APPENDIX TO THE CONGRESSIONAL RECORD In 1946, the Amer{can people paid $46,104,- 000,000 in taxes, Of this, local government got $5,055,000,000 or roughly four and one-half times as much as in 1913. States got $4,529,000,000, which is slightly more than 15 times as much as they got in 1913. The Federal Government's take in 1946 was $36,520,000,000. That is more than 55 times as much money as the Federal Government took in taxes back in 1913. ° It is your money the various governments across the Nation are collecting in taxes— $2,176,000,000 in 1913 and $46,104,000,000 in 1946. Our tax bill in full has gone up by that $2,176,000,000 figure about once every year and a half for 33 years, and the Federal Government has been the biggest hog at the trough all the way. No wonder private property is fading from the American scene. No wonder a working man’s goal is—not a home, not a bank ac- count, not things to buy his wife and chil- dren—but freedom from debt to the Gov- ernment. The tax collector is the first man at the cash window in every American's business today. Do you want It to go on that way? Do you think it should? Do you think it can be stopped? And do you realize what is going to happen unless it is stupped? Of course, we will all be stripped of our last property, and that means our last shreds of independence, if the tax bill of the United States continues to go up for this next 33 years as it has so far in this twentieth century. People are not free who work for the Government. The Germans and the Japanese and the Russians have shown us that. The French and the British are now discovering it for us and for themselves, all over again, The only reason the tax bill goes up, naturally, is that the governments we toler- ate here spend our money faster and faster and faster. We have just come through a world war in which our Federal Government alone spent 8400,000,000,000—dollars belonging to the American people, wealth of the American people. Common sense would say that after such a maniacal spending spree as that, even the Federal Government would be willing to taper off for a while. But last month President Truman asked Congress to appropriate 8$37,500,000,000 for Federal spending in the next fiscal year—or nearly $2,000,000,000 more than he asked for the 1947 fiscal year. Instead of down, he wants to spend up. There is only one way to Jook at such a proposition: the Federal budget will have to be knocked to pieces by Congress if the peo- ple of this country are ever going to be allowed again to build their ownership of private property which means to build their independence again. No man is independent when he is in debt to the Government. Nobody today is out of debt to the Government. We never will be until the tax collector's hot breath is off our necks. And that can’t happen until spend- ing slows. It is the nature of government never to give up a power freely. Can you think of a case? Can you recall a single time any government ever declared of its own free will and without public pressure that it was doing unessential and unnecessary work? That just doesn’t happen. Everything every one of our governments does, local, State, and Federal, will be de- fended as absolutely essential to public wel- fare, until the taxpaying public simply and flatly says “We won't pay for it.” The money involved is your money. Do you want to spend it your way or have the gov- ernments take it away from you and spend it their way? That’s the question right before us. Con- gress is working on just one side of it. The same principle applies to government where- ever found, local, State, or Federal. The taxpayer can decide for himself. He can start now to recover his liberty to work for himself and his family, or in 10 more wild spending years of government we'll all be working for government not just most of the time, but all of the time. This is our last chance. Are Feaeral Corporations a Threat to Free Enterprise? EXTENSION OF REMARKS HON. EMANUEL CELLER OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Tuesday, January 21, 1947 Mr. CELLER. Mr. Speaker, under leave granted to extend my remarks in the Recorp, I include the following de- bate on the Wake Up, America program between Hon. Samuel B. Pettengill, former Congressman from Indiana, and myself: . WAKE UP, AMERICA ARE FEDERAL CORPORATIONS A THREAT TO FREE ENTERPRISE? (As debated by Hon. EMaNve. CreLier, Con- gressman, Fifteenth Congressional District New York; member of Committee on the Judiciary, and Samuel B. Pettengill, for- mer Congressman from Indiana) Mr. CELLER opens: “Federal corporations generally are a threat to free enterprise. However, there are Federal corporations which don’t constitute a threat and which in the public interest should exist; for example, the Reconstruction Finance Corporation. That was inaugurated during the Republican Hoover administration, It supplemented the activities of the ordinary commercial bank. Banks will only grudgingly make loans on fixed or capital assets. The Reconstruction Finance Corporation {s geared, however, to make such loans over a long period. The RFC has made many constructive loans for the purpose of building and erecting rail- roads, buildings, etc. The Tennessee Valley Authority is another Federal corporation which has been a boon to farmers and other inhabitants of the Tennessee Valley. It has made possible cheaper electric power. To the farmers it has often made the difference be- tween failure and success in their crops. During the war emergency it was necessary to set up the Metals Reserve Corporation and the Rubber Reserve Corporation, which should be liquidated. Sometimes emer- gencies arise during peacetime. We had such a situation which gave rise to the Home Own- ers’ Loan Corporation. During that time it was impossible to get mortgages on homes and foreclosures mounted rapidly. As soon as the emergency was over, it went out of business and went out with a profit, too. Subject to the limitations I have stated above, I would depreciate any growth of Fed- eral corporations.” Mr. Pettengill challenges: “The RFC was conservatively run. Nevertheless, Congress wiped off a billion or two of its bad debts. This loss was, of course, saddled on privately owned enterprise. The TVA has made a good showing on paper only because it pays less in interest and taxes than private enter- prise. The HOLC has gone out of business only because its functions were transferred A383 to another alphabet agency. In 1945, it still showed $1,009,982,000 and was still collecting on 532,495 accounts. That it has or will make a profit is very doubtful.” Mr. CeELLeR replies: “Mr. Pettengill is rather isolated in his animadversions against the RFC. Perhaps his new Republican and big-business associates make him that way. Big business wants the RFC scrapped. That is understandable because the RFC primarily helps the little fellow. As for the TVA, I know of no Member of the House who would demand its termination. In fact, there is a great onrush on both sides of the aisle of the House to establish a Missouri Valley Author- ity. Big power companies continue high rates and extract high profits with little re- gard for the farmer needing cheap hydro- electricity for the economical running of his farm. The Government must step in where private power interests fail.” Mr. Pettengil opens: “Federal corporations are the first wave of socialization of busi- ness, They compete with business privately owned; they tax that business to make up their deficits; they discourage that business. With Federal corporations it is possible to socialize business as completely as in Russia. The proponents say, ‘But we don’t intend to go that far. We only intend to go so far.’ When they say this, they admit such corpo- rations are a threat to private business, a threat limited only by self-restraint of Gov- ernment officials, Federal corporations have been organized to do what the Federal Gov- ernment itself cannot do constitutionally Promoters of socialization by deceit have got- ten around the Constitution in some cases by organizing Federal corporations under State law—Delaware law—to engage in any busi- ness a private corporation may engage in. They avoid congressional scrutiny by getting authority to issue their own debentures and obtain funds on United States Government credit to finance their operations without asking Congress for annual appropriations This gets around the control of the purse, one of the last weapons of free people to defend themselves from kings or bureaucrats, They fight to prevent their operations from being audited and exposed by the Comptroller Gen- eral's office, which is an arm of Congress. The Tennessee Valley Authority is an exam- ple. The Reconstruction Finance Corpora- tion was organized in 1932 to operate In a limited field for 2 years only. Look at it now—the biggest bank in the world.” Mr. CELLER challenges: “To say Federal corporations are the first wave of socializa- tion of business is to advance the age-old cry advanced when municipalities undertook operations of private water companies in the public interest. Mr. Pettengill complains that Federal corporations avoid congressional scrutiny, Congress receives reports from all Federal corporations any time it wishes. Mr. Pettengill should consider the effectiveness of the Federal Deposit Insurance Corpora- tion. John Q. Public is insured with saving deposits to $5,000. Banks formerly opposing the corporation idea now actively support it. Federal corporations should be the excep-- tion, not the rule. They should only be established when private industry cannot meet a public crisis or serve best public interest.” Mr. Pettengill replies: “I note Mr. CELLER’s statement that Congress receives reports from all Federal corporations any time !t wishes. This does not square with Comp- troller Lindsay Warren, who has told Con- gress repeatedly of his difficulties with these agencies, It is one thing to get a report, often self-serving, and an independently cer- tified audit. Warren says our Government has become bigger than its creator (Con- gress) and arrogantly snaps its fingers in its face. It was only after Mr. Truman became President that Senator Byron's bill to stop some of this finger snapping became law.”
A384 The Two-State Oyster War EXTENSION OF REMARKS HON. JOHN McDOWELL OF PENNSYLVANIA IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. McDOWELL. Mr. Speaker, under leave to extend my remarks in the Rrc- orD, I include the observations made this morning over radio station WOL of Washington, by George F. Reedy, veteran newspaper reportcr and widely known radio commentator. Mr. Reedy is known far and wide as a meticulous fact-getting veteran reporter and news commentator and his observations on the alarming situation between two of the Nation’s States should be known to all of the citi- zens of the Nation. All is quiet along the Potomac this morn- ing. But behind the curtain of law and order, the forces of Virginia and Maryland are gathering for a final show-down. The climax may come this week. The “two-State oyster war” has passed the stage of comic opera. It is a crucial issue, which already has been stamped in the minds of the local citizenry, by the rattle of gunfire—along the river. The Virginia oyster fleet, which touched off the conflict by dredging for the bivalves, was kept in port over the week end by vigilant Maryland patrol boats mounting machine guns. So far, no one has been hurt but the omens for the future betoken no good. The dangers inherent in the situation have been recognized by Charles M. Lankford, chairman of the Virginia Fisheries Commis- sion. In a warning directed to the oyster- men of his own State, he sald flutly “that all Virginia fishing laws. would be enforced to the hilt.” His meaning was clear and simple. The Virginians must stop the dredging that has brought Maryland legislators to the boiling point. But it is doubtful that his action will placate the house of delegatcs at Annapolis. That body shows no signs of backing down from its intention to pass a law, authorizing Maryland courts to try Virginians for break- ing Free State fishing rules. It seems strange that such a conflict can arise in the twentieth century. War be- tween the States ts somehow as outdated as the bustle. Such battles were supposedly settled more than 150 years ago, when the founding fathers convened to write the United States Constitution. Could they return today and watch the two States fight, they would be- lieve that their efforts had failed. The Constitution was written to solve the same type of issue that hus divided Virginia and Maryland. It was a document that sup- Posedly ended for all time to come the battle of State against State. Possibly the warring oystermen of Vir- ginia and Maryland could profit by a study of the period prior to the Constitution. At that time this country was governed by the Articles of Confederation—a loose agreement that gave almost absolute sov- ereignty to cach of the 13 States. While the rest of the world looked on in amazement, Stute fought State by every pos- sible method. Open warfare was waged with tariffs, taxes, and guns. The results were disastrous to the position of the United States in world affairs. Eng- land sarcastically asked whether it was sup- posed to send 1 ambassador or 13 ambassas dors to this country, And all European na- tions openly ignored our rights in any ques- tion that arose anywhere. An American of that period never referred to himself as an American. If he were questioned as to his homeland, he would say that he was a Virginian, or a Georgian, or a New Yorker. Within a few short years our country had become an international laughing-stock. ‘We were unable to pay our debts, either domestic or foreign, and our prestige had shrunk to an absolute low. Only the enactment of the Constitution saved us from again becoming the colonies of an Old World power. Of course, no one seriously expects the oyster war to bring this country to ang such position again, It will be settled—and settled peaceably. But before the two States go too far it would be well for their leaders to remember that we went through this kind of a spree before. It gained us nothing but a hangover that took some pretty drastic doctoring to cure. The New Year and the Shipping Industry EXTENSION OF REMARKS HON. SCHUYLER OTIS BLAND OF VIRGINIA IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. BLAND. Mr. Speaker, an impor- tant editorial by Mr. Stanley Ferguson, marine editor of the New York Journal of Commerce, appeared in that paper January 7, 1947. It is entitled “The New Year and the Shipping Industry.” It is such @ compact and constructive pre- sentation of the principal problems fac- ing the merchant marine as it enters the New Year that I felt all interested in our merchant marine should read it. Mr. Ferguson’s broad knowledge of shipping, his earnest desire to be helpful to the in- dustry, and his ability to write clearly and forcefully, make him one of the most influential friends the industry has. Therefore anything coming from him is worth serious consideration. The article follows: THe NEw YEAR AND THE SHIPPING INDUSTRY (By Stanley Ferguson) Few years in the present century have confronted the American maritime industry with so many conflicting elements of promise and frustration as that we are now entering. For some sections of the industry it promises to be one of the best years within living mem- ory, but for others the outlook is less rosy and for shipbuilders generally—as Gerrish Smith pointed out so graphically last week— it 1s bleaker than at any time since the de- pression and worse by far at the close of the First World War. As in most industries, wage demands, strikes and the threat of strikes are forcing up costs to constitute the most worrisome problems at hand. With these the industry itself must deal as best it can, but where the outlook is worse, other factors weigh heavily and their resolution is beyond the power of the industry itself to achieve. With the do- mestic shipping lines the chief problem ts rates. With the shipyards it ts the painful lack of orders for new tonnaze. Both of these problems are insoluble without Government aid. A TEST IN STATESMANSHIP One must acknowledge that the Nation's present shipping position presents the E.ght- ieth Congress with a severe test in statesman- APPENDIX TO THE CONGRESSIONAL RECORD ship, particularly with respect to policy on new construction, With such a vast surplus of ships on hand, and the urge for economy in Federal spending so general, the tempta- tion will be strong indeed to cut very sharply any further Federal aid to new construction, if not indeed to end it altogether. The ad- ministration, itself, has already set a prece- dent in this respect by its cancellation last August of plans to build nine large passenger liners for the merchant marine. Members of the Eightieth Congress will doubtless be greatly swayed by this tempa- tion. But the question remains neverthe- less—will the interests of economy actually be served if the Nation does abandon its long-range (50-ships-a-year) program to save money now? Any long-range view returns a negative answer. We tried it before with re- sults now well known. By the late thirties our merchant fleet had grown obsolete as a unit, However, this is far from the whole story. It is true that cancellation of the liner pro- gram and other merchant shipbuilding plans threatens to deprive our out-of-balance merchant marine of special types of vessels it needs. But the real threat is to the main- tenance of an American shipbuilding indus- try. This vital industry, although moder- ately busy today, fs facing virtual disintegra- tion within a few months for lack of new orders. Its facilities are being dismantled, its staffs are being scattered, and its whole future obscured. To permit an industry as vital as this to wither on the root, while shipyards abroad are booming, should be as unthinkable as to permit the aircraft or electrical industry to suffer the same fate. Yet, it no longer lies with this industry to save itself. Building costs here are so high that, left to itself, this industry would merely enter new fields of endeavor. Only direct Government orders, or orders sponsored by the Government through construction subsidies can prevent this deterioration, and only with the con- sent of Congress will it be possible to do it. It is not necessary to embark upon a giant building program to prevent this dangerous relapse. What is required is a small building program, sufficient only to maintain a nucleus of know-how and experience and to keep shipyards here constantly ubreast of all tech- nological improvements. It might involve 50 ships a year and it might involve less. It is up to Congress to decide this, but de- cided it should be. Such a program would be economical, it would prevent obsolescence of the fleet as a unit, it would be prudent and it would be safe. SUBSIDIES AND ECONOMY Another field in which the temptation to cut expenses will doubtless prove strong is that of operating subsidies, which are being resumed this month by the Maritime Com- mission. Even those Congressmen who may be so- bered by the difficulties of the shipyards and domestic lines may wonder why the rela- tively successful offshore lines should receive subsidy aid at a time when they are doing 50 well financially, and here again it is essen- tial that careful thought be given to the reasons why these payments are being made and why they should be continued without legislative impairment. Operating subsidies are being paid out now not because they are needed today, but because they almost certainly will be required before many years have elapsed. These funds are disbursed by the Government under 10- year contracts—in good years as well as in bad. In busy times like these they con- stitute a reserve upon which the industry may draw when cargo and freight rates de- cline. If it should turn out at the expira- tion of these contracts that the subsidy aid was not needed, the funds will be recaptured by the Government. If, on the other hand, subsidy aid should be withdrawn or cut down now in the interes’. of economy, the
APPENDIX TO THE CONGRESSIONAL RECORD whole meaning of the 1936 Merchant Marine Act will be defeated and the loss of 10 years of hard-won gains will resuit. A FIELD FOR SELF-IMPROVEMENT To an industry as individually minded as that of shipping, it 1s frustrating indeed to accept the obvious fact that so much of the future will be determined by the Govern- ment, But this is far from being a reason for passivity. On the contrary, it means the industry must show all the more vigor, imagination, and leadership in grappling with those problems it actually is able to solve by itself. One task to which shipping could set itself with profit is that of improving its position in the estimation of the American public. That this position is not all it should be today is doubtless due to the defensive atti- tude the industry has been obliged to take on such matters as subsidies, surplus ship sales, wage demands, rates, and so on. Ilts needs and problems have been such that it has tended in self-justification to dwell more on its losses than on its gains and more on its difficulties than on its achievements. Without depreciating in any way the ex- tent of the problems with which the shipping industry must grapple, it may be questioned whether the net effect of this defensive atti- tude is precisely that intended. From the outside it does not seem to be. Too many complaints are more likely to produce im- patience than sympathy in a country where “nothing succeeds like success” and one must inquire whether there have not indeed been too many. Nobody loves a poor relation and Still less does anyone want to be treated as one. But the way to avoid such treatment is by not acting like one. Some organizations—the American Mer- chant Marine Institute in particular—have striven nobly to counter this trend by high- lighting the achievements of the American merchant marine in war and in peace, and it seems a propitious time to push this further. In the many fields where American shipping is today operating successfully, where it is competitively strong and prosperous, where it is developing new avenues of commerce and introducing new methods, its achieve- ments should not be hidden on the theory that they will weaken the industry’s position on subsidies and wages. These achievements and successes should, in fact, justify the Na- tion’s confidence as expressed in the 1936 act. They indicate that 10 years of intelligent Government aid and private initiative have resulted in something a good deal more de-~ serving of future support than failure. Resurgence of the Old High Tariff Gang EXTENSION OF REMARKS HON. JOHN W. McCORMACK OF MASSACHUSETTS IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. MCCORMACK. Mr. Speaker, un- der leave to extend my remarks, I in- clude a very analytical article written by Robert L. Norton, entitled “On the Re- surgence of the Old High Tariff Gang,” appearing in the Boston Post of January 29, 1945. . Roserr L. NorgtOoN COMMENTS ON THE RESURGENCE OF THE OLD HicH TARIFF Gana WasHINGTON, January 28.—It is perfectly clear that a powerful movement ia on foot in Congress to kill off the reciprocal-trade agreements and return to the old high pro- tective tariff system which brought about XCIII—App.