11112 Mr. WHERRY. The Alsop brothers had a column in the New York Herald Tribune? Mr, LEHMAN. Yes. ‘There being no objection, the article was ordered to be printed in the Reconp, as follows: Tue State or Mr. TRUMAN acy (By Joseph and Stewart Alsop) WasHINcTon —It is time to give credit where credit is due, In the month that has passed since June 25, when southern Korea was attacked, President Harry S Truman has consistently acted with courage and decision. The fact is that Truman’s mood has now undergone a complete change, according to those who have worked closely with him during this long, anxious month. The grin in which his face was formerly permanently wreathed has disappeared. So, at last, has the euphoric Presidential conviction that “everything’s going to bo all right” The Korean aggression, and the military weakness of the United States revealed in Korea, are both said to have come as & pro~ found shock to Truman. Thus the cockiness which has characterized the President since his victory in 1948 has suddenly been 1¢- placed by a certain, unaccustomed grimness, And, at any rate, for the time boing, all Truman’s energies are concentrated on deal~ ing with the great danger which now con- fronts this country. VISIBLE SHIIFT IN POWER Out of this change of mood have come Truman's two great decisions, to meet the challenge in Korea head-on, and to start 4 really serious program for the rearmament of the United States and the western world. Another outcome of the change of Presi- dential mood has been the increasingly vis- ible shift in the anatomy of power within the Truman administration, It is significant that the elaborate plans which were being laid before the Korea at~ tack for another Truman political junket to “sell” the Fair Deal program and Fair Deal candidates, have now been shelved. The politiclans and political advisers who were gleefully pieparing these plans and other domestic political strategems no longer have easy access to the White House. Equally, such advocates of business-as-usual as Secretary of the Treasury John Snyder and Commerce Secretary Charles Sawyer have seen thelr White House influence reduced close to the ze1o mark. While such men have been moving into the wings, others have moved front and cen~ ter—most notably, perhaps, Gen Omar Bradley and special Presidential Assistant Averell Harriman. Bradley now doubles in brass as Chairman of the Joint Chiefs of Staff and as the unofficial presidential chief of staff. He sees the President alone every morning at 9 30 and briefs him at length both on the specific tactical situation in Korea and on the general strategic situation. Bradley also attends all the once-weekly meetings of the National Security Council, and the twice-weekly meetings of the Cabi- net. The Cabinet meetings are now largely given over to military briefings, conducted by Bradley, and to discussion of the eco- nomic impact of rearmament. Such fore merly live issues as the Brannan farm plan and the Ewing health plan are now exceed< ingly moribund if not entirely dead. Harriman also attends both the Security Council and Cabinet meetings. Moreover, he spends much of his time in the west wing of the White House, seeing the President often several times a day. Secretary of State Denn Acheson usually sees the President only twice a week, on ‘Tuesday and Thursday. Ordinarily, this situation could be expected to give rise to conflict between Acheson and Harriman. Actually, the two men have en- CONGRESSIONAL RECORD—SENATE tire confidence in each other, and work very closely together. Indeed, Harriman’s new role has in fact strengthened Acheson's poe sition, BIGGER ROLE FOR SYMINGTON National Security Resources Board Chair« man Stuart Symington has also been espe- cially close to Truman since Korea, and he has been given the central responsibility for guiding the Truman rearmament pro- gram through Congress. Among the lesser- known figures in the post-Korea inner circle at the White House have been Special Con- sultant Sidney Souers; Executive Secretary James Lay of the NSC, and Naval Aide Roh- ert L. Dennison, who briefs the President throughout the day on important dispatches from Korea or elsewhere Health permit- ting, General Bedell Smith is expected scon to become Chief of the Central Intelligence Agency, and he will undoubtedly join this inner circle, Truman also frequently confers indies vidually with the threo service secictaries, Army Secretary Frank Pace, Air Force Sec- 1etary Thomas Finletter, and Navy Secretary Francis Matthews, now welded into an effec- tive team as the joint secretaries. As for Truman's Secietary of Defense, Louis A. Johnson, he goes to the White House about once a week, usually for an hour, in the late afternoon. But the exact status of the Tru- man-Johnson relationship remains some- thing of a mystery. The two men have never been personally close. And it is surely clear to Truman by now that the advice he has accepted from Johnson has been little shoit of catastrophic, It must be said that Truman himself was only too ready to accept Johnson’s assure ances that the country was getting “greater combat capabilities at less expense” Yet it must also be said in all fairness that since June 25 Truman has shown real leadership in repudiating so totally and rapidly the dis- astrous policies of his Secretary of Defense. As to whether Truman can sustain the lead- ership he has shown, and whether the man who has now been s0 publicly repudiated will retain his post, these questions remain to be settled. There is an obvious, direct cons nection between the two questions. EXECUTIVE SESSION Mr. McFARLAND. I move that the Senate proceed to the consideration of executive business, - The motion was agreed to, and the Senate proceeded to the consideration of executive business. EXECUTIVE MESSAGES REFERRED The VICE PRESIDENT laid before the Senate messages from the President of the United States submitting sundry nominations, which were referred to the Committee on Armed Services, (For nominations this day received, see the end of Senate proceedings.) EXECUTIVE REPORTS OF A COMMITTEE The following favorable reports of nominations were submitted: By Mr. JOHNSON of Colorado, from the Committec on Interstate and Foreign Com- merce: Capt. Kenneth K. Cowart, United States Coast Guard, to be engineer in chief of the Coast Guard; and Edward C Maran and Julian W. Flint, to be commissioned ensigns in the Coast and Geodetic Survey. The VICE PRESIDENT. If there be no further reports of committees, the clerk will state the nominations in the new reports on the executive calendar, JULY 26 UNITED NATIONS The Chief Clerk read the nomination of Hooker A. Doolittle, to be the repre- sentative of the United States of America on the United Nations Commission for Indonesia. The VICE PRESIDENT. Without ob- jection, the nomination is confirmed, DEPARTMENT OF STATE The Chief Clerk read the nomination of Carlisle H Humelsine to