APPENDIX TO THE CONGRESSIONAL RECORD done. It also provides that the district shall be composed of oompact areas. This, of course, ia designed ta prevent the curious patterns that have been established in some States for political purposes and to make it impossible to maneuver the voters for political ends. This practice has been known as gerrymandering, There alao is @ provision to make as fair as possible these divisions as to numbers of people yoting in the different districts. It seems to me tha} it is high time that some such regulation was passed, and I hope both Republicans and Democrats will join together to make it possible. Problems That Confront Our Country EXTENSION OF REMARKS ie HON. A. L. MILLER OF NEBRASKA IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. MILLER of Nebraska. Mr. Speaker, in 7 of the 8 years I have served the people of the Fourth District of Ne- braska as their Representative in Con- gress I have sought their reactions to the problems that confront our country by sending out a questionnaire. I have al- ways received a good response, and many took the trouble to write letters, These questionnaires, I believe, serve two pur- poses; they bring me the private views of a larger number of people, as con- trasted with the views of organizations that purport to represent them, and they stimulate more people to think about the problems that confront the country. I have an abiding faith in the good judg- ment of the people who live away from the confusing propaganda and pressures that pervade the very air you breath here in Washington. They feel and understand the basic concept of the freedom of the individual which our Government was set up to protect. They cherish their rights as individuals, and they resent the gradual encroach- ment of their Government upon them. During the month just passed I sent 70,000 post cards to my district, about evenly divided between urban and rural addresses, On them we asked the fol- lowing questions: Domestic PROBLEMS 1, Should there be complete mobilization, including price controls, rationing, and wage freezes? 2. Do you favor universal military train- ing? . 5. Should the draft law have exemptions for farm boys, students, and other groups? Should 18-year-old boys be drafted? 4, Should we raise taxes and attempt to pay for the war ab we go? 6. Should we eliminate the 40-hour weck and overtime at extra pay? 6. Do you favor Federal aid to schools? Socialized medicine? Repeal of the Taft- Hartley law? 7. Should we limit farm price supports? Forricm ProsirMs 1. How do you £31 about the United Na- tions? 2. Should we send ground troops to defend Europe and other parts of the world? 3. Should we withdraw our troops from Korea? Where would you suggest we tuke a stand? 4 How large an Alr Force, Army, and Navy would you recommend? 6. Should Marshall plan aid and the point 4 program (aid to backward countries) be continued? 6. Should we recognize Red China? Mr. Speaker, you will note that some of them were phrased in a way that they could not be easily answered by “Yes” or “No.” I purposely did this to encourage the people to write letters. I also asked them to write me. The interest shown and the letters received far exceeded my expectations. There were a much larger percentage than from any previous poll Ihave taken. In addition to elaborating on their answers to my questions many expressed themselves on the general sit- uation that confronts us. Throughout the letters ran a note of grave concern— what is all this preparedness program going to do to us and to future genera-~ tions? Huge taxes, controls and regula- tions, universal military training, spread- ing our resources all over the world, and meddling in the affairs of other nations will make profound changes in our way of life. Many wonder whether ox, not we can continue down this road and pre- serve our liberties. There are honest differences of opinion just as there are qgmong the various groups of leaders in both political parties. All the letters expressed the desire for a strong America with strong Christian leadership. They want an end to confusion, corruption, and communism. They crave peace, security, and freedom from unnecessary Government interference with their daily lives, On domestic issues, opinion was about eyenly divided on the questions concern- ing complete mobilization, price control, and wage freeze. Many of those who favored going all out on these did so as a temporary expedient, but expressed a Jack of confidence in the Government's ability to administer them with even- handed justice. The spread was a little greater on rationing—56 pereent op- posed. On universal military training 56 percent approved, but only as a tem- porary expedient; 59 percent opposed ex- emptions from the draft for farm work- ers and students; 64 percent were against drafting 18-year-olds. Most people were bitter at the leadership for the way it has led us to the very brink of war by its appeasement policy toward Commu- nist countries and its sudden reversal to armed conflict when we were ill-prepared and Jacked the support of real allies, all of which made necessary a decision on these matters. The people have an ingrained fear of the military. While the opinion was unanimous that the budget should be cut deeply and Government waste eliminated, 68 percent favored increased taxes to put the re- armament program on & pay-as-you-go basis. There was strong condemnation of the administration's failure to make deep cuts tn the budget for nondefense spending and its attempt to put over its socialistic program in the guise of de- fense spending. On the elimination of the 40-hour week and straight time for overtime, 75 percent voted “‘yes.” So- A123 cialized medicine and the repeal of Taft- Hartley were opposed by more than 90 percent, and Federal aid to education by 66 percent. On elimination of farm price supports, 73 percent voted “yes.” Many felt that the big bureaucracy needed to administer the program should be dispensed with now that agricultural prices are good. i In the fleld of foreign problems, 88 percent expressed the feeling that the United Nations had fatled in its mission and must be reorganized if it is to justify the heavy financial support we are giv- ing it. On sending more troops to Eu- rope, 60 percent voted “no.” Strong support was given to the proposals of former President Hoover; 62 percent wanted our troops withdrawn from Korea; 59 percent opposed continuing Marshall-plan aid and the point 4 pro- gram. Most unanimous was the 92 per- cent registered against the recognition of Red China. Many expressed them- selves bitterly on this subject. One put it this way: “Should I shake hands with the man who has given my children poisoned candy and call him a friend?” AS a result of this questionnaire, Mr, Speaker, I have a splendid cross section of the thinking of the folks in the Fourth District of Nebraska. : Like the people of my State, Mr. Speaker, I am greatly concerned about the future of my country. I am con- cerned about the secret commitments made at Yalta, Tehran, Potsdam, and other places in the world. I am con- vinced that the administration has not told us of the secret commitments made under the Atlantic Charter, especially on the arming of Europe. Even so, if the administration has committed us to sending six divisions to Europe, I feel it must be fulfilled. I agree with former President Hoover that it would be im- possible to protect Europe with e land army. I believe we should have an Atr Force strong enough to strike every mili- tary and industrial target in Russia and to pyptect us at home, and a Navy that can control the sea. We should not be wasting our resources on nations that do not have the courage and willingness to defend themselves. I am also concerned that the strain of supporting an Army of 3,500,000 men, a 100-group air force, and an adequate Navy will break the back of the taxpayer. While I believe we should help other countries in the matter of public health, preventive medi-~ cine, and food within our ability to do so, we should not spread ourselves so thin, that we will lose our economic balance at home. On the domestic scene I am convinced that the attempt to control prices and ration scarce materials is doomed to fail, Rising prices at this time are due to Gov- ernment spending, scare buying induced by the way the situation has been han- dled, and by the administration’s cheap- money policy, championed by the, Secre- tary of the Treasury but opposed by the Federal Reserve Board, There is no in- dication that the administration will abandon its spending policy, nor tighten up on cheap money. Trying to control prices without destroying the causes of
Al244 inflation is like sitting on the valve with- out drawing the fre from under the boiler. Deep in the heart of our people is a natural resentment to Government con- trol of our economy. To accept it they must have great confidence in the judg- ment, honesty, and fairness of the ad- ministration, The sudden reversal of policy that threw us into a full-scale war in Korea, with a casualty lst of more than 50,000, and the fear of another and larger debacle in Europe has raised a,big question as to its judgment. The reve- lations concerning the tie-up between goverment and crime, the disclosures of political influence in obtaining RFC loans, the staffing of control agencies by political patronage, and the sale of jobs in at least one Southern State has destroyed confidence in its honesty and fairness. If we are to avoid disaster, the administration must quickly restore the confidence of the people. It must stop playing politics and bring to its aid those whose judgment they will trust. It must cut nonessential spending to the bone and clean out the influence peddlers and machine hangers-on. It must get rid of those whose soft policy toward com- munism has gotten us into this critical situation. Only by taking such drastic measures can it do this, Open Letter to Congress EXTENSION OF REMARKS or HON. PAUL W. SHAFER OF MICHIGAN IN THE HOUSE OF REPRESENTATIVES Monday, March 5, 1951 Mr. SHAFER. Mr. Speaker, under permission to extend my remarks, I in- clude an open letter to the Crngress of the United States, placed in leading newspapers of the Nation Sunday, March 4, 1951, by the Isbrandtsen Co., 26 Brdad- way, New York. I commend this letter to all Members of Congress: To the Congress of the United States: Bo that you will know, and knowing, you will consider, carefully investigate, and clar- ify the deliberately created hysteria in the Capitol of the United States other than the subject of high appropriations. You have built a Frankenstein monster. Polities contributed to laying the founda- tion and foreign influences completed the like the vampire bat it bas sucked the blood from the veins of our way of life, Pubite indignation and your investigations have provee that in this new era crime and ranketa fyave penetrated public, social, and political life—Hollywood has glorified the eaay way to glamor—legal confusion has cortributed to disintegration—you stand in the Hall of Congress apparently confused and often 4mposed upon by pressure groups, State, National, and international—many beat the drums of war te divert public at- tention from realities to a magrietic sop of ‘unpredictable spending, stimulating the self. tahness of man both home and abroad. The Nation refiects strong emotions of Gespair in mind, home, and buastness—your campaign promises and duties are often over- Yooked for the sake of a political Napoleonic grandeur—this is not inepiring to the people and business who pay the bills, and leaves ambition and life itself questionable. We stand confused in our all-out policy of @ global war that promises only destruc~ tion—isolationism carries the scourge of leprosy—you leave the path of nationalism under the guidance of foreign hyphenated groups in the name of world peace. Today we are atill] muddling and meddling in the Orient. East is East and West is West—-the twain has met. Backward China in the early 1860's warned the Occidentals “You are all too anxious to wake us up and start us on a new road, and you will do it, for, once awakened and started, we shall go fast and far—farther than you think, much farther than you want.” China fought its way out of a drugged stupor forced on her by opium wars, and today stands in deflance of Occidental rule. They have erected an Asian-Arab bloc of 1,800,000,000 peoples in declaration against and resentment of political, economic, and religious interference—they will create their own doctrine and will retain their culture and philosophy. The vast world markets cannot be regained or conquered by war, ambition, or intrigue by any nation, or by military action to force economic or religious issues or beliefs which will only increase hate and the determination amongst them. The Orientals, by weight of numbers, be- Heve they have a justification to exert their influencg in settling the Korean question. Korea is in their sphere of race, religion, and culture and in the orbit of Oriental rule. The United Nations cannot force Occti- dental rule over the Orient. There is no explanation of our purpose in a costly war in Korea. We have debated for a long time the pros and cons of Nationalist China and the Peoples Government of China—our only offered solu- tion and action to date is the growing possl- bility of an all-out war—even that is without explanation as to ite intent, High military authorities point out the folly of # losing undertaking. But, some- where there is an influence in this destruc- tive plan which invites our ultimate disaster. Many in Congress know of what we speak. A much-questioned program was launched to deplete our manhood and treasure. This action was born out of resentment of the other fellow’s beliefs and views. We followed an academio crystal-gazing philosophy with- out intelligence or understanding. We mado many enemies and few friends by interfering in political and religious issues fostered by minority groups. Today we are challenged by racketeers, s0- clallam, and a crack-up of the American way of life, Through the valor of ignorance and folly, dreaming of riches, we entered a spirit of carnival time—the wisecracks of parasites of pleasure have supplanted the warnings and utterances of statesmen. In orgies and revelry we celebrate the birthdays of the founding fathers. This week Washington's advices and preachments will again be eulo~ gised and disavowed. A new era is born. Bo- cial Hfe dissipates ite inheritance In sensa- tionalism and in @ toast ta the dance of demoralization. The world knows all this and encourages our disintegration—many will cheer the fall of modern Babylon. ose nations par- ticipating in dratning our wealth will then have to end their Roman holiday and re- luctantly go back to work. The efforts of business and the people pay all costs of government; destroy their efforts and you destroy government. Every person in public lMfe is a servant and employee of the taxpayer—no one is immune to the voice, vote, or will of the people. You ahould declare a moratotium during which we might get back to atability, factual bookkeeping, and comman sense, ‘APPENDIX TO THE CONGRESSIONAL RECORD Sanctions and arrogance have supplanted realization and understanding of the issues we in this country have had a large part in oreating. On the seas we replace the flag of commerce with the fag of ships of war—make enemies instead of friends. Al- ready our fing of commerce is dented access to more than half the world. Already we are the highest-cost country in the world. Reg- ulations and sanctions add to the almost im- possible task of us teking an intelligent part in the competition for foreign com- merce. It ig universally known that understand- ing between nations and peoples is fostered by the bonds of industry and commerce— the necessary flow of goods that keeps the wheels turning all over the world—ls basic to peace, and that mutual sanctions do pre- clsely the opposite. What has been done may not be undone, but is there no solution that our statesmen have to offer—is there no end in sight? The answer to that question, gentlemen, rests in your hands. The time is here—people are tired, confused, and searching for courageous leadership, IsBRANDTSEN. Treaty of Peace With Italy EXTENSION OF REMARKS HON. NORRIS POULSON OF CALIFORNIA IN THE HOUSE OF REPRESENTATIVES Monday, March 5, 1951 Mr. POULSON. Mr. Speaker, the joint resolution which I have introduced, and which Senator Warxins introduced in the Senate yesterday, if passed, will relieve Italy of liabilities which it is un- der at the present time, and which pre- vent it from taking an effective part in the defense of liberties of Western Europe. Denunelation of the Italian Peace Treaty will open the way for Italy to build up her own defense against Com- munist aggression and effectively con- tribute to the defense of the whole of Western Europe. It should substan- tially reduce the number of ground troops which the United States may be required to send to Europe. The Italian Peace Treaty levied severe economic and territorial tribute on Italy. It deprived Italy of its armed strength and gave it in most part to Russia and her friends, thus weakening Italy and strengthening the military potential of the forces of communism. The Italian Peace Treaty deprived Italy of certain territory along its bor- ders and placed the inhabitants of that territory under the sovereignty of other nations without consulting the will of the people concerned. This was a vio- lation of the spirit of the Atlantic Charter. ; The Italian Peace Treaty placed se- vere limitations on the number of men who may serve in Italy’s armed forces. I believe that Italy showld be allowed to more adequately arm herself and more effectively contribute to the de- fense against Communist aggression. Therefore, I urge the passage of this joint resolution.
