2498 A well-known member of the Green County Bar Association, he practiced law in Spring- field for 50 years, coming here from Bolivar in 1865. He was admitted to the Missouri bar in 1882. With the exception of one term, he repre- sented the old Seventh Congressional Dis- trict of Missouri from 1002 to 1919, serving through both terms of President Woodrow Wilson. His campaign manager from the time he was first nominated until his last election as Congressman was M D. Lightfoot, of Springfield, who was associated with him in @ political way for 20 years. They were warm friends for 45 years. “Courtney Hamlin was an honorable and high-minded gentleman and was always con- scientious in the duties of his office,” Light- foot said last night on learning of the death of his friend. It was recalled by a nephew, Ernest Ham- lin, of 1896 North Douglas, that Congress- man Hamlin was in favor of woman’s suf- frage, while his brother, Ernest Hamlin’s father, was opposed. “That was the only racket they ever had,” the nephew said. C. W. Hamlin was born in Brevard, N C., and traveled with his parents by wagon train to Leasburg, Mo., later resided in Boli- var, and eventually made Springfield his home. His wife, Mrs. Annie L. Hamlin, died in 1933. Mr. Hamlin was a member of the Spring- fleld School Board at the time that Jonathan Fairbanks was superintendent of schools, He was a member of First Baptist Church where he taught the men’s bible class. Hamlin Memorial Baptist Church is named for his father, James R. Hamlin. Funeral services will be held in Santa Monica Monday and the body will be shipped here to the Alma Lohmeyer-Jewell E, Windle funeral home. Graveside rites will not be held until his son, Judge Hamlin, who has undergone an eye operation in a Corpus Christi hospital, has recovered sufficiently to make the journey. Another nephew, Omer Long, and two nieces, Mrs. Granville Waller and Miss Bess Long, reside at North Douglas addresses. CALENDAR WEDNESDAY Mr. McCORMACK. Mr. Speaker, I ask unanimous consent that the business in order on Calendar Wednesday of this week be dispensed with. The SPEAKER. Is there objection to the request of the gentleman from Mas- sachusetts? Mr. MILLER of Nebraska. Mr. Speak- er, reserving the right to object, I thought the procedure was going to be that we were going to follow right on through with the rest of the committees. Mr. McCORMACK. Iam asking unan- imous consent that Calendar Wednesday be dispensed with. Mr. RANKIN. Mr. Speaker, I will be compelled to object to that request. ALASKA Mr. DAVIS of Georgia. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Georgia? There was no objection. Mr. DAVIS of Georgia. Mr. Speaker, I have received a letter from Mrs. Z. V. Peterson, chairman of the legislation de- partment of the Georgia Federation of Women’s Clubs, expressing the interest of that federation in the bill to admit CONGRESSIONAL RECORD—HOUSE Alaska as the forty-ninth State of the Union. This question has been carefully and earnestly considered by the women of this organization. In order that the Members of the House may have the benefit of this organiza- tion’s opinion, under leave previously granted I am inserting the letter here- with: GEorRGIA FEDERATION OF WOMEN’S CLUBS, Atlanta, Ga., February 24, 1950. Congressman JAMEs C. Davis, Washington, D.C. Dear Jupce: The Georgia Federation of Women’s Clubs is very much interested in having Alaska admitted as the forty-ninth State of the Union, and in furtherance of that passed the following resolution: “We urge upon Congress the speedy enact- merrt of legislation that will admit Alaska as the forty-ninth State of the Union.” We think 83 years as a possession and 37 years as an incorporated territory, presum- ably serving an apprenticeship for statehood, is long enough, and that Alaska now seems ready for statehood, with no public debt, a good system of schools, programs already de- veloped for health, welfare, and social serv- ices, and with resources adequate to support a State government. Most important of all is its strategic position in the matter of defense. The Georgia Federation of Women's Clubs will appreciate your support of this measure. Sincerely, GarTHA B. PETERSON (Mrs. Z. V. Peterson), Chairman, Legislation Department, Georgia Federation of Women’s Clubs. RECORD SET FOR DEPOSITORS' SAFETY UNDER FDIC Mr. PRICE. Mr. Speaker, I ask unan- imous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from IIli- nois? There was no objection. Mr. PRICE. Mr. Speaker, I wish to call the attention of the House to a statement recently carried in many news- papers. Mr. Maple T. Harl, chairman of the board of directors of the Federal Deposit Insurance Corporation, has just announced that there has not been a loss to a depositor in an insured bank in 6 years. This is a very commendable record of achievement. It represents, as Mr. Har! has stated, an all-time record in the Nation’s history for depositors’ safety, and bank solvency and stability. I believe we cannot laud too greatly this magnificent record of Federal deposit in- surance. From its inception in 1933 right on down to the present day, the Federal Deposit Insurance Corporation has been a model of efficiency and ef- fectiveness. From a beginning shrouded in controversy and doubt, it has devel- oped to an unquestioned position of integrity and success. In these times of heavy costs of gov- ernment, it is refreshing to note that the FDIC, one of the most effective and efficient of the Federal agencies, does not consume any of the taxpayers’ money. It is supported entirely by as- sessments paid by the insured banks. The Government capital invested in the FEBRUARY 28 Corporation at its beginning has been repaid. There is now pending before the Sen- ate a bill to rewrite the entire Federal deposit insurance law. From my brief reading of the bill, I gather the impres- sion that it is, for the most part, a bank- er’s bill, since one of its chief features is a drastic reduction in the assessments which insured banks pay to the Cor- poration for deposit insurance. I hope that the interests of depositors will not be forgotten when any such bill comes before the House. Federal deposit in- surance was designed to safeguard de- positors’ funds. One hundred and four million depositors now look to the Cor- poration for protection. Their interests should be foremost and of the greatest concern in any legislation concerning the FDIC. It is now the only spokesman for depositors. Its successful and effi- cient operations should give its opinions great weight in any broad scale revi- sion of the laws under which it must operate, and its warning of danger sig- nals should be heeded. The very mini- mum that the Congress can do to guar- antee the continued success of Federal deposit insurance is to provide every possible means to the Corporation to enable it to carry on its brilliant record of achievement. EXTENSION OF REMARKS Mr. TACKETT asked and was given permission to extend his remarks in the Recorp in three instances and include in each an editorial. Mr. LARCADE asked and was given permission to extend his remarks in the Recorp and include an editorial from the New York Times of Sunday, en- titled “Fifty States.” Mr. EVINS asked and was given per- mission to extend his remarks in the Recorp and include two editorials. Mr. LANE asked and was given per- mission to extend his remarks in the Recorp in three instances and include extraneous matter. Mrs. DOUGLAS (at the request of Mr. HOLIFIELD) was given permission to ex- tend her remarks in the Recorp and in- clude extraneous material. VETERANS’ HOSPITALS Mr. RANKIN. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Mississippi? There was no objection. Mr. RANKIN. Mr. Speaker, I objected to dispensing with the business in order on Calendar Wednesday, and expect to continue to object to it until we get a vote on our bill to restore those 16,000 beds in the veterans’ hospitals that were removed by Executive order. The money was appropriated last year for this purpose. It affects every State in the Union. In order that we may make every effort possible to get this bill to the floor of the House, I have also filed a petition, No. 24, with the Clerk, to petition it out
1950 of the Rules Committee, that seems to have sat down on my motion for a rule. So if you are interested just step up to the Clerk's desk and sign petition No. 24. If we cannot get it out in that way, we will just keep objecting to dis- pensing with Calendar Wednesday until our Veterans’ Committee is reached. PERMISSION TO ADDRESS THE HOUSE Mr. WILLIAMS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks and include extraneous matter. . The SPEAKER. Is there objection to the request of the gentleman from Mississippi? There was no objection. [Mr. WiLtIaMs addressed the House. His remarks appear in the Appendix.] Mr. ALLEN of Illinois. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and revise and ex- tend my remarks. The SPEAKER. Is there objection to the request of the gentleman from IIli- nois? There was no objection. (Mr. ALLEN of Illinois addressed the House. His remarks appear in the Appendix.] FEDERAL BUILDING IN GLASGOW, MO. Mr. WILSON of Indiana. Mr. Speak- er, I ask unanimous consent to address the House for 1 minute and revise and extend my remarks, The SPEAKER. Is there objection to the request of the gentleman from In- diana? There was no objection. Mr. WILSON of Indiana. Mr. Speak- er, I want to read to the House an item carried by the Associated Press. It says: WASHINGTON. — Maj. Gen. Harry H. Vaughan, military aide to President Truman, is reported interested in getting a Federal building sometime in the future for his home town of Glasgow, Mo. Representative Mou.per, Democrat, Mis- souri, in whose congressional district the town is located, told a reporter General Vaughan has asked him if he would have any objection in event a site were contributed by Glasgow in the hope that a Federal build- ing later could be obtained there. MOULDER said he replied that he had no objection. Now, Mr. Speaker, I want to ask a few questions. Will this Federal building in Glasgow be known as the Harry H. Vaughan Memorial Library? Will it have one room to house the Vaughan dcep-freeze collection? Will it have a room for the perfume collection and will it have another room where the Vaughan collection of medals, including his decoration from General Peron, or Argentina, will be displayed? I also want to inquire if it 1s planned to have John Steelman named as li- brarian of this shrine to Vaughan at the end of his White House tenure? I think the answers to these ques- tions will interest all Members of the House. EXTENSION OF REMARKS Mr. RICH asked and was given per- mission to extend his remarks in the Recorp and include an article, CONGRESSIONAL RECORD—HOUSE THE COAL SITUATION Mr. RICH. Mr. Speaker, I ask unanf- mous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Penn- sylvania? There was no objection. Mr. RICH. Mr. Speaker, it is a wise thing to keep your head on your shoul- ders and your feet on the ground. The President of the United States has him- self in a hole on coal. As was said here, for 2 months he has been dilly-dally- ing around with this question until the people of this country are running out of coal. He now sees them cold. I am submitting a short editorial on why we have a coal crisis as part of my remarks. You are going to be asked by this New Deal administration to take over and nationalize the coal industry. Then John L. Lewis will be out of the hole, but the country will be in the hole, when they bail out these broken-down coal mines because the coal miners have re- fused to mine coal. It is a terrible sit- uation. It is a situation which is going to be very difficult to handle. The Mem- bers of Congress want to keep their head on their shoulders and their feet on the ground and know what they are doing if they do not want to socialize this great country of ours. The editorial is as follows: Wuy WE Have a Coat Crisis Now the real truth about the coal strike begins to come out. While churches, schools, and industries turn cold and the public suf- fers, John L. Lewis and Mr. Truman are working together for a common purpose. The first half of this purpose is to destroy public confidence in the Taft-Hartley law. The second half is to bring about Govern- ment seizure of the coal mines. The total is to build more power for the Government at any price to the people, in- cluding John L., himself, who stands to be- come sucker No. 1 in the whole dirty in- trigue, as it runs its course. The plan of mine seizure clearly shows why. Instead of applying the Taft-Hartley for- mula for orderly handling of the coal crisis when it first took shape, Mr. Truman has laid back until now in the moment of na- tional desperation Congress is ready to grab at any instrument of seeming solution. STRAIGHT TO SOCIALISM And so, lo and behold, up pops Repre- sentative BarLey, Democrat, of West Virginia, as known creature of John L. Lewis’ will, with a mine-seizure bill. Representative LesinsxI, Democrat, of Michigan, chairman of the House Labor Committee and an equally known creature of Truman's will, announces it must be given immediate attention. 8o now we know. The Government seizes the mines. Then the Government imposes conditions of operation that satisfy John L. Lewis and the mine owners have to accept these in order to get their property back. That has worked before, and Lewis is al- ways glad to have it work again. But it doesn't stop there. Nobody can miss the point of administra- tion talk about all mine earnings during seizure going to the Treasury, after reason- able compensation to the owners. The object of the whole administration performance can now be plainly seen. Mr. Truman wants to socialize the mines as they have been socialized in Britain for that 2499 moans all the more power to him. Once the Government has a solid grip on the coal in- dustry John L. Lewis can be kicked down atairs, The miners will all be dependent on the Government for their livings, and no doubt Kansas City Bill Boyle will teach them the price of that Jackson-Jefferson Day dinner, at 8100 per plate. WAR SCARES Mr. JENKINS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Ohio? There was no objection. Mr. JENKINS. Mr. Speaker, there is a feeling over the country that we are on the verge of another war. This feel- ing is becoming tense with many people. The people are being encouraged into this tense attitude by what they read. One of the lending weekly publications in its last week’s issue had as its lead off article a story about this matter of na- tional security. Here is what it said in its first paragraph: Drastic wartime controls over private busi- ness and civilians for use in world war III now are in the final drafting stage. The master plan already is agreed upon by the top United States officials. The job of draw- ing up detatled legislation is under way. Restrictions decided upon for the next war make those of the last war seem mild by comparison Planning is being based upon the assumption that war will come in a year like 1950 when there 1s full employment of a labor force in producing goods and serv- ices for civillan enjoyment. The blueprint has been prepared by the National Security Resources Board. In its plan, just released from a confidential class- ification, NSRB recognizes a need for drastic crackdown on civilians to release men and materials for war, if that should come. Pri- vate building will be stopped cold. It is well to plan for any contingency but sometimes wars are the result of frenzy attendant upon too much plan- ning. Cannot we plan more sccretively? It seems the world knows what we do even before we do it. EXTENSION OF REMARKS Mrs. ROGERS of Massachusetts asked and was given permission to extend her remarks In the Recorp and include a memorandum from the DAV regarding what the Secretary of the Treasury has requested in connection with taxation and heavy assessments against the DAV. SIXTEEN THOUSAND HOSPITAL BEDS LEGISLATION Mrs. ROGERS of Massachusetts. Mr. Speaker, I ask unanimous consent to ad- Gress the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentlewoman from Massachusetts? There was no objection. Mrs. ROGERS of Massachusetts. Mr. Speaker, I agree heartily with the gen- tleman from Mississippi (Mr. Ranx1n] in objecting to dispensing with Calendar Wednesday until the 16,000-hospital- bed bill has been acted upon. The Con- gress has already authorized the build- ing of those 16,000 hospital beds. Sixty
2500 million dollars already has been spent on plans and so forth, but a presidential cut-back was ordered. The Committee on Appropriations has made the appro- priation for the building of the beds. It will cost the taxpayers no more money. The money is already there to build those beds, but they are not being con- structed. So another direction by the Congress should be made. Mr. Speaker, it is much more difficult to secure the passage of legislation for the sick and disabled than it is for the able-bodied. There was a veto by the President of the bill to provide cars for the amputees and severely wounded and blind. That bill was vetoed. To my mind, it was the most cruel veto that has ever been made in all my service here since 1925. The President was misled by those who did not care for the piti- fully disabled. It was a slap in the face of the blind and others—we should do more for the disabled. The SPEAKER. The time of the gen- tlewoman from Massachusetts has ex- pired. THE COAL SITUATION Mr. KEEFE. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER Is there objection to the request of the gentleman from Wisconsin? There was no objection. Mr. KEEFE. Mr. Speaker, the situa- tion with respect to coal is indeed becom- ing critical. If you were out in my area where the temperature is today perhaps 12 below zero, you would realize that with a coal shortage imminent throughout the country and the actual closing down of schools and factories we are facing a very critical situation. I have heard in the well of this House day after day and day after day repeated statements calling attention to these crit- ical facts, and they are facts; but I have heard no one make a suggestion yet as to what the Congress could do, or any- one could do, to compel men to work and produce coal who do not elect to work and produce coal. Under our system of government we cannot compel the min- ers to go down into the bowels of the earth at the point of a bayonet. I would like to have the brains of this Nation directed to the question of how we can so arrange our economic affairs as to induce those who have devoted their lives to the mining situation tell us what the Con- ercss can do, what the President can do, or what anyone can do to alleviate the present distressing situation. We have heard many caustic complaints about John L. Lewis and his miners—little has been said as to the attitudes of the oper- ators. If coal is what we nced, then it seems to me we should immediately ex- amine the attitude of the operators. It takes two parties to make an agreement, but one party can block any agreement that will produce coal. Can it be, as has been recently suggested, that the opera- tors want seizure of the mines, which might ultimately force the Government to notionalize the coal mines and thus pay oli the owners? I do not have the answer, and the quest.on is asked to pro- CONGRESSIONAL RECORD—HOUSE vide some further consideration of the question. Let us leave no avenue of discovery un- considered. What we want fs coal. The SPEAKER. The time of the gen- tleman from Wisconsin has expired Mr. CURTIS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Ne- braska? There was no objection. Mr. CURTIS. Mr. Speaker, the ad- ministration’s handling of the coal stnke is not in the best public interest. Efforts to show the Taft-Hartley law inadequate, coupled with the desire to ultimately nationalize the coal industry secm to be the goal of the administration. The Justice Department should bring into court the district leaders of the United Mine Workers today and if they failed to put the men to work, the court could then administer such punishment as 1s necessary. If this step were taken, coal production would be resumed in a matter of hours. The President’s unlawful handling of the steel strike some months ago has raised the price of steel to the farmers, small manufacturers and the consumers in general. A seizure of the coal mines is not the appropriate remedy. It will re- sult in a surrender to those who are mak- ing excessive demands. The Truman administration, if they have any concern for the consuming pub- lic and any desire to retain our system of private enterprise, should make a sin- cere and thorough effort to enforce the Taft-Hartley law. This has not been done to date. EXTENSION OF REMARKS Mr. SMITH of Wisconsin asked and was given permission to extend his re- marks in the Appendix of the REcorp in two separate instances and in each to include extraneous matter. Mr. SCUDDER asked and was given permission to extend his remarks in the Appendix of the REcorp. Mr. HOPE asked and was given per- mission to extend his remarks in the Appendix of the Recorp in two separate instances and in each to include extra- neous matter. Mr. HOEVEN asked and was given permission to extend his remarks in the Appendix of the Recorp and include a letter. Mr. LOVRE asked and was given permission to extend his remarks in the Appendix of the Recorp in three separate instances and in each to include extra- neous matter. PRICE SUPPORT FOR HOGS Mr. HOEVEN. Mr. Speakcr, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks and include a letter from the Secretary of Agriculture. The SPEAKER. Is there objection to the request of the gentleman from Iowa? There was no objection. Mr. HOEVEN. Mr. Speaker, 18 Con- gressmen from the principal hog-raising FEBRUARY 28 States have joined in a letter to Secre- tary of Agriculture, Charles F. Brannan, protesting the delay in the announcc- ment of the details of price-support pro- gram for hogs. They demanded that the Secretary of Agriculture, who has the authority to set the support price level at any point between zero and 90 percent of parity, make an immediate announce- ment of the support level after March 31, 1950, During the past year the Dopartment of Agriculture has had a price-support program for hogs under which farmcrs were assured 90 percent of parity. That program ends on March 31, 1950. The letter follows: FEBRUARY 24, 1950. Hon CHARLES F BRANNAN, Secretary of Agriculture, Department of Agriculture, Washington, D. C. DEAR MR. SECRETARY: We, the undersigned, Members of Congress representing the prin- cipal hog-raising States of the United States and acting in behalf of the hog rais- ers in our districts, urge that you immedi- ately announce the support level for hogs after March 31 It being our understanding that in Des Moines, Iowa, on February 18, 1950, you stated that the price-support pro- gram on hogs will continue. Inasmuch as you have the authority to set the support level at any point between zero and 90 per- cent of parity and failed to name a level, considerable confusion has resulted. We teel that our farmers are entitled to know the details of the proposed program that is already late compared with previous announcements. We also feel that as a mat- ter of simple justice, in preserving the farm- ers income and the well-being of the coun- try’s economy, that the support level after March 31, 1950, should be announced at once Sincerely yours, CHARLES B_ HOEVEN, Iowa; Aucust H ANDRESEN, Minnesota; Henry O TALLE, Towa; JAMES I. DOLLIVER, Iowa, HAROLD O. LovrE, South Dakota, Pau, CuNn- NINGHAM, Towa; Cart T. Curtis, Ne- braska; Harotp C. Haarn, Minnesota, Jos—EPH P. O’HaRA, Minnesota; Kart Srreran, Nebraska; A L. MILLER, Ne- braska, K M. LEComprTe, Iowa, FrRANcIs CasrF, South Dakota; Ben F. JENSEN, Iowa, H R Gross, Iowa, CLIFF CULEV- ENGER, Ohio; ReIp F. Murray, Wiscon- sin; CHARLES W VURSELL, Illinois NASHUA GUMMED & COATED PAPER CO, NEW HAMPSHIRE Mr. COTTON. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from New Hampshire? There was no objection. Mr. COTTON. Mr. Spenrker, a rccord of peaceful labor relations in a plant where management deals separately with seven unions is analyzed in the latest case study on the causes of industrial peace by the National Planning Associa- tion, a nonprofit, nonpolitical organiza- tion which has made many studies, some of them at the request of departments of the Government. The company sclected from the entire country in this recent study as an out- standing example of successful labor re- lations is the Nashua Gummed & Coated Paper Co., of New Hampshire, located in my district. The long record of peace-
1950 ful, friendly relations in this company is a happy contrast to the unfriendly labor situations that receive so much publicity. It is with pride that I call it to the atten- tion of the House. Incidentally, it indi- cates that New Hampshire would be a good place for industries seeking a location, EXTENSION OF REMARKS Mr. GROSS asked and was given per- mission to extend his remarks in the ReEcorD and include an article on grain speculation, Mrs. ST. GEORGE asked and was given permission to extend her remarks in the Recorp and include an editorial from a paper in her district. Mr. VAN ZANDT asked and was given permission to extend his remarks in the RECORD. Mr. COUDERT (at the request of Mr. KEaTING) was given permission to extend his remarks in the Recorp and include extraneous material. Mr. ANDERSON of California asked and was given permission to extend his remarks in the Recorp and include a petition. Mr. MANSFIELD asked and was given permission to extend his remarks in the Recorp and include certain material. Mr. JONES of Missouri asked and was given permission to extend his remarks in the Recorp and include an address he made at an REA meeting last week. Mr. POLK. Mr. Speaker, Hon. Adam Frick, of Timlin Road, Portsmouth, Ohio, a successful farmer and former member of the Ohio Legislature, recently wrote a very thought-provoking letter to the President on the farm situation as it affects the state of the Nation. I ask unanimous consent to extend my remarks in the Appendix of the REecorp by inserting Mr. Frick’s letter to Presi- dent Truman. The SPEAKER. Is there objection to the request of the gentleman from Ohio? There was no objection. Mr. GARMATZ asked and was given permission to extend his remarks in the Recorp and include a speech he made on Lithuanian independence. THE COAL SITUATION Mr. FORD. Mr. Speaker, I ask unani- mous consent to address the House for 1 minute and to revise and extend my re- marks. The SPEAKER. Is there objection to the request of the gentleman from Mich- igan? There was no objection. Mr. FORD. Mr. Speaker, anything I may say today in regard to the coal situation would be mere reiteration of what I have been saying for the past 4 months, but I do wish to remind the Members of the House that it is 14 de- grees below zero in Michigan and the people are getting colder by the hour be- cause of the President’s procrastination in invoking the national-emergency pro- visions of the Taft-Hartley Act. There is a law on the books that has been most helpful in alleviating our situation, namely the FHA legislation which provides for repair and mainte- nance loans on homes so that people may convert from coal to gas. In the CONGRESSIONAL RECORD—HOUSE city of Grand Rapids some 10,000 peo- ple in the last 9 months have converted from coal to gas. In other words, over 26 percent of the homes in Grand Rapids within a year have fortunately made this conversion. A substantial portion of these conversions were han- dled under title I of the existing FHA legislation. This legislation, including title I, ex- pires today and if we do not have a re- newal of the authorization we are going to hinder and hamper conversions by the thousands which are vitally neces- sary for public health and welfare in a State that is terribly affected by the present situation. I was recently informed by the officials of a single bank in Grand Rapids that applications for conversions, under title I, were being received at the rate of 30a day. These people cannot get coal be- cause of President Truman’s failure to act promptly under the Taft-Hartley Act. The Democratic leadership now road- blocks the consideration of FHA legisla- tion even though such a lack of action may materially add to almost universal human suffering. I condemn the Demo- crats for lack of foresight in both instances. Mr. COLE of Kansas. will the gentleman yield? Mr. FORD. I yield to the gentleman from Kansas, Mr. COLE of Kansas. Does the gen- tleman know that the reason that law expires today is due to the fact the Demo- cratic administration and leadership has failed to present it to the Congress be- cause they want it as a magnet in draw- ing votcs to the controversial housing bill? The Democratic leadership has de- liberately permitted title I to lapse, and they inserted it in the cooperative hous- ing bill solely to attract support for this measure. This is not the first time the Democratic leadership has used title I as @ political football. The result called to our attention by the gentleman from Michigan [Mr. Forp] is by reason of this fast and loose Democratic playing of politics. The SPEAKER. The time of the gen- tleman from Michigan has expired. 4 FEDERAL BUILDING IN THE SECOND CONGRESSIONAL DISTRICT OF MIS- SOURI Mr. MOULDER. Mr. Speaker, I ask unanimous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from Mis- sourt? There was no objection. Mr. MOULDER. Mr. Speaker, I hesi- tate to dignify the statement made a few moments ago by the gentleman from In- diana (Mr. WiLtson], who made Sarcastic and preposterous statements with refer- ence to the proposal to construct a Fed- eral post-office building within the Sec- ond Congressional District of Missouri. I realize his statement is pure political chicanery and is based upon political hatred. The gentleman from Indiana well knows that during the last session of this Congress, a bill was passed providing for the acquisition of at least one site for Mr. Speaker, 2501 future construction of a post-office build- ing in each congressional] district. I as- sume that the gentleman from Indiana has been consulted as to the site which he has or will recommend for his dis- trict, and I assure him that I am in- formed and well able to manage the af- fairs of my district without any assist- ance or suggestion by the gentleman from Indiana. The SPEAKER. The time of the gen- tleman from Missouri has expired. PERMISSION TO ADDRESS THE HOUSE Mr. PHILBIN. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Mas- sachusetts? There was no objection, [Mr. PHILBIN addressed the House. His remarks appear in the Appendix.] EXTENSION OF REMARKS Mr. MULTER asked and was given permission to extend his remarks in the ReEcorpD in two instances and include ex- traneous matter. Mr. MERROW asked and was given permission to extend his remarks in the Recorp in two instances and include in each an editorial. COMMUNICATION FROM THE CLERK OF THE HOUSE The SPEAKER laid before the House the following communication from the Clerk of the House, which was read: FEBRUARY 25, 1950. The honorable the SPEAKER, House of Representatives, Sr: A certificate of election in due form of law showing the election of Witiam H. BarTzs a8 a Representative-elect to the Eighty- first Congress from the Sixth Congressional District of the Commonwealth of Massa- chusetts, to fill the vacancy caused by the death of Hon. George J. Bates, is on file in this office. Very truly yours, Ra.PH R. ROBERTS, Clerk of the House of Representatives. SWEARING IN OF MEMBER Mr. BATES appeared at the bar of the House and took the oath of office. PRICING PRACTICES Mr. CELLER. Mr. Speaker, I call up 8S. 1008, to define the application of the Federal Trade Commission Act and the Clayton Act to certain pricing practices, with amendments. The Clerk read the title of the bill. Mr. CELLER. Mr. Speaker, I move that the House insist upon its amend- ments to 8S. 1008, to define the applica- tion of the Federal Trade Commission Act and the Clayton Act to pricing prac- tices, and agree to the further conference requested by the Senate. Mr. PATMAN. Mr. Speaker, will the gentleman yield? Mr, CELLER. I yield to the gentle- man from Texas. Mr. PATMAN. Mr. Speaker, I make the unanimous consent request, in view of the importance of this subject and the demand for time, that the time be extended 30 minutes.
2502 The SPEAKER. Is there objection to the request of the gentleman from Texas? Mr. KEARNS. I object, Mr. Speaker. Mr. CELLER. Mr. Speaker, I yield myself 8 minutes. CALL OF THE HOUSE Mr. KEEFE. Mr. Speaker, I make the point of order that a quorum is not present. The SPEAKER. Evidently a quorum is not present. Mr. McCORMACK. Mr. Speaker, I move a Call of the House. A call of the House was ordered. The Clerk called the roll, and the fol- lowing Members failed to answer to their names: [Roll No. 69] Barden Hedrick Pfeifer, Boggs, Del. Herter Joseph L. Bolton,Chio Hoffman,Ill. Poage Bosone Jackson, Calif. Powell Brooks Kelley, Pa. Redden Buckley,N Y Kunkel Regan Bulwinkle Lyle Sadowski Byrne, N. Y McQrath Sasscer Cannon McMillan, 8 C Secrest Chudoft Macy Shafer Coudert Marcantonio Shelley Davis, Tenn Marshall Smathers Dawson Miles Smith, Ohlo Douglas Miller, Calif. Taylor Engle, Calif. Morrison Whitaker Gary Murphy Wilson, Tex. Gilmer Murray, Wis. Worley Golden O'Brien, Mich. Yates Hall, O'Toole Leonard W. Pace The SPEAKER. On this roll call 376 Members have answered to their names, @ quorum. By unanimous consent, further pro- ceedings under the call were dispensed with. EXTENSION OF REMARKS Mr. JENSEN asked and was given per- mission to extend his remarks in the Recorp and include a resolution. PRICING PRACTICES The SPEAKER. The gentleman from New York [Mr. CELLER] is recognized. Mr. CELLER. Mr. Speaker, I yield 30 minutes to the gentleman from Mich- igan (Mr. MICHENER]. Mr. Speaker, I wish to state at the outset that there is no disposition on the part of the Committee on the Judiciary of the House or any of its members to weaken in any respect our antitrust laws. That is clearly indicated. For example, the Judiciary Committee through one of its subcommittees is now conducting im- portant hearings or an inquiry into the concentration of economic power in this country. The Judiciary Committee like- wise is considering a number of bills to increase penalties for violation of our antitrust laws. We passed the Celler bill (H. R. 2734) to plug holes in one antitrust law by preventing mergers by acquisition of assets and thereby caus- ing throttling of competition. We are doing all and sundry to strengthen, cer- tainly not weaken, the antitrust fabric. Mr. Speaker, the bill, S. 1008, as origi- nally submitted had as its major ob- jective elimination of the confusion in the interpretation of the Clayton Act, and the Federal Trade Commission Act, as amended by the Robinson-Patman Act. This confusion was due to certain obiter dicta, as the lawyers call it, in- CONGRESSIONAL RECORD—HOUSE dulged in by Justice Black in the Cement Institute case which obiter dicta was somewhat unrelieved by the so-called 4-4 decision in the Rigid Steel case. If Justice Black had simply stated that any individual could either absorb the freight or sell f. o. b. his mill or factory and did not indulge in these extraneous remarks of his and did not make these extra observations, I do not think there would have been any trouble, but the erudite excursion indulged in by Mr. Justice Black caused all of the diffi- culty. The decision itself in the Cement case unrelieved by the observations of Mr. Justice Black simply states that an individual can absorb freight or sell f. o. b. his plant. The businessmen and those engaged in commerce and industry throughout the length and breadth of the land when they read this decision unrelieved by the Rigid Steel case did not know where they were. The obiter dicta aforesaid created doubts and confusion. So they came to the Congress for some relief. They wanted to know whether they could or could not absorb their freight rates in their busi- ness dealings. The Senate, in the first instance, un- dertook to pass a bill which would per- mit the individual, not acting in a con- spiracy with others, to absorb the freight, but unfortunately the Senate went be- yond that and added certain provisions which I think were unfortunate. Those provisions sought to liquidate some other judicial decisions, one decision in par- ticular, the Standard Oil of Indiana case. That case has not even gone to the Supreme Court, and was decided in the Circuit Court for the Seventh Cir- cuit. However we got the bill and we made some changes in it. The House passed the Senate bill with the amend- ments we prepared in the Committee on the Judiciary. The House passed the bill by a two to one vote. The bill then went to conference. The conferees labored long. The conference report came back to the House, and the House again registered its approval of the report, indicating clearly it wanted this sort of bill. It accepted the confer- ence report by a decisive vote. Thus the House on two distinct occasions indi- cated that it wanted some legislation. It passed the original bill; it accepted the conference report. The conference re- port went back to the Senate, and the Senate then deemed it advisable to post- pone consideration. The House having accepted the conference report, the House conferees were discharged. We are now in the position that we were when we asked that the bill go to conference in the first instance. I think it is the duty of the House now to send this bill to another conference for an- other try. If we try to prevent a bill, passed differently in both Houses, from going to conference, we just stymie the legislative process; we develop a stale- mate. That is no way to legislate. I would say that many bills—I cannot count the infinite number—are passed differently in both Houses, and in my long experience here I do not know of a single case where there has been a re- fusal to go to conference. Yes, some- FEBRUARY 28 times a rule is procured, but the body always approves a resolution and go to conference. Why should there be a refusal now? I do not want to argue the merits or de- merits of the bill. I personally did not sign the conference report, but that is no reason why we should not have a sec- ond try at it; no reason we should not make an honest-to-goodness attempt to come to some agreement, and those who object now—and I do not think they should object to this going to confer- ence—will have ample opportunity when the bill comes back from conference to register approval or disapproval. Mr. JAVITS. Mr. Speaker, will the gentleman yield? Mr. CELLER. I yield to the gentle- man from New York. Mr. JAVITS. Is it the gentleman’s disposition to maintain the strong at- titude the gentleman maintained before on the amendments which were put in on the floor of the House? Mr. CELLER. I do not think that is a fair question. I will say this, that one must bend, sometimes, rather than break. All legislation of importance is a compromise, and I may have to com- promise. I am not going to compromise principles; I might have to compromise on the matter of procedure, because there is lots of procedure in this bill. Mr. JAVITS. That is essentially the point. The gentleman does not intend to compromise principle insofar as an effort to arrive at agreement is con- cerned. Mr. CELLER. My answer is that I may have to compromise. I do not know to what degree I am going to compro- mise. We must get some legislation here because the House, as I said before, has registered its will twice. It passed the bill by a two to one vote. We can- not negative what the House has done here before, and every opportunity should be given to let the House pass on a con- ference report. Some of you might ask why I refused to sign the conference report in the first instance and fought against some of its provisions. I felt that the confer- ence report was too vague. I could not understand it. I said on the floor it was confusion worse confounded. As I read it now, I would use the language of Churchill. The conference report that came back to us in the first in- stance was a riddle inside an enigma wrapped in mystery. I could not un- derstand it. That is why I refused to sign it. But the House said, ‘No, we are going to accept the conference report,” and did. I repeat, Mr. Speaker, this bill should be permitted to go to conference. Mr. HALLECK. Mr. Speaker, will the gentleman yield? Mr. CELLER. I yield to the gentle- man from Indiana. Mr, HALLECK. As I understand, the gentleman’s position is that this is a matter on which the House has passed, and that it should go to conference. I take it that the gentleman is inclined to believe that with conference action be- tween the representatives of the two bodies legislation effective and fair can be developed and worked out.
