1950 The CHAIRMAN. The point of order is withdrawn. toe committee amendment was agreed The CHAIRMAN. The Clerk will re- port the second amendment against which the gentleman from Michigan (Mr. Wotcorr] reserved a point of order. The Clerk read as follows: Page 61, immediately following line 18, add the following new section: “Sec. 6, Subsection (b) of section 405 of title IV of the National Housing Act, as amended, is amended to read as follows. “‘(b) In the event of a default by any insured institution, payment of each Insured account in such insured institution which is surrendered and transferred to the Corpora- tion shall be made by the Corporation as soon as possible either (1) by cash or (2) by making available to each insured member a transferred account in a new insured insti- tution in the same community or in another insured institution in an amount equal to the insured account of such insured mem- ber: Provided, That the Corporation, in its discretion, may require proof of claims to be filed before paying the insured accounts, and that in any case where the Corporation is not satisfied as to the validity of a claim for an insured account, it may require the final determination of a court of competent juris- diction before paying such claim.’”’ The CHAIRMAN. Does the gentle- man from Michigan insist on his point of order? Mr. WOLCOTT. No, Mr. Chairman; I do not insist on the point of order. The CHAIRMAN. The point of order is withdrawn. The committee agreed to. Mr. SPENCE. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr Spence: Add a new subsection at the end of section 3, read- ing as follows: “(c) The amendment made by subsection (a) of this section shall become effective on January 1, 1951.” The amendment was agreed to. The CHAIRMAN. Are there any fur- ther committee amendments? Mr, MULTER. Mr. Chairman, this jis not a committee amendment in the sense that the committee has agreed to it. I think, however, it will have the support of the entire committee. Mr. Chairman, I offer the amendment. The Clerk read as follows: Amendment offered by Mr. MULTER: Page 62, after line 4, add the following new section: “Sec. 6. The name of the Federal Savings and Loan Insurance Corporation created by section 402 (a) of the National Housing Act is hereby changed to ‘Federal Savings Insur- ance Corporation,’ and the words ‘Federal Savings and Loan Insurance Corporation’ wherever else appearing in law shall be deemed to mean ‘Federal Savings Insurance Corporation.'” Mr. WOLCOTT. Mr. Chairman, I re- serve a point of order against the amendment. Mr. SPENCE. Mr. Chairman, I think this is a very desirable amendment. I believe it meets with the approval! of the Corporation, and I am sure it meets with the approval of the majority of the committee. amendment was CONGRESSIONAL RECORD—HOUSE Mr. MULTER. Mr. Chairman, the Advisory Council which is provided for by the law creating the Federal Savings and Loan Insurance Corporation has unanimously recommended that this change in the title be made, in order that there be no question that this Corpora- tion does not insure any loans, but in- sures only deposits in savings and loan associations. We make that clear by changing the name of the Corporation to read ‘Federal Savings Insurance Corpo- ration,” omitting the words “and loan.” Mr. Chairman, I yield back the bal- ance of my time. The CHAIRMAN. Does the genile- man from Michigan insist on his point of order? Mr WOLCOTT. Mr Chairman, I am constrained to insist on the point of order, but I would like to be heard on it. The CHAIRMAN. The _ gentleman from Michigan 1s recognized. Mr. WOLCOTT. Mr. Chairman, the Federal Savings and Loan Association, and the Federal Savings and Loan Insur- ance Corporation are set up under a separate act. I do not think there is any question at all that a point of order would lie against this amendment. We have not had any hearings on this. The statement has been made on behalf of someone or other that it is desirable to do this. I recall in 1939 when an at- tempt was made to force all savings banks into the Federal Home Loan Bank system or they would go out of business. That was a follow-up of the Banking Act of 1935 when an attempt was made to force all banks into the Federal Reserve System The Federal Reserve System under the original bill which was intro- duced was to be politicalized; the Presi- dent was to be given power to remove any member of the Federal Reserve Board at will The method used at that time to force all banks into the Federal Reserve Sys- tem was that if they did not come into the Federal Reserve System they could not have their deposits insured under the Federal Deposit Insurance Act. The danger of that was seen in 1935. We modified the act so that we did not create under that act a eigantic banking octopus under the political domination and control of the President of the United States. It was charged at that time that to control the credit of the Nation in this manner was to control the lifeblood of the American economy. We successfully fought those attempts to socialize banking at that time. In 1939 another bill was considered by the committee and by this House, H. R. 6940, which sought in like manner to force all savings banks into the home- Joan bank system or go out of business. We have had some trouble with some of the Federal savings and loan associa- tions and the State-chartered building and loan associations holding out to the public that they were savings banks. They are not savings banks; they are lending institutions; they are thrift in- situations which are doing a splendid job here in the United States today in home financing. They are restricted in the main to home financing; they are pri- 10727 marily lending institutions. A customer is not called a depositor in the building and Joan and the savings and loan asso- ciations for the reason that we do not want to give the impression that they ars savings banks. They purchase cer- tificates; and when they purchase cer- tificates sufficiently, if their credit is otherwise good, they may make a loan for the purpose of building a home. I think we should keep the Federal sav- ings and loan association in that field. I think we should keep the State-char- tered building and loan associations in that field; and at least I think we should have some hearings upon the desirability of changing the name of the Federal Savings and Loan Association and the Federal Savings and Loan Insurance Corporation before it is done. To strike out the word “loan” might give the idea to some that it is a savings institution. For that reason, notwithstanding the fact that after hearings we might decide the change was desirable, I must insist on my point of order. The CHAIRMAN, Does the gentle- man from New York desire to be heard on the point of order? Mr. MULTER. Mr. Chairman, may I yield to our distinguished chairman, the gentleman from Kentucky? The CHAIRMAN. The Chair will hear the gentleman from Kentucky on the point of order. Mr. SPENCE. Mr. Chairman, the purpose of changing the name of the Federal Savings and Loan Insurance Corporation is because it is a long name and jis not really in conformity with what is actually done The Federal Savings and Loan Insurance Corporation does not insure loans. If they insured loans, they would insure the collection of the borrower’s debt by the institu- tion. What they really do is insure the savings, and this designation is in ac- cordance with their functions and their duties. It is desirable because it shortens the name, which diminishes the expense in advertising The longer name is un- wieldy in printing on their books and stationery and the shorter name actu- ally designates its functions. It is the savings deposited in the institutions that are insured. The gentleman from Michigan has spoken on the general conditions that prevail in reference to the lending insti- tutions, but he has not addressed him- self to the parliamentary question in- volved. We have already legislated in this bill on the name of the Federal Sav- ings and Loans Insurance Corporation, providing that if they use the phrase “Federal Savings Insurance Corpura- tion” in their advertisements it will not be a violation of the law preventing the associations from stating they are fed- erally insured. I submit the matter to the ruling of the Chair. The CHAIRMAN (Mr. Foranp). The Chair is prepared to rule. The Committee has under considera- tion a bill to amend the Federal Deposit Insurance Act. The gentleman from New York has offered on amendment to change the name of the Fedcral Savings
10728 and Loan Insurance Corporation, which was created under another act. They are two very separate and dis- tinct acts; therefore the Chair is con- strained to rule that the amendment Is not germane and sustains the point of order. Mr, MULTER. Mr. Chairman, I offer an amendment, which was considered in the committee, yet it is not a committee amendment. The Clerk read as follows: Amendment offered by Mr. MuLTer: Page 29, line 12, strike out “any officer or em- ployee of the insured bank” and insert in Heu thereof “witnesses”; and on line 138, strike out “his” and insert “their”; and on lines 14 and 15 strike out “of the insured bank.” Mr. MULTER. Mr. Chairman, this will merely broaden the powers of the Federal Deposit Insurance Corporation in carrying on its investigations. Presently it may subpena an officer or employee of an insured bank, but its hands are tied in calling in any outside person who may have knowledge of the transaction un- der investigation. If a person does not voluntarily appear, the Federal Deposit Insurance Corporation has no means to compel him to testify in order to be en- lightened as to what the true situation may be. My amendment will give that organization the right to subpena one who is not connected with the bank in connection with transactions properly within the scope of the FDIC in carrying on its examinations, hearings, and in- vestigations. Mr. WOLCOTT. Mr. Chairman, I rise in opposition to the amendment of- fered by the gentleman from New York. Mr. Chairman, this matter was con- sidered in committee and the amend- ment was not adopted by the committee. Let us understand what we are do- ing by the amendment if it is adopted. The language of subsection (c) of sec- tion 10, starting in line 8, page 29, is as follows: For the purpose of any hearing— I stress the word “hearing” because it does not say “examination”— under this act, the Board of Directors, any member thereof, or any person designated by the Board of Directors to conduct any such hearing, is empowered to administer Oaths and affirmations, subpena any officer or employee of the insured bank, compel his attendance, take evidence, take depositions, and require the production of any books, records— And so forth. As I understand the amendment of the gentleman from New York it authorizes the Board of Direc- tors of the Corporation to designate any examining officer to subpena any of the records of one who has done or is doing business with the bank. This is an au- thority which the Federal Reserve does not have in connection with its examina- tion of banks, it is an authority which the Comptroller of the Currency does not have in connection with the exam- ination of national banks, it is an au- thority which I doubt any of the States have given to their banking commis- sioners. This means that in the exam- ination of a bank, unless an amendment is offered at the same time to define a hearing as something different than an CONGRESSIONAL RECORD—HOUSE examination, it would authorize the subpenaing of everyone who has done any business with that bank. It would authorize subpenaing of a borrower, it would authorize the subpenaing of a de- positor, Now, if we are going to authorize the Federal Deposit Insurance Corporation to do that, to perhaps harass business, industry, agriculture, and labor with the threat of subpena, it carries with it, of course, an unlimited amount of power to investigate on the part of an examiner without any review anywhere. This is cumbersome, this is unusual authority over which the FDIC has had no jurisdiction heretofore and concern- ing which the committee has had no hearings. This came to us as a sug- gested amendment from the FDIC. The committee deliberated upon the matter but did not adopt the amendment for the reason that it would give the FDIC un- usual power to subpena anyone it saw fit to subpena, an authority that is not given to any other examining officer. I believe that the amendment should be defeated, at least until such time as we have a chance to determine whether it is necessary or not. Mr. MULTER. Mr. the gentleman yield? Mr. WOLCOTT. I yield to the gentle- man from New York. Mr. MULTER. We passed this over in committee. We did not call it up for a vote. In the last minute of voting on the bill we overlooked calling it up for a vote. Mr. WOLCOTT. No; we did not over- look calling it up. Ihave a very distinct recollection and a notation here that we passed it because of the controversial as- pects of it, and then I have a note that it was not adopted, and after it was con- sidered we considered six other amend- ments, all of which are included in the same document. Mr. MULTER. The gentleman js quite right. I was wrong when I said that this gives specific power in connec- tion with examinations and inspections. It is only in connection with hearings that they are authorized to conduct. Mr. WOLCOTT. What is a hearing? There is nothing to describe what a hear- ing is, and unless there is semething to describe that a hearing is distinguished from an examination, a hearing may be built out of any examination which the FDIC examiners make of the bank. The CHAIRMAN. The question is on the amendment offered by the gentle- man from New York [Mr. Mutter]. The amendment was rejected. Mrs. WOODHOUSE. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mrs. WoopHouse: Page 15, beginning on line 4, strike out all of section (d). Mrs. WOODHOUSE. Mr. Chairman, I ask unanimous consent to proceed for two additional minutes. The CHAIRMAN. Is there objection to the request of the gentlewoman from Connecticut? There was no objection. Mrs, WOODHOUSE. Mr. Chairman, I offer an amendment which would strike Chairman, will _ JULY 20 out all of section (d) on page 15, begin- ning on line 4. This would delete from the bill before us the proposal for return to the banks of 60 percent of the net assessment income of FDIC and retain the present method of handling assess- ment income. FDIC has an enviable record. I join in all the praise which we heaped upon it yesterday. This is no time to risk spoiling that record. The fundamental purpose of FDIC is to protect the millions of small depos- itors and build public confidence in the banking system. Depositors have been protected. The public has confidence in the banking system; that confidence must be maintained. FDIC now has a reserve of $1,200,000,- 000 plus $3,000,000,000 borrowing power from the United States Treasury. This reserve has been built up over the 16 years of the life of FDIC. During more than one-half of those 16 years the coun- try has enjoyed unusual economic pros- perity with a substantial degree of in- flation. The experience of the FDIC over these 16 years does not offer a dependable cri- terion as to the expectancy of loss either in normal times or in times of depres- sion. FDIC reserves have increased, but not at the same rate at which bank depos- its have increased. In 1934 the ratio was .73 percent. On December 31, 1948, it was .69 percent and today is about .70 percent. Mr. Harl has stated that they would like to build up a reserve of 1 percent of over-all deposits—Senate hearings, page 39. The real question is: Is the reserve of $1,200,000,000 adequate to cover losses should we face difficult economic condi- tions? During the 1929-33 failures depositors lost 3.3 percent of total deposits before the situation cleared up. But such fig- ures mean little. Since then the ratio of capital accounts of all commercial banks to total assets show a decline from an average of 10 percent to 1 percent. On June 30, 1949, there were 312 banks with a ratio of capital to assets of less than 4 percent—a very thin protection. True the character of bank assets and of bank loans has changed. Banking legislation has tightened up certain for- mer practices. But no figures seem to throw much light on this question of reserve. No witness claimed to know what the reserve should be. All of them relied very definitely on the $3,000,000,000 credit with the United States Treasury. In brief, the witnesses seemed to rely on the Government to get the banks out of trouble, if trouble should arise. Increasing coverage to $10,000 will in- crease FDIC liabilities 15 percent from $74,533,093,000 to $86,287,984,000 covered Geposits, meaning 98.6 percent of all bank accounts and 56.5 percent of all bank deposits. At the same time it is proposed to re- duce assessments by a possible 55 percent. In good years banks would get up to a 60-percent refund. In poor years, when they might be in need of help, they may get no refund. This is a topsy-turvy formula,
1950 Moreover, under current conditions the 1950 refund would be some $68,000,000 turned back to the banks at a time when we are fighting potential inflation and taking measures to tighten up loans. Today banks are doing well. ‘Their profits are good, The FDIC premiums do not fall on the banks, but on the de- positors. When FDIC was instituted the banks were permitted to discontinue pay- ment of interest on demand deposits and to make a service charge. These two items have more than met the $120,. 000,000 a year paid in PDIC assessments. Because there is no one who claims to know what the reserve should be, because it is essential to take not even the slightest step which might be inflationary or which might lessen public confidence in the banking system; because the ex- perience of the past 16 years is no cri- terion for the future, and because we are expanding the liabilities of FDIC it would seem wise to leave the situation as it is for the next few years and not to provide for assessment refunds at this time. In support of this stand I quote from the testimony of Mr. H. Earl Cook, Direc- tor, FDIC, and of Mr. Maple T. Harl, Chairman, FDIC, both of whom are held in high esteem by Members of Congress. Mr. Cook states—pages 25 and 26, House hearings: The adequacy of the insurance fund 1s the central question which is raised by the two principal features of 8. 2822; namely, the increase in the insurance protection from 65,000 to $10,000, and the reduction of assess- ment income received from the insured banks which will approximate 55 percent. The ade- quacy of the fund is not a matter to be de- cided by the Federal Deposit Insurance Cor- poration. Only the members of this com- mittee and the Congress can decide that question. However, we would like to offer a few comments which may be helpful to your committee in arriving at this decision. In the first place, our studies do not dem- onstrate that the fund is adequate. May I say here that this Corporation is only 15 or 16 years old and some matters which we will discuss in executive session with you may throw further light on that particular phase. Nor are we aware of studies completed by others which prove with any degree of cere tainty that the present deposit insurance fund will be able to withstand all future periods of adversity. The insurance fund now amounts to more than $1,200,000,000. It represents an insurance reserve accumulated by the Corporation after making full provi= sion for losses in connections with banking troubles. Furthermore, the Corporation has repaid the $289,000,000 advanced by the ‘Treasury and the Federal Reserve, That pay- ment was authorized by Public Law 363 with which you gentlemen are so familiar. How- ever, when the insurance fund is compared with the $157,000,000,000 of deposits in tn- sured banks, the margin of protection for the 104,000,000 depositors appears to be very modest. To be considered also is the fact that, since the Corporation was established, our econ- omy hes been in an expanding phase. This bas helped to solve many of the problems which otherwise would have entailed costly expenditures, There are many other facets of the problem of sufficiency of the FDIC funds * * * The problem cannot be dealt with appropriately im generalities, It is absolutely necessary to develop detailed information of a highly con fidential nature. * * * If you will defer any questions regarding the adequacy of the fund until the executive session, it will be CONGRESSIONAL RECORD—HOUSE possible to furntsh the members of this com- mittee with a much clearer picture of our problem, Mr. Harl states: Our studies do not demonstrate that the fund is adequate. Nor has anyone else, to our Knowledge, been able to establish that the deposit insurance fund is sufficient. to meet all contingencies. The present insur- ance fund amounts to about $1,200,000,000. To be sure, that sum looks like and 1s a lot of money. However, when compared with the §$150,000,000,000 of deposits, it would seem that the margin of protection is indeed modest, (Senate hearings, p. 22.) * * © the experience of the Corporation has been limited almost exclusively to a period of favorable economic conditions—a period of heavy losses could drastically cur- tail the fund. Prudence counsels the avotd- ance of any measures that would drastically reduce the amount of deposit insurance as- sessments or limit the necessary growth of the fund. (Senate hearings, p. 24.) * * © The relatively small demands made upon the resources of the Corporation during its 15 years of operation cannot be regarded as indicative of future requirements. (Senate hearings, p. 96.) To eliminate or drastically reduce the con- tribution of banks to the insurance funds would be a departure from the concept of self-help which is a fundamental feature of the Federal Deposit Insurance System. In- creased reliance on Government help is in- evitable if the bankers’ contribution is re- duced beyond reasonable levels. This will invite Government domination of the bank- ing business. It boils down to this—if free enterprise in banking is to continue, deposit insurance must remain predominantly an instrument of self-aid and the banks must be willing to foot the bill. The cost of main- taining a strong mutual insurance fund is indeed a small price to pay for bank solvency, stability, depositors’ safety, as well as the historical privilege of freedom in banking enterprise. (Senate hearings, p. 23.) In light of their testimony I ask sup- port of the amendment to retain assess- ments as at present, Mr. LANE, Mr. Chairman, will the gentlewoman yield? Mrs. WOODHOUSE. I yield to the gentleman from Massachusetts. Mr. LANE. I want to compliment the gentlewoman from Connecticut on the very excellent statement she has made in behalf of this amendment. I join with her in support of the amendment. I feel it is worthy of consideration and hope it is successful. Mrs. WOODHOUSE. I thank the gentleman very much. Mr. BROWN of Georgia. Mr. Chair- man, I rise in opposition to the amend- ment. Mr. Chairman, the last speaker is a very able member of our committee. She is conscientious, and very helpful as a member of our committee. I am sorry I have to differ with her on this matter, although I know she knows much more than I do about banking. As was explained yesterday, after you pay the operating expenses and all losses for the year, 60 percent of the amount that remains is given as a credit in the following year and 40 percent is carried to the reserve fund. The 40 percent and the $25,000,000 they receive each year as interest on Government securities amount to around $70,000,000 that will be added to the reserve fund. We have in the reserve fund now $1,200,000,000, 10729 The FDIC started without anything and had to borrow for capital $289,000,000. That has all been repaid. Consider the country banks now. I know a bank with $50,000 of capital stock that has deposits of $3,000,000. The assessments costs this little bank $2,500 a year, which is a good deal of money for a small bank. The Members of this House may be cer- tain that we have taken nothing away from the FDIC. Instead, we have strengthened it. How have we strengthened it? By giving the FDIC broader authority to examine and ascertain its risks. This fund or reserve we speak of now amounts to about $1,200,000,000. Its safety or guardianship is a sacred trust. We must always be aware of any attempt to raid this fund either directly or indirectly, such as attempting to alter in any way the independent status of the FDIC. I speak of this great great feeling and considerable pride as I have devoted a great deal of my time to the study of deposit insurance. The Chairman of the FDIC, Mr. Harl, stated before the Senate Banking and Currency Committee that the formula herein prescribed would be workable, that the coverage could be increased from $5,000 to $10,000, provided you pro- tected the fund by giving the FDIC the right to look at its risks. The original bill before the Senate at that time elimi- nated the written consent of the Fed- eral Reserve when the FDIC wanted to examine a State member bank. It was not thought necessary to eliminate the written consent of the Comptroller of the Currency before the FDIC could ex- amine a national bank since the Comp- troller was a member of the Board of the FDIC. This was supported by the Secretary of the Treasury, the Comp- troller of the Currency, the American Bankers Association—in fact everyone who appeared before the Senate subcom- mittee endorsed. this provision. We decided that the FDIC should have the right to examine any insured bank, State or National, without asking any- one’s permission, since it alone of the three Federal banking agencies must pay the losses. I might point out that this is in accord with the recommenda- tions of the Comptroller General. As I said before, this formula is sound. The fund will continue to grow, because if the losses exceed the amount of the assessments due there is no credit to the bank until the amount of the loss is re- stored to the fund. Therefore, the fund will always grow, Everyone who testified and spoke on this bill has paid the FDIC a compliment. Let us call the roll of the people who favor this formula. They are as follows: The Secretary of the Treasury; the Comptroller of the Currency; the Bureau of the Budget; Hon. Lee Wiggins, former Under Secretary of the Treasury; Hon. Walter J. Cummings, first head of the PDIC; next is the second head of the FDIC, Hon. Leo T. Crowley; next is Hon. Maple T. Har], present chairman of the FDIC; next is a member of the Board of the FDIC, Mr. Cook; then the American Bankers’ Association; the Mu-~ tual Savings Bankers’ Association; the
