59,558. This gives you briefly a picture of what is happening to the State of Arizona and the economy of our State when we extend the suspension on the excise tax on foreign copper. The 1949 slump in copper cost the State of Arizona an estimate of over $2,250,000 in income tax. This figure is minor as to what it cost the employees and the owners of the mines. JULY 17 At the present time there are some 400 small mines which were closed down due to the slump in April 1949. These same mines were the first to respond to the call issued when metals were needed during World War II. These same mines at this time need the protection and assurance of the Congress that should they go back into operation they will be able to continue such operation by not having further suspension of the excise tax on foreign copper. This group of miners have not received favor- able consideration in their request for previous legislation in the Eighty-first Congress. And certainly it is little enough for them to receive the just consideration which they are entitled to through this request The small mining industry in Arizona has been curtailed to the point that unless action is taken to encourage their continued operation our national security 1s endangered. Those supporting the measure to fur- ther suspend, the tax are disregarding what should be uppermost in their minds, since it directly affects the American people. We saw a great show here in Washington recently when the President of Chile came to our country on a visit and I am sure all of you read and re- ceived propaganda to the effect that Chile must maintain its market of ex- port copper to the United States if it is to survive. And the picture painted by its President was indeed a doleful one. Yet, I do not recall of anyone raising his voice for the people of Anzona and the other Western States, and yet the same thing can be said if we do not take action and protect our domestic copper- producing States. I appeal to you, my colleagues in the Congress, to give serious consideration to this problem and have uppermost in your mind the effect your action will have on the citizens of the copper-pro- ducing States. We certainly do not want it said, nor do we want any action on the part of our Congress to indicate, that there are those who are more inter- ested in what will happen to the people in the foreign producing countries as against what will happen to the people of Arizona and other States. It is there- fore imperative that no further exten- sion be granted on the suspension of the excise tax on foreign copper and I trust that this group will give favorable con- sideration to my request. Mr. DOUGHTON. Mr. Speaker, I yield the remainder of my time, 1 minute, to the gentleman from Ohio [Mr. Youna]. Mr. YOUNG. Mr, Speaker, carrying out the statement made by the distin- guished minority leader on the Ways and Means Committee, I read as a part of my remarks an editorial appearing in the Cleveland Press and other Scripps-How- ard newspapers: Suspenp THis Crazy Tax on Coprer IN A Horry A tax of $40 a ton on imported copper, suspended at the beginning of World War II, has been back in effect since July 1. Permitting this tax to remain in effect would be economic lunacy, Even before the Korean crisis, this coun- try’s industries were using far more copper than its domestic mines produced. Now the need for copper is tremendously increased. Weapons for Americans who are
1950 fighting in Korea will take @ lot of copper. Our inadequate stockpiles of this and other metals should be built up fast against the menacing possibility of a bigger war. And the foolish tax endangers relations with our South American neighbors, eape- cially friendiy Chile, main source of our copper imports. The House Ways and Means Committee has approved a4 bill to suspend that tax for a year. The House should pass this bill in a hurry, and the Senate should follow suit. So this bill is of the utmost impor- tance, and should be passed. The SPEAKER. The time of the gen- tleman from New York has expired. All time has expired. The question is, Will the House sus- pend the rules and pass the bill? The question was taken; and on a divi- sion (demanded by Mr. Muius) there were—ayes 83, noes 39. Mr. BENNETT of Michigan. Mr. Speaker, I object to the vote on the ground that a quorum is not present, and I make the point of order that a quorum is not present. The SPEAKER. Evidently there is no quorum present. The roll call is auto- matic. The Doorkeeper will close the doors. The Sergeant at Arms will notify absent Members, and the Clerk will call the roll. The question was taken; and there were—yeas 283, nays 58, not voting 89, as follows: CONGRESSIONAL RECORD—HOUSE {Roll No. 205} YEAS—283 Abbitt Crook Harvey Abernethy Crosser Havenner Addonizio Cunningham Hays, Ark. Allen, Calif. Dague Heffernan Andersen, Davenport Heller H. Carl Davies,N.¥. Herlong Anderson, Calif. Davis, Ga. Herter Andresen, Deane Hepelton August H. DeGraffenried Hobbs Arends Delaney Hoeven Auchincloss Denton Hoffman, Mich. Bailey D’Ewart Holmes en Dollinger Hope tt, Pa. Donohue Howell tes, Ky. Doughton Hull ates, Mass. Doyle Jacobs ttle James eal) ton Javite eckworth Eberharter Jenison jennett, Fla. Rott Jenkins Bentsen Ellsworth Jones, Als. Blatnik Elston Jones, N.C. Boggs, . ving Bolling Fallon Karst Bolton, Md. Feighan Karsten Bolton, Ohio Fellows Kean Bonner Fenton Kearney ykin Flood Keating m Fogarty Kee Brown, Ga. Forand Kelley, Pa. Bryson Ford Kelly, N. Y. Buchanan FPugate Kennedy Buckley, Tl, Fulton Kerr Buckley, N. ¥. Furcolo Kilburn Burke Gamble King Burleson Garmats Klein purnside Gey, Kruse Gathings Kunkel Byrnes, Wis. Gavin Lane amp Golden Lenham Canfield Goodwin tham Cannon Gorski LeCompte Carlyle Greham Fevre Case, N.d. Granahan Lichtenwalter Cellier Grant Lina Chelf Green Linehan Chesney Guill Lodge Ohudoff Gwinn Lucas Clemente Hagen Lynch mer Hale McCormack ey Halleck McOulloch Rand MaDon Cotton Harden McGrath Coudert Hardy McGregor Cox Harrison McGuire Crawford Bart MoMillan, 8. 0. McSweeney Price Sutton Mack, Il). Priest Taber Mack, . Rabaut Tackett acy Rains Tauriello Madden Rankin Taylor Redden Teague on Reed, Ti. Thomas Marshall Reed, N. ¥. Thornberry Martin, Mass, Rees Tollefson Mason Rhodes Trimble Merrow Ribicoff Underwood Meyer Richards Van Zandt Michener Riehlman Velde Miller,Nebr. Robeson Vinson Mills Rodino Vorys Morton Rogers, Fla. Vursell Moulder Rogers, Masa, Wadsworth Multer Rooney Wagner Murphy Roosevelt Walsh Murray, Wis, Sadlak Walter Nicholson St. George Weichel Nixon Baylor Wheeler Noland Scott, Hardie White, Calif. Norblad Scott, Whitten Norrell Hugh D., Jr. Whittington O’Brien, Tl Bcrivner Wickersham O'Brien, Mich. Shelley Wier O'Neill Short Wigglesworth O'Sullivan Bikes Williams O'Toole Simpson, I. Wilson, Ind. Pace Smathers Wilson, Okla. Patterson Bmith, Kans. Wilson, Tex. Pfeifer, Smith, Va. Winstead Joseph L. Smith, Wis, Woiverton Philbin nce Wood Phillips, Calif. Stanley Woodhouse Poage Stefan Yates Polk Stigler Young Powell Stockman Zablockt Preston Sullivan NAYS—58 Albert Gross Potter Aspinall Hays, Ohio Poulson Baring Holifield Ramsay Bennett, Mich. Horan Rich Bishop Huber Sanborn Bosone Jackson, Wash. Scudder Bramblett Jensen Secrest Brown,Ohio McKinnon Shafer Byrne, N. ¥. Mansfield Bheppard Carnahan Marcantonio Simpson, Pa Clevenger Marsalis Staggers Curtis Martin, Iowa Steed Dolliver Miles Taille Dondero Miller, Calif. Werdel Douglas Morris Whitaker Engle, Calif. Murdock Withrow Fernandes O'Hara, Minn. Wolcott er O'Konski Woodruff Gossett Patten Granger Plumley NOT VOTING—89 Allen, Tl. Gore Mitchell Allen, La, Gregory Monroney Andrews Hall, Morgan Angell Edwin Arthur Morrison Barrett, Wyo. Hall, Murray, Tenn, Biemiller Leonard W, Nelson Blackney Hare Norton Boggs, La. Harris O'Hara, Il, Breen Hébert Passman Brooks Hedrick Patman Bulwinkle Hill Perkins Burdick Hinshaw Peterson Carroll Hoffman, M1. Pfeiffer, Case,8.Dak. Irving William L. Cavalcante Jackson, Calif. Phillips, Tenn. Chatham Jennings Pickett Chiperfield Johnson Quinn Christopher Jonas Regan Cole, Kans, Jones, Mo, Rivers Cole, N. ¥. Kearns Sabath Combs Keefe Sadowski Cooper Keogh Basscer Davis, Tenn, Kilday Sims Davis, Wis. Kirwan Smith, Ohio Dawson Larcade Thompson Dingell Lovre Towe Engel, Mich. Lyle Welch Frazier McCarthy White, Idaho Gillette McConnell Widnall Gilmer McMillen, 11, Willis Gordon Miller, Md. So (two-thirds having voted in favor thereof) the rules were suspended and the joint resolution was agreed to. The Clerk announced the following pairs; Mr. McCarthy with Mr. Allen of Tlinois, My, Mitchell with Mr. Towe. 10437 My. Dawson with Mr. Angell. Mr. O'Hara of Dilinois with My. Smith of Ohio, Mr. Babath with Mr. Barrett of Wyoming. Mr. Biemiller with Mr. Phillips of Ten- messee. Mr. Hébert with Mr. Blackney. Mr. Breen with Mr. William L. Pfeiffer, Mr, Carroll with Mr. Case of South Dakota. Mr. Regan with Mr. Nelson. Mr. Irving with Mr. Miller of Maryland, Mr. Sadowski with Mr. Chiperfield. Mr. Hedrick with Mr. McMillen of UHnoils, Mr. Cavalcante with Mr. Cole of Kansas. Mr. Gore with Mr. McConnell. Mr. Frazier with Mr. Davis of Wisconsin, Mr. Morrison with Mr. Lovre. Mr, Welch with Mr. Cole of New York. Mr. Thompson with Mr. Keefe. Mr. Gregory with Mr. Engel of Michigan. Mr. Harris with Mr. Widnall. Mr. Gordon with Mr. Gillette. Mr. Gilmer with Mr. Jackson of California. Mr. Pickett with Mr. Kearns. Mr. Andrews with Mr. Edwin Arthur Hall. Mr. Boggs of Louisiana with Mr. Jennings. Mr. Cooper with Mr. Hill. Mr. Dingell with Mr. Johnson. Mr. Morgan with Mr. Leonard W. Hall. Mr. Keogh with Mr, Jonas. Mr. Sasscer with Mr. Hoffman of Dlinols. Mr. White of Idaho with Mr. Hinshaw. Messrs. ExLiorr, BrckworTH, and CunnincHaM changed their votes from “nay” to “yea.” The result of the vote was announced as above recorded. The doors were opened. t f motion to reconsider was laid on the able. GENERAL LEAVE TO EXTEND REMARKS Mr. DOUGHTON. Mr. Speaker, I ask unanimous consent that all Members may have five legislative days within which to extend their remarks on the bill just passed. The SPEAKER. Without objection, it is so ordered. There was no objection. AMENDING THE CLAYTON ACT Mr. CELLER. Mr. Speaker, I move to suspend the rules and pass the bill (H. R. 8763) to amend the Clayton Act with re- spect to the recovery of triple damages under the antitrust laws, and for other purposes, with a committee amendment. The Clerk read the bill as follows: Be tt enacted, etc., That sections 4 and 5 of the act entitled “An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes,” approved October 15, 1914 (38 Stat. 731; 15 U. 8. C. 15), is amended to read as follows: “Src. 4. (a) Any person heretofore or here- after injured in his business or property by reason of anything forbidden in the anti- trust laws may sue therefor in the United Btates district court for the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee. “(b) Whenever the United States ig here- after injured in its business or property by reason of anything forbidden in the anti- trust laws It may sue therefor in the United States district court for the district in which the defendant resides or is found or has an agent, without respect to the amount in eontroversy, and shall recover actual dam- ages by it sustained. “(o) Any action (including an action brought by or on behalf of the United States) to enforce any cause of action under