1950 Mr. CELLER. The gentleman ex- presses and reflects my views probably better than I could express them my- self. Mr. Speaker, I yield 9 minutes to the gentleman from Texas [Mr. Patman]. BASING POINT AND ANTIPRICE DISCRIMINATION Mr. PATMAN. Mr. Speaker, I have never known a proposal before a legis- lative body to be less understood gen- erally than this bill. Very few Members have the time to go into the work of another committee and investigate the merits and demerits of particular bills. NOT LEGITIMATE This bill is not a legitimate bill. We take pride in the Amcrican way of en- acting laws. The American way is for a bill to be introduced and referred to a standing committee. That committee then hears testimony, of witnesses on both sides. Then they take the bill up after all the testimony is in, with every Member knowing how it will affect every Member and every congressional district and every State in the Union, and every paragraph and every sentence and every phrase and every word is gone over. After that is done, the committee makes a report, and in that report it is care- fully gone over to sustain the findings of the committee. However, this bill is not in that posi- tion. This bill was conceived on the floor of the other body, an entirely new bill, a bill upon which hearings had never been conducted by any commit- tee of either body. The United States Senate passed that bill, a very far-reach- ing bill, with certain amendments hast- ily drawn upon the floor of the other body. Then it came over here and we thought we would have an opportunity to have public hearings, but we were denied that privilege. We were denied public hearings. JUDICIARY COMMITTEE SLAMS DOOR IN FACE OF BMALL-BUSINESS REPRESENTATIVE A representative of a small-business group, the largest in America, came 3,000 miles from the State of California to be heard in opposition to this bill. Do you think the Committee on the Judiciary would hear him? No, they slammed the door in his face and would not let him be heard. They slammed the door in the face of every small-business group that wanted to be heard. Do you call that a legitimate bill—a bill upon which no public testimony has ever been taken—a bill which you do not know the effect of and how it will affect your dis- tricts? AREA OF DISAGREEMENT TOO LIMITED FOR CONFEREES TO AGREE ON SATISFACTORY BILL Iam making an unusual request of you, I know, and that is to vote against send- ing this bill to conference. That will force public hearings upon the proposal. Then you can see how it will affect your States and your districts. There is too little disagreement between the two Houses. We know that the conferees cannot agree upon a bill which will not be in favor of monopoly and destructive of small business in this country. They cannot possibly do it. They are bound on one side by what the House did, and CONGRESSIONAL RECORD—HOUSE on the other side by what the Senate did. Knowing it is impossible to bring in a satisfactory bill, why vote to send it to conference? We voted to send it to conference once and after a conference report was agreed on, the very Members of the other body who fought for it and who favored this bill and introduced it in the other body were opposed to it and they sent it back to conference. That is not treating the House right. We ought to vote down this motion and then force consideration before a committee and have public hearings. STEEL MILLS-CEMENT MILLS There is a location in every district in the United States where you have water transportation for a steel mill. If the basing-point is not legalzed, in other words if this does not pass, you will be able to have a steel mill. But if this Passes, you will not have a stecl mill. There is a place in every section in this Nation where there is iron ore for steel mills. But if this bill passes, you will possibly never have a steel mill. There is a place in practically every county in the Nation where cement can be made. But if you pass this bill, you will never have that cement plant. That is what it means. We should investigate it and Jook into it. The Democratic members, the majority members of the Small Business Committee, have unanimously passed a resolution, or at least are in favor of the resolution, asking the Mem- bers of the House to vote against this motion so as to compel public hearings on this proposal. IRONICAL It is certainly ironical that the great Committee on the Judiciary, which is trying to earn for itself the reputation of being antimonopoly, and in favor of small business, should try now to secure the enactment of a bill when no hear- ings of any kind whatsoever were held all during the Eighty-first Congress that is against independent and small busi- ness and in favor of monopoly. It is ironical that they would ask for the adoption of a bill which would pro- mote monopoly and help monopolistic steel and help monopolistic cement and help the railroads on cross hauling and help the great national chain stores. Is it not rather ironical that this commit- tee which is trying to earn for itself the name of antimonopoly fighters should try to get a bill through like this, which would absolutely destroy the rights of small business which have been gained after decades of fighting in the Congress of the United States and in the legisla- tures of the 48 States. That would re- peal everything which has been done. I hope the House does not become a party to such action. PUBLIC HEARINGS—AMERICAN WAY Since it is our American way to have public hearings on bills, and since we have not followed the American way in this instance, do you not think it is a reasonable request to ask you to vote dowr this motion and compel them to give us public hearings? Here are the people who want public hearings, and were refused: The Associ- ated Retail Bakers of America, the Con- 2503 gress of Industrial Organizations, the Cooperative League of the United States, the International Association of Ma- chinists, the National Association of Re- tail Druggists, the National Candy Wholesalers’ Association, the National Council for Petroleum Retailers, the Na- tional Farmers Union, the National Fed- eration of Independent Business, the group that sent their man 3,000 miles to have the door slammed in his face and to be told, “No, we are not going to hear you, we do not want to hear you, and we refuse to hear you.” The National Food Brokers Association, the National Grange, the United States Wholesale Grocers Association. Every genuine small business group I know of in Amcrica is in opposition to this motion. They know it is against their interests. The Secretary of the Navy, Francis P. Matthews, testified be- fore the Monopoly Committee last year and he was asked about this. He said: I come from Omaha, out in the Middle West, and we feel out there that the basing- point price program discriminates against industry in our section of the country and causes the concentration of industry in cer- tain points. I want to beg of you to compel public hearings on this, and I want to assure you that whenever you have public hear- ings and the information is brought out as to how it affects your districts and your States, I venture to say that they will not receive 10 percent of the votes. I make the prediction that if they do have public hearings, which they have refused to do, that this bill will never see the light of day again. The opposition to this motion has 13 minutes out of the 60 minutes allowed to discuss this proposal. This is cer- tainly an unfair division of timc. It is typical of the ruthless and unfair methods used to enact legislation with- out public hearing that will help big steel, big cement, railroads, and national chain stores. So I ask you to vote against this mo- tion. The SPEAKER. The time of the gen- tleman from Texas [Mr. Parman] has expired. Mr. CELLER. Mr. Speaker, I yield 5 minutes to the gentleman from Penn- sylvania [Mr. WaLTER]. CALL OF THE HOUSE Mr. BATTLE. Mr. Speaker, I make the point of order that a quorum is not present. The SPEAKER (after counting). Evi- dently there is no quorum present. Mr. CELLER. Mr. Speaker, I move a call of the House. A call of the House was ordered. The Clerk called the roll, and the fol- lowing Members failed to answer to their names: [Roll No. 70] Allen, La. Chudoft Herter Barden Coudert Hoffman, Il. Bentsen Davies, N Y Jackson, Calif. Boggs, Del. Davis, Tenn Jonas Brooks Dawson Kelley, Pa. Buchanan Douglas Kirwan Buckley,N Y  Eberharter Kunkel Bulwinkle Gilmer Lyle Byrne,N Y. Golden McGrath Cannon Hall, Marcantonio Case,S Dak. Leonard W Morrison Chatham Hedrick Murphy
Murray, Wis. Regan Smith, Ohio O'Brien, Mich. Sadowski Taylor O'Neill Secrest Towe Pace Shafer Whitaker Pfeifer, Shelley White, Idaho Joseph L. Sikes Worley Poage 8impson, Il. Yates Redden Smathers The SPEAKER. On this roll call 375 Members have answered to their names, @ quorum. By unanimous consent, further pro- ceedings under the call were dispensed with. EXTENSION OF REMARKS Mr. VURSELL asked and was given permission to extend his remarks in the REccRD. PRICING PRACTICES Mr. CELLER. Mr. Speaker, I yield 5 minutes to the gentleman from Pennsyl- vania [Mr. WALTER). Mr. WALTER. Mr. Speaker, in my experience in this body I have never heard more misrepresentations made about legislation nor have I ever heard of any legislation more carefully consid- ered than this legislation now under con- sideration. Nearly 1,700 pages of testi- mony have been taken on this subject. The Capehart committee in the Senate held the most extensive hearings imagin- able in the Eightieth Congress extend- ing over many months, to which were in- vited everyone who could possibly have any interest in this legislation. The gentleman from Texas has asked you to defeat this motion. He claims that there should be no conference on the bill because there were no hearings by any House committee, and that no committee had this legislation under consideration on the part of the House. I submit to you that that is the entire basis of his opposition to this motion. If that is the case, then I respectfully sub- mit there can be no opposition to this legislation because here is a copy of the hearings held in the House last year by the Committee on the Judiciary. If you will turn to page 17 of those hearings you will find that the gentleman from Texas himself testified, not just before the sub- committee having this legislation under consideration, but before the full com- mittee—which was a special privilege accorded to him by the committee. Mr. GRAHAM. Mr. Speaker, will the gentleman yield? Mr. WALTER. I yield. Mr.GRAHAM. And was that not done at the request of the gentleman from Texas to permit him to appear before the full committee? Mr. WALTER. Of course it was. Mr. Speaker, as to the misrepresenta- tions made about this legislation, there is nothing in the bill, S. 1008, which will reinstate the multiple basing-point sys- tem of pricing. The Supreme Court in the Cement Institute decision several years ago, in 333 U. S. 683, outlawed that system of pricing. This bill does not make that system legal again. The only reason why we are here today consider- ing this legislation is because, as the dis- tinguished chairman of the Committee on the Judiciary so well stated, one of the Justices went just a little farther than it was necessary to go in writing the opinion. As a result of this obiter CONGRESSIONAL RECORD—HOUSE dictum, business throughout the length and breadth of the land—big and little business—did not know whether they could absorb freight in quoting prices. That is the reason for this legislation. Subsequent to that decision a district court picked up that obiter dictum in the Rigid Steel Conduit case and cited it as the law, with the result that Senator O’MaxHoney, than whom there has been no greater champion of antitrust laws in the history of the Congress, intro- duced this bill which makes it amply clear that the independent, good-faith absorption of freight to meet competi- tion is not a violation of the antitrust laws. It certainly seems to me that American business is entitled to that sort of clarification. May I point out to you in part the effects of this decision? To do so I will turn to the report which the gentleman from Texas (Mr. Parman] mentioncd— the report of his own committee. Here is what he reported in the early months of 1949: The principal deterrent to the distribution of steel, particularly in the West and South- west was apparently the continued unwill- ingness of stecl producers to reduce prices by absorbing freight. Even in the East the committee had evidence of complaints of small-business men that certain steel com- panies were refusing to absorb freight to the old customers. Is this not a remarkable statement for the gentleman to issue in view of his in- sistent opposition to any form of Icgal- ized freight-absorption legislation? It would appear to identify his views with those of the steel companies which he has in the past so chastised. I would like to call your attention to some testimony given recently before the Joint Committee on the Economic Re- port. This is the transcript of the gen- tleman from Texas. This is Mr. PaTMAN speaking several weeks ago: Like the chairman properly brought out and correctly brought out, under existing law, since the basing-point decision in the cement case, April 26, 1948, outlawing the basing point, since that time you can still absorb the freight, Mr. Weir. The chairman agreed with me on that. So leng as you do not agree and conspire with other people to fix prices. Is that correct, Mr. Chairman? The CHarrMaN. That is right. Mr. Weir. Of course, our counsel says we cannot absorb freight. Mr. PatMAN. You cannot have collusion and conspiracy. Mr. Werr. Never had collusion and con- spiracy. Now, here is further testimony: We do not agree with Mr. Parman. We say the language of the Conduit case that says we may not systematically absorb freight is the troublesome thing. The CHARMAN. That depends on what one means by “systematically.” Mr. Reep. The talk about realizing differ- ent mill nets is pretty disturbing. If Mr. PaTMAN thinks we have the right to absorb freight, why he objects to having it said 80 legislatively I do not know. The CuHairmaNn. I do not understand that either. Mr. Speaker, I simply cannot under- stand the opposition of the gentleman from Texas to a bill which does no more than that which he avers so strenuously FEBRUARY 28 is already the law, particularly when he so often makes dark predictions that the bill will destroy the Robinson-Patman Act and restore the basing-point sys- tem. This is not the case. The bill has unfortunately acquired the discredited term of the “basing point” bill, and that more than anything else has hindered its passage. I have already characterized this undeserved appella- tion as being unfair and a misnomer. Reduced to simple terms S. 1008 mere- ly assures to sellers that, in meeting . competition in good faith in distant mar- kets, they may absorb freight provided they do so independently and not in con- cert. Noone has raised a valid argument against this, except those extremists who would have business run by theory and straitjacketed in a mandatory, rigid f. 0. b. mill-pricing system. I do not want to believe that even the opponents of this bill are so misled as to desire such an outcome. Imagine the tremendous freight advantage which United States Steel Corp. would enjoy because of their dispersion over their competitors were f. o. b. mill pricing the rule. So much for that. Now a few words as to the Kefauver and Carroll amendments to the bill, which I thought were neatly and fairly compromised by the con- ference report of last year. We all know that the purpose of the Kefauver amend- ment was to legislate the rule of the cir- cuit court of appeals in the Standard Oil of Indiana case, thereby placing a limit on the efficacy of good faith meeting of competition as a full defense to a charge of price discrimination. We all know that the decision of the circuit court was recently argued in the Supreme Court on certiorari. Iam expectant that the Court will reverse the lower court. When that happens, gentlemen, we shall then un- doubtedly witness an odd _ spectacle. Then you will find that those who op- pose S. 1008 today and want it killed will be the most vociferous in demand for its passage so as to implant the good- faith limitation in the law contrary to what our highest Court may have ruled. This development I shall await with interest. Finally a word on the definition section of the bill which has given us so much difficulty. You will find in the Recorp that I supported the House version of the definition of the term “the effect may be.” Had that definition been rigidly adhered to I am firmly convinced that we would not have encountered the opposi- tion of the distinguished Senator O’ManonEy. The House definition, en- dorsed as it was by the Antitrust Divi- sion of the Department of Justice, would have rejected the unfortunate rule of the Morton Salt decision, precisely its intended effect. My time is running out. As a parting word may I impress my colleagues of the House with the nature of the motion be- fore them. It is merely a motion to send the bill to conference, not a vote on the bill itself. There can be no valid objec- tion to such an orderly, parliamentary procedure, for both sides of the Congress will have a final opportunity to pass on the legislation when a conference bill is arrived at.
1950 The SPEAKER. The time of the gen- tleman from Pennsylvania {Mr. Wat- TER] has expired. Mr. MICHENER. Mr. Speaker, I yield 5 minutes to the gentleman from In- diana {Mr. Hauiecx]. Mr. HALLECK. Mr. Speaker, it has been my privilege to serve on the House Small Business Committee with the gen- tleman from Texas [Mr. PaTMAN] ever since that committee was originally cre- ated. By and large, we have gotten along very well together in our efforts to aid small business. I think the com- mitte has accomplished much in the way of aiding small business. But I cannot agree with him on the position he takes on this particular matter. He would have you believe that this legisla- tion, if adopted, will adversely affect small business. I say just the exact op- posite of that is really the truth of the matter. If I can understand the gentleman from Texas [Mr. ParMan] correctly, he is against freight absorption and the quoting of delivered prices. I have been listening to these arguments, pro and con, that have been going on, for some time. And as I have listened to Mem- bers express their views, I do not think there are many more than 50 Members out of the 435 who stand with the gen- tleman from Texas on that particular issue. Undoubtedly some do not under- stand what the issue here really ts. It is sought to be established that there is something sinister in this proposal which seeks to destroy certain of the antitrust laws, like the Robinson-Patman Act, or the Clayton Act. There again I cannot agree, because I do not believe there is any such effect in this legisla- tion. Beyond that, as the gentleman from Pennsylvania [Mr. WALTER] has just pointed out, this legislation as it is now shaping up, as I understand it, has been cleared by the Department of Justice, and they find nothing in it, as they have suggested it should finally be drawn, that would be in conflict with any anti-trust statute now on the books. What is the real issue here? It has to do with the right of manufacturers to quote delivered prices and to absorb freight. The gentleman from New York (Mr. CELLER], in his very able manner, has pointed out that the question arises not because of any decision of an issue by the court, but rather because of what we lawyers call dicta, the gratuitous comments thrown in the opinion, which in this case have raised great questions in the minds of people doing business, large and small, clear across the land, as to what they can and cannot do. The matter of freight absorption and the quoting of delivered prices is ingrained in our whole economy. There are small businesses all over this land that cannot continue to exist and do business if such ® procedure as that cannot be followed. And finally and fundamentally, what is wrong about it? I do not think anyone can successfully contend that there is anything wrong essentially with freight absorption and delivered prices. What is the particular issue here? It is, Shall this measure which was adopted CONGRESSIONAL RECORD—HOUSE by the House go to conference? Let us recount the history. When the legisla- tion was first before us it passed on a voice vote, not a record vote. It went to conference; the conferees reported back; and after a rather vigorous contention against it, headed by the gentleman from Texas, the conference report was adopted by a vote of 200 to 104 here in the House, we acting first. Then it went to the Senate. I believe it is fair to say that there the Department of Justice raised some questions about the confer- ence action in regard to section 4 (d), the Justice Department maintaining, and I think properly, that the language that the House had written in section 4 (d) should be included in the bill. Therefore, without the other body’s ever acting on the conference report, the proponents of the legislation acting on the Justice Department suggestion, de- cided to send this back to conference in order that it might be brought in line with what the Department of Justice be- lieved and what the proponents of the bill believed, and what even some oppo- nents of the bill argued should be in the legislatition. So we are down to this very simple practical situation. Why all this talk about not sending this bill back to conference? There have been many hearings before differ- ent committees. The gentleman from Texas has belabored us in the CONGRES- SIONAL REcorpD and in speeches on the floor day after day after day; we have all listened to them. We have heard all the arguments pro and con. Let us get this matter acted on; let us bring some certainty into the method of operation in respect to delivered prices and get on with something else. The SPEAKER. The time of the gen- tleman from Indiana has expired. Mr. CELLER Mr. Speaker, I yield such time as he may desire to the gen- tleman from Louisiana [Mr. Wiiu1s). Mr. WILLIS. Mr. Speaker, in the pre- vious debates on the floor of this House on 8. 1008 I clearly enunciated my posi- tion on two points. First, I said that I was not opposed to a seller, acting inde- pendently, to quote or sell his commodi- ties at delivered prices or absorb freight. In fact, I do not believe that this practice was made illegal by the Supreme Court of the United States in the Cement In- stitute case. Second, I announced with- out reservation that I was opposed to any legislation which would have the effect, directly or indirectly, of emasculating the Robinson-Patman Act. It follows that if legislation were pre- sented in a separate package to carry out the first point and without damaging in any way our antitrust laws, I would sup- port it. But the trouble with 8. 1008 is that it wraps up in a single package an alleged legalization of selling at delivered price and absorbing freight with the de- feat of the purposes of the Robinson- Patman law and weakens the rule of evi- dence in cases involving violation of our antitrust laws. This double-barrel ap- proach of 8. 1008 is the cause of the con- fusion in which we now find ourselves. I was a member of the conference com- mittee on the part of the House that con- sidered S. 1008. We tried to iron out and 2505 resolve the differences between the views of this House and the other body. We failed to reach a common and unanimous ground of understanding. Without vio- lating what transpired in the executive sessions of our conferences, I can say that we were advised by the Parliamen- tarians that the area of our discussions is so limited that I do not believe any good purpose would be served by sending the bill back to conference. I am, there- fore, opposed to the motion presented by the distinguished chairman of my com- mittee, the Honorable EMANUEL CELLER, o. New York, which has for its purpose the sending back of this bill to confer- ence. I believe separate legislation should be offered with a view of legalizing the practice of selling at delivered prices and absorbing freight if, after public hearing, such legislation should be found necessary. Mr. CELLER. Mr. Speaker, I yield such time as he may desire to the gen- tleman from Tennessee [Mr. Evins]. Mr. EVINS. Mr. Speaker, it is re- gretted that ample time has not been au- thorized for the consideration of the pending measure. I am opposed to scnd- ing the bill to conference, under the cir- cumstances, and shall vote against the proposal. There are many arguments which can be advanced against some of the contentions that have been advanced here today regarding this measure. The question before the House is whether 8. 1008 is to be returned to conference. Let me state briefly the reasons why I feel this bill should not go to conference, but rather why action on this type of legisla- tion should be held up for full and com- plete public hearings: First. Not within the memory of some of the oldest Members of the House has there been so much confusion over one piece of legislation as over the charges and countercharges swirling around 8. 1008. Many Members actually do not understand the full meaning and impli- cations of this bill. This is quite under- standable. Second. The bald fact is that no pub- lic hearings have been held on this meas- ure, either before the Senate or the House Judiciary Committees. There were short executive hearings but not public hearings on this particular bill. Third. 8. 1008 is no ordinary bill. On the contrary, it is one of the most vital and controversial measures ever to come before the Congress. From my own point of view, it is a bill which would allow the big steel companies—as well as other big companies-——to fix their prices, stifle com- petition, and ultimately add millions of dollars annually to the prices of com- modities that the every-day American consumer buys. Fourth. I am interested here in a prin- ciple of far greater importance than 5S. 1008. That is the principle of passing important legislation without full and public committee hearings. I think that this principle far transcends the merits or demerits of 8. 1008. I think, too, that this principle can be used as a common meeting ground for all of us, whether we are for the bill or against it. I say meet- ing ground in this connection because on this one issue—on the issue of passing on