10730 Consumers Bankers’ Association; and many of the State bank associations, Small banks and large banks all over the country are in favor of this What most bankers wanted was a credit of 80 percent, but they sat down in the Office of the Secretary of the Treasury with the Board of Directors of FDIC includ- ing the Comptrolicr of the Currency and finally agreed on 60 percent. That is subscribed to by practically every bank in the United States. Furthermore, we had 18 witnesses who appeared before our committee and all except one stated that this formula was sound. They repre- sented httle banks and the banking as- sociations in many of the States. Throughout the past 16 years we have not lost more than $26,000,000, and with- in the last 6 years we have not had an insured bank failure, because the FDIC has been on the job. Under the Banking Act of 1935 when a bank fails the FDIC is appointed the receiver because it pays the losses They go in there and give the community and the p2ople sufficient time to sell the assets so that the losses will not be so great. They give them time and do not dump all the assets and securitics on the market at one time. Therefore, with the careful examination and supervision by the FDIC we will not have so many losses from now on. I hope you vote against the amendment. Mr. MULTER. Mr. Chairman, I move to strike out the last word. Mr. Chairman, I dishke very much to take a position opposite to that of the distinguished gentleman from Georgia. He has been very kind and most helpful to me I know that his remarks were of- fered in good faith and that they repre- sent his opinion on the subject. Nevertheless yesterday I took the time to warn the Congress that any reduction of assessment or premiums paid by the banks at this time will place the re- rponsibility on this Congress and on this Congress alone, if anything goes wrong with this insurance fund. I pointed out yesterday that every State insurance system, and there were nine of them in years gone by, failed be- cause after 10 to 15 years of good times they cut the assessments and the pre- miums and cut the reserve funds so that when panic times came and bad times struck those States, the fund was insuf- ficient in every instance to make good the losses. You will follow that same pattern now, unless you do adopt the amendment offered by the gentlewoman from Connecticut [Mrs. Woopxovse], and take out of this bill the provision for the reduction of these assessments. Let me call your attention to a state- ment offered to the other body when the matter was before its committee con- sidering this very bill. The very distin- guished gentleman, Mr. VANDENBERG, pointed out in this language exactly what I am trying to make clear to you. He said: To decrease assets and increase labilities at one and the same time secms to me, I say it most respectfully, as somewhat lack- ing in the prudence which should govern every FDIC procedure, In the language of the street, it “plays both ends against the middle,” It moves too rapidly in reorgan- izing the FDIC concept. It increases FDIC CONGRESSIONAL RECORD—HOUSE Mabilities by a minimum of $12,000,000,000 without comnpensatory offsets while reduc- ing annual FDIC income by a probable aver- age of 55 percent net Although fully ace knowledging the good faith of this proposal and the persuasive arguments that can be made in its behelf, I honestly warn against any such wholeeele changes in the FDIO balance sheet. There were other warnings of the same kind given to us and to the committee on the other side. The FDIC Board of Directors takes the position that they will not state that this fund is adequate; they put the respon- gs bility on you; they say it is for you to decide what is an adequate fund; and I tell you today that $1,200,000,000 in the fund with $156,000,000,000 of deposits in insured banks is not an adequate sur- plus Any Member who votes against this amendment now offered and for the bill with reduction of assessments in 1t as now offered must let his conscience be his guide and be ready to assume the responsibility if anything goes wrong in the days ahead. On June 27 the New York Herald Trib- une carried an 1tem quoting the Second District Federal Reserve Bank as voic- ing a good deal of concern about the future based on its examination of 600 banks in the last 3 months. Mr. Chairman and Members of the Congress, I plead with you, I beg of you to pass this amendment offered by the ontlewoman from Connecticut {Mrs. WoopHousE! and save the banking sys- tem of this country, save this insurance fund so that if the days ahead do blacken and darken—we hope they will not, but if they do—let us be prepared for any emergency; let us build this fund to at Jeast the same amount that the bankers may borrow from the Government under the law; let us have at least $3,000,000,000 in the fund. The law now provides that they may call on the Government for $3,000,000,000. Let the banks at least build up an equivalent amount before we reduce their assessments. Mr. CRAWFORD. Mr. Chairman, I rise in opposition to the amendment. Mr Chairman, we are here discussing aformula. ASI said yesterday, this for- mula does not guarantee to the banks that they will receive one penny reduc- tion 1n the assessment now being made, I ask you to read the formula set forth in paragraph D on page 15. The for- mula closes by stating: “The insurance losses sustained in said calendar year plus losses from any preceding years in excess of such reserves. If the above reductions exceed in amount the total assessments which become due during the calendar year, the amount of such excess shall be restored by deduction from total assessments becoming due in subsequent years.” This formula is so sound that it even reaches out into future years. You can go back and work on this. A $1,500,000,000 reserve is not in itself going to save the banks if a very bad situation arises—now, do not get the idea in your mind that there is enough reserve in the FDIC to save the banks if you get into a great economic wash-out: it is not designed for that purpose, If _ you want to do that, then build up a JULY 20 reserve of around $125,000,000,C00. It becomes fantastic, of course. Take the insurance companies Did the Home Insurance Co. have sufficient reserve to meet the San Francisco earth- quake? Go back and study your history of fire insurance. Suppose you have a catastrophe that wipes out 15,000,000 people; will your life-insurace companies be able to meet it? They do not carry large enough reserves to meet a great wash-out like that; and, of course, you have not got it in FDIC; you will not have it in 50 years assessing one-twelfth of 1 percent as 1s done at the present time. You simply do not run insurance companies that way; you cannot build a capital structure big enough; the social cost becomes too great. Here is a formula that protects the FDIC; it protects its operations; it also prevents a fantastic fund being built up that somebody some day can reach in on and grab. I can imagine our getting into a situation where we would reach in and grab the Social Security reserves, the clivil-service retirement reserves. What are they? They are just some- thing the people think they have. What are my personal goods and money? Just something that is under my name for the time being If the Government wants those things, it can take them in the easiest manner possible. They could make capital levies and take these things from us. If we build up great reserves, you will have somebody some day trying to reach in and grab them. Mr. FULTON. Mr. Chairman, will the gentleman yield? Mr. CRAWFORD. I yield. Mr. FULTON. May I point out to the gentleman that 100 percent of the FDIC reserve is now in Government bonds, obligations of the Government, so there will be nothing for the Government to reach in and grab; it is their own obligations Mr. CRAWFORD. Yes, but they have @ mighty power to tax us. The FDIC is a great psychological force to induce people to keep their money in the banks so that the banks can use that money to buy Government bonds to help finance deficits, if you please. That is why we have FDIC insurance, to induce you to keep your money in the banks instead of in an old sock somewhere. Keep it out where it can be used, where your credit can be used for constructive pur- poses, instead of hidden out under the trees, in tin cans and old mattresses, in stoves and down in the furnace in the summer time. Our people have to have leadership from a psychological stand- point. Why should the depositors be burdened with assessments far beyond anyone's ability to prove that they will be needed? It cannot be proven that this fund is inadequate at the present e, Mr. DONDERO. Mr. Chairman, will the gentleman yield? Mr. CRAWFORD. I yield to the gen- tleman from Michigan. Mr. DONDERO. Have we not had enough proof through the years that the FDIC formula as it stands now has pro- vided more money than is necessary, therefore the provision in this bill to return it is not needed?
1950 Mr, CRAWFORD. The gentleman is correct. What has kept the banks from failing in the last 12 to 15 years? Not the FDIC, The FDIC comes in as a cushion in some individual cases, As I pointed out yes- terday, it is the inflationary forces that have been running. Who is it that could not have made money in the last 15 years in the banking business? The record of earnings is the proof. Mr. Chairman, I ask that the pending amendment be defeated. The C AN. The question is on the amendment offered by the gentle- woman from Connecticut {Mrs. Woop- HousE]. The question was taken: and the Chair being in doubt, the Committee divided and there were—ayes 30, noes 75. Mr, CROOK. Mr. Chairman, I de- mand tellers. Tellers were refused. So the amendment was rejected. Mr. MULTER, Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. Mutter: At page 15, line 25, add the following sentence: “No credit under the provisions of this sub- Givision of this section shall be allowed or applied at any time that the capital account of the corporation aggregates less than $2,000,000,000." Mr. MULTER. Mr. Chairman, this amendment is being offered because the Woodhouse amendment did not prevail. The amendment is very simple. It does not affect the formula that is writ~ ten into the bill to give credits and re- ductions in the assessments or premiums paid by the banks. It provides that those credits or reductions shall not be- come effective, they shall not be allowed or applied to the banks unt?’ the reserve fund reaches $2,000,000,000. At the present time it is $1,200,000,000. The United States Treasury can be called upon to give or lend $3,000,000,000. Mr. Gormley—representing the Georgia Banking Association—testified before our committee, that in his opinion the re- serve fund should be at least $2,500,000,- 000. My amendment only calls for $2,000,000,000. The Secretary of the Treasury, testify- ing before the Senate committee on this bill, stated that in his opinion this fund is sufficient except in panic times like we had in the thirties. In view of the fact that the FDIC board will not take a positive position that the fund is sufficient and adequate now, in view of the fact that the only positive testimony before our committee is that it is insufficient at this time, I say you should not reduce these assessments, you should not allow any reduction by credit or otherwise until this reserve fund reaches at least $2,000,000,000. Mr. Chairman, I urge adoption of my amendment, Mr, BROWN of Georgia. Mr. Chair- man, I rise in opposition to the amend- ment. Mr. Chairmen, the argument I made a few minutes ago against the amendment offered by the distinguished gentle- woman from Connecticut [Mrs. Woop- HOusE] applies to this amendment, CONGRESSIONAL RECORD—HOUSE Now, if $1,200,000,000 is not sufficient to pay for the losses of the banks of this country, I do not think that $2,000,000,- 000 would do much more. I want to repeat: The Secretary of the Treasury, the Comptroller of the Cur- rency, the FDIC, the representatives of the Bureau of the Budget, and practi- cally everyone who testified were in favor of this bill. Now, it is true that one wit- ness, Mr. Gormley, from Georgia, an able and distinguished gentleman, testified it might be preferable to have $2,500,000,- 000. The FDIC officials, bankers, and others have definitely agreed on 60 per- cent. Highteen witnesses testified for this bill and only one witness qualified his statement. Mr. CRAWFORD. Mr. Chairman, will the gentleman yield? Mr. BROWN of Georgia. I yield to the gentleman from Michigan. Mr. CRAWFORD. Would not the gentleman agree with me that one of the greatest possible assets in the FDIC con- cept is the preventive medicine which good management of the FDIC uses, wherein they step in before the disaster occurs and take over and consolidate the banks and prevent the great blow-up occurring in individual banks? Mr. BROWN of Georgia. I agree with the gentleman 100 percent, and 1 say that that is exactly what the FDIC is doing now, and that is one reason why we have not had a failure in 6 years. Another reason is that the FDIC checks these banks very carefully before admitting them into the fund. I know from personal experience that when a new bank applies for insurance the FDIC investigates the management, the needs of the community, the amount of capi- tal, its earning prospects, and so forth. These things are done quietly and effi- ciently, and many banks today have benefited from the prudent admuinistra- tion of the FDIC. Proper credit must also be given to the bankers themselves for continually working to improve their operations. Let me read what Mr. Gormley said: I personally think that the compromise plan arrived at in this bill would be construc- tive. I am not prepared to say that the present surplus developed by the Corporation and accumulated by the Corporation is a sufficient one, and neither do I think anyone else can say that the $1,200,000,000 of surplus now accumulated in the Corporation 1s suffi- cient. But of all the 18 witnesses who testi- fied, only Mr. Gormley said personally that it might be better to have a larger surplus. Then we have the Director of the Budget, who is the representative of the President of the Unittd States, the Secretary of the Treasury, and the Comp- troller of the Currency all in agreement. Practically all of the little banks were represented by witnesses, and all agreed on this formula written by the dis- tinguished gentleman from South Caro- lina, the Honorable Lee Wiggins, who also represented three small banks, and who at one time was head of the American Bankers’ Association. He has the con- fidence of everyone. I do not know much about finance, and I do not believe that the gentleman from New York [Mr, Mu.ttzer] knows much 10731 more than I do, and certainly I would not put my judgment up against that of these distinguished witnesses who ap- peared before our committee. The gentleman from New York (Mr, MUuLTER] is an excellent lawyer and fine gentleman. Mr. Chairman, I ask that the amend- ment be voted down. Mr. CRAWFORD. Mr. Chairman, if the gentleman yields further, reference has been made to the three billion line of credit in section 14 of the bill. Would not a Congress in session, whatever Con- gress it is, if a disaster occurs, immedi- ately recognize that that $3,000,000,000 is just a drop in the bucket as against $175,000,000,000 of deposits? Mr. BROWN of Georgia. If a crisis arises, the Congress will act just like they do when they prepare to meet an emergency in war. Mr. CRAWFORD. And not depend on the reserve fund? The CHAIRMAN. The question is on the amendment offered by the gentle- man from New York |Mr. MULTER). The question was taken; and on a di- vision (demanded by Mr. MuLTER) there were—ayes 20, noes 81. So the amendment was rejected. Mr. WALTER. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. WALTseR: On page 40, line 9, after “obligor”, strike out “st- multaneously” and insert “contemporane- ously” Mr, WALTER. Mr. Chairman, under section 13 (e) of this measure as amend- ed certain conditions for the first time are imposed upon a bank in the event agreements are entered into between customers of the bank and the bank, Prior hereto and up to the time of an un- fortunate interpretation of the law it was believed that all legal agreements entered into by the bank and obligor were binding on the Corporation. Under the language of the bill, this agreement must be entered into simultaneously with the recording and other conditions. It is quite obvious that that is impossible. Bank directors usually meet once a week. In the smaller banks there are no loan committees. This language contem- plates that when these agreements are entcred into they may be approved con- temporaneously, which, of course, means at a time approximating when they were entered into. Mr. SPENCE. Mr. Chairman, will the gentleman yield? Mr. WALTER. I yield to the gentle- man from Kentucky. Mr. SPENCE. I have no authority to accept the amendment for the commit- tee, but I see no objection to it. Mr. RAINS. Mr. Chairman, will the gentleman yield? Mr. WALTER. I yield to the gentle- man from Alabama. Mr. RAINS. May I inquire of the gen- tleman if there is anything tn his amend- ment that would make retroactive the right to sue or file claims against the Corporation? Mr. WALTER. Of course not, because this whole section 13e as amended ap- plies oy to future agreements, It in
10732 no wise affects agreements already en- tered into It was never the intention of Congress to give to the Corporation a stronger position than that of the bank and the adoption of the amendment, my amendment is offered to prove that heretofore it was the intent of Congress that any agreement in the absence of fraud, was binding on the Corporation. Mr. SPENCE. The gentieman’s amendment only changes the word “si- multaneously” to “contemporaneously’’? Mr. WALTER. Yes. Mr. SPENCE. I see no objection to it. The CHAIRMAN. The question is on the amendment offered by the gentle- man from Pennsylvania. The amendment was agreed to. Mr. ANDERSON of California. Mr. Chairman, I move to strike out the last word. Mr. Chairman, I simply want to call the attention of the House to the fact that we have as our guests in Washing- ton today one of the finest precision drill teams in the United States. They have taken 101 first prizes in 3 years of com- petition all over the country. Tonight at 8:15, before the baseball game, they will perform at Griffith Stadium, and to- morrow night at 7:45 in the Capitol Plaza before the band concert. I know my colleagues join me in welcoming them to Washington. Mr. TALLE. Will the gentleman tell the House what State this drill team is from? Mr ANDERSON of California. California. Mr. O'HARA of Minnesota. Where is this drill team from? Mr, ANDERSON of California. This drill team 1s from Half Moon Bay, Cahf. Mr. REES. Mr, Chairman, I move to strike out the last word. Mr. Chairman, I take this time to call attention to the committee amendment on page 26. This amendment I dis- cussed yesterday provides for the author- ization of the expenditure of $15,000,000 for a new building for the Federal De- posit Insurance Corporation. It was my understanding during that discussion that any controversial amendments would be considered today. At that time I called attention to my interest in this provision in the bill and my objections o it. Mr. Chairman, I now ask unanimous coasent to return to the committee amendment beginning on page 26, hne 11, and running over to page 27, line 17, so that we may give this matter further consideration, I feel that the committee did not have a chance to look this amendment over and realize what it was doing when it approved the amendment Jast night. There was no debate on it after it was offered. All I am asking is that we have a chance to reconsider the amendment. I think as a matter of fairness we should do that. It was not debated at all, just put in the bill by the House committee. Let us have a chance to reconsider it. It will take only a few minutes. Then we can find out whether this Committee of the Whole supports this amendment. I trust there will be no objection to my request. It is my intention to offer a motion to strike this From CONGRESSIONAL RECORD—HOUSE provision from the bill, and ask for & vote on the motion. Mr. BROWN of Georgia. Mr. Chair- man, will the gentleman yield? Mr REES. I yield to the distinguished gentleman from Georgia, who has always been more than fair with respect to per- mitting others to express their views. I know he favors this bill. I also favor the bill if this provision is climinated. If he will let us vote on the amendment, as I think we should, this Committee of the Whole will express its approval or dis- approval. Mr BROWN of Georgia. I appreciate the fine compliment paid me and I would like to accommodate the gentleman, but I am going to do something I have never done before in my experience here, Iam going to make an objection. The Chair- man said definitely we would take up the committee amendments yesterday, which we did. The gentleman's objec- tion comes too late now, and he will have to get unanimous consent to return to that amendment Mr. REES. That is what I am trying to do—to get unanimous consent to re- turn to the consideration of the amend- ment I certainly do not see a bit of harm in doing that. All Iam asking isa chance to reconsider the amendment and get a vote on it. Mr. BROWN of Georgia. The gentle- man is very persuasive, Mr. REES. All I am doing is asking unanimous consent to reconsider this amendment Itseems to me that one in- dividual should not object to such a re- consideration. We have done it many times on other occasions. Mr BROWN of Georgia The gentle- man’s views, of course, will be recorded in the CONGRESSIONAL Recorp, but I must object to his request. Mr. REES. Mr. Chairman, I want to call your attention to what you do if you adopt this amendment By this amendment you draw off $15,000,000 for an FDIC building to be constructed in Washington. It is an authorization, you say. Yes, but, of course, an au- thorization means an appropriation. Authorization is necessary before an ap- propriation may be considered. I in- quired yesterday how many people there are in Washington in this agency. Members of the committee did not seem to have the information. Finally, one member estimated there were 600. I called the Civil Service Commission a while ago and find that there are 326 employed in the agency. That means officers, clerks, stenographers, messen- gers, and all. It looks like a lot of money to house a little over 300 employees in a nonwar agency, especially during this crisis. So, if you do not eliminate this pro- vision, you are authorizing a building to house 326 employees at a cost of ap- proximately $50,000 for each employee right at this moment when you are talk- ing about holding back materials for essential buildings and other necessary construction. It will be said this is only an authorization and the building may not be built until 10 years from now. Be that as it may it is not a good policy. It is not a good thing to do. If Gov- JULY 20 ernment buildings are to be erected, there are others more necessary than this one. Furthermore, if you do not expect to construct this building in the near fu- ture, why authorize it now? If you read the hearings you will note where a member of the Board says that the appearance of a fine building such as proposed “would call attention to the great responsibilities imposed upon the Corporation and dignify its functions in the public eye.” In other words, it would make a great impression on those who had the privilege of seeing this great edifice. I think the public would be more impressed right now if the $15,- 000,000 is retained in the insurance fund. This section in the bill was not con- sidered in the other body at all. It was put in the bill at the last minute when the House committee was considering this legislation. I did serve notice yes- terday that I was going to offer an amendment to strike it out. But objec- tion has now been raised by the distin- guished gentleman from Georgia. He says it was agreed to and considered as @ committee amendment. I concede the gentleman from Georgia is within his rights. Unless he is willing to agree to my unanimous-consent request a vote on the amendment will not be permitted at this time. It will remain in the bill for the present. We will be given op- portunity for a separate vote on this amendment when debate is over and the bill is submitted for final vote in the House. Mr. BROWN of Georgia. I would like to correct the gentleman on one thing. Of course the committee amendment was voted on and adopted in the com- mittee. Mr. REES. It was not unanimously agreed to. I am simply asking that the vote be reconsidered so the question may be properly debated. Mr, BROWN of Georgia. They are now paying $200,000 rent I am aston- ished that the gentleman should take the position he does. Mr. REES. I am likewise astonished that this agency would pay $200,000 annual rent to provide office quarters for 326 people, including officers, employees, stenographers and clerks and all the rest of them. Your committee might do well to look into that matter. It seems to me I think you will agree, that such rents are excessive. With the exception of this provision, I am in favor of, and am supporting the legislation. I think the increase in the amount insured from $5,000 to $10,000 is a good move. I want to commend the Federal Deposit Insurance Corporation for the splendid service it is rendering to the banks and to the depositors of this country. The amendment providing for a $15,000,000 building does not belong in this legislation. Not at all, Opportunity will be given to vote on this amendment after debate is con- cluded and the bill is reported to the House for final vote. I trust the Mem- bers will vote to strike the $15,000,000 from the measure,
