1512 SPECIAL ORDER GRANTED Mr. JAVITS asked and was given per- mission to address the House tomorrow for 15 minutes following any special orders heretofore entered. HOUR OF MEETING TOMORROW Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that when the House adjourns today it adjourn to meet at 11 o’clock tomorrow. The SPEAKER. Is there objection to the request of the gentleman from Mas- sachusetts? There was no objection. CENSUS ENUMERATORS Mr. SADLAK. Mr. Speaker, I ask unanimous consent to address the House for 1 minute, to revise and extend my remarks and include an editorial. The SPEAKER. Is there objection to the request of the gentleman from Connecticut? There was no objection. Mr. SADLAK. Mr. Speaker, yester- day I had an opportunity to catch up on some newspaper reading. Among the editorials, I found one that commented on what, to me, likewise seems to be a very timely and practical suggestion. Namely, that unemployed persons, other- wise qualified, be given the job of census enumerators. Of course, Mr. Speaker, this would not cure unemployment but it certainly would make a sizable contribution in my district, the State of Connecticut, where there are approximately 100,000 unem- ployed. The same suggestion can be use- ful, effective, and beneficial in every State in the Union since unemployment and increased welfare expenditures are not confined to Connecticut. The editorial to which I had reference is from the Hartford (Conn.) Courant of January 26. It follows: CENSUS TAKING AND UNEMPLOYMENT Robert H Hausman, candidate for the Re- publican nomination for mayor of New Brit- ain, has made an interesting suggestion to Governor Bowles. Noting the Governor's in- tense interest in unemployment, Mr. Haus- man has sought to correlate this with the impending creation of several thousand jobs for census takers. He has suggested that the Governor take steps to see that these census- taking positions are given to men and wom- en who are unemployed, if they are other- wise qualified. This would not cure unemployment, but it would make a sizable contribution. In New Britain, for example, it would result in 70 jobs In Hartford it would probably provide thrice that number. Hartford's wel- fare director, David H. Keppel, is at present combing the lists trying to reduce the heavy outgo for public assistance If several hun- dred jobs were made available to him, he could doubtless make good use of them. And the taxpayers would profit accordingly. From an administrative point of view this could easily be handled. The Governor would merely notify his State chairman, Mr. Bailey, to get his list of eligible appointees from each local welfare director instead of from the local Democratic town chairmen. It would merely involve substituting worthy people who need work for worthy Democrats who may or may not need the job. Local directors of public welfare, those who have exhausted their unemployment com- pensation, and all others who would like to see these jobs distributed to persons who CONGRESSIONAL RECORD—HOUSE need them most, might get in touch with Governor Bowles to urge such a program, This should be of particular interest to the various leaders of organized labor, who have been especially concerned with unemploy- ment. There are doubtless hundreds of mem- bers of the CIO and AFL who are unemployed. These members could also help to make the program effective by informing their leaders that they are ready and willing to take over as census takers until regular work comes along Mr. Hausman has made an excellent sugges- tion. Mr. Bowles’ concern about unemploy- ment is well Known. And through such a program he could put himself on record as being opposed to the back-room distribution of several thousand jobs to political hang- ers-on, while thousands of their neighbors, needing work, are given the go-by. DEPARTMENT OF CONSUMERS Mr. JAVITS. 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 gentleman from New York? There was no objection. Mr. JAVITS. Mr. Speaker, city dwel- lers are beginning to ask some very em- barrassing questions about continuing high food costs in view of Secretary Brannan’s statement on Friday that the Government will have to jettison, burn, or otherwise waste 70,000,000 bushels of potatoes in connection with the 1949 potato price-support program. This 1s the culmination of a series of other state- ments on all kinds of farm commodities from wheat to dried eggs. It 1s especially noteworthy that this statement comes side by side with evidence of rising relief costs in the big cities. For instance, n my own New York City the public assist- ance case load now provides for 328,469 persons with 387,324 estimated for 1951, and the Federal Government’s share of this public assistance rehef budget is $44,046,625. Agricultural policy now obviously is not just a problem for farmers. It is time we had a department of consumers in the Federal establishment and con- sumers legislative committees in both Houses of the Congress to deal with just such problems as that raised by Secre- tary Brannan in connection with pota- toes. Pressure and special interest groups will then have finally brought on their appropriate counterecffort in the synthesis of all groups into one—for we are allconsumers. Farmers should have a particular interest in aiding consumers at this point because opposition is mounting to the whole agricultural policy in spite of the fact that some farm price support is essential to the country’s economy. It is excesses that city dwellers are worrying about now as shown by the potato, dried egg, and similar programs which have piled up vast surpluses side by side with the existence of vast un- satisfied human needs in our own and other free countries. THE DEPARTMENT OF AGRICULTURE SHOULD MAKE PROPER DISPOSAL OF PERISHABLE SURPLUS COMMODITIES Mr. REES. Mr. Speaker, I ask unani- mous consent to address the House for 1 minute, FEBRUARY 6 The SPEAKER, Is there objection to the request of the gentleman from Kansas? There was’ no objection. Mr. REES. Mr. Sreaker, it appears the Department of Agriculture has final- ly, after many months of consideration, gotten around to a point where it will make plans to dispose of dried eggs and dried milk on hand, costing millions and millions of dollars. Iam informed the Commodity Credit Corporation has approximately 73,000,- 000 pounds of eggs in storage that are not earmarked for use or disposal, and approximately 170,000,000 pounds of dried milk. Putting it another way, the CCC has on hand, for which it is paying Storage, 36,500 tons of dried eggs and 85,000 tons of fried milk. It seems to me that long ago the De- partment of Agriculture should have ar- ranged and made plans to dispose of these surplus food commodities in an or- derly manner. They should be allocated to welfare organizations, school-lunch programs, and all other groups where such commodities are being used at the expense of the taxpayers of this country. There is no excuse or reason why the millions of bushels of potatoes under the control of CCC should not have been al- located to people who are in need of them for food. It 1s inexcusable and abso- lutely wrong that food should be de- stroyed when there are thousands of people in this country who would be glad to have them for food. Mr. Speaker, we are sending millions of dollars’ worth of food to foreign coun- tries under the Marshall plan. Is there any good reason why quantities of these items of food should not be included, and thereby relieve the taxpayers of at least a part of this burden? I am informed that officials in the Department of Agriculture are now, after months and even years, suggesting they are not sure whether they have author- ity to make such disposal of this food. It is my opinzon they have such author- ity, but if they do not, they can certainly get it. I wonder why they have not re- quested it. It seems to me that somc- body has gone to sleep on the job. EXTENSION OF REMARKS Mr. COUDERT. Mr. Speakcr, I ask unanimous consent to extend my re- marks in the REcorp in two instances: In one to include a letter appearing in yes- terday’s New York Times, and in the sec- ond an invaluable contribution on the subject of electoral reform. I am in- formed by the Public Printer that the latter will exceed two pages of the Rec- orp and is estimated to cost $410, but I ask that it be printed notwithstanding that fact. The SPEAKER. Without objection, notwithstanding the cost, the extensions may be made. There was no objection. Mr. KEE asked and was given permis- sion to extend his remarks in the RrEc- orp and include an editorial. Mr. O’HARA of Illinois asked and was given permission to extend his remarks in the Recorp and include a letter from
1950 the Church Federation of Greater Chi- cago and his reply thereto. Mrs. DOUGLAS asked and was given permission to extend her remarks in the Record in five instances and include ex- traneous matter. WOMEN IN THE ARMED FORCES Mr. WILLIAM L. PFEIFFER. Mr. Speaker, I ask unanimous consent to ad- dress the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. WILLIAM L. PFEIFFER. Mr. Speaker, upon reading an article by George Fielding Eliot entitled “Do Women Make Good Officers?” which ap- peared in a recent issue of McCall's mag- azine, I was amazed to learn that in all of the legally established corps in which women hold permanent commissions the highest permanent commissioned rank attainable is lieutenant colonel or com- mander in the United States Navy, ex- cept that each of the corps is authorized a director or chief, who is entitled to hold temporary rank of colonel or captain, United States Navy, while serving in this capacity. This is as high as any women officers can now rise. I must confess I did not know before, that this situation existed. Today I introduced a bill which will, in effect, increase the temporary ranks to brigadier general or rear admiral— lower grade—as the case may be. These officers are capable of acting as heads of their corps and they are entitled to rank commensurate with their re- sponsibility. I am profoundly grateful to be in a position to introduce legislation affect- ing these remarkable women serving in the armed services who are so justly de- serving of this recognition. To honor the heads of these corps in such a way would in my opinion reflect the admiration and respect that the American people feel for all of the women in our armed forces. SURPLUS OOMMODITIES Mr. KEATING. 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 gentleman from New York? There was no objection. Mr. KEATING. Mr. Speaker, on Fri- day 4 Members of the House, and I understand today 24 additional Mem- bers, all from the Republican side, have introduced bills directing the Secretary of Agriculture and the Commodity Credit Corporation to make available surplus foodstuffs to the school-lunch program and welfare agencies. I want to point out that this measure, if considered favorably and adopted, will not cost the taxpayers of this country a cent. The savings in storage charges alone will many times offset the nominal advances for handling and transporta- tion costs. As for the cost of the food commodi- ties themselves, the administration has already written off their cost. It has not only reduced the prices to a fraction of CONGRESSIONAL RECORD—HOUSE their cost for export but is financing these exports with ECA dollars. In addition to the outright outlay of funds, they have to pay storage charges. Many of these commodities have been in storage for from 1 to 2 years. The time is not too far distant when it will be necessary to hire men to dump and dispose of what is now good food. The time to act is now. FOREIGN SERVICE OF THE UNITED STATES Mr. KEE. Mr. Speaker, 1 ask unani- mous consent to take from the Speak- er's desk the bill (H. R. 4106) for the re- lief of certain officers and employees of the Foreign Service of the United States who, while in the course of their respec- tive duties, suffered losses of personal property by reason of war conditions, with a Senate amendment thereto, and concur in the Senate amendment. The Clerk read the title of the bill. The Clerk read the Senate amend- ment, as follows: Page 1, lines 8 and 4, strike out “there is authorized to be appropriated, and there 1s hereby appropriated” ond insert “the Secre- tary of the Treasury is authorized and di- rected to pay.” The SPEAKER. Is there objection to the request of the gentleman from West Virginia? There was no objection. The Senate amendment was concurred in. A motion to reconsider was laid on the table. THE POTATO CRISIS Mrs. DOUGLAS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentlewoman from California? There was no objecticn. Mrs. DOUGLAS. Mr. Speaker, this potato crisis is a most peculiar crisis. It is one which the Congress of the United States could have prevented. We will remember that the reason we have this crisis is that the Congress did not take the action it was required to take in order to prevent this huge sur- plus from being accumulated. If my memory serves me correctly, Congress passed an amendment which made it impossible for the Secretary of Agriculture to pay freight charges to those points where we have school-lunch programs and welfare agencies which would have been able to put those sur- plus potatoes to good use. The Secretary was authorized to pay freight charges for surplus potatoes go- ing to alcohol and starch producers. I think the Congress ought to re- examine its conscience and remember that it voted down the Brannan plan last year. If we would pass such a plan, we would not be accumulating these sur- pluses in the first place. The SPEAKER. The time of the gen- tlewoman from California has expired. EXTENSION OF REMARKS Mr. BOLLING asked and was given permission to extend his remarks in the 1513 Recorp and include a column by Lowell Mellett. Mr. BARING asked and was given per- mission to extend his remarks in the ReEcorp. Mr. BOYKIN asked and was given per- mission to extend his remarks in the RECORD and include a statement on the RFC. Mr. BOGGS of Louisiana asked and was given permission to extend his re- marks in the REcorr and include ex- traneous material. THE TAFT-HARTLEY LAW Mr. CAVALCANTE. 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 Penn- sylvania? There was no objection. Mr. CAVALCANTE. Mr. Speaker, the friends of the Taft-Hartley law show the nature of their mind by their con- stant opposition to all congressional ef- fort to pass laws that will protect labor against the predatory traits of their masters. This nature is seen in their blind opposition to the repeal of any part of that infamous law; in their slavish opposition to the passage of a more adequate and just social-security law; in their shameful opposition to a Federal national-health program; and in their illogical opposition to put teeth in the coal-mine inspection law. The blood of the 534 miners who in 1949 went down to the coal mines and never came back alive—— Mr. HOFFMAN of Michigan. Mr. Speaker, I demand that those words be taken down. The SPEAKER. The Clerk will report the words objected to. The Clerk read as follows: Mr Speaker, the friends of the Taft-Hart- ley law show the nature of their mind by their constant opposition to all congres- sional effort to pass laws that will protect labor against the predatory traits of their masters. This nature is seen in their blind opposition to the repeal of any part of that infamous law; in their sla#ish oppost- tion to the passage of a more adequate and just social-security law; in their shameful opposition to a Federal national-health pro- gram; and tn their illogical opposition to put teeth in the coal-mine inspection law. The blood of the 534 miners who in 1949 went down to the coal mines and never came back alive—— The SPEAKER. The Chair does not see anything in that except an argument for the repeal or amendment of a law. The gentleman from Pennsylvania will proceed for the remainder of his 1 min- ute. Mr. KEATING. Mr. Speaker, will the gentleman yield? Mr. CAVALCANTE, soon as I finish. The blood of the 534 miners who in 1949 went down to the coal mines and never came back alive because of the in- adequate coal-mine inspection law; the blood of the man, woman, and child that died because of inadequate medical and hospital care; and the blood and suffer- ing of those who died so that labor unions might subsist, is all heaped upon the heads of this opposition. I will yield as
1514 The SPEAKER. The time of the gen- tleman from Pennsylvania {Mr. CAvAL- CANTE! has expired. PRIVILEGE OF THE HOUSE AND PERSONAL PRIVILEGE Mr. HOFFMAN of Michigan. Mr. Speaker, I rise to a question of the privi- lege of the House and also a question of personal privilege. The SPEAKER. The gentleman will state it. Mr. HOFFMAN of Michigan. Mr. Speaker, on Thursday, February 2, 1950, the gentleman from Pennsylvania [Mr. CAVALCANTE], after obtaining unanimous consent to address the House for 1 min- ute, addressed the House. Hus remarks are found on page 1376 of the CONGRESSIONAL REcorD. Those remarks, which, for obvious rea- sons, sare not now quoted, but which are before the Speaker and the Members of the House, refiect upon the House as a whole; upon the integrity, in his official capacity, of more than two-thirds of the Members of the House, as well as upon the integrity of the Member from the Fourth Congressional District of Michi- gan. Those remarks, by innuendo, also re- flect upon the integrity of a Member of the other body. Those remarks, when read in connec- tion with other official records of the House and of the other body, falsely charge that more than two-thirds of the Members of the House and of the other body were guilty of improper conduct. They also charge, Mr. Speaker, that the blood of 534 miners who were killed in accidents in the mines during the first 11 months of 1948 are upon the hands of those Members of the House and of the other body who voted in support of the Taft-Hartley Act. It is my contention that those remarks do reflect upon the integrity of the Mem- bers of the House, and the House as a whole. My resolution is to the effect that they be stricken from the REcorpD. The SPEAKER. If the gentleman de- sires to make a motion, the Chair will entertain it. Mr. HOFFMAN of Michigan. not entitled to an hour? The SPEAKER. If it is a question of the privilege of the House, the gentle- man would be. Mr. HOFFMAN of Michigan. Is that not a question of the privilege of the House? The SPEAKER. If the gentleman submits a resolution or a motion, the Chair will entertain it. Mr. HOFFMAN of Michigan. submitted it. The SPEAKER. The Clerk will report the resolution. The Clerk read as follows: Whereas the remarks of the gentleman from Pennsylvania [Mr. CAVALCANTE], which appear on page 1376 of the CONGRESSIONAL Recorp of Thursday, February 2, 1950, cap- tioned ‘The Taft-Hartley Act,” and ending with the words, “Taft-Hartley*law,” falsely charge the House with improper conduct, reflect upon the integrity of the House, and upon the integrity of at least two-thirds of the Members thereof: Therefore he it Am I I have CONGRESSIONAL RECORD—HOUSE Resolved by the House, That said remarks, as so indicated, be, and the same hereby are, stricken from the RECORD. The SPEAKER. The Chair is of the opinion that if the Recorp is going to be protected against language like this it ought to be done at the time the words are uttered, the words taken down, and a motion made to strike them from the ReEcorD; otherwise, the House might find itself in a situation like this any day when some Member who was not on the floor at the time the words were uttered would like to open up the Recorp that had already been approved several days before. Mr. HOFFMAN of Michigan. May I be heard on the point of order before the Chair rules? The SPEAKER. Yes; the Chair will hear the gentleman. Mr. RANKIN. Mr. Speaker, a parlia- mentary inquiry. The SPEAKER. The gentleman will state it. Mr. RANKIN. Were these words ut- tered on the floor of the House or 1n- serted as an extension of remarks? Mr HOFFMAN of Michigan. They were uttered on the floor of the House. Mr. Speaker, there are precedents to the effect that a point of order need not necessarily be made at the time the words are uttered. I was present when the words were uttered, but I did not hear them all, sitting over on this side of the aisle. The precedents are to the effect that the remedy of having the words taken down is not an exclusive remedy; more- over, today, when the gentleman was making practically the same charge, that the blood of those miners was upon the hands of the Members of the House, I called attention to that and asked that the words be taken down, but the ruling was against me. I have nothing left now except the matter of appeal from the ruling of the Chair, which I do not care to take. I call the Speaker’s atten- tion, however, to the fact that I have made the point, now, in both ways; that is where the gentleman from Pennsyl- vania [Mr. CavaLcANTE] today repeated his statement to the effect that the blood of 534 miners was upon the hands of Members who supported the Taft-Hart- ley Act. I asked that the words be taken down. They were. The Speaker ruled that the words were not out of order. I also call the Speaker’s attention to the fact that the remarks that were in the Recorp last Thursday, keeping in mind matters of common knowledge to all the Members of the House, reflect upon a Member of the other body, a Senator from Virginia. Mr. KEATING. Mr. Speaker, a par- liamentary inquiry. The SPEAKER. The gentleman will state it. Mr. KEATING. Before the Chair rules, may I ask that the Chair consider the last sentence of the remarks of the gentleman from Pennsylvania, which, if not stricken, would impute insanity to the President of the United States where it states: ‘Men of honest minds rejoice in the sane decision of the President not to use the infamous Taft-Hartley law,” FEBRUARY 6 in view of the fact that he has used it within the hour? I think that the Chair should take that into considcration in making the Chair's ruling, The SPEAKER. The Chair every day hears worse things said about the Presi- dent than that, right here. The Chair will read the rule: If a Member is called to order for words spoken in debate, the Member calling him to order shall indicate the words excepted to, and they shall be taken down in writing at the Clerk’s desk and read aloud to the House; but he shall not be held to answer, nor be subject to the censure of the House therefor, if further debate or other business has intervened. The Chair, in the interest of orderly procedure, is forced to hold that after the Journal has been read and approved and the Recorp read and approved, it would be bad practice to go back and open it up. Mr. HOFFMAN of Michigan Mr. Speaker, I ask unanimous consent to re- vise and extend my remarks and to cite precedents in connection with the state- ment. I made. The SPEAKER. Is there objection to the request of the gentleman trom Michigan? There was no objection. Mr. HOFFMAN of Michigan. Under the unanimous consent given to revise and extend my remarks and to cite precedents bearing upon the Speaker's ruling, permit me to add: It has always been my understanding that the House had the power to protect itself from false charges which adversely reflected upon the integrity of the House. Likewise, it has been my understand- ing that, when more than two-thirds of the Members of the House or, as in this case, more than two-thirds of the Mem- bers of both Houses, voted affirmatively on @ question, such action was the action of the House. It follows, therefore, that, where such action is characterized as resulting in the enactment of an, and I quote, “in. famous” law—in this case, the Taft- Hartley law—and where those Members of the Congress who voted for such a law have, and again I quote, “upon their heads the blood of 534 of these, our fel- Jow men, who went down to the collieries never to return,” those charges reflect upon the integrity of the House itsclf. The words of the gentleman from Pennsylvania {[Mr. CavaLcanTE] if they mean anything at all, mean that those Members of this House, and of the other body as well, who advocated and who voted for the Taft-Hartley Act, were guilty of conduct which resulted in the death of 534 of their fellow men. Not by the wildest stretch of the imag- ination can it be logically or truthfully charged that the Taft-Hartley Act was in any way responsible for the death of any miner who was killed in a mine. I do not care to repeat the words of the gentleman from Pennsylvania. They will be found on page 1376 of the Con- GRESSIONAL RECORD. The gentleman today repeated a sim- jlar charge from the Well of the House. When I asked that the words be taken down, and they were taken down, the