2506 legislation without full and public com- mittee hearings—there can be little con- troversy. In this case, there can be no argument on the facts involved in the principle. Fifth. To send this bill to conference would be putting the cart before the horse. Inherent in the relationship before us and our constituents is the obligation to read, study, check, and recheck every important bill that comes to us for con- sideration. We frequently arrive at in- dividual conclusions on particular leg- islation by reading the testimony of wit- nesses who have appeared before the various committees of Congress. In other cases, we rely on the judgment of committee members who have cross- examined witnesses on both sides of the question before their committees and who have become specialists in particu- lar fields by concentrated study of spe- cific issues. Unless public hearings are held on vital matters, committee members would find themselves in the position of arriv- ing at conclusions in a vacuum. Even committee members who disagree with the positions of certain witnesses always make sure that these very same wit- nesses have an ample opportunity of ex- pressing their views in public. This is the historically American way of arriv- ing at conclusions. Here we are, then, on the eve of being asked to process legislation on which no public and adequate hearings have ever been held by either House or Senate Ju- diciary Committees. I do not think the membership should tolerate such legis- lative practice. Nor do I think we will tolerate for long the bold attempt of high-paid propagandists to insulate the Congress against the facts in this case by shutting off public hearings. Sixth. The original S. 1008 was merely ® moratorium measure, entirely differ- ent from the present S. 1008, both in purpose and in text. S. 1008 is designed as permanent legis- lation. It will not be a temporary law affecting the lives and economy of a few people for a brief period. It will affect the economy for years to come. Its passage would be a relaxing of our anti- trust statutes. Seventh. This bill is, in fact, a sharp departure from our previous efforts to tighten up the monopoly laws. We should strengthen our antimonopoly laws rather than weaken them. Eighth. Almost 2 years have elapsed since the Supreme Court outlawed the basing-point pricing system in the Ce- ment case. Despite widespread predictions of vio- lent dislocation of our economy, the removal of plants and the shutting down of factories as a result of the decision, nothing of the sort has happened. On the contrary, new plants have sprung up in various sections of the country. On the other hand, quick passage of this measure, without the benefit of com- plete public hearings, could conceivably work great hardships on all segments of the economy of our country. We have, in short, everything to lose and nothing to gain by sending this bill to conference rather than to the House CONGRESSIONAL RECORD—HOUSE Judiciary Committee for proper and ade- quate consideration. Ninth. A majority of the members of the Select Committee on Small Business of the House of Representatives have en- dorsed a resolution urging the House to vote down the motion to send 8. 1008 to conference. This action is prompted by the appeals of many small-business men throughout the country. This resolu- tion has been urged by representatives of farm organizations and businessmen, many bona fide small-business organiza- tions, men thoroughly acquainted with the details of this bill and its impact on the economy. The endorsement of these businessmen and their representatives, reflecting the attitude of millions of American citi- zens, should in themselves constitute a warning against hasty action. Let us vote down this proposal for hasty action on this important measure. Mr. CELLER. Mr. Speaker, I ask unanimous consent that the time of de- bate on this motion to send the bill back to conference be extended for 10 min- utes. Mr. FULTON. Mr. Spcaker, reserv- ing the right to object, may I have a minute of the additional time if it is granted? Mr. CELLER. Mr. Speaker, I amend my request and ask unanimous consent that the time be extended for 11 min- utes. Mr. HOFFMAN of Michigan. Mr. Speaker, reserving the right to object, I have heard the statement made that there were only 50 opposed to sending it back to conference. Is that true? ' Mr. CELLER. Ihave no way of know- ng. Mr. PATMAN. Mr. Speaker, reserv- ing the right to object, the opponents of the bill—— Mr. KEEFE. Mr. Speaker, I object. Mr. MICHENER. Mr. Speaker, I yield such time as he may desire to the gen- tleman from New York |Mr. KiLsurn]). Mr. KILBURN. Mr. Speaker, the sole question before the House is whether S. 1008 shall be sent to conference. In view of the overwhelming adoption by the House last year of the original con- ference report, I can see no reasonable objection on the part of this body in sending it to conference again. Much harm has been done to this use- ful and necessary legislation by con- stant reference to it as a “basing-point bill.” It is no more a basing-point bill than the FEPC bill, and any charge made that it would reinstate the basing-point system is without foundation. Actually the bill simply endeavors to clarify the rights of sellers to absorb freight and to sell at uniform delivered prices in the absence of conspiracy. These rights should be clarified be- cause of conflicting opinions given by the Federal Trade Commission and the courts. It seems to me the intent of the Congress over the years has been perfectly clear and I feel that the recent Supreme Court decision did not conform with our intent. The matter needs to be straightened out and our conference committee did a good job last year. They should be allowed to complete the job so that the Congress can pass legislation FEBRUARY 28 to correct what I consider was a bad decision by the Supreme Court. Mr. MICHENER. Mr. Speaker, I yield 5 minutes to the gentleman from New Jersey [Mr. Case]. Mr. CASE of New Jersey. Mr. Speak- er, as one of the conferees and as one who has been a member of the Judiciary Com- mitee and the subcommitee considering this bill, I urge that the House vote to sent this bill again to conference. As I said before, in the course of previous discussions on this bill, we at- tempted, as it now seems unwisely, to do two things when the bill first came be- fore the House. First, to do something which almost everyone agrees should be done, namely, clarify the law in reference to delivered price systems, and, two, to change the law, as it had been an- nounced in a lower court case, witl re- spect to the defense of good faith “in meeting competition against a charge of violation of the Robinson-Patman Act. I agreed with the previous bill in both respects, but I am now clearly of the opinion it was a mistake to attempt to do the two things in one bite. The matter went to conference. Your conferees attempted to take out the sec- ond effect of the bill. The House ac- cepted the conference report and the Senate rejected it and it comes back with the request for another conference. I urge everyone who feels that we should deal with this problem, everyone who does not think that noncollusive delivered pricing should be outlawed _per se, to vote to accede to the request of the other body at this time so that we may accomplish the first and major purpose of this legislation which I am convinced is very badly needed. Mr, KEATING. Mr. Speaker, will the gentleman yield? Mr. CASE of New Jersey. I yield to the gentleman from New York. Mr. KEATING. Does it appear to the gentleman that the issue here does not involve the merits of this controversy at all, but, rather, involves whether we shall follow orderly procedure and the regular democratic process by permitting this matter to go to a final determination by the conferees, then come back here for such action as the House may see fit to take? Mr. CASE of New Jersey. I agree with the gentleman. It seems to be that un- less we accede to the request of the other body we are in effect saying that no legislation may be enacted. I think that would be an act of the highest dis- courtesy to the other body as well as con- trary to all precedents established in the past. Mr. EVINS. Mr. Speaker, will the gentleman yield? Mr. CASE of New Jersey. I yield to the gentleman from Tennessee. Mr. EVINS. The gentleman is a member of the conference. He will re- call that the House adopted an amend- ment by a substantial vote, the Senate adopted an amendment by a substantial vote, yet the conferees when they met struck out both of the amendments and disregarded the action of both houses Mr. CASE of New Jersey. I do noi agree to that at all. I did not rise to discuss the merits of the bill. But as long as the gentleman has raised the
1950 question, may I say the conferees did not use the language of either amendment. They attempted, I thought successfully, to provide language which would meet the substantive intent of both amend- ments. Mr. EVINS. Will the gentleman not also admit a concern acting independ- ently can absorb freight without violat- ing the law? . Mr. CASE of New Jersey. I think it is possible the courts might hold that the noncollusive delivered pricing is lawful under the statutes as they now stand. But the confusion which exists because of dicta contained in court decisions makes it desirable, in fact, I think, es- sential, for us to pass clarifying legisla- tion. Mr. MICHENER. Mr. Speaker, I yield 5 minutes to the gentleman from Pennsylvania (Mr. Granam]. Mr. GRAHAM. Mr. Speaker, I come from a great industrial district. The county in which I live is the third largest industrial county in Pennsylvania and {t is the seventh in the Union. Oddly enough the great big manufacturers in my district are not the ones who are urging that this measure be sent back to conference. It is the small manufac- turers in my district who have made this request. I was a member of subcommit- tee No. 1. I heard the men testify. I heard Senator O’MaHoney and Mr. Bergson of the Department of Justice. I was present when the gentleman from Texas (Mr. PatMan] appeared before our committee and stated his case. Mr. FULTON. Mr. Speaker, will the gentleman yield? Mr. GRAHAM. I yield to the gentle- man from Pennsylvania. * Mr. FULTON. Is it not true that Mr. Fairless, president of United States Steel Corp., at the hearings before the commit- tee, said that the basing-point dispute was of little concern to the United States Steel Co. because they had their plants strategically and geographically located? Mr. GRAHAM. That is correct. Mr. FULTON. So that it is really the small-business man that will be hurt more by reason of being in a Balkanized area where he cannot compete with a geographical area, Mr. GRAHAM. That is correct. Mr. CRAWFORD. Mr. Speaker, will the gentleman yield? Mr. GRAHAM. I yield to the gentle- man from Michigan. Mr CRAWFORD. May I carry this a little further? Suppose a small steel company located in the city of Lansing, Mich., wishes to sell its product in the Birmingham district, which is a steel cen- ter. Would not this bill, in the form in which it has been passed up to date, pro- tect the Lansing firm and enable it to do business outside of the immediate Lan- sing area? Is not that the purpose of the bill in its present form? Mr, GRAHAM. That is right, if done in good faith and no collusion. But, you must keep in mind now the amendment suggested by the Attorney General which 4s sought to be incorporated in this legis- lation, if it goes to conference. Mr. CRAWFORD. Would the gentle- man tell us what that amendment is? CONGRESSIONAL RECORD—HOUSE Mr. GRAHAM. I will read it. “The term ‘the effect may be’ shall mean that there is reasonable probability of the specified effect.” That is the language of the Attorney General. Mr. CRAWFORD. In other words, if that amendment goes in it does make it legal, in the absence of collusion, for the Lansing, Mich., firm to stay in business and survive. Mr. GRAHAM. That is correct. Mr. CRAWFORD. Now let us go an- other step forward. The United States Steel Corp., for instance, has plants in Pittsburgh, Pa., Pueblo, Colo., Birming- ham, Ala., and Cleveland, Ohio, and so on down the line; so, with its plants scattered it is in a position to hold the trade and to pick up the trade which the Lansing firm would necessarily lose. Mr.GRAHAM. That is right. Mr. CRAWFORD. That is, if it could not do business in the Birmingham area. Mr. GRAHAM. That ts correct, and that is the purpose of this amendment, to protect the small man. Mr. CRAWFORD. So that in the ab- sence of legislation of this type, it leaves the field wide open to the alleged monop- oly of United States Stcel and the other Big Four, while the bill, if it becomes law, is in the interest of the small operator throughout the United States, ti Mr. GRAHAM. That is our conten- ion. The SPEAKER. The time of the gen- tleman from Pennsylvania has expired. Mr. MICHENER. Mr. Speaker, I yield such time as he may desire to the gentleman from Pennsylvania LMr, DAVENPORT]. Mr. DAVENPORT. Mr. Speaker, I favor this legislation. This bill, by all means, should go to conference for fur- ther clarification. Let us take the clothes off “old lady basing point” in the basic steel industry, and see what the bare issue is. Is it monopoly as the gentleman from the western prairies claim? I think not, because it is the smallest producers of stecl who are hurt first, and the hardest, by straight f. 0. b. mill prices. Is it price as the opponents claim? I think not, as there is under the basing- point system of steel pricing a base price for each steel product in each locality where it is produced. Then what is the issue? Any selfish interests in the West try- ing—by the force of Government ac- tion—to compel the exploitation of un- economic resources that have been pay- ing no return to their owners for decades? Is the basing-point cry a smoke screen behind which selfish interests from out- lying regions of the country are attempt- ing to rape the great steel centers of America? I come from Pittsburgh—a district that produces one-fourth of our Nation's steel, and that makes more stcel ingots than all of Soviet Russia. We are against monopoly, and we are for fair prices for the consumers of steel. But we will not stand idly by while these issues are being misrepresented by selfish interests in other regions of the Nation. We will not let the great 2507 steel plants of Pittsburgh be denuded by false theories on how stee! prices are arrived at. Under the basing-point system Amer- ica has become the world leader in steel production. Pittsburgh has produced this country successfully through two wars, and contributed to the highest standard of living yet achieved by any society. We will not allow the defamers of the basing-point system to produce a multi- tude of ghost steel towns in the capital of the steel industry. We are for the wise adjustments worked out by the Federal Trade Com- mission in the pricing of steel. We from Pittsburgh will not permit selfish interests from other regions to decimate our steel plants, create ghost towns along our rivers, throw thousands of working population into unemploy- ment and poverty. Probably no bill before the Eighty-first Congress will have such a deep effect on the economy of this Nation than the measure to permit a moratorium on the Supreme Court decisions affecting the basing-point system. We owe it to the stcel industry, and to the people who de- rive their livelihood from the steel in- dustry, to reinstate the basing-point sys- tem before our economy suffers an irrep- arable blow. If the steel industry is forced to an f. o. b. mill pricing system as @ permanent way of doing business, chaos will arise with a return to a buy- ers’ market in steel. How much simpler and more efficient to have a price which averages out all freight charges so that distant purchasers are not put to a dis- advantage in competing with manufac- turers close to the mill. How much fairer to the people of the Pittsburgh area whose livelihoods are tied directly and indirectly to the steel industry. Winston Churchill said, “England must export or die.” And I say for Pittsburgh, “We must sell our surplus steel beyond Pittsburgh or we will have man-made depression in our midst.” The capri- cious Supreme Court decisions regarding the basing-point system are an unprece- dented and thoughtless action which much be revoked before they stunt our economic health. It is up to us to undo the damage. Mr. MICHENER. Mr. Speaker, I yield 3 minutes to the gentleman from Tennessee |Mr. JENNINGS]. Mr, JENNINGS. Mr. Speaker, I can discuss this measure in these 3 minutes without any animus or animosity to- ward any Member of this body, because I have no personal interest in it, and I am interested only in the effect of this measure on small business, and on the consumer. Here is the gist of the bill: It shall not be an unfair method of com- petition or an unfair or deceptive act or practice for a seller, acting independently, to quote or sell at delivered prices or to ab- sorb freight: Provided, That this shall not make lawful any combination, conspiracy, or collusive agreement; or any monopolistic, oppresive, deceptive, or fraudulent practice, arried out by or involving the use of de- fivered prices or freight absorption. At this time in this country we have from four to five million men and women
2508 out of employment. The one way to give them employment is to keep manu- facturing concerns in operation. There is a cement plant in my city of Knoxville. It is busy all the time. There is heavy construction work going on at all times in that section of the country. As a result of this Supreme Court dicta, which makes it appear that to absorb freight renders the person absorbing it subject to criminal prosecution in the Federal court, as the result of that opin- ion and that apprehension on the part of the manufacturers of cement, there were times in my district, which always has a shortage of cement, when you absolutely could not buy it. This bill is for the benefit of the man- ufacturers of the necessities of life, it is for the benefit of the consumers, it is for the benefit of the men who work in in- dustry, and by all means it should go to conference. Mr. WHITE of Idaho. will the gentleman yield? Mr. JENNINGS. I refuse to yield. I am like a mummy, I am pressed for time. We should send this bill back to con- ference and enact it into law. This will take the handcuffs off industry. Keep our mills and industrial plants at work. By so doing we will enable our people to buy the products of our industry at prices they can afford to pay. This measure gives our small industrial plants a market for their products anywhere in the land. This measure gives small business a purchasing power and a sell- ing market that would otherwise be be- yond its reach. To kill this measure is to play into the hands of big business. Mr. CELLER. Mr. Speaker, I yield 3 minutes to the gentleman from Arkansas (Mr. Tacketr]). Mr. TACKETT. Mr. Speaker, I sin- cerely hesitate and deeply regret to op- pose my friend, neighbor, and colleague, the gentleman from Texas [Mr. PatMAn] upon this particular piece of legislation. My congressional district of Arkansas joins his congressional district in Texas. However, as a member of the Judiciary Committee and after studying the bas- ing-point proposal, I feel it my duty to strenuously insist upon the adoption of this legislation for the general welfare of the entire country, and especially that area in which the gentleman from Texas (Mr. Patman] and I reside. In the Cement case before mentioned by various Members while explaining this legislation, the Supreme Court in- dicated when speaking outside the in- volvements that no business could absorb freight when pricing a commodity for sale. In other words, the Supreme Court decision went beyond the involved sub- ject matter of the Cement case and merely threw in a hint—which is known in the legal profession as obiter dictum— that should the Supreme Court be called upon to decide the legality of permitting freight absorption pricing, that the Court would possibly decide such action {llegal, even should the practice be carried on by individual businesses without sub- stantially lessening competition and lacking in conspiracy or collusion with other businesses. The basing point legislation now be- fore us merely permits freight absorp- Mr. Speaker, CONGRESSIONAL RECORD—HOUSE tion pricing by individual businesses that will not substantially lessen com- petition; and the bill specifically pro- hibits any conspiracy or collusive agree- ments between businesses for the pur- pose of lessening competition. Should the recent Supreme Court dictum aforementioned become a re- ality, a small business in Arkansas, or elsewhere throughout the country, would be greatly jeopardized without the pas- sage of this legislation. It is true that a great number of small businesses have been led to believe that the legislation under consideration 1s detrimental to their interests. Such small businesses have been misled by being denied the opportunity to know the facts and by merely being told that the legislation would jeopardize small businesses. The misled small-business people are sincere in believing that this bill is detrimental to small businesses; however, the very opposite effect would be the true case. Should the Supreme Court dictum be- come the law, without the passage of this legislation, small businesses throughout the country would be selling the same commodities at different prices to the detriment of their businesses and cus- tomers. Gasoline would be cheaper at the refinery than elsewhere; soap would be cheaper at the place manufactured than elsewhere; cigarettes would sell higher in my district because of the to- bacco companies not being allowed to absorb the freight rates when pricing the commodity than in Salem, N. C., for instance, the manufacturing point for considerable tobacco interests. The legislative proposal before us in- tends to foreclose the possibility of the Supreme Court dictum becoming a real- ity so as to continue the present business practices with reference to permitting freight-absorption pricing. Under the present system of freight-absorption pricing, a manufacturer of a commodity takes into consdieration all the freight that would be charged in distributing the commodity and then adds this to the price of the commodity in order that he may sell his product anywhere in the country for the same price. For instance, the American Tobacco Co, may have a million packages of cigarettes to sell within the United States. The company ascertains all the freight that would nec- essarily need be charged in distributing the cigarettes throughout the United States. The total freight bill is added to the total cost of the million packages of cigarettes when determining the price of each package so as to allow a person in California to pay the same price for a package of cigarettes—State taxes not being involved—as a person in Maine would pay for the same package of cigarettes. Especially many of the drug-store people throughout the country have been led to believe that this basing-point legislation is detrimental to their busi- nesses. Most of you have heard from the drug-store people. Actually, with- out the passage of this legislation, should the Supreme Court dictum prevail, there are no businesses in this country that would be hurt worse than the drug stores. These stores in my district would neces- FEBRUARY 28 sarily need pay for and sell every com- modity not manufactured in my district at the normal price of the commodity plus the exact freight required to get the commodity to the stores within my district; while the people within the town where some particular drug-store com- modity is manufactured would purchase the article for its normal cost, with no freight involved. It is difficult for me to know how the opponents of this legis- lation could have the nerve to tell the drug-store people that this basing point legislation is detrimental to their busi- nesses, Should the Supreme Court actu- ally rule against freight absorption pric- ing and this legislation be defeated, prices of every drug-store commodity in my district would necessarily rise in an amount sufficient to pay the exact freight upon each drug-store article. The opponents to this legislation con- tend that its passage will create monopo- lies, while in truth the opposite effect is correct. The adoption of this proposal assures businesses an opportunity to compete outside their own local sur- roundings; and therefore prohibits a business from having @ monopoly within its respective area. Surely it will not be contended that small businesses in Ar- kansas, where little manufacturing is carried on, should pay more for a com- modity because of freight rates than the industrialized East. Of course, a manu- facturer within my district of Arkansas competing with the industrialized East, without the basing-point bill, should the Supreme Court dictum prevail, would have a monopoly on a great area without and about Arkansas. That is the very purpose of the opposition to this legisla- tion. Naturally, I would like to see Ar- kansas an industrialized State, and the Supreme Court dictum would assist in bringing into existence that very thing if we had equalized freight rates in the South; but so long as we have the dis- criminatory freight rates the small busi- nesses of our section will be penalized by the Supreme Court dictum. Factories in Arkansas cannot compete with the fac- tories in the East because of these dis- criminatory freight rates. Once we get an equalized freight rate, then I will sup- port legislation to repeal the basing- point legislation, but during this in- terim, I shall not penalize the people of our State with the Supreme Court dictum. Let us suppose that we have no soap factory in ArKansas and that it is neces- sary for small businesses to buy soap for resale from St. Louis. Unless the St. Louis manufacturer be allowed to absorb the freight charges when pricing the soap, the housewife in St. Louis would pay less for a bar of soap than the house- wife in Arkansas. Under the provisions of the basing-point bill, by the company being allowed to absorb freight charges, the same bar of soap would sell any- where in the United States for the same price. Should I have a manufacturing unit within my district such as a cement plant or a steel mill of some kind, natu- rally without the enaction of this law I would have a complete monopoly upon the cement and steel businesses within an area of several States about me. The inability of my competitor to absorb