be an Assist- ant Secretary of State. The VICE PRESIDENT. Without ob- jection, the nomination is confirmed. DIPLOMATIC AND FOREIGN SERVICE The Chief Clerk read the nomination of John E. Peurifoy, now serving as an Assistant Secretary of State, for promo- tion in the Foreign Service to the class of career minister, and to be Ambassador Extraordinary and Plenipotent'ary of the United States of America to Greece, to serve concurrently and without addi- tional compensation as Chief of the American Mission for Aid to Greece The VICE PRESIDENT. Without ob- jection, the nomination is confirmed. The Chief Clerk read the nomination of C. Tyler Wood to be deputy United States special representative 1n Europe, with the rank of Ambassador Extraordi- nary end Plenipotentiary. The VICE PRESIDENT. Without ob- jection, the nomination is confirmed. UNITED STATES MARSHALS The Chief Clerk proceeded to read sundry nominations of United States marshals. The VICE PRESIDENT. Without ob- jection, the nominations of marshals are confirmed en bloc. That completes the Executive Calendar. RECESS Mr. McFARLAND. As in legislative session I move that the Senate take a recess until 12 o’clock noon tomorrow. The motion was agreed to, and (at 7 o’clock and 6 minutes p. m.) the Senate took a recess until tomorrow, Thursday, July 27, 1950, at 12 o’clock meridan. NOMINATIONS Executive nominations reccived by the Senate July 26 (legislative day of July 20), 1950: In THE Arr Force The following-named officers for temporary appointment in the Air Force of the United States under the provisions of section 515, Officer Personnel Act of 1947: To be major gencrals Brig Gen James Frederick Phillips, 78A, United States Air Force. Brig. Gen. James Wrathall Spry, 824A, United States Air Force. Brig. Gen. William Lloyd Richardson, 86A, United States Air Force. Brig. Gen. Roscoe Charles Wilson, 360A, United States Air Force. Brig. Gen. Harry Anton Johnson, 157A (colonel, U. 8S. Air Force), Air Force of the United States. Brig. Gen. Willard Roland Wolfinbarger, 817A (colonel, U. 8, Alr Force), Air Force of the United States. Brig. Gen. Joseph Francis Carroll, A0048277, United States Air Force Reserve.
1950 To be brigadier generals Col, Oscar Frederick Carlson, 308A, United States Air Force. Col. Manuel Jose Asensio, 324A, United States Air Force, Col, Homer Leroy Sanders, 411A, United States Air Force. Col. Lewis R. Parker, 438A, United States Air Force Col, Harlan Clyde Parks, 472A, United States Air Force Col, Paul Ernest Ruestow, 548A, United States Air Force. Col. David Hodge Baker, 557A, United States Air Force. Col. Daniel Francis Callahan, 579A, United States Air Force, Col. Robert Haynes Terrill, 628A, United States Air Force. Col, William Oscar Senter, 648A, United States Air Force. Col. Wilfred F Hall, 19026A, United Siates Air Force (Medical). Col. August Francis Gearhard, AO207251, United States Air Force Reserve (Chaplain). The following-named officers for appoint- Ment in the United States Air Force to the grades indicated, under the provisions of title V of the Officer Personnel Act of 1947, with dates of rank to be established under the provisions of the afore-mentioned title: To be mafor generals Lt. Gen. Edwin William Rawlings, 95A (brigadier general, U.S. Air Force), Air Force of the United States. Maj. Gen. Leon William Johnson, 88A (brigadier general, U. S. Air Force), Air Force of the United States. Maj Gen. Samuel Egbert Anderson, 92A (brigadier general, U. 8. Air Force), Alr Force of the United States. Maj Gen. Truman Hempel Landon, 938A (brigadier general, U.8 Air Force), Air Force of the United States. Maj. Gen. Bryant LeMaire Boatner, 362A (brigadier general, U. 8, Air Force), Air Force of the United States. To de brigadter generals Brig. Gen. Edmund Clarence Langmead, 207A (colonel, U. 8. Air Force), Air Force of the United States Brig. Gen. Raymond Coleman Maude, 269A (colonel, U. 8. Air Force), Air Force of the United States. Brig, Gen. Willard Roland Wolfinbarger, 817A (colonel, U. S. Air Force), Air Force of the United States, Maj Gen. Frank Alton Armstrong, Jr., 427A (colonel, U. 8. Air Force), Air Force of the United States Brig. Gen. Emery Scott Wetzel, 464A (col- onel, U. 8. Air Force), Air Force of the United States, Maj. Gen. Edward Wharton Anderson, 514A (colonel, U. Alr Force), Alr Force of the United States Maj. Gen. Robert Whitney Burns, 527A (colonel, U. 8. Air Force), Air Force of the United States. Maj Gen. Harry George Armstrong, 200A (colonel, U. 8, Air Force), Air Force of the United States (medical). The officers named herein for appointment in the Air National Guard of the United States of the Air Force of the United States under the provisions of section 38 of the National Defense Act as amended: To be brigadier generals Brig. Gen. Frederick Read Anderson, AQ235349, Michigan Air National Guard, to date from March 31, 1950. Brig. Gen. George Robert Dodson, A0869264, Oregon Air National Guard, to date from March 31, 1050. Brig. Gen. John Munnerlyn Donalson, AQ176345, Alabama Air National Guard, to Gate from March 81, 1850. Brig. Gen. Stanford Willis Gregory, A0331838, Colorado Air National Guard, to date from January 20, 1950, CONGRESSIONAL RECORD—HOUSE Brig. Gen. Lyle Emerson Halstead, 40276747, Massachucetts Air National Guard, to date from January 25, 1950. Brig. Gen. Ray Simeon Miller, AO163634, Minnesota Air National Guard, to date from March 31, 1950. Brig. Gen. Joe Clair MoMtt, AO419945, Colo- rado Air National Guard, to date from March 31, 1950. Brig. Gen, Earl Thornton Ricks, AO395254, Arkansas Air National Guard, to date from January 20, 1960. The following-named officers for appoint- ment in the United States Air Force Reserve under the provisions of section 37, the Na~ tional Defense Act as amended These off- cers are subject to physical examination as required by law: To be brigadter generals Col. Walter Gelvin Bain, AO280604, United States Air Force Reserve. Col. Merian Coldwell Cooper, AOQ163054, United States Air Force Reserve. Col. Bruce Johnson, AQ504391, United States Air Force Reserve. Col Douglas Keeney, AOQ114138, United States Air Force Reserve. Col Charles Maylon, AO108296, United States Air Force Reserve. Col. Charles Freemen Nielsen, AOQ924980, United States Air Force Reserve. Col. Howard Archibald Rusk, AO166916, United States Air Force Reserve. Col, Peter Constant Sandretto, AO908471, United States Air Force Reserve. Col Albert McIver Woody, United States Air Force Reserve. 