APPENDIX TO THE CONGRESSIONAL RECORD of the revenue which does not exceed 19-per- cent interest upon their invested capital pro- vided that income 1s not above $5,000,000. Now, I submit in all reason that a 12-per- cent income on invested capital is a very generous allowance to corporations which are now making the greatest profits that they ever made in all history. Chairman Granix. Dr. DuMont? Dr. DuMoowr. Well, I will agree with the Senator that the companies are making sub- stantial profits. But, as I pointed out before, percenta; these are very much tn line. I will go back agaln. I don’t know whether most people realize, but the average corpora- tion in this country, in 1950, made about 5 cents on a dollar sales or & percent. If we go back to 10929 we find that they made 6 cents on a dollar sale. It doesn’t seem to me that that ts an unreasonable smount for & company to make on the basis of the ratio of the profits to the sales. I would like to get into this excess-profits tax from the standpotnt of the growth com- panies. Senator O'Manoney. Before you do that, Dr. DuMont, may I make this comment? It has been @ favorite device of corporate man- agement in defending tts profits to try to compute the profits on the sales doliar in- stead of on the invested capital dollar. Now that results in complete distortion becruse you may make onty 5 cents on your sales dol- lar, but tf you seli enough people you may be making 25 percent on your invested capital. All in the world those of us who are sup- porting the theory of an excess-profits tax contend is this: That corporations which are now, as Dr. DuMont acknowledges, making the most extraordinary profits in history shall pay a portton of that for the defense of the country which makes it possible for them to make that profit. Chairman Gaanix. Dr. DuMont? Dr. DuMont. Senator, I attended some of the heartngs before the House and also ap- peared before the Senate Finance Commit- tee, and I didn’t hear any of the corpora- tions there objecting to the payment of taxes. The general consensus of the people was that we had an emergency, that very great additional funds would be needed, and nobody questioned the amount of money that the Government set up. The question and the problem ts the ap- plication of a tax, and the excess-profits tax falls on 8 relatively small number of com- panies, In other words, it falls on approxi- mately one company tn eight. And prima- rily the compaentes that are htt by the excess- profits tax are the new companies, the grow~- ing compantes, and the compentes that have helped to a large extent in the expanding of our economy. Chairman Gaanrx. You feel that a fist levy on corporations wil! be more efficient? Dr. DuMont. That is correct. Senator O’Manoner. In the first place, Mr. Granik, I do not agree with the state- ment that Dr. DuMont has just made. Y have here before me a table showing the excess-profite-tax returns for the year 1044, the last full year tn which they were col- lected under World War II. Fifty-five thou- sand nine hundred and twelve corporations made exceas-profits-tax returns. Of this almost §6,000 corporations, 43,719 had excess~- profits-tax incomes less than $100,000, but they hed only 7.8 percent of the total tax lability. At the other end of the scale there wero only 1,880 corporations with excess-profits- tax income above a million dollars, and they bed 688 percent of the eorporate tax Mability. It is the big corporations with excess- Profite-tax income which, of course, is fig- ured only after many credits are allowed in excess of 61,000,000 who are filling the coun- try with propaganda against sending the profit dollar to war. As for this suggestion about a fiat tax, I want to point out that the corporations hav- tng an income of lees than 860,000 pay 25 percent of its income in tax and surtax rates under the present law. The biggest corpo- ration tn the land pays only 45 percent. Of course, the fiat tax is a boon to the big companies, and it {s a burden on the little companies, Chairman Grantx. How about that, Dr. DuMont? Dr. DuMont. I would like to start from the last question and work forward. I don't see where the little company is penalized by a@ flat increase. The company that makes or has an excegs-profite-tax credit or makes less than $25,000 a year only pays a 26-per- cent normal tax. So the proposed increase would be in the surtax of 20 percent. So any company making Jess than 625,000 a year would not be affected whatacever. I don't know what the definition of a smal! company js, but ff you take # company making, for instance, 650,000, he will make out much better by an tnorease in the sur- tax then he would with an excees-profits tax. If the surtax te increased to, say, 30 percent, making a total tax of 55 percent, he will pay that on what he has over $25,000. But if