1950 Speaker ruled that they were not out of order. The ruling stands on the record. If the Speaker, in the exercise of his wisdom and discretion, saw fit, as he did, to permit that untrue charge to stand, that was his prerogative. When the words of the gentleman from Pennsylvania [Mr. CavALCANTE] are quot- ed, if they are hereafter quoted, in the CIO News, or in the Communist press, and comment is made that they would not have been permitted to stand had they been out of order the responsibility will not be mine. Nor will the responsibility rest upon me if those words are used in connection with the comment that they must have been true, otherwise the charge would not have been permitted to remain in the REcorp. The gentleman from Pennsylvania [Mr. CavaLcanTE] also, in the statement hereinbefore referred to, uttered words which reflected upon the integrity, in his representative capacity, of a Member of the other body. It has always been my understanding that it was a violation of the rules of orderly debate for a Member of this body to criticize a Member of the other body. I am familiar with subdivisions 4 and 5 of House Rule 14, which provide a method for calling a Member to order by having his words taken down. I am also familiar with the fact that there are precedents, although I do not have them at hand, which hold that the remedy of having the words taken down is not an exclusive one, that the matter may later be called up by introducing a privilege resolution claiming that the privilege of the House has been violated. In this particular instance, I did that, and I also claimed personal! privilege for the reason that the gentleman’s words cast a reflection upon my integrity as a Member of the House, one who supported and voted for the Taft-Hartley Act. On page 481, section 926 of the House Rules and Manual, Eighty-first Con- gress, will be found this statement: Where a Member had uttered disorderly words on the floor without objection, the House yet decided that it was not precluded from action when the words, after being withheld for revision, appeared in the Rec- orD, and struck them out (V, 6979, 6981; VI, 582; VIII, 2538, 3463, 3472) The House has also ordered stricken from the Recorp printed speeches condemned as unparlHamentary for reflections on Members, committees of the House, the House itself (V, 7017, and the Senate (V, 5129)). It is my contention, and I hope, if and when the Members read these remarks, they will have before them the remarks of the gentleman from Pennsylvania, that the words he uttered are a violation of the privilege of the House, do raise a question of the privilege of every indi- vidual Member of the House who voted for the Taft-Hartley Act. In support, I cite the following: The following statements made by Members were held to be not in order in that they cast reflections either on the House or its membership, or its decisions. It is not in order in debate to cast reflec- tions on either the House or its member- ship or its decisions whether past or present. So held when the following statements were made. CONGRESSIONAL RECORD—HOUSE Mr. Claiborne, of Mississippi, said: Talk not to me of vindicating your insult- ed dignity by the prosecution of Whitney. You have no dignity to vindicate. Mr. Hogan, of Mississippi, said: They have their agents here upon this floor; they have their interested stockhold- ers here to vote upon this measure; they have their feed attorneys here to vote upon this measure and rob the people of the West of the great God-given right to navigate freely the great Mississippi River. Where the Member pronounced opin- jons on decisions of the House to be damnable heresies: I say here and now, and stand ready to make it good before the tribunal of history and the great tribunal of the American peo- ple, that the proposition pretended to be set up here of the right of the minority to stay indefinitely the right of the majority to legislate is as disgraceful, as dishonor- able— The reason why the House was not more dignified was because its Members sat here tamely, acting as the passive instruments and tools of the aspirants for the Presidency in the other body. This was the truth. And whoever commends himself to the affections of the rebel element there com- mends himself equally to the affections of their rebel brethren on this floor. See also the following: HINDS’ PRECEDENTS OF THE HOUSE OF REPRESENTATIVES, VOLUME 3 2637. The publication by a Member of alleged false and scandalous charges against the House and its Members, which he also reiterated in debate, was held to involve a question of privilege. The House took action as to a Member who reiterated on the floor certain published charges against the House, although other business had intervened. Instance wherein testimony taken before a committee and relating to the conduct of a Member was not reported to the House at once. On July 29, 1892, Mr. Charles J Boatner, of Louisiana, as a matter of privilege, submitted the following resolution, and demanded im- mediate consideration thereof, to wit: “Whereas on page 216 of a book purporting to have been written by Thomas E, Watson, of Georgia, a Member of the House of Repre- sentatives, the following charge appears. ““Drunken Members have recled about the aisles, a disgrace to the Republic Drunken speakers have debated grave issucs on the floor, and in the midst of maudlin ramblings have been heard to ask: Mr. Speaker, where was I at?”' and “Whereas the publication of such charges, if untrue, is a grave wrong to this body, and if true the responsibility should be placed where it belongs; and “Whereas the said Watson has reiterated the same on the floor of the House. Therefore, be it “Resolved by the House, That a committeo of five Members be appointed by the Speaker to investigate and report to the House whether such charges are true, and, if un- true, whether the said Watson has violated the privileges of the House and their recom- mendations relative to the same. That said committee have leave to sit during the ses- sions of the House, to send for persons and papers, to swear witnesses, and to compel their attendance.” Mr. Thomas B. Reed, of Maine, submitted the question of order, whether, the House having failed to take action respecting the remarks of Mr. Watson at the time he re- iterated the charges on the floor of the House, and having passed to other business, it was not now too late to hold him to account therefor. 1515 Mr. Louls FE. Atkinson, of Pennsylvania, made the further point of order that the pending business before the House was a conference report, which was itself a matter of the highest privilege. The Speaker held that the resolution sub- mitted by Mr. Boatner presented a question of privilege, and that whenever the Speaker ‘s of opinion that a question of privilege is involvcd in a proposition, he must entertain it in preference to any other business. The Speaker also held that the pending business was the amendments of the Senate to the bill H. R. 752, and that no conference report was pending. Both points of order were therefore overruled. On August 8, 1892, Mr. Boatner submitted the report of the select committee authorized by the adoption of the resolution, and of which he had been made chatrman. This report stated that the committee summoned Mr. Watson and such witnesses as he indicated, and very soon the fact was developed that the charge as to drunken speakers referred to Mr. J. E Cobb, of Ala- bama. The committee thereupon went on and examined testimony as to Mr. Cobb, nao point of order being made that the testi- mony implicating a Member should first be reported to the House The committee concluded that the charge was a libel upon the membership, and rec- ommended the adoption of the following resolution: “Resolved, That the charges made by Thomas E. Watson in his book against the House of Representatives, viz, ‘that drunken Members have reeled about the aisles, a dis- Brace to the Republic,’ and ‘drunken Mem- bers have debated grave issues on the floor,’ etc, are not true, and constitute an unwar- ranted assault upon the honor and dignity of the House, and that such publication has the unqualified disapproval of the House.” This report was made in the last hours of the session and does not apnear to have been acted on Sec 2649 A proposition to censure a Mem- ber presents a question of privilege Early instances wherein the Speaker passed on questions presented as of privilege in- stead of submitting them directly to tho House On January 24, 1842, Mr. Thomas W. Gil- mer, of Virginia, presented the following resolution: “Resolved, That in presenting for the con- side.ation of the House a petition for the dissolution of the Union the Member from Massachusetts |Mr. Adams] has justly in- curred the censure of this House ” Mi. Joseph R Underwood, of Kentucky, objected tu the reception of the resolution at this time, os not within the established order of business, and consequently not now in order. The Speaker said that he considered this @ matter of privilege, and referred to a prece- dent that occurred in 1826, in which the gen- tleman from Massachusetts offered a peti- tion from certain slaves near Fredericksburg, Va., and on which occasion a resolution was offered by a gentleman from Virginia that the gentleman be brought to the bar and censured Under this precedent the Chair did not feel at liberty to arrest the pro- ceeding. Sec. 2652. A charge that a Membcr had been holding intercourse with the foes of the Government was investigated as a question of privilege On July 15, 1861, Mr. John F, Potter, of Wisconsin, offcred the following resolution: “Resolved, That the Committe on the Ju- diciary be directed to inquire whether the Honorable Henry Mav, a Representative in Congress from the Fourth District of the State of Maryland, has not been found hold- ing criminal intercourse and correspondence with persons in armed rebellion against the Government of the United States, and to make a report to the House as to what action
1516 should be taken in the premises, and that said committee have power to send for per- sons and papers and to examine witnesses on oath or affirmation, and that said Hon. Henry May be notified of the passage of this resolution (if practicable) before ac- tion thereon by said committee.” Mr. Henry C. Burnett, of Kentucky, made the point of order that the resolution was not in order as @ question of privilege. The Speaker submitted the question to the House, and the House decided that the reso- lution was in order as involving a question of privilege. By @ vote of 56 yeas to 82 nays the House refused to lay the resolution on the table. It was then agreed to. Sec. 2653. A resolution directing an in- quiry into alleged treasonable conduct on the part of a Member was admitted as a question of privilege.—On December 19, 1865, Mr. John F. Farnsworth, of Illinois, as a ques- tion of privilege, submitted the following: “Whereas it is alleged that Benjamin G. Harris, a Representative in this House from the Fifth District of the State of Maryland, was, in the month of May last, before a very respectable and intelligent court martial tried, and by said court convicted, upon cnarge and specifications, to wit: ‘Violative of the sixth article of war,’ by giving sid and comfort to the public enemy and incit- ing them to continue to make war against the United States, declaring his sympathy with the enemy and his opposition to the Government of the United States in its ef- forts to suppress the rebellion, and “Whereas it was proved at such trial (as is alleged) that the said Harris expressed his regret that the assassination of President Lincoln came too late to be of any use to the rebels, and at the same time declared that Jefferson Davis was a great and good man, all of which acts on the part of said Harris are inconsistent with the oath which he has taken as a Member of this House; and “Whereas the said court martial sentenced the said Harris (among other things) to be forever disqualified to hold any office of honor, trust, or profit under the United States, which sentence was approved by the President: Therefore “Resolved, That the Committee of Elec- tions be directed to inquire into the facts of the case and that they report the same to the House, together with such action as said committee shall recommend; and in making their investigations sald committee to have power to send for persons and papers” Mr. Charles A. Eldridge, of Wisconsin, raised the question of order that no question of privilege was involved. The Speaker held that the question raised was a question of privilege, and of the very highest kind, since It involved the right of a Member to his seat. The resolution was then agreed to, yeas 138, nays 21. Among other precedents which tend to show that the gentleman’s remarks raised a question of privilege are 2 Hinds, section 1246; 3 Hinds, section 2628 It should be noted that the gentleman from Pennsylvania |Mr. CavaLcante], not satisfied with the charge he made which reflected upon the House as a whole, and the individual Members thereof, on last Thursday, today again repeated those charges. He repeated those charges after and notwithstand- ing the fact that the President of the United States today proceeded to in- voke the provisions of the Taft-Hartley Act. A law which the gentleman char- acterized as infamous. CONGRESSIONAL RECORD—HOUSE What the gentleman's charge now amounts to is that the President of the United States is proceeding under an infamous law—a law which the gentle- man charges, inaccurately, wes respon- sible for the death of 534 miners. Of late, it has become the custom to criticize the Congress, to charge its in- dividual Members and the Congress as a whole, with reprehensible conduct. Unless the House itself takes steps to protect itself from unfounded charges by frowning upon such charges when made by its own Members, it should not complain if oihers vilify and smear it. THE COUNTRY’S TRANSPORTATION SYSTEM Mr. BECKWORTH. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and ex- tend my remerks. The SFEAKER. Is there objection to the request of the gentleman from Texas? There was no objection. Mr. BECKWORTH. Mr. Speaker, I desire to announce to the House that beginning February 27, the Transpotrta- tion Subcommittee of the House Com- mittee on Interstate and Forcign Com- merce will hold some hearings concern- ing transportation matters in this coun- try. We all recognize the importance of a strong and healthful transportation system, in both war and peace The Committee on Interstate and Foreign Commerce has sought constantly to make worth-while contributions to- ward keeping our transportation system great and strong. It is hoped the hear- ings we shall hold, to which I have re- ferred, will enable the Transportation Subcommittee and the House Interstate and Foreign Commerce Committee to have a clearer picture of current trans- portation problems, and thereby to be in a better position to help solve transpor- tation problems. EXTENSION OF REMARKS Mr. O'’SULLIVAN asked and was giv- en permission to extend his remarks in the REcorpD and include extraneous mat- ter. Mr. DAVIS of Georgia asked and was given permission to extend his remarks in the ReEcorp in two instances and in- clude extraneous matter. Mr. GRAHAM asked and was given permission to extend his remarks in the ReEcorD and include an editorial on the Reverend James Shera Montgomery. Mr. POULSON asked and was given permission to extend his remarks in the Recorp in two instances and include ex- traneous matter. MESSRS. GREED AND SELFISHNESS COME TO WASHINGTON TO LOOK UPON A DOLLAR DINNER BASKET Mr. O’SULLIVAN. 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 gentleman from Ne- braska? There was no objection. FEBRUARY 6 Mr. O’SULLIVAN. Mr. Speaker, the Republican leaders of the Nation in solemn conclave assembled, are staging a dollar-a-basket dinner tonight to try to capture the imagination, if not the votes of the common “guys”—not Guy Gabrielson, however. The national slogan has now been changed from a full dinner pail to a full basket for a dollar which shows that prices are not so bad after all. This whole silly eating fiasco may be thoroughly understandable, if as some people claim, a goodly number of those attending are really going there to sober up and not to eat as a casual check of the wine, women, and song receipts of Washington and the other sin centers hereabouts would most probably disclose. If many dollat-a-basket dinners are really consumed it will be by the good, liberal men and women whom the big fellows have brought along with them to do their coarse eating. Leaving out of consideration for the moment their natural aversion to such cheap grub. I truly believe they actu- ally do not have much appetite left to eat anyhow after five national trouncings in a row, and maybe that 1s what really drives them to drink and dollar-a-basket dinners, because they want the food to nauseate them too. They claim that they are going to re- lease a 2,000-word declaration of party policy—a platform, if you please—for 1950 and 1952, maybe. That appears to be a bit useless, or to my mind a very idle political gesture, because they already have five national platforms left over from the Hoover, Landon, Willkie, Dewey, and “Deweyer” national cam- paigns which have never been used at all and are really just as good as new right now. In substantiation of this contention of course you remember that the Repubh- can-controlled Eightieth Congress, when called back into extra session by Presi- dent Truman in 1948, after they had been armed with a spanking new plat- form, right hot from the intellectual griddle, had no real appetite whatsoever for 1t neither at that time nor at this session of Congress. No, old Abe Lincoln was right, you can- not even fool the people three times let alone six times. Beside the moral expressed by Aesop in one of his fables, is as true today as it was then, “The truth itself is not be- lieved from one who often has deceived.” If you normal Republicans really want to get some place nationally, why do not you chase the extreme right winged re- actionaries out of poor old Abe Lincoln's once liberal party and quit leaving his great spirit wailing at every crossroad throughout the Nation about how the Republican Party has double-crossed him and his ideas and ideals. Come on, get your gumption up or both you and your gumption are going down for the last time in 1950 and not in 1952. You know you have been pretty lucky after all to be privileged to come up five times and get a sixth try. A lot of peo- ple, just get to come up the usual and customary three times.