APPENDIX TO THE CONGRESSIONAL RECORD Point 4 Agreements With Israel, Lebanon, and Jordan EXTENSION OF REMARKS or HON. ABRAHAM J. MULTER OF NEW YorRE IN THE HOUSE OF REPRESENTATIVES Monday, March 5, 1951 Mr. MULTER. Mr. Speaker, in recent days the State Department made three important announcements which con- stitute significant steps in the direction of raising the standard of living in the Near East and improving the economic stability of the area. Agreements have been reached with the State of Israel, Lebanon, and Jordan to undertake de- velopment projects in those countries under the point 4 program. The agreement between the United States and Israel, signed at Hakirya (Israel) on February 26, 1951, by Foreign Minister Moshe Sharett and United States Ambassador Monnett B. Davis sets forth the conditions of cooperation pre- scribed by the Act for International De- velopment of 1950, under which the point 4 program was authorized. Under the agreement the United States will send American experts to aid Israel in the development of specific projects, and a number of trainees will be brought to this country from Israel for the purpose of acquiring wider knowledge and experi. ence in the specialized fields. The State of Israel is anxious to obtain the help of American experts in connec- tion with road construction, railways, irrigation methods, public-health serv- ices, citrus-fruit production, and techni- cal training. Trainees from Israel are interested in learning methods and ac- quiring experience in the United States in deep-sea fishing, railways, ship repair- ing, the ceramic industry, and others. All of this would be extremely beneficial in the fulfillment of the 4-year plan of eco- nomic development of Israel, which aims to develop the country’s resources, im- prove working conditions, and raise the standard of living of its population. Israel has been making tremendous economic progress since its establishment as an independent state nearly 3 years ago. The United States was the first to recognize the independence of Israel, and since then the relations between the two countries have been most cordial and friendly. The new agreement, just com- pleted, is a further example of the friendly relations and the spirit of co- operation between Israel and the United States, The agreement between the United States and Lebanon calls for a technical mission of 12 specialists from the United States Department of Interior's Bureau of Reclamation to aid in the develop- ment of the Litani River. Specifically, the mission will make a survey for the power and irrigation development of the Litani. It will be recalled that in 1949 a United Nations Economic Survey Mis- sion, headed by Gordon Clapp, visited Lebanon and recommended the develop. ment of the Litani River as a means of inoreasing the country's industrial and agricultural production. Among the major projects intended to raise the standard of living in Uebanon are the development of hydroelectric power and irrigation. The agreement with Jordan, signed at Amman, paves the way for cooperative action to develop that country’s resources and improve the standard of living of its people. Jordan has requested assistance in establishing a laboratory to handle technological problems, health, and re- search in agricultural and industrial chemistry. The United States will also aid in cleaning, repairing and enlarging cisterns, which are vital to this arid country, Lebanon is about the size of Connecti- cut with a population of 1,200,000: Israel is somewhat smaller than Massa- chusetts with a population of 1,300,000: Jordan is somewhat larger than Maine and has 1,200,000 people. All of them are primarily agricultural countries, with much of the land under cultivation de- voted to raising frutts, citrus fruits and the like. All of them have a serious de- ficiency in the production of certain foodstuffs, making it necessary for them to import large quantities of their food requirements, The agreements provide for specific development projects in these countries which will help to increase their agricultural output and to make them self-sufficient in feeding their pop- ulations, This great accomplishment redounds to the credit of the United States, It is another example to other countries of what can be accomplished through co- operation in good faith. With these agreements in the economic sphere as a start, the United States should con- tinue to urge an early consummation of @ peace treaty between Israel and the Arab countries in order to establish true economic cooperation and stability in the whole Near East. Such an accomplishment would be a great boon to the free world. The United States ought to explore this pos- aibility most seriously. It should be made clear to the peoples of the Near East—and also the Far East—that eco nomic development and a higher stand- ard of living will enhance the chances for true peace with freedom, justice, and dignity, The Atomic Bomb and the Defense of the Free World EXTENSION OF REMARKS or HON. F. D. ROOSEVELT, JR. OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr, ROOSEVELT. Mr. Speaker, un- der leave to extend my remarks, I am very pleased to place in the Recorp a copy of the radio address by Dr. Van- nevar Bush, president of the Carnegie A245 | Institution of Washington, which he de- livered over the Mutual Brasdeasting System network for the Committee on the 1 Present Danger on last Sunday eve- In this address, Dr. Bush has given « Penetrating analysis of probably the most serious problem which confronts us today. The address follows: Tue Atomic Boma AND THe Derense or THE FParx Wortp (By Vannevar Bush) My fellow citizens, the Committee on the Present Danger is beginning tonight a series of weekly broadcasts on the peril that faces the American people and how it can be met. The committee is a nonpartisan group of citizens who have organized to work together as the Nation prepares to safeguard freedom, T have never been a “joiner,” as we call them on Cape Cod, but I believe so strongly in what this committee stands for that I am glad to be a member of it. We believe the Nation's preperation to meet the danger must be on the same scale as the danger itself. We be- lieve balanced armed forces are the heart of such preparation. And we believe the utmost speed is essential. I have been asked to begin this series with a reckoning of the probabili« ties of the defense of the free world, and how the atomic bomb affects them. There is no doubt of the desire of the American people—and of our friends. We wish to avoid war. We wish to preserve our freedom and the free way of life. In a world where aggressive dictators are still at large, there is but one way to achieve these ends, That way is: to be strong, I am confident that the American people realize this, Rut we need to study just how to bulld that needed strength. The key to the matter, in my opinion, is the A-bomb. At the end of the war our ale lies wore exhausted. We disarmed, We know what has happened. Russia moved in, Working by intrigue and by the subversive overthrow of governments, she took over enormous territory and millions of people, But Russia stopped. Russia stopped at the bondery where the Kremlin was sure there would he war with us if it proceeded further. We saw the matter tested out at the time of the air lift in Berlin, and we know when we confronted the Russians with true strength they did not force the issue. The deterrent is nearly as powerful today as it was then. If Russia sent its armies rolling across the German plaing tomorrow, we with our A-bomb and the planes to carry them would destroy Russia. We could do it without question as matters stand today. We could destroy not only the key centers from which her armies would be supplied, but also political centers and the communica- tions of the armies on the march. Initially equipped with weapons and supplies, those armies might keep rolling for a time, but there would be no Russia behind them as we know it today. The answer to this is that the armies will not roll. No all-out war 1s in sight for the immediate future unless they or we make some very serious error in« deed. If Russia knowe that she cannot go beyond certain boundaries without provoking & war, she will not pass those bounds: no war will occur, This hes been well shown in recent years. The only appareat excep tion ig in Korea, and there we did not make our position clear. The dificulty is that we cannot count in. definitely upon strategic bombing ae the sole means of averting war. Today, it gives us a military stalemate. To maintain that stalemate ts the real problem. Defenses against strategic bombing have been mounting ever eince the way. Jst pursuit. ships controlled by ground radar
A1246 can be enormously effective in bringing down high-flying bombers. Russia with ite vast distances can have extensive early ‘warning radar networks to alert its defenses. She can have great fleete of jet pursult ships for defense, accurately controlled fram the ground night and day, She can also have about her key positioms modern antiaircraft and also perhaps ground-to-air guided missiles, Russia protect her key points. Note that I say in time. She cannot do it now. She cannot a: any time safeguard all the places in Rus- sia we might wish to attack. But in time there is 9 strong probability that she can @efend key points to the extent that we could not penetrate to them without pro- hibitive attrition, She is also building a stock of A-bomba of her own. The deterrent of our A-bombs is real. But we cannot count on its remaining fully effective forever. TI trust we have time-—time to prepare the de- tenses that will continue the balance and avert war. But we do not have time to waste. These defenses center In an allied army jn Europe capable of holding a defensive ne, stopping the Russian hordes if they should ever start, and so dissuading them from starting. That army must be well trained and it must be suppited with the very beet of weapons of every sort. It must be created before our present enormous atomic advantage is seriously lessened. Of course it needs to be combined with con- tinued development of our striking Air Force and support of our Navy to keep the seas open, but there must be an army in being and on the spot capable of holding tack the hordes of Russia. Such an army does not now exist. This need by no means be 4 matter of opposing hordes by hordes. We have no idea whatever of invading Rusela by land, nor should we develop any such idea. Ours should be a defensive line, a line to hald back the hordes while we strike by other means. Many elements enter into this. In the first place, take the matter of tanks. Ruse ela hes 40,000 tanks of various sorts. All her military doctrine revolves about the use of tanks and artiliery. But there have been developed in the last few years antiaircraft weapons of great power. Relatively small recoilless antitank guns mounted on a jeep or handled by four men can put a heavy tank out of business, with a high probability of doing it before the enemy can get off his first shot, even at ranges of 1,500 to 2,000 yards. These guns can be built in quantity by the hundreds for the cost of a single heavy tank. When the countryside is in- veated by stingers of thia sort no tanks are going to roam that countryside long. There will still be a function for the light tank and for armored vehicles of various sorts. But the big tank hes met its match, and, unless techniques change in a way that I do not now see, it will become a lability rather than an asest in due time. I do not aay that the big tank is now obsolete; I do eay we can make it obsolete if we put our minds to the job and build the things to counter it. With that problem settled, the defense of Zurope ts simpler. There is another factor, moreover, which is of enormously great tmportance. Out in the Nevada desert there have recently been @ number of explosions. Presumably they mean the testing of new types af A-bombs @eaveloped by the Atomic Exergy Commision during the past 6 years. 1 will not specu- late as to their nature, but We can certainly aasume that we have not been idie and that we have more effective botiha today than we had 5 years ago. They may indeed be far more adaptable for a very important pur- pose. ‘We have thought of the A-bomb as a means for attacking great military production facii« {ties or centers of political power. The A- bomb can also have important tactical uses, Suppose that a war were to break out 8 or 5 years from now and that the Russian hordes were held up by a much smaller number of well disciplined and well armed divisions, If the line were not too thinly held, if it were defended in depth with the land mines, antitank obstacles, artillery, and other Weapons that we can have if we choose, how would the Russians break it? They could do 80 only by a huge concentration of armies, artillery, and tanks—the kind of thing the Nagis did in 10944 just before the Battle of the Bulge. But with A-bombs tn existence this becomes a very different matter. An A-bomb delivered upon such @ concentration by an airplane, or possibly by uss of # gun or a guided missile, would be devastating. In its presence, concentration of this sort would not make sense. Tactical use of the A-bomb thus will help to make the defense o” Europe with reasonable numbers of men a practicable matter. Further, Europe is regaining courage and spirit. The mission of General Eisenhower and the evident determination of the Amer- ican people are aiding greatly in that regard. We can join our strong and well trained troops with those of our allies in Europe— we must assemble them in sich numbers that they can hold the line. When enough men are mustered, there are important tech- nical innovations to enable them to hold such a line against vastly superior numbers. It is not a matter of meeting hordes with hordes. Yet with even the most subtie of modern weapons there must be men to main- tain the line and men to wield the weapons if they are to be effective. I trust therefore that in our provision of manpower we will look well to the future. There is no thought in my mind that the men we bring in for training now will have to Hght soon. Rather I think they will be the beginning of a well trained, well organ- ised reserve. We need not only an army in being on the spot, but also behind it masees of trained men who can be called, if it be- comes necessary, without a long perlod of indoctrination. If total war ever comes again it will break suddenly. I believe that the way to accomplish this purpose is to induct 18-year-olds to have approximately 2 years training and service and thereafter to go into the reserve to build up the essen- tial body of trained men, We cannot bulld the forces we need with- out sacrifice. This sacrifice must come in many ways, in foregoing some of the pleas- ures we like to enjoy, in increased taxes and heavier burdens, and above all in the self- Jeasness of our youth as they devote a part of their lives to training for the defense of decency and freedom. In my opinion we shall produce less interruption in the life of the youngster if we train him in the years of 18 and 19, after he has finished high schoo] before he launches his permanent ca- reer. Moreover the earlier the training starte, the longer will men he available for the Reserve. It takes young men to fight a ‘war. As I said when I started this talk, the ob- ject of the free world ig not to fight a war but to avoid the necessity of fighting. If we are wise I feel sure that we can avoid that necessity. We have today an able group of military leaders. We have « strength which Rusela fears. The Kremlin will not strike unless it makes a mistake or unless we by the utmost foolishness cause ft to make a false move in the belief that it can do 50 without bringing our retaliation upon it, ‘We must keep such strength that we cannot be overwheimed, such stre: that % at- tack us would be suicidal. we do, the at- tempt will not be made and we can live without a world war III. The sacrifices we ahall make to that end, heavy though they may be, will be small, indeed, compared to APPENDIX TO THE CONGRESSIONAL RECORD the sacrifices we would make if through ‘weakness or hesitancy we allowed a war to come upon us. Nor does America stand up to Russia alone. Russia today faces the entire free world, of enormous production capacity and enormous numbers of men, a vigorous free world, The free world haa no idea of mak- ing war on Russia. But it is determined to live in peace and to be etrong in order to do 80, We, of the United States, have great allies, They are temporarily in some dis- tress, for they suffered grievously during the war. But their might is rising. France ts rising with all of tts great traditions of strength and independence. Britain is rising with its pride at having maintained the peace of Burope by its strength for many years. So are other allies as well. Their growing strength combined with ours can be made ample to stand off the present dan- ger. If it is held in check that danger will in time fade. We will face the threat shoul- der to shoulder, and facing it thus we will keep the peace. One World—Two Giants EXTENSION OF REMARKS HON. RICHARD BOLLING OF MISBOURI IN THE HOUSE OF REPRESENTATIVES Tuesday, March 6, 1951 Mr, BOLLING. Mr. Speaker, Mr, Edgar Shook, of Kansas City, Mo., the president of the Kansas City Council on World Affairs, has called my attention to the following address given by Dr. Clarence R. Decker, president of the uni- versity of Kansas City. Dr, Decker’s speech represents an important contri- bution to increased understanding of the international problems which confront every citizen today: Onx Wortp—Two Grants (By Clarence R. Decker) I Always at the New Year I find myself burdened with dark memories of another New Year—-a New Year now 18 years ago. I was spenaing the year in Europe, studying in Europe’s famed universities, hiking, and traveling over Europe's countrystde, from Norway in the northwest to Greece in the southeast, and to Turkey in Asia Minor. It had been a beautiful year. Nature was never more generous. But already, in the world of men, there were ominous rumblings of portentous events. Mussolini's voice was growing more strident. Hitler was grasping for power. Within a short hile von Hinden- burg—then old and ill—would sign the fatal Pplece of paper that would drive Germany into ruin and degradation. Spain's civil Gissension cast its shadow before coming events. Pierre Laval—-pictured that winter on Time Magazine's cover as the world’s man-of-the-year—had risen from an obscure stacker in the First World Wer to a sinister fnternational figure. Stalin wae restive and furtive. Baldwin was committing England to the fatal policy of appeasement. Here in our own country we were too preoccupied with the depression and an ideology of isolationism to worry about the problems of the rest of the world. T January of 1989 I found myself in delivered an ultimatum to China, threatening to attack Shanghai and Chapel
APPENDIX TO THE CONGRESSIONAL RECORD unless certain humiliating condittons were met within 32 hours. The attack was to hegin at midnight, Geneva time. China, as a member of the League, had appealed to the Council. All of us at Geneva were deeply disturbed, The situation itself was grave, but graver still were its impliications. Ironically enough, the statesmen of 57 nations were at that moment assembling in Geneva for the ill-fated Disarmament Conference. The Bino-Japanese “incident,” as it was called, came at a critical moment. Now, if ever, the League might justify its existence, might prove itself a powerful agent for world peace. Now, if ever, the signatories to the Kellogg-Briand Pact outlawing war might prove their good faith. Now, if ever, wars made by men might be prevented by men. As we gathered that afternoon we could see through the battery of windows the rays of the setting sun Mluminating the snow- covered Alps rising majestically beyond the blue waters of Lake Geneva. It was a peace- ful, sun-flooded world, almost theatrical in its perfection. But inside the assembly hall there was neither peace nor light. Hundreds of per- sons milled about seeking seats in the al- ready overcrowded room. On the slightly raised rostrum, in the shape of a horseshoe, 18 vacant chairs awaited their occupants, the official representatives of the Great Powers. Contrasting the peaceful world of nature outside and the confused world of men in- side, one could not help recalling Words- worth’s lines: “To her fair works did Nature link The human soul that through me ran; And much it grieved my heart to think What man has made of man.” The Council members at last took their Places. A nervous hush acttled over the room. On the wall, at one end of the hall, the hands of the large clock moved steadily ahead, a kind of nemesis that at midnight would declare the beginning of another war. M. Paul-Boncour presided. First he called upon Dr. Yen, Chinese Minister to the United Btates and special envoy to the League. In an eloquent, moving appeal, quietly spoken, Dr. Yen recalled the unprovoked attack on Manchuria in the fall, the brutal demands of a power-mad Japan on an unprepared and weak China. He called upon the League for protection under article XV of the Cove- nant. When he finished, the reporters and other members of the audience, in violation of the rules, burst into spontaneous applause. The chairman rapped for order. The hands of the clock had moved 1 hour closer to mide night. Mr. Sato, the Japanese delegate spoke next, He too was eloquent—this we had to admit, even though our sympathies were almost unanimously with Ohina. He recalled the humiliations of his own country at the hands of the great powers, including the United States. He argued that Japan was the victim of race discrimination, that in America we looked upon his people as the “yellow peril,” that we had passed the Orlen- tal Exclusion Act, that the great powers were seeking to strait-jacket a little island smaller than California but with a population of more than 70,000,000 people. He reminded us that Admiral Perry had forced the open door upon his country, that we too were guilty of exploiting China, that Japan's im- perialism—if it was imperialism—~was simply the problem of survival in an already tm- perialistic world. As he took his seat, the hands of the clock had moved ahead another hour toward midnight. ‘Then Paul-Boncour arose and made one of the moat tragic talke I have ever heard. Here ‘we are, he said in substance, a small group of men, the representatives of supposedly Civilized nations. We are thousands of miles from the scene of imminent conflict. At midnight the troops will move. He reviewed all the circumstances. He pleaded for pa« tience and good will, only to reach the con- clusion thet under existing circumstances there was little the League could do. Silently we left the hall, As we made our wey back through the cold midnight streets to our hotel, many of us were overwhelmed with the feeling that the world itself, nod China alone, was at stake; that Paul-Bon- cour’s confession of defeat waa the world's confession of defeat; that we had witnessed the beginning of the Second World War, The following morning we read in the pa-~ pers of the smoking embers of Chapei, @ char« nel house in which thousands of humble people—men, women, and children—were blown to bits by Japanese bombers and in- fantrymen, while 200,000 other civilians bare- ly escaped with their Hives. The fires of Chapei soon spread over the world. Almost 10 years later to the day, our own country found itself attacked at Pearl Harbor by the same ruthless and lawleas ag~ gressor. In Europe country after country had been invaded, cities and countrysides laid waste, minority groups brutally herded into concentration camps and all but exter- minated by crematoriums, firing squads, stare vation, and disease. And today, 16 years later, we find ourselves faced with events and decisions of similar, if far larger, import. It is as if the long arm of destiny had begun to not too clearly understood. ped To understand a little better for ourselves, Mrs. Decker and I were happy to accept the invitation of the American Association for the United Nations to represent it on the 1949 ‘round-the-world seminar tour of the well-known radio network program, “Town Hall of the Air.” Altogether 28 national or- ganizations, whose memberships included some 30,000,000 Americans in all flelds—com- merce and industry, labor and agriculture, education and cultural affairs—were repre« sented. The purpose of this pioneering venture was to increase American understanding of world problems, to promote understanding of America around the world, and to advance through uncensored public discussion, the cause of freedom, peace, and well-being. With such ambitious ends in view, we were naturally disappointed that our efforts to include