APPENDIX TO THE CONGRESSIONAL RECORD is true, the GI's are paying $6,000 now for houses that will not bring 83,000 in 2 or 8 years because they cannot rent places. So, after all, who is paying the bill? The answer is with you. Yours truly, Oscar Bigsme. Unification of the Armed Services EXTENSION OF REMARKS HON. MARGARET CHASE SMITH OF MAINE IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mrs. SMITH of Maine. Mr. Speaker, I am interested in Thursday night’s an- nouncement on unification of the armed services. As far back as 1941 I proposed a basic change which was fundamentally the same as that now agreed upon by the President and the Secretaries of War and Navy. A year ago in April 1946 I proposed a plan of unification which is practically identical with the plan now agreed upon. In a public statement at that time, I said: The most important aspect of the contro- versial issue of unification is that it must be acted upon, either rejected or adopted, as soon as possible because the formation and organization of our Army, Navy, and Marine Corps cannot be made until we decide whether we are going to merge the armed services or not. There are certain fields in which there cun be no question of the necessity of merger. They are (1) procurement; (2) services, such as medical, financial, and so forth; and (3) intelligence. These activities of the armed services should be merged with- out delay. But I share the doubts of the opponents of the proposed merger as to the practicality and advantage of merger in the fleld of oper- ation. To put it more bluntly, I oppose the submerging of one service to another service rather than the merging. There can be no question that the Air Forces should be raised to an equal level of authority and autonomy with the land forces and the sea forces. This should be done whether by merger or by a separate Depart- ment of Air. The greatest need for merger Ss the merg- ing of military policy with f reign policy. In other words, get the State Department and the armed services together, trrough a Na- tional Security Council Bearing in mind that there are certain fields in which merger is most necessary but other fields in which it .6 most questionable, I believe that we should adopt the following organization for unification: 1. Create a Secretary of Common Defense, who shall have (a) executive or line au- thority for unifying and merging (1) pro- curement, (ii) services, such as medical, financial, etc., and (iii) intelligence; and (b) advisory or staff duties to the President in coordination of the services on all other mat- ters. 2. Create a Secretary of Air in addition to the existing Secretaries of War and Navy, retaining in these three full executive au- thority under the President, independent of the Secretary of Common Defense, over everything except procurement, services, and intelligence. XCII—App.——18 3. Appoint a Chie’ of Staff of the Armed Forces, but who shall act only in an advisory capacity to the President, and having no au- thority over the chiefs of the separate serv- ices. 4. Retain the Joint Chiefs of Staff as the executive group on military policy and strategy. 5. Merge military policy and foreign pol- icy with the creation of a National Security Council, composed of Secretaries o1 State, Common Defense, War, Navy, and Air, with the Secretary of Common Defense being the chairman of the council. Income-Tax Reduction EXTENSION OF REMARKS Or HON. HAROLD KNUTSON OF MINNESOTA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. KNUTSON. Mr. Speaker, under permission granted me by the House, I insert in the Reconrp for the information of the membership a letter addressed by Robert B. Dresser, an outstanding at- torney, of Piovidence, R. I., to the Presi- dent of the United States and Members of Congress which contains arguments in favor of the measure that are, to say the least, thought-provoking. The letter follows: JaNuaRY 14, 1947. Re Knutson tax bill. The President and Members of the Congress, Washington, D. C. GENTLEMEN: On January 3 Congressman Knutson, chairman of the House Ways and Means Committee, introduced in the House of Representatives « bill (H. R. 1) providing for an across-the-board cut tn the tndividu- al iucome taxes of 20 percent on incomes up to $302,000, and of about 10% percent on in- comes over that amount. You, Mr. Presi- dent, and certain Members of Congress, have expressed opposition to the proposal. prin- cipally on the ground that a reduction in tax rates without a corresponding reduction in expenditures would prevent the balancing of the budget. This conclusion is based apparently upon the assumption that “rate” and “revenue” are synonymous, that the higher the rate the higher the revenue. This, however, is not the fact. The revenue from an income tax is dependent not only on the rate of the tax but also on the size of the income on which the tax is imposed. Both reason and experience demonstrate that in peacetime a moderate rate of tax on income will. in the long run, produce more revenue than a high rate. The ex- planation is (1) that the lower rate leaves in the hands of the taxpayers more income, which, when invested and put to work, produces more wealth, and (2) that the lower rate encourages investment and the produc- tion of wealth. This increase in wealth when invested produces additional income, which in turn when invested produces still more income, and so on. By thus increasing the national income, which tz the base on which the tax is levied, more revenue fs obtained and the wealth of the Nation is increased to the benefit of the people as a whole. Our own Government’s experience sup- ports this view. For examples, we must look to the period prior to the starting of the national-defense program in the spring of 1940, for since then our economy has been subject to the artificial stimulus created by A193 war, & stimulus which is rapidly disappear- ing. Secretary of the Treasury Andrew W. Mel- lon put this principle to the test after World War I and, by getting Congress to reduce dras- tically the income-tax rates, obtained larger revenue and incidentally paid off over $9,000,- 000,000 of the country’s World War I debt. Another example is furnished by a com- parison of the 6-year period from 1926 to 1931, inclusive, with the six succeeding years, 1932 to 1937, inclusive. During the first period the maximum individual income-tax rate was 24 percent in 1 year and 25 per- cent in the remaining 5 years. In the second period the rate was 63 percent in the first 4 years, and 79 percent in the last 2. De- spit. the much lower rates and the sub- stantially amaller population during the earlier period the national income and the revenue, as shown by the individual income- tax returns, were higher than in the later 6-year period with the higher rates and in- creased population. The present tax rates on individual in- comes, running to a high of 86.45 percent, are confiscatory and if continéed will in- evitably destray our system of private en- terprise and our American form of govern- ment and force us into some form of national socialism. The process by which this is accomplished is simple. 1. By increasing the taxes on industry and on those who invest capital in industry to an excessively high rate and maintaining them there. the supply of capital for industry is reduced. 2. Less capital for industry means less busi- ness, lower wages, and fewer jobs If the capita] supply is greatly reduced, business stagnation and large-scale unemployment follow; and if the reduction is large enough, the Government must step in and supply the capital, or chuos will ensue. 8. If the Government supplies the cap- ital, it eventually becomes the owner and we have socialism or communism. The effectiveness of taxation as a means of establishing communism has long been known to the Communists. In the Com- munist platform of Karl Marx, 2 of the 10 planks are— 1. “A heavy progressive or graduated in- come tax.” 2. “Abolition of all right of inheritance,” in other words, a 100-percent-inheritance tax. By this means Marx knew that he could dry up the sources of capital and ultimately abolish private property. which he declared to be the objective of the Communists Accordingly, if communism or socialism is to be avoided, it should be our objective to increase rather than decrease the capital supply. Without a constantly increasing supply of capital for investment in productive enter- prise no nation can be prosperous. For ex- ample, in normal] times about 8$4,000,000,000 of new capital is needed each year merely to give employment to the new crop of young people seeking employment, to say nothing of other needs. Largely because of excessive and unsound taxation, this capital was not forth- coming during the years between 1932 and the beginning of the defense program in 1940, and hence during that period there was large-scale unemployment, averaging as much as 10,000,000. Capital put to work provides jobs and higher wages. The automobile industry fur- nishes an excellent iJlustration. Based upon 1939 reports, the number of jobs created di- rectly and indirectly by the automobile in- dustry, which is less than 50 years old, was at that time 6,105.000. This is over 10 percent of the total number of persons now employed in all classes of employment, including those in the armed forces.
A194 The avernge American produces more and earns more than the citizen of any other nation because he is assisted by a large in- vestment in plant, equipment, and working capital. For example, aided by an investment of $25,000 per employee in railroad plant and equipment, an American railroad worker earns and is paid wages 100 times those paid a Chinese coolie who performs the same serv- ice without the aid of any equipment. Take from the American worker the railroad equip- ment and give him nothing but his bare hands, and his high wages would disappear. Likewise, a primitive Hindu textile worker earns a few pennies a day with her cheap, inefficient hand Joom, on which she can make but a few yards of cloth in a day. Aided by an investment per employee of 86,000 in mod- ern machinery and equipment, the American textile worker produces hundreds of yards of cloth daily and earns over $7 a day. These, of course, are but a few of the many examples, The capital required to provide the ma- chinery and equipment that have so greatly improved the lot of the American worker comes solely from the savings of corpora- tions and individuals Only a small per- centage of the people, however, save money for investment in productive enterprise. Studies by Dr. Carl Snyder and by Dr. Will- ford I. King, of New York University, indi- cate that the great bulk of the capital sup- plied by individuals comes from those hav- ing the larger incomes. If these savings are taken in taxes, the capital is not available and business stagnation and depression with large scale unemployment follow. Those who criticize the Knutson bill be- cause its rate of reduction is not graduated in favor of the smaller incomes are advocat- ing the course proposed by Karl Marx—a course which tf continued will inevitably de- stroy private enterprise and our American system of government.. In fact, it is to be regretted that the bill does not apply the same cut to incomes above the $302,000 level, as that applied to incomes below. It is not surprising, therefore, that peo- ple are expressing alarm at the opposition to the proposed reduction in itncome-tax rates. For example, in the Whaley-Eaton letter of December 28, 1946, it is said (p. 3): “Men talk of whether or not it is ad- visable to reduce taxation. The fact is, that unless it is reduced, communism or some other ism is inevitable for the simple reason that existing taxation is confisca- tory. It is liquidating not only the ‘kulaks,’ but also the white-collar classes and even the wage earners on whom the levies like- wise fall. Taxation is consuming capital- ism; it is nationalizing the income of indus- try, which may be quite as bad as direct Nationalization of plant.” As for expenditures, the budget of $37,500,- 000,000 proposed by you, Mr. President, is four times the highest peacetime budget in the country’s history prior to the starting of the defense program in 1940, and is a matter of grave concern. It should be greatly reduced, and to this end every unnecessary expenditure should be eliminated. The cry of “communism” and “socialism” is not the product of a distorted imagina- tion. If anyone thinks “it can’t happen here,” let him take a look at England, long the victim of a heavy graduated income tax on individuals, where socialism is about to become an accomplished fact, and let him at the same time read the following state- ment made by Mr. Gladstone in the House of Commons in 1876: “Of all the taxes on the statute book, the income tax is the only fax through which it is possible that socialism or communism, or anything ‘ike them, can in the nature of things find an entrance into our system. It cannot be done by indirect taxation. * * * I do not believe it unjust that the rich man should pay more liberally than the man of lower position; but the unlimited adoption of the doctrine is full of danger to the state, and I ask whether it is wise for us to give the smallest scintilla of countenance to that doc- trine, by adopting any proposal such as that now before us. * * * In the income tax we have a law admitting of being dealt with in a manner which would have given satis- faction to the Commune of Paris.” A cut of 20 percent in individual rates, I submit, is none too great, and should be put into effect as soon as possible and made ap- plicable to the year 1947, as proposed in the Knutson bill. Respectfully yours, ROBERT B. DRESSER. P. S.—In an address delivered in New York on December 16, 1940, on the subject, “The Tax Problem and Future Prosperity,” Dr. Carl Snyder, for many years statistician of the Federal Reserve Bank of New York and the author of “Capitalism the Creator,” said: “Deep and wide Lave been the discussions as to why this country should have had in the last 11 years no increase in product or in income over the levels reached in the late twenties. Eleven years without a parallel in the long history of this country! Careful compilations show that every 10 years since the founding of the Republic have shown an average rate of growth not greatly differing from one decennium to the next. In the last 50 years, up to 1930, this average rate of growth per annum has been about 4 percent. Since 1930 a complete arrest of this astonish- ing growth. * * * “But the primal cause? As 1 see it: the drastic reduction in business profits, due in targe part to the tremendous rise in taxa- tion.” After pointing out that the ‘net increase in capital invested over the last 100 years or more” had been at approximately the rate of 5 percent, Dr. Snyder continues: “I suppose this net annual increase in capl- tal investment seems so small] that the star- eyed gods of reform—and the prophets of the millennium which they would introduce— cannot believe that such extraordinary re- cults can derive from so slender a source. Forgetful of the acorn and the towering oak! * * * “Their (our industries’) fabulous increase in product js due to one thing and one thing alone; that is to machinery, new and in- genious chemical processes and all the like— not remotely to any of the fabled skill of the workman. That skill and energy were there, and it had been there, we have now evidence to show, for at least 5,000 years before this great outburst of industry in recent times began. * * * “But all this forty or fifty billion dollars’ worth of machinery and means of transport and the like has required a steady and defi- nite increase in the capital supply year by year. What our ‘statesmen’—so-called—ap- parently cannot understand, is that to stop this capital supply—to tax it out of exist- ence—is simply to bring the progress of the Nation to a standstill. This is exactly what it has done in the last 10 years of futile and fantastic ‘social experimentation’ and bun- gling and equally futile efforts to improve the lot of the common man. As if human nature could be changed by flat or decree! As if by laws and commissions or endless bureaus for this and that, human intelligence or skill could be increased by a hair's breadth! An utterly infantile belief that has already cost this country the incredible sums which I have mentioned and now threatens to con- tinue this enormous loss. For it now seems clear enough that it is Only the burden of unsound taxation and of restrictive laws and meddlesome bureaus that is holding back this country from the continuation of the great industrial and social advancement through five or six gencrations. Simply this and nothing else. As I see it, the greatest eco- nomic tragedy in our history. The price of ignorance, fatuity, and folly. No reason in the world why our national annual income should not today be one hundred and twenty APPENDIX TO THE CONGRESSIONAL RECORD or one hundred and thirty billion dollars, in- stead of seventy or seventy-five. “And consider what this vast sum, with its normal rate of increase, would amount to in another 10 years: a national income then of perhaps, €200,000,000,000. In no wise an idle fantasy. * bd ‘In the face of such a prospect, does it not seem incredible that we should have law- givers and lawmakers so blind to reality, so lacking in understanding, as to believe that the pathway to prosperity and national well- being is through the restriction of profits and the taxation of large corporations and large fortunes, when it would seem that even the blind could understand that it is high profits and chiefly large profits which have provided the capital funds for our wondrous industrial advancement and present-day wealth and well-being?” (Notr.—This letter states my Own views and is not intended as an expression of the views of the law firm of which I am a member.) Tax Reduction EXTENSION OF REMARKS OF HON. CLARENCE J. BROWN OF OHIO IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. BROWN of Ohio. Mr. Speaker, under leave to extend my remarks in the ReEcorD, I include the following broadcast by Hon. Samuel B. Pettengill, former Representative from Indiana: The big issue in Washington this week is how much money the Government should take from your pockets. For the third year after the end of the war in Europe, President Truman proposes to spend an average of $1,000 per family. He says we should not reduce taxes. Republican leaders, together with many Democrats, say we should. Let me begin this discussion by telling a story. A prize was offered for the strongest man at a county fair. Instead of tossing an anvil the greatest distance, the contest was to see who could squeeze the last drop out of a lemon. So a lemon was produced—whether from Florida or California I don’t know—a juicy lemon, anyway. All the blacksmiths and mighty men squeezed it one after the other until no one could get another drop. Then a little shrimp of a man stepped up. He had legs and arms like pipe stems and weighed about 110 pounds. He took the lemon in one hand and squeezed out another teaspoonful of juice. The judges were amazed. They asked, “How do you do it?” He said, “That’s easy— I'm the tax collector.” BOME PERTINENT COMPARISONS Now that we know who squeezes the lemon the hardest, let’s measure the juice. Nineteen hundred and twenty-nine was the top year in national income until war-buying abroad and national defense at home finally gave us the “fools’ gold” which President Roosevelt once called war prosperity. Until then the depression had lasted 10 years, and 8,000,000 still out of work in 1940 showed that the reformers had reformed, but the Nation had not recovered. Now, let's make some comparisons. Na- tional income today, in this post-war boom, has doubled since 1929, but Federal taxes have increased 13 times. . Nearly one-third of all your total income last year was eaten up by the tax locusts of Federal, State, and local governments. On
APPENDIX TO THE CONGRESSIONAL RECORD the average, out of each dollar you earned, you had left about 70 cents to spend. It is of course impossible to abolish all taxes, but if they were, the “take-home” of the average American family would increase 50 percent! That shows how to increase wages without raising prices. Reduce taxes and you increase wages. Keep the lemon from being squeezed and you have more Juice left. . CUT MEANS PAY BOOST A 20-percent tax cut this year, added to the tiny relief already graciously granted us since VJ-day, would amount to a 6-percent pay boost for those earning around 83,000 a year. And, as it would not increase prices but reduce them, it would stimulate consump- tion, production, and jobs. It would help to solve the housing problem. A married man with $5,000 income now pays 173 times as much Federal income tax as he paid in 1929. But that is income taxes alone In addition, there are scores of excise taxes—electric light bulbs, cigarettes, etc.