you go to a 75-percent excess-profits tax, he ts going to be hit a lot worse than he would on the increase in surtax. So it all Cepends exactly on the size of the company how this affects them. But I think, gener- ally speaking, the smaller company will do much better on an increase in the surtax than by having an excess-profits tax. Senator O'Manowsy. May I ask Dr. Du- Mont a question on that? Dr. DuMowr. Yes. Senator O'Manowsy. The company with $100,000 Income under the present law pays a@ tax of 40 percent. That is the norma} and the surtax combined. Dr. DuMont, 4214. I think it ts. Senator O’Manoney. This 1s from the Fi- nance Committee report that I am reading. Dr. DuMont. All right. Benator O'Manongr. Now, the individual with exactly the same income, $100,000, pays @ rate of 52.8 percent. Can you tell me why & corporation with a $100,000 income should pay a profits tax, an income tax, at a smaller rate than the individual having the same income? Dr. DuMont. Well, I would rather turn it the other way end I would say, why should the individual only pay 42.5 percent? There is Just as much logic in that. Senator O’Manonwsy. The answer to that, Dr. DuMont, is that we are in the middie of the twentieth century, the century of world ware. We are entering the third world war, and we must have the revenue if we are going to protect the capitalistic system. Dr. DuMont. There is no question, as far as the corporations are concerned, as to the amount of revenue the Government needs. It is atmply a question of whether you are going to have this excess-profite tax that particularly hits growth companies. It ts a tax on success and not tax on excess profits. I would lfke to show you here, before it is too late, the effect of this profita tax on a chart, there, Dr. DuMont? A4S De. DuMowr. I will go through it very .rap- idly. This chart happens to show the sales Increase of the company that I am associated with. It has increased from 1946, $2.5 mfl- Hon-—~— Chairman Gaanix. Will you use the hand intcrophone for a moment? Dr. DuMow?. To $80,000,000 in 1860. Now, the assumption of « lot of people that talk about this ie that the e¢: tax and the tax bill only take into consid- eration a base period of from 1947 to 1049, So, in effect, ft ts saying that there should be no growth in the United States past 1949. Now, in the case of this particular com. pany, durtng this period of time—muay I have the next chart? Chairman Granix. The next chart. Dr. DuMont. This is the profit for the company before taxes. Now, after taxes the company made between 1946 and 1850—~the next chart, please—nspproximately 812,- 000,000. Now, during that pertod of time, tt wasn’t & question of increasing the price of the product because the profits went up. It was because of an increase of facilities and an increase of manpower. This shows the growth of the people working for the com- Pany from 998 in 1946 to 6,000 in 1951. The next chart, please. During this period of time when this $12,500,000 was made after taxes, let's see what caused it to be made. There was $22,000,000 invested in the busi- ness. We expanded our plant and equip- ment to the tune of $8,000,000. We increased the inventory by $10,000,000 and increased our accounts receivable by §4,000,000. So we had to go out and get additional funda of approximately $10,000,000 in order to do Well, obviously, when you increase your plans and increase your number of em- Ployees, you are going to increase your sales. And it follows through that if you double your sales your profite should increase. But with this bill they just practically clean out after 1949. Moy I have the next chart, please? This last chart shows the condition where you have three companies, A, B, and C. They all made the same profit during the years 1947 to 1949. But company A made more money in 1950, and they are hit by the 64 percent tax. Company B went right along straight. They pay a 52-percent tax. Com- pany C, which was on the downgrade, has paid no excess profits tax at all. Now, the point 1s that you are picking out the companies which have increased, that have grown, and unnecessarily taxing them, If you are going to expand, you need funds just the same as the Government needs funds for this war. We cannot operate with- out funds, and if you are going to take them all away from us it ts going to mean that these companies are not only going to fail to increase in size but they are going to have to curteil size, and I say tt is not a good thing. Chairman Gaamix. Senator? Senator O'Manomzy. May I say, in all sin- cerity and without the elightest degree of intent of being emotional about it, that casualties in Korea, the latest figures, amount to 39,000, of which 5,000 represent dead Americans. They have no possibility of growing. They have no possibility of achiev- ing anything in the future. Their record is their heroism in defense of America. Now, the excess-profits tax of which Dr. DuMont taike falls only upon profits, only upon the profits, not upon capital. We don't take the body of the corporation. In this bill passed by the Houne, if the equity eapital ie less than $5,000,000, why then you are sllowed & profit of 13 percent on that equity capital before there is a penny of tax. If it fe up to $10,000,000, then you are allowed a profit of 10 percent, and if it