meetings and broadcasts behind the jron curtain were unsuccessful. Yet, even without the hospitality of the Kremlin, we traveled 33,000 miles by air, visited 15 world capitals, held daily conferences with leaders in the countries we visited, inspected many of their most significant undertakings, and produced over 150 local broadcasts in addi- tion to the 2 network series broadcast in the United States. The cost of the trip was approximately $200,000, financed entirely by private funds. While we enjoyed the ac- tive assistance of our State Department and the full cooperation of foreign governments, we had no officfa] responsibility. We were likewise entirely free from official control. The whole undertaking was in the best tra- dition of American free enterprise. The results were gratifying from many points of view. The leaders of the ccuntries we visited appreciated the questioning in- terest we took in their problems. That we were setking understanding rather than giving advice impressed them, They were also impressed by our frank method of dis- cussion, especially by our typically American way of disagreeing uninhibitedly and good~ naturedly among ourselves, In many coun- tries our meetings were a revelation in the technique of democratic discussion. Such a trip deepens one's conviction that we ara living in times that offer magnificent opportunities for genuinely heroic and crea- tive achievements, but that thus far our midtwentieth century, far from behaving either heroically or even aa civilized, actually AIR? threatens to destroy itself, The critical problems we face center around three chars acteristics unique in the modern world: {1) The release of atomic energy; (2) the ideological nature of our political ms; and (8) the shift of the center Anterne- tional political gravity from Western Burape to Asta. 1 nur ‘ Hiroshima and Nagasaki! struck a profound fear into the hearts of men throughout the world. The feverish postwar race for the perfecting and stockpiling of the atomic bomb, and other even deadlier weapons of Gestruction, aggravates our giobal fear and hangs like the sword of Damocles over all the other fears of insecurity that beset the smallest villages in India no less than the greatest cities of the western world. It like- wise affects political strategy on the highest levels, The colossal failure of stateamanship to placate this modern Nemesis must be ac- counted & major predicament of our century. wv The history of war has been the history of mankind, but even allowing for the holy wars of the past, the world has never before been more divided and endangered by con~ Aicting potnts of view more completely ideological in character. The ideological struggle of our times has been brilliantly summarized in these words: “There are at this time two great nations in existence which, proceeding from differ~ ent points, appear to be advancing toward the same end. I mean the United States of America and Russie. “All other nations seem to have nearly reached thelr natural @imita, and they have only to maintain their power; but these are still in the act of growth, All others have stopped, or continue to advance with ex- treme difficulty; these alone are proceeding with ease and celerity along a path to which ho Hmit can be perceived, © * * “The American relies upon personal inter- est to accomplish his ends, and gives free scope to the unguided strength and common sense of the people: the Russian centers all authority of society in a single arm. The principal authority of the former is freedom; of the latter, servitude, “Their starting point is different, and their courses are not the same; yet each of them seems marked out by the will of heaven to away the destinies of half the globe.” These observations were not written yes- terday. They appeared tn a book entitled “Democracy in America,” written by the dis- tinguished French traveler and philosopher, Alexis de Tocqueville, and published in 1835, 115 years ago and 14 years before the appear~ ance of Karl Marx's Communist Manifesto. The ideological problem arose long before Karl Marx was born, and it will continue long after Joseph Stalin dies. It is the an- cient and perennial question of two pro- foundly irreconcilable ways of lfe—freedom and servitude. Lenin, and later Stalin, im- ported Marxism from Germany and adapted it to their special purposes, but it ta no longer even communism, as Marx conceived communism; it is rather what we should call Stalinism, an instrument of tyranny and suppression as cruel and as destructive as anything the Caesars, czars, or Nazis ever perpetrated. But even as we contrast Btalinism and democracy, we Americans must remember that the ways of democracy in the United States are by no means always identical with the ‘ways of democracy in the other non- Communist countries of the world. Nor can the fact that these other countries have far more government contro) than ours be charged solely against Socialists, planners, and other devotees of the so-called welfare . state. Conservatives themesives are often . responsible for “statism.” In America, as Arthur Schlesinger in his recent book, The
APPENDIX TO THE CONGRESSIONAL RECORD sippo ago, and the Beveridge wartime report rec- ommended its extension. Radio was nation- alized under the Conservative Baldwin, land undex Lloyd George, Radio, railroads, and ‘utilities {n many Muropean governments ‘were nationalised by conservative or middie- of-the-road governments. In Iervel, sup- ported largely by American money, the co- operatives and collectives account for one- half of the agricultural economy. In much of the Near East the tyranny of statism is actively promoted by reactionary feudal and other vested interests. It is true that 6 of the 15 countries we visited—ell thus far on our side in the struggle against Stalinism— are lesa than 3 years old politically and each is struggling in its own way and with its own conditions to work out its democratic des- tiny, Thetr way may not seem to us the ideal way, but the moral remains that !f we apply our own peculiarly American point of view too rigidly or too arbitrarily to other peoples, we shall not only fat] to understand them, but we may easily drive them into the camp of our real enemy, The United States thus walks a tight-rope tn its foreign rela- tions. Nonetheless, with thia caution in mind, democracies the world over—as opposed to the Stalin ideology that ideaa and ideals are not only fmpotent but evil unless embodied in matter and the might of force—do share to a greater or lesser @xtent the basic belief that free inquiry, open competition, and rea- sonable compromise, if undisturbed on the open market, offer the surest hope in the long run for the greatest good for the great- est number. Of the two major ideologies, Stalinism pre- sents, at least on the surface, a united front, while democracy—an evolutionary way of Ufe derived from the Hberal philosophy of Locke, Hume, Bentham, the French Encyclo- pedists, Jefferson, Hamilton, and othera—ila ‘usually slow to form simple, clearly defined patterns of action. Stalinism consequently holds certain immodiate strategic advantages fm its quarrei with democracy. The post« war strategy of the democracies, I take it, has been to hold the line, to play for time while we clarified our thinking and mobilised our divergent energies, but except for a tactical success in Europe under the Tru- man doctrine, the Marshall plan, and the Atlantic Charter, there ts no conclusive evi- dence that we have held even our own in most of the other critical centers in the world. There are signs now, however, that ‘we are ready to unite on a crusade for fres- dom to forestall the threatened joss of the free world by default. v The struggle has thus far centered mainly in Burope, but the emergence of Asian as a dominant foree adds a third unique factor to the modern world. As the world chooses ‘Up sides, or as specific countries have one or the other aide thrust upon them, Asia, with half the population of the world, ccoupies an increasingly pivotal role. There-—in terms of territory, numbers of people, and in trmediate human appeal—communism hes thus far made the more significant gains, We have lost China, lergely because, in an effort to choose the lesser of two evils,- the ween democracies during the thirties and 'y forties supported a corrupt reactionary regime out of touch with the people; we have. found no way to secure Korea; and we could wana: ehibannera tela i ging, wn; southeastern, ay +H and India, Pakistan, end the Near Bast— troubled by their own special problems— have yet to make up their minds. With the batance of power and influence in Asia—and with our own destiny in Asta no less than Burope—we have yet to impress western democracy in understandable terms on Orient. We have yet to imprese it on man. parts of Kurope, but there we have at least not appeared indifferent. The ideological war of our century is all the more ominous when we recognize that the appallingly low level of human existence throughout the world, especially in Asia, pre- cludes for most peoples any real freedom to choose wisely among the alternattyes, The vast majority of the world’s population lives in filth, disease, poverty, and ignorance——a subanimal existence as low as in any previ- ous period of remembered history. The degraded level of life in much of our so-called modern civilization is, of course, aggravated by what we all hope are temporary Gisiocations, The refugee problem, for ox- ampie, Racial and religious intolerance has literally driven millions of from their anctent homes and lands. We saw them herded together in camps or slums like 60 many cattle: Jews from Europe and Africa in Iareel; Arabs from Palestine in Egypt, Lebanon, Syria, and Tranejordan; Moslem Indians from Indias in Pakistan and Hindus from Pakistan in India, In this last religious war, in the home of Gandhi's “passive re- sistance,” more people were killed than our entire casualties In the war against Japan. Whatever the complicated reasons for the modern barbarism that has displaced mil- lions of people, the unhappy fact remains that their lives can never be wholly or even adequately rehabilitated. But even beyond the refugee problem, the grim truth is thet for the vast majority, human life on this planet has neither dignity nor importance. As we drove one day to the sacred spot on the Ganges where Gandhi's ashes were strewn, we passed through the dirty crowded streets of Calcutta where liter- ally millions of people live and breed in a equatter’s existence, amidst a vast confusion of sacred cows, carabao, camels, goats, cats, dogs, chickens, parrots, and monkeys. For safety’s sake we asked our young Hindu chauffeur to drive cautiously. He shrugged his shoulders and commented, “What is the loss of one more? We have so manyi” There are times, while encircling this sorry globe, that one ts almost convinced that man is not only indifferent to his present state, but that he is intent on race suicide. The older civilizations of the world have all but destroyed the good earth—the mother of us all, Through centuries of waste and neg- lect—in Italy, Greece, Egypt, and Asta— man has decimated his forests, leld waste his soil. Egypt, once the bread basket of a ctvilization sustaining miiHons of people, ts today in large part a boundless and bare desert whose “lone and level sands stretoh far away.” 5 2 indicate that this already overcrowded pop- Wiation will increase ancther 23,000,000 dur- ing the next two decades, Birth conteol, andl helpful, has been accepted as official im most of the non-Catholic countries af the world, but that alone can- not solve the problem, Only a highly de- world pro- plowing with modern tractors, primitive peasants still till the soll with crude wooden plows. Their grain is stili harvested with hand stckles, thrashed with wooden. sleds, winnowed by tossing into the sir against the wind. The grim fact ts that mankind 4s caught tn a back-to-the-wall struggie for survival in a world that is at least four-fifths slave and one-fifth free. Under these conditions, we cannot wonder at the vast restlessness throughout the world. The climate is propitious for a bitter and suicidal war between the privileged and the underprivileged. The struggie is mani- fest in many weays—conflicts over color, race, and creed; the bitterness of 216,000,000 colonials toward imperialists; the historic antagonism of Asiatica toward westerners; the hatred of the poor toward the rich, the starving toward the well-fed. There is ttle or no formal education, but lack of educa< tion does not blind people to the fact that some have, but that most have not. Under these circumstances they will not—indeed, cannot—choose rationally between Stalinism and democracy. They stretch out desperate hands for the first crumbs that promise to aatiefy thetr hungers, vr I have reported a grim picture of the state of man in this midtwentieth century, Can- dor compels me to do ao, But what of the future? Is the world well lost? I am not without hope, although I must confess that our planet seems to me in & bad way and quite capable of losing H. G. Wells’ oft-quoted “race between education and catastrophe.” The greatest hope for the future, it seems to me, is found in the herols efforts of some men and women everywhere to give order and meaning to the chaos of our times. I speak of men and women, be- cause people, far more than government, represent the creative forces of life. On the larger scale, I have seen what has happened to @ country like Turkey in the past 30 years—a country transformed from feudal- jam into a partial democracy almost over night. I have seen the miracle of Palestine. On a smaller goale I have sean the building of hydroelectric plants, irrigation systems, universities, medical schools, hospitals, and health centers in Pakistan and India. I have Although we must rely wiliimately dn people themselves, government must open e@ way and facilitate thelr efforts. What is to be the role of tha United States in the shaping of the world of the future? I
. APPENDIX TO THE CONGRESSIONAL RECORD in gomgeous pageantry the diamond fubiiee of Sucen Wietria. were miles of warships gathered at representatives of free peoples ruling over territories much as hes never before owed do homage to the aged sovereign. The news- papers whore ‘frantic boast and foolish word’ @eve utterance to the feeting of the nation from which those newspapers took their spirtt, were not without excuse. But sud- denly, upon ears still ringing with the biare of trumpets and hearts atill elate with the proofs of material power, there fell the ar- resting vaine which proclatmed the insuf- ficiency and evanescence of all auch power: “ Yar called, our navies melt away, On dune and headland sinks the fire: Lo, all our pomp of yesterday Is ane with Nineveh and Tyre!'"} The British Emptre, forgetting tts largor responsibilities, even then was lost, but out of tts revolution emerged the Common- which I hope will flourish because she 1s an essential and congenial partner in our common democratic cause. Yet the painful knowledge of the price the greatest and the most powerful Empire had to pay should give all Americans pause—“Lest we forget! Lest we forget!” Just as I disregard the position of the iso- lationist, I assame in my own thinking that the United States, although tt possesees half the manufacturing capacity of the world and the only highty mechanised agriculture, ts not rich or strong or wise enough to under- write the entire globe. But our possessions tnvolve responsibilities. The task of our Jeadership is to give economic, technological, and financial hetp designed to open the way for friendly countries to get on their feet. The point 4 program of the Untted Nations, rather than the Marshall plan, tndicates the road for our long-time policy. From our own selfish as well a6 altruistic point of view, an enlightened program would encourage foreign investments of private American capital on a competitive enterprise basis. Already we are investing some 616 ,000,000,000 outside the United States and approximatety 311,000,000,000 from abroad ts being spent here. A dynamic program of international trade and enononiic development would ex- tend what ARAMOCO is doing in the oll fields of the Middle East, Westinghouse and Gen- eral Blectric in the Far East, United Fruit im the Caribbean, Sears, Roebuck In Mexico and Brazil, and United States Steel in Ven- exuela, where the most far-fung and greatest of all ore searches has culminated in the dis- covery of La Parida, an area 1] miles long and 1 mile wide, containing the richest and great- est tron deposit in the history of the world. Like these larger industries, many smaller businesses are finding exciting opportuni. ties throughout the world. Such a program must be partnership-cap- iteliem at its best, without colonialism, tm- perialism, or exploitation. It tmpiies that we will negotiate treaties guaranteeing fair li E [ E | perhaps to a free trade level, for those coun- 1Hugh Vaiker, the Literature of the Vie- perten Bra (Cambridge, University Press, teal}, p. 1. XCVII—App.—-—78 tries who cooperate with us, in order that bring and health to the powerful an appeal that even Russia has not dared to oppose it, But even as we extend our technological fore—in a way, i repeat, that is understand- able abroad. Even the most casual traveler around the world quickly senses a strange mixture of admiration, anxiety, and dindain toward strongly felt reservations, many of them psychological, about us, (1) We are the rich uncle and they often betray an understand- able envy of the vast power, wealth, and world prominence we have acquired in a rela- tively short period of time. (2) They ap- preciate our economic help, but thoughtful Europeans know, as some Americans occa- sionally forget, that the Marshall plan was designed to save us as well as Europe. The Near and the Fer Hast, on the other hand, wonder why we want only to save Europe. (83) They are inclined to feel that we are often excitable and inexperienced in our for- eign policies, that we act first and refiect later, that we sometimes allow purely do- mestic considerations to influence interna- tional affairs, and that we are so far to the right that we cannot understand the pe- cullar nature of their accial and political problems. Sometimes they suspect that we may try to force an imperialist capitalist democracy on all the reat of the world. They may admit that our democracy works reasonably well in the United States, but they object to the notion that it is invartably su- perior to their own or better adapted to their needs. (4) The Asiatics especially think we are hypocritical on matters of social yus- tice. Our Negro problem, with the help of Communist propaganda, is played up every- where. They may not actually be deeply concerned about our Negroes, but they see it ‘tn terms of the Oriental problem. (5) They are often offended by the naive insolence— the exhibitionist conduct and patronising mannetrs—of some cocupation peraonnsl and tourists. (6) They feel that while our culture produces high living standards with a amount of personal freedom, it also produces high divorce rates, tawdry enter~ tainment, and ulcers. Our movies abroad, for example, convey an impression of tmmaturity, crime, speed without direction, materialiem, and plushness. As Mayor Bingh, of Deihi, phrased it in a talk before our group: "When the West ts purely materialistic tn conception as well as tn practice—and most of the is of the modern world are due to this matertalism—we feet there ls much that the West can learn from us, as there is so much we in the East can learn from the Wrest.” Unfortunately, Burope and, even more, Asin ts convinced that whet tt can learn from us is purely technological. They do not believe that we have anything to teach them about a wey of life. Most Amertcans believe that these critt- ctems are etther untrue or grosety exagger- ated, tut at this crucia. moment tn the important fact is thet they are widely be- fieved. Our task, therefore, is to persuade seli ite way of life to ite friends, Staliniam underatands the power of ideas and the value of propagands in disseminating ideas. In @ statement not long ago, Andrei Vishinsky made it clear that the Communists consider ideological weapons superior to tanks and bombs: “We shall uer the world,” he said, ‘not with atom bombs, but with some- thing the Americans cannot produce—with our ideas, our brains, our doctrines.” In this connection, I reoall, among the many slogans soribbled on the walls of buildings, on sidewalks, on vacant s' everywhere in the Rusaslan sector of Berlin, this memore able bit: “Korea for the Koreans, Coca-Cola for the Americans.” In our stand against Stalinism, we are supporting the soldier munificantly, as we should. We are supporting the statesmen generously, as we should. But ultimately life ia not military and it is not political, 1t 1s moral. There is no defense—not even ‘an Atlantic Charter, a Marshall plan, a hy- drogen bomb, or an international army—- agsinst Soviet ideology, except a auperior moral and intellectual courage. That is why we need 80 Geaperately to develop ambassa- dors of good will and mutual understand- ing, whether they come from high Govern- ment levels and such offictal agencies as the United States Information Service, ar, more important, whether they be indus- - trialists, , teachers, artiate, etu- dents, or simply tourists. These need to be encouraged to go into all the world and preach the gospel to every creature—the gospel of trade in goods, 1n services, in ideas, and, not the least, in ideals. ver A few days before we left Tu,0, Mra. Decker and I called on one of Japan's cider statesmen. He had had a long record in Japan's foreign service-—a record of devotion to his country’s best interests. He had held various posts, including 3 years as Ambas- sador to Ruasia. His life bad been one of profund anticommunism and pro-American- tam. He had withdrawn from all public Ufe in 1041 in allent protest against Pearl Har- bor. Now, as Director of the United Nations Tokyo Committee, he invited us to his quar- tera to mest with his committee. As the thin, gray, little man with a quiet, profes- sorial manner greeted us, our minds went spinning back to the meeting of the Council of the League of Nations in January of 1822. Our host was Dr. Mactake Sato, whom we had not seen for 17 years. As we shook hands, he said simply, “I had a poor cause to defend that day.” Now he ls devoting bis remaining years to a beter cause, the cause of free men who would live in a free world, We can hope only for him, as for the miliioms of other men of good will throughout the world, that there is still ‘time. ‘The dny before we left Tokyo the city ‘was shaken by earth tremors. A few hours later “Typhoon Kitty,” the most virulent since the war, clawed the Takgo-Yokohame