1950 freight charges would preclude him as a competitor. We cannot afford to pen- alize the welfare of our people to assist some person who happens to have the chance of a monopoly. Some of the Members will possibly re- member that immediately following the Supreme Court decision in the Cement case many of the manufacturers decided it wise to look upon the Supreme Court dictum as the law. They curtailed their operations to a restricted territory. The price of cement went up because the various plants had no competition within their respective areas. They could raise the price of cement a considerable amount and still sell the commodity cheaper than an outside competitor who would necessarily need charge the exact freight rate upon the commodity in ad- dition to the normal price for the cement. The Supreme Court dictum will curtail business operations and promote sec- tional monopolies to the detriment of the consumers. Mr. WHITE of Idaho. Mr. Speaker, will the gentleman yield? Mr. TACKETT. I yield. Mr. WHITE of Idaho. Would you ap- ply this same principle to farms and farm prices? Mr. TACKETT. I do not see where that has anything to do with the contro- versy at hand. Perishable rather than basic commodities could be involved in farm products. I believe freight should be absorbed in order to give all consumers an equal opportunity rather than favor those in the vicinity from whence the commodities are shipped. Mr. FULTON. Mr. Speaker, will the gentleman yield? Mr. TACKETT. I yield. Mr. FULTON. We in Pittsburgh want to trade with your people and buy your products, too. Mr. TACKETT. Iam certainly in ac- cord with your idea, which can only be accomplished by the passage of this legis- lation. The SPEAKER. The time of the gen- tleman from Arkansas has expired. Mr. MICHENER. Mr. Speaker, I yield 1 minute to the gentleman from Penn- sylvania [Mr. Fo.ton]. Mr. FULTON. Mr. Speaker, the re- markable thing about this bill is that the big industries are completely com- placent about it. The people I have been hearing from are the little fellows who have been saying to me, “We will not be able to sell our products down in Arkansas and will just have to limit our- selves to Pennsylvania, Ohio, and West Virginia. We want the bill passed to protect us and prevent limitation of our selling territory.” Our Pennsylvania businessmen want to be able to sell to the people in Arkansas and Oklahoma at the same price that we sell them in Pennsylvania. We in Pennsylvania will buy the products of California and Florida and these Mid- western States. We want to pay the same price for your products, too. In the district of my colleague the gen- tleman from Pennsylvania [Mr. Kearns] there is a fine, aggressive small business called the Sharon Tube Co. The man who is president of that company, Mr. Don Sawhill, is a good friend of both xCVI——158 CONGRESSIONAL RECORD—HOUSE Congressman Kxarns and myself. Mr, Sawhill has said that because his is a small company it will needlesly restrict him to an area about several hundred square miles in area within which he can sell tube products. This would give him probably a monopoly in his geographical area, but he wisely prefers a large market and adequate competition. If we in the North will restrict our- selves solely to our sections of the coun- try in carrying on business, we will Bal- kanize this country into small trade areas governed by small, tight monopolies. I want to see the housewife in Wash- ington and Oregon and down in the Southwest and in New Mexico get her pots and pans at just the same price that the Pittsburgh housewife gets hers. This bill should be sent to conference today and promptly passed. The SPEAKER. The time of the gentleman from Pennsylvania has ex- pired. Mr. MICHENER. Mr. Speaker, I yield 4 minutes to the gentleman from Penn- sylvania [Mr. Kearns]. Mr. KEARNS. Mr. Speaker, in con- sidering this very important legislation, it seems to me we have overlooked one very important thing. How about the man who works in a plant in a certain town in the United States? How about the man who owns his home in this com- munity and has reared his family there and wants to take part in the community progress life of that community, for years and years to come? Yet the Con- gress of the United States may come along and say that that man has no right as a citizen to have his job in that par- ticular community because we deem it wise, through legislation which we pass, that he move to another community and get a position in a like field some place else. Thus, he is forced to rebuild his and his family’s entire future. That is really a bad situation. No one is fear- ful here of laws that will be for the good of everyone. Yet, I cannot understand how men engaged in the field of en- deavor, and enrolled in one of our great unions could possibly let this very situa- tion happen here in the United States. Now, that is a bad situation. There ought not be any fundamental uncertainty about what the law requires in any field, but especially not in a fleld so important to the basic economic life of this great Nation. Therefore, it is the duty of Congress, as I see it, to clarify all existing uncer- tainties on this matter. Let us declare a policy. Let us not send this bill back to com- mittee to die there. Let us send this legislation along to conference and get a bill that we can act upon, Let us end all uncertainty on this whole delivered-price question. Mr. MICHENER. Mr. Speaker, I yield such time as he may require to the gentleman from Illinois [Mr. VELDE]. Mr. VELDE. Mr. Speaker, I favor this legislation and I urge that it be sent back to conference. I ask unanimous consent to revise and extend my remarks at this point, Mr. Speaker. 2509 The SPEAKER. Is there objection to the request of the gentleman from IIli- nois? There was no objection. Mr. VELDE. Mr. Speaker, I favor this legislation and urge that it be sent back to conference immediately. While I do not care to go into the legal aspects of the Federal Trade Commission's decision or the Supreme Court cases which have made this clarifying bill necessary, I do want to mention the uncertainty and confusion under which businesses of all kinds are operating at the present time due to the obiter dicta in the Cement case. After having read these cases thor- oughly I am convinced that the term “conscious parallel pricing’ which has been mentioned before this distinguished body so many times has caused more trouble and confusion among lawyers and businessmen than the Federal Trade Commission’s decision itself. It further has given the opponents of this present legislation, S. 1008, an opportunity to attach themselves to a few small groups of businessmen with the purpose in mind of causing further confusion. The op- ponents of this legislation, if speaking frankly, would necessarily have to admit that legislation is necessary to clarify the obiter dicta in these Supreme Court cases, if for no other reason. This basing-point bill has had ample consideration by both the Senate and House Judiciary Committees. These two bodies, composed almost entiiely of ca- pable lawyers, have recognized the need for clarification of the law concerning de- livered-pricing systems. Both commit- tees have voted unanimously for legis- lation to carry out this purpose. It seems to me, therefore, that Members of the House of both major parties, whether they be lawyers, businessmen, farmers, or other professional men, should give these committee deliberations and votes a great deal of attention and considera- tion. The overwhelming opinion of business- men of my district, both large and small, is in favor of 8. 1008. My constituents demand that clarification of the issue of delivered-pricing systems be made by Congress immediately. This matter has been pending now for more than 2 years and certainly should be decided before Congress adjourns this summer. If the matter remains unclarified for any fur- ther period of time, it may well be that businessmen will become so confused and uncertain as to methods of pricing that serious unemployment may be causcd. Business just will not continue in opera- tion if it is fearful of every move or uncertain as to the outcome of its plac- ang definite prices on the goods which it sells. For the sake of the prosperity and gcn- eral healthy economic. : condition of the American people, I therefore urge my colleagues in the House of Representa- tives to vote for the return of this bill into conference and for immediate en- actment into law. Mr. MICHENER. Mr. Speaker, I yield myself such time as I may require. Mr. Speaker, this is a procedural mat- ter entirely. If we follow the usual prac- tice in Congress, we must send this bill to
2510 conference. Do not lose sight of the fact that the House passed S. 1008, in the first instance, by an overwhelming vote. Second, that the House also adopted the conference report by an overwhelming vote notwithstanding the protests of the gentleman from Texas [Mr. PATMAN]. Nothing new has been said today. The Senate has twice passed on this bill, just the same as has the House. So, about the only thing before the House is: Shall we send the conference report, which the Senate amended, to conference to see if there is any way that we can compose the differences between the two bodies. The Congress should be permitted to work its will. If and when the House has demonstrated thoroughly that it desires to legislate on a given subject, opportu- nity should be provided for a final ex- pression. There is no question but that the House has spoken at least twice. There is no question but that the Senate has spoken at least twice on the funda- mental question. I do not know how I am going to vote when the conference report comes back. I may vote against the conference report. It all depends upon the way that report reads. Re- membcr, there will be debate when the conference report comes back. As far as the Robinson-Patman Act is concerned, I helped pass that law. The gentleman from Texas [Mr. PaTMan] will agrec. I favor that law. I would not have voted for 8. 1008 if, in my opinion, it destroyed that law. I will not vote for the conference report if I believe it will destroy that law. Forget the Robinson- Patman Act and I do not believe there is any serious objection to 8. 1008. As for the argument made by the gentleman from Texas [Mr. PATMAN] that there have been no hearings, I think that argu- ment has been fully answered. I know there were hearings. I was not a mem- ber of the subcommittee that considered this bill, but when public hearings were announced I attended as a spectator, not as a member of the committee. I heard Senator O’Manoney testify. I heard the representative from the Department of Justice and others testify. At this late stage it is claimed there have been no hearings. As explained by the gentle- man from Pennsylvania (Mr. WALTER], there have been hearings. Just an observation about the prac- tice of committee hearings. The Ways and Means Committee of the House has been considering a tax bill for weeks. When it concludes its consideration it will bring in a new bill based on these hearings. The new bill is what we will consider. Someone may stand up here, like the gentleman from Texas has in this case, and say: “I am opposed to this. There has been no hearing on this par- ticular bill.” Well, that will be true. The committee on monopoly study of the Judiciary Committee will eventually un- doubtedly bring in some bill, but there will not be long and extensive hearings on the individual bills which are based upon the study and hearings which have been given to the subject; that is, the bill in its final form will be the result of extensive hearings. 8. 1008 was the re- sult of prolonged hearings in the Senate. Big business, little business, and all the rest were heard, CONGRESSIONAL RECORD—HOUSE Mr. Speaker, this is not the time to discuss the merits of S. 1008, which has been thoroughly debated in the House on at least two occasions. As to the objective of the bill, I quote from the remarks of the Senator from Virginia, Mr. Roserrson. In the debate on sending this bill to conference, he said: The only purpose of this measure was to restore what had been accepted as a normal and necessary means of doing business, with- out any intention at all of weakening the antitrust laws or of violating any part of the Robinson-Patman Act. The Senator from Louisiana, Mr. Lona, who is opposed to the bill, stated the essence of the opposition as follows: The question is, if the discrimination in favor of a large concern is made in good faith, should that be a defense, under the Robinson-Patman Act, against the charge of unfair price discrimination? In conclusion, let us not forget that the vote we cast here today is not a vote for or against S. 1008. It is only a vote to permit the House and the Senate to indulge in further conference to the end that satisfactory language may be agreed upon by the conferees. If this happens, the conferees must report their handi- work back to the House. Then we will all be permitted to vote for or against the bill in its final form. What is wrong about that? I realize there is difference of opinion among our Members. There is no use in getting excited or angry. Honest disagreement in the drafting of legislation is most helpful. If we are sincere, we can disagree without being disagreeable. I impurn no one’s motives and I believe a majority of the House today, as on another occasion, will fol- low the letter and the intent of the rules and send this bill back to conference. Mr. CELLER. Mr. Speaker, I yield the balance of my time, which I under- stand is 4 minutes, to the gentleman from Louisiana [Mr. Bocas]. Mr. CARROLL. Mr. Speaker, a par- liamentary inquiry. The SPEAKER. The gentleman will state it. Mr. CARROLL. The procedure under this bill, S. 1008, is so complicated that it would be very helpful at least to me and to some Members of the House with whom I have spoken, if we could have some understanding of the legislative situation. I am informed—and I should like to have the comment of the Speaker if he cares to comment—that this bill came to us from the Senate; that this body incorporated certain amendments, that the bill then went to conference, and that the other body rejected the con- ference report. The question I now pro- pound is whether or not if the bill again goes to conference we are back in the situation we were some months ago where the House inserted certain amend- ments to S. 1008? The SPEAKER. The conferees would have the same power they had before in considering matters in disagreement. Mr. CARROLL. But my doubt arises on the subject matter on which they will be working, Mr. Speaker. The SPEAKER. The Chair cannot anticipate what the conferees may do, FEBRUARY 28 Mr. CARROLL. Perhaps, if I may be permitted another question, I can make myself clear: As I recall the Recorp, on July 7 last, the House passed cer- tain amendments; I am wondering if those amendments are the amendments which the conferees, if this bill goes to conference, will work their will upon. The SPEAKER. The conferees could work their will on any matter in dis- agreement. Mr. CARROLL. I thank the Speaker. The SPEAKER. The gentleman from Loutsiana [Mr. Boccs] is recognized for 4 minutes. Mr. BOGGS of Louisiana. Mr. Speak- er, the Recorp will show that the oppo- sition to this bill has had about 11 or 12 minutes out of the hour, but this record is consistent with the history which has been established throughout this legis- lation. This has been a bold attempt to enact into a law a proposition of vital importance to every person in this country without permitting adequate hearings so that the Members of Con- gress may understand the issues in- volved. The gentleman from Pennsylvania has referred to the so-callcd hearings held when this legislation was originally be- fore the committee, Actually, if you will take the trouble to examine these alleged hearings, you will find that they are 35 pages in length, which would normally be about half an hour before a com- mittee; and most of them are devoted to the proposition of the gentleman from Texas asking that the matter be given full and adequate hearings. It is perfectly understandable to me, Mr. Speaker, why the gentleman from Indiana, the gentleman from Pennsyl- vania, and gentlemcn from certain other areas where there presently are large concentrations of heavy industry should be so violently interested in passing this legislation without hearings. The excuse which they give, of course, is a fantastic one; they say that this legislation is required to clear up some obiter dicta of the Supreme Court decision. I ven- ture to say that a large percentage of the Members of this body are lawyers. I believe they understand what obiter dicta means. It means “beyond the de- cision of the court.” It has no effect, it has no meaning, and it has no signifi- cance. No; that is not the reason. The rea- sons for the passage of this legislation are: First, to remove the existing pro- visions of the Robinson-Patman Act which state that good faith shall only be used as evidence when an unfair competitive practice has been found. They propose to substitute for this existing rule of evidence a substantive provision of law making good faith an absolute defense. The effect would be an annulment of the Robinson-Patman Act. The second reason, and I direct my remarks to every Member of this body from New England, from the South, and the West, is that this is an effort to maintain the present geographic struc- ture of heavy industry in this country. Let me given you a startling illustration of what I mean.
1950 Birmingham, Ala., is the most natural, the most logical place in this country for the production of steel because there we have an outcropping in the same place of iron ore, limestone, coal, and coke. In Birmingham, Ala., paying equal if not higher wages than Pitts- burgh, steel can be produced at much less cost than elsewhere. The transpor- tation rates from Birmingham by rail, not by water which certainly should be calculated in the consideration of this bill, are as much as 100 percent less than the transportation rates from Pitts- burgh or from Gary to points in the South. Yet the Birmingham mill sup- plies only a small part of the demand of the South. This bill makes it impossible for the Birmingham area ever to prop- erly develop. I refer you to the Appendix of the CONGRESSIONAL RECORD, page A1188. There the story is told. How any Repre- sentative from the West or the South could vote for this bill is beyond me. It makes permanent the colonization of our areas. Now let us analyze the effect on the antitrust laws. The principal question in case No. 107, Standard Oil Company against Fed- eral Trade Commission, which was ar- gued and submitted to the Supreme Court on January 9 and 10, 1950, con- cerns the proper construction and ap- plication of section 2 (a) of the Clay- ton Act which prohibits price discrimi- nations that have the specified injurious effects on competition. The case also concerns the proper interpretation of section 2 (b) of that act which pro- vides: Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or serv- ices or facilities furnished, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this sec- tion, and unless justification shall be af- firmatively shown, the Commission is au- thorized to issue an order terminating thea discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a com- petitor, or the services or facilities furnished by a competitor. Section 3 of S. 1008 as rewritten by the conference committee and passed by the House, would amend section 2 (b) of the Clayton Act to read as follows: Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price the effect of which upon competition may be that pro- hibited by the preceding subscction, or dis- crimination in services or facilities fur- nished, the burden of showing justification shall be upon the person charged with a vio- lation of this section, and unless justifica- tion shall be affirmatively shown, the Com- mission is authorized to issue an order ter- minating the discrimination: Provided fur- ther, That a seller may justify a discrimina- tion [Kefauver and Carroll amendments both stricken and nothing substituted] by show- ing that his lower price or the furnishing of services or facilities to any purchaser or pur- chasers was made in good faith to meet an equally low price of a competitor, or the CONGRESSIONAL RECORD—HOUSE services or facilities furnished by a competi. tor, and this may include the maintenance above or below the price of such competitor, of a differential in price which such seller customarily maintains, except that this shall not make lawful any combination, conspir- acy, or collusive agreement; or any monopo- listic, oppressive, deceptive, or fraudulent practice. The question presented in the Stand- ard O11 Co. case is whether the proviso to section 2 (b) of the Clayton Act “that nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that hts lower price was made in good faith to meet an equally low price of a competitor” makes such a showing a complete justification for discriminations in price when it is affirmatively shown that such discrimi- nations have had and may have the in- jurious effects on the competition speci- fled in section 2 (a). The complaint issued by the Federal Trade Commission charged that the Standard Oil Co. has discriminated in price in the sale of gasoline in the De- troit metropolitan area by selling its gas- oline to four purchasers classified by Standard as jobbers at prices substan- tially lower than the price which Stand- ard charges for gasoline to other pur- chasers whom it supplies in that area. Since September 10, 1936, Standard has supplied gasoline in Detroit to the operators of approximately 358 service stations who are engaged