1950 Mr. Chairman, let me repeat this is not the time for our Government to set an example of constructing a building cost- ing millions of dollars that has nothing to do with the defense effort. The steel, the copper, and other materials, and the labor, that you would put in this edifice, had better be saved for more essential use right now. Our Government should be first to set the example in this respect. It is difficult to understand how one can support this particular proposal and then insist on the curtailment of steel and other necessary building material. Mr. HARVEY. Mr. Chairman, I move to strike out the last word. Mr. Chairman, I am for this bill and expect to vote for it. But I have a ques- tion I would like to direct to the com- mittee. It has come to my attention, not just recently but over a period of years, that the FDIC insists upon making ex- aminations of both national and State banks. Many of these bankers have complained to me that they are already subjected to examination by either the national bank examiners or the State bank examiners and that this makes an unnecessary duplication and imposes a burden upon them. The question I have to direct to the committee is whether this legislation will make mandatory this continued double inspection. Mr. COLE of Kansas. Mr, Chairman, will the gentleman yield? Mr. HARVEY. I yield. Mr. COLE of Kansas. It is my un- understanding, and I think it is the un- derstanding of most of the members of the committee, as the gentleman from Michigan {[Mr. Wotcort] stated yester- day, that the authority requested is not a duplication of the examinations now provided for by law, but that the exam- inations provided for in this bill will be merely used in cases of emergency and not as a usual and regular periodic ex- amination of, let us say, every 6 months or every year. This shall be done only in case of conditions where the FDIC feels an individual bank under individual circumstances requires an individual ex- amination. Mr. HARVEY. If I may further pur- sue the question. Has it not been the policy, however, in the past for the FDIC, ‘even in the case of strong national banks, to go in and make a duplicate inspection in addition to the inspection made by the national bank examiners, or the State bank examiners? Mr. COLE of Kansas. They do not have the authority now to make the ex- amination without consent, and so far as \ know that is not the situation. Mr. DONDERO. Mr. Chairman, will the gentleman yield? Mr. HARVEY. I yield. Mr. DONDERO. It is true, however, that the FDIC does make inspections of banks now under the authority of the Comptroller of the Currency. Mr. HARVEY. That is correct. Mr. COLE of Kansas. And with the consent of the Comptroller. This is to authorize the inspection without such consent, Mr. TABER. Mr. Chairman, if the gentleman will yield, I think I can an- swer the gentleman's inquiry. xXCVI——676 CONGRESSIONAL RECORD—HOUSE Mr. HARVEY. Iam happy to yield to the gentleman. Mr. TABER. Where they have a na- tional bank examination it is not cus- tomary for them to have an FDIC exam- ination. But where they have a State bank examination, it is customary. Mr. HARVEY. Isee. I thank the gen- tleman for his contribution. Mr. O'HARA of Ilhnois. Mr. Chair- man, I move to strike out the last word. Mr. Chairman, as the only member on the Banking and Currency Committee from the city of Chicago, I have felt it my duty and responsibility whenever measures are before the committee hav- ing to do with the operation of banks to write a letter to all of the bankers in Chicago requesting an expression of their views. Following that practice in the Appendix of the CoNnGRESSIONAL RECORD of Saturday, July 1, 1950, I inserted let- ters received by me on the pending bill from the bankers of Chicago, including one from Walter J. Cummings, the first Chairman of the FDIC. It is the general consensus of the Chi- cago bankers that the measure we are considering is meritorious. Some of the bankers, including those comprising the membership of the Illinois Bankers Asso- ciation, are opposed to the provision au- thorizing the FDIC to examine banks without prior consent of the Federal Re- serve. The Honorable Benjamin O. Cooper, auditor of public accounts of the State of Illinois, takes a similar position, and I am reading Mr. Cooper's letter of July 14, 1950, at the conclusion of my remarks. My own judgment is that, in the inter- est of the depositors, it is important that the FDIC have the right, at any time in its judgment necessary, to go into a bank without notice and without prior consent from the Federal Reserve. This, to me, is just good common sense, but this does not mean that the banks should be put to the inconvenience and the expense of frequent and periodical examinations by the FDIC supplemental to the exami- nations which are now made. The com- mittee was given to understand defi- nitely by Chairman Harl and other members of the FDIC that it was not the intention of the corporation to conduct examinations except in such cases of emergency and immediate urgency as the welfare of depositors demand. If this were an authorization which would set up another regular routine of bank examinations, thus subjecting banks to unnecessary expense and inconvenience through a multiplicity of examinations, I should not support it. But, as I have said, it is not so intended, and I feel safe in assuring the bankers of America that it will mever be carried to that extent. I feel confident thas it will operate in furthering the security of depositors and to the advantage of the bankers as well as of the public. There was some difference of opinion in the committee on the Woodhouse amendment, which I thought was a mat- ter of such importance as properly should come for determination in the Committee of the Whole after calm con- sideration and exhaustive discussion open to all the Members of the House. 10733 My own decision on how I should vote on the amendment I reserved until such time as the matter was before the Com- mittee of the Whole. I have given the matter much study and much thought, and my mind was open until the develop- ment of recent days, placing us on a war- time basis. Under the conditions of the war emergency—and for the very simple reason that in a time of abnormality and uncertainty as to the future there should be the minimum of changes and revi- sions in existing structures—I was in- clined to give weight to what the gentle- woman from Connecticut had to say about the possible element of inflation. But the defeat of the Woodhouse amendment did not as greatly affect the FIDC reserve fund as might have ap- peared on the surface from the able and forceful arguments made in its behalf. In the period of the next 10 years the reserve fund under the provisions of the present bill wil’ be increased from ap- proximately one and a quarter billions of dollars to about one and three-quarter billions, whereas under the provisions of the Woodhouse amendment the increase would not greatly have exceeded the fig- ure of $2,000,000,000. No one knows how large the reserve should be to meet un- expected and drastic situations of finan- cial chaos, but it is doubtful if the dif- ference of a half billion dollars accumu- Jated during a period of 10 years would be the difference between security and insecurity. It is at least reassuring to us that the reserve has been growing stead- ily during the past 16 years, that no in- roads have been made upon it, and that it will continue to grow at the rate of between forty and fifty million dollars a year. I think that the banks of the United States, by and large, have earned the respect and the confidence of the Ameri- can people. I say this as one who was most critical of bank practices and policies in the period antedating the de- pression of 1929. The pressure exerted by certain banks in the control of credits to industry was responsible for the lower- ing of wages that proved a large factor in bringing on the depression starting in 1929. The manner of floating uncer- tain loans to foreign countries and then disposing of such questionable securities at large commissions through agent banks throughout the Nation was an abuse of the prestige of the banker that received deserved rebuke in the public mind. Likewise the profitable traffic in so-called gold real estate bonds that some banks carried on in a wild and reckless era of financing did not add to the good repute of the banking fra- ternity, even though in that period there were many banks that did not fol- low the practice and remained fixed in their adherence to the ways of sound banking. Thus there have been banking abuses in the past, and doubtless there sre banking abuses continuing in some spots as there are abuses elsewhere, but for my part I have the same confidence in the integrity and the patriotism and the good and honest intentions of the aver- age banker as I have in any other American.
10784 It fis a matter of common knowledge that the foundation of banking recovery and the restoration of public confidence in the banks was furnished by the sound banking laws enacted by democratic Congresses under the gifted leadership of Franklin D. Roosevelt. The Federal Deposit Insurance Act, which now has a matchless record of 16 years successful operation with absolute security to the covered depositors, is a cornerstone in that structure. Today Republicans and Democrats alike, with few dissenters, are giving recognition to the wisdom of that Jegislation by supporting this bill which increases the insurance coverage of de- posits from $5,000 to $10,000. The bankers of America also have rec- ognized the soundness of the banking laws enacted by Democratic Congresses and in the main have accorded to them the support of their full cooperation. It is only fair to say that to them is due their share of the credit for the change of the banking picture of 1929 to that of today. When I speak of bankers I am not re- ferring alone to a dozen or more of the big banks in the large centers of popu- lation. I am thinking as well of the thousands of little banks throughout this Nation, and most of the banks in our country do belong in the small-business category. They need our friendly un- derstanding of their problems just as much as those in any other small-busi- ness group. Their contention is that if the prem- fums paid by them for bank deposit in- surance is greater than the amount re- quired to cover the risk, based upon the experiences of 16 years, and plus the cost of maintenance, the excess should be divided into 2 pools, one pool of 40 percent to go into the present reserve of approximately a billion and a quarter dollars, and the other pool of 60 percent upon which the contributing bankers could draw in the payment of their in- surance premiums in later and possibly tougher years. There is no proposal to distribute any money among the banks as cash refunds. On the other hand a considerable part of the 60 percent divi- sion reverting to the credit of the con- tributing banks would go back in cash to the Government in the payment of Fed- eral taxes, Now, certainly I think this should be considered as all other proposals, re- gardless of their source, which come to us in our deliberations on legislative measures. What we are all interested in, and what is essential to our economic functioning, is sound banking with the resultant security of deposits. The main question raised by the Woodhouse amendment was how fast we should go in building up the reserve of the FDIC to meet demands in the years ahead which may not be as favorable as those of the present period. Under the bill as it stands unamended, the reserve would be increased forty to fifty million dollars @ year. If the Woodhouse amendment had been adopted, and the bill were en- acted into law, the increase in the re- gerve would be a little more than twice ‘that amount. In either case it prob- ably would be infinitesimal in the event of a long and deep and devastating de- CONGRESSIONAL RECORD—HOUSE pression such as came to us with the crash of 1929. I am inclined to believe that the pres- ent reserve, plus additions thereto of some $40,000,000 to $50,000,000 a year, is adequate protection in any situation except that which might develop in a time of complete and devastating eco- nomic wreckage. And I do not believe that the American people should be led to believe that, in the event of such a depression as we experienced in 1929, there is any assured stability attaching to any reserve. Our approach to that problem is to protect by good laws and wise regulations our financial and eco- nomic structure from ever again being upset by such a depression as that of 1929. To take the position that all we have to do to avoid the griefs of a de- pression is to build up reserves is the very height of folly. Reserves them- selves are usually composed of the very holdings that are affected and destroyed in value by the depression itself. While I am inclined to the opinion that there was much force in the position of the gentlewoman from Connecticut [Mrs. WoopHovsz] and the gentleman from New York (Mr. MULTER], especial- ly in view of the war-emergency condi- tions preventing, I do not feel that the contrary decision of the majority in the Committee of the Whole has removed the beneficial character of the pending bill which entitles it to our support in the public interest. We cannot lose sight of the fact that the FDIC is not an instrumentality or servitor of the bankers but is the agent and the pro- tector of the plain people who deposit their money in banks, that it has afford- ed to these plain people full and com- plete protection of their savings for an extended period of 16 years, and that it has given to the bill before us its en- dorsement and recommendation that it do pass. In conclusion I wish to read, as I stated at the commencement of my re- marks I would do, the letter from my good and distinguished friend, the great auditor of public accounts of the State of Illinois, the Honorable Benjamin O. Cooper. Because of his high position in my State, and the affection and deep respect in which he is held by all the people of Illinois, I wish to accord to his letter, in which he states his viewpoint on certain provisions of this measure, the courtesy of presentment to my col- leagues. Mr. Cooper writes me: Dear ConoressMaN: I am informed that the House Banking and Currency Committee has voted recently to delete from 8S. 2822 the Senate amendment to section 10 (b). This amendment was placed in the bill in the Senate to protect our State banking in- stitutions, and I hope that the amendment will be retained in the bill if tt 1s passed by the House. This information comes from D. Emmert Brumbaugh, secretary of banking of the State of Pennsylvania, who testified recently on S. 2822 before your House committee as chairman of the legislative committee of the National Association of Supervisors of State Banks. Mr. Brumbaugh probably has dis- cussed the matter with you, and you probe ably have heard, also, from the President of our Association, Maurice C. Sparling, who is superintendent of banks of the Siate of California. JULY 20 You will remember that on February 7, 1950, I wrote you, enclosing a copy of my letter addressed to Mr. H. Earl Cook, Director of the Federal Deposit Insurance Corpora- tion, regarding this proposed legislation, and you very kindly replied in a letter to me dated February 14. As I understand it, sec- tion 10 (b) of S. 2822 as originally introduced in the Senate would have authorized the Federal Deposit Insurance Corporation to examine State Federal Reserve member banks without prior approval of the Federal Reserve Board, which approval is required by the existing law. This provision of S. 2822 was opposed by our national association and by many others. As a result, 5, 2822 as passed by the Senate in March 1950 contained an amendment permitting the Federal Deposit Insurance Corporation to examine State Fed- eral Reserve member banks only with the written consent of the Board of Governors of the Federal Reserve System. Mr. Brumbaugh’s testimony on behalf of our national association urged that the amendment to section 10 (b) of 8. 2822, as contained in the bill approved by the Sen- ate, be retained. I believe that a final vote is to be taken on 8. 2822 within the next week, and I will appreciate anything which you may be able to do in having the Senate amendment remain in the bill if it is passed by the House. Mr. GAVIN. Mr. Chairman, I move to strike out the last word. Mr. Chairman, along the lines of the speech of my good friend the gentleman from Kansas [Mr. Ress] talking about ecor.omies when we have to have an all- out war effort, I was very much surprised when I learned that the bill H. R. 8975, providing for experimentation in the field of synthetic fuels, had been called up by the Public Lands Committee yes- terday and passed the House by unani- mous consent. This bill requires the ex- yenditure of some $87,600,000. My office was advised that it would not be brought up until a rule had been obtained, as the bill was for more than a million dollars, and that a rule had been requested, and therefore I was of the opinion no further action would be taken until the Rules Committee had acted. I feel rather con- cerned to think that they would bring the bill up late last night under a consent re- quest without giving those interested an opportunity to be present to debate the bill. With American boys losing their lives every day in this war effort it seems strange that we should pass an $87,600,- 000 bili with 5 minutes of debate. They jumped the bill from $60,000,000 to $80,000,000, and they tossed in $2,600,000 for a laboratory without objection from anybody. I was interested in that pro- posal. I see my good friend the gentle- man from Florida {Mr. Peterson] is here. I should like to ask him why Mem- bers interested in the legislation were not notified that the committee was go- ing to call up the legislation. Mr. PETERSON, Mr. Chairman, will the gentleman yield? Mr. GAVIN. I yield to the gentleman from Florida. Mr. PETERSON. I may say that this morning was the first time I knew of the gentleman’s interest in this bil. Had I known of it previously, I would have notified him when the matter came up. I cleared the matter with the ranking member of the Public Lands Committee, I discussed it with the majority leader and with the minority leader and then
1950 we brought it up. Normally we would not have brought up a matter of this magnitude by consent except that when the bill passed before it passed by a unanimous vote. We felt that the bill was needed. All of the testimony was for the bill. Since the gentleman spoke to me this morning I have talked with the clerks of the committce. They did not under- stand that the gentleman wanted to be notified. Mr. GAVIN. I may say to the gentle- man from Florida that I have no objec- tion whatsoever to the $80,000,000 au- thorized for experimental work in syn- thetic fuels, but when you come along and toss in $2,600,000 for a laboratory without giving the membership an op- portunity to vote on it I think you are taking rather quick action. I think that you all recognized that if that were to be accepied it had to be done very quickly when there were but few Members on the floor of the House, because certainly I would have objected particularly at this time when we are in an all-out war effort, objections should have been registcred to the $2,600,000 set up for a laboratory. I would like to have such a laboratory in my back yard; my good and able friend the gentleman from Ohi0, WALTER BREHM, Was also interested; he would like to have a Jaboratory in his district. But here we come along and without any debate whatsoever we grant $2,600,000 for a laboratory. If we have got to conserve our resources and our money for this all-out war effort, then we ought not to provide for this costly laboratory with no more than 5 minutes’ debate. Mr. PETERSON. Mr. Chairman, I un- dérstood the gentleman yielded to me to answer him. I was going to say that had I known that the gentleman was in- terested I certainly would have notified him. The bill was reported out unani- mously by the committee. I discussed it with the majority leader, with the dis- tinguished gentleman from Michigan, and he himself when the matter came up under reservation pointed out how industry and Government alike wanted this particular laboratory. With refer- ence to the particular laboratory, the committee in its wisdom put these two matters together because there is an overcrowding at the university and there was a need for this building. Mr. GAVIN. I have appeared before the gentleman’s committee with the same sort of a proposal, but I was not given the opportunity to appear belore the gentle- man’s committee to present my case. I have been before the committee on the same matter. The bill came out orig- inally without the laboratory. The Ja- boratory has only been put in within the Jast 2 weeks. The original bill did not contain the laboratory. It has just been put in lately. Mr. PETERSON. The bill was amend- ed in committee and reported out with the laboratory. If the gentleman is in- terested in his section I assure him he will be heard. Mr. GAVIN. In view of the fact I in- dicated my interest to the gentleman’s committee and to the clerk of his com- CONGRESSIONAL RECORD—HOUSE mittee, certainly when you were going to bring the bill up under unanimous consent, the gentleman should have given me an opportunity to be heard. Mr. PETERSON, I had no knowledge of that. The CHAIRMAN. The time of the gentleman from Pennsylvania has ex- Pired. Mr, BUCHANAN. Mr. Chairman, I miove to strike out the requisite number of words. Mr. Chairman, a few moments ago the gentleman from Kansas referred to a committee amendment adopted by the Committee of the Whole appearing on page 26 in reference to a building and a site. I read that section: When approved by the President, the Cor- poration is hereby authorized to purchase a bullding or to acquire a site at the seat of the Federal Government and to construct there- on a building suitable for the use of the Corporation, at a total cost of not to exceed $15,000,000. The question has been raised that in view of the Korean situation should the FDIC be granted authority now to con- struct a building? The authority in this bill is conditioned upon the approval of the President. The President will not approve construction of FDIC's building if the war situation makes it desirable not to da so. This bill will not permit the immediate construc- tion of a building for FDIC. It is merely stand-by authority requiring the Presi- dent’s approval. This authority should be in this bill, It should not be delayed. The FDIC needs permanent quarters for the most efficient operation. It will not cost the taxpayer 1 cent, The entire cost will be paid out of as- sessments received from banks. The present annual rental paid is about $200,000 in the District of Colum- bia for quarters in three separate loca- tions. So it is only good business »ense and good judgment that the Fedcral De- posit Insurance Corporation use its own funds and be permitted to construct a building and acquire a site of its own in order to administer the agency in one headquarters. I believe that the gentleman is under a misapprehension that an additional appropriation is necessary. These funds have been gathered through the collec- tion of premiums, of course vested in the Corporation, and will be used for this purpose. Mr. REES. Mr. Chairman, will the gentleman yield? Mr. BUCHANAN. I yield to the gen- tleman from Kansas, Mr. REES. The gentleman from Kansas is not under any misapprehen- sion with respect to the use of this fund. The Corporation we are talking about is not an organization that is organized for the purpose of building buildings or any- thing of that kind. It has in its charge $1,200,000,000 of funds in order to pro- tect the depositors of this country. That is what it was created for. As I understand this provision of the bill, you are going to divert a part of that money, or the additional fund, whatever you may call it, for the purpose of erect- ing a building. WhatIam saying is that in my judgment it is not necessary to 10735 erect a building in the city of Washing- ton costing $15,000,000, just to house a few hundred individuals. I realize that something was said in the hearings, al- though there is only about a paragraph here devoted to this building proposition. While the gentleman from Kansas has not been in uhe active banking business, he has been interested in banks and is & member of the board of directors of a bank. I do not believe, as a member of the board of directors of a bank, that he would do the thing that has been sug- gested; that is, use the other fellow’s money to build a bank building. The bank with its own funds could build a building, of course, which would be all right. We too, pay taxes. This outfit is not paying any taxes at all. Mr. BUCHANAN. Since no Govern- ment money is invested in FDIC, or in the proposed FDIC building, the FDIC office space requirements and the servic- ing of its building should be kept sep- arate from Government leasing and servicing. Otherwise FDIC funds for rentals, management, and servicing its building and office space will become intermingled with Government funds. Mr. REES. That is too much to pay for buildings to house some 300 people. They do not need that kind of property. Mr. KUNKEL. Mr. Chairman, will the gentleman yield? Mr. BUCHANAN. I yield to the gen- tleman from Pennsylvania. Mr. KUNKEL. If the FDIC kept this $15,000,000 invested in Government bonds at 2 percent, it would receive $300,000 a year in interest, which would mean a net saving to that organization of $100,000 a year as contrasted with paying $200,000 a year for rental for the present buildings, is that not correct? Mr. BUCHANAN. Yes, but this would be contrary to the whole plan of deposit insurance which is a mutual insurance trust fund paid in by the banks to be used exclusively for deposit insurance purposes. It would be a serious mistake to have this fund and the FDIC author- ity over the same become involved with Government funds and other Govern- ment operations. To operate most ef- fectively the FDIC must remain inde- pendent in all its aspects. Limitation of $15,000,000 on cost of building and site: This amount was ar- rived at by General Services Adminis- tration after a thorough survey of the requirements of the FDIC. It was also approved by the Senate Public Works Committee and the Budget Bureau. Language of bill: This was worked out and approved by General Services Ad- ministration, FDIC, Budget Bureau, and the Senate Public Works Committee. Well, the gentleman certainly would not do that as a bank direcior in the city of Harrisburg, I am sure. Mr. KUNKEL. It would save $100,000 ®@ year. Mr. DONDERO. Mr. Chairman, will the gentleman yield? Mr. BUCHANAN. I yield to the gen- tleman from Michigan. Mr. DONDERO. I think we are over- looking the language in the amendment. It does not say you have got to spend $15,000,000. It says “not to exceed $15,000,000.”