10438 this section shall be forever barred unless commenced within 6 years after the cause of action accrued, “Sxce 6. (a) A final Judgment or decree hereafter rendered in any civil or criminal proceeding, but not including a suit or proceeding under section 4 (b), brought by or on behalf of the United States under the antitrust laws to the effect that a defend- ant has violated said laws shall be prima facie evidence against such defendant in any proceeding brought pursuant to subsections 4 (a) and 4 (b) against such defendant under said laws as to all matters respecting which sald judgment or decree would be an estoppel as between the parties thereto: Provided, That this section ehall not apply to consent judgments or decrees entered be- fore any testimony has been taken. “(b) Whenever any civil or criminal pro- ceeding is instituted by the United States to prevent, restrain, or punish violations of any of the antitrust laws, or to recover dam- ages under section 4 (b) of this act, the run- ning of the statute of limitations in respect of each and every private right of action arising under section 4 (a) and based in whole or in part on any matter complained of in said proceeding shall be suspended dur- ing the pendency thereof.” Src. 2, For the purposes of this act, the term “antitrust laws” has the meaning as- signed to it by the first section of the Clay- ton Act. The SPEAKER. Is manded? Mr. MICHENER. Mr. Speaker, a par- liamentary inquiry. Iam not opposed to the bill, but if no one is opposed, I would demand a second The SPEAKER. If no one else is op- posed, the gentleman qualifies if he de- sires, Mr. MICHENER. I demand a second, Mr. Speaker. Mr. CELLER. I ask unanimous con- sent, Mr. Speaker, that the second be considered as ordered. Without objection, the second was or- dered. The SPEAKER. The gentleman from New York {Mr. CeLuer] is recognized for 20 minutes and the gentleman from Michigan [Mr. MIcHENER] will be recog- nized for 20 minutes. Mr. CELLER. Mr. Speaker, I yield myself 5 minutes. Myr. Speaker, this bill amends the anti- trust laws in two particulars. It seeks to make the Clayton Act current with pres- ent realities. First, it permits the United States Government to bring action for actual damages sustained where there are vio- lations of the antitrust laws, and the United States Government is directly af- fected and damaged. Secondly, it provides for a uniform statute of Hmitations with reference to the bringing of triple damage suits un- der the Sherman Act by private persons aggrieved by the antitrust law viola- tion—that is, for example, through price fixing, allocation, abuse of patents, and the like. It is rather anomalous that the courts have held that suits may be brought for damages for violations of the antitrust laws by a city, by a municipality. A suit may be brought by a State government for damages involved in violations of the antitrust laws, Yet the United States @ second de- CONGRESSIONAL RECORD—HOUSE Government, by a decision of the Su- preme Court, is precluded from bringing such an action. Well, if we accord such action to a State, if we accord such action to a mu- nicipality, it seems woefully in error not to accord the same right to the United States Government, particularly when we keep in mind that the United States Government is the largest purchaser of supplies. For example, the Department of Defense alone purchased, in the 9 months ending March 1950, over $2,500,- 000,000 worth of supplies. That does not take into account civilian supplies. Therefore, the United States Govern- ment, being the largest purchaser, be- comes the greatest sufferer from monop- olistic exactions. The American taxpayer is entitled to the full value of his tax dollar, and he should be protected against its going into the pockets of wrongdoers in the form of excessive prices and profits resulting from violations of the antitrust laws. The report on this bill, which you probably have before you, calls atten- tion to the fact that for the first half year ending March 31, 1937, 18 com- panies submitted to the Procurement Division of the Treasury Department bids identical to the penny on 82 differ- ent sizes of tires and tubes, The same thing happened again during the next half year period with even higher prices; the bids were exactly alike And when identical bids were again submitted for the third half year period which cov- ered October 1, 1937, to March 31, 1938, the Procurement Division, upon the ad- vice of the Attorney General, rejected the bids and invited new ones, but the new bids were again identical to those rejected. As a result of those identical bids it was discovered that the United States had been injured to the extent of $351,000 but was deprived of the right to bring action against those companies because of the collusion. CALL OF THE HOUSE Mr. BENNETT of Michigan. Mr. Speaker, I make the point of order that a quorum is not present. The SPEAKER. Evidently a quorum is not present. Mr. PRIEST. Mr. Speaker, I move a call of the House. A call of the House was ordered. The Clerk called the roll, and the fol- lowing Members failed to answer to their names: [Roll No. 206} Allen, Calif. Chatham Gossett Allen, Il. Chiperfield Gregory Allen, La, Christopher Hall, Anderson, Calif.Cole, Kans. Edwin Arthur Andrews Cole, N. ¥. Hall, Angell Combs Leonard W. Barden Cooper Hare Barrett, Wyo. Davis, Tenn, Harris Biemiller Davis, Wis. Hart Blackney Dawson Havenner Bogga, La, Dingell Hébert Bramblett Douglas Hedrick Breen Doyle Hill Brooks Durham Hinshaw Bulwinkle Engel, Mich. Hoffman, Tl. Burdick Frazier Holifield Camp Gillette Irving Carro}l Gilmer Jackson, Calif. Case,S. Dak, Gordon Jennings Cavalcante Gore Johnson JULY 17 Jonas Morgan Ramsay Kearney Morrison Regan Kearns Morton Rivers Keefe Murray, Tenn Sabath Keogh Nelson Badowsk! Kilday Norton Basscer Kirwan O'Mara, Nl. Shelley LeFevre Pace Sims Lovre Passman 8mith, Ohio Lyle Patman Thomas McCarthy Perkins Thompson McConnell Pfeiffer, Towe MoMillen, Tl. William i. Vinson Miller, Calif, Phillips, Tenn, Welch Miller, Md. Pickett White, Idaho Mitchell Plumley Willis Monroney Quinn The SPEAKER. On this roll call 343 Members have answered to their names, &@ quorum. By unanimous consent, further pro- ceedings under the call were dispensed with. AMENDING THE CLAYTON ACT Mr. CELLER. Mr. Speaker, in addi- tion to providing the Government of the United States a judicial forum where it can sue for damages for breaches of the antitrust laws, where for example bids are collusive or where markets have been divided and prices have been fixed, this bill also provides for a uniform statute of limitations within which actions for damages must be brought by private litigants. There is great confusion with refer- ence to the bringing of triple-damage actions on the part of private litigants against those who have offended against the antitrust laws. In some States the statute of limitations has been deemed to be 1 year, which is woefully insuffi- cient a time within which to bring a very difficult triple-damage suit. In other States there is a statute of 2 years. In Georgia, for example, the statute of limi- tations is 20 years. So that you have States having a period as low as 1 year and another State having a period as high as 20 years. Sixteen States—Maine, Michigan, Minnesota, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Vermont, and Wisconsin—have 6-year statutes, The bill before you provides for a uni- form statute of limitations of 6 years, Indiana has a 15-year statute; Tennes- see has 10 years; Wyoming 8 years. What is the result of that vast num- ber of States over the length and breadth of the land, each having a different pe- riod within which a private suit for triple damages must be brought? Confusion results. A litigant and counsel for liti- gants does not know wHether he has a right or whether he has not any right. The Clayton Act presently provides for no specific statute of limitations. The Supreme Court has held that the State law must be applicable. If you have so many different kinds of statutes in the various States, what is your right, if, perchance, a violation occurs in a number of States? If it occurs in a State where the statute is 1 year, and, in ad- dition, occurs in a State where the stat- ute it 10 years, you are given a choice. You very likely would bring action in the State which has the longer statute of
1950 limitations, But what of the fellow who is domiciled in a given State where the statute is only 3 or 4 years and the wrong does not cover other States? He is put at a serious disadvantage, and if he waits 8 or 4 years before bringing his action, he is deprived of the benefits of the triple damage provisions of the Sherman Act. Mr. HOFFMAN of Michigan. Mr. Speaker, will the gentleman yield? Mr. CELLER. I yield. Mr. HOFFMAN of Michigan. Can the gentleman tell us how long it will be be- fore we vote on the bill? Mr. CELLER. I hope to secure a vote as quickly as possible. Mr. HOFFMAN of Michigan. That was not my point. I am just inquiring because some of the Members were asking. Mr. CELLER. I should think we would vote momentarily. So, in order to dispel confusion, we provide for this uniform statute of limi- tations. Frequently we hear of the un- certainties of the antitrust laws. Well, here is an eminent case where we are endeavoring to remove grave uncertainty as to statutes of limitations in the vari- ous States and to give certainty to the number of years that should be involved in a genera] statute of limitations. I repeat that there was no vital op- position to this bill. Although numerous organizations were invited to attend, there was practically no vital opposition to it. There is no minority report. The Judiciary Committee voted the bill unan- imously, although I believe two Members reserved their right to express themselves concerning one or two of the provisions of the bill. The SPEAKER. The time of the gentleman from New York has expired. Mr. CELLER. Mr. Speaker, I yield myself two additional minutes. Mr. O'HARA of Minnesota. Mr. Speaker, will the gentleman yield? Mr. CELLER. I yield. Mr, O’HARA of Minnesota. What is the limitation which is proposed in this bill? Mr. CELLER. That the statute of limitations shall be uniform and shall be for a period of 6 years. Mr. O’HARA of Minnesota. It applies the same to the Government as to private individuals? Mr. CELLER. Yes. Seetion 4, sub- division (c) provides that any action, in- cluding one brought by United States, shall be barred unless brought within 6 years. Private parties are given the right to sue for triple damages. That is by way of an incentive to encourage people to bring such suits, so as to more readily go after the violators of the antitrust laws, but I do not think there is any need for the Government to have any incentive. Hence, the Government is limited to ac- tual damage. If the Government gets its actual damages, I think that should be sufficient. The purpose of the triple damages was by way of an incentive or inducement that nee@ not be present when the Government sues. At the inception last year of the pro- gram of the Monopoly Subcommittee I CONGRESSIONAL RECORD—HOUSE promised an inqutry that would result in positive legislative action to bring order into the antitrust laws so as to make them more effective instruments in the preservation of free competitive enter- prise. The purposeful nature of that program thus far can be judged from the record of the two bills which have been passed by this Congress with little or no opposition. You have passed over- whelmingly a bill to amend the Clayton Act to prevent monopolistic asset merg- ers, and this bill is now on the Calendar of the Senate after securing the ap- proval of the Senate Judiciary Commit- tee. You have also passed, with no opposition, a bill to