1950 SPECIAL ORDER GRANTED Mr. ANGELL asked and was given permission to address the House today for 15 minutes following disposition of matters on the Speaker's desk and at the conclusion of any special orders hereto- fore entered. MAKING FOOD SURPLUSES AVAILABLE TO NEEDY PEOPLE Mr. JENSEN. 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 Iowa? There was no objection. Mr. JENSEN. Mr. Speaker, a few mo- ments ago the gentlewoman from Cali- fornia criticized the Congress tor not making these foods and surpluses avail- able to needy people. She claimed that we had rcfused to furnish transporta- tion for these surplus goods. An official of the Department of Agri- culture is raported to have informed Congress that they have the authority to use funds provided under section 32 of the Agricultural Adjustment Act to pay handling and transportation charges to move the surplus food to welfare agen- cics. Why then has not the directive of this Congress been followed? The Agri- cultural Act of 1949 was signed by the President on October 1, 1949. Four months have passed and to date only po- tatoes have been recognized by Secre- tary Brannan as being in surplus supply. Js it the intention of the author of that double-edged CIO-Brannan plan to wreck our agricultural legislation and force the Congress to accept his scheme because of the accumulation of surplus food stocks? It scems strangely inconsistent for the Secretary of Agriculture to bemoan the declining farm income of our farmers, while by hoarding food stocks he torces further cuts in the farmer’s income through acreage allotments and mar- keting controls. Also inconsistent 1s his policy of making 1t difficult for the needy to get badly needed food while he advo- cates and promotes lower food prices for all, at the expense of all. Mr. Speaker, it would help solve our Nation’s problems considerably 1f we ralsed instead of lowered tariffs on farm products to stop at least some of the great flood of farm products now coming into our ports, especially such as are already 1n surplus supply, such as corn, wheat, potatoes, and so forth. A LOST TRIBE OF INDIANS OF NORTH CAROLINA Mr. POULSON. 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 California? There was no objection. Mr. POULSON. Mr. Speaker, I am today introducing a bill which in effect will recognize what might be called a lost tribe of Indians in North Carolina. The story of these Indians is both intcr- esting and tragic. XCVI——86 CONGRESSIONAL RECORD—HOUSE Jemes Alexander, who is a constituent of mine, has made a very thorough study of this problem and has written a story in reference to these Indians which I am today inserting in the Recorp. EXTENSION OF REMARKS Mr. FORD asked and was given per- mission to extend his remarks in the RecorD. Mr. JUDD asked and was given permis- sion to extend his remarks in the Recorp and include extraneous matter. Mr. WOODRUFF asked and was given permission to extend his remarks in the Recorp and include an article by Con- stentine Brown. Mr. STOCKMAN asked and was given permission to extend his remarks 1n the Recorp and include an article by Ernest L. Koibe, chief forester of the Western Pine Association. Mr. LODGE asked and was given per- mission to extend his remarks in the REcORD. Mr. MULTER asked and was given per- mission to extend his remarks in the ReEcorp and include extraneous matter. Mr. HARDY asked and was given per- mission to extend his remarks in the Recorp and include a statement by Ad- miral Blandy. Mr. BUCHANAN asked and was given permission to extend his remarks in the RECORD. LEAVE OF ABSENCE Mr. LODGE. Mr. Speaker, I ask unan- imous consent, that the gentleman from Connecticut [Mr. PATTERSON! be granted leave of absence this week on account of official business. The SPEAKER Is there objection to the request of the gentleman from Con- necticut? ‘There was no objection. BALLOT REFORM Mr. COUDERT. Mr. Speaker, I ask unanimous consent to address the House for 1 minutc and to revise and extend my remarks The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. COUDERT. Mr. Speaker, I have just obtained consent to include in the Recorp two articles on a very important subject which I think will be very en- lightening to the Members of this House if they can find time to read them to- morrow. They have to do with the Lodge-Gossett resolution concerning re- form of the method of electing the Pres- ident of the United States. The articles are by two very distinguished Princeton scholars, Professor Corbin and Mr. Lucius Wilmerding. They both advocate elec- tion of electors in the same mode as Members of the Congress. I introduced a resolution for such purpose as an al- ternative to the Lodge-Gossett resolu- tion several months ago providing for the election of electors in the congressional districts and two at large for each State. This was the system contemplated by the framers of the Constitution, and was in effect for some years. In my opinion the Lodge-Gossett resolution, while appeal- 1517 ing in theory, may be appalling in fact. It may be the decisive step in establish- ment of a one-party Government in the United States, I intend to offer my resolution as a substitute for the Lodge ,esolution. SURPLUS COMMODITIES Mr. HILL. Mr. Speaker, I ask unani- mous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from Colo- rado? There was no objection Mr. HILL. Mr. Speaker, I strongly urge the prompt consideration and sup- Port of the bill to make available to the school-lunch program and wellare agen- cies the surplus foods now owned by the Commodity Credit Corporation. Those whom we are seeking to help are our own people—deserving Americans. They particularly need our help at this time. The continuing inflationary policies of the administration have materially re- duccd the purchasing power of the dol- lar. No group has been as seriously af- fected es those who must look to the few dollars granted them in the form of welfare assistance. It is far better, and in Keeping with the best traditions of this country to help those who really need it, than to promise a lower grocery bill to everyone. In the newspapers over the weck end, I have noted that some officials of the Department of Agriculture have promised that. other food commodities, dried eggs and dried milk may be added to surplus Potatoes and will be made available to welfare agencies Here again is another example of ineffective administration in a clumsy piecemeal attempt to solve a Serious set of problems. COMMUNISM Mr SIKES. Mr Speaker, I ask unan- imous 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 gentleman from Flor- ida? There was no objection. Mr. SIKES. Mr. Speaker, the morn- ing press stated that our intelligence corps expects the Reds to attempt to seize Berlin in May. We might have anticipated that. We tucked our tails and ranin China. The statements of our State Department are such that the Kremlin may well anticipate that this great and powerful Nation will tuck its tail and run again before Red puppets elsewhere. SURPLUS COMMODITIES Mr. MURRAY of Wisconsin. Mr. Speaker, I ask unanimous consent to ad- dress the House for 1 minute and to re- vise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Wis- consin? There was no objection. Mr. MURRAY of Wisconsin. Mr. Speaker, let us get this surplus food
1518 proposition straightened out. My ob- servation has been that many depart- ments of the Government can find a law to do most anything they want when they wish to do it, and they cannot find any authority when they do not wish to do it. In the conference on the agricultural bill, the amendment was put in there so that these surplus foods could be distrib- uted to the needy through the welfare organizations. That is what is in the law at the present time. Technicalities of trying to get around it on the basis that we have to wait until the products are in danger of spoiling before we can get rid of them have been the order of the day. I happen to know that our distin- guished colleague from Maryland, as a result of what is happening down in Cumberland, Md., has for several weeks been trying to get some of those surplus foods ‘or the people in that particular town. Mr. Frank Edwards on the radio has called a.tention to it several times. The gentleman from Maryland [Mr. BEA] has introduced a bill |H. R. 7125) to that effect. It is hoped that hearings on this bill will be held shortly, and if the Jaw is not clear it can be changed in conformity to the wishes of the Congress. INTERNATIONAL INSPECTION OF ATOMIO ENERGY ACTIVITIES Mr. HINSHAW. Mr. Speaker, in or- der to repeat here certain remarks which I made to the press on February 4, I ask unanimous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from Cali- fornia? There was no objection. Mr. HINSHAW. Mr. Speaker, on Feb- ruary 4 I made the following remarks to the press: It should be quite clear now that Russia already has “international inspection” of atomic energy activities. Her agents and the democracies’ traitors roam the United States and Britain almost at will, Therefore, the only reason Russia could have for giving us the right frecly to inspect Soviet territory and the atomic cnergy in- stallations there would be to avoid an atomic war and assure world peace. If that be truc, then it would appear either that the Politburo may fear the internal consequences of free inspection more than it fears atomic war, or it is confident of its ultimate conquest of the rest of the world at all events. Add the fact that Marslan dogma dictates that peace can exist only in a totally Marxian world, and reach your own conclu- sions. PERMISSION TO ADDRESS THE HOUSE Mr. HOFFMAN of Michigan. Mr. Speaker, I ask unanimous consent to ad- dress the House for 1 minute and to re- vise and extend my remarks, The SPEAKER. Is there objection to the request of the gentleman from Mich- igan? There was no objection. [Mr. Horrman of Michigan addressed the House. His remarks appear in the Appendix.] EXTENSION OF REMARKS Mr. MARTIN of Massachusetts (at the request of Mr, MICHENER) was given per- CONGRESSIONAL RECORD—HOUSE mission to extend his remarks in the Recorp and include a statement passed by the Republican conference this morning. Mr. WILLIAMS asked and was given permission to extend his remarks in the Recorp and include extraneous material. CALL OF THE HOUSE Mr. HOFFMAN of Michigan. Mr. Speaker, I make the point of order that @ quorum is not present. The SPEAKER. Evidently a quorum is not present. Mr. PRIEST. Mr. Speaker, I move a call of the House. A call of the House was ordered. The Clerk called the roll, and the fol- lowing Members failed to answer to their names: [Roll No. 35] Andrews Hale O'Brien, Mich. Bailey Hand Passman Baring Harden Patman Barrett, Wyo. Heffernan Patterson Bland Heller Pfeifer, Boggs, Del. Herlong Joseph L. Bolton, Ohio Herter Potter Brown, Ga Hobbs Powell Buckley, N.Y. Howell Reed, N Y¥. Bulwinkle Jennings Ribicoff Byrne, N.Y. Kearns Richards Camp Kelly, N Y. Rivers Celler Kennedy Sabath Chatham Keogh Sadowsk! Chiperfield Kirwan Scott, Hardie Chudoff Klein cott, Davenport Kunkel Hugh D., Jv. Davies,N Y, Lane Secrest Dowson Larcade Smathers Dollinger Lichtenwalter Smith, Ohlo Dolliver Lyle Taylor Doughton McDonough Teague Durham McGrath Towe Elliott Madden Wadsworth Fellows Miller, Md. Whitaker Furcolo Monroney White, Calif, Gamble Morgan White, Idaho Gary Murphy Whittington Gilmer Nelson Wilson, Ind. Granshan Nixon Withrow Gianger Norblad Green Norton The SPEAKER. On this roll call 839 Members have answered to their names, a@ quorum. By unanimous consent, further pro- ceedings under the call were dispensed with. SPECIAL ORDER GRANTED Mr. MARCANTONIO asked and was given permission to address the House today for 20 minutes following any special orders heretofore entered. EXTENSION OF REMARKS Mr. SHEPPARD asked and was given permission to extend his remarks in the Recorp and include a letter. Mr. MULTER. Mr. Speaker, concern- ing one of the articles I received permis- sion to insert in the REcorp today, the Government Printing Office advises me that it will exceed two pages of the Rec- orD and will cost $229.50, but I ask that it be printed notwithstanding that fact. The SPEAKER. Without objection, notwithstanding the cost, the extension may be made. There was no objection. CONSENT CALENDAR The SPEAKER. This is Consent Cal- mdar day. The Clerk will call the first ill on the Consent Calendar, FEBRUARY 6 PROVIDE FOR RESIDENT COMMISSIONER FROM VIRGIN ISLANDS The Clerk called the bill (H. R. 2988) to provide for a Resident Commissioner from the Virgin Islands, and for other purposes. Mr. DEANE. Mr. Speaker, I ask unan- imous consent that this bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. BENEFITS OF ANNUITANTS WHO RETIRED PRIOR TO APRIL 1, 1948 The Clerk called the bill (H. R. 4295) to provide certain benefits for annui- tants who retired under the Civil Service Retirement Act of May 29, 1930, prior to April 1, 1948. Mr. CUNNINGHAM. Mr. Speaker, this bill has been on the Consent Calendar since June 1949, It appears to be a very meritorious bill and one that I believe should pass the House, and would pass the House if a rule were granted. How- ever, it calls for an expenditure of about $27,000,000. The rules of the Consent Calendar Committee are that no bill that calls for more than $1,000,000 should be passed by unanimous consent. Iam ad- vised that the chairman of that com- mittee is seeking a rule from the Com- mittee on Rules. Therefore, I ask unan- imous consent that the bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from Iowa? There was no objection. OPERATION OF A MUSEUM AT KLUKWAN, ALASKA The Clerk called the bill (H. R. 2012) to authorize the erection and operation of a museum at Klukwan, Alaska. Mr.FORD. Mr. Speaker, I ask unani- mous consent that this bill be passed over without prejudice, The SPEAKER. Is there objection to the request of the gentleman from Michigan? There was no objection. PROTECT PUBLIC WITH RESPECT TO PRACTITIONERS The Clerk called the bill (H. R. 4446) to protect the public with respect to prac- titioners before administrative agencies. Mr. GROSS. Mr. Speaker, I ask unanimous consent that this bill be passed over without prejudice. Mr. WALTER. Mr. Speaker, if the gentleman will withhold that for a moment. Mr. GROSS. No. Mr. WALTER. I object, Mr. Speaker. Mr. CUNNINGHAM. Mr. Speaker, I object to the consideration of the bill at this time. FORT LOGAN, COLO. The Clerk called the bill (H. R. 4548) to provide for the utilization as a national cemetery of surplus Army Department- owned military real property at Fort Logan, Colo. Mr. BYRNES of Wisconsin. Mr. Speaker, I ask unanimous consent that the bill be passed over without prejudice.
1950 The SPEAKER. Is there objection to the request of the gentleman from Wis- consIn? : There was no objection, PULDLIC AIRPORTS SERVING NATIONAL PARKS The Clerk called the bill (S. 1283) to authorize the Secretary of the Interior to acquire, construct, operate, and main- tain public airports in, or in close prox- imity to, national parks, monuments, and recreation areas, and for other purposes. Mr. DEANE. Mr. Speaker, I ask unanimous consent that the Dill be passed over without prejudice. The SPEAKER. Is there objection to the requesv of the gentleman from North Carolina? There was no objection. FOREIGN AGRICULTURAL LABOR The Clerk called the bill (H. R. 5557) to provide for coordination of arrange- ments for the employment of agricultural workers, admitted for temporary agri- cultural employment from foreign coun- trics in the Western Hemisphere, to as- sure that the migration of such workers will be hmited to the minimum numbers required to meet domestic labor short- ages. and for other purposes. The SPEAKER. Is there objection to the present consideration of the bill? Mr. MARSHALL. I _ object, Speaker. Mr, NATIONAL FORESTS The Clerk called the bill CH. R, 2419) relating to the disposition of moneys re- ceived from the national forests. The SPEAKER. Is there objection to the present consideration of the bill? Mr, BYRNES of Wisconsin. 1 object, Mr. Speaker. CONSTRUCTION OF CERTAIN VETERANS’ ADMINISTRATION JIOSPITALS The Clerk called the bill (H. R. 5965) to provide for the construction of certain Veterans’ Administration hospitals, and for other purposes. Mr. DEANE. Mr. Speaker, I ask unan- 4imous consent that the bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. SETTLEMENT OF CERTAIN PARTS OF ALASKA BY WAR VETERANS The Clerk called the bill (H. R. 4424) to provide for the settlement of certain parts of Alaska by war veterans, Mr. FORD. Mr. Speaker, I ask unan- imous consent that the bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from Mich- igan? There was no objection. GRANTS FOR MINOR PROJECTS AT MAJOR AIRPORTS The Clerk called the bill (S. 1282) to euthorize grants under the Federal Air- port, Act for minor projects at major girporvs, aud for other purposes. CONGRESSIONAL RECORD—HOUSE There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., that section 8 of the Federal Airport Act is amended to read as follows: “Sec. 8. At least 2 months prior to the close of each fiscal ycar, the Administrator shall submit to the Congress a request for futhority to make grants, during the two fiscal years immediately following the fiscal year in which such request is submitied to the Congress, tor those of the projects for the development of class 4 and larger airports included in the current revision of the na- tional airport plan which, in his opinion, should be undertaken during that period, and for which grants have not previously been authorized as provided herein, together with an estimate of the Federal funds re- quired to pay the United States share of the allowable project costs of such develop- Ment: Provided, That a grant or grants of funds for the development of any class 4 or larger airports, in a total amount not in excess of $50,000 during any fiscal year, may be made without prior submission of a request for and grant of authority pur- suunt to this section. In determining what development to include in such a request, the Administrator shall consider, among other things, the relative neronautical need for an urgency of all such development in- cluded in the plan and the likelihood of Fecuring satisfactory sponsorship of projects for the accomplishment of such airport de- velopment. Any subsequent appropriation of funds pursuant to section 5 of this act shall be deemed to grant the authority 1e- quested, unless a contrary intent shall have been manifested by the Congress by law or by concurrent resclution. No grant of iunds in eacess of $50,000 in any one fiscal year for development of any cluss 4 or larger airport shall be made unless authorized as provided herein" The bill was ordered to be read a third time, was read the third time, and passed, and a motion to reconsider was laid on the table. ALASKA AIRPORTS The Clerk called the bill (S. 2436) to amend the act entitled “An act to au- thorize the construction, protection. op- eration, and maintenance of public air- ports in the Territory of Alaska” Mr. DEANE, Mr. Speaker, I ask unanimous consent that the bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. TRAINING OF VETERANS UNDER READ- JUSTMENT ACT The Clerk called the bill (S. 2596) re- lating to education or training of vet- erans under title II of the Servicemen’s Readjustment Act (Public Law 346, 78th Cong., June 22, 1944). Mr. CUNNINGHAM. Mr. Speaker, a rule has been granted on this bill. There- fore, I ask unanimous consent that the bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from Iowa? There was no objection. JOE GRAHAM POST NO. 119, AMERICAN LEGION The Clerk called the bill (H. R 33) to authorize Joe Graham Post, No. 119, 1519 American Legion, upon certain condi- tions, to lease the lands conveyed to it by the act of June 15, 1933. There being no objection, the Clerk read the bill, as follows: Be it enacted, ete,, That the act entitled “An act providing for the sale to Joe Graham Post, No. 119, American Legion, of the lands lying within the Ship Island Military Reser- vation in the State of Mississippi,"" approved June 15, 1933 (48 Stat. 150), is hereby amended by inserting at the end thereof the folowing’ “Such corporation is authorized to lease all or part of such lands for mineral (including ofl and gas) development not- withstending such conditions: Provided, That the money received under any such lease shall be used by the corporation for the maintenance of the reservation as a national recreational park.” With the following committee amend- ment: Page 1, line 7, after “at the end”, strike out the remainder of the bill and insert the following’ “of the sentence ending with the words ‘United Daughters of the Confederacy for the sole use of that organization and the erection and maintenance of a memortal to veterans of the Civil War’, the following: ‘Notwithstanding such conditions such core poration is authorized to lease any part of such lands for mineral (including oil and gas) development, except those areas actu- ally planned for development as memorial and iecreational sites’ Provided, That all that portion of land lying west of the west line of the Nghthouse property shall be ex- cluded from the leasing authority herein provided: Provided jurther, That the money recelved under such lease shall be used by the corporation for the maintenance and development of the reservation as a national recreational park, and tor no other purpose: And provided further, That any leases en- tered into pursuant to the foregoing au- thority shall reserve to the United States all source materials essential to the production of fissionable material in accordance with the provisions of Executive Order No. 9908, dated December 5, 1947.’"" The committee 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 re- consider was laid on the table. FORT LEWIS MILITARY RESERVATION The Clerk called the bill (H. R. 5101) to provide for the transfer to Pierce County, Wash., of certain surplus land in the Fort Lewis Military Reservation. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That the Secretary of the Army is authorized and directed to donate and convey, by quitclaim deed, to Pierce County, Wash., all the right, title, and interest of the United States in and to two triangular parcels of land, which are surplus to the needs of the armed forces, in the Fort Lewis Military Reservation, Wash., more particularly described as follows: (1) All of that triangular parcel of original Fort Lewis comprising a part of section 14, township 18 north, range 3 east, Willamette meridian, and situated northeasterly of State Highway No. 5 (Mountain Road); and (2) That triangular portion of section 19, township 19 north, range 3 east, Willamette meridian, situated northeasterly of tne Milt- tary Roud, being a part of original Fort L-wis,