— hundreds of items. Many of these taxes were imposed for the express purpose to discourage buying the articles during the war, Excise taxes have grown up twelve times. Now watch that little guy squeezing the lemon a while longer. State and local taxes are also going up. All kinds of taxes. In some cities a man pays three income taxes, to the city, the State, and the Leviathan on the Potomac. And here let me say a good word for the Tax Foundation and all similar organiza- tions fighting this engulfing flood of taxa- tion. You should rive them your support. MORE TAXES, MORE RENT Gasoline is taxed two or three times. Real estate taxes are going up. As they go up landlords have to ask for more rent. Taxes account for about one-fourth of all rent. Nearly every tax increase ts a forced mark- up of the cost of living, ordered by the Gov- ernment, So you see that this matter of big government and big taxes is at the heart of a lot of our problems. But let’s take another look at the little guy squeezing the lemon. What effect have taxes and Government debt on security for old age? That is certainly worth your look- ing into. Well, to begin with, we have a borrowing Government—one that pays its bills, in part, only by going into debt, as we have done now for 16 straight years. It forces interest rates down, so as to borrow as cheaply as possible so as not to make the voters mad by taxing them too much to pay the interest on the debt. You may say, fine, reduce the interest rate. WHAT LOW INTEREST ENTAILS But there is another side to that also. Everything has two sides. Government can give to nobody without taking from some- body. So let’s look at the other side of low interest rates, from the somebody stand- point. In 1939, only 8 years ago, you might buy for old age and the security of your family, when you can no longer work, a couple of bonds yielding $3 percent before taxes, or 66 income a year. Today those bonds, on the average, earn you only $5. But the purchasing power of the 65, due to the rise in prices, is only 68 percent of what it was in 1939. But that was before taxes. So watch the lemon squeezer again. Today you pay a higher tax out of the lower income. Putting these things all together, you must now save $2.50 to have it earn you the same net income to buy groceries as $1 bought 6 years ago. In 1980 money in the savings bank earned 4 percent. It now earns 1 t or 1% percent. That means that a school teacher or anyone else has to work longer in order to save two or three times as much in order to have the same income. The same thing is happening to life insur- ance. Because the Government has forced down the tncome from investments of the insurance companies, you now have to pay a higher premium for the same protection. Investment income of churches, colleges, annuity funds for retired clergymen, etc., is melting away. All this is done under the beautiful slogan of “social security.” You hear that word “social” and don’t see what is happening to “security,” @ man's own secu- rity and his family’s. . The result is, unless we change things, a man has to earn more dollars to make his old age secure. He has to keep on working when he would otherwise retire, thus shut- ting out job opportunities for young men and women. And that is important. There is still another way to look at this lemon squcezer Suppose in January 1937, you sold a small house for $3,750 and bought Government bonds. Well, the 10 years have rolled around. You cash your bonds for 85,000. Can you buy back the house you sold with the $5,000 you now huve? No, you can- not. The gain in interest has not offset the shrinking value of the dollar. In addition, you owe your share of the national debt, an invisible but first mort- gage, amounting to nearly $8,000 for the average family. Why do dollars shrink in value and prices rise accordingly? Is it your fault or the fault of industry? No, you don't issue dol- lars - unless you are a counterfeiter. ALL SAVINGS WORTH LESS What then is responsible for the fact that. your savings in Government bonds, insur- ance, bank deposits, pensions, social security cards, etc.. won't buy today what they bought 10 years ago? It is the war, of course, and~—and-—Gov- ernment policies in Washington, The people are responsible only becxuse they supported these policies under the cock-eyed notion that money is wealth, and that we could borrow ourselves rich. We are still pouring billions overseas under the “one world" notion that we have no right to be better off in America than other people. I say, why not, if we earn it, as we have done. Now, with the war over, we find that our money supply—currency and checks—has in- creased three times since 1939 and six times since 1933 And there is where your inflation comes from. That is why you can't buy back that house you sold 10 years ago. As President Parkinson, of the Equituble Life Assurance Society of the United States, says, high prices are not inflation—money is inflation. Yet the lobbies are still pressuring Con- gress for Federal aid to schools, highways, airports, and everything we haven't the cour- age to tax ourselves to buy right where we live. Social reform? Yes. Economic reform? Yes. But I say no reform is worth the candle unless it rests on a completely solvent gov- ernment. I know a man who has a social-security card issued by Bismarck's Germany 50 years ago. How much would it be worth to him now, even if he had not come to America? Think it over. LET'S INFORM THE REFORMERS Before we go in for more social reform in Washington, we had better reform our think- ing about taxes and debt, and pieces of paper called money, as being wealth. If we do that, we could put social reform on a sound basis. Those who make their living spending other people’s money brand everybody who has old-fashioned ideas about paying our bills as we go as a reactionary, a Troy, or a Fascist. But I’m leaving it to you whether they or the folks who think as I do have the real A195 interests at their heart of our old people, the disabled veterans who have nothing but a pension to live on, and our young people starting on life’s journey, looking for jobs. But perhaps the worst effect of high taxes is its deadening blight on new business getting started, or established business ex- panding. Profits, or the hope of profits, determine the birth rate of new business, which is an- other name for opportunities for Jobs. Taxes, on the other hand, increase the dcath rate of business. Even under former tax itates, the average, business lived only 5 years. Belleving, as I do, that prosperity is the greatest of all re- forms, and makes all others possible; aud believing, too, that the best security a wage earner has is a successtul employer, I hope you will look at the lemon squeczer from this angle. Today we are busy repairing the dostruc- tion of war. But take thought for tomorrow. Some day the other nations will recover and compete with us for the world's trade and our own trade with the price of their goods free from the cost of our social-security taxes and minimum-wape rates. We had better begin now to shingle the roof of American business. All taxes and government debt raise prices. And inflation is taxation, the cruelest of all taxes, becuuse it hits the poorest the hardest. Whenever government borrows money from a commercial bank, It, tn effect, creates money out of thin air. It is next door to greenbacks. It is like pouring water into milk. And it we have another war before we get this debt down where we can handle it, we will have to go as totaliturian as Hitler or Stalin, confiscate all private property and conscript everybody into government work camps. Then our social-security cards will be like those issued by Bismarck 50 years xgo. And keep this in mind The revolutionists in our midst would like nothing bettcr than a collapse of government caused hy unbear- nble debt and unpayable taxes MAKE OUR GOVERNMENT SOLVENT Now the optimistic side of this picture is our enormous capacity to create the new wealth to curry the debt ind g: dually pay it off. If we stop all the rackets in Govern- ment, business, and labor that cause more dollars to be paid out for no more goods, and go to work, we can pull through; if we back up men in Congress like Senutors Byro and Tarr in cutting Government spending. Work is the chief answer. That little word with four letters answers more problems than a library of lawbooks Government bonds are no doubt still the safest investment in the world. I advise everyone to hold his bonds, if at all possible, and to reinvest them when they fall due. But this ts a very unsafe world. Let us go to the heart of the problem. It is that gov- ernment costs too much, spends too much, taxes too much, goes into debt too deep. Let us make our Government absolutely solvent. Then the Government bonds and all savings will follow along. The tuil goes with the hide. Vandenberg’s Proposal for China EXTENSION OF REMARKS OF HON. DONALD L. JACKSON OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr, JACKSON of California. Mr. Speaker, under leave to extend my remarks in the Record, I include the
A196 following editorial from the Evening Outlook, of Santa Monica, Calif.: VANDENBERG’S PROPOSAL FOR CHINA The first evidence that this country may be ready to adopt a realistic policy toward China has come from Senator VANDENBERG. In his address to the Council of World Af- fairs at Cleveland he urged that the United Btates abandon its present policy of treating the Chinese Communists on a basis of equal- ity with the National Government and throw its support to the non-Communist coalition . which is trying to put China’s new consti- tution into effect. This is the first time anyone has dared to suggest that we should take sides in China against the Chinese Reds. The plain fact is that we have not been neutral and can- not be. We helped the Chinese Nationalist Government during the war and since. It has represented whatever nation there is in China. It gallantly resisted Japan through years of one-sided war, without any support from the Chinese Communists. In the final phase of the war, when Japan was already hopelessly beaten by our own forces, we made the capital mistake of inviting Russia to come in for the final kill. If that action was not tae only cause of the present Chinese civil war, it did have the effect of confusing the issue in China and blinding many Americans to the under- lying realities of the situation. Having urged Russia to become a leading pa-ty tc an oriental settlement, we felt obliged to con- sider the Chinese Communists on a footing of equality with the Natiorelist Government. The folly of our action is shown by the fact that in 1945 Russia had recognized the Na- tionalist Government a: speaking for China and had reached a complete agreement with it. But once Russian armies were in Man- churia, at our invitation, Moscow naturally began to back the Chinese Reds and to press & propaganda campaign for the United States to withdraw from China entirely. The mission of General Marshall failed be- cause it was dedicated to the impossible goal of reconciling the two Chinese parties, on the false assumption that the Chinese Com- munists would support a genuine democratic regime. Meanwhile, the Nationalist Govern- ment had done two things which should have led General Marshall to revise his policy. It had staked its future on smashing the Com- munist power and on giving China a truly democratic constitution, somewhat on the American model. Senator VANDENBERG wants the United States to throw its influence on the side of this new Chinese Constitution. It alone of- fers hope that China may become a demo- cratic nation, able to accomplish her own regeneration and recovery. The goal of the Chinese Communists, as General Marshall has made clear, is nothing less than a com- pletely communized China, which can only mean prolonged civil war. ‘Generalissimo Chiang Kai-shek may be less “liberal” than our State Department would like, but he is right in believing that the power of the Chinese Reds must be smashed before China can develop as a great nation. That is the reality, and unless our State Department recognizes it and shapes our pol- icy accordingly, there will be no peace in China and no recovery in our time, Senator VANDENBERG'S proposal will, of course, be furiously denounced by our Reds and fellow travelers. Henry Wallace and his kind will argue that it would array us against Russia in the Orient, ruin Big Three har- mony, and lead us down the road to war. But it need do nothing of the kind if we pursue it with the same firmness and patience which we have used in opposing Russian aggres- sion in Europe. Russia is not going to fight us {f we back the new Chinese Constitution and the Generalissimo. Russia will only scream—while we continue to hold the trump cards. Senator VANDENBERG's suggested policy is the only one which makes any sense in China. If we do not apply it, we risk the complete collapse of that country and its ultimate domination by Chinese Communists under Moscow. Reciprocal Trade Agreement Program —— EXTENSION OF REMARKS HON. B. W. (PAT) KEARNEY OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. KEARNEY. Mr. Speaker, under leave to extend my remarks in the Rerc- ORD, I wish to include a statement I made this morning before the Committee of Reciprocity Information pertinent to proposed further tariff rate cuts under the reciprocal trade agreements pro- gram: Members of the Committee for Reciprocity Information, gentlemen. you will no doubt agree that any inquiry into the merits of the reciprocal trade agreements program may well be prefaced with a brief inquiry as to its purpose. The Reciprocal Trade Agreements Act is a very clever piece of legislation enacted as section 350 of the United States Tariff Act of 1930, thereby obviating the rewriting of the Tariff Act, a tremendous undertaking in itself, by delegating to the executive depart- ment of the Government the power to adjust tariff rates either upward or downward in the discretion of the Chief Executive, under advisement of the State Department. Note that rates may thereby be revised upward for the protection of any branch of our American industry which may warrant it. Evidently this is contrary to the lean- ings of the State Department inasmuch as never once in the past 12 years since the inception of the Trade Agreements Act has even one single rate been increased. The Trade Agreements Act was introduced as a temporary piece of legislation to relieve unemployment in this country and to allevi- ate economic distress in other countries by affording them greater dollar exchanges through a concession to them of a larger share of our domestic market, which might logically be expected to result from lowered tariff rates. That it did not alleviate unem- ployment in this country between 1934 and 1941 and that it did not serve to prevent wars is quite obvious from the record. It is, furthermore, apparent that the tariff rate cuts conceded to other nations just prior to the war have not at this time had an opportunity to demonstrate just how effective they can be in favor of the foreign producer and how detrimental to the domesic manu- facturer. We do know that they stimulated imports; and only the preparation for the recent con- flict interrupted the upward trend in volume of imports, which started as succeeding agree- ments were written just prior to the war. We have every reason to believe that those same reduced rates within the next few years will clearly demonstrate that they are only ade- quate to afford foreign producers a liberal share of our domestic market. I cannot therefore understand just how anyone can propose cutting these rates further at this time without first establish- _ing a waiting period until we shall have a clearer picture of just what imports we may expect in the postwar period, APPENDIX TO THE CONGRESSIONAL RECORD Today American producers are deeply con- cerned with the State Department's policy of going ahead now with further tariff cuts, as is quite evident from the printed records of the congressional committee hearings of 1945 on this subject. More industries than ever before filed briefs and made appearances at the hearings conducted by the House Ways and Mvans Committee and the Senate Fi- nance Committee in that year, Today more industries than ever before have gone into exhaustive detuil in preparing their state- ments submitted to your committee in opposition to further tariff cuts. We read statements in the daily press that this program of tariff reduction is being pur- sued for the best interests of our people and in conformity with a mandate from our pectie, as expressed by their congressional representatives when the act was renewed in June 1945. This however is not truly the case. Both congressional committees, after hearing the evidence presented, recom- mended passage of the Act, but with severe limitations. It was passed in Congress after unprecedented delay and by only a slight majority, and then perhaps at the urging of our new President, who asked that it be Passed as ‘the first business of importance” of his Administration. A survey conducted by the National Opinion Research Center in 1945 disclosed the thinking of the American people. In answer to the question, ‘Would you be in favor of or would you be against letting goods come into this country which would sell for leas than our goods?” 78.7 percent of the 94 percent who expressed an opinion answered that they would “be against let- ting goods come into this country which would sell for less than our goods.” Only 21.8 percent favored the free flow of lower- priced, competitive foreign goods. Naturally we are all in favor of the free flow of non-competitive foreign goods such as tea, coffee, cocoa, or any other products which do not directly displace the products of our own farms. The NORC commented: “A majority of every population group studied favored keeping out conipetitive foreign goods. It is significant that both Republicans and Demo- crats questioned were in close agreement on this issue.” This harmonizes with recent press reports on the Association of Southern Commission- ers of Agriculture of the 13 Southern States (proverbially overwhelmingly Democratic in national elections), which filed briefs insist- ing that southern agriculture shall not be ex- posed to imports which could wreck the domestic market, but favoring imports of a noncompetitive nature from other parts of the world which, in turn, would make it pos- sible for us to export an equal volume of our surplus products. After reading news reports and digests of many of the briefs filed by opponents of the Trade Agreements Program, as now admin- istered, I am personally convinced and can only draw the conclusion that the program's opponents do not fear fair or reasonable com- petition with foreign goods. They do, how- ever, see the need for a differential—in terms of a tariff or excise tax on imports or quanti- tive control—to measure the difference be- tween domestic and foreign living standards due to lower foreign wage rates, or longer hours, or other comparable factors, where machines and man-labor are otherwise equal in productive efficiency, When speaking of productive efficiency it has been seriously contended by proponents of the program that perhaps our American handicraft industries are inefficient because they must depend upon a protective tariff for their existence; and that, consequently, as “weak sisters” in our economic set-up, they do not deserve such assistance, but should be made to sink or swim on their own merits, On the surface this may sound like a forth- right argument in favor of clean and decent
APPENDIX TO THE CONGRESSIONAL RECORD competition between the domestic producer and the foreign manufacturer. Actually it is a slur on American handicraft industries. It is furthermore based on a fallacy. If there were such a thing as international laissez faire, this might hold true, but we have seen the devious means resorted to by our foreign competitors who wish to move their goods on the American market at any cost in order to establish dollar credits. It is toward the elimination of such prac- tices that the trade-agreements program is aimed, but certainly to effect our purpose we need not resort to the lowering of rates, for such a procedure is wholly unwarranted. If an American glove manufacturer, for example, must buy his raw material at a higher cust to him than his foreign competi- tor and must then convert his raw skins into finished gloves at labor rates which rank with the highest of any industry in this country, he certainly cannot compete pricewise with his foreign competitor who purchases raw skins at a lower cost and converts them into finished gloves through operation of a cot- tage industry with little or no overhead, and where there is no semblance of a true factory other than a distributing point for raw ma- terials and a collection point for finished Bloves: whose labor rates at the very highest are but one-third of ours; and who is not in the least concerned with factory overhead, paid vacations, social security, unemploy- ment tnsurance, employee health and hosp!- talization insurance; and whose people are free to work any number of hours their physi- cal endurance will permit. If that may be called fair competition, then I don’t know what reasoning to expect from the propo- nents of a general downward tariff revision. Taking the glove industry again as an ex- ample, we find that it is a healthy industry in the American economic set-up, having amicable labor relations, clean factories, prac- tically no homework, a voluntary health insurance plan for employees, pnid vacations, and one of the highest hourly wage rates of any industry in this country. It is situated in small communities, in line with our na- tional policy of decentralization of industry, highly competitive within itself, being com- posed of a number of smal] companies with no monopolies; thereby assuring the Ameri- can consumer a fair competitive price for its product. And yet that same glove industry, the knit glove and fabric industry, is one of the handi- craft groups that necessarily depend upon tariff protection and that have been vilified by proponerts of the trade-agreements pro- gram as inefficient industries, not directly, but by inference. These enthusiasts who speak so forcefully of increased foreign trade have never had the courage to specify even one industry which they might consider inefficient. It is with this type of smear technique that we are forced to contend; and I would therefore like to point out today that as far as the handicraft industries with which I have been associated intimately all my life are concerned, I can assure you that the competition that our American manufac- turers in the leather and knit-wool glove in- dustries have met with, both among them- selves and with importers, is such that over a long period of years it has been proven they must be efficient or they never would have survived, Handicraft work necessarily implies a high labor content in the direct cost of produc- tion; and it is this item of cost which cannot be further reduced, and which has been the target of the ‘s proponents. Wher- ever possible in the industrial history of the United States this item has been shrunken by American manufacturers through tech- nological improvements in the form of new machinery, improved machinery, and mass production; but how can an American manu- facturer be indicted for inefficiency on his failure to reduce this item of cost any more than hie foreign compctitor may be credited with efficency because his item of labor cost is lower as a result of a lower foreign stand- ard of living, longer hours of work, and an almost complete lack of costly social benefits? Since this item of cost cannot be reduced and since it is one which reflects payment of wages to workers, we must, as we have done historically, establish or maintain some equalizing device whieh will offset the differ- ence between our higher American labor costs and the lower cost of foreign lubor in identical competing products. This country has only used one method in doing this and that has been the protective tariff. We huve no other method by and large to keep our American manufacturers on an equal basis in marketing their products in their own country in competition with imports. It is now proposed that we shrink this measure of equalization today in a period when Our labor rates are several times higher than they were back in 1930, when our pres- ent Tariff Act was passed We have been assured that In the coming negotiations every possible precaution will be taken to avert tnjury to American in- dustry. I am certain that it can be proved beyond a reasonable coubt that further tariff cuts, especially in this era of international chaos, wil] do irreparable harm to our do- mestic glove-manufacturing industry, which proved itself so vital a part of our national defense program during the recent war. The fine leather dress glove industry and the knit wool glove industry and tabric in- dustry are located in small communi- ties throuvhout more than 18 States. and when the day comes, as it surely will under the encouragement of further lowered tariff rates. that imports increase. you may be cer- tain these small communities dependent upon this one industry will be wiped out. An outstanding example is Fulton County, N. Y. It presents a picture on a large scale of what we find in a lesser degree through the country, in smaller communities. Just prior to the war instead of being the center of fine dress-glove manufacture for the United States, it right probably more aptly have been called “the center of glove labor employment in the United Stutes.” directly through the vicious competition. pricewise, of other countries, such as Belgium, Czecho- slovakia, Germany. and Italy. In 1938 glove labor took a 10 percent cut in wages as a solution to one problem: How to manufacture a dozen gloves at $15.75, when the competing price wus that of the Czecho- slovakian glove which sold for $14.50. It was simply a question of our labor absorbing a logs in order to allow the manufacturer to compete with that country in our own home market. That same country, under a nationalized economy, with controlled costs of produc- tion which will be entirely unascertainable by our Government, is now back ma.