A46 is above that, a profit of 8 percent. That is why I sey it is a tender bill. Chairman Gaantx. May I take a question from the audience? ‘ Dr. DuMonr. I would just like to answer the subject that the Senator has just spoken about. The one thing that is going to help this whole war situation 1s the increase of production, the increase of the tools for war. The reason that we did as well as we did in the last war was because of the great in- dustrial strength of the country. Benator O'MaHoney. I agree with you. Dr. DuMont. If you are talking about the people that may be killed in the future, if you are cutting down your productlon—— Senator O’Manoney. There is nothing in this that cuts down the production. Dr, DuMont. There certainly is. Senator O'MaHoney, Witness the result of World War II. We outproduced the whole world with an excess-profits tax law very much more rigid than this. Chairman Granix. May I take a question from the audience? ’ Mr, MoynaHan. My name is Moynahan of the National Association of Life Under- writers. Chairman Grants. You are president. Go ahead. Mr. Moynanan, Senator, do you feel that it 1s possible to have an excess-profits tax that will not be inflationary? Senator O’Mastoney. Of course, I do. Chairman GrantK. How do you feel about that quick answer that the Senator gave? Dr. DuMont. Obviously, an excess-profita tax is inflationary. The very fact that it has a tendency to cut down production means that goods are more scarce and that prices are going to go up, obviously. Senator O'Manoney. The facts of World War II completely refute that statement. Dr. DuMont. I don’t agree with that. Chairman Granix. We will take another question. Mr. McNamara, My name is McNamara, Iam an accountant. My question is for Dr. DuMont. In Time magazine of November 27, 1950, you are quoted as follows: “Y resent the threat of my Government taking legislative action that will stigmatize our profits under a completely false label. It this fictional legislation goes through I should feel that it would be my duty to myself, my company, and ‘ts stockholders, to see that there would be no excess profits on which such a tax might be levied.” Do you mean you would keep prices of your products and services at such a low level that no such profits would be produced or, if not, how would you accomplish it? Dr. DuMont. Certainly we don’t alm to pay the highest excess-profits tax of any corpo- ration in the country. Senator O'MAHoney. May I interrupt? I would like to know first whether you actually said that. Dr. DuMont. Yes; I did say that, Senator. I feel that we would be forced, elther by reducing prices or something along that line, to cut down our excess profits because I certainly wouldn't like to see it on my state- ment. Senator O’MaHoNeEY. Do you mean by that atatement that you would increase your ex- penses beyond what they ought to be? Dr. DuMont. No, by decrease of prices. Senator O’MAHONEY. Well, the charge that an excess-profits tax is inflationary is based wholly upon the assumption that business Management will spend money wastefully. Now, do you mean that your company would spend money wastefully rather than pay an excess-profits tax? Dr. DuMoyr. No; absolutely not. Senator O'MaHONEY. I am glad to have you aay that. Dr. DuMont. I meant that we would be forced to bring our prices down, and possibly because we didn't have the funds we couldn't oduce as much. Senator O’Manonry. Couldn't produce as much what, television sets? Dr. DuMont. No; war production. We were 100 percent war production during the last war. Senator O'Manoney. The Government will pay you a good price for everything you pro- duce for war. Chairman Granrx. May I take a question from the distinguished Congressman there from your part of the country, Senator, Con- gressman John Carroll, of Colorado, Congressman Carrot, Iam asking Senator O’Manongy, in the face of constantly ex- panding national income, the highest in the peacetime history of the country, in the face . of the greatest employment in the peacetime history of the Nation, when we appropriated $17,000,000,000, 3 or 4 months ago and an ad- ditional $18,000,000,000 for the Military Establishment whether it ts not vitally essen- tial that we have an excess-profits tax for three reasons: (1) On the doctrine of equal- ity; (2) for revenue; and (3) as an antl- inflationary