1520 With the following committee amend- ment: At the end of the bill add the following new section: “Src. 2. Conveyance of land described in section 1 shall not be made until appropriate action has been taken by the State of Wash- ington and Pierce County, Washington, to the end that such conveyance shall not jeopard- ize, in any way, the title of the United States in and to the remainder of the land donated by Pierce County, Washington, to the United States.” The committee 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. LANGLEY AIR FORCE BASE, VA. The Clerk called the bill (H. R. 5503) to authorize the Secretary of the Air Force to release and quitclaim a portion of a right-of-way easement to Langley Air Force Base, Va. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That the Secretary of the Air Force is authorized to release and quitclaim to the Commonwealth of Virginia, subject to such conditions as are deemed ad- visable by him, all right, title, and intcrest of the United States in and to the westerly 43 feet of an easement 70 feet in width and approximately three-quarters of a mile in length, together with the road located there- on, situate in Elizabeth City County, Vir- ginia, between the southwest prong of Back River and the Little Back River Road, said easement being that set out on sheet num- dered 2 of a map entitled ‘Langley Air Force Base, Railway and Access Road’’ dated Feb- ruary 5, 1948, Drawing No. NAD 49, on file in the office, Chief of Engineers, Department of the Army. 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. PROCEDURE FOR CLAIMANTS OF MINING CLAIMS The Clerk called the bill (H. R. 6406) providing procedure for claimants of mining claims in the United States ob- taining credit for assessment work per- formed during the year ending July 1, 1949, under the provisions of Public Law 107, Eighty-first Congress. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That every claimant of a mining claim in the United States who wishes to obtain the benefits conferred by the second proviso to the first section of the act of June 17, 1949 (Public Law 107, 8lst Cong.), may file, or cause to be filed, in the office where the location notice or certificate is recorded, on or before 12 o'clock meridian on the lst day of July 1950, a state- ment of the labor performed or improvements made on any such mining claim during the year ending July 1, 1949, or such statement may be included as part of the annual notice of the performance of assessment work for the year ending at 12 o'clock meridian on the ist day of July 1950. 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. CONGRESSIONAL RECORD—HOUSE TERMINATING LUMP-SUM BENEFITS TO CERTAIN RESERVE OFFICERS The Clerk called the bill (H. R. 6921) to terminate lump-sum benefits provided by law to certain Reserve officers of the Navy and Air Force. The SPEAKER. Is there objection to the present consideration of the bill? Mr. FORD. Mr. Speaker, reserving the right to object, I would like to ask a question of some member of the commit- tee. Am I right in my interpretation of this bill that it intends doing away with all lump-sum payments for those who entered into naval aviation? Mr. KILDAY. It would repeal the pro- vision now in the law, but suspended, under which those in naval aviation and the Air Force who hold Reserve commis- sions are entitled to a lump-sum pay- ment of $500 for each year completed of active duty. No Reserve officers are now accruing this benefit at this time because it is suspended by the Selective Service Act. If the Selective Service Act is not to be extended, then of course the mem= bers of the Reserve would begin to ac= crue the $500 lump sum. It is the opin- jon that it is no longer necessary as an inducement. Many Reserve officers who were slated for relief from active duty were desirous of remaining and we feel it is the proper time to eliminate this Jump-sum payment, Mr. FORD. May I say to the gentle- man from Texas I agree with the ob- jective of this proposal. I would like to make certain, however, that those who stayed in naval aviation after the war and who have not as yet collected their lump-sum payments under the original act will be taken care of. I would not like to see any unfair discrimination. Mr. KILDAY. It is not intended that they would be able to accumulate any- thing in addition. All sums accumulated before the suspension will be paid. In 1942 in naval aviation, by Executive order, the lump-sum payment was sus- pended, and then in 1948 it was sus- pended under the Selective Service Act as to both services. The maximum to be collected is $500 a year for 7 years. Mr. FORD. Mr. Speaker, I withdraw my objection. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That no further credit shall be allowed for any period of active serv- ice performed after June 24, 1948, in com- puting lump-sum payments to Air Force Ree serve officers or their beneficiaries, under sec- tion 2 of the act of June 16, 1936 (49 Stat. 1524), as amended, nor to Reserve officers of the Navy or Marine Corps or to their bene- ficlaries, under section 12 of the act of August 4, 1942 (56 Stat. 738), as amended. Sec. 2. This act shall not be construed so as to deprive any individual of any benefits heretofore accrued under the acts cited in section 1 of this act, including the prorating of payments thereunder for additional frac- tional parts of years of active service as pros vided for by section 18 (c) of the act of June 24, 1948 (Public Law 759, Eightieth Con- gress): Provided, That hereafter the release of an officer from active duty shall not be construed as a release from active duty upon his own request within the meaning of sec- tion 2 of the act of June 16, 1936, supra, as FEBRUARY 6 amended or section 12 of the act of August 4, 1942, supra, as amended. The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to re- consider was laid on the table. PROVIDING A CIVIL GOVERNMENT FOR GUAM The Clerk called the bill (H. R. 4499) to provide a civil government for Guam, and for other purposes, Mr, DEANE. Mr. Speaker, I ask unanimous consent that this bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. PROVIDING A SINGLE SUPPLY CATALOG SYSTEM The Clerk called House Concurrent Resolution 97, to provide for a single supply catalog system. There being no objection, the Clerk read the resolution, as follows: Whereas the Congress believes that the de- velopment of a single supply catalog system for the National Military Establishment is of vital necessity to the national security and to the civilian economy; and Whereas the Commission on Organization of the Executive Branch of the Govern- Ment recommends that a declaration of congressional policy be made to insure the development of uniform property identifi- cation; and Whereas the Federal Supply Task Force of that Commission, among other recommen- dations, stated that action by the Secretary of Defense should be taken to see that a single supply catalog system shall be speed- ily prepared and adopted; that, after its prep- aration, it must be used in all supply oper- ations of all bureaus, technical services, and commands without modification; and that each bureau, technical service, and com- mand must assist in the preparation of the catalog system by accepting and promptly completing catalog ‘assignments’ by the Catalog Agency in whatever commodity classes it is made the cognizant body; and Whereas a subcommittee of the House Armed Services Committee has carried on extensive hearings on this subject: There- fore be it Resolved by the House of Representatives (the Senate concurring), That it is the sense of the Congress that— (1) The Secretary of Defense shall expe- dite the development and completion of the single supply catalog system, in order that there shall be published and put into use at the earliest practicable moment a single supply catalog system to be used by all de- partments of the National Military Estab- lishment; and (2) In order that these purposes may be achieved it ts deemed essential that such authority be vested tn qualified personnel of the National Military Establishment with respect to cataloging and related supply ace tivities as is needed to insure the establish- ment of programs and priority schedules for property identification and description work, and to insure that operations in each bureau, technical service, or command are carried on in accordance with established uniform policies and approved priority schedules, and to provide the Congress and the Bureau of the Budget with periodic reports showing the progress of the program as a whole as well @ the progress made by each bureau, techni- cal service, or command with the assign- ments made to it; and
1950 (3) In the single supply catalog system each property item shall have but one name and one description and one item identifica- tion number; and (4) The single supply catalog system shall provide a classification system or systems suitable for all supply purposes; and (5) The single supply catalog system shall identify, classify, and describe the millions of items of personal property used by all mili- tary agencies and will provide a standard reference language or terminology to be used by all persons engaged in the processes of supply (computation of requirements in relation to inventories and operating pro- grams, procurement, storage, disposal, budg- eting and accounting); and (6) Reports and records of military agen- eles concerning supply operations and prop- erty management, including production, export, import, procurement, distribution, utilization, and disposal of commodities shall be made in terms of the nomenclature of the single supply catalog system, and (7) In order to prevent duplication of functions, of responsibility, and of publica- tion costs, each item of supply or descriptive title for an article or closely related family of articles serving the same supply need shall be assigned to a single technical serv- ice, bureau, or command for the develop- ment of complete identification data for items assigned to it and for development of the material thei1eon for inclusion in the supply catalog system in accordance with the uniform single supply catalog system; and (8) The Secretary of Defense shall develop @ coordinated publication plan, which will insure that identification and description data, wherever developed, shall be puolished in a uniform manner, but each technical service, bureau or command shall utilize per- tinent uniform identification o: description material for inclusion im its own operating catalogs, unit publications, or technical handbooks. With the following committee amend- ment: Page 1, strike out the wheiens clauses, and all atter the enacting clause down to and including line 11 on page 4, and insert “Whereas the Congress believes that the development of a single supply catalog sys- tem for all agencies of the Federal Govern- ment, both civilian and military, is of vital necessity to the national security and to the civilian economy; and “Whereas the Commission on Organization of the Exccutive Branch of the Government recommends that a declaration of congres- sional policy be made to insure participution and cooperation of the military and civilian agencies in the development of uniform property identification; and “Whereas the Federal Supply Task Force of that Commission, among other recommen- dations, stated that ‘the interests of nation- al defense and effective personal property management demand that a single standard Federal Commodity Catalog be developed * * *' and that action by the Secretary of Defense should be taken to insure that, after its preparation, it is used in all supply operations of all bureaus, technical services, and commands without modification and that each bureau, technical service, and com- mand must assist in the preparation of the catalog system by accepting and promptly completing cataloging assignments made to it by competent authority; and “Whereas a subcommittee of the House Armed Services Committee has carried on ex- tensive hearings on this subject: Therefore be it “Resolved by the House of Representatives (the Senate concurring), That it is the sense of the Congress that— CONGRESSIONAL RECORD—HOUSE “(1) The Secretary of Defense and the Ad- ministrator of General Services shall, based on their respective responsibilities, expedite the development of a coordinated plan looks ing to the completion of the Federal Cata- log System in order that there shall be pub- lished and put into use at the earliest prac- ticable moment a single supply catalog sys- tem to be used by all departments of the National Military Establishment and by all civil agencies, and “(2) In order that these purposes may be achieved, it is deemed essential that such authority be vested in qualified personnel of the National Military Establishment and the General Services Administration with re- spect to cataloging and related supply activi- ties as is needed to insure the establishment of programs and priority schedules for prop- erty identification and descriplion work, and to insure that cataloging operations in each bureau, technical service, command, or civil- jan agency are carried on in accordance with established uniform policies and approved priority schedules, and to provide the Con- gress and the Bureau of the Budget with periodic reports showing the progress of the program as a whole as well as the progress made by each bureau, technical service, or command with the assignments made to it; and “(3) In the Federal Catalog System each property item shall have but one name and one description and one item identification number, and “(4) The Federal Catalog System shall pro- vide a classification system or systems suit- able for all supply purposes, and “(5) The Federal Catalog System shall identify, classify, and describe the millions of items of personal property used by all agencies and will provide a standard refer- ence language or terminology to be used by all persons engaged in the process of supply (computation of requirements in relation to inventories and operating programs, procure- ment, distribution, storage, disposal, budget- ing, and accounting); and “(6) Reports and records of Fede1al agen- cies concerning supply operations and prop- erty management, including production, ex- port, import, procurement, distribution, utilization, and disposal of commodities shall be made in terms of the nomenclature of the Federal Catalog System; and “(7) In order to prevent duplication of functions, cataloging tasks will be assigned to technical services, bureaus, commands, and civilian agencies by a central cataloging authority. Effectuation of the purposes of this resolution will require that each tech- nical service, bureau, command, and civillan agency accept and promptly complete cata- loging task assignments. In discharging its responsibility under the program, each tech- nical service, bureau, command, or civiltan agency shall consult with other interested services, bureaus, commands, or agencies as it deems appropriate or as directed by central authority, and “(8) The Secretary of Defense and the Administrator of General Services shall de- velop a coordinated publication plan which will insure that identification and descrip- tion data, wherever developed, shall be pub- lished in a uniform manner; but each tech- nical service, bureau, command, or civiltan agency shall utilize pertinent uniform identi- fication or description material for inclusion in its own catalogs, unit publications, or technical handbooks.” The committee amendment was agreed to. The concurrent resolution was agreed to. A motion to reconsider was laid on the table. 1521 PROVIDING LIMITING PARTICIPATION UNDER NATIONAL SERVICE LIFE INSUR- ANCE ACT OF 1940 The Clerk called the bill (H. R. 1241) to provide for limiting participation as beneficiary under the National Service Life Insurance Act of 1940, as amended, and for other purposes. The SPEAKER. Is there objection to the present consideration of the bill? Mr. BYRNES of Wisconsin. Mr. Speaker, reserving the right to object, will some Member explain the objections which were apparently raised by the Vet- erans’ Administration to this legislation? As I understand it they advised that it would create some considerable diffi- culty so far as the administration of the provisions is concerned and that there would also be a considerable expense in administration. Can the gentleman ex- plain that situation? Mr. RANKIN. This bill was intro- duced by the gentleman from Texas | Mr. Teacuge]. It excludes from the definition of the terms “parent,” ‘“father,”’ and “mother,” in the National Service Life Insurance Act, any parent who shall have abandoned or deserted his family for a period of 7 ycars and who shall remain in such desertion at the time the insurance matured. An identical] bill to this one was passed in the Eightieth Congress. There will be no additional cost. It applies only to insurance which matured prior to August 1, 1946. Mr. BYRNES of Wisconsin. Would the gentleman explain whether the vet- eran himself would have an opportunity to chanse the beneficiaries, for instance, if he had been abandoned? That would be his right to do that, would it not? This would take care of the situation where he did not take action; is that not correct? Mrs. ROGERS of Massachusetts. Mr. Speaker, will the gentleman yield? Mr. BYRNES of Wisconsin. I yield. Mrs. ROGERS of Massachusetts. Sometimes the veteran docs not realize his rights. He should be protected. 1 think this gives more protection to the veteran. Mr. BYRNES of Wisconsin. In other words it is your feeling and the feelin? of the committee that notwithstanding the possibility of greater administrative difficulties the rights of the veteran him- self really require that this be done. Mrs. ROGERS of Massachusetts. Of course, we should protect the veterans, also. That is the reason we passed the legislation for the veterans. Mr. RANKIN. And it was passed out of the committee unanimously. Mr. TEAGUE. Will the gentleman yield? Mr. BYRNES of Wisconsin. I yield. Mr. TEAGUE. There are many cases where the veteran did not have a chance to change his insurance. Mr. BYRNES of Wisconsin. Mr. Speaker, under the circumstances, I will withdraw my reservation of objection. The SPEAKER. Is there objection to the present consideration of the bill?
1522 There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That section 601 (f) of the National Service Life Insurance Act of 1940, as amended, is hereby amended effcce tive as of October 8, 1940, to read as follows: “(f) The terms ‘parent,’ ‘father,’ and ‘mother’ include a father, mother, father throurh adoption, mother through adoption, pereons who have stood in loco parentis to a member of the military or naval forces at any time prior to entry into active service for a period of not less than 1 year, and a step- parent, if designated as beneficiary by the insured: Provided, That if either parent shall have abandoned his or her family for seven or more years, and shall have remained in abandonment as of the date on which national service Hfe insurance matured by reason of the death of his or her child, such person shall not be considered as the ‘parent,’ ‘father,’ or ‘mother’ of such child and shall not be entitled to participate in such insur- ance ” Sec 2 The amendment made by section 1 of this act to section 601 (f) of the Naticnal Service Life Insurance Act of 1940, as amend- ed, shall not be construed (1) to require the discontinuance of any insurance award, for any period prior to the receipt in the Veter- ans’ Administration of evidence of such abandonment, or (2) require duplicate pay- ments of benefits in any case. 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. AMENDING SECTION 3 OF THE ORGANIC ACT OF PUERTO RICO The Clerk called the bill (H. R. 5282) to amend section 3 of the Organic Act of Puerto Rico. The SPEAKER. Is there objection to the present consideration of the bill? There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That section 3 of the act entitled “An act to provide a civil gov- ernment for Porto Rico, and for other pur- poses,” approved March 2, 1917, as amended, is hereby amended by inserting in the first proviso after the word “Ponce” a comma and the word “Arecibo.” With the following committee amend- ment: Page 1, line 7, strike out “word ‘Arecibo’ ” and insert “words ‘Arecibo, Rio Piedras’.”” 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. TO CORRECT A CLERICAL ERROR IN CIVIL-8SERVICE LAW The Clerk called the bill (H. R 6552) to correct a clerical error in section 2 of the act of January 16, 1883, an act to regulate and improve the civil service of the United States, as amended by Public Law 425, Fighty-first Congress. The SPEAKER. Is there objection to the present consideration of the bill? There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That the second sen- tence of the third paragraph of the second clause of section 2 of the act of January 16, 1883, entitled “An act to regulate and im- prove the civil service of the United States," as amended, is hereby amended by striking out the words “legal voting recidence” and in- serting in leu tnereof the words “legal or voting residence.” CONGRESSIONAL RECORD—HOUSE 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. MINIMUM RATE OF COMPENSATION FOR WORLD WAR II VETERANS WHO HAVE ARRESTED TUBERCULOSIS The Clerk called the bill (H. R. 6559) to amend the Veterans Regulations to provide a minimum rate of compensation for World War II veterans who have ar- rested tuberculosis, The SPEAKER. Is there objection to the present consideration of the bill? Mr. FORD. Mr. Speaker, I ask unani- mous consent that this bill be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from Mich- igan? Mr. RANKIN. Mr. Speaker, reserving the nght to object, I hope the gentleman will not do that. This merely puts World War II veterans on the same footing as World War veterans who heve con- tracted tuberculosis. It is most neces- sary that these tuberculosis cases be pro- vided for, not only for themselves but also to enable them to protect the public against the spread of tuberculosis. I hope the gentleman will not object to the consideration of this bill. Mr. FORD. Was this a unanimous re- port from the committee? Mr. RANKIN. Yes; it was. Mr. FORD. I notice the Bureau of the Budget advises the enactment of this bill would not be in accord with the Pres- ident’s program. Mr. RANKIN. I doubt if the President ever saw the bill, and I have some doubts whether the Bureau of the Budget ever saw it or not. But whether the Bureau of the Budget likes it or not, it is our duty to teke care of these tuberculosis cases and protect the country against the spread of tuberculosis as much as possible. That is what this bill does. It merely puts these World War II tuber- cular men on the same footing as vet- erans of World War I. Mr. FORD. I notice that for the first year the additional cost is estimated to be $475,000. Is there going to be an in- creased cost every year? Mr. RANKIN. I doubt it. My opin- fon is that there will not be. In addi- tion, it will probably save many times that much to the American people. Mr. KEATING. Mr. Speaker, will the e°-ntleman yield? Mr. RANKIN. I yield. Mr. KEATING. Could the chairman of the committee tell us what the Presi- dent’s program is in that regard? Mr. RANKIN. No. Mrs. ROGERS of Massachusetts. Will the gentleman yield? Mr. RANKIN. I yield. Mrs. ROGERS of Massachusetts. It is very difficult for these tubercular men to secure jobs, If an employer knows they have tuberculosis they will not em- ploy them. Also, this will take a great many men off the relief rolls, if the leg- islation is passed. Mr. RANKIN. Just the other day I saw a person whom I know who had tu- berculosis. And one of his children con- tracted tuberculosis because of its con- FEBRUARY 6 tact with him. This bill enables those men not only to live but to protect the public against the spread of tubercu- losis insofar as they are able to do s0. I think it is not only legitimate and just, but I think it is absolutely necessary. Mr. JUDD. Mr. Speaker, will the gen- tleman yield? My. RANKIN. I yield. Mr. JUDD. Were these cases of tu- berculosis contracted after termination of the service? Mr. RANKIN. No. They are service- connected cases, but they have become arrested. If they have to go out and do heavy work, the chances are it will recur. This bill has a great deal of merit inso- far as it protects the people of the coun- try from a recurrence and spread of tu- berculosis. Mr. JUDD. But the point fs that the disease was contracted while they were in the service. Mr. RANKIN. That is right. Mr. JUDD. Even though it was peace- time service. Mr. RANKIN. Peacctime _ service gives them 80 percent of the rate. That is in the law; that is already the law. Mr. FORD. This affects only service- connected tuberculosis cases, is that cor- rect? Mr. RANKIN. That is right. Mr. FORD. In the light of the gen- tleman’s statement, I withdraw my ob- jection. The SPEAKER. Is there objection to the present consideration of the bill? There being no objection, the Clerk read the biil, as follows: Be it enacted, etc., That paragraph II, part I, Veterans Regulation No, 1 (A), as amended, is hereby amended by adding a new subparagraph (q) thereto to read as follows: “(q) If the disabled person is shown to have had a service-incurred disability result- ing from an active tuberculous disease, Which disease in the judgment of the Administrator of Veterans’ Affairs has reached a condition of complete arrest, the monthly compensa- tion shall be not less than #60.” Sec 2. This act shall be effective from the first day of the second calendar month fol- lowing the date of enactment of this act. The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to re- consider was laid on the table. EXTENDING CERTAIN VETERANS’ BENE- FITS TO HUSBANDS AND WIDOWERS OF FEMALE VETERANS The Clerk called the bill (H. R. 6561) to extend certain veterans’ benefits to or on behalf of dependent husbands and widowers of female veterans. The SPEAKER. Is there objection to the present consideration of the bill? Mr. YOUNG. Mr. Speaker, I reserve the right to object. Mr. RANKIN. Mr. Speaker, I hope the gentleman will not object. This is very necessary 1f we are going to treat those women who were taken into the service on an equality with the men with whom they served. Mr. YOUNG. Mr. Speaker, this is too far reaching, extending to widowers and husbands benefits under this law. Until we ascertain the cost, I object.