40178850, CONFIRMATIONS Executive nominations confirmed by the Senate July 26 (legislative day of July 20) 1950: Unrrrn NATIONS Hooker A. Doolittle, of New York, to be representative of the United States of America on the United Nations Commission for Indonesia. DePaRTMENT oF STATE Carlisle H. Humelsine, of Maryland, to be an Assistant Secretary of State. DIPLOMATIC AND FOREIGN SERVICE John £E. Peurifoy, of South Carolina, for promotion in the Foreign Service to the class of career minister, and to be Ambassador Extraordinary and Plenipotentiary of the United States of America to Greece, to serve concurrently and without additional com- pensation as Chief of the American Mission for Ald to Greece. C. Tyler Wood, of the District of Columbia, to be deputy United States special repre- sentative in Europe, with the rank of Am-~- bassador Extraordinary and Plenipotentiary. Untrrn STATES MARSHALS Thomas P O'Donovan, to be United States marshal for the northern district of Illinois. Eugene J. Smith, to be United States marsha! for the eastern district of New York. Donald A. Draughon, to be United States marshal for the district of Puerto Rico. John M. Comeford, to be United States marshal for the western district of Wisconsin, HOUSE OF REPRESENTATIVES WEDNESDAY, JuLY 26, 1950 The House met at 12 o’clock noon. The Chaplain, Rev. Bernard Bras- kamp, D. D., offered the following prayer: Almighty and ever-blessed God, grant that our moments of prayer may be times of lofty vision, of insight and inspiration. 11113 May we be strengthened to accept the challenge of every difficult task and every noble adventure. We humbly confess that our lives are frequently so low-vaulted we allow the windows of our souls to be made opaque by mere material ambitions and interests and there is no clear discern- ment of the spiritual realities and values. We penitently seek Thy forgiveness for as nations and members of the human family we have been content to live on the lowlands of materialism and have failed to take cognizance of the spiritual. Give us this aay such a clear and com- manding vision of the glory and splendor of the kingdom of righteousness and peace that we shall make its consumma- tion the goal of all our aspirations and endeavors. Hear us in Christ’s name. Amen. The Journal of the proceedings of yes- terday was read and approved. MESSAGE FROM THE PRESIDENT A message in writing from the Presi- dent of the United States was communi- cated to the House by Mr. Hawkes, one of his secretaries. SPECIAL ORDER GRANTED Mr PATMAN asked and was given per- mission to address the House for 5 min- utes today following the legislative pro- gram and any special orders heretofore entered, and to include therein certain extraneous matter. TAXATION OF PERSONAL FINANCE COMPANIES Mr. DOUGHTON. Mr. Speaker, I call up the conference report on the bill (H. R. 6073) to amend section 501 (b) (6) of the Internal Revenue Code, and ask unanimous consent that the state- ment be read in lieu of the report. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There was no objection. The Clerk read the statement. The conference report and statement follow: Conrrrence Report (H. Rept. No. 2701) The committee of conference on the dis- agreeing votes of the two Houses on the amendment of the Senate to the bill (H R. 6073) to amend section 501 (b) (6) of the Internal Revenue Code, having met, after full and free conference, have agreed to rec- ommend and do recommend to their respec- tive Houses as follows’ That the House recede from its disagree. ment to the amendment of the Senate and agree to the same with an amendment as follows: Strike out all after the enacting clause and insert the following. “That section 501 (b) (6) of the Internal Revenue Code is amended to read as follows: “«(6) (A) A licensed personal finance com- pany under State supervision, 80 per centum or more of the gross income of which is law- ful Interest received from loans made to in- dividuals in accordance with the provisions of applicable State law if at least 60 per centum of such gross income is lawful in- terest (1) received from individuals each of whose indebtedness to such cumpany did not at any time during the taxable year exceed in principal amouut the limit prescribed for small loans by such law (or, if there 1s no such limit, $500), and (11) not payable in advance or compounded and computed only
11114 on unpaid balances, and if the loans to a person, who js a shareholder in such com- pany during the taxable year by or for whom 10 fer centum or more in value of its out- standing stock is owned directly or indirectly (including in the case of an individual, stock owned by the members of his family as de- fined in gection 503 (a) (2)), outstanding at any time during such year do not exceed $5,000 in principal amount, and ““(B) A lending company, not otherwise excepted by section 501 (b), authorized to engage in the small loan business under one or more State statutes providing for the direct reguiation of such business, 80 per centum or more of the gross income of which is lawful interest, discount or other author- ized charges (i) received from loans ma- turing in not more than thirty-six months made to individuals in accordance with the provisions of applicable State law, and (il) which do not, in the case of any individual Joan, exceed in the aggregate an amount equal to simple interest at the rate of 3 per centum per month not payable in ad- vance and computed only on unpaid bal- ances, if at least 60 per centum of the gross income is lawful interest, discount or other authorized charges received from individu- als each of whore indebtedness to such com- pany did not at any time during the tax- able year exceed in principal amount the limit prescribed for small loans by such Jaw (or, if there is no such limit, $500), and if the deductions allowed to such company under section 23 (a) (relating to expenses), other than for compensation for personal eervices rendered by shareholders (including members of the shareholder’s family as de- ecribed in section 603 (a) (2)) constitute 15 per centum or more of its gross income, and the loans to a person, who is a share- holder in such company during the taxable year by or for whom 10 per centum or more in value of its outstanding stock is owned directly or indirectly (including in the case of an individual, stock owned by the mem- bers of his family as defined in section 503 (a) (2)), outstanding at any time during such year do not exceed $5,000 in principal amount’ “Sec. 2 That section 501 (b) of the Inter- nal Revenue Code is amended by adding at the end thereof the following new pata- graph* “*(8) A finance company, actively and regularly engaged in the business of purchas- ing or discounting accounts or notes re- ceivable or instaliments obligations, or mak- ing loans secured by any of the foregoing or by tangible personal property, at least 80 per centum of the gross income of which is derived from such business in accordance ‘with the provisions of applicable State law or does not constitute personal holding com- pany income as defined in section 6502, if 60 per centum of the gross income is de- rived from one or more of the following classes of transactions: “‘(A) Purchasing or discounting accounts or notes receivable, or installment obliga- tions evidenced or secured by contracts of conditional sale, chattel mortgages, or