—25 such lamentable results with the Smoot- Hawley bill of evil memory. HULL’S PROGRAM While basically this campaign {fs fortified with Republican support, it does not lack Democratic proponents in the South. It is little concerned with partisanship or party principles since as far back as McKinley and Taft, the Republican Party initiated the idea that reciprocal trade would be a good thing for expanding American industry. And, even then, there was a dim recogni- tion of the fact that it would be a contrib- utory factor to world peace, since most wars were started by the determination of nations, backed by superior military force, to grab economic power and trade advantage through territorial acquisition. Now the fight is to ditch the great pro- gram built up mainly by former Secretary of State Hull, negate or cancel altcgether the trade treaties, most of which do not expire until 1948, and restore the fixing of tariffs to Congress. Presently, there is pending negotiations with 18 countries under the terms of the reciprocal-trade pacts which will expire in June of next year, unless extended. OLD ARGUMENT The attempt now being made to sink the world-trade policy of the Government may be briefly summarized without enter- ing into the complexities of the question. Primarily, it’s a step backward toward what used to be called stand-pattism and economic isolation. All of the old-time arguments are advanced, the principal one being that with infinitely higher wage scales and cost of production, this country cannot compete with goods manufactured by other countries, thus holding the domestic market and main- taining the American standards of living. The argument is entirely fallacious since this country is facing an entirely different situation with a world in economic chaos, and ruined industry in other countries struggling desperately to get on its teet, trying to feed and employ its peoples and restore some measure of stability after the frightiul catastrophe of the war. In the circumstances the iron curtain set up by the Soviets is merely incidental to whdt would be involved should Americu once again return to iron tariff barriers. It would be entirely inconsistent and de- structive of our participation in the United Nations and would be the sure road to an- other woild war which in this atomic age might result in extermination, if we are to take the word of cold-blooded scientists. The dire consequences, of which every think- tng person is aware, and which at least ex- cites an uneasy apprehension and fear in the consciousness of those who don't engage in deliberate reasoning, are too apparent to risk. NOT ENTIRELY SELFISH The reciprocal-trade treaties are no more perfect than any other human instrument devised by a government of men, yet beyond peradventure of contradiction they do rep- resent a purpose to bring about some meas- ure of economic stability in a distraught world, and restore world peace, if that be possible. At the same time this philosophy, or policy, is not entirely unselfish so far as this coun- try is concerned. It has in the background the sense that our own security is at stake. Also, it is demonstrable that the expansion of reciprocal-trade relations, rather than lowering our living standards and destroying industry would, in the long run, have just the opposite effect. In practice, these agreements are entirely flexible to meet any situation which may de- velop in unfair competition with other coun- tries, that is, unfair to the American worker, consumer, or any given industry. This has already been proven in the operation of agree- A385 ments with South American countries and it is being worked out with Great Britain, which has been, and may still be, our chief com- petitor for world trade. There could be no worse buncombe than the Soviet propaganda decrying the joint imperialism of the western democracies, more particularly tn the case of Britain and the United States. SHAKY FOUNDATION Whatever hope there may be of reconciling the democracies with Soviet Russia, aside from the great political problems which we are now encountering and which offer the main threat to world peace, lies in the es- tablishment of friendly trade relations. It is only within the framework of these treaties that a free economy, such as we support and adhere to, can get along with totalitarian governments where all production, conditions of labor and basis of exchange of products is controlled by the state. If we can't do business with Russia on a reciprocal basis, as we now propose, then the prospect for agreement in the political field, for tolerance of our conflicting ideologies, for making the structure of the United Nations a potent force for world peace, rests on a shaky foundation, It is to be noted that the assault on the reciprocal-trade trenties comes from the leftists in this country, as well as from what we used to refer to as reactionaries. Soviet propaganda in this country has the support of its fellow travelers and the organized Communists who are mainly interested in isolating capitalism in America by choking off a revival of international trade. PERSONAL INTERESTS On the other hand, Washington today is full of the agents of various high pressure and sectional groups, which in their at- tempts to break down the reciprocal-trade prcgram, are interested in lower tariffs sim- ply because they figure their own immediate profits are involved and without the slightest concern for the far-reaching consequences of a return to the old high protective system, a system which has become entirely obso- lete under present world conditions. It's a revival of sectionalism which is rep- resented by Members of Congress of both parties, who are attempting to restore old time logrolling, and who are motivated entirely by the demands of industry and agricultural groups in their own districts. It would seem to us that the opponents of the reciprocal-trade treaties are biting off their noses to spite their faces. Surplus Property and Local Governmental Agencies EXTENSION OF REMARKS HON. ELLSWORTH B. BUCK OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. BUCK. Mr. Speaker, under leave to extend my remarks in the Appendix, I set forth below a statement on surplus property by the National Institute of Governmenta] Purchasing: The NIGP, an organization representing State and local governmental purchasing agencies from coast to coast, Is greatly dis- turbed by the continuing inaction of the War Assets Administration in making sur- plus property available to local governments, as required by the surplus-property law. Ever since the first Surplus Property Admin- istrator took office, we have regularly ap- pealed to the disposal agency for considera- tion of the needs and the righty of tux-supe ported units of gove:nment,
A386 Despite one appeal after another, State and local governments are today as they have been for two long years thrust aside and held at arm's length, as though their needs were not worthy of attention by WAA. Yet State and local governments should stand in the forefront as logical outlets for the people’s surplus property. Recently General Littlejohn revealed some isolated abuses on the part of a few local gov- ernmental agencies. We join with him in condemning vio¥wions of the law. We be- Meve that any ji<fsons who engage in such practices should be prosecuted. But the fact that out of 175,000 governmental agencies eligible to buy surplus some 38 to 50 have violated the law should not in any way affect the rights of the remaining 174,960 units. The decontrol of prices places State and local governments at even a greater disad- vantage than they were during the war. Governmental agencies are controlled by statutes. They spend the people’s moncy. They cannot compete in a chaotic market for needed supplies for essential services, be- cause they are bound by legal procedures, competitive bidding practices, and safe- guards which, in normal times, protect the people's dollars. In times like these, buying competitors can take away goods from State and local governments simply by paying more. This situation reemphasizes the absolute necessity for the WAA to do every- thing in its power to enable tax-supported agencies to acquire those items of surplus that can be used in maintaining vital com- munity services. It is a national disgrace that publicly op- erated hospitals are without adequate bed- ding, linen, medical and surgical supplies while numerous quantities either remain in Federal warehouses or are being disposed of in such a manner as to make it impossible for the taxpayers’ own governments to acquire them. The maintenance of sanitary facilities is one of the most important of local govern- mental functions. Motor vehicles are used to do this job. But motor vehicle parts and equipment, urgently needed to replace worn- out units, are rusting away in stock piles, or unavailable to us. There has been a steady increase in the national crime rate, but electronic equip- ment that would be of invaluable aid to police departments ‘across the country can- not be acquired for the war against crime. We have read stories of the fantastic sale of a huge quantity of machine-shop equip- ment as Junk. From one end of the country to the other governmental agencies and school systems urgently need machine-tool equipment to modernize their facilities in order that they may do a more economical job for the taxpayers. Now we witness a bland proposal that all priorities be scrapped. Such abandonment of priorities is pictured as a kind of decon-. trol, but it is nothing of the kind. What- ever its intent, its effect will be to sink the people's local governments beneath a mad scramble for surplus materials. It will give free reign to unscrupulous speculators and deprive local governments of supplies urgently needed for essential services. In September of 1944, at a hearing before the Senate War Investigating Committee, there was disclosed a sordid story of what happened when there were no priorities. We refer to the investigation of two companies, World- wide Merchantile Corporation and Consoli- dated Industries; both agencies of one Irving Wexler, better known as Waxey Gordon. We urge that General Littlejohn immedi- ately appoint an advisory committee consiat- ing of outstanding purchasing officials from State, city, and other local governmental agencies for the purpase of planning an in- telligent, constructive program for making surplus available to tax-supported agencies performing public services, whose supporters are the taxpayers who bought them in the first place. The time fs passed for the WAA to give lip service to section 13 of the surplus-prop- erty law while bending all of its efforts toward disposal of war surplus through non- governmental channels, Numerous hearings before committees of the Congress have shown repeated violations of the letter and Spirit of section 13. We belicve that no greater benefit to the national economy can be derived from the war surplus accumulations than to make them available for the maintenance and im- provement of essential public services in every State, county, and community in the United States. An opinion of the Attorney General holds that it is legally proper for disposal authori- ties to distribute surplus real estate to local governments without charge. Congress clearly intended, when !t enacted the sur- plus-property law, that the people's govern- ments be given preference in the disposition of the people's property, For 2 years now, the NIGP has earnestly sought only the obvious rights of the peo- ple's local governments, not special prefer- ences, The reward for this conscientious ap- proach to Washington authorities has becn a ride on the Washington merry-go-round— the well-known Washington run-around. We have warned repeatedly of the potentials of national scandal. We believe that con- gressional investigating committees will ulti- mately show that there has been one. There is still time, because there is still surplus, for State and local governments to procure materials for their people. The dis- posal authority must now awaken to the in- escapable fact thdt State and local govern- ments exist and will be vocal from this point on, We will no longer accept gobbledygook in place of surplus property. We rely upon the people's Congress to see to that. (Note.—The term “local governments” as used herein includes State governments and all political subdivisions thereof.) (The National Institute of Governmental Purchasing, Inc., is a nonprofit organization whose membership consists of public buying agencies of various levels of government in the United States and Canada, and 1s dedi- cated to improving governmental buying.) Should We Reduce Taxes 20 Percent? EXTENSION OF REMARKS HON. WALTER H. JUDD OF MINNESOTA IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. JUDD. Mr. Speaker, under leave to extend my remarks, I include the fol- lowing article on taxes by one of the out- standing students of our economy, Chester D. Tripp, editor of the weekly Economic Trend Line Studies: TAXES Bince the election, several Members of the Congress have asked me the questions: How does Economic Trend Line Studies view the tax adjustment proposed by some of the leaders of the Republican Party? Did we feel that an arbitrary 20 percent reduction should be made now, or should a program of reduced expenditures be worked out first and the tax reduction afterward? APPENDIX TO THE CONGRESSIONAL RECORD Speaking for Economic Trend Line Studies, TI replied that in my opinion the problem was too involved for a yes or no answer, but that I strongly favored working out reductions in expenses before reducing taxes. Let me develop this point of view in some detail, because, if I am rot mistaken, what we do on taxes and when we do it, is going to have profound economic consequences. Certainly there should be very little illu- sion, and not too much disagreement, about taxes as such. Taxes are necessary. No or- ganized society can operate without the pub- lic expenditure of money. However, any tax reduces and distorts the buying power of the individual or group paying it. For instance, a farmer raises and sells 100 bushels of wheat. He has incurred the nec- essary expense and has performed the neces- sary work. If his minimum income tax, say, 1s 20 percent, he enjoys the proceeds of only 80 bushels. Again a workman puts in 40 hours a week and with his income tax being a minimum of 20 percent, he is in effect do- nating 8 hours a week to his Government, during which time he must maintain him- self at his own expense. Examples can be cited for all classes of society, but the above shows that the tax bill, whatever it is, reduces the national spendable income with which the national product in theory must be purchased. In a sense, taxes produce a deflation gap, as it were, which is relatively as large as the tax imposed. If the tax bill is nominal and wisely spread, the effect of the defiation ts unnoticed, but if the tax bill is substantial (and it is more than substantial today) a deflationary force is set up that in time may be devastating. These observations are as sure as death and taxes and is the reasoning that prompts my observation that a yes-or- no answer to the question of what to do on taxes and when to do it is insufficient, A discussion of some of the background of the present scene might throw some light on this question, We are enjoying a national product of something over $190,000,000,000 This goal requires the employment of on toward sixty million people. The question that comes to my mind is: Are we tooled up to carry on any such activity with any degree of efficiency with the equipment that is available? Compared with 1989, today’s national pro- duction is up 67 percent. The scramble for production tools is simply enormous. I doubt if it has yet dawned on the public or even on our legislators that this scramble for capital goods and production facilities is simply a mass effort to get tools and the means to carry on a more efficient national production. The facilities of the country are just not geared up to the Job it faces. If we are to maintain our goal, therefore, literally billions of dollars must be poured into the production of capital goods to be used to produce the necessary national pro- duction. The resources to purchase these Capital goods must be created out of sav- ings, either of the past or the present, and these savings must be measured after taxes, It is a fact that billions of dollars were spent on production facilities during the war, but, to a substantial degree, these war- time facilities mean little in terms of peace production. Where our Government spent money for war facilities that are currently of use for peace production, our tool inven- tory was improved. However, the tens of billions of dollars that went into emergency shipbuilding facilities, emergency airplane facilities, uneconomic metallurgical or syn- thetic-rubber facilities, and the like, repre- sent not only relatively useless tool inven- tory, but also represent a Hability in liquid assets on the balance sheet of the Nation which are in a sense an option on future production which has not yet been arranged ‘or.
APPENDIX TO THE CONGRESSIONAL RECORD We are today producing great quantities of overpriced material. This is only stop- @ap production in that any decline in de- mand would price it out of the market, thus @Geflating production enormously. This great quantity of marginal or stopgap pro- duction can only be made into efficient pro- duction by the retooling of our capital equip- ment and such retooling can only be done by the plowing back of savings and profits into capital equipment. It is evident that the influence of taxation on the status of our capital goods is exceedingly important, and it 1s a serious question whether the tax- take at the present time has not far over- reached logical proportions. There are several angles to the problem that would warrant a little exploration. The American public is well pleased that the pipe lines of industry are filling up, that inven- tories are growing, and goods are becoming available. For the moment, we like that. It accounts in a large measure for our full em- ployment, it is easier for the housewife, and day after day the problems of the purchas- ing agents of industry are simplified. As of the firat of this year, however, the invento- ries of the country reached the astounding figure of 36 billion dollars and they are cur- rently growing at the rate of something like 15 billion dollars a year. We might add in this connection, that these inventories are becoming a part of our supply accounts, with wholesale commodity prices 82 percent higher than they were in 1939. Buying and con- suming is proceeding at a high pitch, and the demand is being satisfied, somewhat re- gardless of price, as indicated by the 82- percent price increase, and at the same time, as I said, we are building inventory at the rate of 15 billion dollars a year. Obviously, the building of this inventory has been an enormous stimulant to produc- tion and employment. It compares favor- ably in volume with the artificial stimula- tion that we experienced during World War I, for war purposes. It represents the em- ployment of millions of people and is sup- plying these people with purchasing power for further buying. Let us have no !llusions, however. This inventory buying is bound to taper off. The pipe lines in time will be filled, in some cases to overflowing, and, when that day comes, the incident of the present tax-take may be catastrophic. Too many fleas can kill any dog and too much taxation can break any economy. Before going into any general question of tax reduction, let us examine one of the dangerous features of our present practice. I have drawn attention to the fact that the outstanding need of a sound economy over the next few years is the creation of enor- mous quantities of capital goods necessary to attain efficient national production. In the past, we have depended to a great extent for this contribution on the little businessman, the new blood of the economy, the young fellow that has know-how or bright ideas, and wants to put them into effect. In past years he could easily put his brain child to work if he stood well in his community. The sav- ings of his friends and neighbors helped him to buy the necessary tools and equipment. We will never realize to what extent this country has depended for its high living standards on the steady emergence of small business into big business. What are today's chances for such undertakings? In the first place, the hardest money in the world to get is money to be invested in fixed assets and the smaller the business the harder it is to get such funds. Our method of taxation has done more to impede progress along this line than any one thing that modern tax tech- nique has accomplished. Let me illustrate what is actually happen- ing today. Two or three promising young men may need a hundred thousand dollars to exploit some brain child or experience. It may be some patent, or some new industrial technique. To try the scheme out in the big, cold world involves, let us say, the raising of $100,000. This $100,000, or a large part of it, is to be invested in fixed assets. The local banker tells our group that such undertak- ings are beyond his province. He simply ex- tends temporary and self-liquidating accom- modation as he is a commercial banker and cannot face the risk of having his funds tied up in long-time commitments, The banker may suggest that they seek private money for the undertaking in mind. Our group in seeking private money finds that they must either take small amounts from a great many individuals or a larger amount from some entrepreneur whose busi- ness it is to analyze and take such risks, Contact with the larger group for small amounts is made very complicated by our SEC requirements and blue-sky regulations. The cost to raise small amounts of capital makes such a procedure almost out of the question, Our group tries to interest some capitalist in the neighborhood in the scheme of supply- ing the front-end money for the new under- taking. They propose a corporation and offer to give the entrepreneur an interest in their capital structure for his hundred thousand dollars. In earlier days the scheme would have been a possibility. If investigation showed promise the money might be arranged for and the undertaking launched. Under present taxation methods it is a different story. The chances are the entrepreneur would not even waste time discussing it. He would simply observe that no matter how good the scheme was or how promising the personnel, he was forced by the tax laws of the land to put his money into tax-exempt bonds, because, considering the ordinary risks of business, the tax laws interfere with the group returning his principal, to say nothing of profit, no matter how well the undertaking worked out. Why is this the case? In the first pluce, if the new corporation was a success 40 percent of its profits would be the Gov- ernment tax-take. Sixty percent of the profits would remain for buying new tools and for paying a return on the capital in- volved, If half the 60 percent was used for paying dividends a very large percent would again be captured in taxes. The man who puts up the venture-capital to make the undertaking possible would find that if he had a taxable income on $100,000 for the year less than 8 cents of the earned dollar of the new venture would remain in his possession after the corporation and his in- dividual taxes had been paid. We find that the normal sources of money for little busi- ness has been relegated to the sidelines and it has happened through a system of double taxation that the public little understands or has any realization of the consequences. I have not drawn this illustration with any intent of arguing a better deal for the entrepreneur. I am simply discussing the economics of the situation whereby we have closed the door to possible expansion in busi- ness activity which the continuity of the American way of life demands be left open. For some time the economic trend-line studies have indicated a deflationary trend developing in the economy. On a short- time basis, this trend could be accelerated, and I am sure if minor collapsing tendencies begin to appear, the tax burden will exag- gerate them enormously. On the other hand, the Government's tax-take must be great enough to meet expenses and it seems only logical that in periods of high indus- trial production, there should be excess tax- take for debt retirement, as, in this way, our artificially produced bank deposits are reduced. But this policy should not be fole lowed too ardently until a normal economy ig reasonably established. A387 Our conclusion, therefore, is that the first logical step is to drastically reduce expenses as far as possible; second, make reductions where double taxation is unduly penalizing the creation of new capital goods; third, re- duce the individual tax burden pro rata and as much as possible in light of the balance between expenditure and income; and finally, set up machinery that will still fur- ther reduce the tax burden in case strong deflationary tendencies become evident when our pipe lines are filled and cut-backs in pro- duction become mandatory. The present problem corresponds with try- ing to repair an old shingled roof. Every move made exposes new trouble and brings to light new difficulties. Whatever we do now in taxation is simply a repair job. The country has a crying need for a new tax struc- ture that will eliminate road blocks to the economy or at least reduce them to mini- mum proportions. Such machinery should incorporate the idea of a flexible tax struc- ture that would allow heavy taxation in ac- tivo times and be easily and quickly reduced in times of depression. Let us keep in mind that the taxing technique hag unbounded possibilities to distort or even cripple the economy. CHESTER D. TRIPP. Montana Senate Joint Memorial on Foot- and-Mouth Disease in Mexico EXTENSION OF REMARKS OF HON. WESLEY A. D’EWART OF MONTANA IN THE HOUSE OF KEPRESENTATIVES Monday, February 3, 1947 Mr. D’'EWART. Mr. Speaker, under leave to extend my remarks in the REc- ord, I wish to include a senate joint memorial adopted by the Montana State Legislature with reference to the cur- rent outbreak .in Mexico of foot-and- mouth disease. Residents of all the great livestock-raising States of the West are justifiably alarmed at the spread of this disease among Mexican cattle. The memorial follows: Senate joint memorial to the Congress of the United States petitioning the Congress to strengthen present sanitary require- ments governing the importation of live- stock and Hvestock products, and to sp- propriate additional funds to the Bureau of Animal Industry, United States Depart- ment of Agriculture, in order that border inspection may be strengthened and a system of patrol established along the northern boundary of Mexico to guard against the importation of people, animals and material carrying the infection of foot-and-mouth disease, nnd also petition- ing Congress to offer tv the Government of the Republic of Mexico such facilities as may be available from the Bureau of Animal Industry, United States Depart- ment of Agriculture, and appropriating money for such facilities and to extend financial ald to the Republic of Mexico in order that foot-and-mouth disease may be eradicated To the President of the United States and to the Honorable Senate and House of Rep- resentatives of tle United States in Con- gress assembled: Whereas foot-and-mouth disease now exists in livestock in the Republic of Mex- ico; and