Gistrict with an 8O<mlle-an-hour fury, up- xooting milés of trees along the boulevards, destroying thousands of homes and leaving homeless some 150,000 persons, killing and injuring hundreds, creating millions of dollars of damage. . : As we later boarded our plane for the ‘Yast Jep of our ‘round-the-world fiying- {nquiring seminar, this wilifulness of nature somehow sytnbolised the perverse and un-~- certain world of our twentieth century. We ow. now fairly closely predict the time, place, and force of typhoons. We cannot yet control their causes or mitigate their havoc. Bo also with the typhoons of our political and moral world. Yet, though we have no clear assurance for our future, the will to aurvive as free men is deep, heroism and faith are still the dynamic virtues, and people the world over—like the men, women, and ohildren of Tokyo the morning after the typhoon—are bunily clearing away the debris and rebuilding with eternal hope for a better world. oem A Capital Levy Sneaks Up on Us EXTENSION OF REMARKS or HON. RALPH W. GWINN Or Nrw YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. GWINN. Mr. Speaker, in addi- tion to inflation, home owners are find- ing the capital gains tax not only bur- densome but a confiscation of home own- ership, Americans are a moving popu- lation—especially in wartime. A home owner in New York who paid $12,000 for his home in 1939 is compelled to sell and move to the Central West. He receives $25,000 for his old house. He pays a 25- percent capital gains tax, that leaves him $21,750, but he cannot buy a new house like the one he has just sold for less than $25,000. So he is short $3,250 of the pur- chase price of a new home, due entirely to a thoroughly unjust and confiscatory system of taxation. This same thing is happening to the farmer and the manu- facturer as shown by Fred H, Sexauer in a recent issue of Spotlight: A Capiran Levy SnzaKks Up on Us Inflation and capital gains taxes are a new method by which the home owner, the small businessman, and the farmer are having part of their capital taxed away. There Is talk of raising the onpital-gains tax but little thought is given to its effect on the little man. May I illustrate? John Jones 10 years ago bought a house. He paid 66,000 for it. Since that time in- flation has cut the purchasing power of the dollar in two. If he were to buy that house today it would cost him $12,000. John Jones finds he must leave his job and go to a neighboring city; so he sella his house for $12,000. He has gained 66,000. That gain is taxable. Let us assume, just for the sake of argument, that it is taxable for 25 per- cent. That means he pays to the Govern- ment $1,500. John now moves to the new city. There he buys an identical house and he pays $12,000, But he only has $10,800 to pay for it, That is hts net on an identical houses which he sold for 612,000. Now John Jones has a 612,009 house and a @1,500 mort- ‘gage. The Government has taken 12% per- oent of his capital, Well, Jot’s take a farmer. Ten years ago he started farming with 20 cows for which he patd €200 apiece. That is $4,000, His son has grown up and he decides he wanta to expand and change the breed of cattle. He selis the 20 cows for 8400 apiece, That is 68,000. He has a 64,000 profit. Let us assume this, too, is taxable at 25 percent, So he has $7,000. His son now buys 20 cows of a different breed, paying 9400 apiece. Farmer Brown only has $7,000 to pay on these cows; the Government has taken not a cattle-gains tax but 4 capital levy. Inflation and capital gains deprive every man who must sell his property and change his location of a pert of his origina) capital. This can be repeated over and over again with small business, professional men, every- one who for whatever reason must relocate but continues in the same fleld of activity. The capital tax is sneaking up on the American public behind the twin camou- fiage of inflation and capital-gains tax. What is now done by indirection, if con. tinued long enough, undoubtedly will be looked upon as sound public policy—-to con- fiscate and redistribute wealth by such a concealed capital levy. A Song for Washington, D. C. EXTENSION OF REMARKS HON. WAYNE MORSE OF OREGON IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (legislative day of Monday, January 29), 1951 Mr. MORSE. Mr. President, I send to the desk an editorial and a letter relative to a contest looking to the selection of an official song for Washington, D. C., with a brief statement rommenting on them. I ask unanimous consent that the editorial and letter, together with the statement, be printed in the Ap- pendix of the Recorp. There being no objection, the state- ment, editorial, and letter were ordered to be printed in the Recorp, as follows: A Sona ror WasHINGTON, D. C, On March 5, the Senator from South Caro- lina |Mr, Jomnston] for himself and the Senator from Wyoming [Mr. Hunt], the Sen- ator from Idaho [Mr. WeLKsR], and the Sen. ator from Utah [Mr. Bennerr] offered a joint resolution (8S. J. Res, 43) relative to the se- a of an official song for Washington, D.C. In this period of strain and crisis, it is not only proper but also a dictate of wisdom that such a resolution, which calls upon the Congress to recognize the need for songs and singing, should be introduced. During the depths of the depreasion in the 1980's, when fear and uncertainty stalked millions of homes and our great financial institutions were tottering, gloom was driven out, hearts were lightened, and we were taught to laugh and sing again hy the minstrels and entertainers of stage and screen. Men like the late Al Jolson and Eddie Cantor did not solve the depression, but through their songs the strain was eased and the problem made to appear smaller, With songs on their Itps, the American peo- ple found that the problem was just the proper size for them to handle, Surely no Member of the Senate can hear or sing the Star-Spangled Banner without feeling the same strong surge of pride and confidence that the composer, Francis Scott APPENDIX TO THE CONGRESSIONAL RECORD Key, felt as he watched the valiant defense of Fort McHenry. This country has been made great through the rhythms of its songs, the singing spir.s of its people. The great cotton plantations of the South were created and tended to the raccompani- ment of some of the world's great folk music. ‘This Nation stretched its sinews westward to the Pacific, built railroads, and created cities and garden valleys while singing the songs of Stephen Foster and other composers of the people. I have learned that music is of great value as a tonic for the soul, as a cultural balance for the home and for the Nation. In perilous times such as this, we need songs—not just militant marching songs, but also hymns of peace and strength, ballads of love and home, and songs of civic and na- tional pride. Perhaps it was a similar emotion which Jed the Honorable Andrew Fletcher to say in 1703; “Give me the making of the songs of a nation and I care not who makes its laws.” [From the Washington (D. C.) Post of January 17, 1951] SincING OF WASHINGTON Mr. James H. Simon strikes a poignant note in his letter elsewhere on this page bemoaning the lack of s suitable song for the District of Columbia. There is no emotion more fundamental than the love of home, and there is nothing ike a rousing song to stir State and community pride. But Wash- ingtonians confronted with, say, a group of Iowans waxing forth with the Tall Corn Song can only mumble meekly, “We're from Wash- ington—that’s where we have no votes” or offer a subdued chorus of Somebody Loves Me, I Wonder Who? There are even some cynics who say that the District could appro- priately take over the Missouri Waltz or start adapting Beautiful Ohio. No loyal Wash- ingtonian, however, could agree to such Intrusions. Joking aside, the contest suggested by Mr. Simon is a constructive idea which, in addi- tion to being a lot of fun, should serve to Kindle community spirit. We congratulate Mr. Simon and the Motorola Co, on their enterprise. For whatever song is chosen should be a good one, sprightly and original, that captures the spirit of this beautiful Capital. Surely there are many embryo Francis Scott Keys along the Potomac of today who will want to try their hand at a composition which Washingtonians, both native and adopted, can sing with gusto, — {From the Washington (D. C.) Post of January 17, 1961} LerTEes TO THE Eprror A BONG FOR WASHINGTON I am a native Washingtonian born and Taised in good old Georgetown, and I am very proud of my home town. I have occasion four or five times dur- ing the year to attend conventions which at- tract others from all sections of the country. These conventions usually end up with a big banquet. While dinner is being served, the orchestra will inevitably begin to play home town songs. As each home town or Btate song is played, the fellows at the table rep- resenting that section of the country will get up and cheer and join in the singing of their native song. Time after time this has presented a most embarrassing situation for me, and it has Mectead areata now where I join in with the Maryland fellows singing “Maryland, M: Maryland,” or the Virginta contingent re helping them sing, "Carry Me Back to Old Virginny.” Thave become quite used to taxation with- out representation, but I am getting quite
' APPENDIX TO THE CONGRESSIONAL RECORD renee i ti Zhaf i. 4 E alvin, the president of the Motorola “You bave a great point there. "t we do something about it? Suap- choral puts Up some prizes and in- te = somg for the Nation's a bunes Fag? igh? 34-k +e Jamxs H. Sinon, President, Simon Distributing Corp. If This Be Treason EXTENSION OF REMARKS ar HON. RALPH W. GWINN OF NEW YORE IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. GWINN. Mr. Speaker, here ts a message from Edward R. Eastman, editor of the American Agriculturist, the oldest agricultural paper in the United States. It occupies a position of leadership and speaks for the farmers im the Northeast- ern States. If everyone who reads this article—whether he ts for or eeainst the At a time whem every perso im this Nation (whether he readings i ar mot) is struggiing wader a Wwuirden of darect and indirect taxes reere ruinous than at any otiner time in the history of the Natton, Presiiemt Trusmen sub- amd in dinewaming it with my friend, vices for the gradual taking of our American way of buaimess and of life by the socialists and the rapad destruction of our Itberties. Im the words of Patrick “If that be treason, make the moat of it!* bmportance of Air Pewer EXTENSION OF REMARKS ie HON. OLIN D. JOHNSTON OF SOUTH CAROLINA IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (begisiative day of Mondey, Janwary 29), 1951 Mr. JOHNSTON of South Carolina. Mr. President, I have before me an edi- torial entitled “Strategie Air Power: Yhe Big Stick Holding Back Kremilin’s Aggression,” which appeared in the March 1 issue of the Anderson (8. C.) Independent. No one can question the extreme necessity of maintaining an adequate ground foree to protect this country from the spread of the evil com- munism, but we must also realize the important role strategie air power is now playing and will continue to play in na- tlomal defense. I ask unanimous con- sent that this ecitorial be printed in the was ordered to be printed in the Reconp, as follows: Not even the most ardent supporters of plana to send United States ground troops to Burope will avy today that such s fores would slow Soviet Buses advamce into Weetern Europe. The foree is token. The four divistoms con- ed at presemt for service in Western Europe woukd be there aa indieation af hanct of the Krenatin. The Third District's Congressman Baran Dosw made am effective recently for ® thinking e.ott-fecket aac that younger men, bradns Réke Does, he cowtends that the presest planning te domixated by men wider idens are outmoded: that the Mavy ie utterly e- reiryamt as on cflenaive furce sm the prewecs attua: [ i f i f ite and stil] with no guaranty of ever stalemate or victory. it is known that Soviet Russia teers at- trithom from the air. The Soviet half the world but, as Dorn points out, they would find vietory empty if they horneland wae laid im ruims and milflions of thelr loved ones sbzaled tm the flashes of atomic or hy- Strategic air power, recogniwed as the one force holding beck all-out Red aggression, appears to us the best hope for maintaining a@ precariows peace. Likewise, showld war come, tt ts the only hope of survival. Congressman Doan ts to be commended foreefulty bringing this to the atten all Americans. i ai The Moscew-Peiping Plet Against Asia's Freedom EXTENSION OF REMARKS HON. WILLIAM G. BRAY oF Inplams IN THE HOUSE OF REPRESENTATIVES Weduesday, March 7, 1951 Mr. BRAY. Mr. Speaker, under leave to extend my remarks in the Recorp, I should like to call attentian to an article in the February issue of the American Pederationist. Written by Richard Deverall, a repre- sentative of the American Federation of Leber in Asia, it is titled “The Moscow- Petping Plot Against Asia’s Preedom.” It details the Communist intent in Asia in a superfor manner, The articke follows: Tux Moscow-Purrie Pror Acanrer Agis's Paassomw (By Richard Deverall) Many of us remember well the raving pages of Adolf Hitler's Mein Kampf, with ‘ta blueprint for the comquest of the west. Some of ua found in Mein Kampf a clear , too, today eollected works of V. 1. Lenin and such books
4.1252 drawn into the struggle for emancipation with extraordinary rapidity, so that in this respect there cannot be the slightest shadow of doubt what the final outcome of the world struggle will be. In this sense, the complete victory of socialism (Stalinism) 1s fully and absolutely assured.” There is no secret in all this. It is not Anglo-American or anti-Soviet propaganda. Following Lenin, Stalin has himself written on countless occasions of the intentions of the Soviet geopoliticians to conquer China first, then through China conquer Asia and, with control of the land mass of Eurasia, complete the conquest of the entire world. This follows the classic formulation of Lenin: “The road to Paris 1s through Peiping.” Some persuns profess to see in the Com- munist drive a “glorious and cpic crusade” to free the world from imperialism and co- lonialism They view the literacy, electric power, and collective farming schemes of Communist Russia as achievements of the Soviet regime, Such persons overlook the tens of millions of Soviet citizens who lan- guish in slave labor camps because they dare to assert their God-given humanity and their human rights. Such naive persous overlook f& Yugoslavia which, if it is Communist, is not under the heel of Stalin and which there- fore, in Stalin's view, must be destroyed by a Communist Russia whose concept of de- mocracy is utter surrender to the will of the Kremlin The Communist geopoliticians at Yalta in 1945 wrung from President Roosevelt and Winston Churchill amazing concessions which made straight the path for the ad- vance of Soviet tmperialisin in Asia, Yalta guaranteed Russian control of Manchuria, guaranteed the encirclement of a disarmed and defeated Japan by Soviet military and naval power, and guaranteed the fnll of democratic Korea under the weight of Soviet pressure. When the war ended, the honest attempt made by the West to find the rond to world peace was termited, as evor, by the Soviet butchers. They created the Cominform, pushed guerrilla activities through stooge Asian Communist parties, and most cyni- cally used Japanese arms and the vacuum created by Japan’s defert to launch full-scale guerrilla warfare in China, in Indochina, and other Asian areas It must never be forgotten that so-called British imperialism has drastically retreated in Asin British power has left India, Pak- istan, Burma, Ceylon, and other areas The Dutch have been forced to relinquish politi- cal control of rich Indonesia. Throughout Asia the grentest phenomenon of the postwar era is the end of European power in Asia. And in the Asian countries which have found freedom and national independence, indigenous regimes have struggled with the terrible social and economic problems which resulted from the brutal and wasteful occu. pations of the Japanese Army. ‘These new regimes have struggled to emancipate their people and to resurrect and returbish their century-old cultures and century-old civili- gations Yot Moscow hus attacked each and every national regime in Asia-—except those subservient to Moscow—as bourgeois, antie national, rotten regimes. In essence the Soviet alm in Asia since the end of the Pacific war has been to wreck the new-found national independence of Pakistan, India, Ceylon, Indochina, Indo- nesia, Burma, Korea, and the Philippines. Stalin's actions clearly warn that Red China is the Asian base which the Kremlin is using to extend Communist domination across the map of ancient Asia. Where the British and Dutch and French have withdrawn, Moscow and its Asian stooges plan to march in, Nothing less than complete domination of Asia is the objective of the Kremlin and ita Chinese Communist colony. The Stalinist butchers use two tactics in the achievement of their aggressive strategy and warmongering,. One is the exploitation of overseas Chinese minorities in the Philippines, Indochina, Thailand, Malaya, Indonesia, and Burma to aid in the financing of Chinese Communist propaganda, penetration, and espionage. Anyone who listens to Radio Peiping broad- casts made daily to the overseas Chinese knows that the Chinese Communists are banking on use of overseas Chinese as a fifth-column in Free Asia The sceond tactic ts use of the so-called World Federation of Trade Unions and its stooge unions to foment civil disorder, vio- lence, sabotage, and juncture with Commu- nist guerillas in the final all-out push to liquidate the governments of Indochina, Pakistan, India, Indonesia, Malaya, Burma, Thailand, and the Philippines All this is a matter of the Communist record. Early in September of 1949, Asian and Australasian Communist leaders and WFTU affiliates reccived invitations to attend a con- lerence to be held in Peiping. capital of Com- munist China The invitation requested complete reports on the situation in your respective countries, progress of your organ- izations, your problems and the means of solving them, and the assistance you wish to obtain from the WFTU. The WFTU confer- ence met in Peiping on the 16th of Novem- ber 1949 with some 177 delegates on hand, representing 13 countries, including Com- munist Russia, Communist China, Commu- nist Mongolia, North Korea, Indochina, India, Burma, Thailand, Indonesia, Ceylon, Malaya, Iran, and the Phillippines The conference was formally opened by Lin Shao-chi, a vice president of the WFTU, trusted adviser to Mao Tse-tung and hon- orary president of the All-China Federation of Labor. With the geopolitical ambitions of world communism well in mind, Liu told the assembled delegates that over one-half of the world's population lives in the vast territories of Asta and Australasia; these territories have rich resources, industrious working peoples As even a blind man can see by rending Liu's speech, this was no conterence of bona fide trade-union leaders promoting free- trade unionism but rather a top policy con- ference of military men, guerrilla tacticians, and quasi-trade-unionists plotting the mili- tary destruction of the hemisphere of Asia not yet under Soviet domination. Thus Liu sald: “The path which led the Chinese people [that is, the Communists—Editor| to victory is expressed in the following formula: “(1) The working class must unite to form a broad, Nation-wide united front. “(2) This Nation-wide united tront must be led by the Communist Party. “(3) It is necessary to build up through putient struggle a Communist Party equipped with the theory of Marxism-Leninism, “(4) It is necessary to set up wherever and whenever possible oa ‘People’s Liberation Army’ led by the Communist Party, an army which is powerful and skillful in fighting enemies, as well as strong points for the oper- ations of these armies, and nlbo to coordinate the inass struggles in the enemy-controlled areas with the armed struggle Morcover, armed struggle ts the main form of struggle in the national liberation struggle in many colonies and semicolonies.” And in case anyone doubted the intent of Liu, he added: “This is the main path followed in China by the Chinese people (1. e., the Commu- nists) in winning their victory. This path is the path of Mao Tse-tung. It can also become the main path of the peoples of other colonial and semicolonial countries for win« ning emancipation where similar conditions prevail." APPENDIX TO THE CONGRESSIONAL RECORD ° On November 16 th* executive board mem- bers of the WFTU were tendered a banquet by Chou En-lai, premier of the Chinese Communist regime. With Chou En-la! were General Chu Teh, commander in chief of the Chinese Soviet Red Army, and other top Chinese Communist and military officials. On November 21, Mao gave a huge banquet honoring the WFTU delegates. And, as reported by the Indian Commu- nist weekly, Crossroads: “The delegates repeatedly toasted to the health of Stalin, leader of world working people, and Mao Tse-tung, the leader of the Chinese working people.” As the smoke screen of public meetings, huge rallies, and banquets proceeded, super- secret military sessions were held by the top leaders with well-known Russian agents. These secret sessions pointed up the essen- tially milltary nature of the WFTU’s Peiping conference. The Russian Communist war- mongers, L Soloviev and 8 Rostovsky, were present at the secret meetings, The partici- pants in the top-level meetings discussed the 1950-51 stiategy of world communism, including the planned tactical struggle in Korea to secure that geopolitical bastion for the KremUn. The report of Louis Saillant, general secre- tary of the WFTU, clearly outlined the key role of the WFTU in undermining the free- dom and national independence of the Asian nations Comrade Salllant listed the sev- eral Cominform stooge organizations which would work with the WFTU in overthrowing popular governments throughout Asia—the World Federation of Democratic Youth, the Women's International Democratic Federa- tion, and the International Committee of Intellectuals Saillant proclaimed the world aims of the Communist tmperialist war- mongers when he declared: “We are forming the grand new coalition of peoples fighting for a new world, lving in peace, making socialism a Hving reality, and laying the foundation of a new civiliza- tion on a world-wide scale” Following Salillant, Comrade Soloviev of Russia warmly supported the recommenda- tion of Salllant that an oriental bureau of the WFTU be set up in Peiping. He out- lined the antinational and espionage role of this agency when he said it would be “re- sponsible for the consolidation of contracts between the countries of Asia and the WFTU, for the provision of mutual exchange of information, implementation of the deci- sions of the leading bodies of the WFTU, for rendering assistance to national trade union centers of countrios of Asia.” And, as Saillant noted in his closine speech, the WFTU described a three-tiered category of Asian countries: Tier 1--China, Mongolia and North Korea. Tier 2—South Korea, Indochina, Indo- nesia, Thailand, Malaya, and the Philippines. Tier 3—India, Burma, Ceylon, Pakistan, Tran, and Japan. Obviously the Tier 1 countries are those dominated by the Soviets and presently be- hind the Kremlin's oriental iron curtain, And if the Peiping conference considered the Tier 3 countries as still diificult, the linplica- tion 1s clear that Moscow’s plan of aggres- sion in Asia comprehends guerrtlla warfare and the overthrow of democratic regimos in the Tier 2 countries—South Korea, Indo- China, Indonesia, Thailand, Malaya, and the Philippines. Another proof of the tactics and strategy can be found in the speech of Li Li-san. He pointed out that the Chinese Communists had learned that they had to stir up agrarian unrest and promote revolutionary land-re- form programs, that they had to unite with the bourgeoisie in the urban areas and thus build a united front. Second, Li Li-san said, guerrilla struggles over a period of years would form the base for the People’s Lib- eration Armies. Third and most funda-