1950 AMENDMENT OF VETERANS REGULATIONS The Clerk called the bill (H. R. 6562) to amend the Veterans Regulations to provide additional compensation for the loss or loss of the use of a creative organ. Mr.CUNNINGHAM. Mr. Speaker, re- serving the right to object, and I do not intend to, this is an extremely merito- rious bill; it is one that should be passed, and I believe every Member of the House will vote for it. It would, however, call for an expenditure the first year of about $8,500,000. The rules of the Commitise of Objectors on the Consent Calendar require that any bill involving the ex- penditure of more than a million dollars may not be passed by unanimous consent. I am wondering if the gentleman from Mississippi, the chairman of the Com- mittee on Veterans’ Affairs, would not be able to get a rule on this measure or ask that it be called up under a suspen- sion of the rules at the close of the call of the calendar today. Mr. RANKIN. Let me say to the dis- tinguished gentleman from Iowa that the million-dollar-limitation rule is, long since, extinct by reason of the failure of Congress to comply with it. I think it should not be called into opcration in this instance. I believe these are merito- rious cases. Mr. CUNNINGHAM. I agree with the gentleman from Mississippi; it is an ex- tremely meritorious bill, but my question was whether he could not secure recogni- tion to call it up under a suspension of the rules this afternoon so as not to vio- late the rule of the Committee of Objectors. Mr. RANKIN. I see the Speaker shake his head, which indicates the negative. The SPEAKER. The Chair an- nounced last week that there would be no suspensions recognized today. Mr. CUNNINGHAM. Would the gentleman not be able to secure a rule from the Committee on Rules? Mr. RANKIN. The gentleman will remember that the House virtually abolished the Committee on Rules the other day. Where would Igo? This is about the only chance we have to get this bill up. Mr. FORD. Mr. Speaker, I ask unan- imous consent that the bill may be passed over without prejudice. The SPEAKER. Is there objection to the request of the gentleman from Michigan? There was no objection. AMENDING TITLE III OF THE SERVICE- MEN’S READJUSTMENT ACT OF 1944, TO PROVIDE FOR TREBLE-DAMAGE AC- TIONS The Clerk called the bill (H. R. 6673) to amend title III of the Servicemen’s Readjustment Act of 1944, as amended, by providing for treble-damage actions. Mr. CUNNINGHAM. Mr. Speaker, re- serving the right to object, I would like to ask the Committee on Veterans’ Af- fairs a question regarding this bill. I notice that it will provide that if a piece of property is sold to a veleran—I assume a GI of World War II—for any amount of money in excess of the value fixed for the property by an authorized appraiser CONGRESSIONAL RECORD—HOUSE of the Veterans’ Administration, then the seller would be liable treble damages in a suit. Ican see the purpose that the com- mittee had in mind recommending sucha bill—to prevent the sale to veterans of properties in excess of their actual value. The passage of the bill, however, would make the appraisers of the Veterans’ Ad- munistration the arbiters or the sole judges of the value of the property, and if they fail to appraise it at an amount near the market value or actual value in the respective community, it would work as a detriment to the GI and make it im- possible for him in many instances to secure any loan whatever. Mr. RANKIN. I may say to the gentle- man from Iowa that I introduced this bill, as he will see by looking at it, at the request of the Department of Justice. I understand that these appraisers will be local men and not be employed by the Federal Government. Mr. CUNNINGHAM. The appraiser appralses for loan purposes rather than for sale purposes, and it might not work to the best interest of the veteran in many cases in being able to take advan- tage of the loan title of the GI bill of rights. I fear it will make it impossible for him to purchase a property at all in many instances. Mr. RANKIN. He only appraises the sale value of the property Mr. CUNNINGHAM. No. He ap- praises a big part of it for loan purposes. Mr. EVINS. Mr. Speaker, I would like to support my chairman on this bill. It 18 & very meritorious piece of legislation and has the unanimous approval of the Department of Justice and the Veterans’ Administration. Mr. CUNNINGHAM. Docs the gentle- man feel that the interest of the veteran will not be interfered with by the passage of this bill? Mr. EVINS. No; Ido not think so. On the contrary, I think the interest of the veteran will be protected. Mr. RANKIN. Whenever the Depart- ment of Justice, the Bureau of the Budg- et, and the Veterans’ Administration get together on anything, you need not have any fears Mr. CUNNINGHAM. Mr. Speaker, I withdraw my reservation. Mr. FORD. Mr. Speaker, reserving the right to object, what is the length of the statute of limitations? Mr. RANKIN. I think it is 3 years. At least, that is my recollection. Mr. FORD. I do not see anything in the bill about that. Mr. RANKIN. The regular statute of limitations in the State would apply. Mr. FORD. For any civil action? Mr. RANKIN. It would not be retro- active. Mr. FORD. Docs the gentleman from Tennessee know about that? Mr. EVINS. The statute of the State applies. There have been many cases in which real-estate opcrators have charged an excessive price to veterans to purchase homes. The purpose of this bill is to prevent that underhanded prac- lice. It is left to the Department of Justice to determine whether or not the case shall be prosecuted through the office of the district attorney. There is no cost attached to this legislation. 1523 Mr. CASE of South Dakota. Mr, Speaker, reserving the right to object, would this be retroactive in any way? Mr. RANKIN. No. The SPEAKER. Is there objection to the present consideration of the bill? There being no objection, the Clerk read the bill, as follows: Be it enacted, ete., That title III of the Servicemen's Readjustment Act of 1944, as amended, is amended by inserting after sece- tion 503 the following new section: “RECOVERY OF DAMAGES “Sec. 603A. Whoever knowingly mak2s, effects, or participates In a sale of any props erty to a veteran for a consideration in ex- cess of the reasonable value of such property as determined by proper appraisal made by an appraiser designated by the Admintstra- tor, shall, if the veteran pays for such prop- erty in whole or in part with the proceeds of a loan guaranteed by the Veterans’ Admin- istration under sections 501, 502, or 503 of this title, be liable for three times the amount of such excess consideration irrespective of whether such person has received any part thereof. “Actions pursuant to the provisions of this section may be instituted by the veteran concerned, in any United States district court, which court may, as a part of any judgment award costs and reasonable ate torneys’ fees to the successful party. In the event the veteran shall tail to institute any action hereunder within 30 days after dis- covering he has overpaid, or having instl- tuted an action shall fail diligently to prose- cute the same, or upon request by the vet- eran, the Attorney General, in the name of the Government of the United States, may proceed therewith, in which event one-third of any recovery in said action shall be paid over to the veteran and two-thirds thereof shall be paid into the Treasury of the United States. “The remedy provided in this section shall be in addition to any and all other penalties imposed by law.” 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. AMENDMENT TO TITLE III OF THE SERV- ICEMEN'S READJUSTMENT ACT OF 1944, AS AMENDED The Clerk called the bill (H. R. 6553) to provide for the promotion of carriers in the rural delivery service in recogni- tion of longevity of service. The SPEAKER. Is there objection to the present consideration of the bill? Mr. BYRNES of Wisconsin, Mr. Speaker, reserving the right to object, I wonder if the chairman of the com- mittee can advise us as to the difference in the cost estimates here? I understand the committee docs not feel the cost will be as much as that set forth by the De- partment; is that correct? What would be the cost of this bill? Mr. MURRAY of Tennessee. I think the Post Office Department has stated the cost of this legislation correctly. Let me say that this is a bill to clarify sub- section (e) of section 2 of Public Law 428 passed by the Congress and signed by the President on October 28, 1949. In that bill Congress gave its approval to this section, which reads as follows: Each officer or employee in the postal fleld service shall have credited to him for pur- poses of promotion to any of the meritorious or longevity higher grudes of his position
1524 established under this act or such act of July 6, 1945, as amended, all periods of serv- {ce performed by him prior to July 1, 1945, for which he has not heretofore received credit for purposes of promotion. It was clearly the intent of the Post Office and Civil Service Committee and the intent of the Congress when that legislation was passed to provide that all pcestal employees shall have credit for all past service as employees performed before July 1, 1945. The report on the bill included this additional cost. The Comptroller General held after this bill became law that because the rural car- riers did not have any automatic annual raises prior to July 1, 1945, they should only receive credit for service from July 1, 1945, on their longevity or meritorious grades. Congress intended unquestion- ably to give the rural carriers credit for all their service. This does not call for an additional appropriation. We passed the bill with this understanding and in- cluded the cost of the legislation in the report on this bill at that time. Mr. BYRNES of Wisconsin. In other words it is the position of the chairman that this bill is really a clarifying bill to correct an oversight Mr. MURRAY of Tennessee. Exactly. Mr. BYRNES of Wisconsin. In reali- ty, when Public Law 428 was before the Congress, it was intended that the pur- pose of this bill was included in that leg- islation, is that right? Mr. MURRAY of Tennessee. Exactly so This bill merely clarifies and spells out the express intent that Congress had in passing Public Law 428 last October. Mr. BYRNES of Wisconsin. Would the gentleman at this time also tell us whcther there is the same situation in connection with Calendar 436, H. R. 6603, wh:ch is coming up in just a few minutes? Does the same situation exist there? Mr. MURRAY of Tennessee. That is practically the seme situation. How- ever, there is this dfference. That bill refers to custodial employees and those {in {he mail equipment shops. In October 1923, the President, by Executive order, transferred all custodial employees from the Treasury Department to the Post Of- fice Department. They became, by Ex- ecutive order, regular employees of the Postal Service. However, Congress did not pass legislation carrying out this Ex- ecutive order until October 1943. There- fore the Comptroller General held that bccause Congress did not make these custcdial employees by law regular em- Joyees until July 1, 1943, they should re- ceive no credit before July 1, 1943 for such service on their longevity credits. Mr. BYRNES of Wisconsin. I notice that the department has registered somewhat of an objection to both of these bills on the basis that other employees are also involved in a similar situation to that which exists so far as rural car- riers and custodial employees are con- cerned, and they say it would seem that any legislation should cover all em- ployees similarly affected and not a single group or class. What other class now will still need consideration? Mr. MURRAY of Tennessee. Con- sideration should be given to special de- livery messengers and to some third class CONGRESSIONAL RECORD—HOUSE post office clerks. However, there is no unanimity of opinion as to how that leg- islation should read, and your Commit- tee on Post Office and Civil Service thinks it best to handle these two bills separately. Mr. BYRNES of Wisconsin. I under- stand that the committee is working on legislation affecting those other cate- gories. Mr. MURRAY of Tennessee. That is correct. Mr. BYRNES of Wisconsin. I with- draw my reservation of objection, Mr. Speaker. Mr. FORD. Mr. Speaker, further re- serving the right to object, I would like to ask the chairman a question. Is it the intention of the committee to report out legislation taking care of some of these other groups, such as special delivery messengers, and so forth? Mr. MURRAY of Tennessee. That is correct. We have some bills pending al- ready to take care of other groups. Mr. FORD. Would the gentleman say that special delivery messengers will be taken care of in this session? Mr. MURRAY of Tennessee. I think consideration will be given to them. Mr. REES. Mr. Speaker, will the gen- tleman yield? Mr. FORD. from Kansas. Mr. REES. Those matters are under consideration before the committee. It is a question of what the committee may do. Mr. FORD. Surely, but committee ac- tion will be taken, will it? Mr. REES. It will be considered. But, the gentleman cannot bind the commit- tee as to what it may report or not re- port. Mr. FORD. No, but if there is not go- ing to be any promise of action by the committee on these other categories, there is some argument for not permit- ting this to go through. Mr. REES. Well, as I see it, andI am @ minority Member, the committee will promise to give consideration to those matters. After all, it is for the commit- tee to determine what it wants. Mr. MURRAY of Tennessee. Mr. Speaker, if the gentleman will yield, I assure the gentleman from Michigan that all these other groups will receive consideration at the hands of our com- mittee. There will be some question about some of those groups, and we want to present satisfactory legislation to the House for consideration. Mr. SADLAK. Mr. Speaker, if the gentleman will yleld, my understanding is that there is an all-inclusive bill which has been introduced by the gentleman from California (Mr. MILLER], and we are awaiting reports from the various de- partments before action is taken on it. Mr. FORD. I withdraw my reserva- tion of objection, Mr. Speaker. The SPEAKER. Is there objection to the present consideration of the bill? There being no objection, the Clerk read the bill, as follows: Be it enacted, eto., That (a) the first section of the act entitled “An act to provide addi- tional compensation and other benefits for postmasters, officers, and employees in the I yield to the gentleman FEBRUARY 6 postal field service,” approved October 28, 1949, is hereby amended by adding at the end thereof the following new subsections: “(d) In recognition of longevity of service, carriers tn the Rural Delivery Service who (1) were in such service on June 30, 1945, or (2) are in grade 11 or above on or after the effective date of this subsection shall be pro- moted to grade 12 upon completion of 13 years of service; to grade 13 upon completion of 18 years of service; and to grade 14 upon completion of 25 years of service. The pro- visions of section 17 (a) of such act of July 6, 1945, as amended, relating to the promo- tion of carriers in the Rural Delivery Service to grades 12, 13, and 14 shall hereafter apply only to such carriers who are in grade 11 or above on the effective date of this sub- section and who elect to have such provisions apply to them. “(e) For the purposes of subsections (c) and (d), all service heretofore or hereafter rendered in the postal field service by any person entitled to the benefits of either of such subsections shall be credited.” (b) The last sentence of subsection (c) of the first section of such act of October 28, 1949, is hereby repealed. Sec 2. The amendments made by the first section of this act to such act of October 28, 1949, shall take effect as of November 1, 1949. With the following committee amend- ments: Page 1, line 7, strike out the word “subsec- tions” and insert in Meu thereof the word “subsection.” (b) Page 2, strike out lines 9 to 15, both inclusive, and insert in lieu thereof the fol- lowing: “to have such provisions apply to them. For the purposes of this subsection, all continuous service heretofore or hereafter rendered in the postal fleld service by any carrier entitled to the benefits of this subseo- tion shall be credited.” (c) Page 2, strike out lines 16 to 18, both inclusive, and insert in Heu thereof the fol- lowing. ‘Src 2 The amendment made by the first section of this act to such act of October 28, 1919, shall take effect as of November 1, 19:9, and shall apply only to carriers in the Rural Delivery Service on or after the date of en- actment of this act.” The amendments were 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. AMENDING IMMIGRATION ACT OF 1917 AND NATIONALITY ACT OF 1940 The Clerk called the bill (H. R. 4684) to amend subsection (c) of section 19 of the Immigration Act of 1917 and sub- section (a) of section 338 of the Na- tionality Act of 1940. Mr. DEANE. Mr. Speaker, I ask unanimous consent that the bill be passed over without prejudice. Mr. WALTER. I object, Mr. Speaker. The SPEAKER. Is there objection to the present consideration of the bill? Mr. MARCANTONIO. Reserving the right to object, Mr. Speaker, may we have this bill explained? Mr. WALTER. Under the provisions of existing law, the Attorney General is empowered to adjust the status of aliens in this country and to stay the deporta- tion in certain hardship cases. Under the proposed legislation, 5 years is set up as the period during which the Attorney General may, upon receiving additional information, proceed with the deporta- tion of certain aliens whose deportation
1950 is stayed. This gives the Attorney General five more years within which to proceed against certain types of aliens. Mr. MARCANTONIO. I wish the gentleman would let it go over. I should like to study this bill. I am concerned with the implications in giving the At- torney General this power. Mr. WALTER. We have given to the Attorney General the power to stay the deportation of certain aliens. Mr. MARCANTONIO. That is right. Mr. WALTER. It has been learncd that, since their deportations have been staycd, in some cases after acquired evi- dence has been made available in view of which, if it had been called to the attention of the Attorney General, he would not have stayed the deportation. This merely gives him 5 years within which to proceed with deportations which ordinarily would have taken place but for the law that this seeks to amend. Mr. MARCANTONIO. Will the gen- tleman let it go over? Mr. WALTER. Yes. Mr. MARCANTONIO. Mr. Speaker, I ask unanimous consent that the bill be passed over without prejudice The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. POST OFFICE DEPARTMENT The Clerk called the bill (H. R. 6603) to provide that certain service performed in the custodial service and in the mail- equipment shops of the Post Office De- partment shall be credited toward pro- motion to the meritorious and longevity grades cstablished for the postal fleld service. There being no objection, the Clerk read the bill, as follows: Be it enacted, ele, That service performed (1) in the custodial service of the Post Office Department on and after October 1, 1933, and before October 18, 1943, and (2) in the mail-cquipment shops of the Post Office De- partment before July 1, 1945, shall be con- sidered postal fleld service fur purposes of promvifon to the meritorious and longevity prades estublished under the act of July 6, 1945, us amended (Public Law 134, 79th Consz ), and undcr the act of October 28, 1949 (Public Law 428, Bist Cong ) Src 2 This act shall take effect as of No- vember 1, 1949. With the following committee amend- ment: Page 2, line 5, strike out “1949” and in-~ sert “1949, and shall apply only to persons jn the postal field service on the date of enactment of this act.” The committee 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 re- consider was laid on the table. NAVAL RESERVE The Clerk called the bill (H. R. 6077) to clarify the status of inactive members of the Naval Reserve relating to the holding of offices of trust or profit under the Government of the United States. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc., That section 4 of the Naval Reserve Act of 1938 (52 Stat. 1176), as CONGRESSIONAL RECORD—HOUSE amended (34 U.S C. 863b), is hereby amend- ed further by substituting » comma for the period at the end thereof and adding the following: “and the Congress hereby grants its consent to officers and enlisted members of the Naval Reserve, while not on active duty, except those entitled to receive retainer pay or retired pay under any provision of law, to accept, subject to the approval of the Secretary of the Navy or such officer as he may designate, civil employment with, and compensation therefor from, any foreign government or any concern which is con- trolled in whole or in part by a foreign gov- ernment.” With the following committee amend- ment: Page 1, line 9, strike out “entitled to re- ceive" and insert “in receipt of any.” The committee amendment was agrezd 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. RETIRED NONCOMMISSIONED OFFICERS The Clerk called the bill (H. R 1151) to amend the act establishing grades of certain retired noncommissioned officers. There being no objection, the Clerk read the bill, as follows: Be it enacted, etc , That chapter 310 of the laws of the Sixty-ninth Congress, Public Law 713 of March 3, 1927 (title 10, 6042 U S C), is hereby amended by adding two new sec- tions at the end thereof as follows. Sec. 2. Noncommissioned officers on the retired lst of the Regular Army placed in second grade; all other sergeants (first class) retired as such and all other sergeants (first class) who were changed to staff sergeants by the act of June 4, 1920, and who continued as such or who continued as staff sergeants or who became technical sergeants until re- tirement in either the second grade or the third grade before July 1, 1922. Sec 3. The provisions of this act shall take effect on the first ot the month following the date of its enactment. With the following committee amend- ment: Strike out all after the enacting clause and insert the tollowing: “That chapter 310 of the laws of the Sixty-ninth Congress, Public Law 713 of March 3, 1927 (title 10, 6040 US C), is hereby amended by adding there- to the following: “‘Sec 2 The following noncommissioned officers on the retired list of the Regular Army are placed in the second grade (now sixth pay grade under Public Law 351, Highty- first Congress). All other sergeants (first class) retired as such and all other sergeants (first class) who were changed to staff ser- geants pursuant to the act of June 4, 1920, and who continued as such or who continued as staff sergeants or who became techuical sergeants until retirement in either the sec- ond grade or the third grade before July 1, 1922 ° . “Sec. 2 The provisions of this act shall take effect on the first of the month follow- ing the date of its enactment.” The committee 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. AMENDMENT OF BANKRUPTCY ACT Mr, COX. Mr. Speaker, by direction of the Committee on Rules, I call up 1525 House Resolution 441 and ask for its immediate consideration, The Clerk read the resolution, as follows: Resolved, That immediately upon the adoption of this resolution it shall be in order tu 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 (8S. 88) to amend section 60 of the act entitled “An act to establish a unl- form system of bankruptcy throughout the United States,” approved July 1, 1898, as amended. That after general debate, which shall be contined to the bill and continue not to exceed 1 hour, to be equally divided and contiolled by the chairman and ranking minority 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 except One motion to recommit. Mr. COX. Mr. Speaker, I yield 30 minutes to the gentleman from Michigan LMr, MIcHENER], Mr. Speaker, this is a matter which might well be handled by unanimous consent, as it does not appear that there is any opposition, or at least none has been evidenced thus far, so far as I am concerned, It 1s a matter on which the gentleman from Alabama |Mr. Hoses], the gentle- man from Illinois [Mr. Reep], and the gentleman from Pennsylvania [Mr. WALTER] have been working for a long time. The legislation is made necessary because of conflicting interpretations of the original Bankruptcy Act of 1898 made by the courts. The purpose is to clear up this confusion and to better in- sure proper and fair administration of the bankruptcy laws of the country. Mr. Speaker, I reserve the balance of my time. Mr. MICHENER. Mr. Speaker, there have been no requests for time on this side, The gentleman from Georgia |Mr. Cox! has made a general statement cor- rectly explaining the situation The gentleman from Alabama |Mr. Hosss) and the gentleman fro. Illinois |Mr. ReEEDI, members of the subcommittee, are very familiar with the details of the legislation and will explain it in debate on the bill which this rule makes in order. Mr. COx. Yes, that is right. The gentleman from Illinois |Mr. Reep] has given a great deal of time and attention to this as well, I might add, as the gen- tleman from Pennsylvania (Mr, Watrer), Mr. MICHENER. Well, everyone on the committee, let us say. Mr. Speaker, as I said, we have no requests for time on this side. Mr. COX. Mr. Speaker, I move the previous question. The previous question was ordered. The resolution was agreed to. Mr. HOBBS. Mr. Speaker, I ask unan- imous consent that the bill (8S. 88) to amend section 60 of an act entitled “An act to establish a uniform system of bankruptcy throughout the United