«ing gloves, with a volume that increases every month. Added to all the historical foreign coun- tries of origin are Argentina, Brazil, and Mexico in the fine dress-glove field, and Can- ada, Mexico, and Cuba in the work-glove di- vision. If past tariff rates, established to enable this industry to compete with foreign sources, are to be again lowered, in the face of in- dustry’s crucial tariff history, then certainly some other device must be drafted to enable it to survive pricewise ‘n competition with foreign sources in the days ahead. I have read the very thorough briefs pre- sented jointly by labor and management in the knitted- and leather-glove industries, which have been filed with you; and it would only be redundancy on my part to go into further detail on the grave problems which the members of these industries realise must be faced if they are to remain in the field of American business life. Al97 I do wish to emphasize, however, that these industries have certainly merited the mast sincere considevation on the part of our Gov~ ernment when it meets with the 18 other lead.ng trading nations of the world to nego- tiate the new reciprocal trade ugreements, which we all so earnestly hope will fulfill the purpose of the program and stimu'nate a better social and economic relationship among the peoples of this earth. Second Bridge Across San Frarcisco Bay EXTENSION OF REMARKS or HON. GEORGE P. MILLER OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Monday January 20, 1947 Mr. MILLER of California. Mr. Speaker, a joint Army-Navy board is in the precess of making siudies for the location of a second bridge across Sin Francisco Bay. I have urged that this crossing be lo- cated southerly of the present bridge, and preferably from the vicinity of Hunt- ers Point to the vicinity of Bay Farm Island in the city of Alameda, Alameda County, Calif. One of the most rapidly developing sections of California is the scuthern Alameda County section. It has all of the natural facilities that go to meke a great industrial district. and its climate mekes it. one of the most desirable resi- dential districts in California. A bridge at this location would not only break the bottleneck of traffic that now exists and would be materially ag- gravatcd if a new structure is built with- in a few hundred feet of the existing structure, one of the suggested locations being examined by the joint Army-Navy board. The city of Alameda, through its city council, has unanimously adopted a res- olution asking the Army-Navy hoard to take into consideration and to g)ve weight to certain pertinent factors per- taining to the location of this bridge, and that this resolution may become of such record, I insert it in the Recorp at this point: “Resolution 3448 “Resolution memorialiging the Congress of the United States of America in the mitter of the construction of a second trrttic crossing between San Francisco and the area commonly known as the East Bay “Whereas the joint Army and Navy hoard is now making studies for the location of a proposed new bridge across San Fiancisco Bay, pursuant to House Resolution No. 529, Seventy-ninth Congress, second session; and “Wherens the Toll Bridge Authority cf the State of California is making a similar study under authorization of its resolution; und “Whereas these reports will be submitted to the Congress of the United States: Now, therefore, be it “Resolved by the Council of the City of Alameda, That the Congress of the United States be, and it is, hereby memorialized on this subject and respectfully requested in its study of the aforementioned reporis, to give due weight to the following considera- tions, to wit:
A198 “1, That the volume of traffic over the present bay bridge is such as to make plainly evident the immediate need for a new structure. “2. That the location of the present bay bridge does not adequately serve the larger portion of the population of Alameda County. Out of a total county population of 743,000, the areas east of Lake Merritt and to the southern county line, including East Oakland and the cities of Alameda, San Leandro, and Hayward, have a population of 391,271. To the traffic emanating from this area must be added that which originates in the cities and towns along highway 50 and that part of highway 99 from Stockton to Bakersfield. “3. That the approaches to the presently existing structure ure not adequate to prop- erly care for the traffic of the bridge. “4, That the location of the proposed bridge should be to the south of the present structure and so situated that it might adequately serve the areas hereinbefore described. “65. That the construction of a new bridge in close proximity to the present bridge would add greatly to the existing confusion in, and difficulties of, handling traffic in these areas, “6. That of all the bridge plans submitted for study, the Walsh plan, providing for a bridgehead at the foot of Army Street in San Francisco and a double bridgehead in Alameda—one to serve West Oakland and points north, and one to serve Southern Ala- meda County—would most adequately serve this area. “7, That the cost of construction of the bridge proposed under the Walsh plan, or some other similar plan, would be much more economical than any other proposed location because of the fact that the lands are now available und open for the proposed construc- tion work. “8. That a recent study of the diversion of traffic from the present bridge discloses that approximately 25 percent of the present bridge traffic would be diverted to the pro- posed bridge if built between Army Street and Bay Farm Island, and that the volume of ‘peak’ traffic diverted would represent approximately 50 percent of such traffic. “9. That the greatest industrial and resi- dential expansion and development in Ala- meda County has been, and will continue to be, in the area that would be most adequately served by a bridge from the foot of Army Street in San Francisco to Bay Farm Island in Alameda. “10. That a crossing on the location herein proposed would bring the San Francisco municipal airport and the Oakland airport many miles nearer each other than another crossing in the vicinity of the present bridge which would be of first importance in case of war. “11. That the rich San Joaquin Valley with all its products which are shipped to the Ban Francisco market would have a direct freeway into the city with a minimum of traffic stops and with the practical elimina- tion of traffic congestion areas. “12. That a second crossing at the location herein suggested would give a wide distribu- tion of traffic and tend to eliminate conges- tion rather than to concentrate traffic with increased confusion as would be the case with @ second crossing in close proximity to the present bridge. “And be it further resolved, That in con- sideration of these factors, the Congress of the United States, and all other bodies vested with authority to deal with this subject, be, and they are, hereby respectfully urged and requested to find and determine that the pro- posed bridge should have its westerly termi- nus at Army Street in San Francisco and its easterly terminus on Bay Farm Island in Alameda and to authorize and direct its con- struction accordingly.” I, the undersigned, hereby certify that the foregoing resolution was duly and regularly introduced and adopted by the council of the city of Alameda in regular meeting assembled on the 7th day of January, 1947, by the following vote, to wit: Ayes: Councilmen Howe, Jones, Osborn, Sweeney, and President Branscheid, (5). Noes: None. Absent: None. In witness whereof, I have hereunto set my hand and affixed the official seal of said city this 8th day of January 1947. J. P, CLARK, City Clerk of the City of Alameda. Another Truman Success EXTENSION OF REMARKS OF HON. AIME J. FORAND OF RHODE ISLAND IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. FORAND. Mr. Speaker, under permission previously granted me, I in- clude as a part of my remarks a very interesting article written by Gould Lin- coln which appeared in the Evening Star, Washington, D. C., on January 18, 1947, The article follows: THE POLITICAL MILL (By Gould Lincoln) Chalk up another success for President Truman—an amicable settlement of the con- troversy between the Army and Navy, the War and Navy Departments, over the proposal to merge the Departments, creating a single Department of National Defense. The final settlement, it is true, retains so- called Secretaries of War, Navy, and Air Forces, to head each a department. But over them is the Secretary of National De- fense, with Cabinet rank, to coordinate them all. The Secretaries of War, Navy, and Air Forces will not have Cabinet rank—but they are to retain the right to talk direct to fhe President. Time alone will disclose whether this right to go over the head of the Secre- tary of National Defense to the President is @& good thing. It, however, was probably the price of agreement. The country is being treated to a phenom- enon—a recrudescence of popularity of a President who was on the down grade dur- ing the first 2 years he was in office—or nearly 2 years. If it continues, the Repub- licans will have to watch their step in Con- gress and out or they may miss the big prize— the Presidency in 1949—to which they have so confidently looked forward since the elections of 1946, For if 1946 was a bad year for Mr. Truman, 1947 is taking on another hue. On the in- ternational side, relations with Soviet Rus- sia appear to be on the up-and-up largely due to the firm policy advanced by Secre- tary of State Byrnes, with the backing of President Truman, and, equally important from the point of view of national unity, with the backing of Senator VANDENBERG, of Michigan, now chairman of the Senate For- eign Relations Committee, and of Senator CONNALLY, of Texas, former chairman, Fur- ther, the appointment of Gen. George C. Marshall, who as Chief of Staff played a major part in winning the Second World War, to succeed Mr. Byrnes as Secretary of State has met with wide approval. On the domestic side, where the President sustained his severest loss in prestige and popular favor last year, there has been a distinct improvement. It has stemmed first from the President's fiat refusal to bow the knee to John L. Lewis and his striking coal miners and, second, from his belated, though APPENDIX TO THE CONGRESSIONAL RECORD necessary, removal of many of the wartime controls over production and prices. Fur- ther, there has been a lull, at least in the battle between organized labor and man- agement on many fronts, a battle which lost the country untold billions since the close of the war and retarded reconversion to peacetime economy. In addition, the Presi- dent has taken the bull by the borns and recommended some amendment of the Fed- eral labor laws—not enough by any means— but some, which marks a distinct withdrawal from the adamant position of the Roosevelt New Deal administration. His labor legislation recommendations have been hailed in some organized labor circles as fair and moderate. There are in- dications labor will rally back of his pro- gram—as the best line of defense against the more drastic proposals advanced by the Republicans in Congress. If labor follows such a course, and at the same time uses enough common sense to abandon demands for large increases in wages at a time when prices of commodities have started to fall, Mr. Truman may emerge as the real friend of labor—which certainly will not hurt him in a contest to succeed himself in the 1948 na- tional election. The best way to play politics, sometimes, is not to play them at all. The moves Mr, Tru- man has been making, on the surface, have not been good politics in that they did not appear to be calculated to appease the rad- icals who stuck to the late President Roose- velt like a leech. When Mr. Truman kicked Henry A. Wallace out of the Cabinet, the rad- icals let out a wail and threatened reprisals. The removal of Mr. Wallace, however, made a hit with a lot of people—and this country, at bottom, is not radical. Mr. Wallace was the last of the Roosevelt Cabinet remaining on the pay roll, except Secretary of the Navy Forrestal. The fum- bling which took place at the White House over Mr. Wallace’s New York speech, attack- ing the foreign policy which Secretary of State Byrnes was pursuing, injured Mr. Tru-~ man's prestige. The result—the elimination of Mr. Wallace—did not hurt at all. Face to face with a Republican-controlled Con- gress, Mr. Truman is aé last himself, appar- ently, without seeking to play the Roosevelt role or listening to those who insisted they spoke the thoughts and policies of the late President. Few people in this country, if any, hate Mr. Truman. Many have been sorry for him because of the heavy burdens he has had to bear in the immediate postwar period. A good many have admired the courage with which he faced the railroad strike and the coal strike—either of which might have brought disaster to the entire country. His expressed willingness to cooperate with Con- gress, if it works out, will do him no harm. If the Republicans, for their part, try to play too much politice—merely to hamstring Mr. Truman—so much the worse for them in 1948. Third District of California, a Mighty Agricultural District EXTENSION OF REMARKS oF HON. J. LEROY JOHNSON OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. JOHNSON of California. Mr. Speaker, the Third District of California comprises five counties, namely, San Joaquin, Sacramento, Yolo, Solano, and Napa. Each of them has some excellent
APPENDIX TO THE CONGRESSIONAL RECORD agricultural areas. This district is in the center of the great interior valley of Cal- ifornia and straddles the delta of the Sacramento and the San Joaquin Rivers. Among the crops raised in this area are almonds, walnuts, grapes of all kinds in- cluding table grapes and wine grapes, celery, asparagus, sugar beets, potatoes, tomatoes, beans, lima beans, corn. al- falfa; beets, peas, onions, carrots, spin- ach, peaches, apricots, prunes, pears, plums, cherries, strawberries, and other crops. Most of the farming is done by means of irrigation. In other words, it is intensive farming where water is ap- plied to the land during the hot summer season when California has no rainfall. The value of the crops for 1946, by counties, is as follows: San Joaquin County..-...---- $129, 000, 000 Sacramento County... - 85,000, 000 Solano County......--------- 22, 000, 000 Napa County..... ---- 16,202,000 Yolo County___..-.......---- 45, 284, 711 Total __..------.------- 247, 486, 711 San Joaquin County leads all of the counties in the Third District in the annual value of its agmcultural crops, and for 10 years has been in the first 10 counties of the United States as one of the highest annual producers, when measured in dollars, of agricultural products. I take pride in and it is a pieasure to represent a district that is as fertile and productive as this is. Many of these crops are processed, and the district is filled with canneries, sugar-beet refin- erles, and other plants having for their purpose the preparation of these foods, in various forms, for the people of the United Svates. Our people are not only great pro- ducers, but they are very generous. Scarcely a week goes by but what some- one sends something to ow office pro- duced on the farms, canneries, and wineries of the Third Congressional Dis- trict. These shipments we shared with my colleagues and others. Address by Hon. James A. Farley, Chair- man of the Board, the Coca-Cola Ex- port Corp. EXTENSION OF REMARKS HON. SOL BLOOM OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. BLOOM. Mr. Speaker, under leave to extend my remarks in the Rec- orp, I include the following address by the Honorable James A. Farley at the testimonial dinner honoring Prime Min- ister Constantin Tsaldaris, of Greece, sponsored by the Justice for Greece Com- mittee at the Waldorf-Astoria Hotel, New York City, on Monday evening, De- cember 16, 1946: I account it a pleasure and a privilege to be invited to speak to you tonight. This is a time in the affairs of the world when hon- est men everywhere want to stand up and be counted. I esteem it an honor to be ac- counted among those who have espoused the Cause of Greece. To you, Mr. Prime Minister, I should like to make a word of explanation. During the last war a phrase developed in our own American speech that I have always Uked. When someone undertook to speak on behalf of the American soldier, the plain simple man in the ranks, the man who did ‘not sit behind a desk, the man who was a thousand miles .tom the “big brass,” the man who did the job of working and fighting and sometimes dying for our common cause, when I say someone took the rostrum or the fleld on his behalf, he very often remarked: “I am speaking for a million good guys named Joe.” Mr Toastmaster and Mr. Prime Minister, that is my place and my function tonight. I am not representing any particu- lar political party, any specialized subdivision of this Commonwealth any race, any creed, any sect. I want to speak to you, rather, on behalf of several million very good persons named Joe and John and Jack and Bill and Mary and Louise and Elizabeth These persons for whom I speak are the good. common folk of these United States. They are friends of mine. I know a lot of them. They are the common folk who work hard for a living They read the newspapers and they listen to the radio, but they are also very busy in the ‘mportant occupation of making both ends meet. They gather in their small clubs and discussion groups and &@ great many of them don't even follow that formality. But they have ideas and ideals. They form opinions and judgments. They supply the lifeblood of this political society. I think I may say with some candor that I know something of how these millions of good persons think and feel. I have never been very far away from them all of my life. In fact, sir, I may say that 1 am proud to be one of them. Surely it is no secret and surely it treads upon no official toes to declare that those common folk sre not entirely satisfied with what has happened and has been happening in the case of Greece. The newspaper com- ment you have seen reflects a genuine Ameri- ean attitude and that attitude has been made manifest in many other forms as well. The American ts traditionally devoted to fair play. He is proud of the fact that he does not tuke a mean advantage. He is sensitive about his straightforwardness, his basic honesty, and his courage. He ts not at all sure now that those at- tributes have been reflected in the course of action that has been taken in respect to Greece. Perhaps this simple and straightforward American, this one of several million good guys named Joe or Mary, is not completely informed on all the finer points of negotia- tion respecting Greece. He probably hasn't had time to read the text on various debates and discussions at Flushing Meadows or Lake Success or here in the Waldorf Towers. But he has some very solid convictions about right and wrong and one of those convic- tions is that he doesn't go back on his friends. The American knows that Greece, as a nation, is a friend of the United States, as a nation. He knows that the individual Greek, and he’s met a lot of them, is a friend of the individual American. He has not forgotten moreover what hap- pened in the early days of the war. He has not forgotten that the Axis military machine was repeatedly pictured to him, by a design, of course, as completely invincible. The Facist legions and the German hordes would, of course, he was told, sweep everything before them. The news that he received was @ bleak record of disaster upon defeat. It was at that time that the men in the mountains of Greece punctured the Axis A199 superstition of invincibility. The Greeks stood their ground. They were outnumbered, they were outgunned, but they were never outfought. The American cannot and will not forget that the Greeks stood fast and showed that free men could remain free, that brave men could fight against the odds and could etill win. If he thought at all about what would happen to Greece after the war, he took it for granted that she would enjoy the same treatment, the same privileges, the same opportunities, the same concern, as that which would be accorded to any victorious ally. This is only natural. Such an attitude would be the logical reflection of the sense of just obligation of the sense of fair play. It is not surprising, therefore, that the American is chagrined by some of the things that have taken place. He suddenly dis- covers that Greece, instead of being the tried and trusted friend, has become a "prob- Jem”. He finds that the Greek cause, in- stead of being the most logical und natural thing in the world, has become the subject for confusing debate and for uneasy com- promise. It is, therefore, small wonder that he has expressed his dissatisfaction. It is not in the American way to forsake a friend in need. It is not in our tradition to retreat in the face of threats. to He down before obstacles. There is perhaps. however. some basis for the confusion that hus existed in many minds. What would have appeared from the beginning as a very simple case of doing justice to and for an honorable ally has been complicated by the intrusion of many other issues that are not at all germane tuo the major facts in the case. There have been political differences in Grecce, for example. That is hardly astonishing since there huve also been some profound political differences in France, in Belgium, in Britain, and even I suspect in these United States. There has been a difficult problem of rehabilitation and recovery in Greece. That also certainly is not surprising since the degree of devasta- tion wrought in Greece by the Axis invasion has been tremendous. There has been quite naturally some degree of unrest, of inse- curity. Nothing could have been more logical. But what has happened is this. By acci- dent or by design, and I think the latter would be correct, this division of opinion has been developed into a political issue that clouds the basic facts in the case. Subtly the whole good cause of Greece has been made an ideological battleground for two great conflicting theories of government. The Greeks chose to remain where they had been from the beginning; in our camp and on our side. As a result they have been subjected to pressure from within, to forays from with- out, and to a campaign of almost unpalal- leled vilification. The precise mold and form that the Greek political state takes at the present time is after all primarily the concern of Greeks. We are committed to the right of people to live under governments of their own choosing. The Greeks huve made their choice. The fact that another body of organized political thought finds that choice disadvantageous to its own aims does not modify in any degree the right of the Greeks to do as they have done or the justice of the claims that Greece may make upon her friends and allies. I submit, sir, that a certain amount of po- litical dust has been thrown in the cyes of right-thinking and well-meaning persons in a desperate attempt to blind them to the issues. On the other hand, the very fact that such a situation has come about should make it plainer than ever that i! there is to be a d- vision along the lines of ideologies and in- stitutions, Greece should be allowed to choose freely inta which cetegory she will fall.