APPENDIX TO THE CONGRESSIONAL RECORD mental, the Chinese Communtst movement has always been under the leadership of the Communist Party of China, which has al- ways accepted the theoretical guidance of Marxism-Leninism. Clearly Li Li-san was hammering home the warmongering, death-to-liberty theme ex- pounded at the conference by Comrade Liu. Significantly, Ban Se-yung of South Korea, led off in presenting reports He noted that since October of 1946 the WFTU forces had led mounting guerrilla wartare against the Republic of Koren (South Korea). He called upon other Asian nations to boycott tre United Nations. And after him came Choi Ho-min, of North Korea, who demanded that UN advisers in Korea and American troops in Japan Jeave at once Hach speaker underlined the activities needed to pave the way for the coming Communist aggression against South Korea. As Indochina is the next on Stalin’s time- table in Asia, it was not surprising to find that Luu Doc Pho reported in turn. Rep- resenting the Victnam trade-unton move- ment, he emphasized guerrilla struggles and the war for emancipation. Luu Doc Pho said that such emancipation would be brought to a successful issue only if the working class of every country follows the example of China. Next came the report of Vas Sundera- chamara of Thailand, who reported on the progress of the labor movement tn that coun- try. After describing the wartime role of the Anti-Japanese Volunteer Corps (the Communist wartime front) and “their strug- gle against Japanese militarism and tho Phibul Songgram clique,” this Communist then told of the emergence of the Bangkok Federation of Labor, and pointed out how the wartime struggle brought “unification of Siamese, Chinese, and workers of other na- tionalities ’ After attacking the government of Thailand, Vas ended thus’ “Long live the new democratic republic of China Long live Mao Tse-tung. Long live Stalin.” The report of Lu Cheng, of Malaya, em- phasized the role of the Communists in buliding guerrilla forces under the Japanese occupation. He told how after the war the Communists formed the Pan-Malayan Fed- eration of Labor to launch revolutionary gen- eral strikes. Then he told the story of how after June of 1948 the Communists and their trade union allies went underground to mount the present civil war in British Malaya. Comrade Ali Marjono reported for In- donesia. He told how the Communists formed the SOBSI in Novemher of 1946, at- tacked Hatta as an imperialist tool, and ascribed Premier Nehru, of India, as leader of the reactionaries in southeast Asia. This Indonesian Communist let the cat out of the bag when he declared: “The great victory of the Chinese people anda its working class, guided by the Chinese Communist Party and the leader, Comrade Mao Tee-tung, is a victory for our people ” Comrade Aun-Win reported for Burma. This Communist denounced the Thakin Nu government. The Communist-led unions of Burma, he said, would fight for “complete destruction of the Fascist system of the Thekin Nu government.” The report from India was unsigned, but it was given in the name of the Communist- led All-India Trade Union Congress. It de- nounced the “bourgeois Congress govern- ment.” It denounced Prime Minister Nehru. It denounced both the Hind Masdoor Sabha and the Indian National Trade Unton Cone gress It also denounced the American Fed- eration of Labor “who have spent many months (and dollars) in India training up their Indian prototypes.” But for Stalin, Mao and the WFTU it hrd sweet words. Them it hailed as saviors of Gandhi's India. The program of the so-called World Fed- eration of Trade Unions and ita Russtan and Chinese Communist backers is crystal clear. The record speaks plainly. There can be no doubt that the criminal Communist aggres- sion against South Korea is but the first move in the conquest of the Tier two coun- tries—Indochina, Indonest{a, Thatland, Ma- laya and the Philippines. And once they are conquered and transformed into Kremlin colonies, then will come India's turn and the turns of Burma, Ceyion, Pakistan, Iran and Japan. No sane pereon can talk of neutrality in the face of this clear Communtst-WFTU blueprint tor the conquest of Asia, which has already given evidence of its authenticity through the brutal Communist aggression against Korea. As the Communist record shows, the Com- munist Party in every country mentioned is committed to the service of Stalin in the subversion of the now independent and free nations of Asia. And in Korea, Indochina, Indonesia, Thal- land, Malaya, the Philippines, India, Burma, Ceylon, Pakistan, Iran, and Japan, the WFTU-affillated unions, by their own pro- nouncement, are traitorous, subversive agen- cles seeking to use armed guerrilla forces, pledged to serve as espionage agents for their Kremlin-Peiping masters and acting as the running dogs of world Communist {mperial- ism--the highest stage of international Stalinist communism In these countries the Communist Party is not a political party but the advance mil- itary base of Soviet imperialism and the co- ordinator of armed terror, arson, bloodshed and unremitting guerrilla warfare. The Communist Party in every country is not a political party but, by its own frank ad- missions, an armed military group 80, too, the agents of the WFTU and their affill- ated members throughout the world are not, trade unionists but the running dogs of the Kremlin, the espionage agents for Soviet Russian imperialism, the paid purnet fo- mentors of bloody revolution, the  >recur- sors of totalitarian coups d'etat aimed at throwing into the ashcan of history the hard-won freedom and independence of the Asian countries which have struggled, in the face of all difficulties, to extend freedom and raire living standards throughout Asia. The biueprint for Communist aggression against all Asta outlined at the Petping con- ference of November-Decemher, 1949, ts proof positive of the vast plot now unfolding throughout Asia. Asia has been warned. Let him who has ears hear! Asia has indeed been warned! Courageous action today may secure freedom, peace and national independence tomorrow But action tomorrow or the day after to- morrow may be too late, How to Fight Communism EXTENSION OF REMARKS HON. EDWIN ARTHUR HALL OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. EDWIN ARTHUR HALL. Mr. Speaker, for a long time I have groped helplessly for a solution to what seems hopeless involvement of America in world war III. I have seen attempt after attempt on the part of the United States to bring about peace go down to defeat and disappointment, especially at the United Nation’s meetings, A1253 Not long ago, a young Cornell man, David Repass, whose home is in Bing- hamton, visited my office. He told me he had made a special trip to Washing~ ton for the purpose of presenting me with a thesis he had written on how to fight communism. As I perused this, I realized Mr. Repass has struck upon a unique and highly practical method. To be able to combat communism without shedding the blood of our boys, yet just as surely, sccms to me to present about the happiest solu- tion to life's No. 1 problem I have been lucky enough to learn about. I was so impressed with Mr. Repass’ essay that I feel he has made a real con- tribution to our ceaseless efforts toward peace. I am, thercfore, taking the lib- erty to incorporate his words in the RecorD: Is there going to be a third world war? If s0, how can we prevent it? These are the questions that all Americans are asking themselves today, for a world war will have deep effects on the lives of all of us. These questions are not easy to answer, but ff we face the facts and analyze there facts, we will be able to draw conclusions that will give us the answers. WHAT WE ARE FIGHTING The first fact we must face is that the third world war has already started. It started in 1917 when the Communists seized power in Ruasia. This is a bold stutement to make, but if we regard, and we must re- gard, the present world war as a war against communism, it must have started with the first Communist revolution To make this point clearer, let us see what communism really is. After all, if we are fighting a war, we must know who and what we are fighting, a rather obvious fact; yet it 1s a fact that many people scem to have forgotten. The original theorics of Marx have been modified somewhat by Lenin and Stalin, but they are still followed by all Communists to- day. These theories are not too difficult to understand. Marx believed that class struge gle between the rich, propertied (bourgeotse ) class and the poor, propertyless (proletariat) class was the cause of all social, economic, and political conflict Since the bourgeotse own property (capital), they have control of the means of production and, therefore they have power over the proletariat who cannot live without the products of capital Thus, the capitalists can rule and exploit the prop- ertyless. As a result of this unjust power that the few capitulists have over the great number of proletariat (workers), said Marx, capitalism is bound to disintegrate for the mass of workers will revolt against the capti- talists and establish communism, According to the Communist Manifesto: “The Com- munists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the forcible over- throw of all existing social conditions. Let the ruling classes tremble at a Communist revolution. The proleturians have nothing to lose but their chains. They have a world to win. Workingmen of all countries, unite” After these revolutions, Marxist for- mula called for socialization of the means of production by a dictatorship of the prole- tarlat (a dictatorship to work for the bene- fit of the proletariat). As scon as this dic- tatorship established a uniform, Classless society there would no longer be a need for state rule, or any form of government at all. Everyone would rule themselves since there no longer would be classes to cause confilet. In 1917 Lenin and Btalin, guided by these principles, led the proletariat of Russia in a revolution which cestroyed their existing government. At this time the Communist
Al1254 leaders expected the workers of the rest of the world to revolt against thetr govern- ments also, and thus establish communism throughout the world. This did not happen, 60 the leaders had to modify their plans In accordance with the Marxist theory, they established a dictatorship of the proletariat in Russia, and waited for the proletariat in other countries to follow their example and revolt. In a dictatorship, all opposition has to be eliminated Thus, the Communist leaders had to kill or ship to Siberia all people who acted or even spake against their exact views. They had to establish a totaliturlan police state in order to keep thetr Communist domeland free from enemies (those who op- pose communism). Thus, the people of Rus- sia found that thev had lost their freedom to speak and act and were under the jron hand of a police state. Communist leaders are at work in every country of the world preaching the {deals set forth by Marx, trylng to stir up a revolt. People who are disontisfied and who are liv- ing in chaos are very susceptible to Com- munist doctrine, for it offers them a way to overcome their dissatisfactions by destroy- ing the society that causes them Thus, the Communist leaders, with the aid of propa- ganda from the Communist homeland (Rus- sia), have won many thousands of people to their wav of thinking These many thou- sands of people who have been converted to communism have revolted in almost every country. These revolutions have succeeded in winning Bulgaria, Poland, Czechoslovakia, Alhaniu, Hungary, and all of China, to the Communist cause These revolutions take the torm of guerrilla fighting in French Indo- chin and on the border of Greece These revolutions have taken the form of riots in France, Germany, Italv, and many South American countries, Thesa revolutions are no different from the first revolution in which Russia wus made communistic, and they are all part of the great plan tor world revolution against all existing forms of gove ernment We are fighting Communists We are fight- Ine Communists no matter if they are in Russia, or France, or right here in the United States. We are fiehting communism because It seeks to destroy our free, democratic way of Ile, and we huve always fought to preserve democracy and l1eedom wherever it was in danger, HOW TO FIGHT COMMUNISM Now that we know that we are fighting Conimunists, and that they have been fght- ing us (and every other existing society) since 1917, we must Jearn how to fight them, It. seems very Inte to stat wondering how to fiebt them now that they have been at war with us for so long, but perhaps it is not too Inte The most intense fighting has been jn the Inst 5 years since the end of World War II. It has been refetrred to as the “cold war", The matin Communist weapon during this war and throughout history has been words, They Use words to preach the gospel of communism. By this preaching, they con- vert many thousands of people to their way of thinking, which is the way of world revolus tion (war) These many converts preach to make more converts, until there are enough Communists to revolt and take over the world, country by country. These words must be & very potent weapon, for the Come munists now control over 800,000,000 people. Every conference in the “cold war’ has been a battlefield for the Communists. We have lost every battle, because we did not use the proper weapon—truthfal words. Truth- ful words are a far more potent weapon than lying words. The only way to fight Com- munism is with the truth. Instead of using words of truth to fight communism in Europe, we use money (Mar- shall plan). We do not even tell the people who receive this money why we are giving it to them, so the Communists tell them that we are imperialists trying to buy control of their countries. Thus, this money actually has a bad effect. The Communists use the UN as a soup box from which to preach their gospel to the world, and we sit by and let them do it, not even preaching our own ideas. We do not use the weapon (truthful words), the only weapon that can defeat communism. We only use money, and now armed might to fight words We must start fighting back with words now. We must tell the world the truth about communism We must devote our de- fense efforts to telling the world the truth. We must build huge radio stations to broad- cast the truth wound the world We must bomb countries behind the tron curtain with pamphlets, magazines, and books 50 that they will know the truth. We must fight with strong, cutting words at every conter- ence. We must fight this war of words and ideas with better words and ideas, What should we say to the people of the world? What is the truth? The answer to this question 1s {n the hearts of every free- dom loving person. Marx forgot oue impor- taunt thing when he developed his theories. He forgot that men desire freedom as much as life itself. Yet in the period of dictator- ship of the proletariat that Is to follow the revolution, all freedom is taken away This, as has been pointed out betore, 1s the situa- tion in Russia today, It is the situation in all Communist dominated countries today— there is no freedom, People are much worse off than they were before they tevolted. They revolted because they were dibsatisfied, and now they are in misery with no freedom. Tell the people in the countiies that bave not yet fallen to the Cominunists what will huppen it they support a Communist revolt. Tell them that i! they follow the Communist preaching they will lose their freedom — Tell them that we stand for the free rights of men and to follow us in pieserving these rights. Tell the people behind the iron cur- tain about the United States, about its bigh standard of living, its free enterprise system of economy, and all about its freedom It we diown out the Communist hes with our truths, cominunism will be defeated If we tear communism apart with wards, peo- pl: will no longer believe the Communists, and thei: weapon of words will be inefiective, People behind the iron curtain (800,G00,000 ot them) will fight the Communists to gain back their freedom, and thus, In time, com- munism will disintegrate. Lessons From the Founding Fathers EXTENSION OF REMARKS Or HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (legislative day of Monday, January 29), 1951 Mr. LANGER. Mr. President, I ask unanimous consent to have mserted in the Appendix of the ReEcorp an article entitled “Modern Americans Can Learn Much From Founding Fathers,” by Drew Pearson. There being no objection, the article was ordered to be printed in the RrEc- orD, as follows: MODERN AMERICANS Caw LEARN MUCH FRoM FOUNDING FATHERS (By Drew Pearson) WASHINGTON —-When George Washington and the Founding Fathers first tried to make APPENDIX TO THE CONGRESSIONAL RECORD a go of this Nation against the British, not many of thera knew much about Korea. Nor did they dream that some day their descend- ants would be fighting communism all the way from Indochina to Italy. However, some of the ideas which the Founding Fathers hatched aie directly ap- pheable to Korea Indochina, and the rest of the world today. Roy Norr, the publicist who made the American ‘Tobacco Co cry uncle in the fa- mous reach for a lucky instead of a sweet campaign, has been doling important re- search on this point and reminds me that, when the Biitish imported Hersian troops to do their fiyhting, George Washington de- cided to undermine them with propaganda. Only Washington used more bigh-brow words than propagunda, namely exciting a spirit ot disaffection and desertion, Anyway, Washington appointed a commit- tee of propaganda experts, including the three top men in the would-be Nation— Thomas Jefferson, John Adams, and Benja- min Franklin And they devised a plan whereby Congress offered every Hessian who would desert the British 50 ucies of free land In short, the Hessians were invited to quit fighting and make their home in the United States In addition, Benlamin Franklin wrote a propacunda letter, which was pure fiction and which he signed “Count von Schaumberg,” regretting that so few Hessians had been lost in the battle of ‘Trenton Naturally, the let- ter didn't make the Hessians feel too kindly toward their Biitish-German masters On top of this Franklin wrote a series of propeganda leaflets which were wrapped around quids of tobacco and smuggled into Hessian hands Net result of this propavanda was that, out ot 30,000 Hessians, 6.000 decerted George Washington had 6,000 Lewet mercentries to Neht In contrast, here are some of the things we are not dolng, and which the Communists are doing in duferent parts of the world. Conthust No 1: Congress last week cut $20,000,0C0 from the State Departments propaganda budget The Senate originally voted all the money the State Department requested, but when House and Senate con- ferees got tovethe:, House Members chopped the appropriation by 820,000,000. The Congressmen who ignored the exame ple of George Washiugton, Ben Franklin, et al, were: Cannon of Missourl, Gore, of Tennessee, WuitthNn, of Missisrissippi. Roungy, of New York, Ciany, of Virginia, Rapaut, of Michi- ean, Democrats, and ‘rarer, of New York, Wicca! ESWORTH of Massachusetts, and Sireran, of Nebraska, Republicans Contrast No 2. First things the Korean Communists did when they advanced into South Korea was redistribute the land Dr. Syngman Rhee, president of South Korea, had Jong been talking about land reforms, but never did anything about it) ~The Com- munistis, tuking a leaf thom George Wush- ington's book, beat him to it. The same thing has happened tn Commu- nist-held French Indochina and in China. Free land to pinched peasants has hud a greater effect than all the quinine, medicine, and technical advice we have flown in to help the Indochinese. Contrast No. 3: Dan Bell, former under- secretary of the Treasury, has Just returned from the Philippines with a similar report. Dan is no radical. He ts president of the American Security and Trust Co., one of the biggest banks in Washington, and went to the Philippines as head of a commission to see what we could do to prevent the island from going Communist. He reports that the land reforms long promised by President Quirino have never taken place. Quirino is a friend of the big
APPENDIX TO THE CONGRESSIONAL RECORD landowners, including Col. Andres Soreanos, a former aide to General MacArthur. So the big estates have not been broken up, and communism is spreading like wildfire among the peasants, many of whom operate under slave labor conditions. Contrast No. 4: In Southern Italy the situation is somewhat similar. There the chief weapon of the Communists is the vast landed estates, held by a few, while several million peasants are landless. Yor some time, Premier de Gasperi has considered land reform, but has been advised by American ECA officials that this would create a bad impression in Congress. Senator Tarr, de Gasper! was warned, would feel toward Italy as he did toward the British labor party and its nationalization proposals. Thus, ECA money for Italy might be jeopardized, Yet, if there isn’t land reform in Southern Italy, it 1s fairly certain to suffer the same fate as Northern Italy, now dominated by the Communists. I doubt if George Washington would have agreed with our ECA officials in Italy. The Federal Trade Commission Reports on Interlocking Directorates of Major Corporations EXTENSION OF REMARKS F HON. JOE L. EVINS OF TENNESSEE IN THE HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. EVINS. Mr. Speaker, the impact of our mobihzation program has focused attention strongly in recent months on ccrtain weak aspects of our Federal stat- utes by which our business life is guided for the protection and strengthening of our small-business enterprises. I refer specifically to our antitrust laws such as the Clayton Act, the Sherman Anti- trust Act, the Robinson-Patman law, and others. In this connection I wish to commend to every Member the reading of the 1950 report of the Federal Trade Commission, the agency of our Government charged with the enforcement of our antitrust laws and the protection of our economic life from the stifling effects of unfair methods of competition in business. The 1950 report of the FTC, recently issued, unfolds to us the story of the sn- called interlocks—a device by which big business is able to dominate and control our economic life through the means of interlocking directorships, and other tie-in relationships which make possible inflexible control in certain fields of business. This story becomes all the more im- portant in its relation to our current mobilization program and the increasing burden of proof that big business in our country continues to get the defense or- ders and that small business can get only the crumbs from the table of our pre- paredness program and its attendant procurement orders. I acknowledge the fact that much of this situation js attributable to the fact that big business is geared to take care of large orders. but it does not alter the proof that, as a whole, small busincss is being left out or not given a fair and proportionate share of Government con- tracts. The report of the FTC for 1950 makes some startling disclosures on the inter- locking device in the operation of big business in this country—among the facts being pointed out is the inter- locking relationship of 1,000 manufac- turing corporations listed as largest by the Department of Commerce to many additional thousands of banks, invest- ment trusts, insurance companies, rail- roads, public utilities, and distributive enterprises. These relationships, Mr. Speaker, have been termed as “kissing kin” by a widely read Washington columnist which, the columnist declares with realism ‘makes jt a cozy family affair’ in our great economy—a famuly affair which has only one end result—the stifling of competi- tion, the squeezing out of small business, the discouragement of new business, the creation of despair among management of small business enterprises—not to mention the maintenance of artificially high prices to consumers and taxpayers, Mr. Speaker, with all due deference to the fact that big business performed magnificently in the last war—albeit for a proper price for what they pro- duced—I want to point out that big busi- ness, aS we al] know, emerged from the war biggcr and stronger than ever, and with its interlocking devices intact and even strengthened. During this present emergency and conflict our Government should take steps to insure tha’, big busi- ness not be permitted to become monop- Olistic giants by repressing small busi- ness and do this ai the expense of the taxpayers, the consumers, and the public gencrally, There is now pending before the House a bill to create a Smaller Defense Plants Corporation—to safeguard the interests of the smaller industrial plants and bus.- ness of the Nation during this penod of expanding production and war emer- gency. This measure deserves the at- tention of every Member interested in preserving the smali-business enter- prises of the Nation—and should be enacted into law. I believe that the Members of the House will agree with the correctness of these statements if they will read and appraise the recent report of the Fed- eral Trade Commission and particularly that portion dealing with the intcrlock- ing directorates of certain of the indus- trial concerns of the Nation. I should also like to point out that the same por- tions of the FTC report wisely could be borne in mind when the membership may be called upon to consider a pend- ing measure to preclude by statute the operation of devices not now clearly de- fined as illegal and monopolistic—but which are, nonetheless, destructive of healthy competition in our eccnomic life. I again refer to the problem and question of “interlocking” director- ships in business and also to the pro- poral which has been made to amend and strengthen section 8 of the Clayton Antitrust Act in this connection. In this regard, I wish to have included with my remarks the following signifi- A1255 cant excerpts from this worthwhile PTC report. The excerpis are as follows: [Excerpts from the Annual Report of the Federal Trade Commission, 1950] INTERLOCKING DIRECTORATES The report on interlocking directorates summarizes the interlocking relationships among directors of the 1,000 manufacturing corporations which are sted as largest by the Office of Business Economics of the De- partment of Commerce, and also the inter- locking directorates between these 1,000 corporations and a selected Ust of banks, in- vestment trusts, insurance companies, rall- roads, public utilities, and distributive enterprises. The report covers not only direct inter- locks among these companies but also In- direct interlocking relationships which are established through the presence of directors of two corporations on the board of a third corporation The interlocking directorates that have been examined fall into six different patterns, which differ in their eflect upon competition, These are: 1, Interlocking directorates between com- petitors, the tendency of which is to reduce or eliminate competition. 2 Interlocking directorates between com- panies in closely related nes of production, which are capable of forestalling the compe- tition that might develop from the normal expansion of these companies. 8 Interlocking directorates between com- pantes that face similar or closely related problems, the tendency of which is to con- solidate Comuunities of interest amung these companies and to create a united front against enterprises that threaten the habit- ual relationships, ways of doing business, or established preemiuence of members of the group 4. Interlocking directorates between com- panies and their suppliers or their custom- ers, which may bring about preferential treatment in prices, in the distribution of materials that are in short supply or in ac- cess to market outlets. 5. Interlocking directorates between man- ufacturing corporations and financial insti- tutions, which may give such manufacturers preferential access to credit or may consti- tute un obstacle to the access of competing enterprises to credit. 6 Interlocking directorates which express 8 desiro to protect an underlying ownership interest. In the survey of interlocking directorates, the Commission has not found it possible to examine closely each of the apparently significant relationships that were found. The potentialities of the various patterns have been analyzed, and interlocks have been classified in accord with these potenti- &litles; but the report dues not scek to de- termine whether or not the possible effects upon competition from various interlocking relationships have actually appearcd THE OUTSTANDING INTERLOCKS IN VARIOUS INDUSTRIES The food industry exhthited an extensive array of interlocking directorships which ap- prared to be significant hoth for competition within the induetry and for its relations with other industries. In the meat-packing branch of the industry, Armour & Co. was indirectly interlocked with the third and fourth largest packers; three of the largest meat packers had indirect ties with three of the largest bakers. Armour and Swift & Co, had direct interlocks with equipment manu- Tacturers. Three of the 10 largest dairies were directly or indirectly interlocked with each other; the 3 largest dairtes were aleo indirectly in- terlocked with General Foods Corp, Stand- ard Brands, and Best Fuvods The largest