exclusively in reselling such gasoline at retail. Also since that date and in the same area, Standard supplied gasoline to the four so-called jobbers, namely, Ned’s Auto Supply Co., Citrin-Kolb Oi] Co., Stike- man Oil Co., and Wayne Oil Co. At the outset it should be noted that there is no magic in the word “jobber.” Standard states in its brief before the Supreme Court, at page 5, that the word shall apply to one who conforms to the industry classification of the word “jobber,” and who therefore may sell at wholesale, retail, or both. Ned’s was exclusively a retailer, resell- ing Standard’s gasoline through its own chain of service stations. Citrin, Stike- man, and Wayne were engaged in resell- ing Standard’s gasoline at wholesale and retail. Thus, in their retail operations, Ned’s, Citrin, Stikeman, and Wayne, although they were classified by Standard as jobbers, and although they bought in tank car quantities, were in fact retailers in competition with the 358 other retail- ers who purchased their gasoline from Standard in tank-car quantities. It is very important to note that the Commission found, and it is not disputed by Standard, that the lower price to the four jobbers was not justified by cost savings to Standard in serving them. The case thus presents a factual sit- uation wherein one large gasoline re- tailer and three wholesalers who sold in part at retail, were able to demand and obtain from Standard, because of the quantities in which they purchased, a substantially lower price for Standard’s gasoline than the price charged by Standard for gasoline of the same grade and quality to 358 other retailers who purchased directly from Standard and 2511 resold such gasoline at retail in competi- tion with the four favored purchasers. The Commission found that Stand- ard’s price discriminations gave the four jobbers in their retail operations a sub- stantial competitive advantage over the 858 retailers paying the higher price. The Commission found that the price discriminations to these four jobbers have had and may have the effect of injuring, destroying, preventing compe- tition between these four jobbers in their retail operations with other retailers in Detroit who are required to purchase gasoline from Standard at higher prices. The Commission concluded that Stand- ard’s discriminations in price in favor of Ned’s, Citrin, Stikeman, and Wayne vio- lated section 2 (a) of the Clayton Act. The sufficiency of the evidence to support the Commission's findings and the Com- mission’s findings to support its conclu- sion are not disputed by the Standard Oil Co. in any manner except as to the question of interstate commerce. The Commission’s order prohibiting such discriminations in price was unani- mously upheld by the United States Court of Appeals for the Seventh Circuit. The Standard Oil Co. contends that section 2 (a) is not a complete section defining a prohibited offense, but is modi- fied by the proviso of section 2 (b). Standard contends that a discrimination in price declared unlawful by section 2 (a) is not unlawful if the seller can show only that the lower of the two prices was made in good faith to meet a price offered by one of his competitors; and that such a showing is a complete defense as a matter of law to a charge of violation of section 2 (a), regardless of the amount of the discrimination and regardless of its injurious effect on com- petition among Standard’s competing re- tailer-customers. In short, Standard contends that all of its price discriminations were made in good faith to meet equally low or lower prices of competitors. In support of this defense, Standard introduced evidence of competitive offers received by the four dealers from distributors of both major and minor brands of gasoline. Some of these offers were made prior to June 19, 1936, and some were made subsequent to June 19, 1936. Of those offers made subsequent to June 19, 1936, some were made after the filing of the complaint herein. Standard also contended that the lower prices allowed the four dealers were made in good faith to meet an equally low price of a competitor for the reason that said four dealers could at any time herein involved have purchased gasoline of grade and quality comparable to that sold by Standard at equally low or lower prices from other suppliers of gasoline in Detroit. Based on the record in this case the Commission concluded as a matter of law that it is not material whether the discrimination in price granted by Standard to the four dealers were made to meet equally low prices of competitors. The Commission further concluded as a matter of law that it is unnecessary for the Commission to determine whether the alleged competitive prices were, in fact, available or involved gasoline of
2512 like grade or quality or of equal public acceptance. Accordingly, the Commis- sion did not attempt to find the facts regarding those matters because, even though the lower prices in question may have been made by Standard in good faith to meet the lower prices of competi- tors, the Commission was of the opinion that this does not constitute a defense in the face of affirmative proof that the effect of the discrimination was to injure, destroy, and prevent competition be- tween the retail stations operated by the 4 dealers and the 358 retailers. In substance the Commission held that the effect to be given proof of meeting competition is not a matter of law but a matter of evidence, and that such proof was not available to Standard as a de- fense on the facts of this case because such proof did not and could not rebut or overcome the Commission’s evidence of injury to retail competition resulting from the discrimination. The Standard Oil Co.’s contention that the proviso to section 2 (b) is a complete defense to a charge of unlawful price dis- crimination in any case as a matter of Jaw, is controverted by the legislative history as well as by the language of the proviso. Prior to June 19, 1936, when the Robinson-Patman Act went into effect, section 2 of the original Clayton Act de- clared discrimination in price to be un- lawful where the effect of such discrim- ination may be to substantially lessen competition or tend to create a monopoly in any line of commerce, with provisos permitting, among other things, discrim- inations in price in the same or different communities made in good faith to meet competition. Under that proviso proof establishing that a discrimination in price was made in good faith to meet competition was a complete defense to a charge of unlawful price discrimina- tion. In framing the Robinson-Patman Act Congress was concerned with the growth of chain stores and the use made of mass buying power to obtain preferential prices. In fact, the Robinson-Patman Act grew out of the Federal Trade Com- mission’s chain-store investigation made at the request of Congress. The Com- mission’s report to Congress showed that many large chains were receiving dis- counts, allowances, and other advan- tages greatly in excess of those granted, not only to competing retailers but even to wholesalers. It was recognized by Congress that section 2 of the original Clayton Act permitting discriminations in price in good faith to meet competi- tion made that section unenforceable in the very cases the statute was intended to reach, for under that section a chain or other large buyer, merely by finding two or more sellers of like goods willing to grant to it the same preferential price, could obtain an unearned competitive advantage over his smaller competitors and neither the sellers nor the buyer would be subject to corrective action, even though the ability of the smaller competitors to compete with the chain or other large buyer was injured or destroyed by such price discrimination. CONGRESSIONAL RECORD—HOUSE The House Judiciary Committee in re- porting the Patman bill in 1936 stated, with regard to the meeting competition proviso and other provisos of section 2 of the original Clayton Act, that “these provisos have so materially weakened section 2 of that act, which this bill proposes to amend, as to render it in- adequate, if not almost a nullity”’— House Report 2287, Seventy-fourth Con- gress, second session, page 7. In reporting the Robinson and Pat- man bills favorably, both the Senate and House Judiciary Committees emphasized the purpose to protect the competitive opportunity of the small-business man by prohibiting all price differentials ex- cept those which could be justified in full by cost savings. The House Committee reported that “the object of the bill briefly stated is to amend section 2 of the Clayton Act so as to suppress more effectually discrimination between cus- tomers of the same seller not supported by sound economic differences in their business positions or in the cost of scrv- ing them”—House Report No. 2287, Sev- enty-fourth Congress, second session, page 7. In this case, Ned's Auto Supply Co. was engaged exclusively in reselling Stand- ard's gasoline direct to the consuming public through its own chain of retail service stations. According to Stand- ard's version, Ned’s was able to induce competitors of Standard to offer to sell gasoline to it in tank-car quantities at tank-car prices and that Standard had to do the same to meet this competi- tion, regardless of the injurious effects upon competition at the retail level be- tween Ned’s and other retailer-purchas- ers of Standard’s gasoline. In other words, Ned’s, although exclusively a re- tailer, was arbitrarily classified by Stand- ard as a wholesaler and given wholesale prices which Standard did not make available to its other retailer-customers, which resulted in injurious effects upon competition at the retail level. Under section 2 of the original Clayton Act, Standard might have justified such dis- criminations in price if made in good faith to meet competition. It therefore appears that Standard’s discriminatory prices granted to Ned’s represent the same chain-store situation which Con- gress found evaded the purpose of the original Clayton Act and also presents exactly the type of case which Congress intended to reach by the enactment of the Robinson-Patman Act. The proposal that meeting competition in good faith be made an absolute jus- tification for discrimination in price otherwise prohibited was considered and rejected by Congress in the enactment of the Robinson-Patman Act. The meet- ing competition proviso was considered one of the principal loopholes in the original act and both the original Rob- inson bill and the original Patman bill omitted any provision similar to this pro- viso. In the Senate a provision with respect to meeting competition having the same effect as under the original Clayton Act was proposed as an amend- ment. In the House the Judiciary Com- mittee reported the bill with a section FEBRUARY 28 substantially identical with the present section 2 (b). The conference commit- tee rejected the Senate’s version and ap- proved the House amendment in the form enacted. With respect to the meeting competition proviso proposed by the amendment to the Senate bill the con- ference committee stated: The Senate bill contained a further pro- viso: “That nothing herein contained shall prevent discrimination in price in the same or different commodities made in good faith to meet competition.” This language is found in existing law, and in the opinion of the conferees is one of the obstacles to the enforcement of the present Clayton Act. The Senate receded, and the language is stricken. A provision relating to the meet- ing of competition, intended to operate only as a rule of evidence in a proceeding befcre the Federal Trade Commission, is included in subsection (b) in the conference text as follows: “Provided, however, That nothing herein contained shall prevent a seller re- butting the prima facie case thus made by showing that his lower price or the furnish- ing of services or facilities to any purchaser or purchasers was made In good faith to meet an equally low price of a competitor, or the services or facilities furnished by a com- petitor. (80 CONGRESSIONAL RECORD, p. 9414; H. Rept, 2951, 74th Cong., 2d sess., pp. 6, 7.) In presenting the conference report in the House the chairman of the conferees explained the good faith proviso of the present section 2 (b) in these words: It is to be noted, however, that this does not set up the meeting of competition as an absolute bar to a charge of discrimination under the bill. It merely permits it to be shown in evidence. This provision is en- tirely procedural. It does not determine substantive rights, liabilities, and duties. They are fixed in the other provisions of the bill. It lcaves it a question of fact to be determined in each case, whether the com- petition to be met was such as to justify the discrimination given, as one lying within the imitations laid down by the bill, and whether the way in which the competition was met lies within the latitude allowed by those Hmitations. * * ® If this proviso were construed to permit the showing of a competing offer as an absolute bar to Mabil- ity for discrimination, then it would nullify the act entirely at the very inception of its enforcement; for in nearly every case mass buyers receive similar discriminations from competing sellers of the same product. (80 CONGRESSIONAL REcorD, p. 9418.) With respect to the meeting competi- tion provision of the original Clayton Act which permitted the statute to be easily evaded, the United States Court of Appeals for the Seventh Circuit (173 F. 2d 210) aptly stated that— Congress sought to change this bypass by changing the discriminatory price, made in good faith to meet the low price of a com- petitor, from a defense, as it then was, to & procedural aid to enable a seller to over- come the prima facie case made by showing a difference in price to customers in the same community for goods of the same qual- ity. The Robinson-Patman Act in section 2 (a) continued to make it unlawful to make a discriminatory price as was pro- vided in the original Clayton Act and kept as a defense the cost savings and other defenses of the original act, but took out of the defense category the pro- vision for making a lower price to meet
1950 competition. As to this, section 2 (b) of the Robinson-Patman Act in part pro- vided: Upon proof being made that there has been discrimination in price, nothing herein con- tained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price was made in good faith to meet an equally low price of a competitor. In this amendment it appears to us as it did to the court below that the intent of Congress is clear and the lan- guage used to express its intent is not ambiguous. The court below was also of the opinion that the Supreme Court in the case of Staley Manufacturing Com- pany v. Federal Trade Commission (324 U. S. 746 (1945)), has expressed the view that section 2 (b) is as the confer- ence report says it was intended to be. To support its opinion the Court of Appeals (173 F. 2d 210) quoted from the opinion in the Staley case wherein the Supreme Court, speaking through Chief Justice Stone, in part stated: It will be noted that the defense that the price discriminations were made in order to meet competition, is under the statute a matter of rebutting the Commission's prima facie case prior to the Robinson-Patman amendments. Section 2 of the Clayton Act provided that nothing contained in it shall prevent discriminations in price made in good faith to meet competition. The change in language of this exception was for the purpose of making the defense a matter of evidence in each case, raising a question of fact as to whether the competition justified the discrimination (pp. 752-3). To support this statement the Su- preme Court cites the conference report, House Report 2951, Seventy-fourth Con- gress, second session, pages 6-7, and the statement of the chairman of the House conference committee, volume 80, Con- GRESSIONAL REcORD, page 9418. From this language it clearly appears that the Su- preme Court has held that the good- faith proviso of section 2 (b) does not provide a substantive justification for violation of section 2 (a); that proof of mecting competition in good faith is sufficient to rebut only a prima facie case of violation of 2 (a) and, beyond that, is merely evidence to be considered by the Commission with other evidence in determining as a question of fact in each case whether the seller’s competition justified the discrimination in price. The Court of Appeals for the Second Circuit in Moss v. Federal Trade Com- mussion (148 Fed. 2d 378, C. A. 2d 1944; cert. den. 326 U. S. 734) has, in effect, held that proof of a price differential in itself constituted ‘discrimination in price” where the competitive injury in question was between sellers. The Supreme Court in Federal Trade Commission v. Morton Salt Company (334 U. 8. 37, 45 (1948), has held that— Congress meant by using the words “dis- crimination in price” in section 2 that, in a case involving competitive inJury between & seller’s customers, the Commission need only prove that a seller had charged one pur- chaser a higher price for like goods than he had charged one or more of the purchaser’s competitors. In the light of these cases the mean- ing of the words “discrimination in CONGRESSIONAL RECORD—HOUSE price” is clear in the first half of section 2 (b) which provides that “upon proof being made, at any hearing on a com- plaint under this section that there has been discrimination in price the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with violation of this section, and unless justification shall be affirmatively shown, the Com- mission is authorized to issue an order terminating the discrimination.” In the light of the Moss and Morton Salt cases, this part of section 2 (b) clearly means that proof of discrimina- tion in price without proof of the in- jurious effects specified in section 2 (a) makes a prima facie case of unlawful discrimination and that the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation. The word “justification” clearly refers to the substantive dcfenscs made available by the provisos of section 2 (a) and the provision relative to meeting an equally low price of a competitor in good faith is not included in that section. The second half of section 2 (b) states: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price * * * to any pur- chaser or purchasers was made in good faith to mcet an equally low price of a com- petitor. Such a showing is not referred to as, and manifestly is not intended to be, justification for price discrimination. And neither section 2 (a) nor 2 (b) pro- vides, as did section 2 of the original Clayton Act, that “nothing herein con- tained shall prevent discrimination in price made in good faith to meet com- petition.” The action of Congress in deliberately taking this proviso out of section 2 of the original Clayton Act where it was a sub- stantive defense and by transferring it to section 2 (b) where it was made a pro- cedural section, discloses in itself the intention of Congress to reduce the legal status of the proviso from that of a sub- stantive defense to the status of an evi- dentiary matter that may or may not be applicable on the merits of a charge of unlawful price discrimination. The action of Congress in deliberately changing the phraseology of the pro- viso likewise discloses the same inten- tion on the part of Congress. It is clear that the effect of the good faith proviso of section 2 (b) extends only to the matter of rebutting the prima facie case, thereby shifting the burden of proof to the Commission on the issue of whether the discrimination has or may have the injurious effects upon com- petition specified in section 2 (a). Since the term “discrimination in price’ was used in connection with the term “the prima facie case” Congress evidently did not intend the term “discrimination in price” to refer to all of the elements of unlawful price discrimination, including the effects upon competition set forth in section 2 (a). Itclearly appears that the term “discrimination in price” as used in section 2 (b) does not include, and, as 2513 held in the Moss, Staley, and Morton Salt cases, section 2 does not require affirma- tive proof of actual injury to competition when the other elements of an unlawful price discrimination are established. If proof of good faith in meeting an equally low price of a competitor is made, the Commission can no longer rely upon a prima facie case, but must show as was shown in the present case, by additional and affirmative evidence that Standard’s discrimination has had and may have the injurious effects upon competition speci- fied in section 2 (a). This construction and application of sections 2 (a) and 2 (b) we submit cor- rectly and clearly demonstrate that where, as in the instant case, the inju- rious effects upon competition have been affirmatively established, a showing that Standard was meeting an equally low price of a competitor in good faith does not constitute a justification for Stand- ard’s discriminations in price. This is particularly true where, as in the instant case, the competition injured is retail competition between competing pur- chasers, since the fact that the seller acted in good faith to meet the price of the seller’s competitor is not inconsist- ent with, and does not logically rebut, the proof that retail competition between competing purchasers is injured by the discrimination. To accept Standard’s construction of section 2 (b) would mean that the indi- vidual seller’s interest in discriminating in price would prevail over the public in- terest in protecting competition against discriminatory pricing. If Standard’s construction should prevail as a matter of law, then the prohibition against dis- criminatory pricing in section 2 (a) will become largely a nullity and sections 2 (a) and 2 (b) taken together will become for the most part merely a declaration of the individual right to discriminate. It has been argued that under the Commission’s construction of the stat- ute, Standard would be forced to sit idly by while its competitors took away its customers by means of lower prices. This is not so. If a seller loses a customer to a com- petitor as a result of a discriminatory price offered by a competitor, the Clayton Act gives him a right of action for three times his damages, and he may also seck an injunction in the district court. To permit retaliation in such a case would be to let one violation of law jus- tify another. Such a contention by the Staley Co. was referred to as startling and was rejected by the Supreme Court in the Staley case. If the competitor who offers a lower price to the seller’s customer is not dis- criminating in price, then the situation is one of normal price competition be- tween sellers, and the remedy is to meet that competition without engaging in unlawful discrimination. If the seller cannot meet such competitor’s price in fair competition it is because the com- petitor either is more efficient or has some lawful advantage, such as lower transportation costs. In either case, nor- mal competitive forces come into play, and the customer’s business will and