measure? Senator O’MaHoney. That is my judgment, and I fee! very strongly that corporations, like individuals, should pay according to their ability to pay, and the excess-profits tax does precisely that. Chairman Granrx. Do you want to com- ment on that? Dr. DuMont. I don't agree that the excess- profits tax does that. I have looked over some of the largest corporations in this country, and I find that there 1s a very con- siderable number of them that are not going to pay a dime in excess profits. Senator O’MaHoney, Will you give me the specifications, Doctor, and we will put them into an amendment which will stop that. Dr. DuMont. Well, I am not offering any amendments along this line, but I think the straight increase in the surtax rate will pretty well take care of it. You don’t hear any complaint of excess-profits tax from the larger corporations. Senator O’MaHONEY. Oh, yes, I have heard about it. But what I know js that the profits before taxes have risen in this era of pros- perity at a rate greater than either salaries or wages or the gross national product. Dr. DuMont. Not percentagewise. Senator O’MAHONEY. Yes, percentagewise, too. Dr. DuMont. No. Chairman Granix. Gentlemen, may we take our summaries now? Dr. DuMont, your summary, please. Dr. DuMont. I would simply like to sum- marize this way, that I believe the so-called excess-profits tax is an unsatisfactory way of raising additional revenue because— No. 1, it penalizes growth; two, it tends to keep small companies small, and pro- tects larger companies; three, it distrib- utes taxes unfairly; four, it is unnecessarily complicated; five, it is Just an additional tax, and not fundamentally a tax on excess profits; six, it assumes all growth stopped in 1949; seven, it is inflationary and unfairly places a stigma of profiteering on many companies, Chairman GranrkK. Thank you, Dr. Du- Mont. ' Senator O’MAHONEY? Senator O’MaHoNnry. Most of the reasons given by Dr. DuMont, I think, are without any basis at all, The reason we need an exceas profits tax is because the Nation is in its greatest crisis. The Communist system seeks to destroy the system of private prop- erty. And if the owners of private property are unwilling to contribute substantially of their profit while the boys of this country are contributing their bodies and their lives, then it will be very difficult, indeed, to defend our way of life. We need the revenue to hold APPENDIX TO THE CONGRESSIONAL RECORD back the tides of Communist totalitarian dictatorship. The dictators in the Kremlin expect the capitalistic system to wreck itself because of unwillingness to face the facts, We must face the facts now and levy the taxes that will be necessary, first, to pay the expenses of defense; second, to absorb all free money so as to prevent inflation—and that is what such a tax will do—and, third, to prove to the boys who are fighting that profit dollars are standing by their side. Ohairman Granix. Thank you very much, gentlemen. The Korean Situation EXTENSION OF REMARKS HON. WAYNE MORSE OF OREGON IN THE SENATE OF THE UNITED STATES Friday, January 5 (legislative day of Wednesday, January 3), 1951 Mr. MORSE. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an editorial entitled ‘“‘Not a Moral Issue,” from the Coos Bay Times. There being no objection, the editorial was ordered to be printed in the Rrcorp, as follows: Nor a Morau Issue Possibilities of a negotiated scttlement of the Korean situation, however tenuous they may be, have for the moment taken the spot- light from the possible use of the atomic bomb. But the question is not dead any more than peace is an actuality in Korea. Whatever settlement may be negotiated with the Communists now or in the immediate future, it is not likely to last any longer than it sults their convenience or the democratic nations hold ready strength enough to ward off new aggressions. When that time comes, or if the fighting is to continue now, the question of the atomic bomb will again came to the fore. Then we hope people will recall words such as the following, written by Bruce Biossat of the Newspaper Enterprise Association: “A prominent church organization declares that maybe it would be all right for us to use the atomic bomb if it js dropped on our cities first. “This statement unquestionably represents 4 decision taken after prolonged soul-search~ ing by leading churchmen. But unfortu- nately it falls into the standard misconcep~ tton that the atomic bomb involves a great moral issue. “It clearly does not. Except for the killing effects of radiation, the A-bomb differs from other bombs chiefly in the magnitude of its impact. The ways in which it kills are the ways all bombs kill. It simply strikes down many more people at one time. “It ig no more immoral to use an A-homb than to use a pistol if the weapon is em- ployed in pursuit of aggressive aims. That's the point; the real r- ‘ral offense is aggres- sion, for it is this crime which lets down the bars to violence. “Once we are in war, it must be left to the discretion of our high command what ‘weapons to use and when. That must be so whether we are fighting the Russians or the Chinese or anybody. There can be no rule that we are free to use the A-bomb against one enemy but not against another. Nor should we have to get anyone’s permis- sion to use it. “And we certainly should not have to wait until the enemy employs it, for by that time