A1255 of the dairy products companies was indi- rectly interlocked with 2 large baking com- panies, which were potential customers, and with a large manufacturer of metal and paper containers, Four of the 12 largest canners had direct or indirect interlocks with companies pro- ducing competitive products The direct in- terlock between Libby, McNcil & Likby and Minnesota Valley Canning Co. is illustrative of the probable competition-reducing ties found in the industry, Six of the 12 grain-mill-products com- panies had interlocting relations with com- petitors. General Mills, the largest, had a direct interlock with Best J’oods and indirect interlocks with Pillsbury Mills, Internetioral Milling Co, end Rustell-Miller Milling Co The three large milling companies alo had one or more direct or tndirect interlocks with bakers or distillers. Both General Millis and Pillsbury Mills were directly interlocked with a large manufacturer of kraft paner  Pills- bury Mills was also interlocked directly with a food-contalner stock manutacturer The producers of bakery products were also tied together through interlocking directors, 6 of the 10 compantes being tnvolved Pur-~ ity Bukeries Corp. interlocked directly with American Bakeries Co. The two largest-—— National Biscuit Co. and Continental Batang Co —had indirect interlocks with each other and with a number of other baking com- panies National Biscult was also directly interlocked with American Sugar Refining and had indirect ties with five other poten- tial suppHers in the food industry, one of its most notable ties outside the food indus- try rested upon five directors in common with American Can United Blscult, Ward Baking, and Interstate Bakeries also had di- rect interloc’ss with container stock or con- tainer manufacturers, A highly concentrated pattern of Intor- locks occurred among the sugar companies. Sixteen ot the 23 largest of (hese comp nics had direct or indirect ties with each other. Bix Hawattan sugar companies were both di- rectly and indirectly interlocked with euch otl) r, while sugar companies outside Huwail wete equally intricately interlocked The sUgar companies also had direct or indirect tles with the country's largest produceis of duiry products, bakery products, and bever- ages American Sugar Refining alone had direct and indirect interlocks with 16 po- tential customers Fight of the 23 largest beverage products companies were duectly or indirectly inter- locked with each other, Canada Dry Ginger Ale, tor example, had a direct tle with Na. tiona! Distillers Products, both compuntes mut icture soft drinis as well as alcoholic beverages Ties between beverage manutac- turers and potential customers or suppers were veiled and numerous, National Dis- tillers Products, the third largest of the dis- tilled-bevernge manufacturers, for example, had indirect ties with the largest corn prod- ucts and sugar-reduing companics It also had a direct tle with the country's lurgest manufacturer of glassy bottles General Foods, Standard Brands, and Best Foods were interlocked with each other through a variety of third companies. Gen- eral Foods also had direct tles with the coun- try’s two largest dalry companies, and in- direct ties with the lurgest bakery company and the two largest gratu-nilll-products companies, all of which manufacture prod- ucts with which General Foods’ ines com- pete. General Foods also had a direct inter- lock with American Can and with the Mead Corp, which sells paperboard. The interlocking relations within the pri- mary tron and steel tndustry fell into four major categories. United States Steel main- tained indirect interlocks with 11 other mem. bers of the industry—7 integrated steel com- Panies, a nonintegrated strip-»teol producer, @ coke and chemical company, and 2 ferro- alloy compunies. The second group of steel companies in- cluded Republic Steel Corp, Youngstown Sheet & Tube, Inland Stecl, Wheeling Steel Corp., Jones & Laughlin, and National Steel Corp. These companies were all interlocked through a group of important Cleveland com- panies, including four ore companies and two Cleveland banks. The interlocks consisttd of both stock ownership and common di- rectors, The third group centered in the Mellon family and in a number of companies in the Mellon sphere of influence, including Mellon National Bank & Trust Co, Gulf Oil Corp, Koppers Co, Pullman, Pittsbingh Plate Glass Co, and Westinghouse Electtic Co Through these corporitions, futerloc tng oo relatious were maintained amons Lethlehem Steel Corp, Armeo, Crucible Stcel, A M_ Byers, Superior Steel, Granite City Steel Co, and Vanadium Corp ot America In addition Jones & Laughlin provided a point of con- tact between the Mellon group and the Cleve- land group, and United States Steel was linked to the group through Fudman Finally, Pitt burgh Steel Co, Alan Wood Steel Co, Pollausbee Steel Corp, and Pitts- burgh Coke & Chemical Co were interlocked thiough ties among themselves and with the peoples First National Bank & ‘Trust. Co. (Pittsburgh). This group was interrelated with the Mellon group through Jones & Laughlin and with the Cleveland group thiough both Jones & Laughlin and National Steel The nonferrous metals industry was char- acterized by multiple tudirect interlocking relations amon compames within the in- dustry, principally through financial insti- tutions but also through a number of leading industrial corporations The concerns thus interioclhed were amoung the industry’s most iinportant Within the industry, Amezican Metal Co interlocked with 10 companies, Kinnecott Copper Corp and Phelps Dodge Corn with 8 Anaconda Copper Mining Co, St Joseoh Lead Co, and Americin Smeltng & Refinins Co with 7, United States Smelt- ing, Refining & Mining Co with 6; Magma Copper Co. with 4, and National Lead Co.,, New Jersey Zine Co, Mueller Brass Co, Doehter-Jarvis Corp, and Anaconda Wire & Cable Co with 3 Several o% the integrated producers of pri- mary metals we also tabricators and thus compete with their customers, actual or potential There were a telatively large number of interlocks between fabricated and primary metal producers Some of these vertical interlocks. for esample, that be- tween the Sharon Steel Corp and the Mullins Manufactining Corp—appear to have been the equivalent of Lorward lnterration., Other interlocks—tor example those between United States Steel, Bubcock & Wilcox, and American Radiator & Standard Sanitary Yorp — provided the basis for establishment of a community of interest among com- panies dominant in their respective fields. The interlocks of fabricated metal producers with users of their products consisted pri- marily in 36 interlocks with the machinery Industry; 24 with the transportation equip- ment industry; and 19 with the electrical machinery industry. Companies in the machinery industry were linked primarily with banks, primary metals producers, transportation-equipment companies, and electrical-machinery manu- facturers. In every branch of the industry, competing producers were directly and in- directly interlocked. Among the farm-ma- chinery manufacturers, International Har- vester, Allis-Chalmers, and J. I. Case were indirectly interlocked with each other and with two of the other six largest producers; the Oliver Corp was indirectly interlocked with two other farm-machinery companies; and Deere & Co. and Minneapolis-Moline Power Implement Co. were interlocked in-= directly with each other. Eighteen compet- APPENDIX TO THE CONGRESSIONAL RECORD ing engine producers were directly or in- directly interlocked, five being classified as manufacturers of engines and turbines and the remainder being otherwise classified. Ten of the large machine-tool manufactur- ere were indirectly interlocked with one an- other, as were the seven largest manufac- turers of office and business machines, Of the four largest producers of textile ma- chinery, the two largest were directly, and aul induectly, interloched with each other. They were also directly linked with four of the country’s largest textile mills and indl- rectly with nine others Six of the major troducers of pumping and drilling equip- ment had direct or indirect ties with one or mole competitors ‘The four leading manu- factaners of road-building and earth-moving machinery were indirectly associated throuc ‘1 muptiple interlocks The machinery pro- ducers were also involved in direct verti-+ cal interlocks with primary-metals pro- ducors and with numerous potential cua- tomers In the electrical-machinery industry, the big four manufacturers—General Electric, Westinghouse Flectiic, Western Electric Co, and Radin Corp of America-—were indl- rectly interlocked on xu multiple basis through stx large commercial banks, two of the largest life-insurance companies, a pub- jie utility, a railroad, and an industrial com- pany This Industry also presented a pat- tern of interlocking relations extending backward to supphers of metals, plastics, and the like, aud forward to users of elec- trical equipment The interlocking direc- torates between General Electric and New York Central and between Westinghouse and the Pennsylvania and New Haven Rnil- rouds appeur to be particularly noteworthy. The transportation equipment industry presented a picture of extensive and complex nterlocling relations. Sionificant interest groups centered around General Motors Corp. and the Victor Emanuel enterprises linked companies im all of the major sub- Qivisions in the industry The railroad equipment companies appear to have estab- lished a close network of tnterlocks--12 of the 15 Interlorked directly or indirectly with other railroad equipment companies. Two manufacturers of ratlway air-conditionine equipment--Salety Cur Heating & L ghti, g Co and the Carrier Corp —were directly in- terlocked = The only two rianvfacturers of railway air-brake equipment—Westinghouse Alr Brake Co and New Yoik Air Brake Co — had multiple indirect interlocking relations, Pullman, an important manufacturer ot rail- way cars, was the nucleus of a far-reaching system of intenlocling directorates Other indirect interlocking relations existed among manutacturers of locomotives, railway roll- ing stock, and other special types of railway eqaipment, In the aircraft group there was un direct interlock between Douglas Aircraft Co and Curtiss-Wilght Corp, which, how- ever, appcurs to have been discontinued The aircraft group also had a chain of tndirect interlocking relations that Jinked not only aircraft manufacturers but also producers of spectalized equipment In the motor-vehicle field, direct interlocks between the large nutomotive manutacturers and the parts manutacturers appear to have been of principal importance. No slgnifeant interlocking relations were found in the ship- and boat-building field. As in other larze and important industries, the pattern of tn- terlocking relations between transportation equipment companies and finacial institu- tions was extensive. Through directors and officers of lending New York banks, the chemical industry maintained many indirect interlocking rela- tions; there were few direct interlocks, Al- Med Chemical & Dye Corp , Virginia-Carolina Chemical Corp , Mathieson Alkali Works, Inc., American Enka Corp., North American Rayon, Davison Chemical Corp , and American Bem-
APPENDIX TO THE CONGRESSIONAL RECORD berg were indirectly interlocked through Chase National Bank. Union Carbide and Carbon, Commercial Solvents, North Amer- ican Rayon, Sun Chemical, and American Bemberg were indirectly interlocked through Central Hanover Bank & Trust Co. Amer- ican Cyanamid Co, American Home Product Corp, General Aniline & Film Corp., Sharp & Dohme, and the Lambert Co. were indi- rectly interlocked through Manutacturers Trust Co. (New York). The chemical indus- try also exhibited a significant array of ver- tical interlocks that related producers to sources of supply and to outlets for their products. The leading petroleum companies—Stand< ard of New Jersey, Socony-Vacuum.- Oil Co., Texas Co., Standard of California, Standard of Indiana, Gulf Ot] Corp., and others—were closely tied together by indirect interlocking directorates or by joint ownership of affili- ates. The most significant interlocking di- rectorates were through Chase National Bank. On that board were directors of Standard of Indiana, Standard of California, Gulf, and Continental Otl. Texas, Shell Union Oil Corp, and Tide-Water Associated Oil were indirectly interlocked through Cen- trul Hanover Bank & Trust Co. None of the rubber manufacturers had any directors in common tn 1946. Indtrect in- terlocking relations existed among the large tire manufacturers, between the large tire companies and some of the smalier tire man- ufacturers, and between some of the cther rubber companies The most significant of the interlocking relations were apparently those between United States Rubber and General Motors, resting on du Pont invest- ments in both companies and the presence of du Pont directors on both boards. Three of the large tire manufacturers—Goodyear Tire & Rubber Co., United States Rubber, and B F Goodrich Co.—had direct interlocking relations with chemical companies produc- ing materials used in the manufacture of tires. The textile industry had an extensive net- work of interlocks, with 39 of the 85 com- panies interlocked with one another, Although members of the same industry, these companies produced a diversified lst of products, A large number of tnterlocks appeared to have been among companies that were currently producing competing prod- ucts. Forward vertical interlocks appeared more significant than those reaching back~ ward to sources of supply. Several of the textile mills had indirect interlocks, prin- cipally through financial institutions, +7ith retat! outlets, largely chain clothing and de- partment stores. In the apparel industry interlocking rela- tions existed through banking interests and factors. The outstanding interlocks brought together on the board of Van Raalte Co., ais rectors of Cluett, Peabody & Co., Manhattan Shirt Co, the Hat Corporation of America, and A. Stein & Co, thus creating a commu- nity of interest potentially significant for competition. Apparel manufacturers also interlocked with textile mills: Cluett, Pea- body & Co, with Sidney Blumenthal & Co., Botany Worsted Mills, United States Finish- ing Co, and Cheney Bros.; Hat Corporation of America with Sidney Blumenthal. In turn, Cluett, Peabody & Co. had directors in common with National Department Stores and Sears, Roebuck & Co; Manhattan Shirt wns also directly interlocked with the Hecht Co and Gimbel Bros.; A. Stein & Co. was represented on the boards of Gears, Roebuck, Bond Stores, Inc, W. T. Grant Co.,, and S H, Kress & Co; thre Hat Corporation of America was interlocked directly with Bond Stores. The strong position of Van Raalte and its ine terlocking relations with apparel manufac- turers reflected in part the presence of two Goldman, Sachs & Co, partners and a Leh- man partner on the board of Van Raalte. The paper and allied products industry had @ chain-like network of interlocking direc- torates connecting 22 of the 31 large com- panies with one another. There was no one company from which these interlocking rela- tions radiated; the ties were as characteristic of the smaller as of the larger companies. The printing, publishing, and allied indus- tries had no directly interlocked directorates and relatively few significant indirect inter- locks. The lumber and wool products industry and the furniture and fixtures industry had few significant interlocking directorates. In the glass industry the direct and in- direct interlocks between Libbey-Owens- Ford Glass Co, and Owens-Illinois Glass Co. appear to have had significance in support- ing a division of fields between the com- panies Several of the glass companies also had vertical interlocking relations with im- portant outlets. Interlocking directorates in the cement in- dustry appeared to be important principally on the Pacific coast. Significance may have attached to the interlocks between refrac- tories manufacturers and cement and stecl companies. The gypsum manufacturers had their most important interlocks with finan- cial institutions. None of the larger compantes classified in the leather products industry were directly interlocked, However, indirect interlocks existed between some of the important com- panies: Endicott Johnson Corp, with Flor- sheim Shoe Co., and the latter with George E, Keith Co No significant interlocking relations were found among the companies classified in the tobacco products Industry. In the professional and scientific instru- ment industry the few insignificant inter- locks were between companies the products of which were complementary or which might provide components for finished products In the miscellaneous manufacturing tn- dustry the interlocks, direct and indirect, involved suppller-customer relations, CONCLUSIONS The major conclusions that cmerge from the Commission's analysis of interlocking directorates among the 1,000 largest manu- facturing corporations and between there corporations and some 330 nonmanufactut- ing corporations follow: 1 Among the largest companies there w1s in 1946 a substantial and significant variety of tnterlocking directorates, which, by virtue of the character of the businesses of the companies, involved reasonable probabilities that competition would be reduced thereby. 2 Some of these interlocks appeared on their tace to be violative of section 8 of the Clayton Act.'. The majority of them, how- ever, did not fall within the prohibition con- tained in that act. 8 Many of the interlocks which were ca- pable of reducing competition were lawful under the provisions of sectlou 8 of the Clayton Act becauge the interlocked con- cerus, though potentially competitors, Lad not been competiturs In the past, or be- cause the interlocked concerns were related to each other as actual or potential sup- pliers and customers rather than as com- petitors, or becouse the individuals through whom the interlocking relationships were maintained were officers or stockholdcrs rather than directors, or because the com- panies involved, tnstead of having common 1 Section 8 of the Clayton Act provides in substance that no person may be director In two or more competing corporations, any one of which has capital, surplus, and undivided profits aggregating more than 61,000,000. (This provision ts not applicable to banking institutions and common carriers, which are covered under other sections of the statute.) A1257 directors, had directors who were jointly membets of the boards of third companies. 4. In certain cases interlocking relatian- ships involving several directors from the game company provided a broad hase for the development of common policies and attl- tudes. In certain industries directors fram various impoitant companies sat together on particular boards which served as focal points of interlocking relationships. In cer- tuin other industries, though there were no tocal points, there was such a multiplicity of interlocking relationships as to constitute a network in which it was evident that the effect of any one interlock was strengthened and supplemented by the existence of the others, The Clayton Act contains no reccg- nition of the significance of multiple, focal, and network interlocks, as distinguished from single interlocks. 6. The most common interlocks were those that linked a seller of goods or services with a buyer thereof. In a substantial number of cases the Importance of the selicr, the buyer, or both was such that establishment of preferential or exclusive-dealing relations between them might be expected to have ad- verse effects upon the opportunities of their competitors. This was particularly true in the case of interlocka between industrial companies and financial institutions The problems raised by interlocks of the sup- plier-customer type appear to be simular to those which led the Congress to prohibit such interlocks in the case of common crr- riers except where steps are taken to assure arm's-length dealing. Nevertheless, there ts no legal imitation upon this type of inter- locking relationship among industrial and commercial companies. Working Hours of Farmers EXTENSION OF REMARKS OF HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (legislative day of Monday, January 29), 1951 Mr. LANGER. Mr. President, I ask unanimous consent to have inserted in the Appendix of the Recorp an article entitled “Farmers Said Now Working 70 Hours for 40 Hours’ Pay,” published in the Leader, of Bismarck, N. Dak. There being no objection, the article was ordered to be printed in the Recorp, as follows: Farmers Sain Now WorkiNnc 70 Hours ror 40 Hours’ Pay Crookston, MinN.-—Farmers today are putting forth 70 hours of hard work a week to match the earnings of 40-hour-per-week city workers, says John Brandt, of Minne- apolis. Pointing out that many farm prices are still below parity levels, Brandt, president of Land O’Lakes Creameries, Inc., said the pres- ent high cost of Uving was due principally to the high cost of getting products of the soll to consumers rather than to the prices farmers get. “When the Nation as a whole puts forth the same hourly effort on a basis comparable with that of the farmer we will have true parity in price levels,” Brandt Wednesday night told an audience at the Red River Valley midwinter shows here, “Then, and only then, will the cost of Ilving start down- ward. “We cannot and should not depend upon war as &@ means of maintaining a prosperous