chat- tel lease agreements, arising out of the sale of goods or services in the course of the transferor's trade or business; “(B) Making loans, maturing in not more than thirty-six months, to, and for the busi- ness purposes of, persons engaged in trade or business, secured by— ““(1) accounts or notes receivable, or in« stallment obligations, described in subpara- graph (a) above; “‘qdi) warehouse receipts, bills of lading, trust receipts, chattel mortgages, bailments, or factor’s liens, covering or evidencing the borrower's inventories; ““(iit) a chattel mortgage on property used in the borrower's trade or business; except loans to any single borrower which for more than ninety days in the taxable CONGRESSIONAL RECORD—HOUSE year of the company exceed 15 per centum of the average funds employed by the com- pany during such taxable year; “‘(C) Making loans, in accordance with the provisions of applicable State law, se- cured by chattel mortgages on tangible per- sonal property, the original amount of each of which is not less than the limit referred to in, or prescribed by, subsection (b) (6) (A) (1), and the aggregate principal amount of which owing by any one borrower to the company at any time during the taxable year of the company does not exceed $5,000; and ““D) If 80 per centum or more of the gross income of the company is derived from one or more of the classes of transactions de- scribed In subparagraphs (A), (B) and (C) of this paragraph, purchasing, discounting, or lending upon the security of, installment obligations of individuals where the trans- feror or borrower acquired such obligations either tn transactions of the classes desciibed in subparagraphs (A) and (C) of this para- graph or as a result of loans made by such transferor or borrower in accordance with the provisions of clauses (1) and (if) of para- graph 6 (A) or of clauses (1) and (ii) of paragraph 6 (B) of this subsection, if the funds so supplied at all times bear an agreed ratio to the unpaid balance of the assiyned installment obligations, and documents evi- dencing such obligations are held by the company; provided that the deductions allowable under subsection 23 (a) (relating to expenses), oth- er than compensation for personal services rendered by shareholders (including mem- bers of the shareholder's family as described in section 503 (a) (2)), constitute 15 per centum or more of the gross income, and that loans to a person who is a shareholder in such company during such taxable year by or for whom 10 per centum or more in value of its outstanding stock is owned di- rectly or indirectly (including in the case of an individual, stock owned by members of his family as defined in section 503 (a) (2) ) outstanding at any time during such year do not exceed $5,000 in principal amount.’” And the Senate agree to the same. R L DouGHrTon, W. D MILs, A SIpNey Camp, WALT A. LYNCH, Dani£L A REED, Roy O, Wcoprvurr, Tuomas A, JENKINS, Managers on the Part of the House, Warren F GEorcrE, Ep C JOHNSON, Harry F. Byrp, E. D MILiKin, Rosert A Tart, Managers on the Part of the Senate. STATEMENT The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H R 6073) to amend sec- tion 501 (b) (6) of the Internal Revenue Code, submit the following statement in ex- Planation of the effect of the action agreed upon by the conferees and recommended in the accompanying conference report: APPLICATION OF THE SURTAX ON PERSONAL HOLD-= ING COMPANIES TO PERSONAL FINANCE COM- PANIES The House bill amended section 501 (b) (6) of the Internal Revenue Code, relating to the application of the surtax on personal holding companies to personal Anance companies. Under existing law, a licensed personal finance company under State supervision is not considered to be a personal holding com- pany if at least 80 percent of the gross income of the company is lawful interest received from individuals, each of whose indebtedness JULY 26 to such company did not at any time during the taxable year exceed $300 in principal amount, if such interest is not payable in advance or compounded and is computed only on unpaid balances. The House Dill modified the language of this exception to reflect changes in State laws regulating the activities of personal finance companies that have been made over the past several years and imposed a new restriction with respect to the type of loan that a personal finance company might make to a stockholder with- out being classified as a personal holding company. The Senate amendment expanded the defl- nition of personal finance companies ex- cluded from the provisions of the surtax on personal holding companies by eliminat- ing the requirement of licensing if the busi- ness of a loan, discount or finance company is engaged in business conducted under State supervision as permitted by one or more con- trolling State statutes. The limitation upon the source of income of such companies was also relaxed in certain respects. The conference amendment also broadens the scope of the exclusion provided by the House bill, but incorporates restrictive pro- visions which appear adequate to prevent the use of a finance company as a device for tax avoidance. The amendment does not conflict with the basic principles underlying the other exemptions granted under section 6501 (b) of the Internal Revenue Code, R. L. DouGHTON, W D. Muss, A Siwney Camp, War A. LyncH, Dante, A Keep, Roy O Woonrurr, THomAS H. JENKINS, Managers on the Part of the House, Mr. REED of New York. Mr. Speaker, I ask unanimous consent to extend my remarks at this point in the Recorp. The SPEAKER. Is there objection to the request of the gentieman from New York? There was no objection. Mr. REED of New York. Mr. Speaker, chapter 2 of the Internal Revenue Code imposes a penalty surtax on the undis- tributed income of personal holding com- panies that derive 80 percent of thcir income from such sources as dividends, interest, rents, and personal service con- tracts, Among vhe excepted corporations are banks, life insurance companies, loan and investment companies, and licensed personal finance companies under State supervision, if at least 80 percent of their gross income is lawful interest received from individuais each of whose indebted- ness to such company did not at any time during the taxable year exceed $300 and if the interest is not taken in ad- vance or compounded and is computed only on unpaid balances. H. R. 6073, as it passed the House, broadened the personal finance company exception by modifying the language of existing law to reflect changes that have been made during the past several years in State laws regulating the activities of these companies, The principal changes made by the House bill increased the $300 limitation on the size of the loan to $500 in all States and to the higher limits provided by State law in States where the law permits small loans in ex- cess of $500, and permitted the compa- nies to conduct a greater portion of their business on a discount basis,