increase the anti- trust penalties to $50,000, and this is now awaiting action in the Senate Judiciary Committee. The business community of the coun- try has long been complaining of confu- sion in the antitrust laws. Confusion certainly exists in determining the par- ticular statute of limitations governing triple-damage actions under the anti- trust laws for, unlike virtually all Fed- eral statutes creating rights to sue for torts, the triple-damage section of the Clayton Act is completely silent. Thus the determination is left up to the sepa- rate laws of the 48 States. No one really objects to the idea of having some form of a statute of limi- tations. The question is as to the extent of the period of limitations. In 1914 the Senate Judiciary Committee reported the Clayton Act with a 6-year statute of limitations, but the provision was lost in the shuffie of compromises. We have surveyed the State laws to determine the type of limitation statutes applicable to such actions and the length of the statutory period in the various States. This has been a difficult, and, in many cases, an uncertain task, for in only isolated cases do States have such laws bearing solely on triple-damage suits under the Federal antitrust laws. But in many States the Federal courts have had occasion to determine which of the State statutes applies to and gov- erns the bringing of such actions, and in those instances there is relative cer~ tainty. These decisions indicate that the State statutes applied take a wide variety of forms. Included are the limi- tations governing the following types of actions: (a) Action for a statutory penalty or forfeiture; (b) Action on the case; (c) Action for damages caused by offenses or quasi offenses; (d) Action on tort; (e) Action on conspiracy; (f) Action on liability created by stat- ute, other than a penalty or forfeiture; (g) Action on liability created by a Federal statute; (h) Residuary actions—those not specified in other limitation provisions. In the case of the States involved in these decisions, our survey has relied upon the statutes applied by the courts. With the remaining States, an attempt has been made to choose the statute most likely applicable to triple-damage actions. Thus, in those States where a 10439 specific Imitation governed actions on liability created by statute, other than a penalty or forfeiture, this provision was chosen. Such a provision appears di- rectly applicable and whenever available was applied by the Federal courts. The Supreme Court held in the Chattanooga Foundry case—Chattanooga Foundry & Pipe Works v. Atlanta (203 U. 8, 390) — that a triple-damage action is not a suit for a statutory penalty or forfelture. In the States having no such provision, a statute similar to one applied by a Fed- eral court was chosen, if available. In many States the residuary statute had to be chosen. The following table which I shall put in the Recorp at this point shows the length of the statutory period in each State, the statutory description of the type of action which it is thought in- cludes triple-damage suits, the citation to the statute, and citations to cases which have either held the statute ap- plicable to triple-damage actions under the Federal antitrust laws or have re- fered to it as being applicable: List or STATE STATUTES OF LIMITATIONS The following information is listed for each State: 1, The statutory description of the type of action thought to include treble-damage sults; 2. The citation to the statute; 8. The cases, 1f any, which have applied or referred to the particular statute of limle tation. ALABAMA, 1 YEAR 1. Noncontractual injury. 3. Alabama Code (1940), title 7, section 26. ARIZONA, 1 YEAR 1, Liability created by statute other than a penalty or forfeiture. non Arizona Code Annotated, section 29, page 1. ARKANSAS, 8 YEARS 1. On the case, 2. Arkansas Statutes Annotated, section 37, page 206. 8. Russelville Canning Co. v. American Can Co. (87 F. Supp. 484 (W. D. Ark. 1949)). CALIFORNIA, 8 YEARS 1. Liability created by statute other than & penalty or forfeiture. 2. California Code Civil Proceedings, sec- tion $38 (1). 8. Burnham Chemical Co. v. Borax Consoli- dated, Lid. (170 F. 2d 869 (9th Cir., 1948), cert. den. 886 U. 8. 924); Foster & Kletser Co, v. Special Site Sign Co. (85 F. 2d 742 (9th Cir., 1996), cert. den. 299 U. 8. 618); Suckow Borax Mines Consolidated, Inc. v. Borax Consoli- dated, Ltd. (81 F. Supp. 301 (N. D. Cal. 1948) ); United West Coast Theatres Corp. v. South Side Theatres, Inc. (86 F. Bupp. 109 (8. D. Cal. 1949) ). COLORADO, 2 YEARS 1, Liability created by Federal statute. 2. Colorado Statutes Annotated, section 102-108 (1), 3. Greve y. Gibraltar Enterprises, Inc. (85 F. Supp. 410 (D. N. Mex. 1949) ). CONNECTICUT, 8 YEARS 1. Tort. 2. Connecticut General Statutes (revised 1949), section 8316. DELAWARE, 8 YEARS 1. On the case. 2. Delaware Revised Code (1935), section 6129,
10440 8. Williamson v. Columbia Gas & Elec, Corp. (110 F. 2d 15 (3d Cir., 1939) cert. den, 810 VU. S. 639). FLORIDA, 8 YEARS 1, Liability created by statute other than & penalty or forfeiture. 2. Florida Statutes Annotated, section 95.11 (5). GEORGIA, 20 YEARS 1. To enforce right accruing to individual under statute. 2. Georgia Code Annotated, section 8-704. IDAHO, 3 YEARS 1. Liability created by statute other than @ penalty or forfeiture. 2. Idaho Code, section 6-218, ILLINOIS, 5 YEARS 1. Residuary. 2. Iiiinois Statutes, annotated, section 102-275. ‘ 3. Tifin Bldg. Corp. v Balaban & Katz Corp. (87 F. Supp. 121 (N. D., Ti, 1949) ). INDIANA, 5 YFARS 1. Residuary. 2. Burns Indiana Statutes, section 2-603, annotated, IOWA, 8 YEARS 1. Residuary. 2. Iowa Code (1950), section 614.1 (6). KANSAS, 3 YEARS 1, Liability created by statute other than ® penalty or forfeiture, 2. Kansas General section 60-306, second. KENTUCKY, 1 YEAR OR 5 YEARS 1. Conspiracy, 1 year: Liability created by statute other than a penalty or forfeiture, 5 years (see note). 2. Kentucky Revised Statutes, 413.130, 413.140 (c). 8. Northern Kentucky Telephone Co. v. Southern Bell Telephone & Telegraph Co, (73 F., 2d 333 (6th Cir.,, 1934), cert. dee nied, 294 U. 8. 719); Fifth and Walnut, Inc., v. Loew's, Inc, (76 F. Supp. 64 (8. D., N. Y., 1948)). NoTeE.—In the case of Northern Kentucky Telephone Co. v. Southern Bell Telephone & Telegraph Co. the court held the 1-year stat- ute governing actions for conspiracy appli- cable rather than the 6-year statute govern- ing actions upon liability created by stat- ute. The latter statute would probably apply to actions not involving conaptracy. LOUISIANA, 1 YEAR 1, For damages caused by offenses or quasi offenses. 2. Louisiana Civil Code, article 3536, 8. American Tobacco Co. v. People’s To- dacco Co, (204 Fed. 58 (1918)). MAINE, 6 YEARS 1. On the case. 2. Maine Revised Statutes (1944), chapter 09, section 90. MARYLAND, 3 YEARS 1, On the case. 2. Flack’s Maryland Code (1939), article 57, section 1. 8, Seaboard Terminals Corp. v. Standard Oil Co. of N. J. (24 F. Supp. 1018 (8. D. N. ¥. 1038), affirmed, 104 F. 2d 659 (2d Cir., 1939) ). MASSACHUSETTS, 2 YEARS 1, On tort. 2. Massachusetts Laws, 1948, chapter 274. 8. Strout v. United Shoe Machinery Co, (208 Fed. 646 (D. Mass. 1913), affirmed 225 Fed. 1022 (1st Cir. 1915)); Momand v. Uni- versal Film Exchange (43 F. Supp. 996 (D. Mass. 1942), affirmed, 172 F. 2d 37 (1st Cir, 1948)). Statutes, annotated, sections MICHIGAN, 6 YEARS 1. Residuary. 2. Michigan Statutes, annotated, section 27.605, CONGRESSIONAL RECORD—HOUSE MINNESOTA, 6 YEARS 1. Liability created by statute other than & penalty or forfeiture. 2. Minnesota Statutes Annotated, section 54105 MISSISSIPPI, 6 YEARS 1. Residuary,. 2, Mississippi Code (1942), section 722, MISSOURI, 5 YEARS 1. Liability created by statute other than a penalty or forfeiture. 3. Missourl Revised Statutes Annotated, section 1014, MONTANA, & YEARS 1. Liability created by statue other than a penaity or forfciture. 2. Montana Revised Code, section 93--2607. 8. Hansen Packing Co. v. Swift & Co, (27 F, Supp. 364 (S. D. N. Y. 1939)). NEBRASKA, 5 YEARS 1. Liability created by statute other than a penalty or forfeiture. 2. Nebraska Revised Statutes (1943), sec- tion 25-206. NEVADA, 8 YEARS 1. Liability created by statute other than a penalty or forfeiture. 2 Nevada Compiled Laws (1929), section 8524, NEW HAMPSHIRE, 6 YEARS 1. Residuary. 2. New Hampshire Revised Laws (1942), chapter 885, section 3. NEW JERSEY, 6 YEARS 1. On the case. 2. New Jersey Revised Statutes (1937), title 2, chapter 24. section 1. 3. Jaeger Research Laboratories v. R. C. A. (90 F. 2d 826 (3d Cir., 1937); Shelton Elec- atric Co. v. Victor Talking Machine Co, (277 Fed. 433 (D. N. J. 1922)). NEW MEXICO, 4 YEARS 1. Residuary. 2. New Mexico Statutes Annotated, section 27—104. 8. Greve v. Gibraltar Enterprises, Inc, (85 F. Supp. 410 (D. N. M. 1949) ). ; NEW YORK, 6 YEARS 1. Liability created by statute other than @ penalty or forfeiture. 2, New York Civil Practice Act, section 48. 8. Seaboard Terminals Corp. v. Standard Oil Co. of N. J. (24 F. Supp. 1018 (S. D. N. Y. 1938), aff'd, 104 F. 2d 659 (2d Cir., 1939) ); Pastor vy. American Telephone & Telegraph Co. (76 F. Supp. 781 (8. D. N. Y. 1940)); Dyson Theatres v. Buffalo Theatres (8 F. R. D. 86 (W. D.N. Y. 1948)). NORTH CAROLINA, 3 YEARS 1. Liability created by statute other than a penalty or forfeiture. 2. North Carolina General Statutes (1043), section 1-52 (2). NORTH DAKOTA, 6 YEARS 1. Liability created by statute other than @ penalty or forfeiture. 2. North Dakota Revised Code (1943), sec- tion 28-0116 (2). OHIO, 6 YEARS 1. Liability created by statute other than @ penalty or forfeiture. 2. Pages’ Ohio General Code Annotated, section 11222. OKLAHOMA, 3 YEARS 1, Liability created by statute other than a penalty or forfeiture. 2. Oklahoma Statutes Annotated, title 12, section 95. 3. Oklahoma v. American Book Co, (144 F. 2d 685 (10th Cir. 1944)); Momand v. Uni- versal Film Exchange (43 F. Supp. 996 D. Mass, 1942), aff'd., 172 F. 9d 37 (1st Cir., 1948) ). JULY 17 OREGON, 6 YEARS 1. Liability created by statute other than a penalty or forfeiture. 2. Oregon Composite Laws Annotated, sec- tion 1-204 (2), PENNSYLVANIA, 6 YEARS 1. On the case. 2, Purdon’s Pennylvenia Statutes Anno- tated, title 12, section 31. 83. Bluefield S. S. Co. v. United Fruit Co. (243 Ped. 1 3d Cir, 1917), appeal dismissed 248 U.S. 595). RHODF ISLAND, 6 YEARS 1. On the case. 2. Rhode Island General Laws (1938), chapter 510, section 8. SOUTH CAROLINA, 6 YEARS 1, Liability created by statute other than a penalty or forfelture. 2. South Carolina Code (1942), section 388. SOUTH DAKOTA, 6 YEARS 1. Liability created by statute other than & penalty or forfeiture. 2. South Dakota Laws, 1947, chapter 153, section 2, TENNESSEE, 10 YEARS 1. Residuary. 2. Tennessee Code (1932), section 8601. 8. Chattanooga Foundry & Pipe Works v¥. Atlanta (203 U. 8. 890 (1906) ). TEXAS, 4 YEARS 1. Residuary. 2. Texas Statutes Annotated, article 5529. 8. Jones & Co. v. West Publishing Co., (270 Fed 563 (5th Cir. 1921), appeal dismissed, 270 U. S. 665). UTAH, @ YEARS 1. Residuary. 2. Utah Code Annotated, section 104-2~30. Nore.—The Utah limitation of 1 year for actions on Habllity created by statutes of foreign States (Utah Code Annotated, sec- tion 104-2-30) was rejected as not applic- able to Federal statutes. VERMONT, 6 YEARS 1. On tort. 2. Vermont Statutes (Rev. 1947), section 1689, VIRGINIA, 5 YEARS 1. Personal actions that survive. 2. Virginia Code (1942), section 5818. 3. Barnes Coal Corp. v. Retail Coal Mere chants Association (128 PF. 2d 645 (4th Oir., 1942) ). WASHINGTON, 2 YEARS 1. Residuary. 2. Rem. Revised Statutes, Washington, sece tion 165. 3. Harvey v. Booth Fisheries Co, (228 Fed. 782 (W. D. Wash. 1915) ). Norg.—The court in Harvey v. Booth Fishe eries Co. held the Washington 3-year provi- sion for actions on statutory penalties ap- plicable, Since the Supreme Court in the Chattanooga Foundry case (208 U. S 390) held treble damage actions were not sults for @ statutory penalty, the Harvey decision seems erroneous and the residuary statute probably should apply. ‘WEST VIRGINIA, 2 YEARS 1. Personal actions that survive (see note). 2. West Virginia Code (10949), section 5404. 8. Glenn Coal Co. v. Dickinson Fuel Co. (72 F 2d 885 (4th Cir., 1984) ). Nore.—Barnes Coal Corp, v. Retail Coat Merchants Association (128 F, 2d 645 (4th Cir., 1942)) held in applying a similar Vir- ginia statute that treble damage actions are ‘tort actions that do survive, a question which the court in the Glenn Coal Co. case did not reach. WISCONSIN, 6 YEARS 1. Liability created by statute. 2, Wisconsin Statutes (1947), 830.18 (4). section ,