10736 Mr. BUCHANAN. That ts right. Mr. DONDERO. We have at present @ large social security fund, and the Social Security Administration is going to build a building out of its own fund. I know the sincerity of the gentleman from Kansas in relation to Government savings. Mr. REES. Has the gentleman ever known of an authorization to go through this House, and where there was a sub- sequent appropriation, where all of the money was not used? Mr. BUCHANAN. I certainly sub- scribe to the argument of the gentleman from Michigan |Mr. DonpERO]. Now as to whether they must pay taxes, let me refer to page 51 of the bill, section 15 wherein it says that— The Corporation * * * except that any real property of the Corporation shall be subject to State, Territorial, county, municipal, or local taxation to the same ex- tent according to its value as other real property is taxed. So it is clear that if this building were to be constructed local real estate taxes would be paid. I am for this committee amendment and hope that it is adopted. The CHAIRMAN. The time of the gentleman from Pennsylvania has ex- pired. Mr. PHILLIPS of California. Mr. Chairman, I move to strike out the last word. Mr. SPENCE. Mr. Chairman, will the gentleman yield? Mr. PHILLIPS of California. I yield to the gentleman from Kentucky. Mr. SPENCE. Mr. Chairman, I ask unanimous consent that all debate on the bill and all amendments thereto close in 10 minutes. The CHAIRMAN. Is there objection to the request of the gentleman from Kentucky? There was no objection. Mr. PHILLIPS of California. Mr. Chairman, this may be the voice of ex- perience, I do not know. I came into the room as the gentleman from Kansas [Mr. Ress} was discussing the inclusion of an amendment in the bill which I think very few Members of the House knew was there. I was here on the floor during the discussion on the bill, espe- cially the latter part of yesterday after- noon. So [I thought I might comment from the experience of the subcommit- tee on which I serve. We have constant requests of this kind, and we have presently before us a request from the Veterans’ Admini- stration, which certainly would receive all possible consideration by us and by the Members of the House, to build an office building in the city of Chicago out of money which had been appropriated for the building of a hospital. Now, I am not trying to compare the two cases, but I am saying that even in a case as justifiable, you might say, as the Veterans’ Administration, which is certainly not a temporary agency nor & small agency, we are very hesitant. It is very doubtful, indeed, if the subcommit- tee will report favorably on the use of that money. We would be very vulner- able, I think, if we did. exactly CONGRESSIONAL RECORD—HOUSE ‘These are the differences. I certainly hope that this amendment since it can- not be reconsidered, will come up for a separate vote in the Congress, and I hope that it will be voted down. These are the reasons: First, we are entering a war, and there will be immediate need for every bit of structural steel, that is, steel for struc- tural use in buildings, and every one of our expenditures should be explored carefully, and limited to the most ab- solute necessities. Second, whenever we build a building for a Government agency, no matter how plausible the need of that agency is, we have a condition in which the private builders and private owners, the people upon whom we depend for the taxes to run this Government, are deprived of just that much more income out of which to pay taxes. Further, it is very rare, if you will check the cost of space under private ownership against the cost of space operated by the Government, do you find that the Government could not have rented office space somewhere in the vicinity for the same price or for less than the other. The third condition is, and this is very important, Mr. Chairman, that when an agency of Government builds a building, it has never been known to build one too small, and having built a building and expanded to fill the confines of that building, it is increasingly difficult to return that agency of Government to a normal size. We simply invite top- heavy bureaucracy by building buildings on requests of this kind. Finally, Mr. Chairman, the point Just brought out by the gentleman from Kansas, there is no comparison between the situation as stated by the gentleman from Pennsylvania [Mr. BucHANAN] and the present situation. A private bank makes its money out of its earnings, out of its profits. It has to be economical. A private bank pays taxes; a private bank supports the community in which it is located. A public agency of Gov- ernment takes land from the tax rolls in almost all instances, although I un- derstand that this bill includes a provi- sion in lieu of taxes; a public agency of Government does not have to live upon its profits; it spends without limitation. Mr. KUNKEL. Mr. Chairman, will the gentleman yield? Mr. PHILLIPS of California. I yield to the gentleman from Pennsylvania. Mr. KUNKEL. As a matter of fact, in connection with the point the gentleman raised, that the Government could al- ways rent more cheaply from private agencies, the evidence so far presented here in this committee shows that the FDIC is paying $200,000, and that they would have to take out of their invest- ment account a sum on which they are realizing $300,000 to do that, so they would lose $100,000 on the evidence al- ready before the committee. Mr. PHILLIPS of California. The gentleman is absolutely right. What the committee should suggest is an investi- gation of why this agency is spending $200,000 for rent, and not a proposal to build them a building. JULY 20 I hope the amendment will be voted down. The CHAIRMAN. Under the rule, the Committee rises. Accordingly the Committee rose; and the Speaker having resumed the chair, Mr, Foranp, Chairman of the Committee of the Whole House on the State of the Union, reported that that Committee, having had under consideration the bill (8. 2822) to amend the Federal Deposit Insurance Act (U.8.C., title 12, sec. 264), pursuant to House Resolution 697, he re- ported the bill back to the House with sundry amendments adopted by the Committee of the Whole. The SPEAKER. Under the rule, the previous question is ordered. Is & separate vote demanded on any amendment? Mr. KUNKEL. Mr. Speaker, I demand a separate vote on the committee amend- ment relating to the $15,000,000 building. The SPEAKER. Is a separate vote demanded on any other amendment? If not, the Chair will put them en gros. The amendments were agreed to. The SPEAKER. The Clerk will report the amendment upon which a separate vote is demanded. The Clerk read as follows: Page 26, line 11, insert the following: “Bleventh. When approved by the Presi- dent, the Corporation is hereby authorized to purchase a building or to acquire a site at the seat of the Federal Government and to construct thereon a building suitable for the use of the Corporation, at a total cost of not to exceed $15,000,000 for building and site, to be paid for by the Corporation and any payment or payments of such cost shall be considered as operating costs and ex- penses of the Corporation in determining net assessment income under section 7 (d) of this act: Provided, That the selection of such site shall be subject to the approval of the National Capital Park and Planning Com- mission, and that the design for such bulld- ing shall be subject to the approval of the Commisison of Fine Arts: Provided further, That the facilities of the Administrator of General Services shall be utilized, in the manner approved by the Corporation, in the acquisition of such site, the preparation of all necessary plans, drawings, and specifica- tions, the making of all necessary contracts, and the supervision of the construction of such building and said Administrator shall provide any other available facilities, in- cluding steam, upon request of the Corpo- ration. Upon request of the Corporation the Administrator of General Services is au- thorized to spend funds for advance plan- ning to prepare drawings and specifications prior to the approval of the title to any such acquisition. ‘The Corporation shall reim- burse the Administrator of General Services for any costs and expenses in furnishing such services and facilities in such amount as may be agreed to by the Corporation and the Administrator of General Services. The Board of Directors shall have exclusive au- thority to manage and service said building and to determine and provide for all of the Corporation's office space requirements.” The SPEAKER. The question is on the amendment. The question was taken; and on a divi- sion (demanded by Mr. Spence) there Were—ayes 59, noes 85. Mr. SPENCE. Mr. Speaker, I demand the yeas and nays. The yeas and nays were ordercd,
1950 as follows: [Roll No. 211] YEAS—91 Abbitt Frazier Addonizio Fugate Albeyt Granger Baring Grant Bates, Ky. Gregory Biemiller Hart Bletnik Havenner Bolling Hobbs Boykin Holifie’d Brown, Ga. Jackson, Wash. Bucharan Jacobs Burke Jones, Ala. Burlcson Karst Burnside Karsten Burton Kee Byrne, N, Y¥. Keogh Camp Kerr Cannon King Carnahan Kirwan Cevalcante Larcade Celler McCormack Cooley Miller, Calif. Davenport Mitchell Deano Morgan Doyle Morris Durham Multer Eberhart2r Murdock Engle, Calif. O'Brien, Il, Felghan O’Brien, Mich. Fogarty O’Hera, Ill. Forand O'Neill NAYS—226 Abernethy Ellsworth Alten, Calif. Elston Allen, I. Fellows Andersen, Fenton H. Carl Fernandez Anderson, Calif Fisher Andresen, Ford August H. Fulton Andrews Gamble Angell Garmatz Arends Gary Auchincloss Gathings Bailey Gavin Barden Golden Bates, Mass. Gorsk1 Battle Gossett Beall Graham Beckworth Gross Bennett, Fla. Guill Bennett, Mich. Gwinn Bentsen Hagen. Bishop Hale Blackney Halleck Boggs, Del. Hand Boggs, La. Harden Bolton, Md. Hardy Bolton, Ohio Harrison Bonner Harvey Bosone Hays, Ark Brambiett Hays, Ohio Brehm Hébert Brown, Ohio Hedrick Bryson Herlong Buckley, Ill. Herter Burdick Heeelton Byrnes, Wis. Hoeven Canfield Hoffman, II}. Carlyle Hoffman, Mich, Case, N. J. Holmes Case, 8. Dak. Hope Chelf Horan Chesney Howell Chiperfie!d Huber Clevenger Hull Cole, Kans. Jackson, Calif. Colmer Javits Corbett Jenison Cotton Jenkins Crawford Jensen Crook Jonas Cunningham Jones, Mo. Curtis Jones, N.C. Dague Judd Davis, Ga. Keating Davis, Wis. Kelley, Pa. DeGraffenried Kruse Delaney Kunkel Denton Lane D'Ewart Lanham Dollinger LeCompte Dolliver LeFevre Dondero Lichtenwalter Eaton Lind Elliott Linehan CONGRESSIONAL RECORD—HOUSE The question was taken: and there were—yeas 91, nays 226, not voting 113, O'Sullivan O'Toole Pace Patten Peterson Polk Preston Price Rains Rameay Rhodes Rooney Sabath Sarscer Shelley Smith, Va. Spence Steed Stigler Sullivan Tackett Vinson Walsh Walter Wheeler Wickersham Wier Wilson, Okla. Young Lodge Lovre Lucas Lynch McConnell McCulloch McDonough McGrath McGregor McGuire McKinnon McMillan, 8. 0. McSweeney Mack, Wash. Madden Magee Mahon Mansfield Marshall Martin, Iowa Martin, Mass. Mason Merrow Meyer Michener Miles Miller, Md. Miller, Nebr, Mills Monroney Moulder Murphy Nelson Nicholson Noland Norblad Norrell O'Hara, Minn. O’Konskt Phillips, Calif. Poage Potter Poulson Rabaut Rankin Reed, Ill. Reed, N. Y. Rees Rich Riehlman Rodino Rogers, Fla. Rogers, Mass. St. George Saylor Scott, Hugh D., Jr. Scrivner Scudder Secrest Sheppard Short Sikes S:mpson, Til. Smathers Tollefson Widnall Smith, Kans. Towe Wigglesworth Smith, Wis. Underwood Williams Staggers Van Zandt Wilson, Ind, Stanley Velde Wilson, Tex. Stefan Vorys Withrow Stockman Vursell Wolcott Taber Wadsworth Wolverton Talle Wagner Wood Tauricllo Weichel Woodhouse Teatue Werdel Woodruff Thomas Whitten Thornberry Whittington NOT VOTING—113 Allen, La. Hall, Pfeifer, Aspinall Leonard W. Joseph L. Barrett, Pa. Here Pfeiffer, Barrett, Wyo. Harris William L. Breen Heffernan Philbin Brooks Heller Phillips, Tenn. Buckley. N.Y. Hill Pickett Bulwinkle Hinthaw Plumley Carroll Irving Powell Chatham James Priest Christopher Jennings Quinn Chudoff Johnson Redden Clemente Kean Regan Cole, N. ¥. Kearney Ribicoff Combs Kearns Richards Cooper Keefe Rivers Coudert Kelly, N. Y. Robeson Cox Kennedy Roosevelt Crosser Kilburn Sadlak Davies, N. Y. Kilday Sadowski Davis, Tenn. Klein Sanborn Dawson Latham Scott, Hardie Dingell Lyle Shafer Donohue McCarthy Simpson, Pa, Doughton McMillen, Ill. Sims Douglas Mack, Il. Smith, Ohio Engel, Mich. Macy Sutton Evins Marcantonio Taylor Fallon Marsalis Thompson Flood Morrison Trimble Furcolo Morton Welch Gillette Murray, Tenn. Whitaker Gilmer Murray, Wis. White, Calif. Goodwin Nixon White, Idaho Gordon Norton Willis Gore Passman Winstead Granahan Patman Yates Green Patterson Zablocki Hall, Perkins Edwin Arthur So the amendment was rejected. The Clerk announced the following pairs: Mrs Kelly of New York with Mr. William L. Pfeiffer. Mr. Roosevelt with Mr. Coudert. Mr. Aspinall with Mr. Macy, Mr. Welch with Mr. Sadlak. Mr. Joseph L. Pfeifer with Mr. Kean. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Cooper with Mr. Taylor. Marsalis with Mr. Latham. Heller with Mr. Leonard W. Hall. Morrison with Mr. James. Kilday with Mr. Edwin Arthur Hall. Gilmer with Mr. Johnson. Gordon with Mr. Kearney. Zablocki with Mr. Hardie Scott. Yates with Mr. Engel of Michigan. Evins with Mr. Gillette. Mr, Carroll with Mr. Kilburn, Mr. Mr. vania. Mr. Shafer. Granahan with Mr. Mortoh. Green with Mr. Simpson of Pennsyl- Barrett of Pennsylvania with Mr. Mr. Pickett with Mr. Patterson, Mr. Mr, Mr. Mr. ming. Mr. Mr. Mr. Mr. nessee. Perkins with Mr. Nixon. McCarthy with Mr. Goodwin, Winstead with Mr. Hill. Heffernan with Mr. Barrett of Wyo- Irving with Mr. Plumley. Harris with Mr. Kearns. Regan with Mr. Hinshaw. Thompson with Mr. Phillips of Ten- Mr. Trimble with Mr. Murray of Wisconsin. Mr. Kennedy with Mr. Jennnigs. Mr. Breen with Mr. McMillen of Tlinois. Mrs. Douglas with Mr. Keefe. Mr. Chudoff with Mr. Smith of Ohio. 10737 Messrs. HepricK, HARRISON, DENTON, Rogers of Florida, Nouanp, Murpxy, Bucktey of Illinois, Hate, BENTSEN, Bat- TLE, Hays of Ohio, HoweE.t, and Mon- RonEY Changed their votes from “yea’’ to “nay,” Mr. Burke changed his vote from “nay” to “yea.” The result of the vote was announced as above recorded, The SPEAKER. The question is on the engrossment and third reading of the bill. The bill was ordered to be engrossed and read a third time, and was read the third time. Mr. MULTER. Mr. Speaker, I offer a motion to recommit. The SPEAKER. Is opposed to the bill? Mr. MULTER. I am, Mr. Speaker, in its present form. hee SPEAKER. The gentleman qual- es. The Clerk will report the motion to recommit. The Clerk read as follows: Mr. MULTER moves to recommit the bill 8, 2822 to the Committee on Banking and Currency with instructions to report the same back to the House forthwith with the following amendment: At page 15, line 25, add the following sentence: “No credit under the provisions of this subdivision of this section shall be allowed or applied at any time that the capital account of the corpo- ration aggregates less than $2,000,000,000." The SPEAKER. The question is on the motion to recommit. The question was taken; and on a division (demanded by Mr. Mutter) there were—ayes 40, noes 167, Mr. MULTER. Mr. Speaker, I de- mand the yeas and nays. The yeas and nays were refused. So the motion to recommit was re- jected. The SPEAKER. The question is on the passage of the bill. The bill was passed. A motion to reconsider was laid on the table, SPECIAL ORDER GRANTED Mr. SHEPPARD asked and was given permission to address the House for 20 minutes today, following the legislative program and any special orders hereto- fore entered. ABACA PRODUCTION ACT OF 1950 Mr. McSWEENEY, from the Commit- tee on Rules, reported the following privileged resolution (H. Res. 717, Rept. No. 2657), 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 itself into the Committee of the Whole House on the State of the Union for the considera- tion of the bill (S. 3520) to strengthen the common defense by providing for continua- tion and expansion of Western Hemisphere production of abacd by the United States. That after general debate, which shall be confined to the bill and continue not to exceed 1 hour, to be equally divided and controlled by the chairman and ranking minority member of the Committee on Armed Services, the bill shall be read for the gentleman
10738 amendment under the 5-minute rule At the conclusion 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 consid- ercd as ordered on the bill and amendments thereto to final passage without intervening motion, except one motion to recommit. REFUND OF CERTAIN ESTATE TAXES Mr. LYNCH. Mr. Speaker, I ask unanimous consent to take from the Speaker's desk the bill (H. R. 7840) to provide for the refund of certain estate taxes, and ask for its immediate con- sideration The Clerk read the title of the bill. The SPEAKER Is there objection to the request of the gentleman from New York? There was no objection. The Clerk read the bill, as follows: Be it enacted, etc., That section 7 (c) of Public Law 378, Eighty-first Congress, first session, is hereby amended to read as follows: “(c) If refund or credit of any overpay- ment resulting from the application of sub- sections (©) and (b) is prevented on the date of the enactment of this act, or within 1 year from such date, by the operation of any law or rule of law (other than section 8760 of the Internal Revenue Code, relating to closing agreements, and other than section 8761 of such code, relating to compromises), refund or credit of such overpayment may, nevertheless, be made or allowed if claim therefor 1s filed within 1 year from the date of the enactment of this act. This subsec- tion shall not apply with respect to a trans- fer of property in case (1) the decedent re- tained for his Mfe or for any period not ascertainable without reference to his death or for any period which did not in fact end before his death (A) the possession or enjoy- ment of, or the right to the income from, the property, or (B) the right, either alone or in conjunction with any person, to desig- nate the persons who should possess or enjoy the property or the income therefrom, and (2) refund or credit of any overpayment re- sulting from the application of subsections (a) and (b) was prevented on or hefore January 16, 1949, by the operation of any law or rule of law.” The bill was ordered to be engrossed and read a third tame, was read the third time, and passed, and a motion to recon- sider was laid on the table. Mr. REED of New York Mr. Speaker, I ask unanimous consent to extend my remarks at this point in the Recorp. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection, Mr. REED of New York. Mr. Speaker, H. R. 7840 amends section 7 (c) of Pub- lic Law 378 of the first session of this Congress to permit refund or credit of overpayment of estate tax resulting from application of section 7 of such law to cases where the decedent retained a life estate or other income interest in prop- erty transferred during life, unless such refund or credit was prevented on or before January 16, 1949, by the operation of any law or rule of law. Section 7 of Public Law 378 provided in certain cases that an inter vivos transfer of property by a decedent prior to March 4, 1931 (or, in some cases, prior to June 7, 1832), with certain interests in the income or use of the property retained CONGRESSIONAL RECORD—HOUSE during his life would not result in in- clusion of the property in the decedent's gross estate if he died before January 1, 1950. Section 7 of Public Law 378 also provided that retention by a dece- dent of certain minor reversionary in- terests in a transfer of property prior to October 8, 1949, would not result in in- clusion of the property in the decedent’s gross estate. Section 7 (c) of Public Law 378 provided for the reopening of closed cases s0 as to permit refund or credit of overpayment of estate tax in cases where property was included in the gross estate by reason of the retention by the decedent of a minor reversionary interest. However, refund or credit was not permitted in closed cases if the de- cedent in transferring the property in question, retained the income from the property for life or some other interest in the income or use of the property. In general, this was a desirable limi- tation on the reopening of closed cases where estate tax had been paid as the result of retention by the decedent of a reversionary interest, since payment of the estate tax was not necessarily in- equitable where the decedent retained not only a reversionary interest but also an interest in the income from the trans- ferred property. The limitation on re- funds in closed cases in section 7 (c) of Public Law 378 is inequitable, however, in its application to cases where estate tax has been paid and refund has been prevented by the running of the time for filing claim for refund or by a final court decision after January 16, 1949, There were no final court decisions on or before this date in which property was included in a decedent’s gross estate by reason of the fact that an interest in the income from the prop- erty was retained by the decedent in a transfer of such property prior to March 4, 1931, On January 17, 1949, the Supreme Court held, in the case of Commissioner y. Church (335 U. 8. 632), that property transferred be- fore March 4, 1931, was includible in the decedent’s gross estate by reason of his retention of a life estate in the prop- erty, whether or not he retained a re- versionary interest in the property. Consequently, after January 16, 1949, it was possible for an estate-tax case to become closed, so that refund would not be allowed, even though the only basis for inclusion of certain property in the decedent’s gross estate was the reten- tion by hfm of a life estate in the prop- erty in a transfer made before March 4, 1931. Your committee believes that this result is contrary to the general policy of Public Law 378, which is that property transferred prior to March 4, 1931, shall not be included in a decedent's gross estate solely by reason of the re- tention by him of a life estate if the de- cedent died before January 1, 1950. H. R. 7840 corrects this result by per- mitting refund or credit of overpayment resulting from the application of Pub- lic Law 378, regardless of the retention of @ life estate in the transferred prop- erty, unless such refund or credit was prevented o:. or before January 16, 1949, py the operation of any law or rule of aw, JuLy 20 The amendment to Public Law 378 made by this bill permits refund in @ case where refund is prevented under the present law by a final court decision rendered after January 16, 1949, and in a case where refund is prevented by the fact that the case was closed on stipula- tion of counsel after January 16, 1949, while on appeal from a lower court de- cision adverse to the taxpayer. Section 7 (c) of Public Law 378 pro- vides that the refund or credit permitted therein shall be made or allowed if claim is filed within 1 year from the date of enactment of such act. Claims for re- fund or credit permitted by reason of the amendment to Public Law 378 by this bill must also be filed within 1 year from such date; that is, within 1 year from October 25, 1949. PROVIDING ADDITIONAL FEDERAL DIS- TRICT JUDGE FOR EASTERN DISTRICT OF TEXAS Mr. McSWEENEY. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 706 and ask for its immediate consideration. The Clerk read the resolution, as fol- lows: Resolved, That immediately upon the adoption of this resolution it shall be in or der to move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (H. R. 5137) to provide for the ap- pointment of an additional Federal district Judge for the eastern district of Texas. That after general debate which shall be confined to the bill and continue not to exceed 1 hour, to be equally divided and controlled by the chairman and ranking minority member of the Committee on the Judictary, the bit] shall be read for amendment under the 6-minute rule At the conclusion 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 amend- ments thereto to final passage Without in- tervening motion except one motion to re- commit. Mr. McSWEENEY. Mr. Speaker, I yield one-half hour to the gentleman from Illinois [Mr. ALLEN] and now yield myself 5 minutes. Mr. Speaker, in behalf of the gentle- man from Texas, [Mr. LYLE], who was requested by the committee to call up the rule, this rule makes in order a bill pro- viding an extra judge for the State of Texas. We all probably realize there has been a great increase in the volume of work devolving on our Federal judges. In order to Jessen that volume of work it will probably take action on the part of the Congress to change the type of cases that come before the Federal judges. But until that is done, it does seem necessary that these judges being asked for at this time be granted in order to carry on the judicial business of the respective Federal districts. We therefore ask that this receive the consideration of the Congress. Mr. Speaker, I reserve the remainder of my time. Mr. ALLEN of Ilinois. Mr. Speaker, I have heard of no objection to the rule on this side with reference to this judge- ship. I take it for granted that the