1950 The House bill, which was recommend~ ed by the Treasury Department, is in- cluded in the bill agreed to in conference without change in substance. H. R. 6078, as it passed the Senate, ex- panded the coverage of the exception provided by the House bill to include all loan, discount, or finance companies en- gaged in business under State supervi- sion as permitted by one or more con- trolling State statutes, and relaxed in certain respects the requirements of the House bill relating to the source of in- come, H. R. 6073, as amended in conference, incorporates the House bill without change of substance and, in addition, provides an exception for two other types of companies engaging in the loan and finance business. The first of these two other types are lending companies en- gaged in the small loan business which cannot qualify as licensed personal fi- nance companies because most of their loans are made on a discount basis. The exception is made available to these com- panies because their business activities are very similar to those of licensed per- sonal finance companies. But in order to obtain the benefit of the exception these companies must comply with limi- tations and restrietions comparable to those governing licensed personal finance companies. The Treasury Department has stated informally that it will not ob- ject to the exception which the confer- ence amendment provides for these com- panies. The other type of company excepted by the conference amendment is a fi- nance company 80 percent of the gross income of which is derived from the business of vurchasing or discounting accounts or notes receivable or install- ment obligations or making loans secured by obligations of that character or by chattel mortgages, The exception for these companies is subject to restrictions and limitations to prevent tax avoidance similar to those applicable to licensed personal finance companies and other lending companies excepted by section 1 of the bill, and the Treasury has stated that it has no objection to this exception. The SPEAKER. The question is on the conference report. The conference report was agreed to. A motion to reconsider was laid on the table. WORKS OF ART ON LOAN TO THE TRUS- TEES OF THE NATIONAL GALLERY OF ART Mr. DOUGHTON. Mr. Speaker, I ask unanimous consent for the immediate consideration of House Joint Resolution 497. The Clerk read the title of the reso- lution, The SPEAKER. Is there objection to the request of the gentleman from North Carolina? Mr, MARTIN of Massachusetts. Mr, Speaker, reserving the right to object, \ 11 the gentleman make an explanation of this resolution? Mr. REED of New York. Mr. Speaker, this resolution simply gives the same privilege of importation relating to works of art that you do to books, CONGRESSIONAL RECORD—HOUSE Mr. MARTIN of Massachusetts. It simply gives the right to import free? Mr. REED of New York. Works of art, the same as they have heretofore On books and many other articles. Mr. MARTIN of Massachusetts. How large will that traffic be? Mr. REED of New York. Very small. The National Gallery of Art has re- ceived on loan a number of old master paintings owned by a citizen of a for- eign country. The owner cannot, how- ever, allow his paintings long to remain in the United States because of the pos- sible liability for Federal and District oi Columbia death taxes and local prop- erty taxes. The joint resolution would exempt from the Federal estate tax, and the Dis- trict of Columbia estate and personal property taxes, works of art imported into the United States for exhibition pur- poses which are loaned for such purposes to the Trustees of the National Gallery of Art by a nonresident who is not a citizen of the United States. The SPEAKER. Is there objection to the request of the gentleman from North Carolina? There being no objection, the Clerk read the joint resolution, as follows: Resolved, etc, That section 863 of the Internal Revenue Code (relating to property without the United States) is amended by adding at the end thereof the following new subsection: “(c) Works of art on loan for exhibition’ Works of art owned by a nonresident not a cttizen of the Untted States tmported into the United States solely for exhibition pur- poses, loaned to the Trustees of the National Gallery of Art for such purpose, and, at the time of the death of the owner, on exhibi- tion, or en route to or from exhibition, either in the National Gallery of Art or in such other public gallery or museum as the Trus- tees of the National Gallery of Art may have designated ” Src 2. Section 1, article I, title V, of the District of Columbia Revenue Act of 1937, as amended, is hereby further amended by adding the following new subsection: “(1) Works of art owned by a nonresident of the United States who is not a citizen of the United States lent without charge to the Trustees of the National Gallery of Art solely for exhibition without charge to the general public shall not be deemed to have 8 taxable situs in the District of Columbia.” Src. 3. Paragraph No, 10 of section 6 of the act of July 1, 1902 (82 Stat 620, ch. 1352), as amended, is hereby further amended by adding the following new subparagraph: “Fifth. Works of art owned by a nonresi- dent of the United States who ts not a citizen of the United States lent without charge to the Trustees of the National Gallery of Art solely for exhibition without charge to the general public.” Sxc. 4. The amendments made by section 1 of this joint resolution shall be applicable only with reapect to estates of decedents dying after the date of enactment. The amendments made by section 3 of this joint resolution shall be applicable only with re- spect to decedents dying after the date of enactment. The amendments made by sec- tion 8 of this joint resolution shall be applicable heginning July 1, 1950. With the following committee amend- ment: On page 2, line 7, strike out the figure “(1)" and insert the letter “(1).” The committee amendment was agreed to, 11115 The joint resolution was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to reconsider was laid on the AMENDING TARIFF ACT OF 1930 Mr. DOUGHTON. Mr. Speaker, I ask unanimous consent for the imme- diate consideration of tMe bill (H. R. 8514) to amend the Tariff Act of 1930 to provide for exemption from duty of cer- tain sound recordings imported by the Department of State, and for other purposes. The Clerk read the titie of the bill. Mr. REED of New York. Mr, Speak- er, reserving the right to object, this bill would extend to sound recordings im- ported by the Department of State for use in the international information program, the same treatment that is now accorded to books, engravings, photo- graphs, etc., imported for the use of the Government. The legislation has the unanimous approval of the Committee on Ways and Means, The SPEAKER. Is there objection to the request