1950 WYOMING, 8 YEARS 1, Liability created by statute other than & penalty or forfeiture. 2. Wyoming Composite Statutes Anno- tated, section 3-505. The very fact of the variety in the periods of limitation in the laws of the several States and the recurring dif- ficulty in determining the period which is precisely applicable demonstrates the need for this amendment. The 6-year period in the amendment under discussion is not chosen at random, as will be seen from an examination of the schedule which TI have just {inserted into the Recorp. I do not personally fa- vor Federal statutes of repose of such an extreme duration as some States like Tennessee, 10 years; Indiana, 15 years; and Georgia, 20 years, for in the elapse of years witnesses die, facts grow stale, and evidence disappears. But a 6-year period, representing a happy medium drawn from the experience and judgment of the various States, is eminently sound for Federal purposes. The present lack of a uniform period of limitations has created confusion, with the choice of forum affecting the result in many cases. In applying State limita- tion statutes, it must first be determined whether the law of the forum or the place of injury will govern. The ramifications of many large Nation-wide conspiracies present the case of injury occurring in 8 multiple of States. If the limitation statute of the State where the injury took place governs, a plaintiff who has been injured in several States may choose the. forum most advantageous to him in this respect. Conversely, a plaintiff injured in a Btate with a short statute of limita- tions may find himself barred from re- covery, while another plaintiff, more ad- vantageously situated in a State with a longer limitation period may recover for the identical injury. The proposed amendment would prevent the occur- rence of these unjust situations. This bill is not to be regarded in any sense as a drastic shift in the antitrust laws. It is merely a little step in the right direction. I hope you will pass it. Mr. MICHENER. Mr. Speaker, I yield 8 minutes to the gentleman from New York (Mr. Keattxe]. Mr. KEATING. Mr. Speaker, the few remarks which I expect to make will be devoted to section 4 (b) of this bill, which is perhaps the most important provi- sion in it. Section 4 (b) of this bill permits the United States Government to sue for ectual, rather than treble, damages sus- tained by it as a result of violation of the antitrust laws. I want to address myself briefly to that provision. In 1941 the Supreme Court, in the case of United States v. Cooper (312 U. 8. 600), held that the United States is not a “person” within the meaning of the triple-damage sections of the Sherman and Clayton Acts and cannot recover damages for losses suffered through anti- trust violations. I recognise a strange ineonsistency between such a denial to the United States Government, on the one hand, and the construction of the game statutes in Chattanooga Foundry v. Atlanta (203 U. 8. 390) and Georgia v. CONGRESSIONAL RECORD—HOUSE #vans (316 U. 8. 158) to the effect that a municipality and a State, respectively, may recover triple damages. We must, however, take the law as we find it fol- lowing the Cooper decision. The reasons persuading me to favor section 4 (b) are simple. The United States is the largest purchaser of goods in the country, spending billions of dol- lars each year. Much of the purchasing is done by competitive bidding through the medium of sealed bids. Effective, honest competition would naturally re- sult in benefits to the Government in the form of lower prices. If, however, bid- ders were to conspire and knowingly submit identical bids—as appears to have been done in the Cooper case—the price advantage of competition would disap- pear, During the 9-month period ending March 81, 1950, the Defense Department alone purchased $672,000,000 worth of goods through the medium of competi- tive bidding, plus another $2,304,000,000 in negotiated contracts. I am informed that an undisclosed but significant per- centage of these procurement dollars were spent in purchases involving iden- tical bids. This factor alone does not necessarily spell conspiratorial arrange- ments, but is merely one element to be taken into consideration. Indeed, the case could be that such schemes are present where the bids submitted are all variant according to plan. However, the fact may be, if antitrust violations occur, the Government is injured to the extent that it is deprived of lower prices and in such cases should be entitled to recover. The normal remedies in civil and crim- inal proceedings fail to protect the pro- prietary interest of the Government or to compensate for its losses, The Amer- ican taxpayer is entitled to full value for hig tax dollar. If he were spending the money himself he could sue for triple damages. He is equally entitled to pro- tection if the Government spends {¢ for Some have asked why the committee has seen fit to report a bill confining the Government to recovery of actual damages in these cases, rather than triple damages. The principal reason is that the Government, as contrasted to private suitors, needs no special induce- ment to bring actions to enforce the antitrust laws, since it is by law already charged with the duty of enforcement. The private suitor, faced with the heavy expenses involved in maintaining his case, the difficulty in securing evidence, and the delay in bringing a case to ulti- mate disposition, requires the additional incentive of triple recovery. Moreover, because the procurement contracts of the Government run into stagge sums, 8 loss for which the Governm in the event of an antitrust violation might recover could be so enormous that, if tripled, it would completely bankrupt the offending seller, a punitive conse- quence which the committee felt would be altogether too severe. The prospect of lability to the Gov- ernment for damages resulting from antitrust violations will give pause to any concerns which would be inclined intentionally to seek to defraud the tax- 10441 payers by overcharging the Government in procurement matters. This knowi- edge will serve as a substantial deterrent, especially since the Government is not handicapped in the same way as private suitors who find the costs, délays and uncertainties entailed in a triple damage action such as to discourage its com~- mencement. At the same time, there is no unfairness or discrimination in the proposal which would operate to the dis- advantage of the honest, legitimate businessmen who comprise the great majority of the American business com- munity. From every point of view this pro- vision improves and strengthens the Clayton Act. Mr, CELLER. Mr. Speaker, I yield 5 minutes to the gentleman from Indiana {Mr. Denton]. Mr. DENTON. Mr. Speaker, with the publicity, attention, and public clamor which frequently accompanies the in- stitution of the Government antitrust suit, we frequently forget that antitrust law policy is enforced through a dual- edged sword. Not only is there the Gov- ernment action which generally demands either fine or injunction, but there is also the suit by the private individual, in- jured by monopolistic practices, in which just retribution is sought. If in our gealous effort to enforce the antitrust jaws more heed is given to the Govern- ment case, we must not overlook the private triple-damage suit as a vigorous and effective weapon of the free-enter- prise system. The roots of the triple-damage suit lie deep in Anglo-American jurisprudence. The medieval statute of monopolies, passed by Parliament in 1623, afforded the injured artisan his remedy in the King’s courts where three times the damage suffered at the hands of the local monopolist was awarded him. Sup- posedly, the origins of this private type of action go back even further into his- tory, for the Statute of Monopolies pur- ported to be mere legislative enactment of the principles of the common law. The framers of the Sherman Act were well aware of the ancient tradition of the triple-damage suit. There is evi- dence to indicate that they believed the private suitor would be the mainstay of an antimonopoly policy, and that Gov- ernment suits would simply augment private suits. Such has not been the case. At times, indeed, the triple-dam- age action has almost fallen into com- plete desuetude. But in more recent days, the private litigant has had an in- creasing role in attaining the objectives of the Sherman Act. Triple-damage ac- tions today on the part of the private individual injured by unfair economic practices or monopolistic abuses are a recurring and important phenomenon in the antitrust fabric of the economy viewed as a whole. What I have said heretofore has been merely by way of preface to the pending legislation of which Iam author. I am not attempting to make something com- lex which is essentially simple. This iii does two principal things. First, it provides that whenever the United States Government as such is