1950 members of the Committee on the Judi- ciary will explain the bill and show a jus- tification for this judgeship as well as the others which it is intended to take up, Mr. Speaker, I yield back the balance of my time. Mr. McSWEENEY. Mr, Speaker, I have no further requests for time. I move the previous question. The previous question was ordered. The resolution was agreed to. CALL OF THE HOUSE Mr. TABER. Mr. Speaker, I make the point of order that a quorum is not pres- ent. The SPEAKER The Chair will count. (After counting.] 181 Members are present, not a quorum Mr BYRNZ ot New York. Mr. Speak- er, 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 212] Abbitt Gordon Paseman Allen, La Gore Patman Anderson, Calif Granahan Patterson Aspinall Green Perkins Barrcit, Pa, Hall, Pfeifei, Barrett, Wyo, Edwin Arthur Josph L. Bates, Mass. Hall, Pfeiffer, Bolling Leonard W. William L. Breea Haie Philbin Brooks Harris Phillips, Tenn. Bucklev, N Y. Heffernan Pickett Bulwinklo Heller Pluniey Burdick Hill Powell Burke Hinshaw Quinn Carroll Irving Redden Cavalcante James Regan Cellier Jennings Ribicoff Chatham Johnson Richards Christopher Kean Rivers Chudoff Kearney Robeson Clemente Kenins Roosevelt Cole, Kans, Keefe Sadlak Cole, N Y, Kelly, N Y, Sadowski Comks Kilburn Sasscor Cooper Kilday Scott, Hardie Coudert Klein Shafer Cox L tham Sims Davies, N Y. Lyle Smith, Ohio Davis, Tenn. McCarthy Sutton Dawson McMillen, Il, ‘Taylor Dingell Mack, Ill. ‘Thompson Donohue Macy Trimble Douglas Marcantonio ‘Vinson Engel, Mich. Marsalis Welch Evins Morrison Whitaker Fallon Morton White, Calif. Flood Murphy White, Idaho Prazier Murray, Tenn. Willis Furcolo Murray, Wis. Winstead Gary Niaon Yates Gathings Norton Zablocki Gillette O’Brien, Mich. Gilmer Pace The SPEAKER. On this roll call, 310 Members have answered to their names, a@ quorum. By unanimous consent, further pro- ceedings under the call were dispensed with, SELECT COMMITTEE ON USE OF CHEMI- CALS, PESTICIDES, AND INSECTICIDES IN AND WITH RESPECT TO FOOD PROD- UCTS The SPEAKER. Pursuant to the pro- visions 02 House Resolution 323, Eighty- first Congress, the Chair appoints as members of the Select Committee to Conduct an Investigation and Study of the Use of Chemicals, Pesticides, and In- secticides in and With Respect to Food Products, and for other purposes: Messrs, DELANEY, ABERNETHY, HEDRICK, CONGRESSIONAL RECORD—HOUSE Jones of Missouri, Krerz, MILLER of Ne- braska, and McDonovcu. PROVIDING ADDITIONAL FEDERAL DIS. TRICT JUDGE FOR EASTERN DISTRICT OF TEXAS Mr. BYRNE of New York. Mr. Speak- er, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the con< sideration of the bill (H. R. 5137) to pro- vide for the appointment of an addi- tional Federal district judge for the eastern district of Texas The motion was agreed to. Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the con- sideration of the bill H. R. 5137, with Mr Harrison in the chair. The Clerk read the title of the bill. By unanimous consent, the first read. ing of the bill was dispensed with. Mr. BYRNE of New York Mr. Chair. man, this bill was introduced by the gen- tleman from Texas [Mr. Comss]. It provides as follows’ That the President 1s authorized to ap- point, by and with the advice and consent of the Senate, one additional Federal dis- trict judge for the eastern district of Texas. Tho first vacancy occurring in the office of district Judge for the euastern district of Texas shall not be filled. This is a temporary appointment. There 15 one judge in this district now. This bill would call for the appointment of a temporary extra judge. The judgeship proposed by this bill has been recommended by the Judicial Conference of the United States at its regular meeting in 1949 Since the enactment of the Judicial Code of 1911, the eastern district of Texas has had one district judge. Under section 124 of title 28, United States Code, this judge holds court at six places; namely, Beaumont, Jefferson, Furis, Sherman, Texarkana, and Tyler. These places of holding court are widely sepa- rated as indicated by the following road distances: Sherman to Paris, 75 miles, Paris to Texarkana, 95 miles; Texarkana to Jefferson, 58 miles; Jefferson to Tyler, 78 miles; Tyler to Beaumont, 194 miles; Sherman to Tyler, 145 miles; and Sher- man to Beaumont, 339 mules, The headquarters of this Judge for this district is located at Sherman. The en- tire district comprises six divisions cov- ering 41 counties. The problem of adequately serving this district which arises from its geo- graphic expansiveness is further in- tensified by the recent development of oil and gas fields in the northern part of the district. In the southern area great industrial development has taken place around Beaumont and Port Arthur. The need for this additional judge- ship for the proper dispatch of the legal business in this district is clearly set forth in a memorandum furnished by the Administrative Office of the United States Courts, which I shall go into at a later time. Mr. Chairman, I now yield to the gen- tleman from Texas |Mr. Witson]} such time as he may require. The gentleman 10739 from Texas [Mr. Comss], who intro. duced this particular bill, happens to be back in Texas attending, I imagine, to some of his primary problems, Mr. WILSON of Texas, Mr, Chair- man, the situation with regard to this temporary court which the Committee on the Judiciary has recommended be created in the East Texas district, where I have tried a good many lawsuits, is such that the court sits in six different places. From the northern end of the district to the southern end it is nearly 400 miles. The present judge, who is more or less physically disabled, lives in the extreme northern part of the dis. trict. The lawyers at Beaumont, which is a town of around 175,000 to 200,000, and at Port Arthur, a town of some 15,000 to 80,000 people, and Orange, a town of some 40,000 or 50,000 people, have to travel 400 miles to see a district court about any legal business, The liti- gants have to do hkewise. Let me read some statistics to you by way of comparison, I have been in- formed by lawyers of the East Texas district that there are some 1,400 cases now pending on the docket in that court. In 1947 the average case load, that is of cases pending, in each one of those places was 484, as compared to the average in the other 84 districts in this country of 271 cases. In other words there were some 150 cases more on the average in 1947. In 1848 there was an average of. 324 cases, aS compared to 205 in the other 84 districts. In 1949 there was an aver- age of 433 cases as compared to the av- erage of 217 in the other 84 Federal dis.' tricts of the country. This would indicate, Mr. Chairman, that certainly we need to create a tem- porary judgeship in that district in or- der to clean up the the docket so that the litigants can get their cases tried,' Bear in mind that Beaumont, Orange,’ and Port Arthur in the southern part of Texas is an oil district, as is all of East Texas. I have tried cases in Tyler and in other places in East Texas in the oil field. One of the largest if not the larg- est oil field in the world 1s located in that district. Much ol litigation is constantly being carried on there about titles to oil lands, as well as other difficulties between vari- ous litigants both out of the State and in the State. That accounts largely for the crowded condition of the docket. I think this is a very meritorious bill and should be approved by the House so that this judge can go there to help clean up the docket and so that lawyers and litigants will not have to travel as they do now 385 or 400 miles to see a judge and to transact legal business, I think this bill is mecessary and should he passed. Mr. MICHENER. Mr. Chairman, I yield 10 minutes to the gentleman from New York [Mr. Keatina]. Mr. KEATING. Mr. Chairman, this 4s a rather unenviable position in which I find myself. There are eight bills to create new judges coming up in the Con- gress at this time and the majority leadership has elected to bring up as the
10740 first bill the creation of an extra judge- ship in the eastern district of the sov- ereign State of Texas. I am told that our distinguished and beloved Speaker is in favor of this bill, It is regrettable that I find myself in disagreement with the Speaker, but I feel sure he would expect me to do my duty as I see it. Equally sorry am I that I find myself in disagreement with my friend from Texas {Mr. WILson] a valued member of our Committee on the Judiciary. What I have to say here in large part will apply to all of these bills to create new judgeships, but I am told that after the Rayburn-Wilson-Combs bill is dis- posed of the Sabath-Yates bill for Tli- nois will be called up, and that the rest of them will probably go over until Mon- day. Yesterday the President delivered his message to us and we were all impressed. We are all of us exercised and concerned over the state of world affairs. Cer- tainly, it must have occurred to us as we heard that message that now is the time to put first things first. As a part of putting first things first we must curtail insofar as possible expenditures for normal Government activities; in other words we should not go into things that are not absolutely essential on the home front. Mr. TABER. Mr. Chairman, will the gentleman yield for a question? Mr. KEATING. I am happy to yleld to the gentleman from New York. Mr. TABER. Ihave in front of me the report on the bill, and in it is a letter signed by Henry P. Chandler, the Direc- tor of the Administrative Office of the United States Courts, dated April 10, 1920. Mr. KEATING. If the gentleman will permit an interruption, I may say that I intend to go into that report following some general remarks on all the judge- ship bills. If the gentleman would be willing to defer his question I should be glad to go into the details of this specific bill a little later, after some general ob- servations. Mr. TABER. Very well. Mr. KEATING. It seems to me at least that this bill or the other bills that are before us should not be allowed to just slip through without a fair hearing on both sides of the question. I do not entertain too much hope about the defeat of the particular measure before us be- cause of the very strong backing it has from the Democratic side. The Re- publicans simply do not have the votes to defeat this bill without substantial help from the other side of the aisle. You will remember that already in this Eighty-first Congress, about a year ago, we created 24 new judgeships and made three more temporary judgeships perma- nent; that is a total of 27. The Conti- nental Congress, the first Congress of the United States, called to set up the entire judicial system throughout the country, created 24 judgeships for all of the United States. Never since that time have we reached as many as 27, which we have already created, and we are now being asked to add 8 to that number, or @ total of 35. When we created these other judge- ships, it was done by the device of an CONGRESSIONAL RECORD—HOUSE omnibus bill. These particular eight are not brought before us under an omnibus pill but in separate bills, so it is imposai- le to offer an amendment to provide that not more than two-thirds shall be members of the same political party, as was done, albeit unsuccessfully, when the previous judgeship bill was before us, I know all of us agree that the non- partisan character of the judiclary should be maintained, despite fhe un- favorable vote which was taken in June of last year, because all of those who op- posed the amendment we offered at that time gave voice to the sentiment that our judiciary should be maintained on a bi- partisan basis. They protested that it was not necessary to include mandatory provisions in the measure to accomplish that result. In fact, the gentleman from Alabama [Mr. Hogss] who took the laboring oar in opposing the amend- ment that was before us a year ago to keep the judiciary bipartisan, said, after paying respects to my sincerity in offer- ing the amendment, for which I was very grateful: The gentleman's contention should be re- spected in principle and in practice. You will find those words in the June 16 CoNGRESSIONAL RECORD. Further he said: I maintain that this amendment, though offered in good faith, we hope it will be re- epected in spirit in the appointments made in every administration, no matter which party shall be in power, And again: It would give the Nation a lift to higher and holier things if we could be sure that the spirit back of the gentleman's amend- ment would always be preserved. Those were the words of the distin- guished gentleman from Alabama in op- posing my amendment which was offered last year. It would be holy and high to keep the judiciary nonpartisan, avers my friend. Now let us see what has happened. There were 27 judges provided for in that legislation. The President of the United States has appointed 24 of those 27 judges and of those 24 it so happens that 23 are members of the Democrat Party. One happens to be a Republican. While I appreciate there are high and holy men in the Democrat Party, I ques- tion seriously whether the relative pro- portion of holiness in that party is as high as is indicated by the appointment of Democrats that has been made. In other words, it was indicated in op- sition to this amendment last year that t was not necessary to provide that at least one-third of the appointees should not be members of the majority party in order to maintain the bipartisan charac- ter of the judiciary. But it has turned out that of the 24 judges appointed 23 are members of the majority party. No doubt all of them are able gentlemen, but the fact remains that the Chief Ex. ecutive in exercising the appointive power has failed to observe the salutary rinciple to which the representative of party gave voice so eloquently when matter was before us a year ago, The history of the appointments from 1933, which was the year when the pres- ent majority party came into power, un- JuLy 20 til this time is that there have been 289 judges appointed of whom 272 have been members of the Democrat Party and 17 not members of the Democrat Party, or @ percentage of 95 to 5 percent. That is a condition which seems to me to deserve a certain amount of correction and is one of the reasons why I am opposing this bill to create further Dem- ocrat jobs in high places. Furthermore, how can we be asked to give our support to this measure? Is it @ part of the Truman program? The CHAIRMAN. The time of the gentleman from New York has expired. Mr. MICHENER. Mr. Chairman, I yield the gentleman five additional min- utes. Mr. KEATING. Mr, Chairman, I took an active part in the campaign in the fall of 1948 and at that time I heard a great deal about this, that, and the other issue. But I did not then hear anything in the campaign about these bills, that there would be bills introduced to create 35 new Federal judgeships. I never heard anything about increasing the Presi- dent's salary or boosting the pay of all the top officials in the Government or introducing and trying to pass a bill which would relieve those who came down here for the inaugural parade from paying admission taxes, or, as I say, this bill to create all these additional judges. It seems to me that these issues should be debated before the people. Do they want to have all of these new Democratic officials appointed, or officials of any party, as far as that is concerned? Does the need exist for saddling this expense on the wage earners and taxpayers of the country? Or is this simply a device to reward the party faithful? Mr. HALE. Mr. Chairman, will the gentleman yield? Mr. KEATING. I yield to the gentle- man from Maine. Mr. HALE. I want to ask the gentle- man if the proportion of 1 to 24 is re- tained, the Republicans will only get one- third of one judge; is that correct? Mr. KEATING. That is correct, and it remains to be seen which third they will get, if any. Mr. HALE. Would not that fractional operation be particularly difficult to execute? . Mr. KEATING. Yes; it would be, and painful too, whether performed on a Democrat or Republican. Mr. Chairman, I should like to com- ment on the argument advanced that the Judicial Conference has approved of these additional judgeships. They have approved, I believe, of all of these bills before us. Now the Judicial Conference is made up of estimable gentlemen, first-rate judges. I know a number of them per- sonally, Two or three of them I am happy and proud to consider as my friends. But they belong to this club which we might call another body that meets from time to time. One of these estimable gentlemen comes in and says, after they have had dinner—I presume it is after dinner-—“Now, we need another Judge down my way.” The rest of them aay, “That is fine,’ and another will say, “As a matter of fact, we need one up my way.” Whereupon after they all have