A388 Whereas the disease has spread from the six original States involved in the vicinity of Mexico City as far west and north as the State of Zacatecas; and Whereas it its extremely doubtful if the Government of the Republic of Mexico can eradicate the disease from their livestock without additional assistance; and Whereas the presence of foot-and-mouth disease in the Republic of Mexico presents a very definite threat to the prosperity of the livestock industry and the entire economic welfare of the United States: Now, therefore, be it Resolved by the Thirtieth Legislative As- sembly of the State of Montana (the Senate and House of Representatives concurring), That we earnestly petition the Congress of the United States to strengthen the present sanitary requirements governing the importation of livestock and livestock prod- ucts from Mexico and from other countries in which foot-and-mouth disease exists; be it further Resolved, That we earnestly petition Con- gress to appropriate additional funds to the Bureau of Animal Industry, United States Department of Agriculture in order that bor- der inspection may be strengthened and a system of patrol be established along the northern boundary of Mexico to guard against the importation of people, animals and materials carrying the infection of foot- and-mouth disease; be it further Resolved, That we petition and urge the Congress of the United States to offer to the Government of the Republic of Mexico such facilities and assistance as may be available from the Bureau of Animal Industry, United States Department of Agriculture, and to ap. propriate funds to provide for this assistance and to provide direct financial aid to the government of the Republic of Mexico in order that foot-and-mouth disease be eradi- cated from their livestock; be it further Resolved, That a copy of this joint memo- rial be forwarded by the secretary of state to the President of the United States and to the President pro tempore of the United States Senate, the Speaker of the House of Representatives, the Honorable Secretary of State, the Honorable Secretary of the United States Department of Agriculture and to the Senators and Representatives in Congress from the State of Montana with the request that they bring this matter forcibly to the attention of the Members of the Congress of the United States. Defeat in Victory EXTENSION OF REMARKS o HON. ALVIN E. O’KONSKI OF WISCONSIN IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. O’'KONSKI. Mr. Speaker, under leave to extend my remarks in the Rec- orD, I include the following article by Felix Morley: {From Human Events of January 22, 1947] DEFEAT IN VICTORY (By Felix Morley) The Polish elections last Sunday, held une der conditions which forced three official protests from Washington and three from London, give extraordinary timeliness to Jan Ciechanowsk!'s book Defeat in Victory, pub- lished by Doubleday & Co. this week. . This fascinating account of the former Polish Ambassador's wartime mission in Washington is background for the travesty of democracy enacted in the Soviet puppet state on January 19. It will help to prepare the reader for the eventual show-down on the betrayal of Poland. But great as is the importance of Mr, Clechanowski's book in the field of international relations, it is even greater for Americans concerned with the preservation of their own form of govern- ment. In his day-by-day account of how the Pol- ish Republic was destroyed by its own allies, the wartime spokesman of that Republic in the United States inevitably reveals a part of the contemporary degradation in Washing- ton. It is that secondary accomplishment which makes Defeat in Victory required reading for Americans. A corner of our own fron curtain is raised to give a glimpse of the New Deal as it actually operated. The story of mental and moral bankruptcy un- der President Roosevelt is not agreeable reading. Nevertheless, “murder will out” and we can be grateful to a distinguished European for his specific evidence on much which has heretofore been gossip. To Mr. Ciechanowski the wartime betrayal of the American people is an incidental mat- ter. His interest centers on our official con- tribution to the destruction of his country, and that story is appalling. But the way in which President Roosevelt helped to ruin Poland cannot be told without some consid- eration of his domestic politics, The revela- tions, with names and dates and places, are sufficient to give many a lead both to a con- scientious Congress and to impartial histori. ans. How Poland was sold down the river is told in straightforward manner, with a humor which does much to relieve the tragedy. There is a wry smile in such incidents as the one in which Roosevelt is reported urging the Polish leaders to keep their shirt on while they were being dexterously disrobed of everything except their honor. peg Defeat in Victory opens with Mr. Ciecha- nowski presenting his credentials to the Pres- ident on March 4, 1941, when he began his second assignment as the ranking envoy of Poland to the United States—the earlier post was from 1925 to 1929. The book closes with the withdrawal of those credentials, as the first official act of James F. Byrnes as Secre- tary of State, on July 6, 1945. The interven- ing pages tell the story of how Poland was made a vassal of Soviet Russia. The author makes few editorial comments. He lets the facts speak for themselves. It was during this initial interview, the United States being still officially neutral, that Mr. Roosevelt in effect told Clechanow- ski to urge Americans, especially Polish- Americans, to scrap neutrality. His deep feeling for Americans of Polish descent, he told the Ambassador jovially, was ‘not merely because they voted for me so overwhelmingly in the last three elections.” Also in March 1941, General Sikorsk! was allegedly requested to arouse Polish-Americans against the neu- trality legislation which Mr. Roosevelt was under oath to uphold. The sequel to these devious tactics came during the 1944 election campaign when, as Mr. Ciechanowski points out, the Polish- Americans had good reason to fear that Pres- ident Roosevelt was planning to surrender their fatherland to Communist control. At that time the Ambassador was frequently asked * * * by election agents of the New Deal his opinion of the most appro- -priate way to obtain the support of what they called the Polish vote for the Demacratic machine, APPENDIX TO THE CONGRESSIONAL RECORD Mr. Clechanowski then relates how, a week before the 1944 Presidential election, Mr. Roosevelt saw Charles Rozmarek, chairman of the Polish-American Congress in Chicago and definitely promised him to take active steps to insure Poland’s independence. Mr. Rozmarek, the Ambassador noted, immedi- ately thereafter made a public staternent fully endorsing the Democratic ticket. The joker was that just 3 weeks earlier, in Moscow, Prime Minister Mikolajezyk, of Po- land, had been told by Molotov, in the pres- ence of United States Ambassador Averell Harriman, that Mr. Roosevelt had already surrendered to Stalin. In Ciechanowski's dramatic words: “At this point Molotov made a surprising statement. He said that he saw it was nec- essary to remind those present that at Teheran President Roosevelt had expressed his complete agreement with the Curzon Line as the Polish-Soviet frontier and regarded it as a just solution which should be satisfac- tory both to the Soviet Union and to Poland, and that the President had merely added that, for the time being, he preferred his agreement on this point should not be made public. “Molotov added that he thought it use- fu) to bring this matter up. He then turned to Churchill and Harriman and challenged them to deny his statement if they consid- ered it inconsistent with the truth, ‘because it appears to me,’ he said, ‘that Mr. Mikola- jczyk is not aware of this fact and is still in doubt regarding the position of America on this subject.’ “Molotov paused dramatically for a while to see whether Churchill, Eden, or Harriman would take up his challenge, and when it became evident that they were not prepared to do 80, the conversation switched.” Ir As the former Polish Ambassador points out, it was the function of OWI to make the American people believe the interests of Po- land were being safeguarded even as that country was actually being made over into a Soviet puppet. Defeat in Victory gives illus- trations of the extraordinary manner in which this agency undermined our diplomacy. When Russia broke diplomatic relations with the Polish Government-in-Exile, on April 26, 1948, Mr. Ciechanowski, in an inter- view on this crisis with Under Secretary of State Sumner Welles, drew the special at- tention of the latter “to the necessity of curbing the exaggerated pro-Soviet tendency of OWI propaganda at this delicate moment.” Mr. Welles, says Ciechanowski, “promised he would try to do so.” In the end the Ambassador realized that he had been too scrupulous for his country’s good, under the rules as rigged by the New Deal. In his last official statement, July 5, 1945, Mr. Ciechanowski admitted: “As long as the war lasted, the Polish Gov- ernment itself contributed to this regrettable blackout of true facts concerning Polish- Soviet relations for the sake of Allied unity so essential to the common victory.” On the deceit surrounding the United Na- tions the Ambassador does permit himself a little open indignation. He is sardonic over the story that Mr, Roosevelt “invented the formula of the United Nations” which he “personally carried to one of the White House bathrooms, where Mr, Churchill spluttered his soapy approval.” He calls the draft charter which emerged from Dumbarton Oaks “a caricature of democracy in interna- tional relations.” And on the actual launch- ing of the United Nations, at San Francisco, Mr. Ciechanowski comments: “The illusory ‘unity’ of the Big Powers, de- termined to dominate the postwar world, was being laboriously achieved at the price of
APPENDIX TO THE CONGRESSIONAL RECORD fundamental princtples of justice and de- mocracy, sacrificed to that precarious ‘unity’.” ‘The Ambassador is also pardonably sarcas- tic over the conduct of American diplomacy during the regime of Mr. Stettinius, who “ap- peared to me to regard foreign relations as a mixture of publicity and propaganda.” There is a painful passage in which Stettinius, then Under Secretary, confesses that he felt “very bewildered,” and beseeches the Polish envoy's advice as to “the best line for him to follow.” But Stettinius is not long depressed. See- ing the unfortunate Mikolajczyk off trom the Washington airport, after the Premier's futile visit to Washington in June 1944, Stettinius turns to Ciechanowski and exclaims, so the latter recounts: “Our friend Stan ts a regular guy, and we shall do all we can to help in his undertaking.” Iv As the basis of a libretto for a musical comedy, Defeat in Victory would be a wow. There are wonderful wisecracks, as when Harry Hopkins is quoted as saying: “After all, what does it matter? The Poles are like the Irish. They are never satisfied with any- thing, anyhow.” But the factual diary of the former Polish Ambaseador unfortunately does not picture an imaginary Throttlebottom regime, set off with a luscious chorus and designed to pro- vide a relaxing evening. This book is the report of a responsible insider on what trans- pired in Washington while 800,000 American boys were dying with the assurance that they Gave their lives to make a better world. Between the lines of Mr. Ciechanowski!'s book, much that has mystified becomes more clear, From it one can understand why Sec- retary Byrnes resigned. The cruel responsi- bility for our new Secretary of State is now the drafting of a treaty for Germany which must seek to conceal the shameful wrong which has been done to Poland. Under the unhappy Churchill-Roosevelt formula the Russian robberies would be offset by award- ing the Poles purely German territory which they do not want. The Polish underground fully recognizes that this arrangement would perpetuate Poland's dependence on Russian direction and support. Defeat in Victory gives the most naive reader a glimpse of the problem which is shaping up. Before long the Senate will have before it a treaty which will inferentially rec- ognize American acquiescence in the atro- cious Polish “settlement.” There will then be no Roosevelt glamor and no OWI further to conceal and obscure the issue. In the cold light of the morning after, the Senate will either have to ratify a treaty which de- stroys every principle for which the war was fought, or else will have to reject it, ending all pretense of Allied unity. As the former Polish Ambassador makes clear, any White House leadership worthy of the name could have avoided the dismal swamp of disillusionment which must now be traversed. It was the New Deal achteve- ment to miss every intelligent solution, yet succesafully to postpone the day of reckoning for Mr. Roosevelt's unhappy successor. Management-Labor Relations EXTENSION OF REMARKS HON. CHARLES R. ROBERTSON OF NORTH DAKOTA IN THE HOUSE OF REPRESENTATIVES Monday, February 3, 1947 Mr. ROBERTSON. Mr. Speaker, as the Eightieth Congress sets about its tasks, perhaps the major domestic legis- lative concern is that of managemente labor relations. I shall be happy to cast my vote to break down labor monopolies and to restore again the rightful relation- ships of labor and management. There must not prevail in this country a mo- nopoly of labor, and I am as zealous as any man on this floor to see that proper legislation is passed to correct these abuses which grew from ill-advised po- litical labor effort during the last 15 years. As we set about the task of correcting these abuses, that have been brought about by bad legislation, giving labor distinct advantages, we must not over- look other phases of the Nation’s well- being, not the least of which is the threat to independent small business: . Sometimes I wonder if the American people really want the antitrust laws fully enforced. Surely, if they want this done, if they desire to maintain free competitive enterprise, then we must be- gin at once a fight against the monopo- listic practices in our country, because these practices are threatening the wel- fare of free enterprise, a cherished free- dom of our people, and certainly are stopping the forward march of all inde- pendent small businesses. It is necessary to begin at once the enforcement of antitrust laws. The Congress must make appropriations ade- quate for the enforcement, and in all probability it is essential that we intro- duce and pass additional laws to stop this concentration of wealth in fewer and fewer hands. We have not become fully alarmed by its present-day propor- tions. It has been tremendously accel- erated during the war and under the last administration, even though the leader of that administration spoke so fervently about the Tories, driving the money changers from the temple, the people’s rendezvous with destiny, eco- nomic royalists, and the lower one-third. The people are not aroused to this dan- ger because of the slow, creeping process that characterizes monopolistic growth, while they do become incensed imme- diately at a Nation-wide railroad strike or a coal strike. The people are de- manding that there be legislation passed immediately to curb labor autocracy. They are not fully informed on what transpires in the capital structures. Yet little by little small business is being crowded to the wall. Men with limited capital today have little opportunity to engage in the established businesses of this country. These incessant demands for curbs upon the power of labor are heard on every side and I, for one, want these curbs to prevail. But at the same time I am desirous—and equally desirous— that we appropriate sufficient funds to enforce antitrust laws against business monopolies. Labor, no doubt, is making its exces- sive demands because it appreciates that monopoly in the capitalistic groups is gradually becoming a power almost un- manageable. To say that labor unions shall be restrained—and I say they A389 should be restrained—while the march of monopoly is allowed to continue, is bound to result in the abandonment of industrial democracy. We cannot—if we are to live and hold to the practices so long considered the fundamentals of our country—allow either monopoly of labor or monopoly of capital to crowd out the independent small businessman. This is a matter for serious consideration at the hands of the Congress at this very hour. National Defense and National Reputation EXTENSION OF REMARKS or RON. J. WILLIAM FULBRIGHT OF ARKANSAS IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. FULBRIGHT. Mr. President, I ask unanimous consent to have inserted in the Recorp an address recently deliv- ered by the Honorable William Benton, Assistant Secretary of State, before the Twenty-first Women’s Patriotic Confer- ence on National Defense at Hotel Stat- ler, Washington, D. C. An estimate I have received from the Government Printing Office indicates that the address will occupy three and one-third pages of the Fiecorp, and w:ll cost $236.67. There being no objection, the address was ordered to be printed in the Recorp, as follows: You have dedicated this conference to the subject of national defense. I shal] dedi- cate this talk to the theme of national de- fense of a new type—a type that is far less understood by the American people than is the atomic bomb. Military experts say there is no effective defense against the new weapons of war, They are, of course, right. There is no mili- tary defense. But there is another, a greater defense, that is not military. We must build that defense, and we must build it now, while there is yet time. If we cannot surely rely on guns and ships, on airplanes and bombs, what other hope is open to us? The constitution of the United Nations Educational, Sctentific, and Cultural Organization declares: “Wars begin in the minds of men, and it is in the minds of men that the defenses of peace must be constructed.” Is it in fact possible, by con- structing defenses in the minds of men, to progress toward national! security that is real and lasting? The use of facts and ideas, us well as oceans and battleships and tanks, is new to the American people when they think of their national defense. But in the war our Army and Navy learned how potent facts and ideas can be. In cooperation with the Office of War Information, they developed what were called PW units—units dedicated to psycho- logical warfare. One incident may demonstrate the power of psychological warfare. Marquis Kido, who as Lord Keeper of the Privy Seal was un adviser to the Emperor of Japan, has testi- fied that the Emperor had access to the monitoring service on our Voice of America broadcasts in the Japanese language. Tie Emperor had himself picked up our leuficts
A390 on the palace grounds. The effect of our information activities, and their potential effect on the Japanese people—Marquis Kido's evidence shows—was a positive factor in the decision to issue the Imperial Rescript, which announced Japan’s surrender, over the op- position of powerful forces which wanted to fight it out to the bittter end. These broad- casts and leaflets may have saved the lives of hundreds of thousands of American boys. Our ideas were thus weapons, perhaps more powerful than any battleship or task force. The war provides us with countless examples of the power of ideas as weapons, But I am not here to talk about psy- chological warfare. That, we hope, is be- hind us. The value of projecting facts and ideas—honest and unvarnished facts, fair and balanced ideas—can be as great in peace, as a measure of national security, as in war as a weapon of offense. The weapons of the war can be forged into the tools of the peace. This we must do, and now. Among the leading nations, it is only the United States that fails to accord recogni- tion to the power of facts and ideas in time of peace as in war. We Americans know much about our Navy, the most powerful in the world; about our Alr Force; our billions of dollars in gold in the vaults in Kentucky; about our Detroits and Pittsburghs. As a people we know lit- tle about the power of our ideas in their potential influence over other peoples. We have as yet shown little faith in their capac- ity to gain understanding throughout the world for our democratic government and our way of life. Do we want friends throughout the world? Does having friends not minimize the risk of war? Are they not assets in time of crisis? We have all of us seen in our own lives, and in the life of our Nation, what a tremendous asset friends can be. We know too that with- out friends no possible action or policy can bring us permanent security. Thus it is not merely our economic policy that can achieve the kind of world in which the chance for peace is enhanced and the risk of war is minimized. It is not merely the fear of our military power that can pre- vent attack upon us. It is also knowledge of what we are and what we do, of our ideas and our intentions; in a word, our reputa- tion. And it is Knowledge of our everyday lives that counts as well as our high policy, for one explains the other; knowledge of the high school in Des Moines and the farm in Indiana, of the small factory in upstate New York as well as the big shipyard in California; of the country weekly in Virginia as well as the glossy magazine out of New York; of our churches, with their 68,000,000 membership, our free unions, our multifarious civic organ- izations. Congress is becoming increasingly aware of the importance of our national reputation. Senator Wi.tey has just introduced a bill Calling for the establishment of a Depart- ment of Peace, under a Secretary of Peace having Cabinet rank. The Secretary of Peace would concentrate the maintenance of peace through promoting better under- standing among the peoples of the world of each other, and thus promoting international cooperation; and through advancing freedom of the press and through throwing the weight of moral force behind the removal of inter- national frictions and misunderstandings. Congressman Drrxsen has introduced a bill calling for the establishment of a Peace Divi- sion in the Department of State, under an Assistant Secretary of Peace, to study the Cause and cure of war and develop a phi- losophy of peace based upon such study. I know and admire both Senator Wer and Congressman Dmxsen. Congressman Dirksen, during the war, testified on behalf of the OWI, reporting his observations on a trip overseas, with an eloquence and per- suasiveness that demonstrated both his in- sight and his courage. I have not seen or talked to either Senator Witry or Congressman Dmxsew since their bills were introduced. Oan it be they are kidding the State Department? Or is it that they feel the State Department is so remiss in its obligations that the only hope is new legislation of the type they propose? I am grateful to them for these bills, which may focus the attention of Americans on what the role of thelr State Department must be. For surely a main function of the Depart- ment of State should be that of Senator WiLrY’s proposed Department of Peace: to foster the kind of world environment that minimizes the risk of war. If it does not do this, it should be, in fact, reoriented in view- point by legislation or otherwise. And it is my area of the Department that is specifically responsible for advancing understanding among peoples and helping to construct the defenses of peace in the minds of men. Here, I agree with what is implicit in these bills; the job is being done inadequately, and on a pathetically small scale; and here you women and your organization can help greatly if you will. As Senator VANpErNBERG recently pointed out, national defense requires constant vigilance. It requires also a constant re- valuation of the elements that make up our security. Today the elements that compose our defense are shifting so rapidly that they demand the coolest, wisest thought of which we are capable. To the men of Jefferson’s day, as in Mc- Kinley's, the phrase “national defense” has meant the defense of our shores against armed attack. It has evoked the picture of an isolated America, warning a hostile world not to trespass. If such a negative concept was ever justified—and it probably was—it is not justified now. The concept of the GAR can no longer be that of the DAR. Na- tional defense must today be a positive con- cept; and you have shown, in the structure of, this conference, that you recognize it as & positive concept. Two new facts of international life, closely related, should produce an overwhelming impact on our conception of national defense, One fact is the revolution that has taken place in our foreign policy within the last 5 years, That revolution is so profound that we have not fully adjusted our emotions, our actions—or our appropriations—to it, though with our minds we recognize it to be in- evitable and irreversible. Our national de- fense is today the defense of law and justice throughout the world. We are committed specifically to resist aggression wherever it may occur. We are committed generally to &@ concern with the well-being of peoples everywhere, not for reasons of altruism but a our own interest and for our own protec- on, Two weeks ago tonight in Cleveland, former Secretary Byrnes said, “As a great power and as & permanent member of the Security Council, we have a responsibility, veto or no veto, to see that other states do not use force except in defense of law.” Secretary Byrnes has been widely praised for that statement. Contrast that with our Neutrality Act of 1989 and you will see what a revolution has taken place in our thinking. The second new fact of international life is that the instruments of modern war have become so horrible that, if war comes again, it is likely that nobody will win, and almost certain that everybody will lose. The prime objective of national defense is thus to pre- vent war and at the same time establish justice. That is the