A200 Manifestly Greece cannot take this course of action unaided. For these are perilous times for defenseless small states on the bor- ders of some great powers. Greece needs friends as she has never before in recent times needed them. Friendship can be ex- tended to Greece in a number of ways. First of all, it is the obligation of Greece's allies to give the fullest possible attention to Greece's justifiable claims for her own secu- rity. In a number of instancer since the end of the war we have advanced, as the basis for decisions that have been made and steps that have been taken, our own inalienable right to see to it that we are not again placed in jeopardy. We have claimed that repeatedly as a natural function of a sover- eign state. If that be true, how then, can we deny to a friend and ally the inalienable right to the same safety and security? The danger to Greece is real, and it affects us. The mode of meeting that danger is much more apparent than any plans that we our- selves are making for or own future secu- rity. Greece has asked for modification of frontier areas to her own military advantage. In the light of the fact that those frontier areas have been in the past made the path of invasion and are being now made the ground from which constant pressure is being put upon the Greek state, this claim seems just. The Greeks are not asking for some type of specialized advantage at this point or at that. They are not demanding some curious sum in reparation based on a bill of hypothetical losses. They are only asking for elementary security. They are asking for a physical adjustment that will give to them the sense of safety and thus the peace of mind that makes recovery possible. Naturally we have a stake in that recovery. There will be no free world, sir, if Greece is in chains. There will be no democratic world if Greece is high-pressured into a po- litical organization that the Greeks them- selves have long since discarded. In this international trial of opposing political ideas, Greece needs friends in court. A few million good people, for whom I speak, want to be those friends. They recognize that the enduring stability of our own in- stitutions is part and parcel of our relation- ship to-the whole world. What happens to Greece is part of that relationship. It is, therefore, part of our own instant and vital concern. Americans will not be content to see this stronghold of freedom forsaken. They will not be content with an inglorious retreat, with weasel words to define some new and treacherous appeasement. We hope, Mr. Prime Minister, that your visit here will be the occasion of once more bringing before all the people the just claims of the nation you represent. We hope, sir, that you will find now and in the future, as others have found in the past, that Americans are neither recreant to their responsibilities nor unmindful of their obligations. We hope that you will be able to return to your own people and tell them that in the people of these United States you found stanch advo- cates and true friends of justice for Greece. Present-Day Four “R’s” in Education EXTENSION OF REMARKS HON. JOHN R. MURDOCK OF ARIZONA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. MURDOCK. Mr. Speaker, for many years we have conveniently—if not grammatically—listed the three “r’s” of public education as “readin’, ‘ritin’, and ‘rithmetic.” But I notice that editors and publicists are adding a fourth “r” to the list, meaning “raise in teachers’ Salaries.” Volumes have been written and spoken on the educational need of today, and most of it calls for Federal aid for our public schools. The demand is growing in these days because the need jis becoming more apparent and the edu- cational crisis greater. I have favored widening the financial support of the American public-school system. I have long seen the need of equalizing educational opportunities for all the children of our Nation. I recog- nize the inequality of wealth in various sections of our great country, resulting in educational “low grounds” in certain areas. These educational “low grounds” can be leveled up only through Federal aid, properly applied. Even in areas where the wealth is moderate, or ade- quate to sustain a good school system under normal conditions, the present- day shifting in population and the build- ing and faculty problems which have grown out of the war years make Federal aid for education, in some form or other, most essential if we are to continue our great system of free—and efficient— public schools. The control and direction of educa- tion is a local matter. I would not favor control from Washington. I believe it is possible, however, for financial support to be given out of the Federal Treasury where it is so imperatively needed with- out dictatorial control—or any other control other than a minimum of finan- cial accountinge—from the Nation’s Capi- tal. Somewhat the same views, and the reasons therefor, appear in the follow- ing letter from Supt. Harvey L. Taylor, of the Mesa Public Schools, in Mesa, Ariz.: Mesa Pusiic SCHOOLS, Mesa, Ariz., December 20, 1946. Hon. JoHN R. Murpock., House of Representatives, Washington, D. C. Dear Mr. Murdock: Because I know of your keen interest in education and because you are well acquainted with the situation in Arizona and particularly in Mesa, I am taking this opportunity to tell you about the school situation in Mesa. We now have 6,000 school children en- rolled. A recent survey shows that we have in school this year, students from 186 dif- ferent cities in the United States, which rep- resents 35 different States. Most of the peo- ple coming into Mesa bring no wealth. Therefore, we have a large number of chil- dren to educate for the amount of taxable property back of each child. As you know the State of Arizona gives us @95 for each high-school child and $65 for each elementary child in average dally at- tendance. The balance of the budget has to be raised by district levy. This works out so that 47 percent of the money comes from the State and 53 percent from the district. To raise our district levy this year, our tax rate is $5.06. Next year, if we put our teachers’ salaries where they must be, our rate will be at least $1.40 higher which will give us a total school levy of $6.46. Every building we have is crowded to ca- pacity. We are using halls, basement rooms, auditoriums, cafeterias, etc. to take care of the overflow and in some instances it has been necessary to have children meet only APPENDIX TO THE CONGRESSIONAL RECORD half day in order to stagger classroom use and take care of our increasing enrollment. We now are planning a building program, which to meet our immediate needs will re- quire a million dollars. This will increase the tax rate another $62 which will give us a school tax rate of $8.46. This will practically bankrupt the farmers in this community be- cause, as you know, most of this money has to be paid by the farming population, since we have little or no industry. The only relief that we have at the present time is for additional State help. Right now we are proposing that the average daily at- tendance allotment be raised from $95 for high school to $115 and from 865 to $95 for elementary students. If this law passes it will relieve the situation some. It would seem, due to the shifting of population in the last few years, that we should have some Federal aid for buildings, perhaps similar to that given us during the depression under the PWA (not WPA). It would also seem that there must be some kind of a plan whereby the wealth of the United States, regardless of where it is, can be used for the education of the children in the United States regard- less of where they are, which, of course, would imply Federal support of education on somewhat the same plan that we now have Federal support of roads. We have always been very proud of our schools in Arizona but we have a new con- dition with this influx of population which creates a real problem for us, especially in Mesa. We deeply appreciate what you are doing to help get some of the buildings from the Japanese Relocation Center at Rivers, Ariz. This camp is only 25 miles from Mesa and it would be inexpensive to move the buildings in to help relieve our situation next year. The present high cost of building and the shortage of materials will keep us from building for at least 2 or 3 years. We must have these buildings in order to keep school until we can provide permanent structures. We know there are many problems facing our national leaders but we can think of nothing that is more important than the adequate education of American youth be- cause in such education must lie the safety of our glorious American way. Kindest regards. Sincerely, Harvey L. TAYLor. Army-Navy Unification EXTENSION OF REMARKS HON. W. STERLING COLE OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. COLE of New York. Mr. Speaker, under leave to extend my remarks in the Recorp, I include the following exchange of correspondence between President Truman, Secretaries Forrestal and Pat- terson re Army-Navy unification: EXCHANGE OF CORRESPONDENCE BETWEEN PRES~ IDENT TRUMAN, SECRETARIES FORRESTAL AND Pattrrson Re Army-Navy UNIFICATION Following is the text of the joint letter on Army and Navy unification sent to the Presi- dent by Secretaries Patterson and Forrestal: May 31, 1946. The PRESIDENT, The White House. Dean Mr. Present: Pursuant to your in- structions, we have reviewed the major ele- ments involved in establishing a greater measure of unification among our national
APPENDIX TO THE CONGRESSIONAL RECORD security organizations, with a view to defin- ing those matters upon which we agree and those upon which We diiier. While we regret our inability to bridge completely the gap between us, we are pleased to be able to re- port a considerable area of agreement. Sin- cere efforts to expand it were made by both of us. For your convenience, we outline below those matters upon which agreement exists and those upon which we are unable to agree. The order of presentation is not intended to indicate the relative importance of the vari- ous items. I. Agreement exists on the following mat- ters: 1. Council] of Common Defense: To inte- grate our foreign and military policies and to enable the military services and other agencies of government to eooperate more effectively in matters involving our national security. The membership of this council should consist of the Secretary of State, the civilian head of the Military Establishment (if there be a single military department), the civilian heads of the military services, and the Chairman of the Nationa! Security Resources Board, referred to below 2. National Sccurity Resources Board: To establish, and keep up to date. policies and programs for the maximum use of the Na- tion’s resources in support of our national security. It should operate under the Coun- cil and be composed of representatives of the military services and of other appropriate agencies. 3. The Joint Chiefs of Staff: To formulate strategic plans, to assign logistic responsibili- ties to the services in support thereof, to integrate the military programs to muke rec- ommendations for integration of the military budget, and to provide for the strategic direc- tion of the United States military forces. 4. No single military Chief of Staff: In the opinion of the War Department. the Military Establishment should contain a single mili- tary Chief of Staff, who would serve as prin- cipal military adviser, available to offer ad- vice when differences of opinion arise among the military heads of the several services. The Navy feels that the Joint Chief of Staff should be the highest source of military advice. The War Department is willing to omit the feature of a single Chief of Staff. 65 Central Intelligence Agency: To compile, analyze, and evaluate information gathered by various Government agencies, including the military, and to furnish such information to the National Security Council and to other Government agencies entitled thereto. It should operate under the Council. An or- ganization along these lines, established by Executive order, already exists. 6. Procurement and supply: There should be an agency to prevent wasteful competition in the field of military supply and procure- ment through joint planning and coordina- tion of procurement, production, and distri- bution. If there should be a single military department, this agency should be within the department. 7. Research agencies: There should be an agency to coordinate the scientific research and development of the military services. If there should be a single military department, this agency should be within the depart- ment. The existence of such an agency would not remove the need for an over-all Central Research Agency. 8. Military education and training: There should be an agency to review periodically the several systems of education and train- ing of personne! of the military services and to adjust them into an integrated program. If there should be a single military depart- ment, this agency should be within the de- partment. 4s to the agencies mentioned in 6, 7, and 8 above, the War Department believes that these agencies will not be fully effective ex- cept as agencies within a single department, The Navy, on the other hand, believes that they will be more fully effective under a co- ordinated organization than under a single A201 NAVY DEPARTMENT VIEW tives set forth in the President’s message WAR DEPARTMENT VIEW military department. II. We are unable to agree on the follow- ing matters: : 1. Single military department: WAR DEPARTMENT VIEW The Military Es- tablishment should be set up as a single entity, headed by a Civilian of Cabinet rank with authority and responsibility for the several serv- ices. The adminis- tration and supervi- sion of the services should, however, so far as possible, be delegated to their respective heads, in order that each serv- ice may have as much freedom of de- velopment as pos- sible and in order that the traditions and prestige of each be not, tmpaired (Only if there ts this unity of struc- ture, headed by an individual with pow- er of decision, can we achieve action where there is now inac- tion, concerted pol- fcy where there is now disjointed pol- icy, and economy of manpower, resources, and money where there 's now waste of them all. Any or- ganization which does not facilitate prompt decision and prompt action there- on, totally ignores scientific develop- ment and the nature of moder: war. The military security of the United States is a single objective. Accomplishment of this single objective with the greatest economy and effi- clency demands uni- ty of direction.) NAVY DEPARTMENT VIEW The Navy favors unification but in a less drastic and ex- treme form. ' It be- lieves that serious disadvantages will result from combin- ing the military services into one de- partment. It would involve sacrifices of sound administra- tive autonomy and essential service mo- rale. The Navy recog- nizes the need for a greater measure of integration than now exists, not only between the military departments but among all agencies of government re- sponsible for our na- tional security. <A single military de- partment falls short of meeting these ob- jectives. While the Navy feels that the meas- ures upon which agreement exists, as set forth above, would fully meet the needs of present conditions, it sees certain advantages in placing a Presi- dential Deputy with clearly defined pow- ers of decision over specified matters at the head of the Council of Common Defense. From this as a starting point, it should he possible to move _ forward such further meas- ures of unification as become advisable, based on further experience. The Secretary of the Navy recom- mends to the Presi- dent, in view of the wide area of agree- ment which present- ly exists, that legis- lation be enacted at once giving statutory effect to those mat- ters on which there is agreement. These eteps will of them- selves constitute a very substantial ad- vance over our pre- War, and even our present, organization for national security. If they are put into effect it will be pos- sible, in the opinion of the Secretary of the Navy, to meet the nine specific objec- to the Congress on December 19, 1945. Further —considera- tion and study can then be given to the remaining questions on which there is wide and general di- vergence of view be- tween, and outside of, the military de- partments. 2. Three coordinate branches: WAR DEPARTMENT VIEW The Military Es- tablishment should contain three co- ordinate branches— naval, ground, and air. Each should have a civilian head and a military com- mander. These offi- cials should have access to the Presi- dent, but not Cabi- net rank, since this would be in deroga- tion of the position of the civilian head of the Military Es- tablishment. As was stated above. the three branches should be given as much autonomy as possible. (Our ex- perience tn the last war clearly indicutes that parity for the Alr Force and the operation of all three services as a team are essential to our national security. Everything that we know of the future points to an increase rather than a de- crease in the decisive role of air power.) 8. Aviation: WAR DEPARTMENT VIEW Responsibility for the development, procurement, main- tenance and opera- tions of the mili- tary air resources of the United States should be a function of the Air Forces with the following exceptions, in which cases these respon- sibilities should be vested in the United States Navy: (a) Ship, carrier, and water-based aicraft essential to naval operations including those of the United States Marine Corps. (b) Land-type air- craft necessary for essential internal administration and for air transport over routes of sole inter- est to naval forces, and where the re- quirements cannot NAVY DEPARTMENT VIEw The Navy feels that our national security requires maintenance of the integrity of the Navy Department, headed vy a civilian Secretary of Cabinet rank. Naval avia- tion, together with surface and subsur- face components, have been soundly integrated within the Navy. The Navy feels that similar integration by the Army of its air and ground forces would be in the best in- terest of our na- tional security. However, if the al- ternatives were three military departments or one, the Navy would prefer three departments. NAVY DEPARTMENT VIEW The Navy has no desire either to com- pete with, or to dic- tate to, the Army Air Forces. On the other hand, the Navy feels that its experlence qualifies it to judge its own aviation needs, One reason for the Navy’s strong con- viction against a single department is the continued ef- forts of the Army Air Forces to restrict and limit naval avia- tion. The Navy knows that these ef- forts, if successful, would seriously im- pair our sea power and jeopardize our national security. To accomplish its fundamental pur- pose, the Navy needs a certain number of landplanes for naval