10442 injured in its business transactions or operations through monopolistic or un- fair practices in violation of the anti- trust laws, the Government may go to court and recover the actual damages sustained by it as a consequence of these violations. Necessity for this legislation arises out of a decision by the Supreme Court of the United States. Under pres- ent law, any person injured by violations of the antitrust laws may bring an action for triple damages in the courts of the United States against the corporation or individual which has acted in restraint of trade. The Supreme Court, in two rather anomalous decisions, has held that a State of the Union and a municipality can bring such an action as if they were private parties, but that the Govern- ment of the United States is not a “‘per- son” within the meaning of the statutes and consequently, remains without any relief, except that afforded by sections 1 and 2 of the Sherman Act to bring crim- inal, injunctive, or dissolution proceed- ings. The first purpose of this bill is to permit the United States to obtain civil relief and recover actual damages sus- tained as the result of economic prac- tices which violate the antitrust Jaws. ' The principal feature of the bill is to establish a uniform statute of limitations of 6 years for the triple damage suits of private persons to which I made refer- ence in the opening portions of my re- marks. At the present time, although the right to bring triple damage suits in the United States courts is accorded through Federal statute, the period of time during which such an action may be commenced is determined by State law. ‘This has resulted in an incongruous anti- trust law policy in force throughout the various States of the Union. Ranging from 1 year to 20 years in duration, these ‘various State laws give the antitrust laws differing intonations in different areas of the Nation. The policy of our country against monopolies, restraints of trade, and unfair practices is a national one and should have uniform application throughout the breadth of the land. As a member of the Subcommittee on ptuly of Monopoly Power, I have heard usinessmen tell us that the antitrust laws are in need of clarification. I be- lieve legislation establishing a uniform time limitation is a long step toward clearing up ambiguities in the antitrust Jaws. I can think of no greater con- fusion in antitrust policy than that which arises out of a situation where, if a party 4s injured through monopoly just within the border of Alabama, he must hasten to bring his suit within 1 year; but if he resides 10 miles away in the State of Georgia, he may rest almost two decades while evidence grows stale, witnesses vanish, and defendants are lulled in false security. I do not see how this measure can excite much controversy. The Subcom- mittee on Study of Monopoly Power and the House Judiciary Committee unani- mously agreed that this bill should be reported to the floor. The two objects of the legislation I feel are laudable and unobjectionable. Certainly the United States Government should be allowed to recover the actual damages it sustains CONGRESSIONAL RECORD—HOUSE through the machinations of monop- olies. Likewise, in view of the fact that the antitrust laws are basically national in scope and objective, the time limita- tion for private actions should not for- tuitously depend upon the geographical boundaries of the States of the Union. I therefore strongly urge that the House give this hill {ts serious consideration and that it pass. Mr. MICHENER. Mr. Speaker, I yield $8 minutes to the gentleman from Maine (Mr. Havel, Mr. HALE. Mr. Speaker, I am in favor of this legislation. I think that the Committee on the Judiciary is to be con- gratulated on bringing it out. The par- ticular provision of the bill which inter- ests me and on which I want to make a few observations, is section 4 (c) which provides that— Any action (including an action brought by or on behalf of the United States) to en- force any cause of action under this section shall be forever barred unless commenced within 6 years after the cause of action accrued. I think it is altogether desirable that there should be a uniform period of lim- itations applicable throughout the Na- tion, and that we should not be remitted to the various limitation periods pre- scribed by the several State statutes. It seems to me regrettable, however, that there is no provision in the bill that the statutory period of limitation shall not commence to run until a conspiracy brought about by fraud or concealment shall become known to the plaintiff. I should like to inquire, if I may, of the gentleman from New York [Mr. Ce.uer], whether I am correct in apprehending that this bill would not affect any State statute concerning the effect of fraud or concealment on the period of limitation. Mr. CELLER. Mr. Speaker, if the gentleman will yield, may I be permitted to read a note I made in reference there- to?— Several States by statute or judicial decree provide for the tolling of the limitation pe- riod during the time the defendant fraud- ulently conceals the cause of action from the plaintiff or is otherwise guilty of fraudu- lent conduct. Iam informed that frequent- ly the statutory period does not begin to run until the plaintiff has discovered the facts of his cause of action which have been fraudu- lently concealed by the defendant. This bill is not intended to change those rules of the various States insofar as they presently apply to triple-damage actions under the antitrust laws. The period of 6 years, under this bill, will be uniform throughout the United States but the State rules benefiting a plaintiff in a case where the defendant has been guilty of fraud or of some other pro- scribed conduct will remain in effect. I would say that the answer to the in- quiry would be that you need have no concern on that score. Mr. HALE. I thank the gentleman for his answer, I am very pleased with the situation as he describes it. Mr. MICHENER, Mr. Speaker, I yield such time as he may desire to the gentle- man from Michigan (Mr. Horrman]. Mr. HOFFMAN of Michigan. Mr, Speaker, I ask unantmous consent to ex- tend my remarks in the Recorp imme- diately following the vote. JULY 17 The SPEAKER. Is there objection to the request of the gentleman from Michigan? There was no objection. Mr. CELLER. Mr. Speaker, I yield such time as he may desire to the gen- tleman from Massachusetts [Mr. KEn- NEpY]. Mr. KENNEDY. Mr. Speaker, during the roll call on the bill 5. 2 I was un- avoidably detained. Had I been present, I would have voted “nay.” Mr. MICHENER. Mr. Speaker, this bill is a compromise, I think it is a splendid compromise. I know of no one who is contesting this compromise. The bill is not in every way the bill that I would write. The bill has been ex- plained. The committee staff has pre- pared a splendid statement which is em- bodied in the committee report and Which covers every phase of this bill, I cannot state more concisely the purposes and accomplishment of this bill. Mr. Speaker, I ask unanimous consent to extend my remarks and include ex- cerpts from the committee report. The SPEAKER. Is there objection to the request of the gentleman from Michigan? There was no objection Mr. MICHENER. The excerpts from the committee report read: STATEMENT Section 1 of the bill would amend sections 4 and 6 of the Clayton Act by providing that (1) the United States may recover ace tual damages for injuries to it in its busi- . ness or property hereafter resulting from violation of the antitrust laws, (2) a 6-year statute of imitations shall apply in all triple-damage antitrust cases, and (3) the provisions tolling the running of the statute of limitations applicable to triple-damage actions, in cases where the United States has brought a civil or criminal antitrust suit, are extended to apply where the United States has brought a suit for damages as well. Section 2 of the act merely provides that the term “antitrust” shall have the meaning ascribed to it in section 1 of the Clayton Act The crucial provisions are those in sec- tion 1 of the bill providing, respectively, (1) for extension to the United States of the right to sue for actual damages, a right which it does not now have, and (2) for a uniform 6-year statute of limitations for damage actions in lleu of the present rule which makes the limitation period dopend. ent upon State law. (1) Suit for damages by the United States: At the present time, as the result of a 1941 Supreme Court decision in United States v. Cooper Corp. (312 U. 8, 600), the United States cannot recover, under section 7 of the Sherman Act or section 4 of the Clayton Act, for damages suffered in its business or property as a result of antitrust violations. That case held that the United States is not @ person within the meaning of section 7 pt the Sherman Act, which gives any person injured as a result of violation of the act the right to sue for triple damages. The present bill would change this rule by per- mitting the United States to sue for actual, although not for triple, damages. A brief statement of the background of the Cooper case may be helpful. For the half-year ending March 381, 1937, 18 com- panies submitted to the Procurement Divi- sion of the Treasury Department bids iden- tical to the penny on 82 different sizes of tires and tubes. The same thing occurred
1950 in the next half-year period, but with sub- stantially higher prices than for the preced- ing period ‘When identical bids were again submitted for the third half-year pertod (Oc- tober 1, 1937, to March $1, 1938), the Pro- curement Division, upon the advice of the Attorney General, rejected the bids and in- vited new ones. The new bids were iden- tical to those rejected, Determining that & public exigency existed, the Treasury De- partment negotiated a contract with Sears, Roebuck & Oo. In its next invitation to submit bids, the Government required bid- ders to Warrant that the prices bid were not the result of agreement among bidders, with the result that the bids submitted were substantially lower than the previous collusive bids. By comparing these bids with the earlier noncompetitive bids, it was ascertained that the United States had been injured to the extent of $351,158 21 in the three 6-month periods during which it had been unable to buy on a competitive mar- ket. A triple-damage action was instituted, but was dismissed for the reason already stated, The United States is by far the largest sin- gle purchaser of goods in this country. Its procurement bill amounts to billions of dol- lars each year. For the fiscal year 1947, for instance, it exceeded &6,000,000,000, accord- ing to the Hoover task force report on the Federal Supply System. In order to secure the advantages of competitive bidding, the Government is required by statute, with some exceptions, to advertise for proposals which are submitted in the form of sealed bids. If the bids are collusive the price ad- vantages of competitive bidding which Con- gress intended the Government to have, when it enacted the competitive bidding Btatutes, are lost. According to TNEC Mono- graph 19, the dollar volume of purchases by the Government in a 12-month pe- riod in 1987 and 1938 amounted to @913,- 401,724 91, of which $87,826,426, or approxi- mately 9.6 percent, was spent in purchases Involving identical bids. These figures do not necessarily indicate antitrust violations. On the other hand, they do not necessarily set an upper limit to the practice of submitting collusive and noncompetitive bids, since instances of col- lusion are not uncommon in which identity of amount 1s carefully avolded. In other words, members of an industry have been known to agree as to which one shall submit the lowest bid and at what figure. It would be unrealistic to assume that the same thing does not happen in bidding for Government orders. The remedies of indictment and injunc- tion cannot protect the Government's pro- prietary interests or compensate for dam- ages inflicted upon it by collusive bidding— and collusive bidding is only one of the many ways in which the Government may be in- Jured as a result of antitrust violations. Ob- viously a $5,000 fine is inadequate compen- sation for damages amounting to 6351,158.91, the actual loss suffered by the Government in purchasing only one commodity in the short space of 18 months. Nor would an Injunction restraining further collusive ac- tivities recompense the United States for damages already suffered. The American taxpayer is entitled to full value for his tax dollar. He should be pro- tected against its golng into the pockets of wrongdoers in the form of excessive prices and profits gained in violation of the anti- trust laws. [ff he were spending the money himself, he could sure for triple damages. He is equally entitled to protection where the Government spends it for him, The question arises, Why should not the Government recover triple damages just as private persons do, instead of being limited to actual damages? it has been suggested that the wrongdoers might be ruined If the Government were permitted to sue for triple damages, in view