of the gentleman from North Carolina? ‘ There was no objection. The Clerk read the bill, as follows: Be tt enacted, etc., That paragraph 1628 of the Tariff Act of 1930 is hereby amended by striking out the period at the end thereof and by inserting in Meu thereof a semicolon and the following: “sound recordings im- ported by the Department of State for use tin the program authorized by the United States Information and Educational Exchange Act of 1948 (Public Law 402, 80th Cong.).” The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to recon- sider was laid on the table. AMENDING TARIFF ACT OF 1930 Mr. FORAND, Mr. Speaker, I ask unanimous consent for the immediate consideration of the bill (H. R 8726) to amend the Tariff Act of 1980 to exempt from duty sound recordings for news broadcasts. The Clerk read the title of the bill. Mr. REED of New York. Mr. Speaker, reserving the right to object, some im- ports of sound recordings on magnetic tape are now classified according to the component material of chief value. The pending bill would facilitate the impor- tation of sound recordings for radio or television news broadcasts by eliminating the difficult and time-consuming task of calculating the value for the purpose of assessing duty of such dutiable record- ings. The bill amends the Tariff Act of 1930 to provide for the free entry of sound recordings transcribed or recorded abroad for radio or television news broadcasts in this country. This bill has received the unanimous approval of the Committee on Ways and Means. The SPEAKER. Is there objection to the request of the gentleman from Rhode Island? There wes no objection. The Clerk read as follows: Be it enacted, etc., That paragraph 1726 of the Tariff Act of 1930, as amended, is amended
11116 by Inserting after “newspapers,” the follow- ing’ “sound recordings transcribed or re- corded abroad and imported for radio or tele- vision news broadcasts in the United States,”. Src. 2. The amendment made by this act shall apply to articles entered for consump- tion or withdrawn from warehouse for con- sumption on or after the day following the date of enactment of this act. Mr. FORASD. Mr. Speaker, I offer an amendment. The Clerk read as follows: Amendment offered by Mr. Foranp: Page J, line 5, strike out “and imported ” The amendment was agreed to. The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to recon- sider was laid on the table. AMENDING TARIFF ACT OF 1930 Mr, KING. Mr. Speaker, I ask unani- mous consent for the immediate con- sideration of the bill (H. R. 7447) to amend the Tariff Act of 1930, as amend- ed, with respect to sound-recording ma- terials for use in connection with mov- ing-picture exhibits and news reels. The Clerk read the title of the bill. Mr. REED of New York. Mr. Speaker, + reserving the right to object, the pur- pose of this bill is to simplify the pres- ent procedures for customs collection in the case of sound recordings suitable for use in connection with motion-pic- ture exhibits. At present, sound re- cordings other than sound tracks of motion-picture films, are subject to varying duties depending on the mate- rial of which they are made. This means that these duties are generally collected on an ad valorem basis, which involves calculating the cost of produc- tion and allocating the cost attributable to a particular recording. For these reasons, customs duties on sound re- cordings have been difficult to admin- ister. The Tariff Commission has advised that the rates of duty on sound record- ings are not of particular significance, either from the standpoimt of revenue or protection of domestic industry, and that making such recordings dutiable at a specific rate as provided in the pend- ing bill would avoid the administrative difficulties involved in determining cost of production for duty purposes. An- other provision of the bill would permit duty-free entry of recordings suitable for use in connection with moving-picture news reels This bill has received the unanimous approval of the Committee on Ways and Means, The SPEAKER. Is there objection to the request of the gentleman from California? There was no objection. The Clerk read the bill, as follows: Be it enacted, etc., That paragraph 1551 of the Tariff Act of 1930, as amended, is hereby amended by adding at the end there- of the following new proviso. “Provided fur- ther, That on photographic or magnetic film, tape, wire, or other material of any kind on which sound has been recorded abroad by photography, magnetism, or any means whatsoever, and which is suitable for use in reproducing sound in connection with moving-picture exhibits (not including any of the foregoing which is photographic film on which pictures have been recorded, or CONGRESSIONAL RECORD—HOUSE any of the foregoing which is provided for in paragraph 1726 of this act, as amended), the duty shall be 1 cent per linear foot.” Src. 2. That paragraph 1726 of the Tariff Act of 1930, as amended, is hereby amended by inserting after the werd “reel” the follow- ing: “photographic or magnetic film, tape, wire, or other material of any kind on which sound has been recorded abroad by photog- raphy, magnetism, or any means whatsoever, and which is suitable for use in reproducing sound in connection with moving-picture news reels,” With the following committee amend- ment: Strike out all after the enacting clause and insert. “That paragraph 1551 of the Tariff Act of 1930, as amended, is hereby amended by changing the period at the end thereof to a colon and by adding thereafter the following new proviso: ‘Provided further, That on pho- tographic or magnetic film, tape, wire, or other material of any kind on which sound has been recorded abroad by photography, magnetism, or any means whatsoever, and which is suitable for use in reproducing sound in connection with moving-picture exhibits (not including any of the foregoing which is photographic film on which pictures have been recorded, or any of the foregoing which is provided for in paragraphs 1616 (c) or 1726 of this act, as amended), the duty shall be 1 cent per linear foot, except that this rate shall not apply to any article so long as a lower duty is in effect therefor pursuant to a proclamation issued under section 350 of the Tariff Act of 1930, as amended, to carry out a trade agreement entered into prior to July 1, 1950’ “Src 2 That paragraph 1726 of the Tariff Act of 1930, as amended, is hereby amended by changing the period at the end thereof to & semicolon and by adding thereafter the following: ‘and photographic or magnetic film, tape, wire, or other material of any kind on which sound has been recorded abroad by photography, magnetism, or any means what- soever, and which is suitable for use in re- producing sound in connection with moving- picture news reels (not including any photo- graphic film not provided for hereinbefore on which pictures have been recorded) ’.” The committee amendment was agreed to. The bill was ordered to be engrossed and read a third time, was read the third time, and passed, and a motion to recon- sider was laid on the table, SPECIAL ORDER GRANTED Mr. DAVIS of Georgia asked and was given permission to address the House for 30 minutes on tomorrow, following the legislative program and special or- ders heretofore entered. UNIVERSAL MILITARY TRAINING Mr. BRYSON. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks and include an editorial. The SPEAKER, Is there objection to the request of the gentleman from South Carolina? There was no objection. Mr. BRYSON. Mr. Speaker, as we become more and more conscious of the fact that we must attain and maintain military strength if we expect to remain a free people, I again urge the adoption of a universal military training program. On several occasions I have expressed my views on this important subject both here in the House and to my people at ome, JULY 26 By nature we are a peace-loving peo- ple. Never have we provoked a war, nor have we profited materially from any of the wars in which we have participated. We abhor cruelty and violence. We dis- like war, but until this troubled world is willing to face reality we must be pre- pared to meet any emergency. It seems to me the only proper thing to do is to provide a universal military training program, Had this legislation passed when we first urged its adoption, we would have adequate strength now with which to protect ourselves. Herewith I am attaching copy of an editorial appearing in the Spartanburg Herald, a South Carolina newspaper: While on a visit here, Commander O. D Freeman of th? South Carolina Department of the American Legion said the Legion is planning an all-out endeavor to have Con- gress enact a universal military training pro- gram. Commander Freeman was on his way to Indianapolis, where a meeting of Legion leaders from all over the country to discuss plans for the movement was scheduled There is much to be said in favor of unl- versal military training, Many competent observers believe World Wars I and II might have been averted if the United States had possessed a strong military establishment which universal military train- ing would have provided. Our disheartening experience in Korea and the threats of Communist aggression else- where around the globe has brought a reali- zation that we must bolster our military defenses This can be done either by build- ing up and maintaining large regular armed forces or by having enough trained reserves ready at all times Fiom a laymen’s point of view, !t seems to us that creating a reservoir of trained reserves by calling up all young men as they come of age for a period of military training would be the more oiderly and more efficient method. Aside from strengthening the Nation's de- fenses and serving as a deterrent to war a limited tour of duty in the armed services would be beneficial in many ways to the young men called up. It has been the expe- rience of a large majority of those who have served that they come out of the services in better physical condition, more self-rellant and in general better fitted to pursue civilian careexs than when they went in. Many young men find educational opportunities in the services that would not have been open to them In civilian life. MIDYEAR ECONOMIC REPORT—MESSAGE FROM THE PRESIDENT OF THE UNITED STATES (H. DOC NO. 644) The SPEAKER laid before the House the following message from the President of the United States, which was read, and, together with the accompanying papers, referred to the Joint Commit- tee on the Economic Report and ordered to be printed with illustrations: Tue WHITE HOUSE, Washington, D. C., July 26, 1950. The honorable the SPEAKER OF THE HOUSE OF REPRESENTATIVES. Str: Iam presenting herewith a Mid- year Economic Report to the Congress. This is supplementary to the Economic Report of the President of January 6, 1950, and is transmitted in accordance with section 3 (b) of the Employment Act of 1946. In preparing this report, I have had the advice and assistance of the Couns,
1950 cil of Economic Advisers, members of the Cabinet, and heads of independent agencies. Together with this report, I am trans- mitting a report, The Economic Situa- tion at Midyear 1950, prepared for me by the Council of Economic Advisers in accordance with section 4 (c) (2) of the Employment Act of 1946. Respectfully, Harry 8. Truman. INCREASING COST OF LIVING Mr. DAVENPORT. Mr. Speaker, I ask unanimous consent to address the House for 1 minute The SPEAKER, Is there objection to the request of the gentleman from Penn- sylvania? There was no objection. Mr. DAVENPORT. Mr. Speaker, the rise in the cost of food and other com- modities has become alarming and is giving great comfort to our enemies. Therefore, Iam introducing a House res-~ olution today to call for a full congres- sional investigation of soaring prices and the reappearance of black markets in our country. In this resolution I call for a@ special congressional committee with power of subpena, to be appointed by the Speaker. Ihave full confidence that the housewives of America will again play the great and important part which they did to help bring about victory in World War II. Our wonderful Ameri- can women, both on the home front and in uniform, can be depended upon to do everything within their power to win a speedy victory. I believe that we Mem- bers of Congress should follow the lead of the great CIO and the A. F. of L. unions in helping to mobilize the women of America in the war against spiraling costs of living, In many cities through- out the United States, under the leader- ship of the CIO and the A. F. of L., thou- sands of women have paraded in front of stores carrying placards bearing warn- ings against hoarding, I appeal to the Members of this body that when you do go back into your districts that you or- ganize volunteer groups and committees in the various communities to join in the fight against high prices and hoarding. Hoarding 1s unpatriotic. Hoarding helps the Communists, Hoarding helps our encmies. Let us all join in this war on soaring prices, black markets, panic buy- ing, and unpatriotic hoarding. MILITARY TRAINING FOR AMERICAN YOUTH Mr, BENNETT of Florida. Mr. Speak- er, I ask unanimous consent to address the House for 1 minute. The SPEAKER. Is there objection to the request of the gentleman from Florida? There was no objection. Mr. BENNETT of Florida. Mr. Speak- er, I congratulate the gentleman from South Carolina [Mr. Bryson] for bring- ing again to the attention of the House the question of universal military train- ing. I believe the Congress should en- act this program. I think it is a vital part of our national defense and one of the cheapest ways to assist in the de- fense of our country. I think anyone who has seen men die because of lack of XCVI——700 CONGRESSIONAL RECORD—HOUSE proper training, and, of course, no one can be entirely