APPENDIX TO THE CONGRESSIONAL RECORD it might well be too late for us to drop it with the most telling effect. “Buppose for argument’s take that we should become embroiled in full-scale war with Red China. Our leaders should not yield to frantic calle that the A-bomb be promptly dumped on major Chinese cities. On the other hand, neither should they be deterred from using the weapon by heart- felt cries that it is ‘inhuman.’ Bo is a bullet. “Their decision should be made on the basis of the military realities they then con- front. The A-bomb is costly. We don't have an unlimited store. Is the advantage to be gained through dropping it sufficient to offset these factors? “Oan the same result be achieved more efficiently by other means? Or is the dispo- sition of enemy resources such that the A- bomb’s terrific concentration of force can be applied effectively? “These are the types of cuestions military men would ask themselves in any bis war, A final decision likely would have to be made by the President as Commander in Chief. But the ingredients of that decision should be military, not moral.” We hope the time will never come when the United States will feel compelled to use the atomic bomb. But should that time come, we may well be thankful that we have it and hope that it will be used in time. Wisc. Compulsory Health Insurance EXTENSION OF REMARKS HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Friday, January 5 (legislative day of Wednesday, January 3), 1951 Mr. LANGER. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp a resolution adopted by the recent convention of the North Dakota Funeral Directors Asso- ciation, held at Bismarck, N. Dak., on May 26, 1950. I ask that, in printing, the names of the officers, executive com- mittee, and district chairmen be also printed, together with the letter of trans- mission, There being no objection, the letter and resolution were ordered to be print- ed in the Recorp, as follows: Noern Dakota FUNERAL Drirgcrars AssociaTION, McVille, N. Dak., June 29, 1950. Mr. Wruriam Lancer, United States Senator From North Da- kota, Capttol Butlding, Washington, D.C. Dea: Mr. Laworr: At the recent convention of the North Dakota Funeral Directors As- sociation held sat Bismarck, the enclosed resolution was adopted and the secretary in- structed to forward the same to you for your consideration. Yours very truly, T. A. Wonver, Secretary. (Officers: Harold T. Anderson, president, Rugby; Almon B. Strong, first vice president, vils Lake; Truman A. Dahie, second vice proaident, Mohall; T. A. Wonder, secretary, McVille; Russell A. Lee, treasurer, Lisbon. Executive committee: Alvin Berg, McClusky; Truman Knott, New Rockford; Frank Mischel, Dickinson, District chairman: northeast district, W. C. Adams, Crafton; northwest district, Oacar Hanson, Williston; southwest district, Alvin Klick, Glen Uliin; southeast district, Selmer Quam, Cooperstown.) Whereas the American famity has received the finest quality of medical care available in any country in the world, developed under our system of free enterprise; and Whereas compulsory health insurance wherever tried has caused a decline in na- tional health and deterioration of medical standards, and facilities, to the detriment of family welfare; and Whereas compulsory health insurance wherever tried has taken away the family’s ment to choosing its own family physician; an Whereas invasion of family privacy and violation of the patient-physiclan relation~ ship has proved to be ane of the most ob- jectionabie features of compulsory health insurance, wherever tried; and Whereas compulsory health insurance would result immediately in a tax of 8 per- cent on the income of the American man, rising within a few vears to 6 percent and higher, creating a new tax burden which would reduce household budgets and bring down family standards of living: and Whereas Government control of medical services, by gradually undermining free en- terprise and establishing heavy new tax bur- dens and unprecedented national deficits, would threaten national bankruptcy and encourage the spread of socialism, which would endanger the rights of our children to the individual freedoms which have been the American heritage: Now, therefore, be it Resolved, That the North