task of statesmanship. That is a task to which we are only begin- ning to be adjusted. That is a task which we do not yet fully understand; and a task on which you women and your organizations are singularly fitted to take leadership. APPENDIX TO THE CONGRESSIONAL RECORD In our American view, the chief function of the armed forces is to discourage ag- gressors in advance. We employ force only as a last resort. The dilemma today is that the resort to force may be a last resort, in- deed—and for all of us. The victor at the next peace table, if there is still a table, may represent a country with its own cities and civilization virtually destroyed. Such would be no victory, except to the few left alive who can hollowly proclaim, “We have won again.” This dilemma, coupled with our new world-wide commitments, requires us to search for, and to develop as we never did in the past, techniques of national defense in which the risk of resort to naked force is reduced to the absolute minimum. Fortunately there is a wide range of tech- niques between the hope for a moral mil- lennium on the one hand, and the resort to force on the other. The American people, as a whole people, have never before had to study and master them. We are now mov- ing to expand and improve our diplomatic corps, 8 move which should have been made many years ago. We have been reshaping our foreign economic policies. ‘We have Shared in the invention and the creation of the United Nations, and its specialized agen- cies, as wholly new instruments of national defense, in the positive sense of that term. And we are beginning the effort to assure that foreign peoples understand us—under- stand our people, understand our problems, our policies, and the national life from which these policies spring. This afternoon you discussed the strength- ening of national defense by strengthening democracy at home. It is true that great empires have succumbed from internal decay as often as from extended attack. What I want to stress tonight is the impact abroad of our domestic policies. Our position as the leading world power makes our domestic, internal activities im- portant to the entire world. How we live, what we do, may affect everyone. Therefore we are objects of intense curiosity. That curiosity symbolizes both the penalty and the opportunity of leadership. It is a new phenomenon. In the nineteenth century older civilizations looked upon us—when they looked at all—as a kind of child prodigy. Their curiosity about the adult is accom- panied by many strange and sometimes mas- sive misconceptions. Evidences of these misconceptions flow across my desk in a con- stant stream. Perhaps the most widespread and damag- ing misconception abroad about the United States is that the American economy 1s sure to prove highly unstable and not to be de- pended on. Foreign peoples remember the world depression of the thirties as an eco- nomic nightmare that had its origin in the United States. Perhaps the greatest single obstacle today to foreign response to our leadership in many parts of the world is fear of economic collapse in the United States. This fear of an American economic break-down is more acute among many for- eign peoples who desperately crave security than it is here. They fear that if they tle themselves in with our economy, or emulate our methods, they will commit themselves to boom and bust. Foreign peoples find it hard to understand, or properly appreciate, the strength and vitality of the American economy, even dur- ing a set-back. One hundred years of Marx- ist indoctrination about the inevitable and bloody collapse of the capitalist system has not made understanding easier. It is claimed against us that we cannot attain stable employment and high produc- tion in peacetime, or that we are firmly in the grip of a growing system of monopoly, or that our system must lead to world-wide economic imperialism. For some countries,
APPENDIX TO THE CONGRESSIONAL RECORD our strikes are dramatized as national dis- asters—the beginning of the end—even _ though they affect only a small fraction of our work force. The moral here for us, in the economic area, is twofold. First, it is in our national in- terest that we project to peoples abroad the facts of our economic life fully, steadily, accurately, and deliberately, and by every means at our disposal. We can see to it that our reputation is no worse than the facts Justify. The other half of my dual moral ts that we must in fact strengthen our democracy— and thus our prestige, our leadership, and our security. There is still truth in the old adage, “What you are speaks so loudly I can- not hear what you say.” Our efforts will be watched abroad with bated breath. Can we temper the excesses of the business cycle? Can we solve our labor problems? We cannot blame the French for worrying about our economics when an American coal strike can bring French industry grinding to @ halt; or the British, when their meager bread ration is threatened; or the Italians, when their reconstruction program is en- dangered. Can we steadily expand our pro- duction, provide basic security for our people, insure equality of economic opportunity, and at the same time maintain our traditional freedoms? Can we, in short, put into practice what we have learned since 1929? Of course, we will continue to have some fluctuation. But there is a new spirit in America, and we do have the knowledge, and the power, to take steps that will avoid the extremity of boom and bust, if we have the will. As we succeed, and as understanding of our progress spreads, it will be no local tri- umph, It will be a success that will help determine the shape of the future of the world. And it will bear heavily on our na- tional defense, as that term should be broadly and positively conceived. Tomorrow you will hear about the military aspect of our defense, and the military re- sponsibilities we have assumed through our membership in the United Nations. This is still a poor world we live in, morally, educationally, and in mutual under- standing among peoples. Physical force is still the ultimate arbiter. Sometimes it lies very close beneath the surface of negotia- tions. Secretary Byrnes emphasized, in sev- eral of his public statements last year, that it is unrealistic to think that your words will carry weight in an international conference unless you have force to back them up. The United States was catapulted into its present position of world leadership—some- what reluctantly and to its own surprise— not because of its virtue but because of its economic, technological, and military strength, Despite the reservoir of good will we have in many parts of the world, you would be disappointed, if you sat where I sit, to find that respect for our good works, and admiration for our moral or spiritual leader- ship, lags far behind the knowledge of our economic power and military might. Iam not minimizing the value of a reputa- tion for strength. It is a reasonable assump- tion that if the Japanese and German peo- ple had known the strength and determina- tion of the United States they would never have risked an aggression involving us, or raised up leaders who risked it. They were told that we were weak and divided, decadent from too much luxurious living, and they be- Meved it. Brigadier General Fellers, one of General MacArthur's aides, who interviewed leading Japanese generals and admirals, told me that some of those leaders who knew America best so opposed the attack on Pearl Harbor that they were forced into retirement. A country must be strong if it is to be a leader, and the United States is strong. But @ real leader must have more than power. He must have loyalties and he must have friends; and these friendships must not be based on fear and favors bu on mutual un- derstanding and respect. He must be re- spected for what he is and for what he does. He must be honest, reliable, predictable, Other nations and their peoples must have confidence that self-restraint will be exer. Cised in the use of power. They must be con- vinced that the leader will act according to principle, and use power for the benefit of all rather than for narrow selfish ends. To- day it 1s necessary not only to be and to do but to say what we are, and what we are doing, in a voice the whole world can hear. Former Ambassador Bullitt says in his re- cent book, “The most legitimate use of force on earth is to gain time to permit the growth of moral ideas.” We are now putting a very great deal of money into force and properly so, given the present state of the world’s morals, and of the present lack of under- standing of the United States. But when ycu listen tomorrow to a description of our mili- tary, naval, and air protection, remember to ask yourselves, “What are we doing to pro- mote the growth of moral ideas? And what are we doing to make clear to the peoples of the world an honest picture of our lives— our achievements with our failures, our as- Pirations with our shortcomings?” You will also hear tomorrow a discussion of the United Nations and several of its corol- lary agencies. I shall now anticipate some of that discussion. These agencies operate in the great field that lies between reliance on pure morality on the one hand and pure strength on the other. I want to bespeak your interest in the United Nations agency that takes the longest view, reflects most closely the moral end of the spectrum of in- ternational relations and, potentially, may hold the highest promise for building de- fenses of peace that will endure. Last month I had the honor of leading the American delegation to the first general con- ference of the United Nations Educational, Scientific, and Cultural Organization, meet- ing in Paris. The program that emerged is one that can contribute significantly to our national security. UNESCO will seek to eradicate illiteracy everywhere, and to lift educational stand- ards. Illiterate men are pawns in a power struggle. UNESCO will seek to reduce bar- riers to the free flow of ideas and informa- tion everywhere. The most literate peoples can be led and bullied into aggression when they are cut off from a full and steady ac- count of development among other peoples, and fed on lies and distortions. UNESCO will seek to diagnose the social and psycho- logical tensions that lead to conflict, as urged in Congressman DmkseEn’s bill. And UNESCO will stimulate the exchange of students, teachers, scholars, and experts on the widest possible scale. In such ways UNESCO will strive to lay that solid foundation of un- derstanding among peoples which is the best hope of peace. As UNESCO succeeds, our security, and the world’s security, will be strengthened. The operating budget for all of UNESCO for 1947 is $6,000,000. This is, I should guess, one ten-thousandth of the world’s military and naval expenditures this year. UNESCO should have your support, not passive and inarticulate, but active and vocal. Finally, you should interest yourselves in a@ new instrument in our program for na- tional security, the Office of International Information and Cultural Affairs in the De- partment of State. This arm of national security is designed to accomplish, on a na- tional and bilateral basis, what UNESCO is Gesigned to accomplish on an international and multilateral basis. Its function is to project to foreign peoples a full and fair pic- ture of American life, and of the aims and policies of the United States Government. Ita policy is to concentrate on those areas, and those media of communication, where private agencies do not or cannot function A391 adequately, to fill the gaps and correct the misconceptions. It is thus the guardian of our national reputation abroad. Its end is to help assure that our country will not again be placed in jeopardy because it is misunderstood. Our political and military leaders have recognized the new urgency of understand- ing. President Truman has said, “At no time in the history of man has the survival of man depended so much upon the ability of man to understand his fellow man.” Secretary Byrnes has said, “There was a time when we could afford—or thought we could afford—to be unconcerned about what the rest of the peoples of the world thought about us. That time is past.” Secretary Marshall, in his report on China, has stressed the confusion that results from distorted propaganda. General Eisenhower has said, “I am con- vinced that the world cannot stand another Global War, and, as I see it, the thing to pre- vent such a tragedy happening its education, No one wants war. The common man every- where hates war. We must enlist that hatred of war to prevent it happening again. The peoples of the world must be made to realize how much the very thinking of war costs us all, how much of the revenue of our coun- tries is being diverted to the purposes of war—these nonproductive expenditures. I believe so fervently in mass public opinion— look how it armed the United States when war came—and if only it were mobilized in favor of the peace we all want, there never would be another war." General Eisenhower is right in referring to military expenditures as nonproductive, They are a nonproductive drain on the econoe my, just as a fire-insurance premium is a none productive expenditure for a home owner. Both are necessary for protection. But when his fire-insurance premium becomes unbearably large, the home owner seeks ways to reduce it by reducing the risk of fire. If our State Department's information program helps reduce the risk of war, it can thus help reduce the premium cost of armaments. The Office of International Information and Cultural Affairs observed its first birth- day on January 1. This Office has main- tained small information staffs, and United States information libraries, in 62 countries. It has exhibited noncommercial documen- tary motion pictures about American life to some 100,000,000 people overseas, It has furnished background material, and full texts of official statements, to editors throughout the world. And it has broad- cast by short wave around the clock in 24 languages. Next month a twenty-fifth lan- guage will be added—Rusasian. This Office has also been the focal point for a program of scientific and cultural co- operation, and of exchange of students, with the other American Republics. It awaits congressional authorization to extend this work to the rest of the world. The lack of this authorization, which will be requested in a bill to be introduced shortly, is one of the great gaps in our national security pro- gram. It is a gap which I hope Congress will shortly fill. These efiorts are indeed modest in scope, compared with the breadth and depth of the misunderstanding about America. Other powers, under the spur of greater necessity, long ago developed skill in projecting their stories. Great Britain’s effort is on at least twice our scale. Compared with the total activities of the Soviet Union, where propa- ganda seems to be placed in a class with the Red Army as a bastion of foreign policy, the informational efforts of both Great Britain and the United States are minor. Modest is perhaps too flattering a word to Gescribe our information activities abroad. Our budget for these activities is less than one-quarter of 1 percent of the budget of the armed forces. There was # time last yeur
A392 when it seemed likely there would be no budget at all. Thus these new activities are still not recognized by Congress and our people as an important and an integral part of the conduct of our foreign relations, and thus as a major element in our security. The exchange of students is an example. I know of no surer method of increasing un- derstanding of the Unitec States, for the long run, than to bring foreign students to live among us for a year or two. If this is true, and if the understanding they acquire contributes to our sccurity, then we should invite such students not in terms of a few score or a few hundreds but in terms of thousands. And we should widen the area from which we assist such students, not limit it to Latin America. We must widen our horizon~ and raise our sights. This will re- quire the basic legislation, to which I have referred, and it will then require a budget. Another example is our foreign-language broadcasting. If this is worth doing, if it contributes to our security—and we in the State Department are convinced that it does—then we should see to it that the pro- grams we broadcast are audible, without fading, in every key area of the globe. This will require additional relay stations abroad, to pick up our programs and rebroadcast them. The cost of these relay stations is negligible compared to the results we are after. Here again congressional action is called for. I was particularly happy to accept your invitation to speak to you tonight because your 32 organizations represent such an im- portant part of the women of America, and because through your 32 organizations there is such an excellent chance to achieve under- standing within our own country of this new opportunity for us in our foreign relations and national security. I well remember a most exciting event.in the life of my mother, when I was a boy in Minnesota. The DAR seemed to me the most important organization in Fergus Falls, Here I spent my summers with my grand- mother. When my mother came east from Minnesota to represent the Minnesota DAR at its annual convention we felt that no comparable honor had ever been bestowed on the family. When she returned to Minne- sota she spoke with real authority. I remem- ber the pride with which she wore her DAR pin and the long struggle that went into saving the money for those 18 tiny diamonds, Boys who have been brought up in Minne- sota and Montana, as I was, not only know that women are people; they know that they &re the most important people of all. My experiences as a boy in Montana, trying to prove up on a homestead, on the frontier, showed me why women have achteved such @ unique position in the United States. I used to have to ride 30 miles to attend a Gance. There wasn’t an unmarried girl within 400 square miles. Women achieved their position in our frontier communities because they were so valuable. They need to continue to be valuable. They need to continue to be valuable, in this modern civi- lization of ours, if they are to retain their position. In what ways can they be of greater value to their country than through constructive and positive programs developed by such or- ganizations as yours? Through your mem- bership you can form and give direction to an important part of American public opinion, if you will. The time to arouse public inter- est in national defense, and do it construce tively and imaginatively, is now, at the con- clusion of a successful defense of our se- curity, not in the heat and excitement of a new threat. Surely one constructive way is to spread understanding within our own country of the role that American ideas and facts can play in our national defense. It seems to me that women, much more readily than men, can understand that there are other ways to defend oneself than merely through the use or threat of force. Women are experts at persuasion. As mothers and as teachers they know the value of under- standing, in the home and in the community. They have watched the power of education, the power of facts, and the power of ideas, in the unfolding growth of their own chil- dren. They know what it means to build the minds of men. A bachelor’s conduct may be his own busi- ness—as long as he is a bachelor. This is no longer true when he marries. After 150 years of a pleasant and profitable bachelorhood, the United States suddenly finds itself mar- ried. It is married to the rest of the world. Some might call it a shotgun marriage, or an aerial-bomb marriage. But it is for keeps, just the same—and for better or worse. Our private conduct now becomes a family and a community affair. Understanding, confidence, and example, the bulwarks of family life and of com- munity life, now become the bulwark of the world family and the world community. In the family and community of nations our na- tional reputation is a precious asset. You can help our fellow-Americans to understand what an asset it is. And thus, as our globe becomes, perforce, one great community, you can bring to bear, on an ever larger sphere, your talents and your devotion, as citizens, as patriots, and as women, to the building of peace in the minds of men, and in the minds of men everywhere. Proposed Reduction of Taxes EXTENSION OF REMARKS HON. BRIEN McMAHON OF CONNECTICUT IN THE SENATE OF THE UNITED. STATES Wednesday, February 5, 1947 Mr. McMAHON. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp a radio ad- dress entitled “Can Taxes Be Reduced?” delivered on January 31, 1947, by the Senator from Illinois [Mr. Lucas]. There being no objection, the address was ordered to be printed in the Recorp, as follows: CAN TAXES BE REDUCED? Today America must make a tremendously important choice in this matter of a peace- time tax policy—important to every citizen in the land. And faced as we are with this decision, we find the atmosphere befogged, we find men in places of high public trust misleading our people in the hope of gaining some personal or party advantage. Tonight I want to talk about taxation without misrepresentation. Now, nobody in his right mind likes to pay taxes. But neither does anyone in his right mind want to be without a policeman when a thug points a gun in his face—or without an army, so long as the world remains in its present unsettled condition. And taxes pay your policeman and keep up your army. In the formation of a tax policy, therefore, we must recognize two essentials: First, that we support a government able to fulfill ite responsibilities. This means pay- ing for the essential services. . Becond, that we maintain that government in a sound financial position, This means balancing the budget and, insofar as possible, reducing the national debt. If we can accomplish these two objectives on a reduced rate of taxation, well and good. I am for reducing taxes. But I appeal most APPENDIX TO THE CONGRESSIONAL RECORD earnestly to my fellow citizens tonight—for the security of this America we love and for the individual welfare of every one of us—to face the facts, however unpleasant they may seem. For your safety, I urge you not to heed the siren tune of those who tell you they would reduce taxes first and then see whether we can keep a functioning government and & solvent nation. Let us beware, my fellow Americans, of the politician who says, “Democracy? Why I can get it for you wholesale.” And yet such an offer has been made to the American people. Republican leaders in the House of Representatives have already introduced a bill which would reduce our in- dividual income taxes by 20 percent across the board. We are told that the budget presented by President Truman can be reduced by an amount that would take care of this tax cut, which amounts to §3,500,000,000, but what we are not told is that the only sure way such a huge decrease in Government outlay could be achieved would be to cut down on items like the national defense, or the fulfill- ment of our promise to those war veterans who risked life and limb for us, or the in- terest on our national debt, or refunds due under our tax laws. Would the congressional leaders who beckon us toward their financial primrose path cut down on those? Y-t the four items I have mentioned account together for more than 825,500,000,000, or two-thirds of the whole outlay for the year in prospect. Well, then, would they have America renege on her commitments to her neighbor nations in the world? Would they abandon the development of atomic energy, pretend that it doesn’t exist? Would they sacrifice the husbandry of our natural resources, for- sake the farmer, cancel aocial security, forget the aged and the infirm? Is this economy? Yet it is precisely such essential items as these that account for the bulk of Presi- dent Truman’s budget. Where, then, is that 20 percent coming from? We are told that essential Government services will not be sacrificed, but what we are not told is that even if reductions in the Federal outlay could be made to take care of this tax cut, the Government would be left with nothing available for reduction of its debt. I regard debt reduction as sound business, I believe our national debt should be re- duced by at least a billion dollars a year, more if possible. Has the conservative party in America sud- denly decided there need be no hurry about reducing this debt? Have they suddenly changed their minds about red ink, and de- cided it isn’t so dangerous after all? They acknowledged that they were wrong with re- spect to their hasty promise to eliminate the Federal excise taxes after President Truman's budget message was delivered. I hope they will also admit they were in error in propos- ing a 20 percent reduction in income tax, and that they will repudiate this reckless and ir- responsible course in tax reduction. The thinking American citizen who under- stands the meaning of a tax cut of 20 per- . - cent at this time, who realizes that in the long run he may have to pay tenfold for any such reduction, may well ask the lead- ers of the Republican Party responsible for this promise: “Is your proposed tax cut a promise or a threat?” Promise it may have been in the days when it could be held out as an alluring prospect to the voters. But the election is over now. It is time to reevaluate that promise. To fail to do so, to insist upon it now, is a threat, a threat to the military security of the Nation, a threat to the finan- cial security of every American who has in- vested in the obligations of his Government.