1950 their say, the matter goes through unanimously. All of these are always unanimous, there is never or rarely ever a dissenting opinion in the meetings of the Judicial Conference composed of these fine, estimable gentlemen. Please understand that I am not intending to be critical of them or of their devoted service to their profession. But it is our responsibility, not the responsibility of the Judicial Conference, as to whether these additional judges will be appointed. We must measure all of the factors en- tailed in such a determination. Mr. McCORMACK. Mr. Chairman, will the gentleman yield? Mr. KEATING. I cannot yield at this time. I am limited in time. Mr. McCORMACK. Will the gentle- man yield to the gentleman from New York a minute? Mr. BYRNE of New York. Mr. Chair- man, I yield the gentleman a minute. Mr. KEATING. As soon asI finish this I will be happy to take the minute and at that time to yield to the majority Jeader. The proper approach to all these judgeship bills is to increase the juris- diction of the Federal court from $3,000 to $10,000. When the $3,600 jurisdiction was set up it was a big sum of money; $10,000 will not begin to buy now what $3,000 bought when that jurisdiction was es- tablished. That is the sound approach, That will cut down the number of cases and will lead to a completely different set of figures in all these courts as to the number of cases pending. That is the move we should make, instead of con- tinually adding new Federal judges. Now, let me come to the consideration of this specific bill before us. I hope that the Members will look at the tables to which I refer as to this case here. In deciding whether this judicial dis- trict needs a new judge, please look first at page 11 of the report, which gives the cases that have been commenced and terminated in this district during the last 10 years. The CHAIRMAN. The time of the gentleman from New York has expired. Mr. MICHENER. Mr. Chairman, I yleld the gentleman five additional min- utes. Mr. KEATING. Up atthe top you will find that in the year 1949 there were 433 civil cases started, which was less than in three of the previous 10 years. Then when you come down to the crim- inal cases, down at the bottom of the page, you will find that in 1949 there were 138 cases started, which is the low- est number of any year since 1940. Now that is no doubt due to the increasingly law-abiding character of the fine citizens of Texas, and I congratulate the gentle- men representing those districts for the fact that their crirsinal cases have de- clined. But it is a fact that there is a lower number of criminal cases being tried in this judicial district today than at any time in 10 years. When you turn over the page, table 2, on page 12, the strongest reason is re- vealed why this bill should be defeated. Here is shown the total civil cases per judge and the total criminal cases per judge. If you take the column relating CONGRESSIONAL RECORD—HOUSE to civil cases and you add it to the crim- inal cases, that gives you the total case load for the judge in the eastern district of Texas. The total is not printed in this report, but it is an easy arithmetical computation and is very {lluminating. The total case load back in 1940 was 726. It went up next year to 783; in 1942 to 796; then 1943, dropped to 521; 1944, rose to 630; 1945 up to a peak of 837; 1946, 800; 1947, 695; 1948, 503; and 1949, 571. The year 1949 is the lowest year except 1948 of any one of the 10 years. The one judge has been handling that number of cases all of these 10 years, and there is no justification for creating another judge to handle fewer cases now. Mr. TABER. Mr. Chairman, will the gentleman yield? Mr. KEATING. I yield to the gentle- man from New York. Mr. TABER. It seems to me that the meat of this question is on page 3 of the statement by Mr. Chandler, Director of the Administrative Office of the United States Courts: The time for disposition from filing to de- termination of cases tried in the district (ex- clusive of land condemnation, habeas and forfeiture cases which are not typical) shows an excellent record, 7.9 months, for the east- ern district of Texas, compared with an aver- age of 10.4 in the 86 districts. Indicating that business is being dis- posed of there on a much more rapid basis than it is anywhere else. Mr. KEATING. That is right. The gentleman from New York has put his finger on it exactly. The Members will hear on Monday from the proponents of some of these other measures that the main reason why judges should be named in their districts is that this 10.4 figure is exceeded. Nov, if that basis is followed, then, certainly, when the 7.9 figure is so much of a decrease from the average, some effect should be given also to that factor. Otherwise, the taxpayer gets it in the neck going and coming. And I might add, that is without any corre- sponding benefit to the litigants. If the courts are so congested, that justice is unduly delayed and if that condition is occasioned by a shortage of judges and that fact can be affirmatively established, a strong case can be made out for the authorization of additional judicial of- ficers. The statistics here show that exactly the opposite is true and litigants get substantially quicker justice than on the national average. There is one other factor which dis- tinguishes the Texas case from any other, and that is found on page 5 of the report, that some of the civil cases arise from the fact that injured workmen are given the right under Texas law to bring suit in the Federal Court against insur- ance companies, and that is reflected in the number of civil cases. As you see, a very large amount of the load, small though the total is, and less though it is than in most of the rest of the districts in the country, is caused by the fact that the State of Texas gives jurisdiction to bring these actions in the Federal court, Where does that end us up? It means that any sovereign State by conferring jurisdiction on a Federal court to hear their local controversies, and most of these involve just a few dollars, can 10741 | throw the burden of the expense of all this Htigation upon the United States Government. It seems to me that strong representations should be made to the State of Texas to compel these cases to be tried in their State courts and not permit them to be brought in the Federal courts. Of course, much of that litiga- tion would naturally be channeled into the State courts if we were to adopt my suggestion about raising the jurisdic- tional limit in the Federal courts. Mr. BYRNE of New York. Mr. Chair- man, I yield 4 minutes to the gentleman from Massachusetts [Mr. McCormack]. Mr. McCORMACK. Mr. Chairman, I listened with great interest to the adroit- ness of my friend from New York [Mr. Keatina!. We all know how adroit he is. But he let the cat out of the bag so far as he is concerned, and I was somewhat surprised because usually he does not make his objections so open as he did on this occasion, when he said he is oppos- ing it as a Republican. I think that must have been a temporary lapse of memory on the part of my friend, be- cause he usually is too adroit to admit that publicly. His open frankness, which is refreshing, clearly shows just what his opposition is based on, that he is a Republican. My mind goes back to 22 years ago when I came here, when similar bills were brought in under the administra- tion of the late President Coolidge and former President Hoover. We on the Democratic side never opposed them. We recognized that the important thing was service to the public. One of the most important problems confronting the people, whether on the Federal level or on the State level or on the city level, so far as our courts are concerned, is the crowded condition of the dockets, with people trying to get their cases tried as quickly as possible. Long delays create extreme dissatisfaction. I know as a practicing lawyer, a very active trial lawyer, for more years before I came here than I want to confess, that in the Massachusetts courts it took any- where from 4 to 6 years in those days to have accident and other cases tried. Clients would come into your office, and there was nothing you could tell them. The insurance companies would recog- nize that and would compel many a cheap settlement, because they knew they had time on their side. They knew that the plaintiff invariably was a per- son who did not have much means and could not afford to wait. The result is that oftentimes we were forced to make a settlement far below what the liability and the injuries and the damages called or, It seems to me the basic question we should consider is not that of politics. While that is important to us, it should be secondary. The basic question in each one of these bills is whether or not the circumstances, the facts, justify fa- vorable action on the bill, and whether or not the service to the people, the party litigant, those who go into the Federal courts in the district affected, warrants favorable action on our part, The question of who are appointed, as long as they are good men, judicial- minded, is at times a matter of import,
10742 and it is important to have persons who are Judicial-minded; but the basic ques- tion is whether or not an additional judge or 2 permanent judge is warranted in these districts, based upon the condi- tions that exist there, and having in mind the primary objective of service to the parties litigant, and particularly to try to speed up justice in bringing to the parties litigant early consideration and early action on the cases in which they are involved ‘This applies particularly to the person or the company that does not have the means to engage in long years of litigation, particularly when an important part of the delay is due to the fact that the dockets of the courts are so crowded that the courts are unable to hold trials as quickly as they would like to and as they ought to In any event I again want to say while I regret it I am pleased to note the open frankness of my friend, the gentleman from New York [Mr. Keatinc! in his expression that his opposition to these bills is based on the fact that he is a Republican. Mr. BYRNE of New York. Mr. Chair- man, I yield myself 8 minutes. Mr. Chairman, the letter written by Henry P. Chandler, who is the Director of the Administrative Office of the United States Courts, has been referred to by the gentleman from New York. I want to quote from that letter a part which in my opinion will clinch this particular matter so far as settling the question of the necessity for this judge: In a recent letter written to Chief Judge Hutcheson of the fifth circuit, the present district judge for the eastern district of Texas, Hon Randolph Bryant, explained some of the factors in the business of the court as follows: “However, the biggest intangible in the sit- uation of this district at this timo (and which 1s not disclosed by the statistics of business at all) is the fact that the Govern- ment has already begun condemnation pro- ceedings looking to the acquisition of over 800,000 acres of land within this district, and embracing separate and diverse projects ex- tending from the Gulf of Mexico to the westernmost county of the district. One project alone—that on Sulphur River in the Texarkana division—contemplates the ac- quisition of over 100,000 acres of land, and these matters are almost unending in their demands upon the time of the court in litiga- tion involving disputes over the value of lands, hearings upon the distribution of proceeds resulting from the condemnation, and the like.” ° . * s e “Another ftmportant circumstance to be considered is the fact, of which I have kept the Administrative Office advised, that there are almost daily discoveries of off and gas fields in this district, which, as you Know, are always prolific of litigation. “The dockets here (ln Beaumont), where most of the business of the district originates, are fairly current, but this is due entirely to the adventitious fact that I have had the assistance of four or five outside judges here during the last year, in addition to my own valiant efforts. I am concluding my third week of court here now and expect to be here next week, and in spite of this there will remain 100 more civil cases upon the dockets here, and there will be twice or more that number by the time the fall term begins.” May I call to your attention the con- clusion of Mr. Chandler based upon their CONGRESSIONAL RECORD—HOUSE investigation, and upon the facts that have been presented to them: For the various reasons above-mentioned, it seems apparent that the business of the eastern district of Texas has outgrown the ability of one judge to handle it adequately, notwithstanding the excellent record of the prosent judge with the assistance from the outside which he has received tn coping with the burden thus far and his own intense application. Mr. TABER. Mr. Chairman, will the gentleman yield? Mr. BYRNE of New York. With pleasure. Mr. TABER. It appears on page 2 that the committee recommends that this judgeship be temporary, therefore it does not appear conclusively that the need is of a permanent character which would indicate that the merits of this additional judgeship had not been too greatly im- pressed upon the committee. Mr. RAYBURN. Mr. Chairman, will the gentleman yield? Mr. BYRNE of New York. Yes; Mr. Chairman. Mr. RAYBURN. Mr. Chairman, I have no personal interest in this at all, I do not recommend judges for appoint- ment. This judge in this district every- body knows is not a wellman. He is one of those good Republicans. I have known him and he has known me prac- tically all our lives. He cannot handle the business of this-district. The reason why at times this thing looks slightly current is that four or five judges are pulled away from their own districts and brought in here to help clean up or pertially clean up this one. Randolph Bryant is not a shirker; he is a fine man. His father was a great judge, and they have all been Repub- licans. But the litigants in this district are suffering; there 1s no question about that, and these other judges, busy as they are, cannot leave their districts every year, or twice a year, and go help Judge Bryant clean up this docket; they are all busy themselves. It is 400 miles from Sherman by Texarkana to Beau- mont. This man has to sit in six places, Even if he did not have much of a docket, just going from one of these courts to another would certainly be a big physi- cal task for even a man in good health. Mr. GOSSETT. Mr. Chairman, will the gentleman yield? Mr. BYRNE of New York. I yield, Mr. GOSSETT. The bill itself pro- vides that this is a temporary judgeship. Mr. BYRNE of New York. The gen- tleman is correct, Mr. GOSSETT. If it should appear later that the business of this area was so heavy that an additional judgeship was required, undoubtedly the recom- mendation would be made and our com- mittee would have to consider the matter and act on the recommendation for per- manency and establish the need. So we shall have an opportunity again to pass upon the question of permanency at a subsequent time in addition to the date we already have in the Recorp. Mr. BYRNE of New York. I thank the gentleman for his contribution. JULY 20 Let me finish this statement by Mr. Chandler, and this is very conclusive with me: For the various reasons above-mentioned, it seems apparent that the business of the eastern district of Texas has outgrown the ability of one judge to handle it adequately, notwithstanding the excellent record of the present Judge with the assistance from the outside which he has received in coping with the burden thus far and his own intense ap- plication. The additional Judge for whom the bill would provide has become necessary on account of the increase tn industry and business in the district. Accordingly I trust that the bill may be enacted. With kind regards, I am, Sincerely yours, Henry P. CHANDLER, Director. Mr. Chairman, the table at the bottom of page 5 shows the additional work that was done by visiting judges: In 1947 3 judges gave attention to 13 cases in 1114 trial days; in 1948 5 judges came in and gave attention to 53 cases in 6414 trial days; in 1949 5 judges came in and gave attention to 33 cases in 43 trial days; and in the first half of the present cal- endar year 1950 2 judges have already heard 9 cases over a period of 12 days. So it does appear that there is not only great necessity for a temporary judge, but undoubtedly great necessity for a permanent judge, As has been stated by the gentleman from Texas [Mr. Gos- sETT], if the emergency arises and is seri- ous enough undoubtedly there will be a demand made by the people in the dis- trict for a permanent judge. Mr. MICHENER. Mr. Chairman, I think no one will accuse me of being partisan in connection with the selection of Federal judges. It is regrettable that these selections are made on a partisan basis; that is all wrong. It is too bad that before a name can be sent to the Senate by the President for appointment to a Federal judgeship that that name must first have the approval of the Dem- ocratic national committeeman or the Republican national committeeman, de- pending upon which party is in power. The functions of political chairmen are not judicial; they are partisan entirely— to win elections and dispense patron- age—and they would not be true to their trusts if they recommended some- body to be appointed judge who did not meet political specifications. A few years ago Congress established the judi- cial council composed of the presiding circuit judges of each circuit in the United States. . It was thought that this council would not recommend the appointment of ad- ditional judges unless they were abso- lutely necessary to the dispensing of jus- tice in the districts affected. Well, coun. cil judges are human just like the rest of us. Practically all of them hold their positions because of political affiliation and invariably because of politically par- tisan activity and endorsements. It has been clearly demonstrated, how- ever, that Congress was too optimistic and this council, being fallible, has not solved our problem. I fear politics do enter into these matters. It is fine to talk about a bipartisan judiciary. It
1950 seems difficult to do anything about it, however. The present system is not non- partisan and the political complexion of the Federal judiciary is bound to reflect to some extent the views of the political part appointing the judge. Mr. Chairman, all virtue does not re- side in either political party. For my part, I would rather have an outstand- ing lawyer whose integrity is above ques~ tion and whose ability is recognized, ap- pointed to a Federal judgeship even though he be a Democrat, than a rene- gade Republican selected by a Demo- cratic national committeeman or even the State chairman of the Democratic Party. This is plain, blunt, ordinary sense, It 1s quality we want in the Fed- eral judiciary rather than political expediency. Mr. Chairman, I shall vote for this bill. It has the approval of the judicial conference. The court calendar is in ar- rears to such an extent that the taxpay- ing constituents are entitled to have the bencfit of the courts in administering jus- tice to them. I have never talked with the Speaker, who happens to come from Texas—about this bill; however, there are two Members from Texas on the Committee on the Judiciary. The gen- tlemen from Texas |Mr. Gossetr] and the gentleman from Texas, Judge WIL- son, both are outstanding Democrats. They are fearless and patriotic repre- sentatives of the people. If there are any two men on the committee who are Jess partisan in doing the work of the committee, then I do not know who they are. Both of these gentlemen come from that part of Texas affected by this bill. Judge WILSON was an outstanding jurist in the district and, in addition, he is a splendid lawyer and I am sure would not advocate the appointment of another Federal judge unless he conscientiously believed such action was necessary in the interest of all of the people. When these Texas Members tell me of the existing conditions, and urge that this bill be enacted into Jaw, I am convinced they speak with knowledge and sincerity, and I am inclined to follow their recommen- dations. Mr. HALLECK. Mr. Chairman, will the gentleman yield? Mr. MICHENER. I yield to the gen- tleman from Indiana. Mr, HALLECK. I am glad the gen- tleman has made reference to what should be the nonpolitical character of the Federal judiciary. Without regard to any adverse position on this particu- lar measure, I might point out that, at the time the matter of filling a vacancy on the Supreme Court was before the country, I took occasion to run down the figures on the political affiliation of re- cent appointments to the Federal judi- ciary. I discovered that of 10 appoint- ments to the Supreme Court made since 1933, 9 were Democrats, 1 was a Repub- ican; also, of the Federal judgeships that were filled in that time, of 189 so filled, 182 were Democrats, only 7 were Republicans. | I may say to the gentleman from Michigan that I have examined this par- ticular bill and Iam inclined to follow his CONGRESSIONAL RECORD—HOUSE leadership and vote for it; however, I think it is well that the attention of the Congress, the country, and the executive branch be callcd to the proposition that the judiciary should certainly—within some reasonable limits—include in its ranks people of different viewpoints or different philosophies as they may be found from time to time, Certainly they should all be people of judicial qual- ification—qualification based on law— but, beyond that, to pack the judiciary through the years with people of one po- litical affiliation, which very often means people of one sort of inclination in re- spect to current problems as against any other, is not good for the judiciary and is not good for the country. Mr. MICHENER. I agree with the gentleman’s views, and to the end that that which he suggests might come about, if the present administration will not make a bipartisan judiciary possible, there is one place and one time in the United States when this question can be properly settled. That 1s at the election box on election day. In conclusion, if this judge is not needed, then this bill should not pass. I am persuaded it is needed and shall vote accordingly, The CHAIRMAN. The time of the gentleman from Michigan has expired. Mr. BYRNE of New York Mr Chair- man, I yield 5 minutes to the gentleman from Alabama | Mr. Hosss]. Mr, HALLECK. Mr. Chairman, will the gentleman yield? Mr. HOBBS. Of course, I will be de- lighted, and always am, to yield to the distinguished gentleman. Mr, HALLECK. The gentleman al- most overwhelms me, but not quite. I intended to add in the brief remarks I made, when the gentleman from Michi- gan LMr. Micrener] so kindly yielded to me, that prior to the year 1933, to which I referred, the executives of the United States, the Presidents, Demo- crats, and Republicans, made what was very obviously a good faith effort to try to maintain in the Federal judiciary a reasonable degree of bipartisanship. Mr. HOBBS. I thank the gentleman for that contribution, and I would not, for any reason in the world, attempt to overwhelm him, and I am sure that I could not do so even if I would because of his ability to take care of himself. I have said often before, and I now say, that the only fair policy in regard to the judicial appointment is the time- honored policy of a 50-50 balance, as nearly as can be, having regard to the variance in the life-spans of the differ- ent judges. I am mindful of my old in- structor, Justice Horace Lurton, of Ten- nessee, who was appointed by a Repub- lican President. I am mindful of the fact that Edwin Douglas White was ap- pointed Chief Justice by the same dis- tinguished Republican