Dakota Funeral Directors Association does hereby go on rec- ord against any form of compulsory health insurance or any system of political medicine designated for national bureaucratic con- trol; be it further Resolved, That a copy of this resolution be forwarded to the President of the United States, to each Senator and Representative from the State of North Dakota, and that said Senators and Representatives be and are therefore respectfully requested to use every effort at their command to prevent the enactment of such legislation. Tue NoatH Dakota FouneraL Dmec- ToRs ASSOCIATION, ALMon B. Strona, President. Tv. A. Wonpzs, Secretary. Mar 26, 1950, Pro-Reds in Our War Plants EXTENSION OF REMARKS HON. NORRIS POULSON OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Wednesday, January 3, 1951 Mr. POULSON. Mr. Speaker, con- cerning this column by Mr. Victor Riesel, it certainly should be a warning to our Communist-softie administration. Sure. ly, they will awaken to this threat, and I trust that they have been reading the newspapers of late about the man whom they have so stanchly supported, known to them as Mr, Remington, formerly a prominent official in the Commerce De- partment, [Prom the Hollywood (Cabf.) Citizen-News of December 29, 1950] Pao-Reps mw Ovn War Piawrs {By Victor Riegel) Add a prayer to the wing of the B-50 bombers soon to fly our Gl’s high in the sky. Aa7 Por the supersecret “Belzyn” fire control unit was installed in these new flying forte by members of a pro-Communist union some of whose leaders have sneeringly said of the Korean Wear: “Anyone with eyes can see only the hand of Wall Street in Korea—making cannon- fodder of American youth fn e distinctly un- American cause. The Korean le * * * tried * * * to establish unity without a shooting war, but they were stopped by the American military government (operating es a branch of J. P. Morgan & Co,) are the so-called United Nations Commission for Korea * * ® (let's) withdraw troops thrown hastily into Korea.” For years, I've monitored the Soviet world agande broadcasta and thoee words parallel almost line for ling what Moscow's Red radio Jams into the alr waves every day. Yet this union, the pro-~Communiat United Electric Workers, has its men in a score of hush-hush secret weapons departments of big plants punching out bomber fire con- trols, guided missiles, and jets. A list of these departments reads like a Classified military production dossier on General Marshall's desk. ‘nis pro-Stalinist union has its people in the guided missile, Jet propulsion, heavily curtained “Hermes” project. Its followers work on automatic gun sights for B-36 bombers; turbogen- erators for Navy vessels, where, according to CIO experts, “a slight deviation by changing the tolerances of the turbovanes” affects the machine's usefulness, They have access to plants where control panels for aircraft carrier communications are built; where remote control turrets are put together; where electronic radar and sonar tubes and electrical equipment for aircraft bomb elevators and platform hoists are intricately woven into the very rhythmic pulsebeat of atomic-age war, So now, let's get behind the scenes tn at least one plant: That's a secret atomic energy installation in Schenectady. There, in research labora- tory Knolls I, right next to the ultra secret Knolls I, works one of this union's national leaders and shop stewards. Frequently, work fo. Knolls It is done in Knolls I-—right under his nose. He has free access tu everything— and I'm not here impugning the security sys- tem of the firm, nor the honesty and patri- otism of any man. I just know that a pro- commie, whose union believes that the So- viet had nothing to do with the invasion of Korea where our GI's are being killed, works in such a plant. Then there's an avowed commie who has drummed door to door for Daily Worker sub- scriptions and party petitions and haa run commie meetings. He's in the maintenance division. Therefore, he has accees to most of the atomic installations. There are others, identified before congres- sional hearings as party members—and they can roam anywhere, including the punch- press division, often punching out highly secret feeder parts for other sections. This could be drawn on and on-—-with building numbers, department sections, names, and addresses listed. But the story is the same everywhere. Now, all this is in the General Electric Co. plants. But it exists in many other heavily guarded electronic centers. Why? Most cer- tainly the General Electric Co. (head of which ts Charles Wilson, the Nation's chief mobiliver) writhes just as uncomfortably un- der the procommies as does the CIO's elec- trical union which has been exposing this critical situation. The answer in part comes to me from a high company spokesman, who says quite bluntly that GE “follows religiously the in- structions of the competent Government agencies—including the exclusion or removal of certain persons from areas of contact with secret or classified research and production.”