APPENDIX TO THE CONGRESSIONAL RECORD For if we are to have a Government that puts tax reduction before debt reduction at a time when the national income is the largest in our peacetime history, if we are to have a Government that puts party poli- tics before national solvency under such con- ditions, what will become of the investments of those who have had faith in a solvent Nation? Let us hold high the credit and the in- tegrity of the Government of the United States. It is our best guaranty of continued leadership among the nations of the earth. When and if the time comes to cut taxes, a straight 20-percent reduction across the board is not the answer. On its face, it has a plausible sound, but when you figure those savings to dollars, you begin to see how absurd this proposal is. A married Wage earner with a net income of $2,000, struggling to support hig family in these times of high prices, would save $38 under the 20-percent plan. A married man with & net income of $20,000 would save $1,279. A married man with a net income of $250,000 would save more than $38,000. The plan, therefore, shows a shocking disregard for “ability to pay’ on which our income-tax system is based. It would spread the sav- ings very generously among those best able to pay and give the lower-income group the least tax relief. If any tax reduction is to come, it must be spread among the lower-income groups who are having a des- perate time trying to make ends meet with prices what they are today. If a tax cut can be made, I will propose at the proper time the simple device of rais- ing the exemption levels. Exactly what that increase should be, no one can safely say at this time. As an example, raising the ex- emption for married couples from $1,000 to $1,200 and for dependents from $500 to $600 would remove 3,200,000 people from the tax rolls, save the Government the expense of collecting taxes from that many people and would cost the Government in taxes $1,500,- 000,000. But I repeat this is not the time to spend our energy figuring out ways to re- duce taxes. We first have to sce whether or not any tax reduction is possible. We have to be hard-headed about this subject. We must not let political and selfish consid- erations cloud our vision. Until we know what our minimum needs are going to be to operate the Government, no one can truth- fully say how much, if any, taxes can be cut. I want to see the Federal Government op- erate as cheaply and as efficiently as it can, and I favor any reduction in Government ex- penditure that is consistent with good Gov- ernment, but I shall resist any effort to slash taxes which will impair in any degree the credit of our country, its security, or its efficient operation. A Challenge to the State Employment Service EXTENSION OF REMARKS HON. TOM STEWART Or TENNESSEE IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr, STEWART. Mr. President, I ask unanimous consent to have printed in the Appendix of the REcorp a very eloquent and able address entitled “A Challenge to the State Employment Service,” delivered by Hon. Jim McCord, Governor of Ten- nessee, at the Governors’ Conference, Miami, Fla., December 6, 1946. There being no objection, the address was ordered to be printed in the Rrcorp, as follows: When Eric Johnston was president of the United States Chamber of Commerce he made this significant statement: “Unemployment is the greatest problem of our civilization. We must solve it. It isa terrible, insistent, devastating disease in our lives.” Johnston might have added that this “ter- rible, insistent, and devastating disease" is not the handiwork of God. It is not like an earthquake, tidal wave, or a hurricane which thus far are beyond the control of man. But unemployment is a disease that is created by society itself. It is an indirect result of man's struggle to conquer his environment and to rise to higher levels of human enjoy- ment. Unemployment, especially involuntary mass unemployment, is a man-made problem. It is a part of the price we pay for freedom. Being man-made the problem should grad- ually yield to the same sort of human dynamics that brought man by progressive cycles from the jungle up through slavery and feudalism to his present social and eco- nomic status. Economists have learned to recognize fairly well the causes that bring on mass unem- ployment. And they know that there js really only one serious obstacle confronting those who apply checks and remedies to mitigate what Johnston calls “its devastating effects.” That obstacle is human inertia. It is seen most clearly in the attitudes of those who believe in letting things alone. These people, quite sincerely, of course, believe that “if we let nature take its course, everything will work out all right.” That is a do-nothing policy. But those of us who think differ- ently know that a do-nothing policy has never provided a single job. It has never conquered a wilderness, controlled a river, or penetrated into the mysteries of the unseen world. Those who believe in doing something about a problem at last have recognized that unemployment is not entirely an individual matter, In its larger aspects, it is a social problem of great magnitude that must be approached and treated with social measures. Fortunately we have recognized that some- thing can, and should, be done about un- employment. Thus, today, we are engaged in a Nation-wide and determined effort to soften the effects of job losses, both as they apply to individuals and to the community at large. Like diseases of the human body, the causes of an economic allment may be re- mote, deep-seated, and difficult to reach. We have seen unemployment crop out in the most unexpected places—among the well-to- do professional men as well as among the laborers who depend on odd jobs for a live- lihood. During the depression of the 1930's it was common to hear it said that “The largest em- ployer of Ph. D.’s in the entire country is the WPA.” At that time vast, unscen forces beat against our economy and we saw intelligent men and women of good work habits, cast adrift by movements they could neither per- ceive nor control’ We now know that unem- ployment begets unemployment. And we know that, if left alone, it quickly spreads like a@ contagion, from individual to individual, until entire communities are infected. It thus becomes a matter of concern to the com- munity and the Nation to meet unemploy- ment quickly and effectively before it spréads. It took a long time for this country to realize its obligation to those who are in- voluntarily unemployed. It would be well to briefly review some of the efforts that have been made to combat the evil through pub- lic employment offices. A393 You are no doubt familiar with the first timid efforts to help persons become reestab- lished in gainful employment. In 1834 New York City recognized the problem and in- augurated perhaps the first employment service in the country. Other large cities later followed the example. Then, in 1830, Ohio became the first State to pass a law providing for a public-employment office. In 1913 the newly organized United States Department of Labor took over the function of guiding aliens to jobs. Three years later placement activities were extended to all un- employed groups. By 1915, 23 States had laws providing State employment offices. During the period of the First World War the Employment Service faced its first seri- ous emergency. Activities at that time swung quickly from job finding to a program of find- ing workers. The rapid expansion of the employment service during that war forced public recognition of the problems of recon- version when young veterans, who had seen great adventure and had thrilicd at the bright spots of cities, showed a reluctance to go back to rural areas. The public soon found that the junior-worker and the farm-labor prob- lems could not be brushed off with the ex- pression, “they just don’t want to work.” Experience proved that by far the great ma- jority did want to work, but they wanted to work in what they felt was a more congenial environment. After the end of that war there was a period when people began to smart under the high cost of living, and there was a drive tor economy in Government operations. Con- gress responded to the pressure and reduced many appropriations, including the Employ- ment Service. As a result, most of the 2,000 Employment B6ervice offices were closed, and the scientific approach to a scrious social and economic problem received a major Bet-back,. I think it should be noted here that an economy-minded Congress has followed each war. It may well be for their own salva- tion the employment services have been re- turned to the States, Congress can abolish the United States Employment Service, but it cannot repeal the laws of 48 States that require them to maintain adequate public employment offices. It took a devastating depression to awaken Congress to the need of a public employment service. At the beginning of the depression in 1930, largely through the pressure of or- ganized veterans, about 30 offices were opened. These offices did not try to find em- ployment for all jobless persons. They were limited by the law to the placement of veterans. Times got worse, and Labor Secretary Doak attempted to reorganize the Federal Employ- ment Service. The mistake was made in opening offices at places where the States already had similar offices. This duplication of effort, to some extent, was responsible for the Wagner bill calling for a Federu)-State system of employment offices. This bill Passed Congress, but it was vetued by Presi- dent Herbert Hoover. Mr. Hoover, it seems, preferred a national employment service wholly administered by the Federal Govern- ment, All of us recall the hectic days of 1933 when the Wagner-Peyser Act was passed by Congress. Under that act a new United States Employment Service was established as & bureau of the Department of Labor. Funds were made available to the States for the development of a Federal-State system of public employment offices. Under that act the States were required to meet certain minimum standards in order to receive Fed- eral funds. The veterans’ placement func- tions of the Veterans’ Administration were transferred to the United States Employment Bervice.
A394 In 1935 Congress passed the Social Security Act. That act placed great responsibility on the public employment offices in the admin- istration of unemployment compensation. The States combined the employment and unemployment compensation functions and, as a result, the offices developed rapidly in size, number, and scope of activity. We are all familiar with the period when this country turned to national defense. And also the war period when the employ- ment service wus loaned to the Federal Gov- ernment so as to channel available labor into critical industries. The employment service operated as a unit of the Social Security Board. It did a good job during the war. As an example, during 1942 it placed more than 10,000,000 persons in war work. The employment service is back home in the States where it belongs. Action by Con- gress to bring it back home to the States was overwhelming, There can be no doubt in the minds of the public that overwhelming senti- ment at all levels was that it should be re- turned to the Stutes. And as I have said, it is home now and home to stay. All thinking persons realize that jobs must be filled in the communities, not in Wash- ington. No one sitting behind a fine, mahogany desk in that city could possibly know intimately the situation that exists In any community in the United States. Just as unemployment occurs in a community, so must Jobs be found in a community. Although the return of the service to the State places the unemployment compensa- tion and employment service programs under a single State department of administration, where they so properly belong, a great defect which will seriously handicap the States in proper administration of this joint program exists at the Federal level. Under the Wag- ner-Peyser Act the United States Employ- ment Service exists in the Department of Labor, which develops an over-all national policy with rules and regulations, too many of which are presumed under the act. These are thrust upon the States in their adminis- tration of the employment service. On the other hand, the Federal Security Adminis- tration under the social-security law develops the over-all policies for the Federal-State ad- ministration of the unemployment com- pensation part of the program. Likewise, two separate financial grants for administration of the two programs come down from these separate agencies, all of which will necessarily result in confusion and complication in the administration of the program. The Wagner-Peyser Act of 1983 became ob- solete when the Social Security Act was passed in 1935. These glaring defects on the Federal level should be promptly corrected by the incom- ing Congress. Federal provisions relating to the estab- lishment and maintenance of State systems should be of exactly the same nature with respect to both unemployment compensation and the employment service. The Wagner- Peyser Act should be repealed and these two component programs incorporated in one basic Federal act and administered by one Federal agency. But regardless of this existing handicap at the Federal level, the return of the em- ployment service to the States places on us a heavy responsibility and a great challenge. ‘We must prove that the States can admin- ister the service better than it can be oper- ated by the Federal Government. We must not be satisfied with mediocre performance and we must not fail to move forward to new achievements. We asked for the opportunity to prove our ability. That opportunity is ours. What are we going to do with it? What is before us? How are we going to meet the challenge of the fast-developing new South? It is not far from the truth to say that the South has been treated as a province—a pro- ducer of raw materials—in times past. Our progress has been throttled to a fraction of what it could have been with certain arti- ficial restraints removed. But we are moving, and moving rapidly, into a period of growth that may well make this region an industrjal empire. Our management and our labor have the know-how. In several fields, notably the manufacture of work clothing, this region leads the Nation. We are becoming impor- tant manufacturers of paper. We are de- veloping new uses of pulpwood made from our great storehouse of timber. This prom- ises to be a major industry. There is rea- son to believe that the manufacture of pre- fabricated houses will become a prime factor in reducing building costs and making home- ownership more attractive. Our chemical plants are expanding, especially in the fleld of plastics and synthetic resin. And great industries are being built for the production of derivatives of coal, petroleum, and timber, I know my own State best. What I say of it applies more or less to all Southern States. ‘Tennessee, ever since it became a State, has been predominantly an agricultural State. During the past few years its economy has changed, and today more of its people receive their livelihood from manufacturing, mining, construction, and services than from agri- culture. Taking the one classification of manufacturing as fairly typical of the other groups, employment between April 1940 and May 1945 increased 54.5 percent. This in- crease was not limited to manufacturing, however, as all insured employment increased during the same period 53.9 percent. Incidentally, I hope that you will overlook what may appear as unseemly pride, but my State made a truly remarkable record in em- ployment during the war. It led all of the Southern States in percentage gain in em- ployment covered by job insurance and ranked fifth in the entire United States. The last available tabulation revealed that since VJ-day, when large numbers were laid off from war plants, my Stute has regained much of its insured employment and is rapidly nearing the peak record established during the war. What does all of this mean to the State employment services? What are the prob- lems that lie ahead in this changing econ- omy? How can we anticipate the problems and help courageous employers to utilize our natural resources and employ our manpower to best advantage? The problems are highly technical and too specialized to be detailed here, but I feel that we must approach our task with deter- mination and intelligence. Above all, we must keep before us a vision of the possi- bilities of using this service in a manner that will promote the prosperity and general well-being of the entire section. The coming industrialization of the South should be so integrated that it will not de- stroy our equilibrium. While capital is seeking profits we must look at the disloca- tions that are bound to come. We must see to it that the progress of one industry does not create problems in another that will “up- set the boat.” For example, we know that a plant is being built to manufacture me- chanical cotton pickers. We know that, already, agricultural labor is being made idle by the cane harvester. It ‘is none too soon for us to begin to plan for the coming dis- Placement of a vast number of workers who have no skill other than that of picking cotton, That means that the States should en- courage the establishment of research cen- ters. They also must do all that they can to meet the coming displacement and idle- ness by providing vocational schools. This will call for close cooperation with manage- ment. It will call for encouragement of those with capital who are seeking opportu- nities for profitable investment. If we fail to plan for the great changes that are com- ing, we might be compelled to carry a publice APPENDIX TO THE CONGRESSIONAL RECORD welfare load that would strain our financial structure. This brings us to the moment when the Employment Service is again a State agency. As you well know, unemployment compensa- tion and job placement go hand in hand. The work of these two agencies goes to make up what we are pleased to call employment security—a term we have adopted in Tennes- see in naming our department of employ- ment security. The one branch of the program is to place an unemployed person in suitable employ- ment. Failing in this, the other branch is to pay modest benefits for a number of weeks to bridge the gap between jobs. But before benefits can be paid the claimant must pre. sent himself at the employment-service of- fice and “be exposed” to offers of employ- ment. The two services ure inseparable. The States must integrate the two divisions to effect economy and to insure efficient and effective service to the public. It is a well-known fact that the South has the largest birth rate of any section of the country. It is also well known that we spend our tax money in giving our boys and girls the best education possible with the funds that are available. Then what happens? Too often these boys and girls who have been educated at the expense of southern taxpay- ers seck in vain to find profitable employ- ment in the South. Then, in despair, they break their home ties and journey north, east, or west. As one glaring example of what is taking place, by June 1944, 37 percent of the workers in Detroit were found to be southern born, The South can prevent this outmigration of its skill and leadership only by creating opportunities that will match or nearly match those of other sections. The question before us is, Will we have the wisdom to discern, and the courage and resourcefulness to provide, the opportunities that our resources and climate entitle us? The public employment service can, and I believe will, play @ major role in utilizing the brawn and skill and ingenuity of our boys and girls, Yes; Eric Johnston was right: “Unemploy- ment is the greatest problem of our civiliza- tion. We must solve it. It is a terrible, in- sistent, devastating disease in our lives.” Labor Problems EXTENSION OF REMARKS HON. ELBERT D. THOMAS OF UTAH IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. THOMAS of Utah. Mr, Presi- dent, I ask unanimous consent to have printed in the Appendix of the Rrecorp an editorial bearing on industrial peace appearing in the New York Post of Janu- ary 29, 1947, There being no objection, the editorial was ordered to be printed in the Recorp, as follows: From TRUCE TO PEACE? The agreement reached between the United States Rubber Co. and the CIO's United Rub- ber Workers is good news for everybody, be- cause the country wants industrial peace. The reported extension of contract-termi- nation deadlines by the CIO's big three unions, in electrical goods, steel, and auto- mobiles, in order to give more time for peace- ful negotiations, points up an effort by the unions to achieve settlements without ma- Jor strikes.