A202 WAR DEPARTMENT VIEW be met by normal air transport facilities. (c) Land-type air- craft necessary for the training of per- sonnel for (a) and (b) above, (The Nation can- not afford the luxury of several completely self-sufficient serv- ices. The war dem- onstrated that they must be complemen- tary—-mutuaHy sup- porting. With re- spect to landplanes, there are no purely naval functions which justify uneco- nomical duplication of equipment and installations. For example, the Air Force already per- forms long-range re- connaissance for the ground forces and it- self. The Navy’s rec- ognized requirement for the products of long-range recon- naissance can be ef- fectively filled by the Air Force. As re- gards antisubmarine warfare, it is the view of the War Depart- ment that the expe- rience of the Army Air Forces in the last war adequately justi- fles the belief that land-based planes operated by the Air Forces can meet this requirement). APPENDIX TO THE CONGRESSIONAL RECORD NAVY DEPARTMENT VIEW reconnaissance, anti- submarine warfare, and protection of shipping. Experi- ence indicates that such landplanes to be effective, must be manned by naval personnel trained in naval warfare. Lack of such aircraft un- der complete naval control as to design, procurement, opera- tions, personnel, training, and admin- istration might be disastrous to our na- tional security. Sim- ilarly the Navy must have air transport essential to its needs. 4. United States Marine Corps: The Navy and the Army differ on the func- tions of the United States Marine Corps as follows: WAR DEPARTMENT VIEW There shall be maintained as a con- stituent part of the naval service a bal- anced Fleet Marine Force, including its supporting air com- ponent for (1) service with the fleet in the sciz- ure of enemy posl- tions not involving sustained land fight- ing and (2) to continue the development of tactics, techniques, and equipment re- lating to those phases of amphib- ious warfare which pertain to water- borne aspects of landing operations, NAVY DEPARTMENT VIEW There shall be maintained as a con- stituent part of the naval service a bal- anced Fleet Marine Force, including its supporting air com- ponent for (1) service with the fleet in the selz- ure or defense of ad- vance naval bases or for the conduct of such limited land operations as are es- sential to the prosc- cution of a naval campaign and (2) to continue the development of those aspects of am- phibious operations which pertain to the tactics, techniques, and equipment em- Ployed by landing forces. There is agreement upon the other primary duties of the Marine Corps, viz: (1) To provide detachments and organi- gations for service on armed vessels of the Navy, and (2) To provide security detachments for protection of naval property at naval sta- tions and bases. These matters have been explored by us with a sincere desire to comply with your wishes that the military services reach com- plete mutual agreement. Our failure to achieve complete unanimity is due to no rea- son other than that our respective views on the points of difference are as sincere as they are divergent. Faithfully yours, Ropert P, PATTERSON, Secretary of War. JAMES FORRESTAL, Secretary of the Navy. The text of the letter from the President to Secretaries Patterson and Forrestal fol- lows: JuNE 15, 1946. GENTLEMEN: I have read with care your joint report of May 81, 1946. It was also helpful to me to have the full oral pres- entation of the points involved, which you and the members of your Departments made to me on June 4. I am pleased and gratified at the progress you have made. I feel that we have come a long way in narrowing the zone of dis- agreement which had previously existed be- tween the services. The full understanding reached on eight vital aspects of unification is a significant accomplishment. These eight elements are Council] of Common Defense, National Security Resources Board, Joint Chiefs of Staff, omission of single military Chief of Staff, Central Intelligence Agency, Procurement and Supply, Research Agencies, and Military Education and Training. In addition to these eight points of agree- ment, I am advised also by representatives of both services that they are in accord in their attitude toward the provision in the Thomas bill, 8. 2044, which provides for four assistant secretaries in charge of Research, Intelligence, Procurement, and Training, re- spectively. They believe that such assistant secretaries are unnecessary. I agree with thelr position that the presence of these four assistant secretaries is undesirable because they would greatly complicate the internal administration of the services and that such a plan would deprive the secretaries of the respective services of functions which are properly theirs. Your report of May 31 listed four items upon which you were unable to agree. An analysis of your comments contained in your report, and in the lengthy discussion which we had, discloses that the services are not nearly so far apart in thelr attitude toward these points as had been reported. It is my firm conviction that the determination of these questions in the manner which I pre- sent herein will result in a plan which in- corporates the best features offered by the respective services. With reference to the points upon which full agreement was not reached my position is as follows: 1. Single military department: There should be one Department of National De- fense. It would be under the control of a civilian who would be a member of the Cabi- net. Each of the services would be headed by a civilian with the title of Secretary. These Secretaries would be charged with the internal administration within their own services. They would not be members of the Cabinet. Each service would retain its autonomy, subject of course to the authority and over-all control by the Secretary of Na- tional Defense. It is recognized that the services have different functions and differ- ent organizations and for these reasons the integrity of each service should be retained. The civilian Secretaries of the services would be members of the Council of Common De- fense and in this capacity they would have the further opportunity to represent their respective services to the fullest extent. 2. Three coordinated services: There should be three coordinate services—the Army, Navy, and Air Force. The three serv-~ ices should be on a parity and should oper- ate in a common purpose toward over-all efficiency of the national defense under the control and supervision of the Secretary of National Defense. The Secretaries of the three services should be known as Secretary for the Army, Secretary for the Navy, and Secretary for the Air Force. 3. Aviation: The Air Force shall have the responsibility for the development, procure- ment, maintenance, and operation of the military air vesources of the United States with the following exceptions, in which re- sponsibility must be vested in the Navy: (1) Ship, carrier, and water-based aircraft essential to naval operations, and aircraft of the United States Marine Corps. (2) Land-type aircraft necessary for es- sential internal administration and for air transport over routes of sole interest to naval forces and where the requirements cannot be met by normal air-transport facilities. (3) Land-type aircraft necessary for the training of personnel for the afore-mentioned purposes. Land-based planes for naval reconnais- sance, antisubmarine warfare, and protection of shipping can and should be manned by Air Force personnel. If the three services are to work as a team there must be close cooperation, with interchange of personnel and special training for specific duties. Within .its proper sphere of operation, na- val aviation must not be restricted but must be given every opportunity to develop its maximum usefulness. 4. United States Marine Corps: There shall be maintained as a constituent part of the naval service a balanced Fleet Marine Force, including its supporting air component, to perform the following functions: (1) Service with the fleet in the seizure or defense of advanced naval bases or for the conduct of such limited land operations as are essential to the prosecution of a naval campaign. (2) To continue the development of those aspects of amphibious operations which per- tain to the tactics, technique, and equipment employed by the landing forces. (3) To provide detachments and organiza- tions for service on armed vessels of the Navy. (4) To provide security detachments for protection of naval property at naval sta- tions and bases. It is important that the basic elements of the plan of unification be stated clearly. The eight fundamental points agreed upon and the four points which are herewith decided constitute a total of 12 basic principles that should form the framework of the program for integration. There is no desire or intention to affect adversely the integrity of any of the services. They should perform their separate func- tions under the unifying direction, authority, and control of the Secretary of National De- fense The internal administration of the three services should be preserved in order that the high morale and esprit de corps of each service can be retained. It was gratifying to have both of you and General Eisenhower and Admiral Nimitz as- sure me that you would all give your whole- hearted support to a plan of unification, no matter what the decision would be on those points upon which you did not fully agree. I know that I can count upon all of you for full assistance in obtaining passage in the Congress of a bill containing the 12 basio elements set forth above. Very sincerely yours, Harry S. TRUMAN. The Honorable Roserr P, PATTERSON, The Secretary of War. The Honorable JamMEs FoRRESTAL, The Secretary of the Navy. The President today sent identical letters as follows to Senator Elbert D. Thomas, of
APPENDIX TO THE CONGRESSIONAL RECORD Utah, chairman of the Senate Committee on Military Affairs; Senator David I. Walsh, of Massachusetts, chairman of the Senate Com- mittee on Naval Affairs; Representative An- drew J. May, of Kentucky, chairman of the House Committee on Military Affairs; and Representative Carl Vinson, of Georgia, chairman of the House Committee on Naval Affairs: JuNE 15, 1946. My Dear : One of the most impor- tant problems confronting our country to- day is the establishment of a definite mili- tary policy. In the solution of this problem, I consider it vital that we have a unified armed force for our national defense. At my request the Secretary of War and the Secretary of the Navy have made a sin- cere effort to settle the differences existing between the services on this question. They have made splendid progress. , They have reached an agreement on eight important elements of unification, and with reference to the four upon which there was not full agreement, their differences are not irreconcilable. On May 31, 1946, the Secretary of War and the Secretary of the Navy delivered a report to me of the results of their efforts. I have replied to them stating my position of those points submitted to me for decision. I enclose herewith a copy of the report of the Secretury of War and the Secretary of the Navy, together with a copy of my reply to them. You will note that there are now presented 12 basic principles upon which the unifica- tion of the services can be based. They ure as follows: 1, Single military department: There should be one Department of National De- fense. It would be under the control of a civilian who would be a member of the Cab- inet. Each of the services would be headed by a civilian with the title of Secretary. These Secretaries would be charged with the internal administration within their own services. They would not be members of the Cabinet. Each service would retain its au- tonomy, subject of course to the authority and over-all control] by the Secretary of Na- tional Defense. It is recognized that the services have different functions and differ- ent organizations and for these reasons the integrity of each service should be retained. The civilian Secretaries of the services would be members of the Council! of Common De- fense and in this capacity they would have the further opportunity to represent their respective services to the fullest extent. 2. Three coordinated’ services: There should be three coordinate services--the Army, Navy, and Air Force. The three serv- tces should be on a parity and should oper- ate in a common purpose toward over-all efficiency of the nationa] defense under the control and supervision of the Secretary of National Defense. The Secretaries of the three services should be known as Secretary for the Army, Secretary for the Navy, and Secretary for the Air Force. 8. Aviation: The Air Force shall have the responsibility for the development, procure- ment, maintenance, and operation of the military air resources of the United States with the following exceptions, in which responsibility must be vested in the Navy: (1) Ship-, carrier-, and water-based air- craft essential to naval operations, and air- craft of the United States Marine Corps, (2) Land-type aircraft necessary for essen- tial internal administration and for air trans- port over routes of sole interest to naval forces and where the requiremente cannot be met by normal air transport facilities. (8) Land-type aircraft n for the training of personnel for the afore-mentioned purposes. Land-based planes for naval reconnais- sance, antisubmarine warfare, and protection of shipping can and should be manned by Air Force personnel. If the three services are to work as a team there must be close cooperation, with interchange of personnel and special training for specific duties. Within its proper sphere of operation, naval aviation must not be restricted but must be given every opportunity to develop its maximum usefulness. 4. United States Marine Corps: There shall be maintained as a constituent part of the naval service a balanced fleet marine force including ita supporting air component to perform the following functions: (1) Service with the fleet in the seizure or defense of advanced naval bases or for the conduct of such limited land operations as are essential to the prosecution of a naval campaign. (2) To continue the development of those aspects of amphibious operations which per- tain to the tactics, technique, and equipment employed by the landing forces. (3) To provide detachments and organiza- tions for service on armed vessels of the Navy. (4) To provide security detachments for protection of naval property at naval stations and bases 5. Council of National Defense: To inte- grate our foreign and military policies and to enable the military services and other agen- cies of government to cooperate more effec- tively in matters involving our national secu- rity. The membership of this Council should consist of the Secretary of State, the civilian head of the Military Establishment, the civil- ian heads of the military services, and the Chairmun of the National Security Resources Board, referred to below. 6. National Security Resources Bourd: To establish and keep up to date policies and programs for the maximum use of the Na- tion's resources in support of our national security. It should operate under the Coun- cil and be composed of representatives of the military services and of other appropriate agencies. 1. The Joint Chiefs of Staff: fo formulate strategic plans, to assign logistic responsi- bilities to the services in support thereof, to integrate the military programs, to make rec- ommendations for integration of the mill- tary budget, and to provide for the strategic direction of the United States military forces. 8. No single military Chief of Staff: In the opinion of the War Department, the Military Establishment should contain a single mili- tary Chief of Staff, who would serve as prin- cipal military adviser, available to offer ad- vice when differences of opinion arise among the military heads of the several services. The Navy feels that the Joint Chiefs of Staff should be the highest source of military ad- vice, The War Department is willing to omit the feature of a single Chief of Staff. 9. Central Intelligence Agency: To com- plle, analyze, and evaluate information gath- ered by various Government agencies, in- cluding the military, and to furnish such in- formation to the National Defense Council and to other Government agencies entitled thereto. It should operate under the Coun- cil. An organization along these lines, estab- lished by Executive order, already exists. 10. Procurement and Supply: There should be an agency to prevent wasteful competition in the field of military supply and procure- ment through joint planning and coordina- tion of procurement, production, and dis- tribution. 11. Research agencies: There should be an agency to coordinate the scientific research and development of the military services. 12, Military education and training: There should be an agency to review periodically the several systems of education and train- ing of personnel of the military services and to adjust them into an integrated program. A plan of unification containing these 12 elements has my unqualified endorsement, The Secretary of War, the Secretary of the A203 Navy, the Chief of Staff of the Army, and the Chief of Naval Operations have assured me that they will support such a plan. It is my hope that the Congress will pass legislation as soon as possible effecting a unification based upon these i2 principles. Very sincerely yours, Harry S. TRUMAN. — The President has received the following letter from the Honorable Robert P. Patter- son, Secretary of War: Dear MR, PRESIDENT: I have received your joint letter of June 15, 1946, addressed to me and to the Secretary of the Navy. I believe the changes you outlined will provide an economical and effective organiza- tion for the military services and again pledge my wholehearted support, and that of the War Department, to carrying out its provi- sions. You can count upon us to furnish any assistance in any way that you may deem advisable Respectfully yours, ROBERT P. PATTERSON The President has received the following letter from the Secretary of the Navy: JUNE 24, 1946. My Dgar MR. Presipent: The purpose of this letter is to acknowledge your letter of June 15, 1946, addressed to the Secretary of War and to me, and to refer to my conversa- tion with you of June 19 on the general sub- ject of the reorganization of the War and Navy Departments. It is my understanding from your letter and our subsequent conversation that your principal objectives are: (a) The creation of a single department of national defense under a civilian head, with broad powers of over-all supervision and control, while leaving full administration of thelr respective services to the Secretarics for War, Navy, and Air. (b) With particular regard to the Navy— the preservation of its integrity and au- tonomy so as to insure the retention of those imponderables of spirit and morale so essen- tial to a military service, and to insure also that the ability of the future Navy to dis- charge its responsibility for the security of the Nation is not impaired. I consider the foregoing objectives attain- able, and the recognized difficulties in draft- ing legislation which will insure their suc- cess, surmountable. One of the other points in your letter of June 15 relates to the subject of land-based Planes for naval reconnaissance, anti-sub- marine warfare, and protection of shipping. I am glad to note that the Navy is to have a continuing part in the future development of these operations, so that full advantage may be taken of its experience in this field and of the lessons learned in the late war. Admiral Nimitz joins me in this expression. I wish to thank you for the patience with which you have listened to the Navy's views on the reorganization of our national defense and for the time which you have devoted to the subject. You may be assured of my desire and that of Admiral Nimitz to co- operate with you fully in the effort to achieve the objectives of your program. Respectfully, JAMES FORRESTAL. The President today sent the following letter to Secretary of War Robert P. Patter- son and Secretary of the Navy James For- restal: JANUARY 16, 1947. GENTLEMEN: I am exceedingly pleased to receive your joint letter of January 16 in which you advise that you have reached full and complete agreement on a plan for the unification of the armed services. I recognize that each of the services had made concessions in the effort to reach this
A204 agreement, and I feel that it constitutes an admirable compromise between the various views that were originally held. The agreement provides a thoroughly prac- tical and workable plan of unification and I heartily approve it. You have both worked ably and effectively, with your respective staffs, in bringing about this result. I appreciate your fine efforts and I congratulate you upon an accomplish- ment which, I am sure, will contribute greatly to the efficiency of our national de- fense. Very sincerely yours, Harry 8. TRUMAN. The President has received the following letter from Secretary of War Robert P. Pat- terson and Secretary of the Navy James For- restal: Dear Mr. PRESIDENT: On May 381, 1943, we jointly submitted to you a letter which gave our respective views on the major elements involved in establishing a greater measure of unification of our armed forces. In your letter of June 15, 1946, you ex- pressed gratification at the progress made in narrowing the gone of disagreement which had previously existed between the services and stated your position with reference to the essential points on which disagreement still existed. In our opinion the necessity for agreement between the military services is now even greater than at the time of our earlier letter. We and our representatives have been meet- ing in an effort to secure further resolution, within the scope and the spirit of the state- ment of your position, of the views of the two departments. We are pleased to report suc- cess in this undertaking. We agree to support legislation in which the following points are incorporated: (a) There shall be a Council of National Defense, # National Security Resources Board, and a Central Intelligence Agency (which already exists) as.agreed by the Secretary of War and the Secretary of the Navy in their letter to the President of May 381, 1946. (b) The armed forces shall be organized under a Secretary of National Defense s0 as to place the Army, the Navy (to include the Marine Corps and Naval Aviation), and the Air Forces, each with a military chief, under the Departments of the Army, the Navy, and the Air Force respectively. Each shall be under a Secretary and, under the over-all direction of the Secretary of National De- fense, shall be administered as an individual unit The Secretary of any of the three de- partments may, at any time, present to the President, after first informing the Secretary of National Defense, any report or recom- mendation relating to his department which he may deem necessary or desirable. (c) A War Council shall be created con- sisting of the Secretary of National Defense as Chairman and with power of decision, the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force, and the military heads of the three services. The War Council] will concern itself with matters of broad policy relating to the armed forces. (a) There shall be a Joint Chiefs of Staff consisting of the military heads of the three services, and also the Chief of Staff to the President if that office exists. Subject to the authority and direction of the Secretary of National Defense, the Joint Chiefs of Staff will provide for the strategic direction of the military forces of the United States, will formulate strategic plans, assign logistic re- sponsibilities to the services in support there- of, integrate the military requirements, and, as directed, advise in the integration of the Military budget. (e) There shall be a full-time joint staff to consist initially of not over 100 officers to be provided in approximately equal numbers by the three services. The joint staff, oper- ating under a director thereof, shall carry out policies and directives of the Joint Chiefs of Staff. (f) The Secretary of National Defense shall head the Armed Forces Establishment, shall be vested with authority, under the President, to establish common policies and common programs for the integrated opera- tion of the three departments, and shall ex- ercise control over and direct their common efforts to discharge their responsibility for national security. We are agreed that the proper method of setting forth the functions (so-called roles and missions) of the armed forces is by the issuance of an Executive order concurrently with your approval of the appropriate legis- lation, We attach for your consideration a mutually agreed draft of such an order. Respectfully yours, Rosert P. PATTERSON, Secretary of War. JAMES FORRESTAL, Secretary of the Navy. EXECUTIVE ORDER FUNCTIONS OF THE ARMED FORCES By virtue of the authority vested in me by the Constitution and laws of the United States, and as President of the United States and Commander in Chief of the Armed Forces of the United States, I hereby prescribe the following assignment of primary functions and responsibilities to the three armed services. Section I. The common missions of the armed forces of the United States are: 1. To support and defend the Constitution of the United States against all enemies, foreign or domestic. 2. To maintain, by timely and effective military action, the security of the United States, its possessions and areas vital to its interest. 