President. I be- lieve that it ought to be polestar guid- ing every President, and of every Sen- ator in confirming the judiciary, that the ability and integrity of the appointee should be the first consideration, but that there should be some balance main- tained between the two Parties that al- ternately control, else we will have an 10743 unbalanced judiciary and not be able to preserve that ideal of the blind goddess who holds the scales of justice, and we cannot live up to the hope engraved on the front of the Supreme Court Build- ing, “Equal justice under law.” Now, so much for that. That is noth- ing new; that has been with us ever since the founding fathers of this Re« public declared the policy in the Con- stitutional Convention. The judicial branch of our Government will always be assured against a frozen ideology if that principle be observed. I wish to make three other remarks: “Justice delayed is justice denied.” When a judge who is not up to par physi- cally has a district 400 miles long, it is utterly absurd to ask the litigants, wit- nesses, and lawyers to come frequently to their court only to find the sign out, “There will be no court today. The judge isillagain.” That kills respect for the courts. It denies justice by delay. The other thing I wished to say was this, that this distinguished Republican who has so long and so faithfully, until his health failed, honored himself and the bench upon which he sat, is not being displaced for any other reason. A tem- porary judgeship is merely a catch« phrase which we have employed in our committee. It does not mean temporary except that the position of the first judge to die shall not be filled unless it is necessary, As my good friend the gen- tleman from Michigan |Mr. Micwener] knows better than almost anyone else, while these positions very nearly always are filled, it is only by making out a new case. ‘Therefore, I think with assurance the word “temporary” does not mean temporary in the sense that this judge- ship is not needed at this time. Mr. BYRNE of New York Mr. Chair- man, I yield 4 minutes to the gentleman from Pennsylvania [Mr. Fioop]. Mr. FLOOD. Mr. Chairman, on July 18 I introduced a resolution which was referred to the Committee on Rules. I see the distinguished chairman here. Upon his advice I communicated with the distinguished chairman of the House Committee for the District of Columbia, who assured me of his full cooperation. That resolution has to do with requesting an investigation of alleged war scare profiteering in the District of Columbia, where the price of bread has been in-~ creased 1 cent. I understand that today gas is going up half a cent. We do not know what the end might be. I hope the District Committee is empowered to act and proceeds to act immediately on this investigation. I think you will be happy to know that I received 20 letters from Members of the House in today’s mail approving of that and agreeing with the resolution and its purpose. I also received a num- ber of telephone calls, also favorable, from Members of this House. As a result of that, and conversations I have had with our colleagues on the floor and in the cloakrooms in the last couple of days, I have been prevailed upon by them to introduce a resolution, which I will introduce when I finish this talk, asking for the creation of a select
10744 committee of the House to conduct a full and complete investigation of any war- seare profiteering or panic buying or hoarding that may be or is going on any place in the United States or its posses- sions during the period of this emer- gency. There fs little more at this time that I feel it necessary to say about this reso- lution or its purpose or its potential or its intent. I am sure that my distin- guished colleagues can do that far be- yond my poor power to add. You might be interested, however, in knowing that for the same purpose and along the same line I wrote the Attorney General of the United States this morn- ing to this effect. I added, however, this: I advised him of what I had done with the District resolution and that I intended today to introduce this resolu- tion. I further said to him that I felt under all these circumstances, if they are true—and I do not know whether or not they are any more than or as much as you do, but the press is full of it, the radio is full of it, and there are edi- torials and special stories about it, and the President of the United States in his address to the Nation last night com- mented upon and stressed this kind of thing—I asked the Attorney General to direct all the United States district at- torneys to conduct a survey, or what you will, within their areas and jurisdictions and report to him what information they have as to the truth or falsity of these statements, and that being the case, to act as the Department best sees fit. Mr. Chairman, I feel that under all of the circumstances, the best interest and the general welfare of the Nation will be served by the House acting immediately on the provisions of this resolution. The CHAIRMAN. There being no fur- ther requests for time, the Clerk will read the bill for amendment, The Clerk read as follows: Be it enacted, etc., That the President is authorized to appoint, by and with the ad- vice and consent of the Senate, one addi- tional Federal district Judge for the eastern district of Texas. With the following committee amend- ment: On line 5, after the period add the follow=- ing: “The first vacancy occurring in the of- fice of district judge for the eastern dis- trict of Texas shall not be filled.” Mr. HUBER. Mr. Chairman, I move to strike out the last word. Mr. Chairman, I wonder sometimes how a non-lawyer ever gets into this closed-shop argument with all these lawyers. I say to my nonlawyer friends—if we let some of our attorney members have their way, I think there would be a Federal judge to about every 10 square miles. We added 27 last year and there are 9 proposed this year. I imagine there are some difficulties and that some of these gentlemen are unable to get around. But I say to you in all sincerity, if the average Federal judge is willing to work half as hard as the aver- age Member of Congress he would clean up his docket. If he was willing to work a few Saturday afternoons and Sundays and holidays in writing up some of his opinions, they would not be so far be- CONGRESSIONAL RECORD—HOUSE hind in their work. Iam sure we do not want to get into any political argument on these bills as to whether the new ap- pointees are going to be Democrats or Republicans. Of course if you are going to create these judgeships, I think the Democrats should have the edge. But seriously the way to get away from that, at least temporarily, is to put this off un- til next year. One of these vacancies is in my district. I know the judges are not suffering in northeastern Ohio. There has been a vacancy existing there for about a year. I do not think any- body is being hurt there. I would sug~ gest that all these bills be defeated or else recommitted and when we get back next year we will have plenty of time. We are in an emergency and we are try- ing to avoid nonessential spending. Let us attend to our emergency needs and not go into anything new during this session. The CHAIRMAN. The question is on the committee amendment. The committee amendment was agreed to. Mr. JACOBS. Mr. Chairman, I move to strike out the last word. Mr. Chairman, I feel there has been a fair case made out for the creation of this judgeship. In my judgment justice is of sufficient importance to the Amer- ican people that its cost should not be counted too closely. I do not know how to put a price tag on justice. As an illustration of what I mean, let me call your attention to some- thing which is not a very good recom- mendation of this body. On the Speak- er’s desk there are two discharge peti- tions. One of them is Discharge Petition 28, which I filed several months ago, It would bring up a bill which would em- power the Federal courts to force delin- quent parents who take refuge in other States to support their children whom they have deserted and left behind. That is a problem with which the States have not been able to cope. It is an important problem and only the Federal courts can deal with it. Every lawyer and every judge who has had any experience with that problem knows that that is the truth. There are 54 names on that dis- charge petition. But, Mr. Chairman, there is another discharge petition on the Speaker’s desk which was filed just a few days ago. That discharge petition is supported by some powerful organiza- tions. It has 211 names on it. I do not want to be cynical about the thing, but TI have a feeling that there is a good deal of merit to the legislation of which I am speaking—I will not discuss the merits of the other bill which the second discharge petition attempts to bring out. But I would just like for the Members of this House for a few minutes to consider the comparison. The deserted children— about a million of them in this country— of course are not organized, but the folks back of this other discharge petition are organized, and so it has four times as many signatures. I am going to vote for this bill because I believe that justice is something on which you cannot put a price tag, but I will agree with the gentleman from Ohio to this exterit, that the Federal judges are pvrobablv not tno husv to render JuLy 20 justice in those types of cases where only Federal courts can give relief. They might have to work a bit harder, but that will not hurt them. They have pretty good pay and security. I know that this speech is vain and futile; I know that it is not going to do any good, that we are not going to get the bill out to help these deserted kids get justice, but at least I would like to shame those who sign for bills backed by organ- ized groups and not for this bill. Ishould like for the Members of the House to think about it a little and to reflect as to whether or not their signature on dis- charge petition 28 would not be in sup- port of the thesis upon which our juris- prudence is based, that the weak are en- titled to justice the same as the strong; and I particularly would like for those folks who signed the other petition upon which there are now 211 names, to con- sider whether or not they would not like to sign the petition to give a remedy to about a million deserted children in this country. The mark of failure of any government is when it becomes careless of the pro- tection of its weakest citizens. Your weakest citizens are the little ones, and they are entitled to their birth- right—the right to support from their parents; not a shameful existence on charity nor on the pittance a poor mother might earn while she might be making their home comfortable for them. Even the beasts of the field and jungle care for their young until the appointed time of emancipation. Sadly, I say, there are parents who, in this respect are outranked in honor by the beasts of the field and jungle. This bill would make them meet their moral obligations regardless of where they are. If we believe in justice for the unorganized “kids” we should sign peti- tion 28. The CHAIRMAN. Under the rule, the Committee rises. Accordingly the Committee rose; and the Speaker having resumed the chair, Mr. Harrison, Chairman of the Com- mittee of the Whole House on the State of the Union, reported that that Com- mittee, having had under consideration the bill (H. R. 5137) to provide for the appointment of an additional Federal district judge for the eastern district of Texas, pursuant to House Resolu- tion 706, he reported the bill back to the House with an amendment adopted in the Committee of the Whole. The SPEAKER. Under the rule, the previous question is ordered, The question is on the amendment. The amendment was agreed to. The bill was ordered to be engrossed and read a'third time, was read the third time, and passed, and a motion to recon- sider was laid on the table. IWO ADDITIONAL DISTRICT JUDGES FOR THE NORTHERN DISTRICT OF ILLINOIS Mr. SABATH, Mr. Speaker, I call up House Resolution 702 and ask for its immediate consideration. The Clerk read as follows: Resolved, That immediately upon the adoption of this resolution it shall be in order to move that the House resolve itself
1950 into the Committee of the Whole House on the State of the Union for the considera- tion of the bill (H. R. 6454) to authorize the appointment of two additional district judges for the northern district of Illinois. That after general debate which shall be confined to the bill and continue not to ex- ceed 1 hour, to be equally divided and con- trolled by the chairman and ranking mi- nority member of the Committee on the Judiciary, the bill shall be read for amend- ment under the 5-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 thereto to final passage without intervening motion exccpt one motion to recommit, Mr, SABATH. Mr. Speaker, this reso- lution makes in order the consideration of the bill (H. R. 6454) authorizing the appointment of two additional district judges for the northern district of Dli- nois, ' Both the Senators from Mlinois have joined in introducing a like bill in the Senate, which has been reported favor- ably without amendment to the Senate by the Senate Judiciary Committee. It should be noted, Mr. Speaker, that the Administrative Office of the United States Court, as well as the Department of Justice, the Bureau of the Budget and all of the United States district court judges for the northern district of Ili- nois, have joined in unanimously ap- proving this legislation. All have urged that this bill be enacted because of the dire need for additional judges in this area. The situation has become acute. The latest figures as given me by Roy H. Johnson, clerk of the United States Court for the Northern District of Illi- nois, as of June 30, 1950, indicate that 3,349 civil cases are now pending in this court; and 349 criminal cases are pend- ing. The estimate of the backlog on civil cases in 2 years, and the criminal docket is 8 months behind. In the report of the Attorney General on this particular bill, which is contained in IIouse Report 2393, he states—and I quote: It is to be noted that the court for the northern district of Illinois adjudicated and terminated more cases in the fiscal year 1949 than were disposed of in either of the other districts (California and Pennsylvania). Yet, instead of being able to reduce the back- log, it has increased from 349 cases per judge in 1947 to 420 cases in 1949. It is also noted that * * “ many cases may not be disposed of for 2 years because of lack of judicial power. Notwithstanding the evidence pre- sented showing the need for additional judges, the Committee on the Judiciary amended this bill to provide for two addi- tional judgeships with the condition that when a vacancy occurred in those judge- ships, such vacancy will not be filled. As it is, only yesterday, one of the judges, Judge Elwyn R, Shaw, passed away, cre- ating still more of a work load for the other judges. I am inserting herein, at this point in the Recorp, a letter which I received jointly from all of the honorable judges of the United States District Court for the Northern District of Illinois, setting forth in detail the need for this legisla- CONGRESSIONAL RECORD—HOUSE tion and the reasons for the delay in meting out justice. “Justice delaycd is justice denied.” ‘rhe figures that I have given previously are as of June 30, 1950, and are not reflected in the afore-men- tioned Ictter. UNITED STATES DISTRicT Court, NORTHERN DIsTRicr CF ILLINOIS, Chicago, October 13, 1949. Hon. Apotex J. SADATH, House of Representatives, House Office Building, Washington, D.C. Dzar CONGRESSMAN SABATH: At a meeting of the judges of this court, held early last May, we considered the accumulation of cases in our court, the state of our calendars, and, particularly, the large number of cases pend- ing which are likely to take many weeks to try, and unanimously resolved to request help. Our request for help came before the annual seventh circuit conference on June 16, 1949, and the conference went on record as approving our request and recommended the creation of two additional judgeships for this district. The Honorable J. Earl Major, chief judge of the seventh circuit, presented our request to the September 1949, session of the Judicial Conference of the United States and, as we are informed by Chief Judge Major, that conference approved our request for the creation of two additional judgeships for this district. The purpose of this letter 1s to call to your attention the foregoing facts and certain statistics hereinafter re- ferred to, which we feel sure make the need for two additional judgeships in this district imperctive. Since the coming into the court, in 1933, of Judges Holly and Sullivan, the judges of this court have handled the business of the court without substantial assistance from the outside, and we think we may be permitted to say that, for a metropolitan community of the size of ours, this is a somewhat extraordinary record. The statistics set forth on the attached sheet indicate, however, that, since July 1, 1944, we have been getting behind in the trial of our civil cases. You will observe that on July 1, 1944, there were 1,105 civil cases pending in the District. On July 1, 1949, there were 2,354 civil cases pending—an in- crease of 1,249 cases. During the same time, the number of criminal cases pending Jn our court has increased by only 2—this, for the reason that the Rules of Criminal Procedure require that we give preference to criminal cases and we follow the rules to the best of our ability, with the result that criminal cases have not piled up ahead of us. During the same time, July 1, 1944, to July 1, 1949, the pending bankruptcy cases in- creases from 1,013 to 1,245. The low point in the pendency of bankruptcy cases was apparently July 1, 1946, when there were only 526 cases pending. On July 1, 1949, there were more than twice that number pending. Bankruptcy cases are increasing in number rapidly, but during the period under dis- cussion bankruptcy cases have taken but little time, relatively, of the judges of our court. There was a time, however, during the middle 1930's, when bankruptcy cases took all of the time of certain judges of our court and very nearly all of the time of the remainder of the judges. For present purposes, however, we need consider only the increase in the number of pending civil cases. As has been pointed out, and as the statistics set forth on the attached sheet show, there were 2,854 civil cases pending in our court on July 1, 1949. That was more cases than all of us disposed of in any one of the years from July 1, 1943, to July 1, 1949, inclusive. During the year ending June 80, 1946, we disposed of 2,852 civil cases, but that was an extraordt- mary year, and many of the cases disposed 10745 of that year were not the ordinary civil case. The average number of civil cases disposed of annually during the period be- ginning July 1, 1943, and ending July 1, 1949, was 1,853. Accordingly, there were pending on July 1, 1949, almost one and one- third times as many civil cases as all of us could dispose of in a year. Furthermore, the increase in the number of civil cases pend- ing during the period from July 1, 1044, to July 1, 1949, of 1,249 cases ts more than two- thirds of an average year's work for all of us. We are all clearly of the opinion that the interest of society and of the court will be well served by an increase presently in the number of judges in our district by two. We respectfully request that you set in mo- tion the machinery necessary for the crea- tion of the two additional judgeships. With kindest regards, we are Sincerely yours, J. BARNES, P. SuLirvan, M. I. Iaoz, W. J. CAMPBELL, Water J. LaBuy, ELwyn R. SHaw, Judges, United States District Court, Northern District of Illinois. Casrs PENDING IN THE UNITED STATES District Court For TITE NORTHERN District oF ILLI- NOIS ON JULY 1, 1943, AND COMMENCED AND TERMINATED IN THAT Court Dunina Eacw OF THE YEARS ENDING JUNE 30, 1944, 1945, 1946, 1947, 1948, ann 1949 ann Caszs PENp- inc July 1, 1949 CIVIL Pending July 1, 1943, 1,108; commenced, 1,536; terminated, 1,539; pending July 1, 1944, 1,105; commenced, 2,084; terminated, 1,784; pending July 1, 1945, 1,355; commenced, 2,630; terminated, 2,352; pending July 1, 1946, 1,633; commenced, 1,999; terminated, 1,833; pending July 1, 1947, 1,789; com- menced, 1,934; terminated, 1,532; pending July 1, 1948, 2,201; commenced, 2,232; ter- minated, 2,079; pending July 1, 1949, 2,354. CRIMINAL Pending July 1, 1943, 226; commenced, 749; terminated, 753; pending July 1, 1944, 222; commenced, 872; terminated, 869; pending July 1, 1945, 225; commenced, 777; termi- nated, 744; pending July 1, 1946, 258; com- menced, 700; terminated, 658; pending July 1, 1947, 299; commenced, 666; terminated, 619; pending July 1, 1948, 246; commenced, 622; terminated, 644; pending July 1, 1949, 224, BANKRUPICY Pending July 1, 1943, 1,398; commenced, 069; terminated, 1,344; pending July 1, 1944, 1,018; commenced, 576; terminated, 887; pending July 1, 1945, 702; commenced, 3&3; terminated, 529; pending July 1, 1916, £26; commenced, 436; terminated, 410; pending July 1, 1947, 552; commenced, 575; termi- nated, 126; pending July 1, 1948, 1,002; com- menced, 738; terminated, 495; pending July 1, 1949, 1,245, Therefore, Mr. Speaker, in view of these facts, I feel that justice demands that favorable action be given to the con- sideration of this legislation. In view of the lateness of the hour, I shall not delay the House and I hope that the rule will be adopted unani- mously. For the House's information, I have agreed not to call up the bill today, and in view of the fact that I have been called out of the city and will not be here on Monday, I most respectfully ask, that in my absence, you will give this bill the same unanimous vote that I know you will give to the rule.