APPENDIX TO THE CONGRESSIONAL RECORD The proposed voluntary strike truce on the part of some of the big unions in basic in- dustries clears away some of the political smoke, and highlights the sharp difference between the constructive approach to labor problems supported by President Truman and the strife-breeding offensive of the Re- publican extremists. The core of the difference is that Truman’s desire to avoid crippling strikes is a move toward industrial peace; but the Republican extremists’ drive against unions is a move toward industrial war. For instance, GOP Congressmen are sup- porting bills which would outlaw the closed shop, the union shop—under which the em- ployer is free to hire nonunion workers but they must join the union after they are on the pay roll—and maintenance-of-member- ship clauses. THE PUBLIC PAYS THE PRICE A ban on the union shop would encourage labor-management strife by making it pos- sible to bring in scab workers in an effort to break the already weakened union, and even to foster company unions. It would throw companies where labor re- lations have been stabilized for years open to furious rivalry between unions. But it would take away from the majority the pres- ent practical and democratic solution to jur- isdictional strife, which consists, under the Wagner Act, in choosing an exclusive union by majority vote. Then, having thrown the gates wide open to jurisdictional strikes by law, and shackled the workers' power to end them, the reac- tionaries could hope to turn public anger and reprisals against all labor. A law enforcing the open shop could be effective in weakening the big unions. But, like all merely antiunion measures, the price would be more strikes, not peace. The same thing is largely true of what Sen- ator Batt likes to call equality for employers and workers. Looked at closely, the chief effect of the proposals for establishing equal- ity would be to strip workers of the legal pro- tections for their right to organize and bar- gain collectively, without reprisals or dis- crimination, contained in the Wagner Act. Yesterday, Labor Secretary Schwellenbach warned that if the Congress wants to start out deliberately to create industrial strife, the way to do it is by laws which would de- stror union security. BUT NO MONEY FOR PEACEFUL SETTLEMENTS It ts time for the public to draw a clear line between the administration’s attempt to find fundamental solutions to labor-manage- ment relations, and the reactionary antl- union crusade which holds that chaos and strikes are a cheap price to pay for weaken- ing labor. For instance, Congress has about nine anti- union bilis in the hopper. Yet, last year Congress cut heavily the appropriation re- quested for the National Labor Relations Board. The NLRB had to reduce its per- sonnel by 20 percent, and now reports that the tremendous delay in settling the backlog of cases may well provoke strikes. But the antilabor Republicans, who claim to believe that strikes are-such an urgent problem that it is worth curtailing the fun- damental rights of American workers to check them, have shown a suspicious lack of interest in fostering labor peace by giving the NLRB enough money to operate effectively. The move toward a partial strike truce in basic industries gives the country an oppor- tunity to search calmly for fundamental so- lutions. They should be based on compro- mise, not on the fanaticism which thinks a dispute is settled by gagging and shackling one of the parties. And they should be aimed at genuine and lasting industrial peace. Arkansas State Symphony Orchestra EXTENSION OF REMARKS HON. J. WILLIAM FULBRIGHT OF ARKANSAS IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. FULBRIGHT. Mr. President, I ask unanimous consent to insert in the Appendix of the Recorp an article ap- pearing in the Musical Courier entitled “Founding a State Orchestra.” There being no objection, the article was ordered to be printed in the Recorp, as follows: FOUNDING A STATE ORCHESTRA The Arkansas State Symphony, conducted by William Hacker, will have a full season of about 50 concerts throughout the State. This is rather an amazing number for an orchestra barely 2 years old, and the story of the organization's founding bears retelling. In June 1944, Hacker took the 835 budget left over from a previous attempt to form a university orchestra at the University of Ar- kansas (where he had just been engaged as Tesident pianist) in one hand and his baton in the other, and set out to accomplish a seemingly impossible task—that of creating a symphony orchestra with no music and al- most as few musicians and no immediate prospects of any more to come. Especially since there were no instrue mental music students at that time in at- tendance at the university, it was necessary to invite townspeople to play. The results of that call, from a town of 12,000, were 13 amateur musicians—a far cry from the pres- ent 50, at least 50 percent of whom are pro- fessionals. It took but a few rehearsals to impress two things upon the young conductor. Here were people with an inherent love for music who might really accomplish things if given an opportunity. Though this was the case, there was little chance of creating a really good orchestra in any town, because most Arkansas communities are too small to sup- port one. But the prospect of 50 many people starved for the best in musical entertainment be- cause of the size of their communities caused him to decide to make his ultimate goal a State symphony which would be of the finest and would serve even the smallest towns, thus being truly a “State’’ orchestra. SYMPHONY GROWS From its humble beginnings as the Uni- versity-Civic Orchestra, the group began to travel and to play in nearby towns. These trips quickly resulted in additions to the orchestra from many regions and a change in name to that of Northwest Arkansas Sym- phony. As such, it played 19 concerts in- cluding 2 broadcasts from a local station during its first season. Though its mem- bers were drawn mainly from the northwest section, it was able to attract substantial artistic help from the nearby Oklahoma City Symphony and Springfield (Mo.) Symphony. During National Music Week, 1945, the orchestra startled the State by announcing that it would tour. And this it proceeded triumphantly to do, playing in seven towns, six in Arkansas and Memphis, Tenn., where it was presented through the philanthropy of I. L. Myers, local businessman, whose aid to the arts and the Memphis orchestra is well known. * Despite the orchestra’s outstanding suc- cess in its first season, Hacker was well aware that unless more sponsorship and that of a more sustaining nature were found, the sym- phony would never progress beyond its status A395 at the close of the 1944-45 season. He was also increasingly aware that in order to assure the orchestra of a permanent place in the State and the lives of its people, something must be done to improve music education in the schools, from which he hopes will come his future symphony play- ers and concert audiences. Proceeding on the premise that to produce @ first-class orchestra he would have eventu- ally to include the entire State, Hacker set about interesting several towns in organizing permanent symphony societies which would sponsor the orchestra for one or more con- certs annually and would thus insure a def- inite financial budget. He made personal trips to several towns, giving talks on his plans for an Arkansas State symphony. He found the people willing and eager to back the orchestra. At the close of the second successful season, the orchestra had 10 per- manent organizations in as many towns planning to sponsor it next year. (Now there are 17.—Editor.) In Little Rock, the State capital, a cen- tral meeting of representatives from each town was called in April, and the Arkansas Philharmonic Society—to which each spon- soring organization belongs—was formed. The society will guarantee the symphony sea- son for the ensuing year, and will act as booking headquarters to send the orchestra to other Arkansas commmunities which have not yet permanent sponsoring groups. Thus the plans for an unusual third season of 50 concerts next year. SCHOLARSHIFS FOR YOUNG PLAYERS In pursuit of his desire to further and im- prove musical education in the State, Hacker is diverting some of the funds guaranteed by the society to scholarships for talented young musicians, who may have them applied at any college within the State, and who are then given the opportunity to play at back stands in the orchestra. Another aspect of his plan is the placing of teacher members of the symphony throughout the State, thus providing good teachers where in many instances there have been either none at all or inferior substitutes, In the hope of stimulating interest and de- sire for music, the sponsorship of the makers of Grapette. a carbonated drink manufac- tured in Camden, Ark., has been secured to present 20 additional concerts in schools throughout the State. Another project of the society its the for- mation of community orchestras in all towns in the State. Many of the teacher symphony members will be acting as conductors of these smaller groups in their own communi- ties. During the summer a 2-week workshop will be held in Eureka Springs, Ark. (the second annual one this year), where both young and older musicians will have the opportunity of study and sight-reading re- hearsals of new and classic works amidst sur- roundings reminiscent of an Alpine village, In short, during the past 2 years, a whole State has gradually been awakened to the value of and its need for a symphony or- chestra as a social force for good in the com- munity. ‘Young people all over the State are showing increased interest in music both as a career and as a cultural pursuit—an achievement which is primarily the result of the dreaming. perseverance, and love for humanity of the founder. BIOGRAPHICAL DETAILS A concert pianist and composer as well as conductor of the symphony, William Hacker has had a short but purposeful career. Not yet 30, he was forming orchestras when still in his teens; was for 2 years conductor of the Albany (N. Y.) Philharmonic Orchestra, Having had the advantage of study under Jose Iturbi, he received degrees from the Eastman School of Music and at the same time managed to pursue his concert career, which had taken him from Maine to Cuba
A396 and Mexico. He spent last summer in Mexico City as a special musical ambassador from the State of Arkansas, playing concerts and guest conducting, and engaging in a search for new Mexican music which he plans to introduce into the orchestra’s program dur- ing the coming season. His work in forming orchestras as a boy has stood him in good stead in Arkansas, where until this season he had to be his own business manager, personnel manager, finan- cial secretary, and—almost—librarian. He feels that his entire life has been a prepara- tion for his work in Arkansas and declares that, having made the State his home, he will continue to work unceasingly to give it the finest symphony orchestra possible. “These are fine people,” he says, “and with- out their cooperation and enthusiastic love for music it would have been impossible for the orchestra to exist, much less to progress as it has during its 2 years of existence.” B.R.M. Report on Thomas Jefferson Memorial For 1946 EXTENSION OF REMARKS HON. ELBERT D. THOMAS OF UTAH IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. THOMAS of Utah. Mr. President, I ask unanimous consent to have printed in the Appendix of the Recorp a report on the Thomas Jefferson Memorial for 1946, prepared by A. E. Demaray, Direc- tor and Executive Agent for the Thomas Jefferson Memorial Commission. As Chairman of the Commission, I deem it wise to publish this report. Of special interest will be the statement in regard to the progress being made in the cast- ing of the statue. This would all have been done when the memorial was dedi- cated if it had not been for the fact that during the war when the metal was so scarce the Commission deemed it unwise to use bronze for making the statue. I am sure that it will be remembered by many Senators that when the plaster-of- paris cast was placed in the memorial, it was such a good imitation that the Com- mission actually received criticism for using bronze at that time. There being no objection, the report was ordered to be printed in the Rrecorp, as follows: Report ON THOMAS JEFFERSON MEMORIAL, 1946 ATTENDANCE During 1946, 682,023 persons visited the Jefferson Memorial, an increase of 238,448 over 1845. DISTINGUISHED VISITORS The President of the United States, Harold L. Ickes, Secretary of the Interior, Gen. U. 8. Grant III, Associate Director A. E. Demaray and party visited the Jefferson Memorial on January 14, 1946. Alcide DeGasperi, Prime Minister of Italy, placed a wreath at the base of the statue on Sunday, January 5, 1947. He was accom- panied by a party of 35 persons. CEREMONIES April 18, 1946, the two hundred and third anniversary of the birth of Thomas Jefferson, was celebrated at the Jefferson Memorial under the auspices of the District of Colum- bia Society of the Sons of the American Revo- lution, Benjamin D. Hill, Jr., president of the local society, was in charge of the cere- mony. The principal address was delivered by Maj. Gen. Edward F. Witsell, Adjutant General of the United States Army. Massing of the Colors, and laying of wreaths by 26 prominent persons and organizations, the President of the United States represented by Lt. Col. James H. Batte, the Secretary of State represented by the Chief of Protocol, the Governor of Virginia, University of Virginia, National Society of the Sons of the Ameri- can Revolution and others, completed the program. The National Capital Parks ar- ranged a speaker's podium and chairs for the Navy Band and the audience. Easter sunrise services were conducted on the steps of the memorial on Sunday, April 21, 1946. The program was sponsored by the Washington Federation of Christian Youth with Rev. Thomas M. Steen in charge. Some $8,500 persons were in the audience. There is attached an extra program of these services. PROGRESS ON CASTING OF STATUE The Roman Bronze Corp., of New York City, is proceeding with the casting of the bronze statue of Thomas Jefferson. The casting is being made in nine sections, the two legs, circular base, vertical base, upper torso, head, large drape, small drape, and lower torso. As of December 31, both legs, circular base, and vertical base have been molded, cast in bronze, chased, and finished. The upper torso, head, and large drape have been molded and cast in bronze and the chasing and finishing of these three pieces were partially completed. The small drape and lower torso were partially molded prepa- ratory to casting. The small drape should be cast this month, while the lower torso is scheduled to be cast in February. The schedule calls for the assembling of the statue in April and the applying of the patina during the first half of May. The installation in the Memorial is scheduled to start the latter half of May and be com- pleted about the middle of June 1947. Due to a truckmen’s strike in New York City, th. Roman Bronze Corp. was delayed by nondelivery of bronze for 22 days, from September 26 to October 17. Although the contractor's time for the work expires on No- vember 28, 1947, his production schedule calls for the statue to be erected by the middle of June of this year, and the actual work is closely following the production schedule. On November 3, 1946, the Washington Sun- day Star published a story with appropriate pictures in its gravure section regarding the casting of the statue. LITERATURE DISTRIBUTED Forty thousand copies of the attached Thomas Jefferson Memoriel leaflet were re- ceived and distributed during the year. An order for 100,000 copies is now in the hands of the Government Printing Office and are expected before the coming visitor season. Propaganda Budget of National Associa- tion of Manufacturers EXTENSION OF REMARKS HON. GLEN H. TAYLOR OF IDAHO IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. TAYLOR. Mr. President, I ask unanimous consent to insert in the Recorp a short news item from the January 17 issue of the Farmers’ Union Herald, a newspaper printed in South APPENDIX TO THE CONGRESSIONAL RECORD St. Paul, Minn. So much ado has been made on the floor of this body when- ever farm organizations, consumer or- ganizations, labor unions, or other groups that represent the interests of the people gather together a few dol- lars in order to publicize their policies and principles that I thought something should appear in the Recorp to indicate that an occasional dollar is being spent by the giants of industry. There being no objection, the news item was ordered to be printed in the Recorp, as follows: NAM PLANS $4,700,000 FUND FOR PROPAGANDA IN 1947 Regulating the thinking of the American people is an expensive business. The Na- tional Association of Manufacturers will spend $4,700,000 on the job in 1947. This is an increase of $1,100,000 over NAM’s 1946 budget for propaganda. First example of NAM's subtle work was released at its fifty-first annual congress, Waldorf-Astoria Hotel, New York. The New York Times publicized the campzsign’s first blasts with this headline: “Liberal program on labor, economy announced by NAM.” Within 2 days all the Nation’s controlled press had picked up the story. The NAM, nearly all agreed, had repudiated its black record of blind reaction and had now become a@ liberal organization. This liberal smokescreen is itself one of the biggest propaganda shows ever staged by the industrialists. The show is an added ex- pense to the public, which is providing the $4,700,000 by a nickel or a dime added to the cost of this or that manufactured item. Members of NAM will collect the money from the public and contribute to the head- quarters organization. The collection speech to back the program was made at the Wal- dorf-Astoria by President J. Howard Pew, of the Sun Oil Co., chairman of the NAM's national industrial information committee and owner of Pew's Farm Journal. Pew encouraged the NAM-ites to dig down into their pockets, boasting of how the NAM had succeeded in killing OPA. “No more diffi- cult assignment ever faced a group of men,” he said, admitting that before the NAM launched its antiprice control campaign about 80 percent of the people favored OPA. Seven months later, after the press and radio had picked up the NAM propaganda, another public-opinion poll showed that a majority of the people were against OPA con- trols, Pew said. Democratic Party Hope EXTENSION OF REMARKS oF HON. WAYNE MORSE OF OREGON IN THE SENATE OF THE UNITED STATES Wednesday, February 5, 1947 Mr. MORSE. Mr. President, I ask unanimous consent to have printed in the Appendix of the Record a communica- tion published in the Washington Post of February 5, 1947, under the heading “Democratic Party hope.” There being no objection, the letter was ordered to be printed in the Recorp, as follows: DEMOCRATIC PARTY HOPE The recent defeat suffered by the Demo- cratic Party may not turn out to be as disas-