8. To uphold and advance the national policies and interests of the United States. 4. To safeguard the internal security of the United States as directed by higher authority, 5. To conduct integrated operations on the land, on the sea. and in the air necessary for these purposes. In order to facilitate the accomplishment of the foregoing missions, the armed forces shall formulate integrated plans and make coordinated preparations. Each service shal] observe the general principles and fulfill the specific functions outlined below, and shall make use of the personnel, equipment, and facilities of the other services in all cases where economy and effectiveness will thereby be increased. Section II. Functions of the United States Army: General: The United States Army includes land com- bat and service forces and such aviation and water transport as may be organic therein. It is organized, trained, and equipped pri- marily for prompt and sustained combat in- cident to operations on land. The Army is responsible for the preparation of land forces necessary for the effective prosecution of war and, in accordance with integrated joint mo- bilization plans, for the expansion of peace- time components of the Army to meet the needs of war. The specific functions of the United States Army are: t 1. To organize, train, and equip land forces ‘or: (a) Operations on land, including joint operations. (b) The seizure or defense of land areas, including airborne and joint amphibious operations. (c) The occupation of land areas. 2. To develop weapons, tactics, technique, organization, and equipment of Army combat and service elements, coordinating with the Navy and the Air Force in all aspects of Joint concern, including those which pertain to amphibious and airborne operations, APPENDIX TO THE CONGRESSIONAL RECORD 8. To provide, as directed by proper au- thority, such missions and detachments for service in foreign countries as may be re- quired to support the national policies and interests of the United States. 4. To assist the Navy and Air Forces in the accomplishment of their missions, in- cluding the provision of common services and supplies as determined by proper au- thority. Section III. Functions of the United States Navy: General: The United States Navy includes naval combat and service forces, naval aviation. and the United States Marine Corps. It is organized, trained, and equipped primarily for prompt and sustained combat at sea. The Navy is responsible for the preparation of naval forces necessary for the effective prosecution of war, and in accordance with integrated joint mobilization plans, for the expansion of the peacetime components of the Navy to meet the needs of war. The specific functions of the United States Navy are: 1. To organize, train, and equip naval forces for: (a) Operations at sea, operations. (b) The control of vital sea areas, the pro- tection of vital sea lanes, and the suppression of enemy sea commerce. (c) The support of occupation forces as required. (d) The seizure of minor enemy shore po- sitions capable of reduction by such landing forces as may be comprised within the fleet organization, (e) Naval reconnaissance, antisubmarine warfare, and protection of shipping. The air aspects of those functions shal] be coordi- nated with the Air Force, including the de- velopment and procurement of aircraft, and air installations located on shore, and use shall be made of Air Force personnel, equip- ment, and facilities in all cases where econo- my and effectiveness will thereby be in- creased. Subject to the above provision, the Navy will not be restricted as to types of aircraft maintained and operated for these purposes. (f) The air transport necessary for essen- tial internal administration and for air transport over routes of sole interest to naval forces where the requirements cannot be met by normal air transport facilities. 2. To develop weapons, tactics, technique, organization and equipment of naval combat and service elements, coordinating with the Army and the Air Force in all aspects of joint concern, including those which pertain to amphibious operations. 3. To provide, as directed by proper author- ity, such missions and detachments for serv- ice in foreign countries as may be required to support the national policies and interests of the United States. 4. To maintain the United States Marine Corps whose specific functions are: (a) To provide Marine Forces together with supporting air components, for service with the Fleet in the seizure or defense of ad- vanced naval bases and for the conduct of limited land operations in connection there- with. (b) To develop, in coordination with the Army and the Air Force those phases of am- phibious operations which pertain to the tac- tics, technique, and equipment employed by landing forces. (c) To provide detachments and organiza- tions for service on armed vessels of the Navy. (d) To provide security detachments for protection of naval property at naval sta- tions and bases, ‘ (e) To provide, as directed by proper au- thority, such missions and detachments for service in foreign countries as may be re- quired to support the national policies and interests of the United States. including joint
APPENDIX TO THE CONGRESSIONAL RECORD 5. To assist the Army and the Air Force in the accomplishment of their missions, in- cluding the provision of common services and supplies as determined by proper authority. Section IV. Punctions of the United States Air Force: General: The United States Air Force includes all military aviation forces, both combat and service, not otherwise specifically assigned. It 1s organized, trained, and equipped pri- marily for prompt and sustained air-offensive and defensive operations. The Air Force is responsible for the preparation of the air forces necessary for the effective prosecution of war, except as otherwise assigned and in accordance with integrated joint mobilisa- tion plans, for the expansion of the peace- time components of the Air Porce to meet the needs of war. The specific functions of the United States Air Force are: 1. To organize train, and equip air forces for: (a) Air operations, including joint opera- tions. (b) Gaining and maintaining general air supremacy. (c) Establishing local air superiority, where and as required. (a) The strategic air force of the United States and strategic air reconnaissance. (e) Air Iift and support for air-borne op- erations. (f) Air support to land forces and naval forces, including support of occupation forces. (g) Air transport for the armed forces, ex- cept as provided by the Navy in accordance with paragraph If, of section III. 2. To develop weapons, tactics, technique, organization and equipment of Air Force combat and service elements, coordinating with the Army and Navy on all aspects of joint concern, including those which per- tain to amphibious and airborne operations. 8. To provide, as directed by proper au- thority, such missions and detachments for service in foreign countries as may be re- quired to support the national policies and interests of the United States. 4. To provide the means for coordination of air defense among all services. 5. To assist the Army and Navy in accom- plishment of their missions, including the provision of common services and supplies as determined by proper authority. The Pipe Lines -What Shall We Do With Them? EXTENSION OF REMARKS HON. CLARE E. HOFFMAN OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. HOFFMAN. Mr. Speaker, from a member of the Select Committee To In- vestigate Disposition of Surplus Prop- erty wel] qualified to speak, the gentle- man from Oklahoma [Mr. Riziry], came the statement in the Committee on Ex- penditures in the Executive Departments this morning that the Big Inch and Little Big Inch Pipe Lines were one item of sur- plus property which the Government at this time might sell and realize at least more than the original cost. As bearing upon the present situation, the attached letter and statement re- ceived this morning are given to the com- mittee: WASHINGTON, D. C., January 17, 1947. My Dagan Mr. CHAIRMAN: Mr, Charles Smith, Mr. E. McK. Hunt, and I, who called on you last Thursday afternoon on behalf of Big Inch Gas & Oil Corp., are very apprecia- tive of the time and attention which you gave us. As you suggested, we have prepared, and now enclose, memoranda setting forth the considerations which in our view bear on both sides of the question of extending the period for consideration of the supplementary report establishing a new policy for disposal of Government-owned pipe lines. As we said, it is our view that on balance the interests of the country would be best served by permitting disposal of the Big Inch and Little Big Inch Pipe Lines pursuant to the supplementary report without further delay. If you should desire, we stand ready to confer with you again or to appear before your committee at any time to furnish any additional information at our disposal. Very sincerely yours, 8. Lancrorp. HISTORY September and October 1945: Government operation of the Big Inch and Little Big Inch Pipe Lines in petroleum service was termi- nated. November 1945: Heurings before the Sur- plus Property Subcommittee, Committee on Military Affairs, United States Senate (Sen- ator O’'MaHoney, chairman) January 4. 1946: Date of report to the Con- gress by the Surplus Property Administra- tor on disposal of Government-owned pipe- nes (sometimes referred to as the Syming- ton Report or the Blue Book) A copy of such report is attached hereto. This report favored disposition of the pipe lines in petro- leum service. June 1946: War Assets Administration advertised for bids on the pipe lines under the policy established in the Symington Report. July 30, 1946: Closing date for bids on lines. July 31, 1946: Sixtcen bids publicly opened and read. September 16, 1946: Last date for submis- sion of more detailed information by the bid- ders pursuant to invitation by War Assets Administration November 19, 1946: War Assets Administra- tor Littlejohn announced rejection of al) bids. November 19, 1946-December 9, 1946: Hearings before the House Select Committee on Surplus Property Disposal (Represent- ative SLauGHTER, chairman). December 80, 1946: War Assets Administra- tion advertised for new bids to be submitted before noon on February 8, 1937, and to be opened and read on February 10, 1947. January 8, 1947: Eightieth Congress con- vened, having befure it supplemental] report of Robert M. Littlejohn, War Assets Adminis- trator, on Government-owned pipe lines. dated December 18, 1046 (sometimes referred to as the Littlejohn Report or the Yellow Book). A copy of such report is attached hereto. Its principal recommendation ts that the lines be sold “to the purchaser offering the greatest net return in dollars to the United States Government.” January 3, 1947: Congressman WaALtTzR, of Pennsylvania, introduced House Joint Reso- tution 2 proposing that the War Assets Ad- ministrator be prohibited from disposing of the lines until 6 months after submission to the Congress of the Federal Power Commis- sion’s report on its investigation of the natural-gas industry, Docket No. G-580. January 10, 1947: Senator O’MaHonsy and Genator Ruvsacoms introduced Senate Joint A205 Resolution 20, proposing that section 19 of the Surplus Property Act be amended to pro- vide that in the case of the Big Inch and Little Big Inch Pipe Lines 90 days shall elapse following the submission of the supple- mentary report before the War Assets Ad- ministrator may sell the lines, instead of the 80-day period now provided. January 15, 1947: Senator Mymrs, of enn- sylvania, introduced Senate Joint Resolution 34 proposing the same postponement as Con- gressman Watrsr’s House Joint Resolution 2. CONSIDERATIONS IN FAVOR OF EXTENSION OF THE PERIOD FOR CONGRESSIONAL CONSIDERATION OF THE SUPPLEMENTARY REPORT ON GOVERNMENT- OWNED PIPE LINES 1. Members of the Congress not already familiar with the problems incident to dis- posal of the lines would have a longer period within which to consider whether or not they are in favor of the disposal policy set forth in the supplementary report of General Little- john, dated December 18, 1946. 2, The Congress after further study might establish a policy which would avoid certain inequities which are possible results of the policy set forth in the supplementary report. The policy of disposing of the lines to the highest cash bidder js likely to result in higher prices to the consumers of gas (if the lines are to be used for gas). For each cent per thousand cubic feet increase in the price at which the owner of the lines sells gas, he can afford to pay roughly $20,000,000 more for the lines. This, of course, must be paid for by the consuming public in the long run. Any difference between the price paid for the lines and the cost of constructing new equiv- alent facilities is an unreasonable burden on the consuming public 3. The Congress would huve the opportu- nity of deciding once and for all] whether it regards the creation of a common carrier sys- tem for petroleum and petroleum products as necessary and desirable as a part of the regulation of the ol] industry 4. It would give the Congress the oppor- tunity to reiterate specifically with respect to the ptpe lines that, as stated in section 2 of the Surplus Property Act, the dollar return to the Government is deemed to be of lesser importance than the other objectives there stated 5. It has never been fully developed what the consequences would be to industry and the public if, after conversion of the lines to gas, the armed services should require their use for ojl in an emergency Testify- ing before the House Surplus Property Com- mittee, Edwin Hill, vice president of Ford- Bacon-Davis, stated that in his opinion the lines, if once converted to gas, would never be reconverted to oil, even in an emergency The reason, briefly, is that purchasers of the gas, whether for industrial use or home use, would become dependent upon a continued supply of natural gas through the lines A cutting off of their supply would cause great hardship and economic chaos. Some per- sons believe this factor would outweigh mili- tary requirements for oi] use CONSIDERATIONS AGAINST EXTENSION OF THE PERIOD FOR CONGRESSIONAL CONSIDERATION OF THE SUPPLEMENTARY REPORT ON GOVERN- MENT-OWNED PIPE LINES 1. Changing of the period specified in sec- tion 19 of the Surplus Property Act from 30 days to 90 days would of itself probably not be particularly harmful However, the delay would almost inevitably be very much longer and under Congressman Wa tTEr's resolution, disposal of the pipe lines would be indefi- nitely postponed, since it is not known when the Federal Power Commission will submit its report on its iavestigation of the natural- gas industry, Docket No. G- 580. 2. Delay alone would serve no purpose. Delay merely gives the opportunity for such action as the Congress might wish to take during the longer period.
A206 3. If the Congress desires to enter upon & thorough exploration of the disposal of the pipe lines, even after the already over-long delay in their disposal, this could be done only by full-dreas hearings and a complete investigation. If such hearings were to serve their purpose, it would be necessary to have them conducted by a competent and un- biased staff with able counsel of the caliber which served the Senate Subcommittee on Surplus Property Disposal. Otherwise the committee would hear only witnesses repre- senting vested interests opposed to the utilization of the lines for one purpose or another, or opposed to their use at all, whose views are already well known. Only with a skillful staff to conduct the investigation would all of the pros and cons be brought forward fully and independently for the benefit of the committee. 4. After the hearings, which would un- doubtedly consume weeks of time, the com- mittee would have to digest a voluminous record and formulate its conclusions as to the policy for disposal of the lines which it would recommend. The committee’s report and any legislation which it desired to recom- mend would then go to the floor of the House of Representatives where it would unques- tionably be debated at great length, consid- ering the various conflicting interests which are involved. 5. After adoption of a policy by the House of Representatives, the proposed policy would go to the Senate where it would be reviewed in committee. The Senate committee might or might not choose to hold hearings of its own. The recommendations of the Senate committee would then go to the floor of the Senate where extensive debate would again be inevitable. 6. The possible further delays incident to conference between the two Houses and the subsequent procedures before final adoption of the policy are obvious. 7. If that extensive procedure should re- sult in a policy differing from that set forth in the supplementary report of the War As- sets Administrator, it would be necessary for still another set of bids to be invited. 8. If Congressman WaALTER’s resolution should be adopted, the delay would be an ab- solute minimum of 6 months following sub- mission of the Federal Power Commission's report, which has not yet been filed. No matter what the cause of the delay, it is en- tirely possible that the result of further substantial postponement of disposal of the lines would be that they will never be sold at all This is a result which appears to be desired by certain elements in the oil, coal, and railroad industries. 9. It is already established that there is @ need for these facilities for the transporta- tion of both oi] and gas. Both industries have projected facilities to serve the same need that the Big Inch lines would meet. They cannot be expected further to delay in- definitely the execution of their plans. The result of further delay in disposal of these lines will be the construction of facilities by both the oil and the gas industries to serve precisely the same purposes which these lines could serve. The demand for the use of these facilities would be drastically re- duced by the construction of such competing facilities. 10. All of the bidders have been faced with the necessity of keeping financial under- writing and backing intact for an unusually long period of time. It is well known that the financial commitments behind certain of the bids which were opened July 31, 1946, expired upon the rejection of all of those bids. Bidders cannot reasonably be expected to maintain their own interest and that of their financial backers for further indefinite periods of time. 11. Every time the disposal of the lines is again considered publicly, those who desire to use them for gas dispatage their useful- ness for oil; those who desire to purchase the lines for oil are inclined to disparage their usefulness for gas; and those who do not want to use the lines at all disparage their usefulness generally. The inevitable result of this repeated casting of doubt on the practicability of operating the lines for either gas or oll would be, cumulatively, to destroy the confidence of banks, underwriters, and the investing public generally in the soundness of securities issued to finance the purchase of the lines. 12. During the period of delay the Govern- ment will continue to bear depreciation on the lines at the rate of over $10,000 per day. 13. War Assets Administration states that it proposes to go ahead with the present schedule of receiving bids on or before Febru- ary 8 and opening and reading them publicly on February 10, 1947, even if the Congress should adopt a resolution postponing the Administrator's power to dispose of the lines. Upon the reading of the bids it will be plain who are the leading bidders for the lines. It would be very unfair to them to have them set up as targets for all unsuccessful or dis- gruntled bidders at hearings conducted thereafter. Should it be decided in spite of the inherent dangers further to delay dis- posal of the lines, it would be for the benefit of all bidders to require postponement of the submission and reading of the bids until hearings have been concluded. 14. Despite the wording of the conclusions and recommendations of the supplementary report of Administrator Littlejohn, his dis- posal of the Big Inch and Little Big Inch Pipe Lines is still controlled by the Surplus Property Act of 1944. The Administrator must dispose of the lines in accordance with the objectives of that act. The purposes which might be served by further congres- sional action with all the possible delays inci- dent to hearings would be equally well served by making it clear to the War Assets Admin- istrator that failure of the Congress to reject his supplementary report does not authorize him to ignore the objectives of that act. His disposal of the lines under the act must also be reviewed by the Attorney General. Un- conscionable returns will not be allowed by the Federal Power Commission or the State public utilities bodies, in the case of gas, nor by the Interstate Commerce Commission in the case of oil. Testing American Citizenship EXTENSION OF REMARKS HON. ALEXANDER WILEY OF WISCONSIN IN THE SENATE OF THE UNITED STATES Monday, January 20 (legislative day of Wednesday, January 15), 1947 Mr. WILEY. Mr. President, I ask unanimous consent that there be re- printed in the Appendix of the Recorp the text of an article which I wrote for the October 1946 issue of the magazine Public Service. The article is entitled “Testing Our American Citizenship.” There being no objection, the article was ordered to be printed in the Recorp, as follows: TestiInc Our AMERICAN CITIZENSHIP (By Hon, ALEXANDER Wier, United States Senator from Wisconsin) “God, give us men! : “The time demands strong minds, great hearts, true faith, and willing hands.” Never was this cry of Josiah Gilbert Holland for inspired leadership and followership more urgent than todey in America in the atomic age. With crisis both at home and abroad, APPENDIX TO THE CONGRESSIONAL RECORD American-thinking Americans are called upon to preserve our way of life from the insidious wiles of alien influence. We are called upon to preserve our consti- tutional Republic of checks and balances— the way of individualism against the way of collectivism—of private ownership against public ownership—of spiritual truth against base materialism. How can we succeed in maintaining Co- lumbia as the true gem of the ocean, the home of the brave and the free? The answer is: By better citizenship in every American home, in every American office, in every American school. We need, indeed, more little red schoolhouses and fewer little Red school teachers. We need to combat the propaganda from poison factories in govern- ment and outside government that would set class against class, race against race, creed against creed, that would ruin our system of free, competitive, private enter- prise. To be adequate to our responsibility, each of us ought to be able to test our citizenship, just as an immigrant is tested in order to be navuralized as an American citizen. Here, then, are a few standards which I believe may be appropriate. They represent what I humbly believe to be ideal standards of citizenship, Probably no single one of us will fulfill all of these ideals, but tt is up to each of us to approximate them more and more, “STANDARDS OF CITIZENSHIP “1. We should know and love the American Charter. “What is the American Charter? It con- sists in part of the United States Constitu- tion, including, of course, the great Bill of Rights, the first 10 amendments to the Con- stitution. “The American Charter consists in part of the Declaration of Independence, sealed by the blood of the martyrs of the American Revolution. It consists in part of the Fare- well Address of the Father of Our Country, George Washington, and of the Gettysburg Address delivered by that epic figure, Abra- ham Lincoln. “It consists of American history, the great deeds and words and thoughts of every gen- eration of America since 1776, in time of war and peace. All these we should read and reread, learn and relearn, and love sincerely from the very depth of our being. “2, We should know and love the American cultural heritage. “America, the Beautiful is more than a song. Ours is more than a great and beauti- ful geographic expanse. We have American poetry, literature, music, art, which can hold their heads high amidst the other towering cultures of the world. We have thrilling customs, traditions, flowering in every one of our regions, in every one of our local commu- nities, all constituting a part of our cultural heritage—yours and mine and the posses- sion of those who are yet to come. “8. We should know and respect the sym- bols of America. “Every good citizen knows and respects the great symbols of our land. He has a deep and abiding respect for the Stars and Stripes. He knows our great songs—The Star- Spangled Banner, Columbia, the Gem of the Ocean, and many others. He observes our national holidays—Lincoln’s Birthday, Wash- ington’s Birthday, Independence Day, Me- mortal Day, Thanksgiving, Christmas. “He loves these symbols of our country, not blindly, but with his eyes clear and filled with the beauty of them. He respects all these symbols in the very depths of his heart and soul and relives each holiday in the very fiber of his being. “4. We should know and love and see the shrines of America, “In order to become fully infused with the spirit of America, we should be acquainted with ‘the shrines of each patriot’s devotion’—