1526 States,” approved July 1, 1898, as amend- ed, be considered in the Fouse as in the Committee of the Whole. The Clerk read the title of the bill. The SPEAKER. Is there objection to the request of the gentleman from Ala- bama? There was no objection. The Clerk read the bill, as follows: Be it enacted, etc., That section 60 of an act entitled “An act to establish a uniform system of bankruptcy throughout the United States”, as amended by the act of June 22, 1938 (52 Stat. 840, 869), is hereby amended by striking out all of subdivision (a) of said section and substituting in Meu thereof the following: “(a) (1) A preference is a transfer, as de- fined in this act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within 4 months before the filing by or against him of the original petition initiat- ing @ proceeding under this act, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class: Provided, however, That this section shall have no application to proceedings under chapter IX of this act. “(2) For the purposes of subdivisions (a) and (b) of this section, and subject to the provisions of paragraph (3), @ transfer shall be deemed to have been made or suffered at the time when !t became so far perfected that no creditor obtaining under applicable law by legal or equitable proceedings on a simple contract a Men on such property, without a special priority (whether or not such a cred- itor exists), could acquire, after such per- fection, any rights in the property so trans- ferred superior to the rights of the transferee therein, and if such transfer is not so per= fected prior to the filing of the original peti- tion initlating a proceeding under this act, it shall be deemed to have been made im- mediately before the filing of such original petition: Provided, however, That where real property is transferred for or on account of an antecedent debt, the transfer shall be deemed to have been made at the time when—became so far perfected that no bona fide purchaser from the debtor could acquire, after such perfection, any rights in the prop- erty so transferred superior to the rights of the transferee therein. “(3) A transfer, wholly or in part, for or on account of a new and contemporaneous con- sideration shall, to the extent of such con- sideration and interest thereon and the other obligations of the transferor connected therewith, be deemed to be made or suffered at the time of the transfer, unless the ap- plicable law requires the transfcr to be per- fected by recording, delivery, or otherwise, in order that no creditor described in para- graph (2) could acquire, after such perfec- tion, any rights in the property so trans- ferred superior to the rights of the transferee therein. A transfer to secure a future loan, if such loan is actually made, or a transfer which become security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous con- sideration. If any requirement specified in this paragraph (8) exists the time of the transfer shall be determined by the following rules: “I Where (A) the applicable law specifies a stated period of time of not more than 30 days after the transfer within which record- ing delivery, or some other act is required, and compliance therewith is had within such stated period of time; or where (B) the ap- plicable law specifies no such stated period of time or where such stated period of time is more than 30 days, and compliance there- with 1s had within 30 days after the transfer, CONGRESSIONAL RECORD—HOUSE the transfer shall be deemed to be mede or suffered at the time of the transfer. “II. Where compliance with the law appli- cable to the transfer is not had tn accordance with the provisions of subparagraph I, the transfer shall be deemed to be made or suf- fered at the time of compliance therewith, and if such compliance is not had prior to the filing of the original petition initiating @ proceeding under this act, such transfer shall be deemed to have been made or suf- fered immediately before the filing of such original petition.” Amend the title so as to read: “An act to amend an act entitled ‘An act to establish a uniform system of bankruptcy throughout the United States’, approved July 1, 1898, and acts amendatory thereof and supplementary thereto.” With the following committee amend- ment: Strike out all after the enacting clause and insert in Meu thereof the following: “That subdivision a of section 60 of the act entitled ‘An act to establish a uniform sys- tem of bankruptcy throughout the United States,’ approved July 1, 1898, as amended, is amended to read as follows: “‘a, (1) A preference is a transfer, as de- fined in this act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within 4 months before the filing by or against him of the petition initiating a pro- ceeding under this act, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class. (2) For the purposes of subdivisions a and b of this section, a transfer of prop- erty other than real property shall be deemed to have been made or suffered at the time when it became so far perfected that no sub- sequent len upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. A transfer of real prop- erty shall be deemed to have been made or suffered when it became so far perfected that no subsequent bona fide purchase from the debtor could create rights in such property superior to the rights of the transferee. If any transfer of real property is not so per- fected against a bona fide purchase, or if any transfer of other property is not so per- fected against such liens by legal or equitable proceedings prior to the filing of a petition initiating a proceeding under this act, it shall be deemed to have been made immedi- ately before the filing of the petition. “"(3) The provisions of paragraph (2) shall apply whether or not there are or were credi- tors who might have obtained such liens upon the property other than real property transferred and whether or not there are or were persons who might have become bona fide purchasers of such real property. “*(4) A len obtainable by legal or equita- ble proceedings upon a simple contract within the meaning of paragraph (2) is a lien arising in ordinary course of such pro- ceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after Judgment or decree and whether before or upon levy. It does not include liens which under applica- ble law are given a special priority over other lens which are prior in time. “*(5) A lien obtainable by legal or equita- ble proceedings could become superior to the rights of a transferee or a purchase could create rights superior to the rights of a trans- feree within the meaning of paragraph (2), if such consequences would follow only from the lfen or purchase itself, or from such lien or purchase followed by any step wholly within the control of the respective len FEBRUARY 6 holder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become so superior and such a purchase could not create such superior rights for the purposes of para- graph (2) through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agree- ment or concurrence of any third party or which require any further judicial action, or ruling. “«(6) The recognition of equitable liens where available means of perfecting legal liens have not been employed is hereby de- clared to be contrary to the policy of this section. If a transfer is for security and if (A) applicable law requires a signed and delivered writing, or a delivery of possession, or a filing or recording, or other like overt action as a condition to its full validity against third persons other than a buyer in the ordinary course of trade claiming through or under the transferor and (B) such overt action has not been taken, and (C) such transfer results in the acquisi- tion of only an equitable lien, then such transfer is not perfected within the mean- ing of paragraph (2). Notwithstanding the first sentence of paragraph (2), it shall not suffice to perfect a transfer which creates an equitable lien such as is described in the first sentence of paragraph (6), that it is made for a valuable consideration and that both parties intend to perfect it and that they take action sufficient to effect a trans- fer as against Mens by legal or equitable proceedings on a simple contract: Provided, however, That where the debtor's own inter- est is only equitable, he can perfect a trans- fer thereof by any means appropriate fully to transfer an interest of that character: And provided further, That nothing in para- graph (6) shall be construed to be contrary to the provisions of paragraph (7). ““(7) Any provision in this subdivision a to the contrary notwithstanding if the ap- plicable law requires a transfer of property other than real property for or on account of a new and contemporaneous consideration to be perfected by recording, delivery, or oth- erwise, in order that no lien described in paragraph (2) could become superior to the rights of the transferee therein, or if the applicable law requires a transfer of real property for such a consideration to be so perfected in order that no bona fide pur- chase from the debtor could create rights in such property superior to the rights of the transferee, the time of transfer shall be de- termined by the following rules: “‘T, Where (A) the applicable law speci- fies a stated period of time of not more than 21 days after the transfer within which re- cording, delivery, or some other act is re- quired, and compliance therewith is had within such stated period of time; or where (B) the applicable law specifies no such stated period of time or where such stated period of time is more than 21 days, and com- pliance therewith is had within 21 days after the transfer, the transfer shall be deemed to be made or suffered at the time of the trans- fer. “IT, Where compliance with the law ap- plicable to the transfer is not had in accord- ance with the provisions of subparagraph I, the transfer shall be deemed to be made or suffered at the time of compliance there- with, and if such compliance is not had prior to the filing of the petition initiating @ proceeding under this act, such transfer shall be deemed to have been made or suf- fered immediately before the filing of such petition. “°(8) If not such requirement of appli- cable law specified in paragraph (7) existe, a transfer wholly or in part, for or on account of a new and contemporaneous considera- tion shall, to the extent of such considera~ tion and interest thereon and the other obligations of the transfer or connected
1950 therewith, be deemed to be made or suffered at the time of the transfer. A transfer to se- cure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.’ “Sec. 2, Subdivision c of section 70 of such act, as amonded, is amended to read as follows: “‘c.The trustee may have the benefit of all defenses available to the bankrupt as against third persons, including statutes of limitation, statutes of frauds, usury, and other personal defenses; and a waiver of any such defense by the bankrupt after bank- ruptcy shall not bind the trustee. The trus- tee, as to all property of the bankrupt at the date of bankruptcy whether or not com- ing into possession or control of the court, shall be deemed vested as of the date of bankruptcy with all the rights, remedies, and powers of a creditor then holding a Men thereon by legal or equitable proceedings, whether or not such a creditor actually exists.” “Sec 3, a. All acts or parts of acts incon- sistent with any provisions of this amenda- tory act are hereby repealed. “b. If any provision of this amendatory act or the application thereof to any person or circumstances is held invalid, such in- validity shall not affect other provisions or applications of this amendatory act which can be given effect without the invalid pro- vision or application, and to this end the provisions of this amendatory act are de- clared to be severable. “Sec 4 Effect of this amendatory act: a. Nothing herein contained shall have the ef- fect to release or extinguish any penalty, forfeiture, or Habllity incurred under any act or acts of which this act is amendatory. “b The provisions of this amendatory act shall govern proceedings so far as practicable and applicable in cases pending when it takes effect; but proceedings in cases then pending to which the provisions of this amendatory act are not applicable shall be disposed of conformably to the provisions of said act approved July 1, 1898, and the acts amendatory thereof and supplementary thereto.” The committee amendment was agreed to. Mr. KEATING. Mr. Speaker, I move to strike out the last word, for the pur- pose of inquiring of the chairman of the subcommittee which handled the bill, about the failure to provide for the re- cording of accounts receivable. I have had a great many objections to this measure from credit representatives of various companies who point out there is n> way of extending credit to a com- pany and being assured that they have not already assigned their accounts re- ceivable unless there is some provision for recording. To leave that out Coes not seem to give unsecured creditors a fair break in the event of bankruptcy. I fear it may result over the years in losses to them running into many thousands of dollars. The success of American busi- ness is so dependent upon sound credit laws that every effort should be made to recognize and incorporate in our laws the best possible provisions for the protection of all creditors with equally due regard to the interests of all debtors. I had prepared an amendment to the committee amendment to insert the pro- visions of a bill originally introduced by the gentleman from Alabama IMr. Hosss!|—H. R. 2691—containing the CONGRESSIONAL RECORD—HOUSE necessity for the recording of these ac- counts; but I hesitate to offer that amendment because my understanding is that the committee intends to take that up as a separate problem, and as a practical matter, I know I cannot suc- ceed in securing passage of such an amendment if the members of the com- mittee oppose it here on the floor. Fur- thermore, I Go not want to interfere with the orderly processes of the committee, I would be grateful if the gentleman from Alabama [Mr. Hosss] would give the House an expression of what is intended in that regard, and what his own position is, as chairman of this subcommittee. Mr. HOBBS. I will be delighted to comply with the request of the distin- guished colleague on the Committee on the Judiciary. I introduced H. R. 2691, which pro- vides due notification to the general, un- secured creditors when accounts receiv- able and similar secret preferences, or which may become secret preferences, have been assigned; but that bill, after 4 years of almost constant study in our committee, and after conference with the National Bankruptcy Conference, was decided to be handled, if handled at all, as a separate measure. Therefore, it was left out of the amended bill which was adopted by a small majority of the members of the National Bankruptcy Conference. I have the highest regard for both sides of the dispute in the National Bank- ruptcy Conference, and for the distin- guished members of that body who have given almost 12 ycars of continuous free work to our committee in collaboration, ever since we began consideration of the Chandler Act. I know that they are sincere and honest, and that there is a strong diversity of opinion, adequately presented and cogently argued, that substantiates the bill which I believe in with all my heart. I believe that we ought to give this House and the Senate an opportunity to consider that on its merits, but I doubt if there 1s the slightest possibility of retting an act passed in either body with that inclusion. The SPEAKER. The time of the gen- tleman from New York [Mr. KEatinG] has expired. Mr. KEATING. Mr. Speaker, I ask unanimous consent to proceed for an additional 5 minutes. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. HOBBS. Therefore, as strongly as Iam committed to my own bill, I have gone along with my friends on the sub- committee of the Committee on the Ju- diciary, and have agreed to sidetrack that issue for the time being. Let me say, if the gentleman please, that we have never had the slightest political activity in our committee, as he so well knows, and that we have as won- derful a subcommittee as has ever sat under the aegis of this body. I challenge anyone to dispute that. The men who are selected and the men who have been selecled to work on that subcommittee 1527 are, as nearly as we can ascertain, the best-posted men on the subject of bank- ruptcy that there are in the Congress on this side of the Capitol. I want to call the roll: The distinguished gentleman from Michigan, Hon. Ear C. MicHener, rank- ing member of the subcommittee; has served on that committce except for the period when he was chairman of the full committee, for upwards of 20 years. The distinguished gentleman from Illinois, Hon. CHAUNCEY W. REED, and I went on the committee 16 years ago and we have Served on jt ever since, alternating as chairman in the latest Congresses. Without his able and diligent work, com- mittee administrative success would be impossible. Our outstanding colleague from Ohio, Hon. WiLLIAM M. McCULiocu, came on later and he is very much in the situation that the gentleman from New York [Mr. KEATING] and I are with regard to this very measure. I believe I am quoting him correctly when I state that he preferred the engrafting of the provisions the gentleman from New York (Mr. Keatinc! plans to engraft by amendment onto this bill, but he and I both have agreed that that should not be done at this time for the reasons that have been assigned by the gentleman and by me. The late lamented gentle- man from Illinois, Hon. Martin Gorski, who for 8 years was Master in Chancery of Cook County, and as such handled all the State bankruptcies in that great con- stitucncy, has Just been succeeded by another distinguished Member, Hon. Peter W. Ropino, Jr., of New Jersey. The gentlcman from Texas, Hon. FrRanK WILson, and the gentleman from Okla- homa, Hon. Dixie C1itmer, who happens to be ill at the moment in a hospital. The late lamented Martin Gorski is gone, but there is no interruption of the flow of business or the consideration of bank- ruptcy work in that committee. We have not the slightest hesitancy in sub- mitting anything to each other. The most efficient, experienced, and accommodating clerk of our subcommit- tee is indispensable. She is Miss Velma Smedley. This is a bill which has been brought from that kind of atmosphere, that kind of subcommittee, through the full com- mittee of which the gentleman from New York [Mr. Keatinc] is a distinguished member. It has been unanimously ap- proved all the way through, and we are living up to the written pledge that we made in the Eightieth Congress that some such action would be taken in the Eighty-first; so that if we could not get together on anything else we would give relief to a business that amounts to $11,- 000,000,000 a year which is crippled by the limitation of credit which we need sorely to go ahead with the refinancing of automotive paper and similar busi- ness. I think, therefore, Mr. Speaker, that this is the answer at the moment; and I appreciate the gentleman’s ex- pression of willingness not to offer his amendment. The SPEAKER. The time of the gen- tleman from New York has expired. Mr. KEATING. Mr. Speaker, I ask unanimous consent to proceed for two additional minutes.