APPENDIX TO THE CONGRESSIONAL RECORD d for the party's future hopes as firat ippeared to be the case. The reason for this that there are many important problems the country which cannot be solved by mere political oratory. These are prob-~ lems which need answers and if the Repub- lican Party does not these answers the 1948 elections might not turn out so favorably for them. If a recession comes within the next 2 years, the Republicans will have to shoulder part of the blame since they will be in control of the legislative branch of the Government. The continuation of strikes, further short- ages, and especially the housing shortage, veterans’ problems—and innumerable prob- lems of lesser magnitude—will be blamed to @ great extent on the Republican Party. It so happens that the present moment is not @ favorable one for an incoming party which has hopes of capturing the executive branch at the next election. From this set of condi- tions President Truman may take great hope. The Republican victory was more in the mature of a protest vote against the Demo- crats than an affirmative gesture toward the Republicans. The question may well be Taised as to whether the GOP has any definite Program to meet the many problems of the day. To an outsider it appears that they do not possess any comprehensive program of action, or if they do, they have it under wraps. Although all through the New Deal years they freely criticized the late Presi- dent Roosevelt's attempts to restore prosper- ity, they appear to have nothing constructive of thetr own to offer. Those who are in power in the policy-making levels of the Republican Party favor a nineteenth-century laissez-faire which admittedly is incompetent to cope with the present-day complex economic sys- tem. This writer does not advocate nor does he pretend to have a panacea for society's ills. However, he did acmire Roosevelt's sin- cerity and willingness to act, and does not find that these qualities exist in the Repub- lican Party of today. Their political program can be compared to a vacuum, and to my knowledge vacuums have never solved any lem. Herein lies the hope of the Democratic Party. It is now their duty to regroup their foroes, weld together a workable program of political action, and await their opportunity to put it into force. Their situation 1s not by any means hopeless. i MAx WoOLp. WasHINGTON, Is It a Crime To Make Money? EXTENSION OF REMARKS HON. EMANUEL CELLER OF NEW YORK IN THE HOUSE OF REPRESENTATIVES Wednesday, February 5, 1947 Mr. CELLER. Mr. Speaker, under leave to extend my remarks in the Regoorp, I include the following state- ment made by me at the Milton Kron- heim dinner, Hotel Mayflower, Washing- ton, D. C., February 3, 1947: Is it a crime to make money? This ques- tion is not so frrelevant 2 tt sounds. an our proper approach to this question, find why the public relations of the liquor industry ts 80 sadiy out of focus. Do not think for one moment that the miscompre- hension of the entire liquor industry by the American public in relation to its profits does not constitute a danger and a threat to the industry. The private-enterprise system, of which we are justly proud, permite one to get rewards tor his endeavors, for his rendition of serv. ices, and for his making and selling of goods, The profit motive underlies all the diverse activities of our economic system. It em- braces the farmer, the clerk, the cobbler, the teacher, the industrialist. The legitimacy, however, of rewards and profits is never seriously questioned except when it relates to the liquor industry. The liquor industry, although once declared hors de combat, is back in the fold. There are some who find this fact difficult to accept. They view the industry with a malignant eye, and, ergo, anyone who mukes money at it should be condemned. Tax the moncy away with all kinds of unusual levies, they eay, bury it under all manner of restrictions, then let it dig its way through ff it can. It has been suggested by a gentleman on Capitol Hill that the liquor dealers be taxed to take care of a Washington Alcoholics Anonymous. If a man gets indigestion from eating too much food, shall the food Gealers be blamed and taxed to cure that indigestion? Shall the druggist who sells barbiturates (600.000 pounds are produced yearly) be charged with the abuse of those Pilis that are habitually taken to induce sleep? And just as logically may I ask that because 80 Many men commit adultery, shall we do away with women? Assuredly, the liquor industry bears heavy enough burdens of taxation. It need not be saddied with any such proposal. During the war emergency, the Nation will- ingly allowed the Government to take a goodly share of ite profits in the form of taxes. We are now happily developing our peacetime economy. Those high taxes must gradually be removed. Reduction in taxes is eseential for future capital investments, for further business expansion, and for the undertaking of new enterprises. This is as true of the liquor industry as it is of other industries. However, organiza- tions like the WCTU's, the Antisaloon League, and the Methodist Board of Tem- perance, if they could have their way, would tax the liquor industry out of existence. What cannot be accomplished directly, they A397 seek to accomplish by indirection. The ob- jective ts prohibition. Small wonder, therefore, that in many States liquor is taxed for all kinds of pur- poses, for old-age pensions and the like. On the one hand the prohibitionists are happy to get the benefits of those revenues, and, on the other hand, seek to destroy the indus- try—a clear-cut case of wanting the cake and eating it too. The recent debates on the matter of the extension of wartime excise taxes show some queer thinking on the part of the Members of the House. The taxes are supposed to yield $1,500,000,000 a year. What year? Last year or next year? Everybody seemed to hang on to that figure for the purpose of arguing for a reduction of personal income taxes. Come up to my bailiwick and you will see a great falling off of the demand for furs, liquor, luggage, toilet articles, etc. The shelves are sagging with merchandise. The price, for example, of furs has fallen 60 per- cent, and liquor prices are tumbling. The so-called “dogs,” like cordials, rums, and gins, can be had almost for the asking. Under the present prospects for business this year on articles subject to wartime excise taxes there will be no such yield of $1,500,000,000 a year. The reduction in the number of sales and the shrinkage of prices are going to surprise many Members of Congress in the sense that the return will not be even one-half billion dollars. In the argument liquor was sought out as the industry that could carry the heaviest tax burdens. Liquor is always made the scapegoat. Certainly, it can bear its fair share of taxes, but it cannot carry much more than any other industry. If the Schenley Distillers Corp., the Na- tional Distillers Products Corp., Joseph E. Seagram & Sons, Inc., the Hiram Walker Co. made money—and they did—so did the Standard Oil Co. of New Jersey, the United States Steel Corp., General Motors Corp., and the du Ponts. I had the Library of Congress prepare for me through its legislative reference service a chart revealing the sales and profits of 25 selected large industrial corporations classi- fled by total asset size. I herewith set it forth: Sales and profits of selected large industrial corporations classified by total asset size, 1945 Company 3 Cc 14, International Harvester Co. 1f, Allied Chemical & Toye Corp 16, Kennecott Copper Corp. 17. Western Kicctric Co., Ine. 18 Sinclair O11 Co Chrysler Corp... A: Garton Wright Com. . Curtiss. ‘orp... 25. Swift & Co_....... mp aeeeeee 1 No allowance made for depletion. Source: Prepared from data contained in Standard and Poor’s Corporation Records, 1. Standard Oi! Co. (New Jersey)... ..-..---| $2, 531, 808 2. United States Stee! Corp....... 1, B80, 760 3. General Motors Corp......-.-...- 1, $13, 886 4, ¥. 1. duPont do Nemours & Co.. 1, 44, 921 5. Bocony-Vacuum Oil Co,, Ine. 1, 076, 777 6. Standard Oil Co. (indlana) 046, 136 7. Bethlehem Steel Corp. 880, 88 8, Gencral Electric Co. 9. Texas Co......... 833, Net profit Total before Profit | Net profit | Profit sales income | before after alter (gross or and taxes ns income tuxes as ) profits | percent taxes percent (add 000) taxes of sales | (add WO) | of suics (add 000) $1, 638, 706 | $223, 156 13.6 $154, 156 9.4 1, 747, BO 85, O15 6.0 5b, 045 38 8, 127,935 | 212, £36 6.8 188, 264 6.0 631,574 | 186, 761 24,8 77, 421 12.8 828, Re, 420 7.2 42, M2 5.1 620, 148 65, Ait 1.2 AL, 732 &. 3 1, 320, 4 47,147 3.6 34, VAG 26 weeeeen war]awweee---- RG, 4.4 62, 857 Ww.9 51, 887 8.0 $1, 855 lau F5, 666 16.1 48, 199 9.6 4h, 214 90 137, 198 W.3 19), BUR “3 6.977 5.4 24,477 39 28, 744 4 18, 913 86 143, 7th 20.9 4 30, 243 14.4 Ob, G15 &.0 Vi, 126 8 14, 155 4.7 14, 645 3.9 96, 205 2.0 37, 890 79 85, 522 ran %&, 712 6.0 wewnennnneee 30, 702 |-..-----.- 19, 942 j....---- 065 5.8 37, 465 3.8 26, 44 5.4 f, Bad 19 80, 78 24, 430 2.0 23, 821 18 12, 304 .@ | x
A398 You will note that the Standard Oi! Co. of New Jersey has total assets of $2,500,600,000 and that its profit after taxes as a percent of sales, 1945, is 94. The E. I. du Pont de Nemours & Co. has assets of over a bil- lion dollars and its percent of sales profits after taxes is 12.3. The Standard Oil Co. of Indiana has assets of a little less than & billion dollars and its profit after taxes is 83 percent. Similarly, the Texas Co, with assets at eight bundred and thirty-three million has a profit after taxes of 9 percent. Certainly, the distillers do not reach the magnitude of profits of these industrial giants. We hear no outcry against the huge profits of the Anaconda Copper Mining Co. or the Union Carbide & Carbon Corp. If it is no crime for these companies to make money it should be no crime for the liquor interests to make profits. The Securities and Exchange Commission has made a survey of profits and operations of all beverage companies, nonalcoholic and alcoholic. The comparisons are actually startling. The Hiram Walker Co. made a profit of 3.7 percent after taxes. The Schen- ley Distillers’ Corp. made a net profit after income tax of 4.3 percent. Joseph E. Sea- gram & Sons showed a profit of 2.7 perent. Now compare these profits with those of the nonalcoholic companies. Permit me to list some of them: Net profit after income taxes Company: Percent Coca-Cola Bottling Co. of New York..--_~.-.----------.------- 8.4 Canada Dry Ginger Ale- -- 48 Coca-Cola Bottling Co. of St. Louis -..--~-~-..---------.- ee 17.3 The Coca-Cola Co. in general__.__. 16.9 Dr. Pepper Co.._-..--------. --- 13.6 The Charles E. Hires Co_..-. -- 10.0 The Panama Coca-Cola Co. 40.2 Pepsi-Cola Co.-...------ -- 11.9 Nehi Corp__._..-.....--------.--- 11.2 Now, let us look at the over-all picture. Take the weighted average of the profits after taxes of the percent of sales of the 25 largest industrial corporations and compare it with that of the distillers of alcoholic beverages. The industrial corporations have such weighted average of 5.7 percent whereas the distillers have a weighted average of profits after taxes of 3.6 percent. Take the nonalcoholic beverage companies. They have &@ weighted average of profits after taxes of 13.7 percent. It may likewise interest you to know that of all retail stores, throughout the country the liquor stores have the shortest longevity with reference to operation. Liquor stores average about 4 years of operation, the lowest average operating life of any retail store. Yet the liquor induetry must always take the rap. Let one member of the liquor in- dustry fall out of Ine and his sin is visited upon the entire industry. It is blamed for all the ills of the nation. When I was a lad, liquor was taxed $1.10 per proof gallon; now it is 66, With the war- time excise taxes, it is $9. In addition, there are State taxes and municipal taxes. There is such a thing as charging more than the traffic can bear. Any additional tax beyond the 89 should create the justifiable suspicion that the purpose of the additional tax is to destroy the industry. Furthermore, these taxes piled upon taxes create a mind-set in the public. It has gotten so that whenever @ question of additional revenue arises, what~ ever its purpose, almost automatically the public turns its head toward the liquor in- dustry. In my opinion, the $3 wartime tax should be removed. Similarly, I am opposed to con- sumer taxes. They place a restrictive hand on purchases, Consumer taxes are an unfair tax form since they place an equal tax bur- den on all purchasers, regardless of their ability to pay. I believe the comparisons of profits which IT have made tonight have not been sufficient~ ly publicized. I emphasize that the liquor public relations are not good. Much remains to be done in that regard, People should be told that every liquor man is not a Croesus and that every liquor establishment is not a gold mine. A Plan for National Security EXTENSION OF REMARKS r HON. CHARLES B. DEANE OF NORTH CAROLINA IN THE HOUSE OF REPRESENTATIVES Wednesday, February 5, 1947 Mr. DEANE. Mr. Speaker, under leave to extend my remarks in the Rec- orp, I wish to include an address de- livered by Lt. Gen. I. C. Eaker at the Bilt- more Hotel, New York City, on January 22, at a luncheon given for members of the Wings Club on the subject entitled “A Flan for National Security”: It is a normal American method, as soon as a war is over, for our people to dust their hands, turn with relief away from war with all its burdens, restrictions, heavy expendi- tures, and the reading of the long lists of dead and wounded, and to get back with all haste to the more cheerful scenes of peace- time living and the brighter prospects of civil occupations and professions. I am not suggesting any radical change in the American way. It has been adequate for the winning of two great wars in my lifetime and yours. I am suggesting, however, before we close the books of the late war and start the grim business of paying for it, that we have a last look—rake a few dead leaves, if you will—at least let us determine the rea- sons why we won and the enemy lost. Here is my lst of lessons from the war, for whatever it is worth. If it is thought-pro- voking, I have accomplished my purpose in compiling it. One great reason for our victory lay in the fact that we had more and better manpower. In the course of the last war, half a mil- lion American airmen served under my com- mand. Nearly 100,000 of those men were listed as missing in action; fully half of them will never return to their homes. Having seen their conduct in battle, I think the least I can do is to tell their mothers and fathers the kind of fighting men their boys made. In the early days in England, when we started the building of the Eighth Air Force with 56 men and when we began our in- vasion of Hitler’s Fortress of Europe with 10 airplanes, one of my worries was as to how our American youth would react to the cruel tests of modern war. I received my answer in those days when the Eighth Air Force was sometimes losing 10 percent of its strength on a single mission, in the days when it looked like we would all be used up and lost in 10 days. Here, briefly, are two typical stories which gave me my answer: 1, In the early days of the Eighth Air Force there was a young bombardier who, because of the skill he had exhibited, was detailed to be the master bombardier on a mission against German targets. As his plane ap- proached the target, a German fighter at- tacked head-on and fired a 20-millimeter shell into the nose of the airplane. It blew the bombardier to the back of his compart- ment and tore a big hole in his body. In- atinctively, he crawled forward to his bomb- sight and got off an excellent bombing run. hit the target squarely, as photographs later showed, then fell dead over his bombsight. This bombardier had a twin brother who ‘was in the same organization. We told his brother that we would like to have him stand down for a few days since we felt the loss of APPENDIX TO THE CONGRESSIONAL RECORD his brother would affect his work. He said: “No. I want to carry on as my brother would have me do.” The next day he climbed into the bloody cockpit from which his brother was lifted the day before and took off on @ mission from which he never returned. 2. Iremember well another instance when, on one of our tough missions, a squadron lost all of its planes but one. We told the squad- ron commander that afternoon that it would be some days before we could send up new crews and new planes and that his squadron would necessarily be out of the fight during that time. This squadron commander said: “No, sir. We have one airplane left. It came beck with 400 bullet holes in it, but I have every man in the squadron working on it to- night, and it will be ready to go in the morn- ing. We are not out of the fight.” We ad- mired the spirit of that squadron commander 80 greatly that we borrowed planes and crews from other squadrons, and he was back in the fight when a mission was launched the following day. Since my return from the war theaters I have noticed the impression in some quarters that the Air Forces had an easy ride in this war. Our Air Forces in Europe lost more than 90,000 men. The Fifteenth Air Force, under my command in Italy, had a combat strength of 20,000. In 1 year it lost 22,500 men. How many units in this war lost 114 percent of their combat strength in a single year? Other primary reasons for our victory— Because we had more industrial capacity to produce more and better weapons of war. Because we had time in which to gear these tremendous establishments to full-scale stature and production. Because we had space—great oceans on either side of us, which served as protective barriers and prevented our manpower and our industrial capacity from receiving blows from the enemy while it was being mobilized. Let us now see whether these factors will be sufficient to place us on the winning side should a war come again. Let me say first, with all the emphasis at my command, that nobody hopes more fervently than we in the Army that the United Nations or- ganization may be so perfected as to pre- vent any further wars. But until that time comes, we must provide armies, navies and air forces in sufficient force to insure that our country will be protected while we are developing the peace machinery. I suggest to you that the nature of war- fare and its weapons has changed to such an extent that time and space factors have been materially reduced, in fact largely elim- inated. If the Germans could in 1944, as they did, produce a rocket which could travel 70,000 feet above the earth for a distance of 280 miles at 700 miles per hour and deliver a ton of explosives with considerable accuracy, it is absolutely certain that any of the prin- cipal industrial nations of the earth can, by 1950, develop a super rocket with a range of from 3,000 to 5,000 miles which can travel at a speed of 1,000 to 3,000 miles an hour sufficiently high to overcome the earth's curvature, and deliver 10 to 20 tons of explosives with great accuracy. When that weapon is developed, you can well see that the time and space factors which have stood ‘us in such good stead will largely disappear. Much has been said in recent times about the effect of the atomic bomb on warfare in the future. We in the Army Air Forces have thought a great deal about it too, and we now have developed a Deputy Chief of Staff for Air whose sole mission is the study of the effect of atomic energy and weapons on warfare and the development of new weap- ons through the most advanced experimen- tation and research. We acknowledge the shattering and cataclysmic implications in- troduced by atomic fission, and we have marshalled our best brains and our whole scientific and experimental organization to think through every possible implication and mold our air establishment accordingly.