APPENDIX TO THE CONGRESSIONAL RECORD with Independence Hall, Concord, Lexington, Mount Vernon, Springfield, and, in our Na- tion’s Capital, the United States Capitol, the United States Supreme Court, the White House, the Washington, Jefferson, and Lin- coln Memorials. “Tf it 16 at all possible, we should try to see these unforgettable landmarks in person, but at any rate, whether we see them in pic- ture, in drawing, or in real life, we should see them tn our mind's eye with love and de- votion. “5. We should develop the personal qual- ities of an American. “We have great traditions for the ideal in- dividual American. He is a man of health and vitality, of thrift and diligence, industry and humor, and love. His mind is unclouded by distrust or fear. He has perspective. He has faith in himself, in his loved ones, in his constitutional government, in his fellow man. “He has no time for the pessimist, the de- featist, the divisionist. He owes allegiance to his God, to his country, and to his fellow man. He holds his head high because his conscience is clear. He is a growing man. He is not guilty of arrested development. He knows that life is an unfolding process in which more and more of his potentialities can be developed with each passing day. “He believes in and practices above all the Golden Rule. “ ‘Therefore al] things whatsoever ye would that men should do unto you, do ye even so to them; for this is the law and the prophets.’ “6. We should Know and contribute to American leadership. “It is up to each of us to become acquainted with the workings of our Government— local, State, and national. We should make certain that the men whom we elect and support in public office respect public office as a public trust. They must be men devoted to the American way of life. “Thus, we must exercise our ballot choice wisely and carefully. We must no allow ourselves to be mentally stampeded hy false slogans and synthetic thinking—by glittering generalities and promises ui sccurity in re- turn for liberty. We must remember the words of Benjamin Pranklin, ‘He who would give up liberty for security deserves neither.’ (And he usually gets neither.) “7, We should know and contribute to our community “We have obligations not only to the land in which we live, but to the local community in which we reside and work. We must do our part in helping to make it e clean, happy, thriving community. We must fulfill our neighborly obligations to those who dwell in our vicinity, The. strength oi the Nation is founded on the strength of its smallest unit— in the family and in those whw are close to the family. “8. We should contribute to the economic well-being of our country. “If we are good citizens, we must become an ever more important suatainer to the oco- nomic life of our country. We must con- tribute to the ecunomic blood stream of our land. We must do our part, however humble, in helping to make new jobs, higher wages, and more quality goods. Amertca needs job makers and job builders.” It needs men of vision and enterprise, will- ing to invest their time and money and energy tnto opening up new industries, new vistas of opportunity for all. It needs men who will tap our genius of mass-production eoonomy: to produce goods that will give us a still higher standard of living. It needs men who will work for harmony and cooperation between labor and manage- ment in order to be of greater public service to all of us—the farmer, the housewife, the merchant, and others. CONCLUSIONS These are our ideals. Applying them pre- sents the real rub. But it can be done, it is being done, it will be done. There are more and more Americans, in Holland’s words, who are: “Tall men, sun-crowned, who live above the fog In public duty and in private thinking.” They will enable our ship of state to pro- ceed in spite of all perils to the calm seas of prosperity, freedom, and peace. It is up to you and to me to be among those valiant men. The Good Samaritan EXTENSION OF REMARKS HON. JOHN W. McCORMACK OF MASSACHUSETTS IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. McCORMACK. Mr. Speaker, un- der permission to extend my remarks, I include with pleasure a splendid and powerful message of tolerance and de- cency expressed in the words of the poem by James Patrick McGovern, of Wash- ington,D.C.,entitled “The Good Samari- tan.” THE GOOD SAMARITAN Christ was born a Jew, yet many gentiles scorn The race from which their own religion's born; Charity in thought. alive with deed, Their Saviour taught to be the soul's prime seed; Still charity seems more of hand than heart; A gesture rather than of them a part, While Jews once more are homeless on the earth— No Palestine, no Promised Land, no hearth. The Hebrews bravely fought for every land Where freedom marched for footholds in the strand; Now freedom won, where is their sacred sod On which they may like others worship God? Once more they wander, flying refugees. Persecuted, across the seven seas; And sometimes hearts turned bitter in dire stress Rise to violent passions of lawlessness What tragedy of suffering compares In years and poignancy to turn gray hairs, With that which trial has graven on this race? The gentile’s scorn has marked the Jewish face With thought-worn brow. grave eye, and mystic fire, Brands of survival and the heart’s desire. And so the Jew by long tradition tried By grace as well as strength is fortified. Do gentiles in their proud majority Fear to set this dwindled people free That they may grow in all their scope and power? Was not an Finstein born in happy hour? Did not a Heine in his suffering Voice lyrics which with deathless beauty sing? Has a Baruch accumulated gold Save that he might serve mankind growing old? The Jew is man, no ism mars his name; Just human nature, as you and me the same; Scion of Moses and of Solomon, With good and evil of the father’s son; A small minority, which seared by time, Scales the ridiculous to the sublime. Should gentiles, then ignore their fellow man. Forget Christ and the Good Samaritan? —James Patrick McGovern. A207 Let There Be Light—It Is Gradually Dawning on the Country That a 20- Percent Tax Reduction Would Benefit All EXTENSION OF REMARKS HON. HAROLD KNUTSON OF MINNESOTA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. KNUTSON. Mr. Speaker, when Republicans in Congress first proposed a drastic reduction in Government spend- ing, to be followed by substantial reduc- tion in personal income taxes, the do- gooders and spenders joined in an anvil chorus to denounce the program as purely political. Some even went so far as to say that it was designed to help the rich at the expense of the poor. Columnists. commentators, and Com- munists took up the cry, and some have ersisted in their tactics down to this very day. Mr. Speaker, the American people were not deceived. They know that the way to cut taxes is to cut taxes; that the way to reduce spending is to reduce appropriations. The Republican Party is pledged to this program. and with the help of forward-looking Democrats who place country above party we hope to succeed. Recently two very able editorials on the subject have come to my attention; one, from the St. Pau} (Minn.) Pioneer Press, the other from the Tampa (Fla.) Times. It is because these two edi- torials are unusually factual and dis- cerning that I ask to have them inserted in the Recorp The editorials follow: [From the St. Paul (Minn) Pioneer Press] TAX'NG AND SPENDING Last session Congress adopted a reorgan- ization bill intended to modernize its own procedure and bring back into legislative hands control over Federal taxing and spend- ing The first budget under the new sys- tem provides a test of tne taxing and spend- ing reform Republican leaders of Congress are now taking steps to get this machinery into motion. The idea is to adopt u definite plan and then stick to it, instead of treating spending and taxing as though they had no relation to each other Minnescta legisiutors, faced with serious financia] problems, should watch this experiment and adopt whatever seems applicable to this State’s situation, as Representative Claude Allen has been urg- ing. The plan calls for joint sessions of the taxing and spending committees of both branches of Congress. These committecs will decide how much they want to tax, how much they want to reduce the national debt This will determine how much they can properly appropriate. If they also de- cide that the impelling needs of the gov- ernment are higher than they first assume, they will have to change their ideas on the other two points. In other words, Congress is supposed to then see that the spending and taxing bills it passes carry out the policy What it spends will determine what it taxes and the other way around. No doubt there will still be some politicians tn Congress who make @ career out of favoring all appropriations
A208 and voting against all taxes. But the ma- jority leaders will have to assume responsi- bility for a more sensible handling of the public’s money, The Federal Government has been spend- ing more than it taxed since 1930, living on borrowed money. much of the New Deal this was a deliberate pump-priming policy and during the war a necessity. The idea now is that the time has come to start paying off the debt and reducing taxes. President Truman's Budget shows that this makes necessary even more cutting down of wartime spending than he has proposed, for his Budget left room neither for tax reduc- tion nor debt reduction. It is up to Congress to say by how much this can be done, [From the Tampa (Fla.) Times] THE PRESIDENT STICKS TO THE NEW DEAL PLUS To anyone who looked to President Tru- man's economic report for further signs of an administrative trend away from bureaucratic meddling, his report yesterday was a dis- appointment. The President's call for maintenance of wartime tax levels, extended rent controls, increased social-security benefits, higher minimum wages, wage-and-hour regulations covering wider fields and new groups, and long-range housing is the New Deal plus. If enacted, the program would reopen the way for more governmental interference, con- trols and regimentation. That is completely and diametrically opposed to the very clear Mandate of the American people expressed at the polls in November. The very name—wartime income tax—is reason enough to show that the high tax level should be sharply lowered. It is easy enough to talk of taking advantage of the high level of prosperity to build up revenue surpluses to be applied on the national debt, but how long does Mr. Truman think the high level of peacetime production oan be maintained saddled with excessive wartime tax rates? The wartime taxes are already a drag on business enterprise and individuals and cer- tainly do not square with the frequent pre- dictions of recession and depression emanat- ing from the inner sanctums of many ad- ministration bureaus ond departments. For- tunately the Cassandras among the New Dealers and the professed liberals of the Henry Wallace stripe have had an extremely low batting average. Had their worst fears been realized, recession and unemployment would already be harassing the country. The move for a 20-percent tax reduction under the leadership of Representative KNUT- son is the right course toward equitable tax adjustment and. in effect, increased real wages The President’s talk of reduced prices, while at the same time encouraging wage increases and a higher minimum wage stand- ard is cock-eyed economics. It is just as fal- lacious as his bitterly recalled go-ahead sig- nal to labor in August 1945, to seek higher wages, while prices were frozen by the OPA ceilings. The most disastrous effect of that untimely move by Mr. Truman was to set in motion a chain of reactions that has not stopped exploding since. The strikes throughout 1946 were directly attributable to such a hastily announced policy. Their Continuance would precipitate more of the same in 1947, if recognized by Congress. If Mr. Truman and his staff of economic advisers seriously comtemplate stimulating greater production and resultant expanded employment in 1947, they would do far bet- ter to recommend an end to the siphoning into governmental extravagance of the earn- ings of the American people. There lies the greatest danger to the economio prosperity of this Nation, waste and inefficiency de- manding a Federal Budget at an excessive peacetime scale of close to $40,000,000,000, Along with the price and tax proposals which reflect the influence of too many years of New Deal thinking, the economic report's housing; social security, and fair employment’ practices recommendations are equally un- acceptable for the well-being of the Ameri- can people. — The long-range housing program sounds attractive enough, but Mr. Truman was sup- posed to have started a housing program un- der Wilson Wyatt and everyone knows the mess of that. It did not work before because it was impossible to control even with the liberal wartime powers the President pos- sessed. It will not work if tried again. As for introduction of the fair employment practices issue into the months ahead by in- cluding it in the report when harmony is the most desirable condition, Mr. Truman could not have selected a more highly con- troversial problem. The doctrines of the FEPC go straight back to the Néw Deal and that means plenty of political trouble for any economic program. In his bid for public support, Mr. Truman talked generously of doing something to aid small business—incentive aids to encourage their prosperity. That is the usual fine talk, but his suggestions for making it easier for small businesses to get credit assistance do not make sense. Mr Truman need only study the stringent supervision of banks and bank loans conducted by the Federal Comptroller of the Currency to know how difficult the Government makes it for small business to negotiate private loans. Of course, if he proposes to let the bars down and use the taxpayers’ money freely to underwrite ob- viously speculative loans without regard to the borrowers’ responsibility, a flurry of small businesses can be launched, but the days of their success would be numbered at the start. The patronuge of government cannot de- feat the ancient. economic laws governing prosperity. Word juggling, couched in the most optimistic language. is no substitute for economic stability founded on tried and true experience. The President’s economic report is high sounding, but after all is said and done, it is only a promise of his willing- ness to foster more economic experimenta- tion of which the country has already had too much. Reciprocal Trade-Agreements Program EXTENSION OF REMARKS or HON. B. W. (PAT) KEARNEY OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday. January 20, 1947 Mr. KEARNEY. Mr. Speaker, under leave to extend my remarks in the Rec- orp, I wish to include a statement made by me on January 16 at hearings before the Committee for Reciprocity Informa- tion regarding the reciprocal trade- agreements program, as follows: Gentlemen, you have a full program, and I realize that many others desire to present testimony to you on the reciprocal trade ne- gotiations, For that reason I will be as brief as possible. Fulton County, New York State, is the cen- ter of tanning in that State as well as being the heart of the dress-glove industry of the United States. Leather-industry . employ- ment in Pulton County amounts to about 5,000 workers. These workers are dependent entirely upon the prosperity of the leather APPENDIX TO THE CONGRESSIONAL RECORD industry, and I am concerned with the future of the Fulton County leather industry, should the already extremely low tariffs on leather be further reduced. In offering this statement in protest against the lowering ot present rates or the binding of these rates at current levels, I am not unaware of the need for foreign trade and the need for the stimulation of such trade. I believe with you that the prosperity of the community, whether it be local, national or international, is dependent upon the flow of trade and that unwarranted obstruction to such a flow should be removed. Gentlemen, I believe in reciprocity but it has never been my understanding of that term that it should be unilateral. True reciprocity involves more than con- cession in tariff rates by the United States. It should mean the abandonment by other countries of those political and economic restrictions on trade which relegate tariff rates to minor significance. It should mean the reduction of foreign tariff rates to levels consistent with those in this country. The United States has already reduced its tariff rates on leather by from % to %, and today has lower rates on leather than any other country in the world, Its average rates on leather, in fact, are leas than the average ad valorem rate imposed upon imports in general. The next step, gentlemen, in my opinion, lies not with us but with foreign countries before this country gives any consideration to tariff concessions. The leather industry 1s particularly con- cerned in these negotiations with the arti- ficial restraints to trade which have been imposed by foreign countries. These re- straints are, briefly: 1. Subsidization or nationalization of for- eign leather industries with the result that they can compete with the United States on @ level where competition costs can be ignored. 2. Bilateral trade agreements for the secur- ing of essential raw material to the exclusion of the United States. 8. Export embargoes on essential raw ma- terials for the development of home indus- tries or to support war-born industries which could not survive in a free international economy. 4. Currency and exchange restrictions which make export of raw materials to the United States impossible; this also for the Purpose of supporting war-born industries which could not otherwise be maintained. 5. Imposition of special luxury and sales taxes on United States leather, thereby nulli- fying tariff agreements, in order to protect their home industries by shutting out Amer- jean goods. 6. Empire preference in tariff rates where- by the United Kingdom and its Dominions enjoy preferential treatment with each other at the expense of United States exports. In presenting the above points I have de- liberately been terse. These points could be expanded upon at greater length but I know how jammed your schedule is. The points ] have made will, I believe, be discussed in more detail by representatives of the leather industry on Thursday. Nevertheless, I feel that I could not sit by while these discussions were in progress without stressing the im- portance of the subject to Fulton County, N. Y. The leather industry there is vitally concerned by the threat to its existence in the unfair competition now being practiced by foreign ents against American tanners. On their behalf, I submit that fur- ther reductions in ‘the already too low tariffs on leather should not even be considered and that the prime question should be the secur- ing of some reciprocity from foreign govern- ments to meet the already generous conces- sions made by the United States.