1528 The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. KEATING. I appreciate the re- marks of the able and distinguished gen- tleman from Alabama. I, of course, en- tertain for him and for the members of this subcommittee the high regard which he has voiced, It is because of that and because of the practical situation which I realize would cause the defeat of any amendment at this point unless it did have the support of the gentleman and other members of the committee that I am inclined to refrain from offering this amendment. Most of all, I would not desire to take precipitate action here which would result in the defeat of my amendment and thereby foreclose for the foreseeable future the favorable consid- eration of legislation which I happen to feel is badly needed requiring the record- ation of assignments of accounts recelv- able in order to validate them in the event of bankruptcy. I believe it would be a fair conclusion to draw from the gentleman's remarks—if not I would ap- preciate it if the gentleman would cor- rect me—that this question of the re- cording of assignments of accounts re- ceivable is not foreclosed by the passage of this bill. If I felt it were I would op- pose the bill. It is still a continuing matter which will receive the careful at- tention of his subcommittee and upon which either one way or the other we may expect in the near future some kind of action. Would that be a fair conclu- sion to draw? Mr, HOBBS. In all candor and hon- esty—and I am challenged by the gen- tleman’s remarks—I would say that I do not think there can be a considera- tion immediately at this session of that particular matter for the reason that in the Eightieth Congress we gave a writ- ten report to the House and to our full committee promising to take action of this kind in the Eighty-first Congress. Now I understand that the leadership, wisely, wishes to terminate this particu- Jar session of the Congress as speedily as possible; so I would be less than candid if I answered the gentleman’s question in the affirmative. I do not believe we can get action or consideration at this session but I believe that the fight for a fair recordation statute will go on. Mr. KEATING. I appreciate deeply the gentleman’s candor which is most commendable, but the answer he has given leaves me no alternative except to oppose the passage of this legislation which admittedly contains many desir- able provisions but which seems to me fatally defective in failing to provide for the recordation of assignments of ac- counts receivable. If this bill passes in its present form it means that each state must pass a sepa-~ rate recording statute to protect unse- cured creditors against a trustee in bank- ruptcy. That seems to me a cumber- some and unnecessary result which could be obviated by the adoption in this meas- ure of protective provisions. I realize, however, the utter futility of any attempt at amendment here with regard to such a highly technical meas- CONGRESSIONAL RECORD—HOUSE ure and can only record my opposition to passage. Mr. HOBBS. This is the subcommit- tee’s report to the House Committee on the Judiciary, which has been referred to: REPORT OF THE SUBCOMMITTEE ON BANKRUPTCY AND REORGANIZATION OF THE COMMITTEE ON THE JUDICIARY The Subcommittee on Bankruptcy and Reorganization begs to submit to the Com- mittee on the Judiciary this final report for the Eightieth Congress on the three pending House bills—H. R. 2412, H. R. 5834, and H. R. 5693. Hearings have been held and careful study given to each of these measures. Your subcommittee is unanimously and cordially in favor of H. R. 6693, which was carefully drawn by our chairman, Hon. CHAUNCEY W. REED, 80 as to include only noncontroversial amendments of the Bank- ruptcy Act. These amendments were helpful and clarifying. This bill was reported fa- vorably by our full committee and passed the House. We sincerely hope that Senate con- currence may be had. Your subcommittee is in hopeless disagrees ment as to the advisability of reporting fa- vorably either H. R. 2412 or H. R. 5834, each of which is highly controversial. Your subcommittee has been informed that the Committee on the Restatement of the Law and the National Bankruptcy Con- ference are giving careful study to the sub- ject matter of these bills and that during the remainder of this year they may be able to report their recommendations as to the revision of the Bankruptcy Act which would accomplish the desirable changes which the decade of experionce with the Chandler Act indicates. So it is the hope and pledge of your sub- committee that a careful restudy of the Chandler Act in the light of experience may be undertaken early in the Eighty-first Con- gress and that we may be able to report a workmanlike bill that may be thus produced upon which we may be able to agree unani- mously. For the present, however, our report is that no piecemeal revision or amendment other than the noncontroversial H. R 6693 can be advocated by your subcommittee, Respectfully submitted. CHAUNCEY W REED, Chairman. The report of the full committee is as follows: AMENDING AN AcT ENTITLED “Aw Act To Es- TABLISH A UNIFORM SYSTEM OF BANKRUPTCY THROUGHOUT THRE UNITED STATES,” APPROVED JuLy 1, 1898, anp Acrs AMENDATORY THERE- OF AND SUPPLEMENTARY THERETO Mr. Hosss, from the Committee on the Judiciary, submitted the following report: The Committee on the Judiciary, to whom was referred the bill (S. 88) to amend section 60 of an act entitled “An act to establish a uniform system of bankruptcy throughout the United States,” approved July 1, 1898, as amended, having considered the same, report favorably thereon with amendment and rec- ommend that the bill do pass. The amendment ts as follows: Strike out all after the enacting clause and insert in leu thereof the following: “That subdivision a of section 60 of the act entitled ‘An act to establish a uniform system of bankruptcy throughout the United States, approved July 1, 1898, as amended,’ is amended to read as follows: “ ‘a, (1) A preference is a transfer, as de- fined in this act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within 4 months before the filing by FEBRUARY 6 or against him of the petiton initiating a proceeding under this act, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class. “"(2) For the purposes of subdivisions a and b of this section, a transfer of property other than real property shall be deemed to have been made or suffered at the time when it became so far perfected that no subse- quent Hen upon such property obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee. A transfer of real property shall be deemed to have been made or suf- fered when it became so far perfected that no subsequent bona fide purchase from the debtor could create rights in such property superior to the rights of the transferee. If any transfer of real property is not so per- fected against a bona fide purchase, or if any transfer of other property is not so per- fected against such liens by legal or equitable proceedings prior to the filing of a petition initiating a proceeding under this act, it shall be deemed to have been made immedi- ately before the filing of the petition. “(3) The provisions of paragraph (2) shall apply whether or not there are or were creditors who might have obtained such liens upon the property otnrer than real property transferred and whether or not there are or were persons who might have become bona fide purchasers of such real property. “"(4) A Men obtainable by legal or equi- table proceedings upon a simple contract within the meaning of paragraph (2) 1s a lien arising in ordinary course of such pro- ceedings upon the entry or docketing of a Judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after Judgment or decree and whether before or upon levy. It does not include liens which under appli- cable law are given a special priority over other Mens which are prior in time. “*(5) A llen obtainable by legal or equi- table proceedings could become superior to the rights of a transferee or a purchase could create rights superior to the rights of a transfereo within the meaning of paragraph (2), if such consequences would follow only fiom the Hen or purchase itself, or Irom such lien or purchase followed by any step wholly within the control of the respective lien holder or purchaser, with or without the aid of ministerial action by public officials. Such & lien could nci, however, become so superior and such a purchase could not create such superior rights for the purposes of paragraph (2) through any acts subsequent to the ob- taining of such a lien or subsequent to such @ purchase which require the agreement or concurrence of any third party or which re- quire any further judicial action, or ruling. ““(6) The recognition of equitable liens where available means of perfecting legal liens have not been employed is hereby de- clared to be contrary to the policy of this section. If a transfer is for security and if (A) applicable law requires a signed and de- livered writing, or a delivery of possession, or a filing or recording, or other like overt action as a condition to its full validity against third persons other than a buyer in the ordinary course of trade claiming through or under the transferor and (B) such overt action has not been taken, and (C) such transfer results in the acquisition of only an equitable lien, then such trans- fer is not perfected within the meaning of paragraph (2). Notwithstanding the first sentence of paragraph (2), it shall not suf- fice to perfect a transfer which creates an equitable lien such as is described in the first sentence of paragraph (6), that it is made for a valuable consideration and that both parties intend to perfect it and that they take action sufficient to effect a transe fer as against liens by legal or equitable pro-
1950 ceedings on a simple contract: Provided, however, That where the debtor's own in- terest ts only equitable, he can perfect a transfer thereof by any means appropriate fully to transfer an interest of that charac- ter: And provided further, That nothing in paragraph (6) shall be construed to be con- trary to the provisions of paragrapu (7). “*(7) Any provision in this subdivision a to the contrary notwithstanding if the ap- plicable law requires a transfer of property other than real property for or on account of & new and contemporaneous consideration to be perfected by recording, delivery, or other- wise, in order that no lien described in para- graph (2) could become superior to the rights of the transferee therein, or if the applicable law requires a transfer of real property for such a consideration to be so perfected in order that no bona fide purchase from the debtor could create rights in such property superior to the rights of the transferee, tl:e time of transfer shall be determined by the following rules: “"I Where (A) the applicable law specifies a stated period of time of not more than 21 days after the transfer within which re- cording, delivery, or some other act is re- quired, and compliance therewith is had within such stated period of time, or wheie (B) the applicable law specifies that no such stated period of time or where such stated period of time is more than 21 days and com- pliance therewith is had within 21 days after the transfer, the transfer shall be deemed to be made or suffered at the time of the trans- fer. “IT, Where compliance with the law ap- plicable to the transfer is not had in accords ance with the provisions of subparagraph I, the transfer shall be deemed to be made or suffered at the time of compliance therewith, and if such compliance is not had prior to the filing of the petition initiating a proceed- ing under this act, such transfer shall be deemed to have been made or suffered imme- diately before the filing of such petition. “*(8) If no such requirement of applicable law specified !n paragraph (7) exists, a trans- fer wholly or in part, for or on account of a new and contemporaneous consideration shall, to the extent of such consideration and interest thereon and the other obliga- tions of tne transferur connected therewith, be deemed to be made or suffered at the time of the transfer. A transfer to secure a fu- ture loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contempo- raneous consideration ’ “Sec. 2. Subdivision c of section 70 of such act, as amended, is amended to read as fol- lows: ‘ce, The trustee may have the benefit of all defenses available to the bankrupt as against third persons, including statutes of limita- tion, statutes of frauds, usury, and other personal defenses; and a waiver of any such defenre by the bankrupt after bankruptcy ehall not bind the trustee. The trustce, as to all property of the bankrupt at the date of bankruptcy whether or not coming into pos- session or contiol of the court, shall be deemed vested as of the date of bankruptcy with all the rights, remedies, and powers of a creditor then holding a len thereon by legal or equitable proceedings, whether or not such a creditor actually exists.’ “Sec. 3 a. All acts or parts of acts Incon- sistent with any provisions of this amenda- tory act are hereby repealed. “bp. If any provision of this amendatory act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applica- tions of this amendatory act which can be given effect without the tnvalid provision or application, and to this end the provisions of this amendatory act are declared to be severable, CONGRESSIONAL RECORD—HOUSE “Src. 4. Effect of this amendatory act: a. Nothing herein contained shall have the effect to release or extinguish any penalty, for- feiture, or liability incurred under any act or acts of which this act is amendatory. “b. The provisions of this amendatory act shall govern proceedings so far as practicable and applicable in cases pending when it takes effect; but proceedings in cases then pending to which the provisions of this amendatory act are not applicable shall be disposed of conformahly to the provisions of said act approved July 1, 1898, and the acts amenda- tory thereof and supplementary thereto” Amend the title to read as follows: “A bill to amend an act entitled ‘An act to establish a uniform system of bankruptcy throughout the United States,’ approved July 1, 1898, and acts amendatory thereof and supplementary thereto.” I INTRODUCTORY The bill is jointly sponsored by the Amer- {can Bar Association, the National Bank- ruptcy Conference, and the Chicago and New York City Bar Associations, and is supported by a number of other groups hereinafter in this report enumerated. In the Eightieth Congress bills with the same general effect and containing essen- tially the same substantive provisions were introduced (S. 826 (which passed the Senate), H. R. 2412, and H. R. 5834), and in the Eighty-first Congress (S. 88, H. R. 272, and H. R. 2691). Hearings on one or more of these bills were held before a subcommittee of the Judiciary Committee of the Senate in 1948; before the Subcommittee on Bankruptcy and Reorgani- zation of the Judiciary Committee of the House of Representatives on May 7, 1948 (printed hearings, serial No. 19); and be- fore Subcommittee No. 2 of the Committee on the Judiciary of the House of Representa- tives on March 14, 16, and 18, 1949 (printed hearings, serial No 7). Purposes of the bill (a) With respect to section 1 of the bill, dealing with section 60a, its purpose is to clarify the provisions of that section of the Bankruptcy Act; eliminate confusions that have been created by reason of certain court decisions discussed below; and remove the resultant serious doubts that now exist among banks, factors, and other extenders of credit upon the validity of security taken in good faith and for present value The present language of the act tends to impede and choke the flow of credit, principally to small-business men, and the object of the bill is to free its channels. (b) Section 2 of the bill amends section 70c of the Bankruptcy Act, dealing with the general rights of a trustee {1 bankruptcy, and is essentially correlative to the amend- ment to section 60a, effected by section 1 of the bill. Under existing law, a trustee, as to all property in the possession or under the control of the bankrupt at the date of bank- ruptcy, is deemed vested, as of the date of bankruptcy, with all of the rights of a credi- tor then holding a Men by legal or equitable proceedings, and, as to all other property, with the rights of a judgment creditor then holding an unsatisfied execution. In view of the amendment made to sec- tion 60a, as well as intrinsically, it is deemed wise to place the trustee in bankruptcy in the position of a licn creditor with respect to all of the bankrupt’s property, and sec- tion 2 of the bill so amends section 70c, il, STATEMENT Traditionally, it is the primary office of the Bankruptcy Act to protect creditors, both secured and unsecured; to marshal] the bank- rupt’s assets; and to distribute them among his creditors equitably and ratably, in ac- cordance with their respective rights and interests. 1529 It follows from these broad general princi- ples, as well as from the basic provisions of the Bankruptcy Act itself, that-— (A) A trustee in bankruptcy occupies the position of a “universal” judgment or lien creditor, with all such a creditor’s remedies (Bankruptcy Act, sec. 70); and (B) Except as may be necessary to avoid preferences or fraudulent transfers, he takes the bankrupt’s assets subject to all valid liens and encumbrances, thereon, as con- ferred by applicable State law (Bankruptcy Act, secs. 57 (e) and (hh), sec. 67 (b), and sec. 70). This consistent pattern would probably never have been disturbed, but for a series of decisions of the United States Supreme Court in the earlier decades of this century. In Sezton v. Kessler ((1912) 225 U. 8. 90), the Supreme Court, under the language of the Bankruptcy Act prior to the 1938 amend- ment, recognized as valid a pledge of stocks and bonds consummated within the 4-month period, at a time when the pledgor was in- solvent, because a promise to make a pledge had been made before the commencement of the 4-month perlod. This result was reached on the doctrine of “relation back.” Similarly, in Carey v. Donohue ((1916) 240 U.8 430), the Supreme Court recognized as valid an unrecorded deed to real estate, on the ground that the applicable State statute did not make such a deed invalid as against judgment creditors. The Carey case, accord- ingly, became known as the “pocket lien” case Other cases, substantially to the effect of one or the other of these two, are Batley v. Baker Ice Machine Co ((1915) 239 U 8. 268): Martin v The Commercial Bank ((1918) 245 U. 8. 513); and Bunch v. Maloney ((1918) 246 U.S 658) In 1938 the Bankruptcy Act was amended to obviate the effect of these cases, which were regarded with disfavor by the great majority. But, in so doing, the authors of the amendment went further than was neces- sary, and it brought about results which they did not anticipate. The amendment placed the trustee in the position of an artificial potential bona fide purchaser, and, by so do- ing, unintentionally invalidated many types of liens acquired in good faith and for value, in normal and accepted business and finan- Cla] relationships. The matter was first brought to a focus in 1943, in the case of Corn Exchange Na- tional Bank & Trust Company v. Klauder (318 U § 434, 63 Sup. Ct. 679, 87 L. Ed. 884), in which the Supreme Court, because of the new language, felt constrained to strike down an assignment of accounts receivable taken by a bank long prior to the beginning of the 4-month perlod and for value, be- cause it had failed to comply with the re- quirement of notifying the account debtors, which, under the applicable State law, was necessary in order to cut off the rights of @ possible second assignee. And this, de- spite the fact that no second assignee was involved in the case at all. The difficulty was emphasized by the de- cision of the United States district court in In re Vardaman Shoe Company ((1943) 52 Fed. Supp. 562), where the law of two States (Iiinois and Missourl) was involved. In the Vardaman case, the court went even further than in the Klauder case. (The Vardaman decision was, unfortunately, not appealed ) Although the Third Circuit Court of Ap- peals in the later case of Matter of Rosen ((1946) 157 Fed. (2d) 997 (cert. den, 330 U. S. 835)), expresses its disagreement with the theory of the Vardaman case, the law thus remains in conflict, and there are 8 judicial circuits out of the 10 which have not ruled on this question. The resultant confusion has cast grave doubt upon the validity of normal business security, in all of the areas covered by trust
1530 receipts, factors liens, oil leases, cattle loans, airplane-equipment financing, chattel mort- gages, assignments of accounts receivable, conditional sales agreements for resale, etc. Indeed, a bank Officer, who appeared as one of the witnesses at the subcommittee hear- ing, testified that the situation had come to such a pass that his tnatitution was com- pelled to regard all such types of transace tion as unsecured loans, and to rule on them, as to the terms which his bank was willing to enter into them, accordingly. In 1945, the American Bar Association ad- dressed itself to the problem, and created a special committee to consider it. The committee consulted with a number of both disinterested and interested groups, and evolved an amendment which was approved by the house of delegates of the American Bar Association at its annual convention in 1946. This amendment subsequently be- came 8 88 and H. R. 272. In the meantime, the National Bank- ruptcy Conference also interested itself in the problem, at meetings held in 1946 and 1948, expressed support, in principle, of the bar association's amendment, but felt the necessity for several refinements in language and limitations in scope. Accordingly, the representatives of both groups met in joint sessions, resulting in final agreement upon the language of H.R 5933. The text of this Dill is the amendment substituted by the committee for the provisions of 8 88, as passed by the Senate and referred to the Comunittee on the Judiciary The committee on bankruptcy and cor- porate reorganizations of the Association of the Bar of the City of New York has collabo- rated with them and joins in support of the measure. The objectives of section 1 of the bill are as follows: (A) To retain unimpaired the basic object of the 1938 amendment, which eliminated the relation-back doctrine of Sexton v. Kess- ler, and the pocket-lieu doctrine of Carey v. Donohue, referred to above: {(B) To eliminate the evil of allowing a trustee in bankruptcy to take the position of a potential and artificial bona fide pur- chaser, and to restore him to the position of a lien creditor, in harmony with his func- tions under the Bankruptcy Act; and (C) in effectuation of said policy, to pro- vide that no transfer made in good faith, for @ new present consideration, shall constitute 8 preference to the extent of such considera- tion actually advanced, if the provisions of applicable State law governing the perfection of such transfer are complied with, with an appropriately rigid time limitation (21 days) for such perfection if such limitation is not itself prescribed by the applicable State law. At the hearings held on these several bills, the following groups all favored their ob- jectives, by written statement; the oral testi- mony of their representatives; and (in most Instances) both: American Bankers Associa- tion; California Bankers Association; Illinois Bankers Association; Massachusetts 8tate Bankers Association; Michigan State Bankers Association; Minnesota State Bankers Asso- clation; New Jersey State Bankers Associa- tion; New York State Bankers Association; American Finance Conference; Factors Legis- lative Committee; New York County Lawyers Association; National Conference of Com- mercial Receivable Companies, Inc.; Midwest Sonference of Accounts Receivable Com- sanies; Association of Commercial Discount csompanies, Inc. (of New York); Minnesota Association of Sales Finance Companies; 3ank of America (Los Angeles); First Na- onal Bank of Boston; First National Bank ~~ Chicago; Bankers Trust Company of New fork; Commercial Investment Trust. im. COMMITTEE AMENDMENT As above stated, the measure, as originally lrafted by the American Bar Association ommittee, has already passed the Senate as CONGRESSIONAL RECORD—HOUSE 8. 88. Therefore, for the information of the House, the following analysis and comparison of it with the bill as amended is submitted. (1) Subdivision a (1) of both bills 1s vir- tually identical, and substantially reenacts the first sentence of section 60a of the pres- ent act. (2) Subdivision (2) of 8. 88 and subdivi- sions (2), (3), (4), and (5) of the committee amendment have the same general objective; namely, to effectuate the purposes enumer- ated as (A) and (B) above. The committee amendment spells out the matter in greater detail, and in language that is regarded as more definite. In addition, subdivision (5) makes it clear that the hypothetical lien or purchase (to which the trustee succeeds) protected by the preference section must be one obtainable upon the entry of a Judgment or decree, or attachment, garnishment, exe- cution, or like process, bused upon a simple contract and by steps within the control of the lien holder or purchaser, as such, with or without the aid of ministerial action by pub- lic officials. In other words, for illustration, it excludes, as it should, spectal priority Mens or rights that may be acquired only by the agreement or concurrence of a third party or further independent judicial action. (3) Subdivision (6) of, the committee amendment does not appear in S. 88 as passed by the Senate. Its purpose is to make it cer- tain that the amendment will not validate, in the hands of a secured creditor, equitable liens where available means of perfecting legal lens have not been employed by him. The matter is, perhaps, covered by inference in 8. 