A1258 agriculture, as war itself can bring only tem- porary booms.” Brandt said that livestock farming had always been a stable and reasonably safe pursult, adding that “there is nothing on the horizon that points to a reversal of this situation.” The Record of 32 Years EXTENSION OF REMARKS OF HON. ANDREW F. SCHOEPPEL OF KANSAS IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (legislative day of Monday, January 29), 1951 Mr. SCHOEPPEL. Mr. President, last Sunday, March 4, 1951 in the capital city of my State, Arthur Capper, a dis- tinguished former Member of the Senate of the United States, made a radio ad- dress over Station WIBW. What he had to say on that occasion, after 30 years of service in this legisla- tive body, is most timely for us to con- sider. He points out the changes that have come over our Nation and where some of our present policies, if pursued, will lead us. Mr. President, I ask unanimous con- sent that the address be printed in the Appendix of the Recorp. There being no objection, the address was ordered to be printed 1n the Recorp, as follows: Carrer Nor Sure ALL CHANGES IN 32 Years ARE ror Best INTERESTS OF UNITED STATES AND ‘WORLD (Senator Capper discussed the things that havé happened to the world and the United States in the past 32 years since he went to Washington as Senator, in his weekly radio talk over WIBW Sunday. He also was grati- fied over ratification of the anti-third-term amendment, and paid his respect to the would-be dictators in Government.) Thirty-two years and 30 minutes ago, at noon on March 4, 1919, I became a United States Senator from the State of Kansas. You Kansas people kept me in the Senate for almost 30 years afte~ that. Due to the adoption of the so-called “lame duck" amendment to the Constitution, terms of United States Senators and Representa- tives, starting in 1934, have begun their regular terms of serving on January 3 instead of on March 4 following the general election, For that reason I did not serve a full 80 years. My fifth and last term ended January 2, 1949, The following day at noon my suc- cessor, former Gov. ANDREW F, SCHOEPPEL, took office. My impression is that Andy ts doing a good job. I certainly enjoyed my nearly 80 years in the Senate, and appreciate more deeply than I can tell you the honor you people of Kan- Sas accorded me by electing and reelecting me five times to that high office. During those years I represented you to the best of my ability. I tried sincerely to follow this rule: On every piece of legisla~ tion I cast my vote as I believed the majority of the people of Kansas would have voted, if they had the same information and under- standing of what was involved which I be- lieved I had. But all that is water over the dam. Only I just couldn't help reminding you that to- day ls one of my anniversary days—and a very hap,y one for me, personally. There have been a lot of changes in Amer- fea, in the world in those 32 years. Not all of them have been for the better. Actually, although few of us realized it at the time, the wheels of fate already had started whirling us tnto the era of the great change in America, the American way of life, the American form of government. In 1919 we were Just emerging from World War I which we thought we had won, We had defeated Germany, broken up the Aus- trian Empire, and, so we weie told, had made the world saute for democracy. As it has turned out since, there are grave doubts whether our American First Crusade promoted the Interests of democracy, to say nothing of making the world safe for de- mocracy Instead, World War I just paved the way for World War II, which we also thought we had won, 5 years ago. We destroyed Ger- many und Japan—-and apparently also have made Soviet Russla dominant in the Old World; ulso seem to have made Russia a threat to the New World So now we must butld up Germany and Japan. And also, Judging from the.plans we are making tor the future, World War I and World War II just paved the way, combined, tor world war III Instead of bringing the four freedoms to the peoples of the world, we assisted in mak- ing Joseph Stalin the dictator over one-third the people in the world, gave Britain a La- bor-Socialist government which will become a dictatorship tf ever we quit pumping funds into Britain to keep the Labor-Socialist gov- ernment in power And there are some in our own country who believe we are headed toward a dicta- torial form of government in the United States, as a result of our world crusades, I think it is at least correct to say that to date our participation tn three world wars— we are in the third one now, whether we sare willing to admit it or not—has decreased rather than increased the freedoms of the individual, here and overseas. When a government spends as much as one-third of the nation’s income, taxes its people for one-third of thelr incomes; depre- ciates the value of its currency more than one-half in less than o generation, loads a bonded debt larger than the national income upon its people, and proposes universal serv- ice for all its citizens— Where those conditions prevail and are in prospect indefinitely into the future, one cannot truthfully proclaim that such a peo- ple is a free people—at least not as we understood was the word “free” in those pre- World Wars days. Briefly, those are some of the reasons I raise the point that all the changes in the 32 years—and 30 mtnutes—since I became a Member of the United States Senate, have not been changes for the better. Not but that I believe the American peo- ple, the American way of life, and the United States Government will rally and survive the perils that obviously lie ahead. I do be-~ lieve we will survive—but only if we have the will to survive, and to fight for survival. By the way, I received another letter from Dwight Hauptman, of the Hauptman Family Farm, Brewster, Kans., the other day. In this letter Mr. Hauptman said so much in so few words that I cannot resist repeat- ing them to you. Mr. Hauptman wrote us this way: “It seems to me the Httle Napoleons in the administrative branch of the Government are intent upon dissipating the accumulated wealth of past generations, the earnings of the present, and are wishing to mortgage the earnings of the future citizens of America. “It was only a few years ago,” our farmer friend from Brewster, Kans., continues, “we farmers had only to contend with drought, grasshoppers and hail. But today we look with apprehension toward Washington for APPENDIX TO THE CONGRESSIONAL RECORD some new fint or directive in keeping with the perpet al state of emergency or crisis in which we live— “A crisis so admirably maintained by the ponderous and burdensome machinery of government.” Then Mr. Hauptman concludes with this call to duty, which I in turn pass on to you with the suggestion you take it unto your- selves to carry on-—~ “Please continue, Mr. Capper, the good fight in behalf of the individual, who, after all, is the strength of America,” Mr. Haupt- man, of Brewster, concludes. One of the bright spots of Inst week was the action of the Nevada and Utah State legislatures in ratifying the twenty-second amendment to the constitution. The fol- lowing day I believe Minnesota also did, but the Minnesota action in a way was super- fluous. When Nevada acted, following by a few minutes only the ratification by Utah, the amendment was ratified, 36 States having approved it. The twenty-second amendment prohibits anyone—except President Truman him- self—from being elected to serve a third term as President of the United States. This action at least 1s an attempt to return to a form of government in which all powers are not centered in the executive branch of the Government. But the Congress itself, as I see it, faces the Job of asserting itself in the matter of war making. As I mentioned last week, I believe, the forefathers who wrote the Con- stitution did their best to vest war making powers in the Congress, rather than the President. They had seen, some of them at first hand before coming to America, what evils were wrought in Europe through the war-making power being lodged in the hands of rulers. So I say, Congress has 8 job to do I hope it does that job And more power to Sena- tors Tait and Wherry and to Herbert Hoover and others who are making the good fight. Some 10 days ago I had the pleasure, and the mental and spiritual profit, of henring an address at the Hi Twelve Club by Dr. Eugene Frank, pastor of the First Methodist Church of Topeka. It was an inspiring speech, and I would like to give you all of it. But I am going to give you just one or two ideas among the many that he gave to us. Dr, Frank was speaking on “brother- hood"—week before last was Brotherhood Week, I believe. He listed several basic assumptions, as he said it, that are necessary if the idea of brotherhood 1s to prevail, In the first place, Dr. Frank said, only a free people can do anything about brother- hood. Free people must be free to think their own thoughts, speak their own minds, choose t.eir own friends, and so on, “You cannot crowd brotherhood down people's throats,” said Dr Frank “You can- not get brotherhood at the gun point. “Subservience is a barrier to brotherhood ” “For that reason,” he continued, “mili- tarism is the enemy of brotherhood.” “And when you have universal military training in America, same as under Hitler, Napoleon, Mussolini, Stalin—any dictator— then you have militarism, and that is the end of freedom of the individual. “Without freedom you cannot attain the brotherhood of man,” Dr. Frank explained further. “You cannot have freedom under militarism; therefore you cannot have broth- erhood under universal military training, Military discipline supersedes democracy when we are at war. “It also supersedes democracy when It is fastened on a people between wars, Uni- versal military training means a subservient people, whore thinking is done by others, whose decisions are made by others, whose
APPENDIX TO THE CONGRESSIONAL RECORD actions are ordered by others. That is the end of democracy, the end of freedom, the end of hope for brotherhood ” He said something else which I wholly ap- e. “Government subsidies,” he declared, “are the enemy of freedom, the enemy of brother- hood. Subsidies set group against group for manna from government, submdies bring about subservience, which destroys the free- dom of the individual “Socialism,” said Dr Frank, “sounds to the uninformed He the brotherhood of man, But {t is just the opposite. socialism is hascd on the idea that men cannot govern them- selver " I wish we had more men like Dr. Frank in the ministry, tn businese, in public life— and hotding putbiie office Am looking forward to talking to you again next Sunday. Navajo Aid Program EXTENSION OF REMARKS oF HON. WILLIAM LANGER OF NORTH DAKOTA IN THE SLNATE OF THE UNITED STATES Wednesday. March 7 ‘legislative day of Monday, January 29), 1951 Mr. LANGER. Mr. President, I ask unanimous consent to have inserted in the Appendix of the Recorp, an article entitied “Aid Program Lags, Navajos Complain,” published in the New York Times on February 25 last. There being no objection, the article was ordered to be printed in the Recorp, as follows: Ain Procram Laos, Navasos ComMPpLlain— SCHOOLS, Hosprrats, Roaps ARE BEING BUILT BuT INDIANS ARE LIVING IN SQUALOR Winpow Rocx, Antz, February 24 — Roads are being built, schools expanded, hospitals enlarged, and water facilities surveyed under the 10-year $88,500,000 rehabilitation pro- gram for Navajo Indians and their Hopl neighbors, authorized by Congress and begun last October. But accomplishments are too slow, according to Sam Ahketh, chairmun of the Navajo Tribal Council, which met here recently. The tribal council is an elected tribunal looking after the interests of the Nation’s largest Indian tribe. The reservation spreads over much of northwestern New Mexico, northeastern Arizona, and southeastern Utah and entirely surrounds the less popu- lous Hopi pueblos in Arizona. It ts a denert land, where Navajos Itve in illiteracy and squalor. A year-long drought has added considerably to the burden. “Our people still need the aid of such men as Bert Pousma, of Gallup,” says Mr. Ahkeah, MAVAJOS LONG NEGLECTED Mr. Pousma heads Navajo Assistance, Inc., & nonprofit organization set up to dispense direct relief to the Navajos and to promote causes benefictal to the tribe. Eight decades of Government neglect have contributed to the present Navajo plight. In 1868, the Government returned the Navajos to their traditional homeland after & years’ exile at Fort Sumner, N. Mex. This has become known as the Bosque Redondo incident. There were only about 10,060 Navajos then, but now the population is over 61,000, and the parched land cannot support a third that number. After the exile, a treaty was drawn up guaranteeing a school for every 30 Navajo children between the ages of f and 16. Some achools were built, and through the yenrs many Navajos have attended them, but the facilities have never been adequate. Today the illiteracy rate for this tribe ts 80 per- ceni—htghest for any ethnic group in the Nation. Residents of Cheechiigeetho and Thoreau, two Navajo communities near Gallup, N Mcx., petitioned in 1048 for the reopening of their schouls, closed for several years because funds tor maintenance were lack- ing. The iony-ravge rehabtlitu(ion program provided for conversion of these facilities to boat ding-schoul statue, along with cihers at hunter's Point and Kaibeto, Water has been proved in aclequute amount for the Thoreau, i.uuter’s Pulnt, and Kaibeto plants, and con- struction will begin as soun as the weather permits. Plans for the Cheechiigeetho school are awaiting a water survey. ECHOLS STILL INADEQUATE, But the situation continues bad, with 22.000 Navajo children of school age, and only 8,000 able to crowd the inadequate Gove ernment and mission facies of the area. “On aecount of closing some rehools, and wing schoolrooms for siceping purposes in others,” Mr Pousma says, “the seating ca- pacity on the reservation is 1,315 less now than it was 10 years ago “ Illness nnd death rates among the Nava- jos are out of all proportion to the country as a whole Tuberculosis Is estimnted as 10 times the notional average Mobile X-ray units have discovered thousands of tubercular Navajos, but hospital facilities are so scanty that those with the mort ac- tive cases must otten return to insanitary hogans, where in many instances the dis- ease ts parsed on to small chi!dren and others, About 8,000 die trom tuberculosis on the reservation annually A 700-becd hospital ts planned for Fort Defiance, Arig, asa part of the rehabilitation program, but even the funds for its blue- prints won't be available in the current fiscal year. Shortage in the Accounts of the Commodity Credit Corporation EXTENSION OF REMARKS HON. EDWARD MARTIN OF PENNSYLVANIA IN THE SENATE OF THE UNITED STATES Wednesday, March 7 (legislative day of Monday, January 29), 1951 Mr. MARTIN. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp an editorial regarding a shortage in the accounts of the Commodity Credit Corporation, pub- lished in the Washington (Pa.) Observer of February 28, 1951. There being no objection, the editorial ‘was ordered to be printed in the Recorp, as follows: Goop Worx, Senator For- nearly 2 years Benator JoHN J. WIL- LiaMs, of Delaware, has been hammering away at a $336,000,000 shortage which he ‘uncovered in the accounts of the Commodity Credit Corporation. The Senator's per- sistence has been producing some note- worthy results. By last June the General Accounting Office reported that the deficit had been reduced to $96,440,000. It said this amount was wuncolfectible because no records had been kept of where it went. Senstor Wriuuzams refused to accept this explanation as final. Jt turne out he was £1259 right. The Delaware Senator was able to report to the Senate the other day that more than §15,000,000 more has been re- covered. Some of it has been collected from private citizens, some from foreign govern- ments, and the remainder from the Depart- ment of Defense. This constant prodding hana already saved the taxpayers millions, and that’s no trifle even in a Cray when the Government ts deal- ing mostly in billlon-dollar chips. It cught to save additional millions by foreing Gov- ernment ayencies to thirhten up book!esp- Ing practices so faulty that $336,000,900 cun get lost. Anybody, including Uncle Sam, can fo broke quickly with that kind of hole itn his pockets. Tke Unconstitutionality of a Federal T-x Upon State and Municipal Bond luterest EXTENSION OF REMARKS or HON. ABRAHAM J. MULTER Or Nw YOuK IN Tl; HOUSE OF REPRESENTATIVES Wednesday, March 7, 1951 Mr. MULTER. Mr. Speaker, under unanimous consent to extend my re- marks in the Recorp, I am plcased to direct the attention of my collerxues to the following very excellent mermoran- dum prepared by the distinguished At- torney General of the State of New York, the Honorable Nathaniel L. Gold- stein. Although it was prepared with specific reference to the pending tax bill, the underlying principles of the law are of the greatest importance to all legislators. The matter referred to fol- lows: MFMORANDUM PrEseNTep TO CONCRESS IN Oprostrion To Prorosat To Tax State AND MonicipaL Bonn Unrensst— THe UNcoNsti~ JTUTIONALITY OF A FeprRat Tax Upon Srate and Mounicrpat. Bono INTEREST—-THE CoN- STITUTIONAL IMMUNITY or STATE AND MUNICIPAL SECURITIES STATEMENT This memorandum, submitted in opposi- tion to a proposal of the Secretary of the Treasury, to tax State and municipal bond interest, dealx with the absence of power in the Federal Government, under the Consti-~ tution of the United States, to impose such a tax The fiscal and economic effects of Federal taxation of interest upon bonds issued by the State and {ts local subdivisions are being presented by the Comptroller of the State of New York and the State superintendent of public works in oral testimony before tho Ways and Means Committee of the House of Representatives, and by written state- ments. Such effects, they have ahown, would be to add staggering amounte to the coat of State and municipal fluanciug The eaddi- tional cost would be so formidable a burden upon the people of the State that the cer- tain, inevitable effect would be to put a halt to the provision of essentially necessary fa- cilities for the people, by the State, its counties, cities, towns, villages, school dis- tricts, improvement districts, fire districts. Public housing, the elimination of water pollution, the pullding of State hospitals,
A1260 the State throughway, and other State high- ways could not go on. The local communie tles—some desperately requiring new facili- ties because of growth in population in recent years—could not provide the schools, hospitals, streets, transit, sewage, water supply, and fire-fighting facilities that they so urgently need. Not only could the in- creased cost not be absorbed but the tax- exempt feature gone, the municipals par- ticularly and the State bonds as well, would lose their sales appeal, and the source of State and local funds by borrowing would be vastly and seriously limited. Thus, {t is indisputably clear that such a tax would place a burden, actual, sub- stantial, direct and tangible, in nowise merely conjectural or uncertain, upon the State tn the pertormance of the functions which in the very nature of our constitu- tional system of government are those of the State and local units of government. It is a judicially recognized fact that the tm- position of such a tax which would cut off the ability of State and localitics to provide these facilities tor the people, both by mak- ing the cost burden one that cannot be met and by impeding the power to borrow, could spell the end of State and municipality as vital units of government. Under the Constitution of the United States, such a tax may not be levied. The Supreme Court of the United States so holds. Immunity has tts source in basic constitue tional provisions and principles Proposals to tax State and municipal bond interest have been before the Congress re- curringly during the last decade, but the Congress has either declined to consider such measures or rejected them after considera- tion. The invalidity of such a tax is implicit in the basic framework of our Federal sys- tem of government. Our Government was formed of » unlon of States (Preamble to the Constitution; cf. Mr. Justice Frankfurter in Graves v. New York ex rel. O'Keefe (306 U. Bw. at p 488); Mr. Justice Douglas in New York v. United States (326 U. 8S. 694, 596- 697)). It was not a central government in its origin, divided into units by a central power. It was the States through which the people spoke in ratifying the Constitu- tion. The National Government 18 one of delegated powers, The people and the States which united to form that National Govern- ment retained all powers except those which they surrendered to the Federal Govern- ment (tenth amendment). Governmental power over internal affairs is, by the Con- stitution, distributed between the National Government and the several States (United States v. Belmont (301 U. S at p. 830)). Ench is sovereign in its own sphere. From this basic concept the courts have drawn «und developed the principle that taxes may not be imposed by the Federal or State governments, the one upon the other, which would burden and obstruct the opera- tions of cither. In order that this Federal system, to in- clude the States, cities, and other units of government shall endure, in order to pro- tect “the continued existence of the state” (Helvering v. Gerhardt (304 U. S. at p. 421)), no taxes by the Federal Government may be levied which would straiten them by depriv- ing them of the means of periorming those functions which it is thelr province to exer- clse for the people (Mr. Justice Douglas in New York v. United States (326 U. S. at p. 698)). The immunity of the States from Fed- eral taxation, which would hamper them from performing thelr essential functions, flows from the same basic principles as the Federal Government's immunity from State taxes which would have the same effect. The necessity of that immunity to the Na- tional Government as essential to permit it to function is one of which the Congress is acutely aware, I. To preserve our dual system of govern- ment, Congress has the responsibility not to enact a law which would hamper and ultimately destroy the ability of the States to exercise the powers expressly and de- liberately reserved to them in the Consti- tution (tenth amendment) The responsibility of the Congress to pre- serve our dual system of government, pare ticularly to preserve and maintain the in- tegrity of the States and their governmental subdivisions, is profuund. It is a respon- sibility which is primarily that of the Con- gress, Only if the Congress has not ful- fined that responsibility, is it the province of the courts to declare its action un- constitutional. The United States Supreme Court approaches the construction of stat- utes which present the issue of encrosch- ment of the Federal Government upon tho States, on the assumption that the repre- sentatives of the States in the Congress would decline to surrender the independ- ence of the States. So tn Helvering v. Ger- hardt (304 U.S at p. 416), the Court sald: “The very fact that when they [representa- tives in Congress| are exeroising it [the na- tional taxing power] they are taxing theme. selves, serves 10 guard against its abuse through the possibility of resort to the usual processes of political action which provides a readier and more adaptable means than any which courts can afford, for securing accom- modation of the competing demands for national revenue, on the one hund, and for reasonable scope for the independence of state action, on the other” See also New York v. United States (326 US at p. 582). Thus, the courts point to the initial duty of the Congress to abide by the declaration of the Constitution (tenth amendment) that those powers not granted to the Government of the Untted States are reserved to the States and, abiding by that constitutional declara- tion, not to enact any law which would ren- der that reservation meuningless by stripping the States of the wherewithal to exercise the powers which the people declined to surren- der to the National Government and were deliberate in reserving to the States. “The ultimate touchstone ot constitution. ality,” sald Mr Justice Frankfurter in the O'Keefe case (306 U. 8 xt p. 491), is “the Constitution itself” It is the constitutional duty of the Members of Congress to refrain from the imposition of taxes which would render the States powerless to function by making the cost so excessive that it cannot be met, and by reducing dangerously the ability to raise money through sale of bonds, For so the existence ot the States as free, independent units of government which the Constitution intended and provided, could end. The United States Supreme Court has sald: “It rests on the luw of self-preservation, for any government, whose means employed in conducting its strictly governmental opera- tions are subject to the control of another and distinct government, exists only at the mercy of the latter” (Ambrosini v. United States (187 U S. 1, 7)). That is simple fact for the Congress to consider carefully and seriously. UU, The United States Supreme Cowt has never departed from the prinetple that the Congress may not enact a law which will obstiuct the funetioning of State govern- ment The several opinions of the United States Supreme Court in New York v. United States (326 U. S. 572), decided in 1946, make it in- disputably clear that the Court deems the States immune from Federal taxation where such taxation would impede or curtail them in the performance of their sovereign func- tions. Five of the eight Justices who sat in that case are members of the Court today, In one of the prevailing opinions, Justices Reed and Burton concurring, the late Chief APPENDIX TO THE CONGRESSIONAL RECORD Justice Stone unmistakably forecast that the Court would disapprove any Federal tax which would— “So affect the State, merely because it is a State that is being taxed, as to interfere unduly with the State’s performance of its sovereign functions of government. The counterpart of such undue interference has been recognized since Marshall's day as the impled immunity of each of the dual sov- ercignties of our constitutional system from taxation by the other. McCulloch v. Mary- land (4 Wheat. 316).” The issue in that case was considered and determined by the Court on the premise that # tax is invalid which “unduly interferes with the performance of the State’s func- tions of government” (p. 588), and declared it “plain” that a tax js invalid which ‘“in- fringes” ‘In some manner” upon the State's performance “of its functions as a govern- ment which the Constitution recognizes as sovereign” (p, 588), continuing (pp. 589- 590): “The problem is not one to be solved by a formula, but we may look to the structure of the Constitution as our guide to de- cision “ *" * nelther government may destroy the other * * * or * * * seriously * * *“ impair * * ®* = the appropriate exercise of the functions of the government affected by it. Metcalf & Eddy v. Mitchell (supra, 523-524) ," Another opmion in that case said squarely (p 584): “All agree that not all of the former im- munity is gone”’ The dissenting opinion in the case written by Mr. Justice Douglas in which Mr Justice Black concurred, was strong in its emphasis upon the soverciynty of the States in our scheme of government and upon immunity from Federal taxation as an essentinl con- comitant of that sovereignty. He said (tak- ing as granted that the Constitution gives to the States “immunity from a tax on the is- suance of securities” (p. 591)): “The sovereignty of the States * * * has been understood throughout our his- tory” (p. 592). ‘Woodrow Wilson stated the starting point for me when he said that ‘the States of course possess every power that government has ever anywhcre exercised, except only those powers which their own constitutions or the Constitution of the United States explicitly or by plain inference withhold They are the ordinary governments of the country; the Federal Government is its instrument only for particular purposes’ (p. 592). “It is antagonistic to the very implications of our Federal system to say that the power of Congress to lay and collect taxes—article I, section 8—-includes the power to tux any State activity or function so long as the tax does not discriminate against the States” (p. 592). Going back to earHer decisions of the Court he quoted: “As stated in United States v. Railroad Co. (17 Wal. 822, 327-328), ‘The right of the States to administer their own affairs through their legislative, executive, und judicial de- partments, in thelr own manner, through thelr own agencies, is conceded by the unt- form decisions of this Court and by the prac- tice of the Federal Government from its or- ganization. This carries with it an exemption of those agencies and instruments from the taxing power of the Federal Government. If they may be taxed lightly, they may be taxed heavily; if Justly, oppressively. Their opera. tion may be impeded and may be destroyed, if any interference is permitted’’’ (pp. 592- 593). Specifically, State and municipal securities were to him a fortior! constitutionally im- mune from Federal taxation: “Can it be that a general Federal tax on the issuance of securities would be consti- tutional if applied to the issuance of munic-