2514 should go to the seller able to offer the lowest nondiscriminatory price. There is nothing in the Commission's order which would prevent the Standard Oil Co. from selling to wholesalers and retailers at a price lower than any of its competitors and thereby preventing the switch of its customers to its competitors, so long as Standard’s prices are not dis- criminatory. Therefore, the argument made on behalf of Standard that the Commission’s order would preclude it from engaging in competition to hold its customers is without merit. It has been argued that the Clayton Antitrust Act, as amended by the Robin- son-Patman Act, does not encourage hard competition. It is submitted that the full impact of competition upon Standard, compelling it to lower its en- tire price structure in order to hold its customers, will impose on Standard hard competition. It is soft competition that would permit Standard to discriminate in price to hold the business of some of its favored customers without being com- pelled to lower its general price struc- ture. If Standard’s construction of the stat- ute is accepted, it means that a small business located at one point cannot undersell a large corporation with many branches without the risk of economic strangulation through price discrimina- tion although the small concern does not discriminate at all. It also means that one competitor whose differences in cost would justify a lower price, runs the same risk at the hands of its larger rival. Standard’s construction would even mean that the discriminator would justify his otherwise unlawful dis- criminations by the discriminations of & competitor, although the latter may also be unlawful. To accept Standard’s construction of the statute would mean that Congress intended to let down the bars to injurious price discrimination whenever the seller can show that a competitor is offering the same price to @ favored customer. A seller in a com- petitive industry usually encounters such competition in selling to chains and other large purchasers and Stand- ard’s construction of the statute would license injurious and oppressive dis- crimination. From the foregoing argument in the Standard Oil Co. case, the conclusion is reached that section 3 of S. 1008 as re- written by the conference committee and passed by the House and providing “that a@ seller may justify a discrimination by showing that his lower price was made in good faith to meet an equally low price of a competitor,” will emasculate and nullify section 2 (a) of the Clayton Act prohibiting price discriminations which have or may have the specified injurious effects upon competition, If this amendment is enacted into law, sec- tion 2 (a) and 2 (b) of the Clayton Act will become for the most part largely a declaration of the right of the seller to discriminate in price regardless of the quantity of the discriminations and the amount of injury resulting therefrom to competition. The amendment pro- posed by Senator Kerauver and im- proved by Represcntative Carrot, would sustain the application and construction CONGRESSIONAL RECORD—HOUSE of sections 2 (a) and 2 (b) by the Federal Trade Commission and the United States Court of Appeals for the Seventh Circuit in the Standard Oil Co. case. Without an amendment such as that offered by Senator Kerauver and Con- gressman CARROLL, retail competition among competing purchasers of a seller who discriminates in price would be afforded no protection from the injurious effects of such discriminations. With- out the Kefauver and Carroll amend- ments sections 2 (a) and 2 (b) of the Clayton Act would revert to the same status as section 2 of the original Clay- ton Act which Congress found to be in- effective and unenforceable. FREIGHT ABSORPTION LEGAL RIGHT NOW-—NO NEW LAW NEFDED—PROVIDED ONLY THERE IS NO COLLUSION OR ADVERSE EFFECTS ON COM- PETITION—THIS 18 ALSO THE VIFW OF FED- ERAL TRADE COMMISSION—S. 1008 REALLY DESIGNED TO RESTORE BASING-POINT SYSTEM Mr. MANSFIELD. Mr. Speaker, pro- ponents of S. 1008 state that the bill is necessary in order that sellers desiring to absorb freight may do so with the confi- dence that they will not be violating the antitrust laws merely by reason of such freight absorption. Are the bill’s pro- ponents sincere in their statement? In public hearings before the Federal Trade Commission, in the matter of American Iron & Steel Institute et al, Federal Trade Commission Docket 5598, on Tuesday, February 14, and Thursday, February 23, 1950, members of the Fed- eral Trade Commission’s legal staff, in- cluding Mr. Everette MacIntyre, its Chief of the Division of Antimonopoly Trials, made clear their view that at present it is not unlawful for a seller to absorb freight or otherwise discriminate in price. They made it clear that discriminations in price, whether in the form of so-called freight absorption or otherwise, are law- ful except where they operate to destroy competition and tend to create a monop- oly or involve collusion. In that con- nection it should be noted that the views thus expressed conform to views which have been expressed by the Federal Trade Commission in its public an- nouncements and communications to the Congress dealing with this problem. For example, on July 12, 1949, the Commis- sion in an order disposing of respond- ents’ motions to dismiss in the Rigid Steel Conduit case, Docket No. 4452, made it clear that its order in that case does not run against freight absorption, as such. It should be noted that prior to that date the respondents had filed a motion with the Commission for that case to be reopened for the purpose of making clear that the order did net run against freight absorption as such. The Commission in disposing of that motion, on July 12, 1949, stated: The purpose of the requested modification is said to be to make clear that the order does not prohibit any of the respondents, acting independently, from quoting or selling at de- livered prices or from absorbing freight. The Commission does not consider that the order in its present form prohibits the independent practice of freight absorption cr selling at delivered prices by individual sellers. (See CONGRESSIONAL ReEcorpD of August 11, 1949, last paragraph of the first column of p. 11256; see, also, CONGRESSIONAL Recorp of August 11, 1949, pp. 11253, 11268, 11284-11285; Appendix FEBRUARY 28 of the ConGressIOoNAL Recorp, p. A4891; and CONGRESSIONAL REcorD of August 10, 1949, p. 11182.) At the public hearings before the Fed- eral Trade Commission in a basing-point case where the steel companies are ac- cused of collusive and unlawful price fix- ing, namely, the American Iron & Steel Institute et al., Federal Trade Commis- sion Docket 5508, the Chairman of the Federal Trade Commission asked mem- bers of the Commission’s staff what their views were concerning mandatory f. o. b. prices. To that question the Chief of the Commission’s Division of Antimonopoly Trials advised as follows: I have never held the position that the law entrusted to you provides you with the powor to require anyone to sell exclusively at a single nondiscriminatory f. 0. b mill price. I have held the position, and I still hold it, that the Clayton Anti-Trust Law, as amended by the Robinson-Patman Act, makes unlawful f. 0. b, mill prices which are discriminatory with the adverse effect speci- fled in that statute; that is, the destruction of competition or injury to competition. Likewise, the Federal Trade Commission Act prohibits the use of unfair practices, and an unfair practice is discrimination which creates or tends to create monopoly. (Tr. p. 180, lines 1-15 ) To that statement was added the fol- lowing: At this time I would like further to exDlain my answer to this effect. It is my opinion that the law does not require either f. 0. b. mill or delivered pricing. It is my position that the law does not prohibit either f. o. b. mill or delivered pricing per se. It is my position that the law does not prohibit so- called freight absorption or any discrimina- tion not involving adverse effects specitied in the Clayton Antitrust Act, as amended by the Robinson-Patman Act. Those effects are clearly specified in section 2 (a) of the Clay- ton Antitrust Act as amended. Its effects include hindrance, suppression, and injury to competition or tendency to create a mo- nopoly. They are matters which must be proven as facts and included in the Commis- sion’s findings of facts before it can prohibit said practices. If there should come before this Commission a case involving price dis- crimination, whether or not in the form of so-called freight absorption, the Commission is without authority to prohibit its discon- tinuance if the facts in the case should show that the practice promotes competition and does not injure competition, promote mo- nopoly or involve oppression or collusion. I Know of no recognized dissent to that view. I suggest careful consideration of that view by those who either hold or favorably regard the thoughts expressed by Mr. Littleton in his plea to the Commission on this matter on February 14, 1960. It is recalled that he pled for the right to continue the practice of freight absorption where it promotes compe- tition. Let us not confuse the law on that point with a finding of fact. A jury or other fact finders have the task under our system of jurisprudence of determining whether discriminations in a particular situation pro- mote competition or destroy it. In the last analysis, freight absorp- tion is a reduction in price, a reduction in the net return to the seller. Nothing in the antitrust laws prohibits a seller from reducing his price, unless he does so as part of a collusive scheme, or with the effect of lessening competition. A reduction of price, accomplished by freight absorption or by direct quotation, is within the power of any seller who follows the present laws
1950 The supporters of S. 1008 are less than frank when they state that the purpose of the bill is to clarify the seller’s right to absorb freight, Section 1 of the bill does declare that freight absorption is legal. But then why do we need sections 2,3, and 4 with their serious amendments to the Robinson-Patman Act? I ask te Members of the House to ponder on Ss. Mr. CELLER. Mr. Speaker, I move the previous question. The previous question was ordered. The SPEAKER. The question is on the motion offered by the gentleman from New York [Mr. CELLER]. The question was taken; and on a division (demanded by Mr. PatmaNn) there were—ayes 157, noes 86. Mr. BOGGS of Louisiana. Mr. Speak- er, I demand the yeas and nays. The yeas and nays were ordered. The question was taken; and there were—yeas 240, nays 144, not voting 48, as follows: [Roll No. 71] YEAS—240 Abbitt Fallon Lind Abernethy Fellows Linehan Allen, Calif. Fenton Lodge Allen, Il. Fernandez Lovre Andersen, Fisher Lucas H Carl Flood McConnell Anderson, Calif Forand McCormack Andresen, Ford McCulloch August H. Frazier McDonough Andrews Fugate McGregor Angell Fulton McGuire Arends Gamble McMillan, 8. C. Aspinall Galy McMillen, M1. Auchincloss Gavin Macy Barrett, Pa, Gillette Magee Barrett, Wyo. Goodwin Mahon Bates, Mass. Gordon Marsalis Beall Gore Martin, Iowa Bennett, Mich Gossett Martin Mass. Bishop Graham Mason Blackney Granahan Merrow Bolton, Md. Granger Mever Bolton, Ohio Green Michener Bonner Gwinn Miles Boykin Hale Miller, Md. Bramblett Hall, Miller, Nebr. Brehm Edwin Arthur Morton Brown, Ohio Hall, Murray, Tenn. Buchanan Leonard W. Nelson Buckley, Il. Halleck Nicholson Burleson Hand Nixon Burton Harden Norblad Byrne, N Y. Hardy Norrell Byrnes, Wis. Hare O'Brien, Il, Case,N J Harris O'Hara, Ill. Case,S Dak. Harrison O’Hara, Minn. Celler Harvey Patten Chatham Hébert Patterson Chelf Herlong Peterson Chesney Heselton Pfeiffer, Chiperfield Hill William L, Church Hinshaw Philbin Clemente Hobbs Phillips, Calif. Clevenger Hoeven Pickett Cole, Kans. Hoffman, Mich. Potter Cole, N Y. Holmes Poulson Colmer Hope Priest Cooley Horan Quinn Cooper James Ramsay Corbett Jenison Reed, Ill, Cotton Jenkins Reed, N. Y. Cox Jensen Rees Crawford Johnson Rhodes Curtis Jonas Ribicoff Dague Jones, Mo. Rich Davenport Judd Riehlman Davis, Ga. Kean Rivers Davis, Wis. Kearney Rogers, Mass. DeGraffenried Kearns Sadlak Delaney Keating St. George D'Ewart Keefe Sanborn Dolliver Kennedy Sasscer Dondero Kilburn Saylor Donohue Kilday Scott, Hardie Eaton Kirwan Scott, Eberharter Latham Hugh D., Jr. Ellsworth LeCompte Scrivner Elston LeFevre Scudder Engle, Caltf. Lichtenwalter Shafer CONGRESSIONAL RECORD—HOUSE Short Taber Welch Sikes Tackett Werdel Simpson, Ill. Talle Wheeler Simpson, Pa, Thomas Whitten Smith,Kans. Thompson Whittington Smith, Va. Towe Widnall Smith, Wis. Van Zandt Wigglesworth Spence Velde Wilson, Ind. Stanley Vorys Wilson, Tex. Steed Vursell Wolcott Stefan Wadsworth Wolverton Stigler Walter Wood Stockman Weichel Woodruff NAYS—144 Addonizio Hagen Murdock Albert Hart Murphy Batley Havenner Noland Baring Hays, Ark. Norton Bates, Ky Hays, Ohio O’Konskti Battle Heffernan O'Sullivan Beckworth Heller O'Toole Bennett, Fla. Hollfleld Passman Bentsen Howell Patman Biemiller Huber Perkins Blatnik Hull Phillips, Tenn. Boggs, La. Irving Polk Bolling Jackson, Wash. Powell Bosone Jacobs Preston Breen Javits Price Brown, Ga Jones, Ala Rabaut Bryson Jones, N.C. Rains Burdick Karst Rankin Burke Karsten Richards Burnside Kee Rodino Camp Kelly, N. ¥. Rogers, Fla. Canfield Keogh Rooney Carlyle Kerr Roosevelt Carnahan King Sheppard Carroll Klein Sims Cavalcante Kruse Staggers Christopher Lane Sullivan Combs Lanham Sutton Crook Larcade Tauriello Crosser Lemke Thornberry Deane Lesinski Tollefson Denton Lynch Trimble Dingell McCarthy Underwood Dollinger McKinnon Vinson Doughton McSweeney Wagner Doyle Mack, Ill. Walsh Durham Mack, Wash. White, Calif. Elliott Madden White, Idaho Engel, Mich. Mansfield Wickersham Evins Marshall Wier Feighan Miller, Calif. Willlams Fogarty Mills Willis Garmatz Mitchell Wilson, Okla. Gathings Monroney Winstead Gorski Morgan Withrow Grant Morris Woodhouse Gregory Moulder Young Gross Multer Zablocki NOT VOTING—48 Allen, La. Hedrick Plumley Barden Herter Poage Boggs, Del. Hoffman, Ill. Redden Brooks Jackson, Calif. Regan Buckley,N. Y. Jennings Sabath Bulwinkle Kelley, Pa. Sadowski Cannon Kunkel Secrest Chudoff Lyle Shelley Coudert McGrath Smathers Cunningham = Marcantonio Smith, Ohio Davies, N. Y. Morrison Taylor Davis, Tenn, Murray, Wis. Teague Dawson O'Brien, Mich. Whitaker Douglas O'Neill Worley Furcolo Pace Yates Gilmer Pfeifer, Golden Joseph L. So the motion was agreed to. The Clerk announced the following pairs: On this vote: Mr. Gilmer for, with Mr. Yates against. Mr. Secrest for, with Mr. O’Brien of Michl- gan against. Mr. Kunkel for, with Mr. Morrison against. Mr. Taylor for, with Mr, Marcantonio against. Mr. Hoffman of Illinois for, with Mr. Mc- Grath against. Mr. Jackson of California for, with Mr. Allen of Louisiana against. Mr. Teague for, with Mrs. Douglas against. Mr. Herter for, with Mr. Joseph L. Pfeifer against. 2515 Mr. Kelley of Pennsylvania for, with Mr. Hedrick against. Mr. Whitaker for, with Mr, Chudoff against. Mr. Coudert for, with Mr. Buckley of New York against, Mr. Plumley for, with Mr. Shelley against. Until further notice: Mr. Cannon with Mr. Boggs of Delaware. Mr. Smathers with Mr. Golden, Mr. Sadowski with Mr. Jennings. Mr. Worley with Mr. Smith of Ohio. Mr. Redden with Mr. Murray of Wisconsin. Mr. Regan with Mr. Cunningham. The result of the vote was announced as above recorded. Mr, CARROLL. Mr. Speaker, I offer @ preferential motion. The Clerk read as follows: Mr. CarROLL moves that the managers on the part of the House at the conference of the disagreeing votes of the two Houses on the bill 8. 1008 be instructed to insist upon the House amendment, Mr. WALTER. Mr. Speaker, I move that the motion to instruct conferees be laid on the table. The SPEAKER. The question is on the motion of the gentleman from Penn- sylvania to lay on the table the motion to instruct conferees. The question was taken; and on a divi- sion (demanded by Mr. CarRRoLt and Mr. Boces of Louisiana) there were—ayes 114, noes 100. Mr. CARROLL. Mr. Speaker, I de- mand the yeas and nays. The yeas and nays were ordered. The question was taken; and there were—yeas 211, nays 161, not voting 60, as follows: [Roll No. 72] YEAS—211 Abernethy Davenport Holmes Allen, Calif, Davies, N. ¥. Hope Alien, 11. Davis, Ga. Horan Andersen, Davis, Wis. James H Carl Delaney Jenison Andresen, D’Ewart Jenkins August H. Dolliver Jennings Andrews Donohue Jensen Angell Eaton Johnson Arends Eberharter Jonas Auchincloss Ellsworth Jones, Mo, Barrett, Pa. Elston Judd Barrett, Wyo. Fallon Kean Bates, Mass. Fellows Kearney Beall Fenton Kearns Bennett, Mich. Fernandes Keefe Bishop Fisher Kilburn Blackney Flood Kilday Bolton, Md. Ford Kirwan Bolton, Ohio Frazier Latham Bonner Fugate LeCompte Boykin Fulton LeFevre Bramblett Gamble Lichtenwalter Brehm Gary Lind Brown, Ohio Gavin Linehan Buchanan Gillette Lovre Buckley, U1. Goodwin Lucas Burleson Gordon McConnell Burton Gossett McCulloch Byrne, N. Y. Graham McDonough Byrnes, Wis. Granahan McGregor Case,N J. Grant McGuire Case,S.Dak. Green McMillan, 8 C. Celler Gwinn McMillen, 11. Chelf Hall, Macy Chesney Leonard W. Magee Chiperfield Hallock Mahon Church Harden Martin, Iowa Clemente Hardy Martin, Mass, Clevenger Hare Mason Cole, Kans. Harris Merrow Cooley Harrison Meyer Corbett Harvey Michener Cotton Herlong Miles Cox Hill Miller, Md. Crawford Hinshaw Miller, Nebr. Cunningham Hobbs Nelson Curtis Hoeven Nicholson Dague Hoffman, Mich. Norblad
CONGRESSIONAL RECORD—HOUSE O'Brien, T™ Rogers, Mass. Stigler O'Hara, Il Sndlak Stockman O'Hara, Minn. 8st. George Taber O'Nelll Sanborn Tackett Patterson Sasscer Talle Peterson Saylor Van Zandt Pfotffer, Scott, Hardie Velde William L. Bcott, Vorys Philbin Hugh D., Jr. Vursell Phillips, Calif. Scrivner Wadsworth Ictett Scudder Walter Plumley Shafer Weichel Potter Short Werdel Quinn Sikes Whitten Reed, Mi. Simpson,T1. Whittington Reed, N ¥. Simpson, Pa. Widnall Rees Smith, Kans. Wigglesworth Rhodes Smith, Va. Wilson, Ind. Ribtcoff Smith, Wis. Wilson, Tex, Rich Spence Wolcott Riehlman Stanley Wolverton Rivers Stced Wood Rogers, Fla, Stefan Woodruff nays 76h Abbitt Hal Multer Addonizio Edwin Arthur Murdock Albert. Hand Murphy Acpinall Hart Murray, Tenn, Bailey Havenner Noland Baring Hays, Ark. Norton Bates, Ky Hays, Ohio O’Konskt Battle Hébert O'sullivan Beckworth Heller O'Toole Bennett, Fla. Heselton Passman Bentsen Holifield Patman Biemiller Howell Patten Blatnik Huber Perkins Boggs, La. Hull Phillips, Tenn, Bolling Irving Polk Bosone Jackson, Wash. Poulson Breen Jacobs Powell Bryson Javits Preston Burdick Jones, Ala. Price Burke Jones, N.C. Priest Burnside Karst Rabaut Camp Karsten Rains Canfield Keating Rankin Carlyle Kee Richards Carnahan Kelly, N. ¥. Rodino Carroll Keogh Rooney Cavalcante Kerr Roosevelt Chatham King Sims Christopher ein % Staggers Combs Bullivan Cooper fine. Button Crook Lanham Tauriello Crosser Larcade Thompson Deane Lemke Thornberry DeGraffenried Lesinski Tollefson Denton Lodge Trimble Dingell Lynch Underwood Dollinger McCarthy Vinson Doughton McCormack Wagner Doyle McKinnon Walsh Durham McSweeney Welch Elitott Mack, Il. Wheeler Engel, Mich. Mack, Wash. White, Calif. Evins Madden White, Idaho Feighan Mansfield Wickersham Forand Marsalis Wier Garmata Marshall Williams Gathings Miller, Calif, Willis Gore Mills Wilson, Okla. Gorski Mitchell Winstead Granger Monroney Withrow Gregory Morgan Woodhouse Groes Morris Young Hagen Moulder Zablocki NOT VOTING—60 Allen, La. Golden Pfeifer, Anderson, Oalif. Hale Joseph L. Barden Hedrick Poage Boggs, Del. Heffernan Ramsay Brooks Herter Redden Brown, Ga, Hoffman,Tll. Regan Buckley, N. ¥. Jackson, Calif, Sabath Bulwinkle Kelley, Pa, Badowski Cannon Kennedy Becrest Chudof Kunkel Bhelley Cole,N Y. Lyle Sheppard Colmer McGrath Smathers Coudert Marcantonio Smith, Ohio Davis, Tenn, = Morrison Taylor Dawson Morton Teague ondero Murray, Wis. Thomas Douglas Ni qT Engle, Calif, xon owe Fogarty Norrell Whitaker Furcolo O'Brien, Mich. Worley Gi!mer Pace Yates So the motion was agreed to. The Clerk announced the following pairs: On this vote: Mr. Gilmer for, with Mr. Yates against. Mr. Secrest for, with Mr. O’Brien of Michie gan against, Mr, Kunkel for, with Mr. Morrison against. Mr. Taylor for, with Mr. Marcantonio against. Mr. Hoffman of DMnots for, with Mr. Mo- Grath against. Mr. Jackson of California for, with Mr. Allen of Louisiana against. Mr. Teague for, with Mrs, Douglas against, Mr. Herter for, with Mr. Joseph L. Pfeifer against. Mr. Kelley of Pennsylvania for, with Mr. Hedrick against. Mr. Whitaker for, with Mr, Chudoff against, Mr. Coudert for, with Mr. Shelley against. Mr. Towe for, with Mr. Heffernan against. Mr. Thomas for, with Mr. Buckloy of New York against. Mr Kennedy for, with Mr. Fogarty against. Until further notice: Mr. Cannon with Mr. Golden. Mr. Smathers with Mr. Anderson of Cali- fornia. Mr. Sadowski with Mr, Boggs of Delaware. Mr. Colmer with Mr. Dondero. Mr. Engle of California with Mr. Hale. Mr. Redden with Mr. Smith of Ohto. Mr Regan with Mr. Cole of New York. Mr. Furcolo with Mr. Murray of Wisconsin. Mr. Worley with Mr. Morton. Mr. Ramsay with Mr. Nixon. Mr. HucuH D. Scort, Jr., changed his vote from “no” to “aye.” Mr. EDWIN ARTHUR HALL changed his vote from “aye” to “no.” The result of the vote was announced as above recorded. The SPEAKER. The Chair appoints the following conferees: Messrs. CELLER, Watter, WILLIS, MICHENER, and Case of New Jersey. GENERAL LEAVE TO EXTEND ON THE BILL Mr. CELLER. Mr, Speaker, I ask unanimous consent that all Members may have five legislative days within which to extend their remarks on the basing-point bill, S. 1008. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. NATIONAL SCIENCE FOUNDATION Mr. CROSSER. Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the further con- sideration of the bill (H. R. 4846) to pro- mote the progress of science; to advance the national health, prosperity, and wel- fare; to secure the national defense; and for other purposes. The motion was agreed to. Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the further consideration of the bill (H. R. 4846) to establish the National Science Founda- tion, with Mr. THompson in the chair, The Clerk read the title of the bill. The CHAIRMAN. On yesterday the Committee agreed that the bill be con- sidered as read and open for amendment at any point. Are there further amend- ments? FEBRUARY 28 Mr. PRIEST. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr, Priest: On page 16, line 18, strike out “1923, as amended” and insert in lieu thereof “1949.” The amendment was agreed to. Mr. DURHAM. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. Duritam: On page 20, line 8, after the word “of”, strike out the word “atomic” and substitute the word “nuclear.” Mr. DURHAM. Mr. Chairman, I offer this amendment for the reason that at the present time it is not very clear whether or not the word “atomic” covers the new process of the hydrogen bomb. This language will, in the opinion of the members of the committee, clarify it to a certain extent. Mr. PRIEST. Mr. Chairman, will the gentleman yield? Mr. DURHAM. I yield to the gentle. man from Tennessee. Mr. FRIEST. Mr. Chairman, we are very happy to accept this amendment, I am sure the gentleman from North Carolina has stated adequate reasons why it should be accepted and we are willing to accept the amendment. The CHAIRMAN. The question ts on the amendment offered by the gentleman from North Carolina [Mr. DurHAM}. The amendment was agreed to. Mr. HARRIS. Mr. Chairman, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. Harris’ Page 20, line 24, strike out “annually”; and in line 25, strike out beginning with “such” through the period in line 1 on page 21, and insert “not to exceed $500,000 for the fiscal year ending June 30, 1951, and not to exceed $15,« 000,000 for each fiscal year thereafter ” Mr. HARRIS. Mr. Chairman, it has been my privilege for nearly 8 years out of this my 10 years’ service in the Con- gress to be a member of the Interstate and Foreign Commerce Committee of the House. During this time a great many bills have come from our committee af- fecting the welfare and security of our Nation. I do not believe, however, there has been any legislation from the com- mittce more important and necessary to our future security than this proposal for a National Science Foundation. I am not presently on the Public Health Subcommittee, and, therefore, did not participate in the hcarings con- ducted by the subcommittee during this Congress. I did participate in the ex- tensive hearings we held in the Seventy- ninth Congress. I participated in the consideration of this proposal at that time as a member of a subcommittee designated to try to perfect the most de. sirable bill if possible. A bill was re- ported but it was in the closing days of the Seventy-ninth Congress and was not considered by the House. It was again proposed in the Eightieth Congress. We did not have subcommit- tees in the Eightieth Congress under the chairmanship of our distinguished col- league the gentleman from New Jersey (Mr. WOLVERTON]. All legislation was