of the size of the Govern- CONGRESSIONAL RECORD—HOUSE ment’s purchases and the consequent magni- tude of the damages that might be awarded. We do not find this argument controlling, however. If a wrongdoer imposes extensive injuries, he should be prepared to bear the burden of extensive damage awards. A more persuasive justification for ilmit- ing recovery to actual damages is that no spe- cial inducement need be held out to the Government to institute suit against wrong- doers, The Government, already charged with enforcement of the antitrust laws, needs no incentive. Liability for damages to the Government resulting from antitrust violations should cause one to think twice before engaging in such violations. The Government buys al- most every known type of commodity and there are few businessmen today who do not have occasion to deal with it, often to a substantial extent. Knowledge that they will be lable for damages will serve as a sub- stantial deterrent, especially since the Gov- ernment does not labor under the handicap of many private victims of antitrust viola- tions who, having suffered financial loss at the hands of the violators, find themselves hard put to obtain the necessary resources to support adequately an action for damages. We strongly recommend this amendment, and urge its enactment by Congress without further delay-—both as an act of fairness to the Government and the taxpayer and as a further deterrent to antitrust violations. (2) A uniform 6-year statute of limita- tions, The bill would amend section 4 of the Clayton Act to provide for a 6-year statute of Hmitations, applicable to both private and United States damage suits resulting from violation of the antitrust laws. It provides that suit may be brought within 6 years after the cause of action accrued. As previously pointed out, it would also amend section 5 of the Clayton Act, which at present pro- vides for tolling the statute covering triple- damage suits during pendency of a civil or criminal antitrust suit by the United States, by providing that the statute would also be tolled by the Institution of a suit for dam- ages brought by the United States. The toll ecoyld not, however, be invoked by the Gov- ernment itself in a suit for damages. At the present time triple-damage actions under the Shorman and Clayton Acts are governed by State statutes of limitations, Chattanooga Foundry & Pipe Works vy. At- lanta (203 U. 8. $90 (1908)). This situation has created confusion and lack of uniformity, with the choice of forum affecting the re- sults in many cases. A threshold question in applying State limitation statutes is whethor the 1aw of the forum or the law of the place of injury will govern. In antitrust cases involving Nation-wide conspiracies, in- juries may have occurred in many different States. If the limitation statute of the State where the injury took place governs, a piain- tiff who has been injured in several States may choose the forum most advantageous to him in this respect On the other hand, a plaintiff injured in a State with a short statute of limitations may find himself barred from recovery while another plain- tiff, more advantageously situated in a State with @ longer limitation period, may recover for the identical injury. Other factors caus-~ ing adventitious results in these cases are the confiict-of-laws problem and the ques- tion whether State or Federal determination of when a cause of action accrues shall be controlling. The Senate Judiciary Committee has pre- viously in the current Congress held hearings on 8. 1910, a bil} similar in some respects to the limitations portion of the present bill, except that tt contained an added provision for retroactivity and had a apecial applica- tion to sults based upon conspiracy viola- tions. In those hearings the De t+ of Justice stated that in its opinion “a uniform 10443 statute of limitations would be highly destr- able and would be consistent with the gen- eral policy of making the Federal laws uni- form in matters of this character.” The consensus of those testifying with reference to 8. 1910 was that a uniform statute of limitations in damage sults arising from vio~ lations of the antitrust lawe would be desir- able. A 6-year limitation appears to be entirely reasonable. Because antitrust violations usually have a complex background, 6 years may well be required to adequately prepare 8 triple-damage case. Six-year statutes of limitations govern other types of suits, often having less complicated fact structures, such as suits for infringement of patents and claims against the United States. A shorter period here would, in our opinion, be unwar- rantedly prejudicial to the injured party, At present it is difficult, if not Impossible, in most cases, to determine the applicable period of limitations in the statutes of the various States. Thus, the litigant is often placed at a considerable disadvantage In not being able to make a precise advance deter- mination of whether his sult can be main- tained. To summarize, the provisions which would permit the United States to sue for damages and for a uniform statute of limitations are sound in principle and will undoubtedly have a salutary effect. Private parties in many instances are financially handicapped as a result of the injuries for which thoy seek redress. They should be given the aassist- ance and encouragement Which this bill will give them to move against violators of the antitrust laws. ‘The bill as a whole repre- sents & substantial step forward, both in pro- viding greater protection for those who have been injured and in setting up additional deterrents to violation. CHANGES IN EXISTING LAW In compliance with clause 2a of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill are shown as follows (existing law in which no change is proposed is shown in roman, new matter is printed in italic, and existing law proposed to be omitted is enclosed in black brackets) : “Sec. 4. (a) That any person [who shall! be] heretofore or hereafter injured in his busi- ness or property by reason of anything for- bidden in the antitrust laws may sue therefor in [any district court of] the United States District Court for [in] the district In which the defendant resides or is found or has an agent, without respect to the amount in con- troversy, and shall recover threefold the dam- ages by him sustained, and the cost of suit, including a reasonable attorney's fee “(b) Whenever the United States is here~ after injured tn tts business or property by reason of anything forbidden in the anti- trust laws it may sue therefor tn the United States district court for the district in which the dejendant resides or ts found or has an agent, without respect to the amount in con- troversy, and shali recover actual damages by it sustained, “(c) Any action (including an action brought dy or on behal/ of the United States) to enforce any cause of action under this sece tion shall ve jorever barred unless com- menced within siz years after the cause of action accrued, “Bec. 6, (2) CThat aj A final judgment or decree hereafter rendered in any [criminal prosecution or in any suit or proceeding in equity] ole! or criminal proceeding, but not including a suit or proceeding under section 4 (0), brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defend- ant in any [suit or] proceeding brought pur~ suant to subsections 4 (a) and @ (b) Eby any other party] against such defendant under said laws as to all matters respecting which
10444 said judgment or decree would be an estoppel as between the parties thereto: Provided, CThis] That this section shall not apply to consent judgments or decrees entered before any testimony has been taken. [: Provided, jurther, This section shall not apply to con- sent judgments or decrees rendered in crim- inal proceedings or suits in quity, now pend- ing, in which the taking of testimony has been commenced but has not been concluded, provided such judgments or decrees are rendered before any further testimony 1s taken.] (b) Whenever any [sult or proceed- ing in equity or criminal prosecution] civil or criminal proceeding is instituted by the United States to prevent, restrain, or punish viclations of any of the antitrust laws, o7 to recover damages under sectron 4 (b) of this Act, the running of the statute of limitations in respect of each and every private right of action arising under [said laws] section 4 (a) and based in whole or in part on any matter complained of in said sult or proceed- ing shall be suspended during the pendency thereof.” The SPEAKER. The question {s will the House suspend the rules and pass the bill. The question was taken; and (two- thirds having voted in favor thereof) the bill was passed. OUR FIRST JOB Mr. HOFFMAN of Michigan. Mr. Speaker, among all the numerous un- pleasant facts revealed to the American people by current events in South Korea, two stand out high above all the others; two facts which are so alarming in their implications that they should not be permitted to go unnoticed. One is the fact that invasion of the South Korean Republic by the Commu- nists of Russia's North Korean satellite marks the essential failure of what at first was called the Marshall plan, and which later became known as foreign aid through the Economic Cooperation Ad- ministration, The other is the fact that national- defense funds appropriated by Congress in the 5 years since VJ-day have not been expended with the good judgment upon which the security of any nation ultimately depends. Taken together, these two facts add up to a situation wherein this Nation has become involved in a war—and war it is, even though designated as a police action in behalf of the United Nations—rela- tively unprepared, and far less strong economically than should be the case. Since 1945 nearly $50,000,000,000 have been appropriated for all forms of na- tional defense, including economic and military assistance to other free nations, and expenditures for maintenance of our own armed services. Of this amount, approximately $400,- 000,000—nearly half a billion—has been expended in economic aid by ECA to the Republic of South Korea. Considering the comparative smallness of South Korea in area and population, this is a tremendous sum. At the same time, Senator Rosert A. Tarr, who should be well informed, if anyone is, has stated that direct expendi- tures for military aid in South Korea have totaled only about $200. This, of course, in addition to 140,000 rifies, and little else, left behind when American oc- cupation troops were withdrawn. CONGRESSIONAL RECORD—HOUSE Just prior to the invasion from the north, we were told by the White House and the Defense Department that the American officers delegated to train the South Korean Army had done such a good job that the infant republic was well prepared to withstand any possible as- sault. Within 24 hours after the invasion started, it became painfully manifest that the expenditure of $400,000,000 in economic aid had not instilled the spirit of freedom in the hearts of the South Koreans. They did not fight as our forefathers fought to create and preserve the American Republic. The tremendous ECA expenditures in South Korea had made of that country nothing but a sitting duck—and a fat one, at that—to be knocked off at will by the Kremlin stooges from the north. Undoubtedly the American officers who trained the South Korean Army did the best job possible with the equipment available. -And perhaps the South Ko- rean troops should not be blamed too much for running away, instead of standing to fight. Army rifles, of which nearly a third