APPENDIX TO THE CONGRESSIONAL RECORD fpal securities or of State bonds or of the securities of public-utility districts organ- ized by the States” (p. 633)? “As stated in United States v California (207 U. & 175, 184, 185), the immunity of State instrumentalities from Federal taxa- tion ‘is implied from the nature of our Fed- eral system and the relationship within it of State and National Governments, and is equally a restriction on taxation by either of the instrumentalities of the other” (p. 692 footnote). He cautioned: “A tax is a powerful, regulatory instru- ment. Local government in this irce land does not esist for fiself. * “ * Local government exists to provide for the wellare of its people, * * *. If the Federal Gove ernment can place the locul governments on its tax collector’s list, their capacity to serve the needs of their citizens is at once ham- pered or curtailed. The fleld of Federal excise taxation alone is practically without limits. Many State activitics are in marginal enterprises where private capital refuses to venture. Add to the cast of these projects a Federal tax and the social program muy be destroyed before it can be launched, In any case, the repercussions of such a fundamen- tal change on the credit of the States and on their programs to take care of the needy and to build for the future would be consider- able. * * * The power to tax lightly is the power to tax severely. The power to tax is indeed one of the most effective forms of regulation, And no more powerful itnstru- ment for centralization of government could be devised” (pp 593-554). “The Constitution was designed to keep the balance between the States and the Na- tion outside the field of legislative contro- versy” (p 694). He recalled: “The immunity of the States from Federal taxation ts no less clear because it is im- plied. The States on entering the Union surrendered some of their sovereignty. It was further curtailed as various amend- ments were adopted. But the tenth amend- ment provides that ‘The powers not dele- gated to the United States by the Constitu- tion, nor prohibited by it to the States, are reserved to the States respectively, or to the people’ The Constitution is a compact be- tween soveretgns. * * * If the power of the Federal Government to tax the States is conceded, the reserved power of the States guaranteed by the tenth amendment does not give them the independence which they have always been assumed to have. They are relegated to a more servile status. They be- come subject to interference and control both in the functions which they exercise and the methods which they employ. They must pay the Federal Government for the privilege of exercising the powers of sov- ereignty guaranteed them by the Constitu- tion * * *” (pp. 564-595). Worthy of particular note is his view that a tax which would curtail State activity in many fields would have an adverse effect on the Federal tax burden: “There is no showing whatsoever that an expanding field of state activity even faintly promises to cripple the Federal Government in its search for needed revenues. If the truth were known, I suspect it would show that the activities of the States in the fleids of housing, public power and the like have increased the level of income of the people and have raised the standards of marginal or submarginal groups. Such conditions affect favorably, not adversely, the tax po- tential of the Federal Government” (p. 59B). See also pages 54, 696-597. Thus, the current United States Supreme Court writing in the contemporary scene maintains the sovereignty of the States and the attendant principle of immunity from Fedeial taxation as an indispensable essen- tial of that sovereignty and, indeed, of their continued existence. Between Chief Justice Marshall's state- ment of this unalterable truth as arising from the fact that “the power to tax is the power to destroy,” and Mr. Justice Douglas’ statement cf the reason as that “the power to tax is indeed one of the most effective forms of regulation. And no more powerful iustiument for cen‘ralization of government could be devised" (226 U 8. F984), huve been a long succession of decisions affirming and reaffirming the ductrine of immunity. In considering the decisions of the United States Supreme Court, we are taking the most recent cases first, for the argument of those who urge a tax by the Federal or State Government upon the other is based on a mistaken or wishful theory that the Court in recent years has decimated the tmmunity doctrine to the point of extinction. It is not 60 New York uguinst United States, from which we have quoted at Icugth, supra, 18 the most recent case which discussed the principle extensively and showed that it is still very much alive. In an even more recent case, one decided approximately a year ago--Wilmetle Park Distruwt v. Campbell (338 U. 8. 411 (Decem- ber 19419) )—the Court iu an opinion by Mr. Justice Clark, aflirmed the principle that a tax does not offend the principle of immu- nity only “when the burden on the State 1s so speculative and uncertain that if allowed it would restrict the Federal taxing power without affording any corresponding tan- gible protection to the State government” (p. 419). At page 420 he alsu Indicated un- mistakably that a tax which would cause “the volume of its [the State’s] revenues” to suffer, would be unconstitutional. In 1944, in United States v. Allegheny Co. (322 U, 8. 174), Mr. Justice Jackson held distinctly that ‘‘the trend of recent deci- sions" was not tn the direction of “impairing the immunity of the State or Nation itself” (p. 186; see also p. 194). In Alabama v King & Boozer (314 U. 8.1), in an opinion in which, of the present Court, Justices Black, Reed, Frankfurter, and Doug- las concurred, Mr. Justice Stone made clear his acceptance of the doctrine that a tax would be invalid where ‘the economic bur- den” thereof would fall upon the Govorn- ment (p. 12) or where it was “an infringe- ment of the Government immunity” (p. 14). Going back to 1938 and 1939, to Helvering v. Gerhardt (304 U 8 405), and Graves v. N.Y. ex rel. O'Keefe (306 U. 8. 466), the cases which held that the salaries of State eme- ployees are taxable by the Federal Govern- ment and the salaries of Federal employees are taxnble by the States, the opinions in those cases leave unimpaired the immunity of the States from a Federal tax, where the burden upon the State function is “actual and substantial" (Helvering v. Gerhardt (304 U. 8 421)). The Court tn the Gerhardt case recognized that ‘the basis upon which constitutional tax immunity of a State has been supported is the protection which it affords to the continued existence of the State,” and that a tax is invalid which “pre- cludes or threatens unreasonably to obstruct any function essential to the continued existence of the State government” (304 U. 8. at pp. 421, 422; see alco p. 424). In the O'Keefe case, the Court was again explicit in expressing its continued accept- ance of the doctrine of immunity. At pages 4771-478 tt said: “The theory of the ta: tmmunity of either government, State or National, and its in- strumentalities, from taxation by the other, bas been rested upon an Implied Mmitation on the taxing power of each, such as to fore- atali undue interference, through the exer- cise of that power, with the governmental activities of the other.” Bee also page 480 where the Court recog- nized “the purpose” of the tmmunity as Al261 one “to avoid interference with the func- tions of the taxed government,” and page 481 where the Court pointed out that the argument for constitutional immunity would be “that the economic burden of the tex is in some way passed on Bo as to tmpose @ burden" “tantamount to an interference by one government with the other tn the performance of its functions.” At pages 4.3-484 the Court again said that the “pure pose of the finmunity” is “to prevent un- cue interference with the one government by imposing on it the tax burdens of the cther” Finally, at page 426, the Court ac- copied the principle of immunity where the eflect cf the tax is that a “tangible or cer- tain economic burden is imposed on the government concerned.” Justices Black and Reed of the present Court. concurred in the majority opinion in this cnse. In a concurring opinion Mr. Justice Frank- furter declared (p. 488) that— “Neither [the State nor Federal Governe ment] through its power to tax can be ale lowed to cripple the operations of the other. Therefore, State and Federal Governments must avoid exactions which discriminate against each other or obviously interfere with one another's operation ” Shortly before the decision in the Ger- hardt case, the Court in Helvering vy Moun- tain Producers Corp, (303 U 8. 878 (1938) ) tested the validity of a tax by whether it wb “a direct and substantial interference” with State government (308 U.S at pp. 864, 387). See also, Helvering v. Therrell (808 U S 218, 233). Thus, it is abundantly clear that in the last dozen or more years, through depres- sion years, defense years, war years, and the uneasy postwar years, om examination and reexamination of the theory underlying immunity (Graves v. New York exrel O’Kecfe (306 U 8 at p 483)) by a Supreme Court of changed personnel, there has remained the basic doctrine of immunity of the States from taxation by the Federal Government, where that taxation will interfere with the performance by the States of their func- tions There has remained the appreciation by the Supreme Court that such interfer. ence would endanger the very existence of the States as such. There has remained the cognizance by the Court that the Constitu- tion designed a role for State government as well as for the National Government There has remained the respect by the Court for the role of the States in our constitutional scheme of government No serious question exists in any mind as to the strength of the doctrine of immunity prior to 1936. Therefore to keep this mem- orandum within temperate bounds, we merely st without discussion or quotation some of the numerous cases, never overruled, that have sustained it: Titnityfaim Co. v. Grosjean (291 U.S 466). See especially page 471. Indian Motorcycle Co. v United States (283 U. 8. 570). See especially page 475. Willcuts v. Bunn (282 U.S. 216), See espe- cially pages 224~—226. Metcalf & Eddy v, Mitchell (269 U. 8. 614), Bee especially pages 621, 622, 623 Ambrosini v. Untted States (187 U. 8. 1), See especially page 7. McCulloch v. Maryland (4 Wheat 316). Bee especially pages 420-430, 431. Brush v. Commissioner (300 U 8. 362), Bee especially page 354. South Carolina v. Uniled States (199 U. 8, 437). Sce especially pare 452 Pollock v. Farmers’ Loan and Trust Co, (157 U. 8. 429). Sze especially pages 583— 584, 603. United States v Railroad Co. (17 Wall. 322). Bee especially page 327. See also the decisions cited in point III, infra.
A162 I. A Federal tax on State and municipal bond interest is, under erpress decisions of the United States Supreme Court, an une constitutional direct burden on the States The United States Supreme Court has con- sistently held, from its earliest decisions on the subject to the present day, that to tax the interest on Government bonds—Federal, State, and municlpal—-would be to disas- trously affect the borrowing power of these governments, and thus under the Constitu- tion to be mutually prohibited. The power to borrow money is 60 indis- pensable to government that it is expressly provided for the Federal Government in the Constitution of the United States (art. I, sec, 81 and like provision 1s made in State constitutions, It is that power which a tax upon State and municipal bond interest would endanger In December 1944, in Smith v. Davis (323 U.S 111), the late Mr. Justice Murphy in a unanimous opinion of the Court, noted that interest-bearing securities of the Govern- ment are tax exempt and this for the reason that they would “diminish” “the market value or the tnvestment attractiveness" of the obligations issued to “secure necessary credit” (p. 117). Justice Murphy cited cases reaching back to eally decisions of the Court sustaining such tax immunity (p. 115). See also Mr. Justice Douglas’ opinion in New York v. United States (326 U. S at pp. 591, 693). Smith v Davis was in turn cited only a year ngo in N J, Ins, Co vi Div. of Tag Appeals (338 U S 665 at p. 675), Decisions by the United States Supreme Court holding Government bond interest tax exempt because of the deleterious effect on Governments’ borrowing power are legion, An opinion ot not long avo (December 1937) which enjoys high prestige with the Court today, James v, Diavo Contracting Co, (302 U, S. 1384) held (p. 153, Chief Justice Hughes): “That doctrine recognizes the direct effect of a tax which ‘would operate on the power to burrow betore it is exercised’ (Pollock v. Farmeis’ Loan d& Trust Co, supra), and which would directly affect the Qovern- ment’s obligation us na continulng security. Vital consideration are there involved re- Bpecting the permanent relations of the Government to tnvestors in its securities and its ubllity to maintain its credit, * * *," A few months later (March 1938) 1n Helre ening v. Mountain Producers Corporation, the Court pointed out (8u3 U.S), at page 386 “The interest pavable on Stute and mu- nicipal honds has been held to be invalid as a tax bearing directly upon the exercise of the borrowing power of the Government (Weston v. Charleston (2 Pet. 449, 468, 469): Pollock vy. Farmers’ Loan & Trust Co. (157 U 8. 429, 686) ).” In prior cases, whose authority, as we have seen, 1s undiminished, the United States Supreme Court has repentedly voiced this view We quote from just a lew of the very many casos that are in accord’ Indian Motor- cycle Co, v United States (283 U. 8. 570), at pages 576-577° “It has been adjusted that bonds of the United States tasued to raise money for governmental purposes, and the interest thereon, are immune from State taxation, because such a tax, even though inconsider- able in amount and Imposed only on holders of the bonds, would burden the exercise by the "Inited Stutes of its power to borlow money Weston v. Charleston (2 Pot. 449, 468); The Banks v. The Mayor (7 Wall. 16); Home Savings Bank v. Des Motnes (205 U. 8. 608, 513); Northwestern Ins. Co, v. Wiscon- sin (275 U. 8 136, 140). * * * It also has been adjudged that bonds of munictpal corporations in the several States issued to raise money for public municipal purposer, and the interest thereon, are immune from Fedelal taxation, and this on the ground that * * ® under the implications of the Constitution the governmental agen- cies and operations of the States have the same immunity from Federul taxation that like agencies and operations of the United States have from taxation by the States. Pollock v Farmers Loan & Trust Co (157 U. S. 429, 584-586, 601, 652, 653; 5. c. 158 U 8, 601, 618, 693).” Willeuts v Bunn (282 U. S 216), at pages 22h, 226-227° “A tax upon the obligations of a State or of its political subdivisions falls within the constitutional prohibition as a tax upon the exercise of the borrowing power of the State. Pollock v. Farmers’ Loan & Trust Company (157 U. S 429, 584-586; id., 158 U S 601, 618); National Life Insurance Company Vv. United States (277 U. S 508, 521). * * * ~ o “In the case of the obligations of a State or of its political subdivisions, the subject held to be exempt from Federal taxation is the principal and interest of the obligations, Pollock v Farmers’ Loan & Trust Company, supra These obligations constitute the con- tract mode by the State, or by its political agency pursuant to its authority, and a tax upon the amounts payable by the terms of the contract has therefore been reyarded as benring directly upon the exercise of the borrowing power of the Government In Weston v. Charleston (2 Pet. 449, 468, 469), where the tax, laid under «an ordinance of the elty council upon United States stock which has been issued lor loans made to the United States, was held invalid, the principle was thus stated by Chief Justice Marshall ‘fho right to tax the contract to any extent, when made, must operate upon the power to bor- row, before it ts exercised, and have a sen- sible influence on the contiact. The extent of this influence depends on the will of a dis- tinct government To any cxtent, however Inconsiderable, it is a burden on the opera- tions of government. * * * ‘The tax on Government stock 1s thought by this Court to pe a tax on the contract, a tax on the power to boriow money on the credit of the United States, and consequently, to be re- pugnant to the Constitution,’ This Janguage was apphed by the Court in Pollock v. Farim- ers' Loan & Trust Company, supra (157 U 6 at p 586) in holding tnvalid Federal taxae thon ‘on the interest’ from municipal se- curities " Miso v Gehner et al. (281 U 8 313), at pages 320-021 “It 18 elementary that the bonds or other securities of the United States muy not bo taxed by State authority * * * The power of Congress to borrow money on the credit of the United States would be bur- dened and might be destroyed by State taxa. tion of the means employed for that purpose. As the tax-exempt feature tends to increase and Is reflected In the market prices of such securities, a State tax burden thereon would aclvorsely aftect the terms upon which money may be borrowed to execute the purposes of the general government” The Macallen Company vo Massachusetts (279 U S 629), at pages 624, 62u- “Of course, in respect of United States se- curities, the statutory exemption is super- fluous. A State tax, however small, upon such securities or interest derived thereirom, interferes or tencis to interfere with the con- stitutional power of the general government to borrow money on the credit of the United States, and constitutes a burden upon the operations of government, and carried far enough would prove destructive. The prin- ciple set forth a century ago in Weston v. Charleston (2 Pet. 449, 468), has never since been departed from by this Court: “The right to tax the contract to any ex- tent, when made, must operate upon the APPENDIX TO THE CONGRESSIONAL RECORD power to borrew before It is exercised, and have a sensible influence on the cuntract, The extent of this influence depends on the will of a distinct government, to any ex- tent, however inconsiderable, it is a burden on the operations of government. It may be carried to an extent which shall arrest them entirely’ (Home Savings Bank v. Des Moines (205 U. S. 503, 513).) * * * * e “tn the consideration of such legislation, the controlling principle, constantly to be borne in mind, is that the State cannot tax the instrumentalities or bonds of the United Stutes, or, what is the same thing, the in- come derived therefrom, directly or indi- rectly—that is to say, it cannot tax them in any form.” National Life Insurance Company v. United States (277 U 8 508) at page 521: “Il is settled doctrine that directly to tax the income from sccuritles amounts to tax- ation of the securities themselves, North- western Mutual Life Ins Co. v. Wisconsin (275 "J. 8 1386). Also that the United States may not tax State or municipal obligations. Metcalf & Eddy v Mitchell (269 U. S. 514, 621) ” Farmers Bank v, Minnesata (232 U. S. 516) at pages 526-627. “But we deem it entirely clear that a tax upon the exercise of the function of issuing municipal bonds is a tax upon the operations of the Government, * * “. And to tax the bonds as property in the hands of the holders is, in the last analysis, tu Impose a tax upon the right of the municipality to Issue them (Quoting from Weston v City Council of Charleston (2 Pet 449, 466, 463), McCulloch v. Maryland (4 Wheat 316) ) bd * “ ” * “It is on this ground that United States bonds have always heen held exempt trom taxation under authority of the States By like reasoning it has come to be recognized that bouds issued by the States are not tax- able by the Federal Government, and it was upon this ground that this court held in Pollock vo Farmers Loan & Trust Co (157 U.S 429, 684), that the income tax provisions of the act of August 15, 1894, were unconsti- tutional in that they {mposed a tax upon the income derived from municipal konds issued under the authonty of the States.” Hibernta Savings d Loan Society v. San Fiancisco (200 U.S 310) at page $13: “The efficiency of the Govetument service cannot be impaired by a taxation of the agencies which it employs for such service, and, as one of the most valuable and best known of these agencies Is the borrowing of Money, @ tax which diminishes the slightest degree the value of the obligations issued by the Government for that purpose impairs pro tanto their market value.” It is unnecessary to quote trom the plio- neer cases holding that Government bond interest may not be taxed because of its burden and inevitable ettect upon the puwer to borrow the necessary 1unds tor the opera- tion of Government, even to the point where Mt could arrest them entirely (Pollock vy. Farmers’ Loan & Trust Co, (1657 U S 429, 586). See also pp. 585, 601, 652, 653, 8. c., 158 U.S 601, 618, 693). Their trequent cita- tion in the later cases has made them and the well-known subsequent cases familar, e g., Weston v. City of Charleston (2 Pet. 449); Bank of Commerce v. New York City (2 Black 620); The Banks v. Mayor (7 Wall. 16); United States v Ratlroad (17 Wall 322), Pollock cases, supra; Home Insuwance Co v. New York (134 U S 698); Home Savings Bank v Des Moines (205 U_ S. 503), Smith v Kansas City Title Co (255 U. S. 180, 213); Metcalf & Eddy v. Mitchell (269 U. S 514, 622); Northwestern Ins Co vo Wisconsin (275 U S. 185, 140); Hale v. Stute Boad, (802 U S. 95, 107).