1950 considered by the whole committee. A bill establishing a National Science Foundation was reported and passed by this Congress. I was privileged to be a member of the conference committee be- tween the Senate and the House. We worked out the differences and passed the bill which was vetoed by the Presi- dent, because of administrative policy it contained in connection with the estab- lishment of the Board and appointment of the Director. Consequently, Mr. Chairman, I believe that I am somewhat familiar with this proposed legislation, its purposes, design, and need. I have been somewhat impressed with the debate yesterday and today. I have been especially interested in the fears that have been expressed in connection with this proposal. Obviously many Members are justified in raising this or that question but Mr. Chairman, this is not a glorified piece of legislation. It is not setting up a foundation as some would have us believe that would absorb and take over all scientific research in every field from private or public insti- tutions and organizations. There is nothing to the contention that this would be a super duper agency that becomes all powerful over any other activity in- cluding educational institutions where scientific research programs are Car- ried on. This is a program proposed out of an experience with which all of us are familiar. It is a program out of recogniz- ing in an emergency that we in this country were sadly lacking in a most fundamental problem, inevitably affect- jing our future progress and security. As has been explained, President Roosevelt, in 1941, directed Dr. Vanne- var Bush, then director of the wartime Office of Scientific Research and Devel- opment, to prepare a report on the need for a post war science program. Out of that report filed July 19, 1945, Science: The Endless Frontier, came the basis for science foundation legislation which we have here today. This is not a hurried, jll-conceived piece of legislation. It isa carefully considered proposal for now nearly 10 years. Shortly after the submission of the re- port in the Seventy-ninth Congress, my colleague the gentleman from Arkansas [Mr. Mitts], intro“uced the first bill aJong with Senator Magnuson, based on the careful and scientific study contained in the report. Mr. Miiis appeared before our committee in that Congress and the hearings will reveal that he made a most commendable contribution, in the initial consideration of this legislation. He deserves much credit in initiating this progiam and I want to pay tribute to him now where tribute is justly due. Now the real need, Mr. Chairman, for this legislation. As was said by Dr. Compton: “Rest upon the major require- ment in this country with respect to science.” It has a dual or two-fold pur- pose. First, to supplement private re- sources available for the support of basic rerearch: and ‘sccond, the training of scientists. CONGRESSIONAL RECORD—HOUSE No one can deny that these two fun- damental needs are absolute require- ments if we are going to continue our place in world affairs and assume our leadership to which we are committed for a just and enduring peace. I have offered this amendment placing a limitation of $500,000 for the first year 1951 and $15,000,000 annually thereafter. The bill as presented does not place any ceiling or limitation in its authorization which has caused many to express deep concern and I think, justifiably so. I am just as concerned about the con- tinuous Government spending, our Fed- eral budget, deficit spending and high taxes, as any Member of this Congress I am convinced that it is imperative that we adjust our fiscal affairs, to not only live within the budget but that we should start applying something on the huge war debt that hangs over our heads. But I am also concerned about the fu- ture security of our Nation. Unless we keep the pace and ahead in basic re- search we can have no real security. When it comes to these matters, I believe sincerely necessary to our future, I think it behooves us to reduce the appropria- tion in some other lesser important fleld and place first things first, and I consider this among the first. The record shows there is no need for a huge sum of $100,000,000 or more but that this program in basic research delv~ ing into the unknown, under the Founda- tion of 24 Board members and Executive Committee and a Director would cost ap- proximately $15,000,000 the first year and level off at $25,000,000 at the end of 4 or 5 years. This is the program contem- plated by the administration. But to assure the membership of this House that this is a limited program in comparison with the $544,000,000 or more conducted by the National Dcfense, Army, Navy, and other agencies, most of which is in applied science, I propose this limitation, a minimum recommended by the Bureau of the Budget for the first year and each year following, or annual appropriations, I do this, Mr. Chairman, after con- sultation with other members of the committee for an additional reason than the question of cost and increased bur- den. This will make it necessary for the Foundation to come back to this commit- tee and to the Congress and give a full account of its activities and show the need for any additional funds or expres- s.on. The purposes of the bill are stated briefly in the report which I will not again take the time to outline, but in addition to the explanation of these pur- poses it is my belief that the correlating of these research programs in basic sci- ence will not only give us a program im- perative to our future, but will in my opinion ultimately reduce this burden and cost in the entire scientific fleld. We cannot and should not overlook such an important possibility. The development of the atomic bomb cost the taxpayers of this country over $2,000,000,000. We were in a war emer- gency. It was a trial and error effort. The cost, of course, was excessive. I do not know if a program such as this 2517 proposed had been under way if it would have saved any money or not. We do know that Dr. Bush and other great scientists and educators have empha- sized the possibility. We could relate many experiments carried on in basic science research, tremendously affecting the health and welfare of the individual. In our short span of time, we have seen the effect of this research work. It has been nearly five years since the ending of the war. I am also greatly concerned at the apparent attitude and feeling that prevails. I have seen it gradually develop and it disturbs me beyond expression. At the end of the war most everyone throughout this country was determined that we should place the greatest pos- sible emphasis toward efforts to assure that such another world tragedy would never occur again. Read the records of this Congress in those years. Go back and review the headlines in the papers. You will be reminded of the determina- tion of our people toward future peace and security. We made commitments, costly com- mitments. We entered upon a program of peace, United Nations organization and various other costly programs to bring about a just peace and prevent Communist aggression and other totali- tarian effort to rule the world. Yes, that was at the end of the war, but Mr. Chairman, how easy it is to forget in such a short time when the matter of our security is at stake. We all said during those years that we must remain strong, militarily and otherwise, but how easy it is to become complacent, and in the hope that it cannot happen again. We cannot afford to ever again adopt the cannot-happen attitude. So let us adopt this amendment, placine this limitation and prepare the way f the development of scientists in t country and the encouragement of r_- search efforts among all groups, private and public, that there may be no doubt as to our place in the future of a troubled and unsteady world. This amendment places a lHmitation for the first fiscal ycar, 1951, of $500,000. That is the amount contained in the budget submitted for fiscal year 1951, to get the organization started and under- way. This is for administrative cx- penses. It will take some time to get it going. Then it further provides a lim- itation of $15,000,000 for each fiscal year therafter. That takes into account the fact that the Bureau of the Budget says that in the first year of the program after it gets underway and to make an effective program, they should have $15,- 000,000; that is contract authority, ad- ministrative expense, funds for scholar- ships and fellowships, and so forth. In addition, it is expected that in the course of about 5 years the cost will reach a level, perhaps, of $25,000,000 a year. In limiting the authorization in the first active year to $15,000,000 and each year following, it will be necessary for the Foundation to come back to the committee and the Congress and give a report of its activities, its organizational
2518 work as to the progress and success of the program in the first few years, and obtain increased authorizations if it needs to expand as requested to accom- plish the purposes of the act. If the Foundation can show that it should have additional authority and additional funds, it will then give the Congress an opportunity to determine, when a proper showing is made, that it should have the additional authority for such expansion. The CHAIRMAN. The time of the gentleman from Arkansas has expired. Mr. HARRIS. Mr, Chairman, I ask unanimous consent to proceed for three additional minutes. The CHAIRMAN. Is there objection to the request of the gentleman from Ar- kansas? There was no objection. Mr. CASE of South Dakota. Mr. Chairman, will the gentleman yield? Mr. HARRIS. I yield to the gentle- man from South Dakota. Mr. CASE of South Dakota. In con- nection with the liimtation on the dollars, does the gentleman's amendment do anything in the hmitation of the range of power of the Commission as to its supervision over other research work? Mr. HARRIS. I think the bill itself provides that, and you will find in various sections, particularly in the policy sec- tion, the purposes of the bill, and also in subsection (h), which was discussed on the floor yesterday, at which time the gentleman from Wisconsin [Mr. KEeEerE] participated rather extensively and very timely. Mr. CASE of South Dakota. The gen- tleman then feels that this moncy will be applied to basic research? Mr. HARRIS. To basic research, yes, except in connection with national de- fense matters. Mr. VORYS. Mr. Chairman, will the gentleman yield? Mr. HARRIS. man from Ohio. Mr. VORYS. The gentleman did not point out, I believe, that the purpose of deliberately limiting this to $15,000,000, although it is planned that it will go more than that in, say, the second year, is to bring it back not only to Congress, but to bring it back to this legislative committee which brought this legisla- tion in. I want to commend the gentle- man on his amendment. We all have great respect for this great committee. We feel that this committee can review 4t much more amply when it is a going concern. Mr. HARRIS. I appreciate the state- ment of the gentleman. I have just dis- cussed this matter with the Bureau of the Budget. As has been explained, the first year is the organizational year in which the $500,000 for administrative ex- penses would be needed. The second year it is estimated that it will prob- ably cost about $5,000,000 in getting the program under way, and probably the second year it will be increased to $10,- 000,000, and perhaps the third year to $15,000,000. and so on, until it reaches its level. But after it goes beyond the $15,000,000 limitation, it will be neces- sary then for the foundation to come back to the Congress. Then we cer- tainly can find out just what has been I yield to the gentle- CONGRESSIONAL RECORD—HOUSE going on, what they plan to do, and just how effective the program is at that time. Mr. HINSHAW. Mr. Chairman, will the gentleman yield? Mr. HARRIS. I yield to the gentle- man from California. Mr. HINSHAW. I think it would be well to call the atention of the House to subsection (b) on page 21, where it states: Appropriations made pursuant to the au- thority provided in subsection (a) of this section shall remain available for obligation, for expenditure, or for obligation and ex- penditure, for such period or periods as may be specified in the acts making such appro- priations. This leaves the question of how long they shall be available pretty much up to the Appropriations Committee and the House pursuant to its action. Mr. HARRIS Of course; naturally, when they come back it will be the re- sponsibility of the committee and the Congress to take a look at the entire picture again. One reason for placing this at the $15,000,000 level, and I thought about 5 or 7% million level, was that thcy tell me that they will have some diffi- culty in getting the top scientists of the country to participate in the program if we make the authorization too low. I think that is a highly important matter. In other words, as one expressed it, they might take the attitude, perhaps, “Well, it is Just a bugaboo program set up with nothing much to do, and we will not fool with it.” I think that is hghly im- portant, because if it is to be an effec- tive program the outstanding scientists of this country will have to participate, and Iam sure they will participate. Mr. HESELTON. Mr. Chairman, I offer an amendment to the amendment. The Clerk read as follows: Amendment offcred by Mr. HESELTON to the amendment offered by Mr. Harris. After “exceed” strike out $15,000,000” and insert “81,000,000.” Mr HESELTON. Unfortunately, the copy of the budget I had 1s temporarily mislaid. Let me ask the gentleman from Arkansas if we are not in accord that the budget itself says not only in fig- ures in two places but in text that all they can spend in 1951 effectively is $500,000? Mr. HARRIS. That is true, and that is the reason I made it $500,000 for the first year for administrative expenses. Mr. HESELTON. That is right. I commend the gentleman for going that far, but I think the House is entitled to a clear opportunity here on as to how far it wants to go in the next year in the absence of any defined program and without anything like exact esti- mates. There are many differences of opinion as to how far this program will go. No- body knows. Nobody can accurately tell you what the figure will be. How- ever, in the first annual report of the President’s Scientific Research Board, on August 27, 1947, this language ap- pears at page 31: The Federal Government should spend abdut 850,000,000 for support of basic re- search outside its own laboratories in 1949. From that point grants for basic research FEBRUARY 28 should increase rapidly until they reach an annual rate— Not of $10,000,000, not of $15,000 000, but— of at least $250,000,000 by 1957. Yet, at page 26 of the same report there is the following language: As a nation, we should spend each year no less than 1 percent of our national income for research and development the physical and biological sciences, including medicine. It 1s true that the Board is talking in terms of national income for research and development which is an all-inclu- sive term beyond both the basic research we are now discussing and the much larger field of even appled research. That 1s one enormous difficulty in con- sidering this problem because we /ind fixed into Government terminology and in budget presentations the general term of research and development. Then consider another paragraph in that report: We will have the trained manpower to sup- port @ pilogram of this magnitude by 1957. Assuming in that year a national income of over %200,000,000,000, our national research budget should then be more than $2,000,- 000.000. Again, tnis is a suggested figuie of $2,000,000,000 over all, and although it defines it as our national research budget, as I read the paragraph 1t 1s referring to basic and apphed research and development in the Federal Govern- ment, in other public bodies, in industry, and in our universities and colleges Nevertheless, I call your attention to the specific language of still a third par- agraph on page 27. After discussing the Sharp decline in endowment income, the limiting of sources of new endowment funds by taxation, and other factors, the Board states: In view of these considcrations, we should anticipate Federal expenditures in support of research and development of more than $1,000,000,000 a year by 1957. Then I am confronted, and I think all of us are confronted, with a very prac- tical dilemma. Yesterday I pointed out that the Budget, at page 1118, lists ex- penditures for research and development as actually $940,000,000 in 1949, $964,- 000,000 estimated in 1950, and $953,000,- 000 estimated in 1951. The gentleman from South Dakota [Mr. Case] has shown me another tabu- lation which I understand to be an offi- cial one indicating that already the Fed- eral budget requests are far in excess of $1,000,000,000 this year and steadily mounting. It occurs to me that this is primarly because of the wide scope of what is called research in the Federal Govern- ment and perhaps because it appears that very substantial expenditures for construction of facilities are not classi- fled as strictly research and develop- ment I pointed out yesterday that there is a request for construction at Langley Field, Va., which is, I think, carried in the Independent Offices Ap- propriation Act of 1949 with an item of $1,000,000. I do not know whether this is classified strictly as research or not. I pointed out that the medical-rescarch facilities at Bethesda are bcing ex-
1950 pended, that the principal building is now in its second year of construction with a clinical center and a research labosatory to be equipped with 500 re- search beds for clinical research in can- cer, heart, metabolic, and infectious diseases, Certainly this is an excellent program of which I am sure we all approve but let me point out that the budget calls for an appropriation of $15,125,000 which is in addition to the $18,100,000 appropriated to date. Here again I do not know whether that 1s classified as within the research program or, rather, treated as a construction item. My whole point is that I do not think that, with all due respect to the many people who have been interested in this matter and are interested in this mat- ter, anyone is in a position to state with exactness, whether we will require one, two, three, five, or fifteen million dollars, as suggested by the gentleman from Arkansas {Mr. Harris] and others; $25,000,000, as others so persuasively suggest as a minimum; $27,500,000, as still others suggest, or even $250,000,000, for basic research as far off as 1957. In view of all these contradictions, and for that reason, I am suggesting $1,000,000 as a ceiling in 1952. Concededly, that is an arbitrary limitation. If someone wishes to place it at $5,000,000 or $7,500,- 000 and can produce further evidence to support that as a figure, I should be in- clined to support that amendment. But I do want to leave the record entirely clear that, in my opinion, we should deal with the facts as they are contained in the recommendations of the President in his budget message, should have pre- sented to the Interstate and Foreign Commerce Committee a continuing re- port of the development of the National Science Foundation program with accu- rate estimates as to what may be re- quired in fiscal 1951, so that we will be prepared to act intelligently on any fur- ther authorization in 1952 and prepared during the ensuing 11 months to state with some authority to the House what we believe to be a proper ceiling. Let me conclude this phase of my ex- planation of the reasons for this amend- ment with one paragraph from the Board’s report at page 25. What is here proposed, therefore, 1s not @® maximum, but a minimum annual na- tional research and development budget for the future—a budget below which we can- not afford to fall. It is in the nature of a recommended floor for expenditures, rather than an optimum ceiling. We have been talking now about a ceiling. Too frequently we have found that any ceiling becomes a floor. I com- mend the Board for its frankness in including this paragraph in its report and I am entirely sincere in making that statement. I have repeatedly com- mended this Board for the work it has done and for these excellent reports. I recognize the limitations under which it had to work, both as to time, as to funds and personnel available, and as to the extreme complexity of the subject mat- ter with which it was dealing. But, as my chief witness on this point, I believe that the Board has proven beyond any reasonable doubt that no wise, sound figure can be suggested by any one for CONGRESSIONAL RECORD—HOUSE the fiscal year 1952. I wish the gentle- man from Arkansas [Mr. Harris] had taken the clear limitation recommended by the budget for fiscal 1951 and stopped there. Since he did not do so, I want the record clear as to my reasons for questioning the wisdom of placing any limitation on fiscal 1952 until we have sufficient knowledge of the program and of its requirements so that we can ap- prove a reasonable’ authorization. Surely, if this bill passes and becomes law, all those interested in creating the Foundation and making it operate suc- cessfully are going to believe that the majority of this and future Congresses will recognize the necessity of support- ing a soundly conceived and well admin- istered program. Personally, I believe we can count on our scientists, engineers and other technicians to work effectively to develop such a program and to im- plement it. I think of them first as loyal Americans willing and anxious to work with us in the interest of the secur- ity, the economic well-being and the health of the United States. The over- whelming majority of them, with rare exceptions indecd, proved that conclu- sively in the crucial days in 1940-45. I certainly credit them with as much in- terest in and devotion to this country’s security now as then and I would be amazed if as many as 6 of them declined a request to assist in creating a sound structure and program for this Founda- tion. We all know that public service is something this Nation has never had to buy. Why should we fear that our history would reverse itself between now and the early months of 1952? I think the Members are entitled to all the information the committee can develop. Ihave the highest regard for my friend from Arkansas | Mr. Harris] and all the members of this committee. I know they are sincere and I know they are worried, and I am worried and that is one funda- mental reason for my support of this bill. I said yesterday that in the Defense Department in research alone they have been able to cut back in 2 years $82,000,000. I urge upon you to realize there is rea- son to believe if we put this Jaw into effect and set up an effective agency, instead of increasing the cost of government, to the extent of $105,000,000 as outlined in the budget requests of agencies other than the national defense for 1950 and 1951, we can and we should save a sub- stantial portion. Is that wishful think- ing? Ido not think so. If the Defense Department has attacked this thing real- istically and has applied standards and has created a balanced program, as it surely has, then through the medium of the National Science Foundation, if we make this a law, we can hope not only to save all which involved even in this pro- posed ceiling for 1952, but many more millions of dollars. Have I any ground for saying that? Ithink so. This morn- ing I talked with an executive officer in the National Defense Department. I know this is not considered classified in- formation. I was told that out of the military budget they can turn over a minimum of $15,000,000 or a maximum of $20,000,000 in the current funds to 2519 this newly created science foundation. Iconcede that that will not cover scholar- ships. But let us be realistic about it. It will set this program going. This is the Defense Department only. What of the others? And I remain unconvinced that we can hope to start the fellowship and scholarship program going until 1952 at the earliest. This is not the measure which has passed the other body. I personally be- lieve it is a much better and more re- fined version. It has to go to conference. We can get more information and our conference committee can iron this out. But why should we project ourselves clear into 1952 by saying, “You have permis- sion to go up to $15,000,000.” Remem- ber that is a minimum and I predict it will be so construed irrespective of what any of us say here during this debate. I say the situation is one where we should, as the gentleman from New York has so ably suggested, stop, look, and listen. I do not want to wreck this pro- gram and I do not believe I am doing so. This is not intended as and it is not a crippling amendment. It should help to gain support for the bill and the Founda- tion. It is translating the President's budget message to a dollar, as I read that message. If the President and the Budget Bureau are right, Iam right. If they are wrong, I shall be open-minded as to any other figure. But no one yet has offered reasons for another figure. Iam concerned ebout some of the figures which I gave ‘o the committee yesterday about what they are doing in Soviet Russia. They are not my figures. They come from the Department of National Defense. I call your attention to the fact that these are figures from behind the iron curtain which are believed to be accurate. The budget of the Soviet Union for 1947 is reported to provide $1,200,000,000 for this purpose as com- pared with outlays of $900,000,000 in 1946. What were we doing in 1949? We were spending $940,000,000. Then there is something more. I am told our Government does not have any figure it can isolate. But through 1948 and 1949, the total military expenditures of Soviet Russia appear to have increased by about 20 percent. But listen to this. At the same time expend- itures for scientific research and dc- velopment appear to have increased 80 percent, Those are increases over 1947. The CHAIRMAN. The time of the gentleman from Massachusetts has ex- pired. Mr. HESELTON. Mr. Chairman, I ask unanimous consent to proceed for two additional minutes. The CHAIRMAN. Is there objection to the request of the gentleman from Massachusetts? There was no objection. Mr. HESELTON. Mr. Chairman, I appreciate the consideration of my col- leagues. These final remarks move me to a deep conviction that I must sup- port this bill, I shall support it, even though this amendment is defeated. I want the matter to go back to the com- mittee with a new program that we can analyze. It will under the amendment offered by the gentleman from Arkansas [Mr. Harris]. It will also under my