APPENDIX TO THE CONGRESSIONAL RECORD Investigation of Excessive Expenditures of Public Money EXTENSION OF REMARKS HON. CHARLES R. ROBERTSON OF NORTH DAKOTA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. ROBERTSON. Mr. Speaker, on many occasions during the reign of Roosevelt, we frequently heard about the mandate of the people. I think we can well continue this line of reasoning today when we think about the Novem- ber 5 elections. Certainly the people of the Nation expressed a mandate for a change in the methods and practices of this National Government. And it be- comes the duty of the Republican ma- jority in both Houses of Congress to carry out that mandate. One phase of that mandate which was clear-cut is that they want the national budget balanced, and the public at large have a right to know why the excessive expenditures that have gone on year after year even preceding the war un- der the direction of Mr. Roosevelt. It seems to me that it is the responsibility that rests upon the Republicans in Con- gress to make the necessary investiga- tions of these excessive expenditures and to go to the very bottom of each instance. This can only be done by intelligent, well-timed, and carefully arranged in- vestigations. The November 5 election was won by the Republican Party because the American people finally saw through the propaganda that is put out by the New Deal to justify their excessive ex- penditures which have brought the Na- tion to the brink of disaster. Under unanimous consent, I include herewith a syndicated article written by the accomplished writer, David Lawrence, dealing with the question of investiga- tions: ConGrrss MOVE SEEN TO BAR INVESTIGATIONS— New Dearers LOOK ror Way OvuT UNDER ORGANIZATION ACT (By David Lawrence) It begins to look as if the New Dealers who spent billions of dollars of public money without an audit of their expenditures and as if the bureaucrats who abused public power are about to escape scrutiny, and per- haps punishment altogether, by the device of banning special congressional investigating committees The Republicans will prove themselves poor politicians and will virtually hand over the 1948 election to the Democrats if they go along with ‘the let-bygones-be-bygones spirit which ts behind the effort to kill off investi- gating committees. The Republican Party won in 1946 because the public at last saw through a decade of New Deal propaganda and finaily got the im- pact of governmental controls operating at their worst. But the true extent of govern- mental mismanagement has never been dis- closed to the public. It had been believed that in the next 2 years there would be an opportunity to turn the searchlight of publicity on the misdeeds of the past decade. Now. however, the Democrats see a chance to squelch investigating committees by argu- ing that the Congressional] Organization Act was designed to do away with special com- mittees. It is being contended that the regu- lar committees of the Senate, for instance, XCITI— App.——14 can do the investigating. This is a fallacy. For the regular committees are much too busy with their regular assignments to do all the investigating necessary to penetrate a com- plicated field of inquiry, which is usually the reason for a special Senate resolution order- ing a special committee to take testimony. PRECEDENT IS SOUGHT The issue arises, to be sure, over the con- tinuance of the Truman-Mead committee, but it goes far deeper. For the Senate is be- ing asked to establish a precedent and let all committee investigating be done by regular committees. The Congressional Organization Act will become a mockery if it is constantly inter- preted as a device to curtail the rights of the Congress itself. There is nothing sacro- sanct about an organization bill which is invoked every day as a reason for not doing what the Congress is supposed to do— namely, to protect the people's interests against abuse. The same persons in Congress—with an exception here and there on both sides of the aisle—who are inveighing against special committees took a sadistic delight in using committee investigation powers to harass their political opponents. Even the income- tax returns of citizens which were supposed to be secret were tossed before investigating committees by the New Deal administration in its ideological combat that precipitated the present wave of class warfare in America. WAY TO BLOCK ABUSES It 1s true that some investigating com- mittees go too far but on the whole they do more good than harm. It is true also that some of the regular committees have succeeded in squelching inquiries and that the only way the House of Representatives, for example, got a chance to investigate the labor situation under the watchful eye of Representative Howarp SMITH, Democrat, of Virginia, a few years ago was to appoint a special committee. The regular labor com- mittee of the House was stacked by the pro- labor elements in this country against an inquiry. It will be easy for the lobbyists to get to some of the regular committee and stack the membership in the future, as in the past, by concentrating against the one or two mem- bers who hold the balance of power. When Congress, however, is free to look into any subject at any time with a special commit- tee, the lobbyists have everything to fear and so have the individuals who abuse the power of Government. While the Congressional Organization Act is a good thing, it was intended to assist routine procedures and not to rule in ad- vance on substantive matters of legislative interest. If the barrier of the law is to be brought forward every time some of the Members of Cong”ess want to make an in- quiry, it will-:gradually weaken the act itself and bring about repeal. Certainly, as be- tween a curtailment of the power of Con- gress to investigate and the so-called stream- lining of routine procedures, it would be better to give the benefit of the doubt to the investigating process, which is the sole instrument that really scares many bureau- crats from committing abuses. Our Atom Bomb Monopoly Will End EXTENSION OF REMARKS or HON. MELVIN PRICE ' OF ILLINOIS IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. PRICE of Illinois. Mr. Speaker, under leave to revise and extend my re- A209 marks, I desire to include in the Rrecorp a very well written editorial from the Alton (Ill.) Evening Telegraph. I feel that the significance of this piece is felt by all thinking Americans who seriously consider the atom bomb in all of its horrible phases. Were more people to read and feel like this editorial we might proceed to control this new energy. It follows: WITH £ACH DAY— The Rebekah Lodge is conducting an apron sale today and tomorrow at the Peerless Cleaners on Belle Street. Miss Betty Ann Bohart has become en- gaged to Paul E. Todd, of Wood River. Judge Boynton granted two divorces Wednesday in city court. Six babies were born Tuesday and Wednesday at St. Joseph’s and Memorial Hospitals. The fire depertment made three minor runs Wednesday, one to put out a fire started by a small boy playing with matches. People are talking about the coal strike, the high cost of living, and what the Repub- licans will do when they take over in Con- gress next year. It's still big news when one of the stores gets a shipment of nylons or white shirts. It looks like the same old world, with peo- ple dying, getting married, having babies, and conducting apron sales. But it isn't the same old world. More than a year has gone by since, with a silent flash far brighter than the sun, an insignificant amount of uranium yielded up its atomic energy over Hiroshima, erasing a major city eight times as large as Alton. At a lake bearing the odd and ironic name of Success, in New York, the diplomats are wrangling over what shall be done with this weapon of Armageddon. So far, in measur- able action, they have achieved exactly nothing. The debate gives the appearance of a stale- mate, and so we go about our daily lives as if everything were the same. But it is only the debate that is stale- mated, not the race for the atom bomb itself. While the diplomats argue, Russia is fever- ishly at work at solving the riddle whose answer flashed over Hiroshima. We have the bomb now, but each day that passes whittles away our monopoly. It may end tomorrow or next week, but end it surely will. What then? Hawaii EXTENSION OF REMARKS oF HON. BEN F. JENSEN OF IOWA IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. JENSEN. Mr. Speaker, my good friend from home, E. C. Gregersen— better known as Slim—composed the fol- lowing poem about beautiful Hawaii, which is further proof that everything our good colleague JOSEPH FARRINGTON tells us about his Hawaii is true: : HAWwan (Dedicated to all lovers of the islands) When hill and dale is cloaked in snow and glaring ice, Then let the helmsman take me ; Paradise, That icy breath I'l) leave behind, and fear it nevermore; Oh, speed the day when I may see the beau- ties of Hawall's shore. back to
A210 With lazy swells and gentle tides the kindly seas CBTess US, Then in the purple haze of dawn the island shores address us; Voleanic peaks, white crowned with snow, look down on verdant Valleys far below, and royal palms with stately grace Sway gently in the trade winds light embrace. The thunderous roar of surf is heard on coral strand, The tumbling waves race up to kiss the gleaming sand, There are singing strings and swaying hips of maidens fair Bedecked with leis, and orchids in their raven hair; The while, with graceful hula bands sweet tales unfold Of pagan love and prinoely deeds and war- riors bold. Terrestrial wonders by the score, greet ear and eye along the shore And from the Pali’s dizzy height, unfold the beauties of the night. The friendly moon swings low o’er youthful lovers passing by, The Southern Cross stands guard in brilliant starlit sky. A lunar rainbow spans the gulch, from can- yon walls A silvery veil adorns the glistening water falls. At the crater's brim there's a fiery glow, and ships in the harbor far below At Waikiki on a flowing tide the surfboard riders gracefully glide; Then a welcome hand, an open door in a quiet nook on the Kona shore, In this Paradise I'll dream and rest, ‘mid friendly emiles and life at its best. ~E.C. Gregersen. Extra, low4, December 1946. Statements by Under Secretaries of State Clayton and Acheson EXTENSION OF REMARKS HON. SOL BLOOM OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. BLOOM. Mr. Speake:, on Thurs- day, January 16, the gentleman from Michigan (Mr. SHarer] made certain remarks concerning Under Secretaries of State Dean Acheson and William L. Clay- ton, which were given considerable pub- licity in the public press. In fairness to these gentlemen and to their untiring efforts on behalf of the welfare of the peopie and Government of this country, I would like to insert in the REcorp the public statements they is- sued on this subject on Friday, January In conclusion, Mr. Speaker, I should like to recall to the Members of this House the President’s constant reitera- tion of the difficulties he encounters in persuading men of integrity and proven ability to make the personal sacrifices that Government service entails. And I am sure that any Member of Congress on either side of the aisle who is familiar with the work Mr, Acheson and Mr Clay- ton have performed, at great personal sacrifices to themselves, will deplore this type of attack. Such attacks only go to make it that much more difficult to ob- tain or retain the best men available for the tremendous tasks vhat face this Na- tion and the world in restoring conditions of lasting peace. The statements follow: STATEMENT BY UNDER SECRETARY OF STATE WILLIAM L. CLAYTON When asked for his comment regarding the speech of Representative Suarza in the House on January 16, 1947, W. L. Clayton, Under Secretary of State for Economic Affairs, made the following statement: “Whatever his intention Mr. SHarcr’s statement is clearly wrong on its facts. “The British loan was approved on July 18, 1946. by the House. “The fiscal year of Anderson, Clayton & Co. ended July 31, 1946, ao that obviously the loan could not affect the profits to which Mr. Suarex refers. I have no connection with Anderson, Clayton & Co. except as a stockholder, but I have ascertained that dur- ing that year Anderson, Clayton & Oo. sold only 3,500 bales of American cotton to Great Britain. This was less than one-quarter of 1 percent of its total sales of 1,979,028 of American cotton for the season, which sales were very largely to domestic mills. “Of total exports of 3,600,000 bales of American cotton, during the cotton season of 1945-46 (which corresponds to the fiscal year of Anderson, Clayton & Co.), the Commodity Credit Corporation shtpped directly 2,060,000 under lend-lease, UNRRA and arrangements with the Army in occupied territories. No cotton merchant profited from these govern- mental transactions, but quite the contrary. The remaining private exports of some 1,540,- 000 bales were made under the Commodity Credit Corporation surplus-sales program and directly reduced Government-owned stocks to the substantial benefit of the Government and the American cotton farmer. “It is, of course, quite obvious that the exportation of cotton and other American products has been assisted by Export-Im- port Bank credits. In the case of cotton, the principal beneficiaries have been the Commodity Credit Corporation and the American cotton farmer. “In the case of the cotton credits, more- over, the loans have been uniformly short- term, interest-bearing and virtually self- liquidating. Thus, they cost the American taxpayer nothing unless there are unex- pected defaults. “Anderson, Cluyton & Co. are not only cotton merchants, but are engaged in cotton- seed oi] milling, cotton ginning, and other local industrial activities in this country and abroad and not much affacted by for- eign trade and these activities contribute substantially to its profits.” STATEMENT BY UNDER SECRETARY OF STATE DEAN ACHESON Mr. Sxarer has seen fit to make derogatory remarks about me on the floor of the House of Representatives. Only one of these is worthy of comment. He implies that since 1 have held public office I have profited from the business of the law firm in which J] was formerly a partner. I resigned from membership in that firm on February 1, 1941, the day on which I took office in the De- partment of State. My interest in the then existing business was valued and thereafter paid to me by the partners, I have had no connection with or financial {oterest in the business of the firm since that e. APPENDIX TO THE CONGRESSIONAL RECORD Radio Address to My Constituents EXTENSION OF REMARKS HON. EDWIN ARTHUR HALL oF NEW YORE IN THE HOUSE OF REPRESENTATIVES Monday, January 20, 1947 Mr. EDWIN ARTHUR HALL. Mr. Speaker, under leave to extend my re- marks in the Recorp, I include the fol- lowing radio address delivered by me over Station WNBF on January 18, 1947. Dear friends of the Triple Cities and my congressional district, when Adolf Hitler climbed to power in Germany one of his favorite methods of getting rid of men se- lected by the people was to lie about them and repeat that lie so many times that he finally made people believe it. This devilish method {s often put into effect by enemies of the people against their chosen representatives in our country. This method has been used right here against your own Congressman, For instanoe, the poison-pen letter was de- veloped by ingenious enemies some years ago in this district to amear me and to create the impression that John Q. Pubitc was tfn- censed over the man they had so recently elected their Congressman. Actually, the writers of these poison-pen letters were phonies, or else stooges of the smal] and select fraternity of pet-hate boys whose chief pleasure is derived from mouth- ing invectives at yours truly. Last week their strategy was to try to give the people the tdea that I am getting more publicity than anybody else in Con- gress and that my unimportant chatter, as they called it, didn't deserve space anyway. Triple Cities readers know, of course, that while some newspapers have been mighty kind to me, others haven't. They know that they can always read a lot more about cer- tain other public officers, about their activ- ities and personal references, than they can about me. So the new strategy of making me look ungrateful for favors not received won't work. I will continue to resist that kind of hypocrisy just as ] have the other kinds. I realize that in fighting the smear-ped- dlers, Iam tackling a job as difficult as David faced when he fought Goliath. They always come back with more. But my duty is to place you people on guard against such tac- tics and make them recognizable. The particular smear letter, entitled “Too Much Hall,” attempted to draw into the pic- ture a distinguished Washington newswriter, Mr Cecil Dickson, of the Gannett newspapers, and use his column as a@ source of the con- tention that I am a great publicity getter. Mr. Dickson was talking about State-wide publicity through Gannett newapapers gen- erally and he was absolutely right. I keep close check on State news and 1 am well aware of the marvelous treatment given me by the Gannett News Service here in Washington. This State-wide publicity they have given me could not be bought for any price. However, the Gannett News Service would be the first to say that I had merited the publicity or they would never have given it to me. Today, I kept a promise 1 made during the recent election campaign by introducing a bill designed to help veterans. Last fall and since then, many boys just out of service complained to me that Con- gress had placed a limit on their abilities
APPENDIX TO THE CONGRESSIONAL RECORD and opportunities when the ceilings were put on their earnings in connection with on-the-job training. The Government adopted the policy of affording veterans a chance to make up for their lost time during the war by paying them extra for understudying the man on the job higher up. This is the American way. Instead of finding himself in a groove, the veteran immediately looked about him and saw the chance to get ahead by training for a better position, at the same time receiving compensation for his efforts. This was judged as fitting and fair to our veterans who had given up s0 much during the war years while others more fortunate forged ahead of them. Of course, there were some abuses. For instance, it was found in the War Depart- ment that colonels were training to be gen- erals and getting general's salaries at Govern- ment expense. Other flagrant violations were discovered, so Congress last year was called upon to place an earning limit of $175 for single men, 6200 for married men. I agree that some limit hould have been placed on this job-training program in order to stop the abuses. But I think Congress went too far with the limit. Such action bears out the complaints I have received and therefore I am proposing to remedy this iniquity. The bill I have introduced does not raise the allowance each veteran receives, but it gives more veterans a chance at on-the-job training. It reads as follows: “A bill to increase the monthly maximum allowed to veterans receiving both compen- sation for productive labor and subsistence allowances for education “Be it enacted, etc., That the proviso in paragraph 6 of part VIII of Veterans Regula- tion No. 1 (a), as amended, is hereby amended to read as follows: ‘Provided, That in no event shall the rate of such allowance plus the compensation received exceed 8350 per month for a veteran without a dependent or 8400 per month if he has a dependent or depend- ents.’” An Answer to Denials EXTENSION OF REMARKS HON. PAUL W. SHAFER OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Tuesday, January 14, 1947 Mr. SHAFER. Mr. Speaker, under leave to extend my remarks, I include a transcript of remarks made by me over Ed Hart's forum, Is Congress Doing Its Job, over Station WINX, Washington, D, C., on Sunday, January 19, 1947: Mr. Hart. Congressman, recently you have leveled some pretty serious charges against some high officials of the State Department. Just what do you think that the Congress of the United States should do about these men that you accuse of high crimes and mis- demeanors? Mr, SHaFer. Mr. Hart, the charges that 1 leveled against those men, principally, Dean Acheson, Under Secretary of State, and Will Clayton, largest single stockholder of the cot- ton firm of Anderson, Clayton & Co., are backed up by cold, hard, unfortunate facts. But I have only begun to tell the public and the Congress the tie-up between these men, and America’s State Department policies and their own pocketbooks. I stated, and I want to repeat, that Will Clayton, the largest stockholder of the larg- est cotton company on the face of the globe probably made, or will make, more money out of the British loan through sale of cotton to Great Britain, paid for by American taxpay- ers, than any other single individual made, or will make out of that loan. Mr. Clayton denies this, saying that he has no connection with Anderson, Clayton & Co, except as a stockholder. But, Mr. Clay- ton, isn’t it a fact that you own 40 percent of the stock of the largest cotton company of the world? And isn’t it a fact, too, that you were one of the prime leaders negotiating the loan to Great Britain? And isn't it a fact, too, that Great Britain is our ‘largest cotton buyer? The fact that the British loan was au- thorized only a few days before the closing of the fiscal year of the books of your com- pany means nothing. You know, Mr. Clay- ton, that credits are anticipated. You know that governments lend money by various means, through their banking institutions to private corporations, which purchased large quantities of American cotton. You know that commitments of the operations of companies such as Anderson, Clayton & Co. are not limited by a matter of a few days. And here {is something I would like to ask you, Mr. Clayton, if you are listening. Is it just a coincidence that the firm of Anderson, Clayton & Co. was able to buy nine cargo ships from the War Shipping Administration at knock-down prices and that these ships are being used to take cotton from Brazil] to China? And ts it only coincidence, Mr. Clay- ton, that you have worked long and hard, not only for loans to Great Britain, but to China, to Poland, to Yugoslavia, to Italy, and to every other country on earth that wants an American hand-out? Now, Mr. Clayton, I want to ask you an- other question, if you are listening. Isn't it a fact that you, a prime mover in negotiat- ing the Mexican Waterway Treaty, are profit- ing through that treaty by means of the development of some 200,000 acres of the richest cotton land in the Western Hemi- sphere located In northern Mexico? That treaty allows Mexico to get more water from the Colorado River watershed than Mcxico had any idea of getting, and Mexico got this water at the expense of our western cities and our western cattle industry. Under that treaty Mexico can take up to 1,500,000 acre- feet of fresh water per year even if it dries up cattle waterholes or curtails water sup- plies for the cities of Los Angeles, San Diego and other cities in the West. One other charge I want to make has to do with dealing with the enemy. Mr. Clay- ton, did your company deal with Brazilian and Argentine cotton firms that were on our State Department blacklist, as charged by Drew Pearson several months ago? And since there has beer. no denial of this charge how does it happen that your firm was not placed on that same State Department black- list? Mr. Clayton, why don’t you resign from the State Department? Even though you were to resign, you may be sure that the Repub- lican-controlled Congress will look into all of these dealings that I have mentioned. If the Congress were to fail to do this, the Con- gress would not be serving the people of the United States. Mr, Hart. Congressman SHAFER, you men- tioned Under Secretary of State Dean Acheson in your opening remarks, but you have spent most of the time presenting charges against Mr. Clayton. What do you think the Congress should do about Mr. Acheson? Mr. SHarer. Congress should make sure he is separated from any position where he can influence American commitments to foreign nations. A211 In his denial of my charge that his law firm will make a million dollars if the Polish Joan goes through, Mr. Acheson states that he is no longer a member of the firm of Coving- ton, Burling, Rublee, Acheson & Shorb; that he resigned from the firm in 1941 when he entered the Stute Department. By the way, Mr. Hart, the firm of Coving- ton, Burling, Rublee, Acheson & Shorb is trying like the very mischief to get the Polish loan through the Senate. Naturally, the firm sees a very considerable fee in clos- ing a deal whereby half a billion American tax-paid dollars would go to the Soviet-con- trolled government of Poland. Now, just how much that fee would amount to we cannot be sure because there are a lot of expenses involved, but it should run in the neighbor- hood of a million dollars—a million American taxpayers’ dollars, Now, Mr. Acheson says he has nothing to do with the firm of Covington, Burling, Rub- lee, Acheson & Shorb, but why it is, Mr. Acheson, that in the Washington telephone directory of current issue, on page 162, col- umn 4, there appears the name of the law firm, Covington, Burling, Rublee, Acheson & Shorb. Now, Mr. Acheson has denied that he has any connection with this law firm of Coving- ton, Burling, Rublee, Acheson & Shorb since he entered the State Department, but Mr. Acheson has not denied that his former eco- nomic adviser, Mr. Donald Hiss, left the State Department to become affiliated with the law firm of Covington, Burling, Rublee, Acheson & Shorb. Mr. Acheson has not denied that Mr. Donald Hiss is a brother of Mr. Alger Hiss who resigned from Government service be- cause his affiliations with certain one-world do-gooder, communistic, starry-eyed, crack- pot left-wing groups. Now, isn't it customary, Mr. Acheson, that when a& man resigns as a member of a law firm, that the resigning member has his name taken from the telephone directory, the door of the law office and the building direc- tory? It is only in the case of a deceased member that the name jis retained in the di- rectory for good-will purposes. And isn't ita fact that when a man permits his name to be used by a law firm that he is considered under the law as a member of that firm and is responsible as a partner in that firm? But, Mr. Acheson, when you became Under Secretary of State should you not have made absolutely certain that your name was ex- punged completely from the law firm, so that the public, and those who would seek favors for foreign governments, might not be mis- led? But Mr. Acheson, it wasn’t eliminated, any more than it was eliminated before you were fired from the Treasury Department, So, why don't you resign at once? You, too, were mixed up in that Mexican Waterway Treaty that means so much to Will Clayton. Congress should investigate these men thoroughly so that the American taxpayer, the American businessman and the Ameri- can public be no longer kept in ignorance of what these men may be doing behind the scenes. American Business Opportunity EXTENSION OF REMARKS oF HON. RALPH E. CHURCH OF ILLINOIS IN THE HOUSE OF REPRESENTATIVES Tuesday, January 21, 1947 Mr, CHURCH. Mr. Speaker, under leave to extend my remarks in the