APPENDIX TO THE CONGRESSIONAL RECORD In my studies of this problem, I have asked this question: If I had been the head of the Japanese General Staff, how could I have prevented the atomic bombs from being de- livered on Japanese targets? This is my conclusion: There are three ways in which this might have been done had the Japanese the necessary military force. The first would have been to destroy the produc- tion capacity of atomic bombs at its source in the factories and laboratories of the United States. This would have been the most decisive and effective way. The sec- ond method would have been to destroy the bombs, and the planes which were to deliver them, on their bases in the Marshall Islands, before they were launched. The third pas- sible but doubtful method would have been to have had a fighter defense and an anti- aircraft defense of sufficient efficiency and intensity all over Japan to have destroyed the planes carrying the bombs as they ap- proached their target. This would have re- quired a larger fighter force and a better antiaircraft defense than any nation in the world has even approached to date. It would have been the most inefficient of the three methods and least likely to succeed. Now, what sort of force would Japan have needed to accomplish the first two of these methods? The only weapon known to war- fare today which could have accomplished these purposes—the destruction of bomb- making capacity in the United States or of the planes carrying the bombs—the long- range bombers on bases in the Marshall Islands—would have been a long-range bom- ber force such as we alone of ell the nations of the earth had in this war. The most powerful army in the World and the most powerful navy afloat would have been impo- tent to stop these bombers with their death- dealing atomic bombs. Only a long-range bomber force of sufficient power to fight its way through to its targets could have saved Japan from the bombs. We must revamp our war plans; we must reorganize our military power for a new type of war. If all of us will fully realize these facts and prepare our military machine for the future in accordance with them, our country will still be secure. If we do not, if we insist upon building a military machine with which to win the last war, then we shall have no real security and the tremen- dous cost will have been an idle expenditure. You hear the argument that we should not alter an organization which has won two wars. Sitting Bull won the Battle of the Little Big Horn with bows and arrows. Dewey won the Battle of Manila Bay with 6-inch guns. Could anyone suggest that, because two great victories were won with antique weapons, we should hold fast to old means and modes and methods? There is every indication that we must re- organize our national defensive structure for the new type of warfare I have indicated, where time and space are practically elimi- nated. We will need more speed of decision than we were able to get in the last war. It is enough to say for the proposed unification of the armed forces, with Army, Navy, and Air Forces on coequal status, that economy in peace and efficiency in war demand it. A system of national security for the United States in the future must have these ingre- dients: First of all, our State Department must be an organisation which will entice and offer an ample career to the best brains we can produce in this country. We must always remember that where the diplomat leaves off, the soldier must take up the burden. Secondly, we must have a central intelli- gence agency which will tell us what is brew- ing in every corner of the earth. Thirdly, we must have a force in being ready to move on a moment's notice to de- stroy the discovered war chest of the enemy before it is launched. . Fourthly, we must keep our weapons mod- ern, This requires great emphasis on scien~- tific development—research and experimen- tation. It has been said that every war be- gins with the weapons of the last war. It may well be that we were given a preview of the weapons which will dominate the next war in the robot bomb, German rocket, V-2, or our atomic bomb. It may well be, too, that some of the technique which appeared experimentally in the last war may be com- monplace and routine in the next—such things as radar, blind bombing. While there is grave danger that the war of the future will be a short war of unparalleled destruction, the first blows of which will come through the air, nevertheless, if we are wise, we will maintain naval and land forces, modern and mobile, the whole to be sup- ported by a National Guard and Organized Reserve, and Reserve Officers Training Corps prepared to mobilize and lead the manpower of the Nation. Then, too, we must have bet- ter plans for the conversion of industry to warfare than we have had in the past for the simple reason that there will be Jess time, plus the great probability that it will have to be done while the destructive blows of the enemy are raining upon us. This much ig certain. There is the great- est probability that the first battlefields of the next war will be the industrial cities of the United States. No aggressor nation of the future can miss the point that the last two wars were lost by the aggressor becauce he neglected to depreciate the manpower or destroy the material resources of the United States. Finally, over all this business of sound organization, modern weapons and mobilized industry and manpower, rides this dominant fact—no nation is secure unless the citizen places the welfare of his country above his personal self-interest. During the war the national interest was dominant, Now there are many signs and there is grave danger that personal interest and selfish welfare of highly organized minorities are being placed above the national interest, the welfare of all the people. As the first plank in our platform for national security, let us make certain that the future generation is educated to put national interest first. Three Great American Newspapers Con- duct Campaigns To Alert Citizens Against Communism EXTENSION OF REMARKS HON. KARL E. MUNDT OF SOUTH DAKOTA IN THE HOUSE OF REPRESENTATIVES Wednesday, February 5, 1947 Mr. MUNDT. Mr. Speaker, I have recently had called to my attention three specific campaigns conducted by widely separated American newspapers to alert the citizens of their respective communi- ties against the menace of communism within their midst. Undoubtedly there are many other such examples of public service by newspapers waging specific campaigns against definite Communist activities in their areas; hence the three I am about to mention should in no sense be considered a complete list but I mention them simply to indicate meth- ods which patriotic and public-serving newspapers can employ to help curtail the activities and growth of American communism. May I say in passing, Mr. Speaker, that these concrete cases of effective cam- A399 paigns against communism demonstrate that the best traditions of Journalism are still existent in this Republic. We hear much criticism of the press to the effect that American journalism is be- coming just a conveyor belt for carrying comic strips, gossip columns, and syndi- cated editorial comment into American homes and that the courageous editorial campaigns against community evils are no longer a part of the service rendered by modern newspapers. Mr. Speaker, I have never been one to accept this pat criticism and this too inclusive indict- ment of our American press. I believe the three following illustrations will help to discredit critics who condemn modern American journalism with too much haste and too little evidence. THE MILWAUKEE SENTINEL _In a series of 59 articles the Milwaukee Sentinel recently exposed the activities of Communists in Wisconsin, especially mm the important industrial area of Mil- waukee. With courage and candor, the Milwaukee Sentinel articles named names, cited instances, spelled out cases—and got results. As a matter of this great public service by the Milwaukee Sentinel, a number of admitted Communists have been driven out of positions of authority and the Democratic Party went so far as to deny support to one of its nominees for Con- gress when the evidence demonstrated that he was a Communist operative. Those interested can secure the series of articles from the Milwaukee Sentinel since they have been prepared in booklet form. The title of the booklet is “How the Milwaukee Sentinel Exposed Mil- waukee Communists and Fellow Trav- elers.” ; The Milwaukee Sentinel’s own sum- mation of its noteworthy crusade against un-Americanism in Wisconsin’s largest city is as follows: What one American city is doing to rid itself of Communist domination of a key union council other cities can do. It takes time, patience, and some old- fashioned courage, but the job is fur from impossible. A fighting newspaper is the best weapon simply because the Reds can’t stand the glare of public exposure. The average American workingman just won’t stand still for being a sucker (when he Knows about it), and that's what the Commies have made him wherever they have gained control of labor unions. The clergy, public officials, and the average man on the street will help out once the danger is shown and the battle line drawn. If the Communists can be rooted out at the local level, they will lose their strength in Washington, and we will have a chance to enjoy the peace our boys bought with their blood. It can be done. For further information as to the campaign of the Milwaukee Sentinel I am having reprinted at this point the concluding article of the series run in that great newspaper: {From the Milwaukee Sentinel of November 20, HOW TO BEAT REDS? WITHHOLD SUPPORT (By John Sentinel) How can America rid itself of a too powerful Communist influence? Believing in demo- cratic and humane rights, we Americans dO
A400 not kill our opponents or send them to the salt mines as is done in Russia. The answer to communism in America is simple: Stop giving them support! 1f Communists did not draw so much sup- port from non-Communists, they would at once melt down to their own size and their own strength, and be no problem at all. Trade unionists: When there are union elections, get out and vote! Communist can- didates for union office want a small turn- out, so they and their lackeys can capture the election. When you vote, vote for pro-American can- didates. This is the way to get the Russia- Firsters out. Voters: Vote for candidates who have a consistent record of allegiance to the political party of your choice. Watch out for newly mude Democrats or newly converted Repub- licans. As we saw in the last election, some of them were imposters. Liberals: “United front” with Communists is not liberalism, but stupidity. Playing with tigers is a hazardous sport. - Communists despise liberals, but want to “use” them to give momentum to their own objectives. A true liberal cannot at the same time condemn injustices in America and apologize for the far greater injustices in Russia. He cannot condemn the ethics of some Ameri- cans and wink at the even worse ethics of Communists. Joiners: Before you join a high-sounding organization or open your pocketbook to it, investigate. Who is soliciting you? Who is the secretary of the group? Communist fronts always give the presidency to an hon- ored citizen, but keep the secretary's job for a Communist. Many Milwaukee organizations are worthy of your support. They are not Communist fronts. But some are. Someone may call on you and say that So-and-so, whom you know, has lent the group his name. Remember, he may have been a sucker. Demand better arguments for your joining before you give your name or your money to the organization. Members of minority groups: Communists make special efforts to win your support by noisily championing your cause. But be- ware. They have special plans for you. You are to be their shock troops, their ‘‘expenda- bles,” when they feel strong enough to make a bid for power. Communists will promise you utopia in return for your support. But they will never deliver utopia to you and your people. Russia is the opposite of utopia, both for the majority group and for the minorities. When we have the sense to give the Com- munists the cold shoulder and refuse sup- port of their ventures, the Communist prob- Jem will be well in hand. To assist the public in spotting Commu- nists and Communist sympathizers, the Sen- tine] is arranging a public service. At your request, the Sentinel will tell you whether a local organization is worthy of your assist- ance or is a front group. The Sentinel will advise you as to whether people running for union office or political office have a record of Communist affiliations or not. Write John Sentinel; and if the informa- tion is available, it will be supplied. THE BUFFALO EVENING NEWS The largest daily newspaper of Buf- falo, N. Y., and one of the most impor- tant papers in the upstate area of the Empire State has been running a series of editorials and exposures showing the techniques of Communists by which they infiltrate into front organizations with high-sounding names and perverted pur- poses and then get gullible but well- meaning Americans to aid the commu- nism program, In spotlighting this front-organiza- tion tactic of the American Communists, the Buffalo Evening News is rendering a significant public service. Americans are notorious joiners—they will pay a dollar or $5 or even $10 to join an organi- zation with a pretty name and a noble slogan without investigating as to the real nature or purposes of the organiza- tion. Thus, many thousands of inno- cents at home are duped. More im- portant, many thousands of respectable Americans lend their names and their finances to the advancement of un- American programs and communistic creeds. The results are equally detri- mental whether these giddy joiners are dullards or knaves; they provide the re- enforcements and recruits by which crafty Communists and their fellow travelers conceal their objectives while at the same time undermining our basic American institutions. The Buffalo Evening News has demon- strated that suspicious front organiza- tions cannot thrive when the spotlight of objective publicity is turned upon their real purposes and their red personnel. What that newspaper has done to safe- guard Buffalo against these under- ground, underhand front organizations, other newspapers can do in a thousand different communities in this Republic if they will take the time and devote the talent to scrutinizing and investigating the various “fronts” operating in their localities and appealing for funds from their readers. THE MEMPHIs (TENN.) COMMERCIAL APPEAL One of the most thoroughgoing and complete exposures of communism and what its creed threatens for a Christian civilization such as America’s, has been made by the Memphis Commercial Ap- peal. It has made an objective, intelli- gent, and analytical study of the meth- ods and purposes of communism and it has given its readers the benefit of this information in fearless, factual terms. Interested citizens can secure a copy of this informative and interesting study by writing to the Commercial Appeal, Mem- phis, Tenn. The studies have been col- lected in an attractive booklet, the study of which has been recommended by no Jess an authority on un-American activi- ties than J. Edgar Hoover, Director of the Federal Bureau of Investigation. Mr. Hoover’s letter with reference to the classic on communism published by the Memphis Appeal is as follows: FeperaL BuREAU oF INVESTIGATION, Unirep STATES DEPARTMENT OF JUSTICE, Washington, D. C., November 12, 1946. To the Reader: The Memphis Commercial Appeal is ren- dering a real public service in bringing to its Teaders the mission of communism in Amer- ca. The menace of Red fascism will continue to threaten the security of our Nation until its forward march is halted. It has advanced by trickery and deceit, it has infiltrated every phase of American life. An aroused America means a secure Amer- ica. When every loyal, patriotic citizen APPENDIX TO THE CONGRESSIONAL RECORD knows the objectives of the Communist Party, United States of America, then und then only will its forward march be halted. The American Communists endeavor to con- ceal their sinister aims by high-sounding slogans and front organizations, but these are only blinds. The American Communists stand for revolution, they work for revolu- tion, they seek to foment revolution. They stand for the destruction of American democracy and the cherished freedoms our forefathers fought so valiantly to win. Only an aroused and an informed America can halt their program of destruction. J. Encan Hoover, Director, Federal Bureau of Investigation. Mr. Speaker, one of the most gratifying and significant developments of the past few months has been the fact that com- munism has ceased to be either fashion- able or respectable in America. The Communist coddler, the liberal (sic) writer and commentator with his abject apologies for communism, the fellow traveler who disguises his Red leanings behind the mask of academic freedom, -progressivism, or antifascism has re- ceived some rude shocks. Americans, generally, are awakening to the con- spirational nature of communism; they are rapidly familiarizing themselves with those who are supporters and those who are opponents of communism. Thelittle fellow in the neutral corner who no longer dares commend the Communists but who will not effectively crticize them is getting more and more lonesome. The great work of papers like the Milwaukee Sentinel, the Buffalo Evening News, and the Commercial Appeal has contributed greatly to this alerting of lethargic Americans to the menace of communism. A few chapter headings from the highly illuminating booklet published by the Commercial Appeal indicate the scope and significance of that analysis which, Mr. Speaker, would be a highly valuable booklet for patriotic citizens to secure for the purpose of placing it in the libraries of our schools and colleges. The indicative headings follow: “People need the awakening light,” “The ‘disso- lution’ was a lie,” “Pattern for world revolution,” “Communism wants us helpless,” and “God or anti-Christ— Which?” American Legion and Veterans of For- eign Wars posts, lodges, churches, service clubs such as Rotary and Kiwanis—these and other civic or patriotic organizations would do well to place such booklets as that published by the Memphis Com- mercial Appeal in the hands of the high- school students of their communities. The United States Chamber of Com- merce booklet on communism is equally well suited for general distribution to the youth of the land. To the individual who sometimes asks himself and others, “What can I do about communism” there is now a direct and challenging answer. He can purchase a few copies of the significant new book- lets on the true nature of communism and make certain that they are made available to the youth of America who can be depended upon to curtail commu- nism if the rest of us do our part to make certain they know exactly what it is.
APPENDIX TO THE CONGRESSIONAL RECORD Speech of Senator Raymond E. Baldwin EXTENSION OF REMARKS HON. HORACE SEELY-BROWN, JR. OF CONNECTICUT IN THE HOUSE OF REPRESENTATIVES Wednesday, February 5, 1947 Mr. SEELY-BROWN. Mr. Speaker, under permission to extend my remarks in the Recorp, I include the following address made by the Honorable RayMonp E. Batpwin, Senator from Connecticut, before the Washington League of Women Voters on February 3, 1947: Because I believe the women in our party want to take—and should take—a great in- terest in the issues that confront us, I would like to discuss with you here this afternoon one of the most serious of those problems, one on which, I believe, our success as a party hinges—that is labor-management re- lations. I know it is a practice for men to choose subjects somewhat different from this when they have the opportunity of appear- ing before such groups as yours. However, it seems to me that the women of this coun- try not only play an important role in for- mulating the opinions of the men in their homes, but also now play an active public role in helping to establish and carry out national policies. Consequently, I believe they want to be acquainted with—and con- cerned about—the most serious problems we face whether or not those issues are enter- taining. I said that I thought labor-management relations was one of the most important issues to be met by our party. Not only be- cause legislation on that subject affects daily the lives and incomes of millions of people, but also because the attitude we take there will probably reflect our general attitude on many other subjects. Of course, there is the added reason that no subject has aroused more violent controversy in the last 15 years, even more particularly in the last 5 years. Now that we, as a party, have become a major influence rather than a minor one, we are expected to produce some legislation in this field that is constructive and wise. ° Before analyzing the kind of solutions that have been proposed by Republicans, let us look back a few years to see what has brought on this problem. The history of disputes between labor and management in this country is a long one. Some of the early chapters are violent and bloody—not pleasant chapters for either side to recall. In more recent years we have, for the most part, found more peaceful and more rational methods of settlement. I hope it shall be our firm purpose to continue in this peaceful direction. We are all aware that there has been a trend in the last 50 years, accelerated in the last 15, toward the development of freedom and rights for laboring people. Depending upon the administration in power at the time, we have tended to swing first toward giving management the larger portion of the power in disputes and then toward giving labor the largest power. Collective bargaining was met for many years by both Government and management with considerable hostility. Though be- tween the years of 1880 and 1920 an increas- ing number of union agreements were made with management, the actual membership of unions was small and that membership rose and fell sharply as economic conditions changed. During these years unions got a foothold in such industries as mining, con- XCIII—App.——26 struction, printing, and railroads. In other industries unionization was small. During this period the courts of our country played a large part in determining the lengths to which unions could go. Labor organizations were weak. They had little support from Government, and the progress toward in- creased unionization was usually success- fully blocked by business. The compara- tively few strikes that occurred during these years were frequently won by the employer who used methods common in those days but which would, to us today, appear tyran- nical. Bitter hates were developed on both sides. The battles between management and Government on one side and labor on the other cost lives on both sides. In many cases these strikes were literally civil wars and like the Civil War they were forgotten slowly and painfully. The results were not conclusive. Manage- ment felt that labor was getting out of hand and must be quelled. Labor became only more determined to win in the end, regard- less of cost. After some gains in membership between 1900 and 1920, the prosperity of the twenties reduced membership in trade- unions, The decline continued during the depression, until by 1932 the total member- ship was estimated to be only about 2,500,000. The development of collective bargaining in this country, therefore, was a slow one. It was not until the third decade of this century that such bargaining was more than tolerated. It was not until the passage of the Norris-LaGuardia Anti-injunction Act that unions began to flourish. This act was an extension of the Clayton Act of 1914, which had, in many instances, failed in its apparent purpose to exclude unions from antitrust action. Since that time the policy of en- couraging unionism has brought the total strength of union membership to somewhere near 16,000,000. Thus, today, a large propor- tion of our working people have agreements with their employers whereby terms of pay, methods of handling disputes, hours of work, methods of handling grievances, safety regu- lations, etc., are determined by consultation between owner and worker. These agree- ments are, of course, intended to—and ex- pected to—preserve peace in industry during the period of their operation. In 1935 the second law which contributed a major boost to the growth of unions was passed. That was the National Labor Rela- tions Act, more commonly known as the Wagner Act. This act for the first time gave the Government, through the National Labor Relations Board, the duty of not only pro- tecting, but encouraging, collective bargain- ing. It also gave that Board wide discre- tionary powers to prevent management from Jngaging in practices regarded as unfair and from interfering with workers in their efforts to urganize themselves for mutual assistance. This Government-encouraged collective bar- gaining, approved by Congress, is a com- promise between individual bargaining and compulsory Government regulation. Compulsory government regulation or ar- bitration, of course, in the end amounts to complete government control over wages and working conditions. By and large, such con- trol is regarded by both management and labor as alien to our system of individual enterprise. Individual bargaining is regarded by all labor and by a large part of manage- ment today as being unfair to workers be- cause in our complex industrial society no individual worker is capable of himself bar- gaining on an equal basis with the manage- ment of a large plant. The Wagner Act had as its purpose to “diminish the causes of labor disputes.” It marked a change in our traditional government policy in regard to labor unionization. It marked the begin- ning of an era in which government encour= A401 aged and supported labor through their own organizations. Armed with this new support, labor undertook tremendous programs of unionization. They sought immediately far- reaching and important changes. Manage- ment objected to these violent changes. To enforce their demands, which had now been made legal, the workers went on strike. The result was, until 1937 the number of strikes increased yearly. Many of these strikes have as a basic cause, efforts at increased unioniza- tion rather than immediate demands for bet- ter working conditions. Thus, clearly, the Wagner Act failed, for reasons that may or may not be justified, in its avowed purpose to “diminish labor disputes.” It failed largely because the authors of this act pre- sumed that by giving labor increased back- ing, the right to freely organize, and the right to bargain collectively, peaceful agree- ments could usually be reached if the em- ployer bargained in good faith. They for- ‘get, however, to provide any machinery to facilitate these agreements. Apparently, it never occurred to the authors at that time that the unions could or would sometime get in a position where they could assume a “take it or leave it” attitude, and with little or no notice go out on strike. The act as- sumed that by equalizing bargaining power, Wages would be raised and stabilized. It did not provide any way of peacefully settling disputes when collective bargaining ended in disagreement. Thus, in effect. any dis- cussion which did not quickly and peacefully produce an agreement was likely to wind up in a strike or lock-out. The third major piece of legislation affect- ing labor during the thirties was the Fair Labor Standards Act which effects minimum wages, established the 40-hour workweck, and required payment of time and one-half for work in excess of 40 hours. The over- time provision affected all workers in inter- state commerce, not merely those recciving the minimum wage. It was the wage defini- tions of workday and workweek in this act that brought the portal-to-portal pay suits. After 1937, a general improvement in busi- ness and huge war orders reduced unemploy- ment, the power of labor increased and the number of strikes decreased. However, work stoppages still continued at a high level. It would seem clear then that regardless of the rights or wrongs involved, the Wagner Act did not diminish the number of work stoppages. On this point, the unions, of course, argue that they were justificd in these strikes because they had a legal right to strike and needed this weapon to change working conditions about which they had had little to say previously. Management, on the other hand, decried those strikes on the ground that labor had all the power on its side and would only work if all their demands were met. Whatever the reason, or whichever side was most nearly correct, the fact does remain that labor disputes did not diminish. Up to the time of the war, large sections of the American public were on the side of labor regardless of the issues involved. First, because they felt that labor was only then in a position which management had held for such long years, and second, because most of these strikes did not effect the dally living of any major part of the American people. During the war period, however, the Amer- ican public became incensed by continued strikes because they considered these strikes contrary to national interest in that they were a threat to the preservation of our Na- tion, and also because these strikes affected the supply of goods needed by a large part of the public, Actually, during this period it was said by both industry and labor that for all practica- ble purposes the Government directed the conditions under which lubor should work