A48 And this spokesman, Lemuel Boulware, company vice president, says: “Consequently we feel it may be fairly con- cluded that anyone criticizing the employ- ment of alleged Communists or others nearly equally dangerous to national safety, or any- cne criticizing the act of recognizing, or will- ingness to bargain with any union certified to any employer, is criticizing not the em- ployer but the competent Government agen- clea under whose legally authorized direction the employer is operating.” Now let’s hear from the Government. It's certainly the boss. The Significant Role Played by Civil Avia- tion in Air Transportation in the Korean Fight Against Communism Has Proven It To Be Our Second Line of National Defense EXTENSION OF REMARKS HON. FRANK W. BOYKIN OF ALABAMA IN THE HOUSE OF REPRESENTATIVES Monday, January 8, 1951 Mr. BOYKIN. Mr. Speaker, on innu- merable occasions I have spoken on the floor of the House of the necessity for these United States to achieve absolute supremacy in the air with respect to civil as well as in military aviation. In ad- dressing the House on Thursday, Novem- ber 30, 1950, I said in part: More than ever I am convinced that the only thing which has contained the Rus- sians to date and prevented them from out- right and direct attack has been our pos- session of a stockpile of atom bombs and our unquestioned ability to deliver them by air with precision and with dispatch. Air power is truly peace power. Air power is everything within our Nation that has to do with the air. It includes our aviation production line, air education, commercial transport, private flying, maintenance facil- ities, and research laboratories as well as all branches of the Military Establishment for Air. Mr. Speaker, a recent joint meeting of the Rotary and the Exchange Clubs and the Junior Chamber of Commerce in Mo- bile was addressed by J. H. Carmichael, president of the Capital Airlines, one of the major air transport companies in these United States. In this interesting and informative talk made with respect to air transportation this distinguished airman and leader of the aviation indus- try graphically told of the contribution being made by the air carrters of our country in providing planes necessary for the successful operation of the Korean airlift. In discussing this secondary line of military defense with our former col- league, the Honorable Robert Ramspeck, now executive vice president of the Air Transport Association, he informed me that the initial contribution of the air- lines of this country to the Korean air- lift alone had already equaled about 70 percent of the total daily service of all commercial planes used during World ar IT, . Mr, Ramspeck further stated that dur- ing the first 4 months of the conflict the aircraft of the scheduled carriers made 696 round trip flights across the Pacific in operating almost 37,000,000 ton miles of lift and in doing so had transported upwards of 5,600 tons of military cargo, CAPITAL SENDS ITS PLANES Capital Airlines placed two of its four- engine ships into the lift in July last, They were returned in November but ap- proximately 5 weeks later they were again doing service in the Pacific. These were aircraft which were converted in the company’s hangars at the Washing- ton National Airport. Wing and fuselage tanks were installed in order to increase the fuel capacity of the C-54's—stand- ard commercial DC-4 equipment—from 1,800 to 3,700 gallons and their range from 1,650 to 3,300 miles. Over-ocean navigation sets were installed, as well as auxiliary ol] tanks. How well I recall participating in the exercises at the time Capital Airlines be- gan operating in Mobile in April 1948. The increased use of its splendid serv- ice, both in passenger and cargo by our people daily contributes to the ever-ex- panding economy of our great South- land. Mr. Speaker, because of the splendid contribution made by civil aviation to national defense in this present emer- gency, I am extending my remarks and including the outstanding speech by J. H. Carmichael, president of the Capi- tal Airlines entitled “Air Transporta- tion—-Our Second Line of Defense.” Mr. Carmichael spoke as follows: Mr. Chairman, honored guests, and you of the Mobile Chamber of Commerce, Rotary, and Exchange Clubs, it is needless for me to tell you that there are those who have opposed the investment which you, through your Government, have made in the develop- ment of the present air-transport system of our country. Many of those who objected to this investment were interested in pro- tecting some special interest. Others, with the best of intentions, were motivated