10746 Mr. Speaker, at this time I yield 30 minutes to the gentleman from Illinois (Mr, ALLEN]. Mr. YATES. Mr. Speaker, I ask unanimous consent to extend my re- marks at this point in the Recorp. The SPEAKER. Is there objection to the request of the gentleman from Tllinois? There was no objection. Mr. YATES. Mr. Speaker, I am very much in favor of the passage of H. R. 6454, for the creation of two additional district judges for the northern district of Illinois. The northern district of TNlinols in- cludes the metropolitan area of the city of Chicago, an ever-growing urban and suburban community, bringing with it the problems attendant upon concen- trated, thickly populated city life. These problems have been reflected in the num- ber of cases filed in the courts, and the six very able and distinguished judges of the United States District Court for the Northern District of Mlinois have worked Jong and diligently to clear their dockets. However, the situation has grown worse rather than better with the passage of time, and in spite of their best efforts the number of cases awaiting disposition is greater than it was a year ago. I first became aware of the situation on September 27, 1949, when the growing district court docket was called to my attention, and I thereupon filed H. R. 6255, to authorize the appointment of two additional district judges. Civil cases have increased, criminal cases have increased, and apparently the United States District Court for the Northern District of Illinois was to become the forum in which the Government pro- posed to try more than 40 of its antitrust suits, the shortest of which would take not less than 3 months, ana the longest, it was anticipated, would take more than 2 years. It is difficult to foresee how speedy and full justice can be given in the face of such a condition, and judges are being constantly harassed by the thought that no matter how hard they work to dispose of their matters two other cases will be filed to take the place of those disposed of. Mr. Speaker, this is a very vital bill, not only to sustain the true administra- tion of justice guaranteed under our Constitution to the people residing with- in the northern district of Tlinois, but as well for the judges themselves who cannot sustain the pace of the work ne- ecssitated by the condition of their dock- ets today. I urge its speedy enactment. Mr. ALLEN of Dlinois. Mr. Speaker, I know of no opposition to this resolution Mr. SABATH. Mr. Speaker, I move the previous question. The previous question was ordered. The SPEAKER. The question is on the resolution, The resolution was agreed to, A motion to reconsider was laid on the table. CALL OF BILLS ON THE CONSENT AND PRIVATE CALENDARS ON THURSDAY NEXT Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that it may be in CONGRESSIONAL RECORD—HOUSE order on Thursday next to call bills on the Consent and Private Calendars. The SPEAKER. Is there objection to the request of the gentleman from Massachusetts? Mr. HALLECK. Mr. Speaker, reserv- ing the right to object, as I understand it, that does not include the matter of any suspensions? Mr. McCORMACK, There will be no suspensions. That is understood. Mr. HALLECK. Just the call of bills on the two calendars? Mr. McCORMACK. The minority leadership has very kindly consented to this call of the calendars, which is out- side of the regular day and it will be confined to bills on the Consent Calendar and the Private Calendar. Mr. PHILLIPS of California. Did the gentleman say there would be no suspen- sions or did not know of any? Mr. McCORMACK. There will not be any suspensions. LEGISLATIVE PROGRAM FOR NEXT WEEK Mr. HALLECK. Mr. Speaker, I ask unanimous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from In- diana? There was no objection. Mr. HALLECK. Mr. Speaker, may I inquire of the majority leader as to the program for next week? Mr. McCORMACK. On Monday next there will be continuation of considera- tion of the judgeship bills, with the so- called Tilinois bill, the rule on which has just been adopted, the first order of busi- ness. I announced yesterday that those bills might set aside as other legisla- tion came up for consideration, but they will be called in the order I stated yes- terday when opportunity presents it- self during the next week, 10 days or 2 weeks. Monday will be confined to con- sideration of these judgeship bills and we will dispose of as many of them as possible on that day. On Tuesday there will be H. R. 9177, extension of enlistments. That is ex- pected to be reported out of the Com- mittee on Armed Services tomorrow, and, if so, it will be brought up on Tuesday. Then there is H. R. 9178, personnel ceilings in the armed services. That is in the same situation as the previous bill. The probabilities are that those bills will not take very long under the adroit leadership of the gentleman from Georgia [Mr. Vinson] and the adroit leadership of the gentleman from Mis- souri (Mr. SHortT]. Following that there is H. R. 6277, Russian Railway Service Corps, and H. R. 8569, continuing Texas City tin smelter. If there should result any roll calls on Tuesday I shall ask unanimous con- sent that they go over until the next day due to the fact that on Tuesday next there are primaries in several States. We have done this in the case of every State to date where there has been a primary. Of course, if that program is not en- tirely disposed of on Tuesday it will go over until the next day. JULY 20 On Wednesday there will be House Resolution 687, which relates to sta- tionery allowance for Members. With all due respect to any opposition to this, I personally am strong for it. I feel we are entitled to it because all Members are buying stationery out of their own pockets. I know the people of my dis- trict do not expect me to do that. Then there is 8S. 3520, the production of abaca, and H. R, 9038, determining the forms of budget. As I stated, on Thursday there will be the call of bills on the Consent and Pri- vate Calendars, following which we will take up for consideration the bill H. R. 9109, cotton-acreage allotments and marketing quotas. Mr. HALLECK. Has a rule been re- ported on the last bill? Mr. McCORMACK. Yes; a rule has been reported today. If by any chance the Committee on Banking and Currency should report a bill following the recom- mendations of the President in his mes- sage of yesterday, such bill will be given priority. Mr. HALLECK. I have had some in- quiry regarding a bill out of the Inter- state and Foreign Commerce Committee having to do with transportation. Mr. McCORMACK. That is the for- warders’ bill? Mr. HALLECK. Yes. Mr. McCORMACK. That is not on the program for next week. Mr. SABATH. But a rule is out- standing. Mr. McCORMACK. There is a rule outstanding. We have a very busy pro- gram without that. If there fs any further program, it will be announced later, particularly with reference to any bills involving the President's recommendations, and, of course, conference reports will be brought up at any time. Mr. HALLECK. I take it the majority leader can assure us that the spectal legislation which might be necessary for action, in view of the President’s recent message, will come along as rapidly as possible. Mr. McCORMACK. As soon as it fs reported out of committee, as soon as a rule can be obtained, it is my intention to bring it up. That is the only answer I can give. I understand that both the Senate and House Committees on Bank- ing and Currency are going to start hearings on Monday. That is on infor- mation and belief. Of course, I cannot state how long those hearings will take. That rests within the jurisdiction of the committees. But all I can say is that as soon as a bill fs reported out, it is my intention to bring it up just as quickly as I can. Mr. HALLECK. Of course, the gentle- man is in the position that many of us are in, that we are being asked constantly as to any adjournment or recess plans. However, I take it that that is a matter about which there can be no definite advice at this time. Mr. McCORMACK. At this time it Is difficult to state. My remarks are not so much directed to the leadership of this body, but I might say that, so far asI am concerned, and I am sure I express the
1950 views of the Speaker, I am very hope- ful that the leadership of the other body. will recognize that when we get through with our program, and get it through as quickly as possible, there is no necessity for Congress to be in session, and that some adjournment, sine die, as I hope, or some other form of adjournment or long recess might be made. I am hope- ful that that might take place within the next 3 or 4 weeks, But that is clearly in the realm of probable speculation. Mr. BROWN of Ohio. Mr. Speaker, will the gentleman yield? Mr. HALLECK. I yield to the gentle- man from Ohio. Mr. BROWN of Ohio. I ask the gen- tleman to yield just to inquire of the ma- jority leader the gentleman from Massa- chusetts |Mr. McCormack], whether he is of the opinion that the bills that have been mentioned are the only pro- jected measures that this Congress will be asked to pass upon in the foreseeable future, Mr. McCORMACK. I am unable to state now. AsIam talking now, that is all I can say, but if I have any further information, I shall acquaint the House with it just as quickly as possible. Mr. BROWN of Ohio. I have asked that ques.ion because I read, or thought I read, in the President’s words, or in between the lines, the indication that he expected to come back to Congress and ask for further legislation on different matters a little later on. In other words, there was mention made of taxes, there was mention of possible controls, perhaps the freezing of wages, and many other actions, that he, at least, sug- gested in his words and in his message, both to the Congress and to the people over the radio and television, he might desire, and might request of the Congress in the foreseeable future, and I just wondered whether the gentleman had any information about that. Mr. McCORMACK. I have no knowl- edge now, but as soon as I have any knowledge I shall acquaint the House with it, because it is only right that all Members should be acquainted as fully as possible as to what the situation is and what to expect. The SPEAKER. The time of the gen- tleman from Indiana has expired, ADDITIONAL FEDERAL JUDGES FOR ILLINOIS Mr. SABATH. Mr. Speaker, I ask unanimous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from Tllinois? There was no objection. Mr. SABATH. Mr, Speaker, we have adopted the rule on the bill to provide two additional judges for the northern district of Illinois. The bill will be taken up on Monday. Unfortunately, I have been called out of the city and will not be here on Monday, as I said before. Of course, if it were possible, I would ask unanimous consent that it be considered and passed now, but I do not want to delay the House unnecessarily at this late hour, CONGRESSIONAL RECORD—HOUSE BPECIAL ORDER GRANTED Mr. MASON asked and was given per~ mission to address the House for 15 min- utes on Monday next, following the leg- islative program and any special orders heretofore entered. COMMITTEE ON THE JUDICIARY Mr. WALTER, Mr. Speaker, I ask unanimous consent that the Committee on the Judiciary may have until mid- night tonight to file a report. *° The SPEAKER. Is there objection to the request of the gentleman from Pennsylvania? There was no objection. CLASSIFYING COMMUNISTS AS ENEMIES Mr. GWINN, Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentlenian from New York? There was no objection. Mr. GWINN. Mr. Speaker, this after- noon I introduced a resolution, as follows: Whereas world communism has avowed its intention to overthrow the Government of the United States: Resolved, That the Communist Interna- tional, the Comintern, the Cominform, and all their sections, branches, affiliates, organ- izations, subsidiaries, and agents are hereby declared to be the enemies of the United States, within the meaning of article III, section 3, of the Constitution of the United States. Mr. Speaker, with freedom facing its severest test in history, it is time to call a halt and declare the Reds traitors to our form of government and subject to the penalties relating to treason. Our men are dying on the Korean front in the current tragic phase of this eternal conflict between free men and slavery. We must now declare what we know and define more clearly our ene- mies and foes within as well as those without our borders. This resolution extends the coverage of the word “enemy” as used in our Con- stitution. Instead of limiting the use of the word “enemy” to describe a particu- lar nation, it includes organizations or individuals, even those within our own borders whose purpose is to overthrow our Government. There are many confused and deluded Americans who are deceived or careless in their association. This resolution constitutes notice to all our citizens to risk identification with such enemies and to engage in disloyal action at their peril. This resolution gives our authorities power to deal immediately with such ele- ments as staged the Peekskill military demonstration in my district. It makes such recent efforts as those to liquidate Judge Medina in New York during their trial impossible. It exposes them to trial as traitors, which they are. This resolution does not define as ene- mies any nations or any loyal nationals now residing in the United States such as Poles, Chinese, Yugoslavs, Russians, or any others, It does declare those to be traitors who by overt act aid or com- fort those who have avowed their inten- 10747 tion to overthrow our Government by orce, The SPEAKER. Under previous order of the House, the gentleman from Florida [Mr. Sixes] is recognized for 60 minutes. HON. J. HARDIN PETERSON Mr. SIKES. Mr. Speaker, I have re- quested this time in order that I might speak of one of the great records of serv- ice of its entire history, and about one of the most beloved Members who has served in this body. I want to talk about J. HARDIN PETERSON, Member of Congress from Florida, a man who is leaving the Halls of Congress at the close of this session aftcr 18 years of distinguished and valuable service. I think all of us recognize the fact that Pete’s service has been public service at its best. The measure of his ability, the measure of his work are the things which will live on in our memories and in the records of this institution for many, ° many years. He is one of those people who possesses the simple, kindly, human qualities that all of us admire in men of any walk of life, and particularly admire, and often find it hard to discover in men whose careers have been devoted to pub- lic life. I do not think any of us have ever called upon Pete for help when we did not get it. I know there have been in- numerable occasions when he out of the goodness of his heart has given many of us a lift along the way in carrying on the heavy respunsibilities of this work, Particularly has that been true of the younger Members as they have come in to the House. Ten years ago when I first came to Congress, the knowledge that I could lean upon Fete for help in finding my way and in learning my job, was one of the most comforting and re- assuring things that happened to me. Leadership {s measured in many ways, and the leadership of Congressman PE- TERSON has been revealed time and again in the conduct of the affairs of the Na-~ tion during his period of service. The fine record of his committee is only one example of his influence. Perhaps it has passed more bills than any other in the history of the Congress. But above and beyond the fact that he has sponsored and passed many bills lies the fact that they were good bills. Many of them were little bills, but each of them went deep into the lives and habits of good, sincere, honest people somewhere in this great land, and they have hetped those people. I want to name one of the reasons, and a very important reason, for the leader- ship which Pete has shown. Always her influence has been shown in the up- rightness, the moral stature of his work. Always she has been close to him when she has been needed to comfort, to cheer, and to inspire him. Today she sits in the Gallery, and I know that pride fills Ler heart for the things are said of his work, but we know that those things apply equally to her. I speak of his very fine and lovable wife, Christine. She has done much, indeed, to make him the great and valuable force that we know him to be. Pete is leaving Congress voluntarily, He is leaving because he is tired and he
10748 wants to go home, to the comfort and pleasure of private life with his own family. He has earned the rest for his job has been more than well done. But we shall miss him greatly. I shall miss him as a friend and counselor. My State and my Nation shall miss him for his great contribution, his sterling char- acter, his fine statesmanship. Mr. ROGERS of Florida. Mr. Speak- er, will the gentleman yield? Mr. SIKES. I yield. Mr. ROGERS of Florida. Mr. Speak- er, I am indced glad to have an oppor- tunity to pay a short tribute to a gen- tleman of the type of J. Harpin PErer- son, of Florida. When I first came here, through the kindness and courtesy and hospitality of Mr. Pererson I had the pleasure of meeting a number of you Members and particularly the Speaker of the House. You know, for a country boy who had not gotten around, to get up here and shake hands with the Speaker was a mighty good feeling. I had heard so much about the Speaker and what an outstanding man he is. I felt that I was shaking hands with greatness when I shook hands with Sam RaysBurn. Thomas Jefferson said there were cer- tain qualifications that a public servant should have; first, he should be honest, second, he should be qualified, third, he should be faithful You can add to those hard work. Mr friend, J. Harpin Peterson, has each one of those quali- ties He is what I call a working Con- gressman. Pete has a fine conception of what a public servant is. He believes that public office is a public trust and his service, while he has been here, has demonstrated that, I might say in conclusion, Mr Speak- er, that the elements of progressivism and liberalism and conservatism are so mixed in J. Harpin Peterson that nature might well stand up and say to all the world, “This is a real American.” I regret to see such men as Mr, PeTer- son, Sam Hosss, Jay LeFevre, and Bos Ricw, and such men as Bit, WHITTING- ron and Steve Pace and Mr. WapswortH and a number of others leaving the Halls of Congress in these critical times. They are real leaders who are leaving the serv- ice of the people at a time that we can {ll afford to have them leave. These are critical and troubled times in the history of this country. Mr. Speaker, I wish for J. Harp Peterson Godspeed. May he have the Lord’s blessing in his future career. Mr. POULSON. Mr. Speaker, will the gentleman yield? Mr. SIKES. I yield. Mr. POULSON. Mr. Speaker, we all regret that J. Harntn Pererson, affec- tionately known as Pete, is retiring from the Congress. We know it will not only be a loss to the State of Florida, but in- deed a loss to the entire United States. I believe I can say as a member of his committee of which he is chairman, and I being a member of the opposition party, that there never has been nor will there ever be a better chairman than Pete. Pete not only has a knowledge of the problems which come before the committee, but he has that other great requisite, the ability to act as chairman CONGRESSIONAL RECORD—HOUSE and be falr to representatives of all groups, whether they be of his party or not. Therefore, Mr. Speaker, I say that we in Coneress are really losing a col- league of whom we can be justly proud and one whom we all affectionately love. Mr. SMATHERS. Mr. Speaker, will the gentleman yield? Mr. SIKES. I yield. Mr. SMATHERS. Mr. Speaker, I wish very much to associate myself with the complimentary things being said about our senior colleague from the State of Florida, J. Harpin Peterson, ‘The other evening I was privileged, at a Florida alumni party in honor of J. Harpin PETERSON, to sit beside Mrs. Holland, the wife of the junior Senator from the State of Florida. She said that she and Pete had grown up together and that they had gone to school together. The first time she met Pete was when she entered the school and the young boys and girls came to her and pointed out this fellow and said of him, ‘““He makes 100 percent in all of his studies—and he even makes 100 percent in deportment.” So far as I am concerned Pete has been 100 per- cent from that day to this. He has been 100 percent in his devo- tion to his duty, 100 percent in his loyalty to his friends, and 100 percent cooperative with his colleagues. I do not know of anyone who has been nicer to other people nor more helpful to them and to me than the senior Member of our Florida delegation, J. HarpIn PETER- son. Some of the many things that have been accomplished in the last 4 years, even in my district, he has been responsi- ble for. I am frank to say that the establishment of the Everglades National Park, for which I got most of the credit, actually the greater portion of that credit is due to the hard work and gen- erous attitude of J. HARDIN PETERSON, who as chairman of the Committee on Public Lands, guided that legislation through the House. We here are going to miss him The Nation is going to miss him. Words cannot properly express the sadness his retirement brings. The one gratifying thing about his retirement is that it will make it possible for him to associate himself again with those good people of the State whom he loves and wants to be with.” He looks forward to a wonder- ful and closer association with a really fine young man, J. Hardin Peterson, Jr., ® young man for whom I feel a great affection and to whom I owe a debt of gratitude for campaigning for me re- cently. He is a fine man, and that young man has the stamp of greatness and goodness on him that his father and mother have put there. We hope their association may continue for many long years to come—we know it will be a happy one—but let us never forget that J. HarpIn PEtTsrson’s retirement 1s a great loss to the United States Congress, to the State of Florida, and to our Nation. Mr. SIKES. Mr. Speaker, I yield to the gentleman from Nebraska (Mr. MILLER). Mr. MILLER of Nebraska. I want to Join with the friends of J. HaRpIN Perer- SON in paying a word of tribute. I have been a member of the Committee on JULY 20 Public Lands for 8 years, during which time we have had several chairmen, but none more gnxious to please, none more willing to accommodate than J. HarpIn Perrrson; in fact, he leaned over back- wards, sometimes to his own detriment, in order to accommodate some little thing, something going on in the com~- mittee. J. Harpin Peterson! I do not know what the “J” stands for; I have always called him “Pete” and I hope when he leaves the House of Representatives and I meet him down in Florida—I hope to go down there and fish with him—he has invited me as he has almost every- one—that I will be calling him “Pete” at that time. The Public Lands Com- mittee has already lost a number of very able men; we lost a valuable man in the death of William Lemke; Frank Barrett is running for Governor of the State of Wyoming, and the friend in front of me is not running again. JoHn SANzorn is aspiring to be Senator from his State, and there may be others on the other side who will not be back. That has been @ good committee; it has worked hard under the leadership of Pete as we af- fectionately know him. Mr. PETERSON fs a great American; and, best of all, he is a Christian American. I know that. I think he must have found, some place along the road of life, that the finest flower that grows is that of fellowship and friendship with his fellow man. There is a little poem, the words of which, if I remember right, run some- thing like this. I think he may not know it but he exemplifies the thoughts expressed in these few words: The greatest business in the world is that of making friends, And no investment on the street pays higher dividends, For life is more than stocks and bonds and love than great percent And he who gives in friendship’s name shall reap what he has spent. Yes; life is a great investment, and no one lives in vain, He guards a hundred friendships as a miser guards his gain; So let’s give the world a Welcome whate’er it may bring forth, And may no mortgages e’er foreclose this partnership of friends. Pete, I’ll be seeing you in Florida. Mr. SIKES. Mr. Speaker, I yield to the gentlewoman from Utah I[Mrs. Bosone]. Mrs. BOSONE. Mr. Speaker, first I should like to ask unanimous consent that the gentleman from Colorado [Mr. ASPINALL] may extend his encomium of Mr. Prrerson at this point in the Rec- ORD, Mr. ASPINALL being unable to be here; and also that the gentleman from Pennsylvania (Mr. O’Nri1L] may like- wise extend his remarks. He regrets his inability to be present today. The SPEAKER. Is there objection to the request of the gentlewoman from Utah? There was no objection. Mr. ASPINALL. Mr. Speaker, I desire to join with my colleagues of the House and, especially with those of the Com- mittee on Public Lands, to voice my ap- preciation of the challenging ability and leadership, fine character, thoughtful- ness for his associates, pleasing person-