88, but subdivision (6) of the commit- tee amendment spells it out. (4) Subdivisions (7) and (8) of the com- mittee amendment are essentially the same as subdivision (3) of 8. 88. Both would ef- fectuate object (C) above stated. The only difference is that, where the applicable State law specifies no specific time for perfection by the recording of a secured len, the per- missible period for one claiming security to comply with a State recording provision is shortened from 30 to 21 days. Subdivision (8) is a restatement of the second sentence in paragraph (3) of 8S. 88, and has been placed in a separate subsec- tion for clarity of draftsmanship and lan- guage (5) Sections 2, 3, and 4 of the committee amendment are new. Section 2 is the amend- ment to section 70c of the act above referred to, which has been placed in the bill for the protection of trustees in bankruptcy as cor- relative to the amendment to section 60, and also to simplify, and to some extent expand the general expression of the rights of trus- tees in bankruptcy. Sections 3 and ¢ are purely formal provi- sions. Iv. CONCLUSIONS As a result of the hearings held and after giving extensive consideration to the oral testimony adduced thereat, and the written statements of the responsible bodies filed in connection therewith, your committee is of the conviction that the bill constitutes a much needed amendment to the Bankruptcy Act; that it will facilitate the extension of credit upon fair and reasonable terms; and that its provisions are equitable to the irnter- ests of secured and unsecured creditors alike. The committee, accordingly, unanimously recommends that the bill do pass. Changes in existing law In compliance with clause 2a of rule XIII of the House of Representatives, there is printed below in roman existing law in which no change is proposed, with new matter shown in italic, and with matter proposed to be omitted enclosed in black brackets: “SECTION 60A OF THE BANKRUPTCY ACT (52 STAT. 840, 869) “(a) (1) A preference is a transfer, as de- fined in this Act, of any of the property of a debtor to or for the benefit of a creditor for FEBRUARY 6 or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of {the petition in bankruptcy, or of] the original petition initiating a pro- ceeding under {chapter X, XI, XII, or XIIT of] this Act, the effect of which transfer will be to enable such creditur to obtain a greater percentage of his debt than some other creditor of the same class: Provided, however, That this section shall have no application to proceedings under chapter 1X of this Act. (For the purposes of subdivisions a and b of this section, a transfer shall be deemed to have been made at the time when it became so far perfected that no bona fide purchascr from the debtor and no creditor could there- after have acquired any rights in the property so transferred superior to the rights of the transferee therein, and, if such transfer is not 80 perfected prior to the filing of the petition in bankruptcy or of the original petition under chapter X, XI, XII or XIII of this Act, it shall be deemed to have been made ime mediately before bankruptcy.] (2) For the purposes of subdtvisions (a) and (bv) of this section, and subject to the provisions of paragraph (3), a transfer shall be deemed to have been made or suffercd at the time when it became so far perfected that no creditor obtaining under applicable law by legal or equitable proceedings on a simple contract a len on such property, without @ spectal priority (whether or not such a credi« tor exists), could acquire, after such perfec- tion, any rights in the property so transferred superior to the rights of the transferce therein, and tf such transfer is not so pere fected prior to the filing of the original petition inttiating a proceeding under this Act, it shall be deemed to have been made immediately before the filing of such original petition: Provided, however, That where real property ts transferred for or on account of an antecedent debt, the transfer shall be deemed to have been made at the tume when it became so far perfected that no bona fide purchaser from the debtor could acquire, after such perfection, any rights in the prop- erty so transferred superior to the rights of the transferee thercin. “(3) A transfer, wholly or in part, for or on account of a new and contemporancous consideration shall, to the extent of such consideration and interest thereon and the other obligations of the transferor connected therewith, be deemed to be made or suffered at the time of the transfer, unless the ap- plicable law requires the transfer to be per= fected by recording, delivery, or otherwise, in order that no creditor described in para- graph (2) could acquire, after such pcrfece tion, any rights in the property so trans- ferret superior to the rights of the transferce therein. A transfer to secure a future lcan, if such loan ts actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration. If any requirement specificd in this paragraph (3) exists the time of the transfer shall be determined by the followe ing rules: “I. Where (A) the applicable law specifies a stated period of time of not more than thirty days after the transfer within which recording delivery, or some other Act is re- quired, and compliance therewith is had within such stated period of time; or where (B) the applicable law specifies no such stated period of time or where such stated period of time is more than thirty days, and compliance therewith is had within thirty days ajter the transfer, the transfer shall be deemed to be made or suffered at the time of the transfer. “Il, Where compliance with the law ape plicable to the transfer is not had in accord- ance with the provisions of subparagraph I, the transfer shall be deemed to be made or suffered at the time of compliance therewtth, and if such compliance is not had prior to
1950 the filing of the original petition initiating a proceeding under this Act, such transfer shall be deemed to have been made cr suf- fered immediately before the filing of such original petition. “COMMITTEE AMENDMENT “SECTIONS 60A AND 70C OF THE BANKRUPTCY ACT ($2 STAT. 840, 869) “Sec. 60. PREFERRED CrREDITORS.-a A pref- erence is a transfer, as defined in this Act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within 4 months before the filing by or against him of the petition [in bankruptcy, or of the original petition under chapter X, XI, XII, or XIII ofl initiating a proceeding under this Act, the effect of which transfer will be to enable such creditor to obtain a greater per- centage of his debt than some other creditor of the same clats. [For the purposes of sub- divisions a and b of this section, a transfer shall be deemed to have been made at the time when it became so far perfected that no bona fide purchaser from the debtor and no creditcr could thereafter have acquired any rights in the property so transferred cu- perior to the rights of the transferee therein, and, if such transfer is not so perfected prior to the filing of the petition in bankruptcy or of the original petition under chapter X, XI, XII, or XIII of this Act, it shall be deemed to have been made immediately be- fore bankruptcy ] “(2) For the purposes of subdivisions a and dD of this section, a transfer of properly other than real property shall be deemed to have been made or suffered at the tume when it became so far perfected that no subsequent lien upon such property obtainable by legal or equitable proceedings on a simple contract could become supertor to the rights of the transferee. A transfer of real property shall be deemed to have been made or suffered when it became so far perfected that no sub- sequent bona fide purchase from the debtor could create rights in such property superior to the rights of the transferee. If any trans- fer of real property is not so perfected against a bona fide purchase, or tf any transfer of other progerty is not so perfected against such liens by legal or equitable proceedings prior to the filing of a petition initiating a procecding under this Act, 1t shall be deened to have been made immediately before the filang of the petzlion. “(32) The provisions of paragraph (2) shall apply whether or not theve are or were credi- tors who might hare obtained such lens upon the property other than real property transfericd and whether or not there are or were persons who might have become bona fide purchasers of such real property. “(4) A lien obtaimabdle by legal or equitable proceedings wpon a simple contract uithan the meaning of paragraph (2) isa lien aris ing in ordinary course Of such procecdings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or lke process, whether before, upon, or after judgment o7 decree and whether before or wpon levy It does not inelude hens which under applicable law are given a spectal priority over other liens which are prior 17 time. “(5) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee or a purchase could create rights supertor to the rights Of a tians- Jeree within the meaning of paragraph (2), tf such consequences would follow ony from the lien or purchase itself. or from such lien or purchase followed by any step wholly within the control of the respective len holder or purchase1, with or without the aid of minister ral actzon by public officials Suci a lien could not, however, become so superior and such a purchase could not create such superior rights for the purposes of paragrazh CONGRESSIONAL RECORD—HOUSE (2) through any acts subsequent to the ob- taining of such a len or subsequent to such a purchase which require the agreement or concurrence of any third party or which ree quire any further judicial action, or ruling. “(6) The recognition of equitable liens where avatlable means of perfecting legal liens have not been employed is hereby de- clared to be contrary to the policy of this section. If a transfer is for security and if (A) applicable law requires a signed and delivered writing, or a delivery of possession, or a filing or recording, or other like overt action as a condition to its full validity against third persons other than a buyer in the ordinary course of trade claiming through or under the transferor and (B) such overt action has not been taken, and (C) such transfer r1esults in the acquisition of only an equitable lien, then such transfer is not perfected within the meaning of peragraph (2) Notwithstanding the first sentence of paragraph (2), it shall not suffice to perfect a transfer which creates an equitable len such as ts described in the first sentence of paragraph (6), that it 18 made for a valuable consideration and that both parties intend to perfect it and that they take action suffie cient to effect a transfer as against liens by legal or equitable proceedings on a simple contract’ Provided, however, That where the debtor's own interest is only equitable, he can perfect a transfer thereof by any means appropriate fully to transfer an interest of that character And provided further, That nothing tn paragraph (6) shall be construed to be contrary to the provisions of para- giaph (7). “(7) Any provision in this subdivision a to the contiary notwithstanding tf the ape plicable law requires a transfer of property other than real property for or on uccount of anew and contemporaneous consideration to be perfected by recording, delivery, or other- wise, in order that no len described in para- graph (2) could become superior to the rights of the transferee therein, or if the applicable law requires a transfer of real property for such a consideration to be so perfected in order that no bona fide purchase from the debtor could creale rights tn such property superior to the rights of the transferee, the time of transfer shall be determined by the following rules: “I Where (A) the applicable law specifies a stated period of time of not more than twenty-one days afte) the transfer within which recording, delivery, 07 some other act is required, and compliance therewith is had within such stated period of time, or where (8) the applicable law specifies no such stated period of time or where such stated period of time is more than twenty-one days, and compliance therewtth is had within twenty-one days after the tiansfe7, the trans= fer shall be deemed to be made or suffered at the time of the transfer. ‘Tl Where complianee with the law ap- plicable to the transfer is not had in accord- ance with the provisions of subparagraph 1, the transfer shall be deemed to be made or suffered at the tame of compliance there- wih, and tf such compliance ts not had prior to the filing of the petition initiating a pro- ceeding under this Act, such transfer shall be deemed to hare becn made or suffiered ime mediately before the filing of such petition, “(8) If no such requirement of applicable law specified n paragraph (7) ezists, a trans. jer wholly or in part, for or on account of @ new and contemporaneous consideration shall, to the extent of such consideration and interest thereon and the other obligations of the transferor connected therewith, be dcemed to be made or suffered at the time of the transfer. A transfer to secure a future loan, tf such a loan 1s actually made, or a transfer which becomes security for @ future loan, shall have the same efiict asa thansfer for or on account of a new and con- temporaneous consideration. 1531 “Src 70c. The trustee may have the bene- fit of all defenses available to the bankrupt as against third persons, including statutes of Imitation, statutes of frauds, usury, and other personal defenses; and a waiver of any such defense by the bankrupt after bank- ruptcy shall not bind the trustee. The trus- tee, as to all property [in the possession or under the control] of the bankrupt at the date of the bankruptcy [or otherwise] whether or not coming into [the] possession fof the bankruptcy court] or control of the court, shall be deemed vested as of the date of bankruptcy with all the rights, remedies, and powers of a creditor then holding a lten thereon by legal or equitable proceedings, whether or not such a creditor actually exists {: and, as to all other property, the trustee shall be decmed vested as of the date of bank- ruptcy with all the rights, remedies, and powers of a judgment creditor then holding an execution duly returned unsatisfied, whether or not such a creditor actually exists}"" Mr HINSHAW. Mr. Speaker, I move to strike out the last word. Mr. Speaker, may I inquire of the dis- tinguished gentleman from Alabama what action his committee may be tak- ing 1n connection with the section relat- ing to farm bankruptcy? As I under- stood it, there are some very difficult situations existing in the country, largely by virtue of catastrophes to farm orchards and products of various kinds. Mr. HOBBS. We are keenly alive to the necessities of that situation, particu- larly in Cahfornia I may say to the gentleman that, of course, it is a sep- arate and distinct matter and is the only one of the six composition settle- ment bills that has not become law. We are very anxious to close that up as soon as we can and write it into law TI hope that that can be done at this session Mr, HINSHAW man and I hope it can too. some very vital parts to it. Mr HOBBS. I realize that is true, particularly of Califorma Mr. YATES. Mr. Speaker, I move to strike out the last word. Mr. Speaker, may I inquire of the dis- tinguished gentleman from Alabama just what this bill proposes to do? In his re- marks to the gentleman from New York tMr. Kratine] he has stated the back- ground of the legislation during the Eightieth Congress, but as a new Member of Congress and as one contronted with this report on the bill for the first time, I find it is rather difficult to comprehend its full implications. It presents a very technical approach to amend the Bank- ruptcy Act, and therefore I would appre- ciaie a delineation by the gentleman of the purposes of the legislation Mr. HOBBS. It is exceedingly techni- cel and is the result of a thoroughgoing microscopic examination of every word in the Bankruptcy Act which was passed in 1938 and now afcer 10 years of experi- ence has been brought up again today. This has one object in view, to try to safeguard the rights of creditors as op- poscd to the overriding of those rights in too many instances by the bankrupts. We wish an honest administration of the bankruptcy law, and what this does ts to delineate carefully with the advice of the very best minds in the bankruptcy world, and I mean by that the members of the I thank the ecntle- There are
1532 National Bankruptcy Conference, not of the subcommittee. All I am saying for the subcommittee is that we worked hard and have done it honestly with their con- sideration and help. But here is the point, and I think I can answer the gen- tleman to his entire satisfaction very quickly. The sole object is to kill crooked pref- erences and to see to it that a man who has an honest account receivable, or mortgage, or any other paper that en- titles him to a preference, gets it, but that the crook who has no right to pref- erence over the regular run of creditors does not get an unfair advantage. Mr. YATES. What will be the position of the trustee in bankruptcy as the result of the passage of this legislation? Mr, HOBBS. The trustee in bank- ruptcy is removed from the position of a bona fide purchaser for value without notice and given an adjudicated lien as a judgment creditor. I think that that is a fair statement of the act. Mr. YATES. In othcr words, then, the trustee in bankruptcy’s position as a se- cured creditor will be lessened as the result of the passage of this bill, will it not? Mr. HOBBS. Yes, but the question is: What was the intent of the law that we passed? We never intended it to go as far as the Klander case and three other cases have gone. The distinctive feature that is inveighed against, and I think rightly, is that we set up a hy- pothetical process, whether it was fol- lowed or not, and I do not think that we ought to follow the Klander case to the extent of saying that we suppose that something happened, although it never did, and are required to give the trustee in bankruptcy a supposititious preference. All that the trustee needs is a judgement of a court of competent jurisdiction giving him his lien as a pref- erence to the rank and file of unsecured creditors, and that is what this bill does, instead of giving him a Hen as a bona fide purchaser for value without notice. Mr. YATES. If the gentleman will bear with me a moment, is not, however, the possibility of the evil toward which this legislation is directed still likely to continue in view of the fact, as I under- stand the gentleman’s explanation, a re- cording of a chattel] mortgage or of some instrument showing a secured debt within the 4-month period will be given preference over the trustee in bankrupt- cy’s rights, might there not be a spu- rious recording which would compel the trustee in bankruptcy to bear the burden of proof to set that aside? Mr. HOBBS. No, sir. This bill never rewards fraud in any particular. Here is the point. We cannot suppose that anything happened which never did, and in the act we set up that supposititious status which in many cases never arose, The SPEAKER. The time of the gen- tleman from Ilinois has expired. Mr. YATES. Mr. Speaker, I ask unan- imous consent to proceed for 2 addi- tional minutes. The SPEAKER. Is there objection to the request of the gentleman from Illinois? There was no objection. CONGRESSIONAL RECORD—HOUSE Mr. HOBBS. I think you will find, sir, that this has been carefully considered and that there is no disposition whatso- ever otherwise. I perfectly agree, if this were a matter of first impression, and if we had not considered it and argued it with the bankruptcy world for 4 years, that I would like to have considered the bill that I introduced which provides for recordation. However, I think the amended House bill H. R. 5933, which we are substituting for the Senate bill by amendment, improves the Bankruptcy Act. This fs the point I want to drive home. In 17 States there has already bcen passed what they call a validation stat- ute, which could not be upset by any- thing we might do, so that situation needs further consideration before we pass a recordation statute. Mr. YATES. I notice in the report that a very distinguished list of associa- tions has approved this legislation. Can the gentleman tell us whether there are any comparable persons or associations which are opposed to its passage? Mr. HOBBS. There is only one asso- ciation that is on record opposing it, as far as our information goes. That is a very distinguished and a powerful group, with some 30,000 members. Mr. YATES. Which group is that? Mr. HOBBS. That is the National Association of Credit Men. They are represented by one of the ablest lawyers in the field, Hon. Randolph Montgomery, who has worked with us for 12 years. I will say to the gentleman that there are five or six other distinguished law- yers, master minds in the bankruptcy field, who agree with me, but in spite of the fact that we agree perfectly on every- thing else, they cannot agree with this amendment. Our committee has the highest respect for these gentlemen of the minority of the National Bankruptcy Conference and for any opinion they espouse, yet we have felt constrained to report the pending amended bill to the House unanimously asking its passage. Mr. STEFAN. Mr. Speaker, I move to strike out the last word. Mr. Speaker, I take this time to inter- rogate the gentleman from Alabama {Mr. Hosss] on this bill. Has this been taken up with the Judicial Conference? Mr. HOBBS. Does the gentleman mean the National Bankruptcy Confer- ence? Mr. STEFAN. Has the gentleman dis- cussed it with the bankruptcy referees? Mr. HOBBS. Oh yes, sir. Many of them testified before us many times. Mr. STEFAN. Has it been discussed with the Federal courts? Mr. HOBBS. No, sir. The gentleman means the Judicial Conference that is under the Chief Justice? Mr. STEFAN. Yes; the Judicial Con- ference. Mr. HOBBS. No, sir; although Chief Judge Orie L. Phillips of the tenth cir- cuit, as chairman of its bankruptcy com- mittee, I believe, was very helpful. Mr. STEFAN. But you have discussed it with the bankruptcy referees? Mr. HOBBS. The National Bank- ruptcy Conference, the bankruptcy com- mittce of the American Bar Association, FEBRUARY 6 and every other one of the 40 important groups that speak on bankruptcy mat- T's. Mr. STEFAN. Mr. Speaker, I feel that legislation like this is necessary if it is going to strengthen the arm of our bank- ruptcy courts. The gentleman will probably recall that our Committee on Appropriations for the Department of Justice and the Federal courts made the bankruptcy referees Officials of the court, taking them off a commission basis and putting them on a salary basis. This year when they appeared before us, we found that the cost of referees is now more than self- liquidating. I believe that the Members of the House would be interested to know that @ report coming to us indicates that bankruptcy cases are on the increase. If this bankruptcy increase is any indi- cation for future business it is not at all bright. The peak of the bankruptcy cases fol- Jowing the First World War numbered 70,000. Today there are approximately 20,000 bankruptcy cases in the Umted States. The prediction is that in another year or so the number will be close to 40,000. The prediction is also made that the number of bankruptcy cases in the United States will equal the peak follow- ing the First World War about 15 ycars after World WarII. However, the num- ber of bankruptcy cases is increasing by leaps and bounds and any legislation to establish a uniform system of bankruptcy is very timely indeed. I am merely serv- ing notice on the Membership of the House to watch that prediction made by our Federal referees in bankruptcy that it will not be many more years before we again reach the peak of bankruptcy cases in the United States which may number 10,000 cases, as was true following World War I. This prediction should put American business on guard against coming events. Mr. HOBBS. Mr. Speaker, I cannot resist the temptation to say to the House that the distinguished gentle- man who has just spoken was chairman of the Subcommittee on Appropriations which enabled us to put into effect the placing of referees in bankruptcy on a salary basis, The House of Representa- tives ought to be proud of the fact that for the first time in history we are run- ning at a net profit to Uncle Sam of over $1,500,000 a year and that we are paying every cent which comes in in the form of bankruptcy costs or fees into the Treasury of the United States rather than into the pockets of the ref- erees as in the past. As I said, the gen- tleman was the chairman of the sub- committee which gave us the pump priming to start and enabled us to start the good work. You gentlemen and the Senators voted unanimously to write into law that very salutary reform which struck from our statutes the last vestige of the old and unlamented fee system. Again, we congratulate you. The SPEAKER. The time of the gen- tleman from Alabama has expired. Mr. RODINO. Mr. Speaker, I rise in support of S. 88. The bill proposes amendments to sections 60a and 70c of the Bankruptcy Act. It has been rig-