by an honest conviction that Government should not participate in private enterprise. During the many years of controversy on the issue of Federal-local funds in the air-trans- port industry, the opposition, well-inten- tioned or otherwise, have made their case before the court of public opinion with words. Today the air-transport industry is making its reply with action. In every 24- hour period 101,000 pounda of vital war ma- tcrial reaches our fighting forces in Korea as a direct result of the participation of the air-transport industry in the Pacific airlift, We in Capital, as part of the air-transport industry, are proud of the part we are playing in supporting the Armed Forces in the pres- ent emergency. Nothing would please me more than to tell you today about Capital Airlines, because it is the subject we know best and in which I am sure you can ap- preciate I am most interested. However, as there is represented here today an important segment of those who form public opinion in Mobile, I feel It incumbent to make sure that you are aware of the contribution that the air-transport industry is making to the national defense—a contribution made pos- sible by your partnership in the development of air transportation. APPENDIX TO THE CONGRESSIONAL RECORD BUILDING A BRIDGE OF SUPPLIES It 1s not exaggeration to say that your dollars and your interest in commercial avia- tion are helping to build @ bridge of supplies from Mokile to Korea, Perhaps you're not conscious of the job you are doing. Some- times we go slong in a work-a-dey world scarcely aware of the fact that we are con- tributing another link in the chain of na- tional defense, There are certain fundamental starting points on the road to possible world peace and national security. To begin with, trans- portation is the keynote of al] modern so- ciety and enterprise. There would be no real advancement of commerce, of standard of liv- ing, no national wealth and certainly no national defense, without our modern sys- tems of transportation. We cannot take for granted the existence of our finest and most efficient transporta- tion in the world, We must appreciate the fact that we have these great water, rail, highway, and air systems only because of the initiative and daring, the investment and risk, manag’ment and labor, which are pos- sible under our fr e competitive enterprise. And we have them, too, because of public support. Your investment in your airport has made it possible to join Mobile with the other great communities of the Nation. The air- port here is a li1k in the chain of national defense. It is part of an airport system, now r-imbering 6,500, that has made pos- sible the tremendous growth of commer- cial aviation in this country which today is proving its worth to the Nation’s security in the Korean airlift. Let’s take a look at the record and see what the commercial airlines with your sup- port are doing to aid the Armed Forces. On June 30, 3 days after the Red aggression, the military service requested the civilian airlines to temporarily step into the breach while the Milit:ry Air Transport Service could build its forces to take over the com- plete job, The Korean emergency required immediate air transport’ tion of persomnel and critical materials to the far eastern theater and te ‘r evacuation of dependents and hos- pital patients to the United States. Whrn the Reds moved across the thirty- elghth parallel, MATS had fewer than 60 four-engine planes assifned to the Pacific division. The ser lce immedtately assigned 40 additional transport planes to the Pa- cific division and called upon the civilian airlines for participation and support. COMMERCIAL AIRLINES WERE READY Three days after the military called upon the commercial airlines the first clvillan car- rier left the United States for the Far East. Since then the airlines have sent 66 planes and many well-trained and experienced crew- men into action. Capital placed one of the first domestic transports into the airlift. The readying of these aircraft took priority over all other phases of our operations, Personnel operated on an around-the-clock basis to convert these airplanes for long-range mili- tary transport. The know-how of commer- cial air transport and its reservoir of trained manpower again backed up the military until ita machinery could be geared to this emergency. This lag is the penalty we in a democracy pay. Responding to the emergency, the commer- cial planes poured into the west coast with highly trained crews and began operations immediately. The military was not in a po- sition to activate its planes with this dis- patch as recent economies in the military services had akeletonized the personnel of the Military Air Transport Service of our coun- y The value of this immediate availability is best evidenced by the statement made the