were obsolete, were poor equipment with which to combat 50-ton tanks, machine guns and long range ar- tillery. Then American troops were thrown into action by the impulsive and uncon- stitutional act of a President who appar- ently knew little of the situation. Seem- ingly he was ignorant of the facts, even though the Korean ambassador has said in a public statement that he warned the White House a month in advance. Almost at once it became evident that General MacArthur never had been given the additional troops and equip- ment for meeting all emergencies in the areas for which he now has been made responsible—-troops and equipment .for which he had pleaded in vain. Troops and equipment which might have been available were scattered around the world, it may be in areas less vulnerable to Communist attack. Now it appears likely that we shall have to endure a long and bitter fight; a fight which threatens to explode into a world-wide conflict. It may take all of the sacrifice, the loyalty, the utter devo- tion of which the American people are capable, before we attain ultimate vic- tory. It may be that those for whose freedom we have spent our money, for whom our men are now dying, will fail adequately to assist us. China was lost as a result of mistaken and well-nigh treasonable foreign pol- icy followed in the Far East by the Fair Deal administration. Now we are fight- ing in Korea, without the millions of Chinese Nationalist troops we might have had, except for that mistaken pol- icy; troops whose loyalty to us probably would have prevented the present sit- uation entirely. But the Administration has committed us to fight, now at ex- cessive cost in Hves and treasure. It is my own conviction that Congress now should put a stop even to talk about the socialistic proposals of the Fair Deal Administration for excessive expendi- tures in connection with its legislative program. This is not the time to in- crease domestic expenditures, whether JULY 17 for so-called social gains or for the po- litical advantage of the party in power. Let us cut our expenditures here at home to those essential for only the barest necessities. Let us spend the billions thus saved in further arming ourselves and those allies whom the pres- ent conflict may prove trustworthy. Our first duty is to those who are sent to fight and win the war into which gullibility and incompetency have plunged us; and, in the meantime, let us get rid of the friends of “Good Old Joe,” of the Achesons, of all of those who do not believe that the liberty of our people, the security of our Nation, is our first duty. On a dark street, in a tough neighbor- hood, with men of doubtful purpose about, there is nothing that makes a man feel so safe and gives him so much courage as a club in one hand, a gun in the other. PURCHASE OF BONDS TO COVER EM- PLOYEES OF GOVERNMENT Mr. KARSTEN. Mr. Speaker, I move to suspend the rules and pass the bill (H. R. 8706) to provide for the purchase of bonds to cover officers and employees of the Government. The Clerk read as follows: Be it enacted, etc., That section 14 of title 6 of the United States Code is amended to read as follows: “PURCHASE OF BONDS TO COVER OFFICERS AND EMPLOYEES OF THE GOVERNMENT “Sec. 14. Under regulations promulgated by the Secretary of the Treasury, the heads of the departments, and independent estab- lishments of the Government shall, and the appropriate officials of the legislative and judicial branches of the Government may, obtain blanket, position schedule, or other type of surety bonds covering their civilian officers and employees, and military person- nel, required by law or administrative rul- ing to be bonded. Each bond shall be of the most economical type available for the number and type of personnel required to be bonded, and shall be conditioned upon the faithful performance of the duties of the persons so bonded, and the term ‘faith- ful performance of the duties’ shall be deemed to include the proper accounting for all moneys or property received by virtue of the bonded persons’ positions or employment and all responsibilities and accountabilities imposed by statute or regulation issued pursuant thereto. The bond may cover a period not exceeding two years and the pre- mium shall be paid from funds available for administrative expenses when the con- tract, or renewal thereof, is made. No bond shall be purchased at a premium rate per individual covered which is more than 35 per centum in excess of the rate of premium for coverage in a like penal sum for a person holding a similar position during the cal- endar year 1908. If the initial or renewal premium cost exceeds $500 for any bond procured under authority of this section, advertisement for bids shall be required therefor and procurement shall be made from the lowest responsible bidder and through the Administrator of the General Bervices Administration when so required by him.” Sec. 2. (a) The first sentence of section 83 of title 6 of the United States Oode is amended to read as follows: “Every officer whose duty it is to take and approve official bonds (expect those procured pursuant to section 14 of this title) shall cause all such bonds to be renewed every four years after their dates, but he may require such bonds
1950 to be renewed or strengthened oftener if he Geems such action necessary” (b) The last sentence of section 6 of title 6 of the United States Code is amended to read as follows: “Except with respect to bonds procured pursuant to section 14 of this title, no officer or person having the ap- prova! of any bond shall exact that it shall be furnished by a guaranty company or by any particular guaranty company ” Src. 8. The analysis of title 6 of the United States Code, immediately preceding section lof such title, is amended by striking out the item “Src. 14. Rate of premium on bond; premiums not to be paid by United States”, and inserting tn lieu thereof the following: “Sec, 14. Purchase of bonds to cover officers and employees of the Government” The SPEAKER. Is a second de- manded? Mr. HOFFMAN of Michigan. Speaker, I demand a second. The SPEAKER. Without objection, a second will be considered as ordered. There was no objection. Mr. HOFFMAN of Michigan. Mr. Speaker, we have no requests for time on this side, if the gentleman will just explain the bill. Mr. KARSTEN. I intend to make an explanation of the bill, I may say to the gentleman Mr. Speaker, I yield myself 10 minutes. Mr. Speaker, this legislation had its origin in one of the recommendations of the Commission on Organization of the Executive Branch of the Govern- ment The Hoover Commission's Report on Budgeting and Accounting recom- mended the Congress study the whole problem of bonding Federal employees in order to provide a simplified and a less expensive procedure. This measure is based on that recommendation and it will provide the Government with a mod- ern, efficient, and economical system for bonding Federal personnel. Before the proposed bill was drafted, the Public Accounts Subcommittee, working in close collaboration with prac- tically all of the departments and agen- cles of the Government, including the Bureau of the Budget and the General Accounting Office, made an exhaustive study of the existing cumbersome and expensive procedure for bonding employ- ees of the Government, It was found that there are 1,103,000 Federal officers and employees—includ- ing 515,000 temporary and seasonal em- ployees of the Post Office Department— who are required to furnish surety bonds in connection with the performance of their official duties. The permiums paid for surety bonds by these employees for 1949 amounted to $1,685,779 90, while the recoveries from the surety companies for the same period amounted to $207,303 70 In other words, the surety companies re- ceived over eight times more money than they paid out in losses. The Hoover Commission also made a thorough study of bonding procedures in the Government and their figures were substantially the same as those compiled by the committee. This sizable income to the surety com- panies is at the expense of the Federal employees. It is contrary to the prac- tices of private industry, and State and local governments, which absorb the XCVI-—-658 Mr. CONGRESSIONAL RECORD—HOUSE costs of furnishing surety bonds for their employees who are required to be bonded. The committee found further that the outmoded bonding procedures existing in the Federal Government today are the result of a 1909 statute, section 14, title 6 of the United States Code, which pro- hibits the United States from paying any cost of the premium for surety bonds covering Federal personnel. As a result of this old law, Government records of the 1,103,000 individual bonds must be written and maintained in the various Government dep ents and agencies. It is a tremendous task and very costly. Periodic from of all these bonds is required from time to time to ascer- tain whether the Government is amply protected and the bonds are sufficient in penal sum, that they are in force and have not expired, and that the surety is reliable and is on the approved list of the Treasury Department. All this administrative handling of over a million records is not only burden- some but also it is a very expensive oper- ation for the Government. Although no figures for the actual cost of this func- tion are available, the committee has in- formal advice from seven of the major departments that approximately $292,789 is spent each year in connection with the maintenance of records for bonded per- sonnel. Consider all of the depart- ments and indeperittent offices concerned with this operation, it is not unreason- able to believe that the annual cost to Government is close to $350,000. This item is really a hidden administrative ex- pense for the reason that it 1s never budgcted or otherwise indicated in the appropriation of any department or agency. There are three possible approaches to the problem of bonding Federal em- ployees. The first is to continue the present unsatisfactory system. The sec- ond would be to set up a revolving fund financed either by the Government or the employees to which shortages and losses could be charged, This, however, would practically amount to putting the Government into the bonding business. Moreover, it would destroy the desired and wholesome effect which naturally attaches to commercial surety bonds in protection against fraud, negligence, and other wrongful acts. The third course would be to establish a modern bonding program patterned after sound commer- cial practices, employing blanket and po- sition schedule bonds. The committee chose the latter course. In drafting legislation to provide a bonding procedure which is efficient and economical for the Government and in line with commercial practices, the committee found that section 14 of title 6 of the United States Code should be amended so as to permit the Govern- ment to bear the cost of bonding its em- ployees. With this change of law in mind the subcommittee, while working with the Surety Association of America and the Association of Casualty and Surety Companies, ascertained that the 1,108,000 individual bonds could be re- duced to 20,628 by use of the blanket or position schedule bonds, and at the same time give the Government the same 10445 amount of coverage and protection for its fiscal and property operations. This enormous reduction in the number of bonds now required to be written will have two effects: First. It will virtually eliminate the $350,000 hidden expense paid each year by the Government for maintenance of records and files on bonded personnel. Second. It will create a sound and simplified bonding practice which will give the Government greater protection over its fiscal and property operations, and at the same time promote more effi- ciency and economy. Provision is made in the proposed leg- islation for the payment of premiums 2 years in advance. This will permit the Government to take advantage of a 63% percent discount which the surety com- panies grant if premiums are paid in this manner. There is also a provision in the bill which requires competitive bidding. In consideration of these two provisions, and also having in mind the virtual elim- ination of $350,000 hidden administra- tive expense which the Government now absorbs for maintaining records on bonded personnel, in addition to approx- imately $225,000 in recoveries that will be received from the surety companies on account of lability, it is believed that the net annual cost for this legislation should not exceed $275,000. It is the view of the committee that a further reduction in bond premiums can be accomplished by the various depart- ments and agencies. The information developed by the committee disclosed that there are many positions requiring bonds where the employees have no ac- cess to property or Government funds. On the other hand, there are positions in which there are employees who should be under bond but are not and there are still other cases where the present bonds are insufficient to adequately protect the Government It is the belief of the com- mittee, therefore, that the new bonding program proposed by H. R. 8706 should be carefully reviewed during the next 2 years for the purpose of ascertaining what further improvement, economy, and efficiency can be achieved By do- ing this, the committee feels that addi- tional savings can be realized not only through a further reduction in the pro- posed number of blanket and position schedule bonds, but also through a Ccor- responding reduction in premium costs. Moreover, these savings can be accom- plished without decreasing the bond pro- tection which the Government must maintain to completely safeguard its fis- cal and property transactions. While it 1s expected the passage of the bill will result in @& small initial cost, T believe this is a wise expenditure because in return the Federal Government will receive insurance against fraud, negli- gence and dereliction of duty of its em- ployees. It will also receive the tremen- dous benefits of deterrence against mis- handling of the Government’s enormous fiscal and property operations which nat- urally flows from coverage by commer- cial bonds. ‘The bill has the approval of the Comp- troller General as well as the Bureau of the Budget. It is supported by numerous
"10446 other departments and agencies of the Government and by various employee or- ganizations. No opposition to the mod- ‘ernization of the Government’s bonding program was voiced during the hearings. Because of the great benefits and pro- tection which will be afforded the Gov- ernment under this measure for a very modest cost, and because it will provide an up-to-date bonding procedure, effi- cient and economical and in keeping with sound business practices, I hope the bill will be passed. Mr. WAGNER. Mr. Speaker, the fig- ures on bonded personnel of the Federal Government compiled by the Public Ac- counts Subcommittee, in collaboration with the various departments and agen- cies of the Government, indicate very clearly an urgent need for modernizing and improving the existing surety bond- ing procedure for employees and officers within the Federal service. The House report on H. R. 8706 reveals that under the present law 1,103,036 in- dividual surety bonds are written and maintained in Government records. Al- though the Federal Government does not now pay the premium cost for these bonds, undoubtedly administrative cost for handling all these records is an ex- pensive operation for our Government when consideration is given to the fact that each of these bonds must be care- fully reviewed from time to time for the purpose of ascertaining whether the bond is sufficient in penal sum, that it has not expired, and the surety company involved is on the approved list of the Treasury Department. As further pointed out in the report on the proposed legislation, these 1,103,036 individual bonds can be reduced to 20,628 if blanket and position schedule bonds are employed. The use of blanket and position schedule bonds will modernize our present bonding system and bring it in line with the sound practices of private industry, State and local governments. Furthermore, by this enormous reduction in individual bonds, the administrative cost for handling the records of Federal bonded personnel will be virtually elimi- nated, The subcommittee has informa- tion from the departments indicating that the administrative expenses for this operation now costs the Government ap- proximately $350,000 annually. In comparing this cost alone, with the annual cost of premiums which the Gov- ernment will absorb under H. R. 8708, sufficient savings will be realized by the Government to pay for the proposed Fed- eral bonding procedure envisioned by this Because this measure is a great im- provement over existing law and will in fact pay for its own operation through savings on our existing bonding system, I hope that the bill will be passed. Mr. HUBER. Mr. Speaker, I ask unanimous consent to address the House with reference to the statement made by the gentleman from Missouri {Mr. Karsten] concerning H. R. 8706, a bill to provide for the purchase of bonds to cover officers and employees of the Gov-- ernment. The gentleman from Missouri has done an outstanding job in sponsoring CONGRESSIONAL RECORD—HOUSE this piece of legislation and I wish to compliment him, The measure is a progressive step in the field of surety- ship and its relation to Federal em- ployees, and it will provide a splendid means for improving our present bond- ing system. There is no doubt that it will promote more efficiency in our Fed- eral service and undoubtedly in time the Government will realize a great saving in operating under this proposed sys- tem for modernizing surety bonding re- quirements with the Federa] Govern- ment. I hope that the, whole program of surety bonds as it affects Federal per- sonnel will be reviewed carefully under the provisions of HOR. 8706 with a view toward further improvement. Mr. HOFFMAN of Michigan. Mr. Speaker, we have no requests for time. The SPEAKER. The question is on suspending the rules and passing the bill. The question was taken; and (two- thirds having voted in favor thereof) the rules were suspended and the bill was passed. AMENDING MUTUAL DEFENSE ASSIST- ANCE ACT OF 1949 Mr. DELANEY, from the Committee on Rules, reported the following privi- Jeged resolution (H. Res. 696, Rept. No. 2573), which was referred to the House Calendar and ordered to be printed: Resolved, that immediately upon the adop- tion of this resolution it shail be in order to move that the House resolve itself into the Committes of the Whole House on the State of the Union for the consideration of the bill (S. 3809) to amend the Mutual De- fense Assistance Act of 1949, and all points of order against the said bill are hereby waived. That after general debate which shall be confined to the bill and continue not to exceed 1 day, to be equally divided and controlled by the chairman and ranking mi- nority member of the Committee on For- eign affairs, the bill shall be read for amend- ment under the 56-minute rule. At the con- clusion of the consideration of the bill for amendment, the Committee shall rise and report the bill to the House with such amendments as may have been adopted and the previous question shall be considered as ordered on the bill and amendments there- to to final passage without intervening mo- tion except one motion to recommit. AMENDING FEDERAL DEPOSIT INSURANCE ACT Mr. SMITH of Virginia, from the Com- mittee on Rules, reported the following privileged resolution (H. Res. 697, Rept. No. 2574), which was referred to the House Calendar and ordered to be printed: Resolved, That immediately upon the adoption of this resolution it shall be in order to move that the House resolve iteelZ into the Committee on the Whole House on the State of the Union for the consideration of the bill (S. 2823) to amend the Federal Deposit Insurance Act (U. 8. C., title 12, sec, 264). Theat after general debate, which shall be confined to the bill, and continue not to exceed 2 hours, to be equally divided and controlled by the chairman and ranking mi- nority member of the Committee on Bank- ‘ing and Currency, the bill shall be read for amendment under the 56-minute rule. At the conclusion of the consideration of the bill for amendment, the Committees shall rise and report the bill to the House with such amendments as may have been adopted JULY 17 and the previous question shall be consid- ered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit. REFUNDING OF CUSTOMS DUTIES TO PREPARATORY COMMISSION FOR THE INTERNATIONAL REFUGEE ORGANIZA- TION Mr. LANE. Mr. Speaker, I move to suspend the rules and pass the bill (A. R. 6863) for refund of customs duties to the Preparatory Commission for the In- ternational Refugee Organization, as amended. The Clerk read as follows: Be i enacted, etc., That the Secretary of the Treasury is authorimed and directed to pay, out of any money in the Treasury not otherwise appropriated, to the Preparatory Commission for the International Refugee Organization the sum of $120,000, paid by the Preparatory Commission for the Interna- tional Refugee Organization to the United States as duties on property brought into the United States for sale to provide funds for the rehabilitation and resettlement of victims of German action pursuant to the agreement entered into on June 14, 1946, by the Government of the United States with the Governments of the United Kingdom, France, Czechoslovakia, and Yugoslavia: Provided, That no part of the amount appro- priated in this act in excess of 10 percent thereof shall be paid or delivered to or re- ceived by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000. The SPEAKER. Is a second de- manded? Mr. MICHENER. Mr. Speaker, I de- mand a second. The SPEAKER. Without objection, a second will be considered as ordered. There was no objection. Mr, LANE. Mr. Speaker, I yield my- self 5 minutes, and I ask unanimous con- sent to revise and extend my remarks. The SPEAKER. Without objection, it is so ordered. There was no objection. Mr, LANE. Mr. Speaker, it was neither the desire nor the intent of this Government to profit from sales of loot- ed property, the proceeds of which were designated to promote the rehabilitation of the victims of Nazi persecution. These exact words are quoted from a State Department letter to the Commit- tee on the Judiciary, in recommending the enactment of H. R. 5863. But customs duties to the amount of 120,000 have been taken from reparation goods sold in this country to provide funds for the resettlement of those vic- tims of Nazi aggression who could not be repatriated. This is not only a contradiction of our solemn commitments. If we do not re- turn this money which has been taken to provide revenue when itt should have been spared to provide relief, a number of viotims will suffer, unjustly. This may seem like a small matter in the march of great events, At a time, however, when we are plan- ning 8 global truth campaign to win the moral support of people everywhere it behooves us to practice what we preach.