adequately trained, must come to the conclusion that we should properly train the youth of our country to defend our country. I feel that sta- tistics show that a man has about 10 times as much chance of coming out of combat if he 1s properly trained than if he is not so trained. I do hope the Com- mittee on Armed Services will seriously consider this legislation which I think to be important to our national defense. FEDERAL BUREAU OF INVESTIGATION SHOULD FERRET OUT SUBVERSIVES Mr. STAGGERS. Mr Speaker, I ask unanimous consent to address the House for 1 minute and revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from West Virginia? There was no objection. Mr. STAGGERS Mr Speaker, these are times of decision We cannot afford to play politics here, for the life of civill- zation 1s in the balance. We cannot afford to dilly-dally over the passage of defense laws and the enforcement of them. We cannot afford to longer de- lay mobilization and all-out production of war materials. We must stop fooling around while the world is folding up over our heads. We must take immedi- ate steps to increase our home defenses. All known subversives in our country should be rounded up and interned. The enemies of our Government should be ferreted out now and placed where they cannot be a potential menace. This should be done now—not next week or next month—but now! The Federal Bureau of Investigation {s the proper agency to deal with the situation. As I have said before on the floor of this House, the FBI is the best trained investigator in the history of the world. I feel that all matters dealing with communsm and subversives should be turned over to that Bureau and we, as Members of Congress, should cooper- ate fully with that agency to see that the job is done. At no time in our history has the pub- lic been so aroused and alarmed over the critical developments in our country. Letters come to me from my constituents urging that action be taken at once on these matters. It is up to Congress to correct and allay the universal fear and frenzy which exists among the people of this Nation. We must see that hoard- ing, profiteering, and other grave men- aces are stopped now. I am confident an all-out preparation for the defense of this Nation will have the backing of the loyal people of our country. HOARDING Mr. BURNSIDE. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from West Virginia? There was no objection. Mr. BURNSIDE. Mr. Speaker, I have been doing a little reading recently, I have been reading about pack rats, 11117 A pack rat is a kind of wood rat. It has a bushy tail, large, membranous ears, and a thick, angular skull. Its home is usually a large heap of miscellaneous trash, And why is it called a pack rat? It is called a pack rat because it has a habit of carrying off anything it can get its hands on and storing it in its home. It does not matter whether the articles are needed at that time—or, for that matter, if the articles will ever be used. The pack rat simply likes to have them around, just in case. After all, the ro- dent thinks, he may not be able to get the same useless article tomorrow. Pack rats are very strange and inter- esting animals, even though they are annoying pests. Just look around you— you might see some in your own nelgh- borhood. Seriously, though, folks—hoarding is a foolish thing to do. If everyone buys in normal quantities, there will be enough of everything for everybody, Hoarders succeed only in creating arti- ficial shortages and in bringing on higher prices for themselves and all other consumers. If you buy large quantities of sugar now and try to store it, it will get hard and useless. The Cubans have plenty of sugar. They did have too much, be- fore the hoarders started taking it off their hands. But now the hoarders have made it possible for the speculators: to go to work, and between them they can make it difficult for the rest of us to get what we need. Even though we have no real short- ages, hoarders and speculators may cre- ate so many artificial shortages that rationing may be necessary. We are close to that point already, and if the present trend continues I will ask that the President be authorized to estab- lish temporary price controls and ra- tioning until the current hysteria is over. It is not right that a few hoarders, by their selfishness and foolishness, should make it impossible for others to get the goods they need. Do not hoard and urge others not to hoard. If you see someone hysterically buying up everything he can get his hands on, stop and reason with him. After all, reasonableness and self-dis- cipline are always preferable to restric- tive Government controls. And remember—our troops in Korea are not hoarding anything. President Truman has sent detailed requests to Congress for $10,500,000,000 to carry on the war in Korea and build up our military strength to a point where we will rot be a push-over for Russia. I see little difficulty in getting the necessary funds approved. But there is quite a bit of controversy over how they are to be obtained—whether by in- creased taxation, or by increasing the national debt. Quite a few people here in Washing- ton are in favor of a pay-as-you-go pol- icy in regard to war spending. They be- lieve that taxes should be increased so that no one will make a fortune on the war, The increased taxes would pay for
11118 the war expenditures, keep down infla- tion, and prevent the national debt from growing beyond its present astronomical figure. Even Senator Bos Tarr—and this is surprising—expressed the thought that the pay-as-you-go idea has merit. This much is certain. It is not right for the people here at home to make ex- cessive amounts of money off war work while our boys overseas are paying with their lives for the right to defend our democracy. It is my opinion that per- sonal and corporation taxation should keep pace with the war effort. I add my voice to those who support the pay-as- you-go idea. I have noticed a tendency recently in the most reactionary part of the press which disturbs me. It is an attempt to tell the American people that the war in Korea was manufactured by the ad- ministration, and that we should pull our troops out and let the Communist ag- gressors take over. That, incidentally, is the same line being taken by the Com- munist newspaper, the Daily Worker. These people apparently believe that we should just stand by and allow the Communist armies to conquer the rest of the world. After the Communists have captured all our allies, of course, we would not have a chance against a direct attack. Obviously, that is not a very smart at- titude for a loyal American to take. Apparently this small, reactionary seg- ment of the press merely wants to make things more difficult for the adminis- tration, and does not care whether it hurts our defense efforts or not. I think the newspaper publishers who encourage that attitude are simply not loyal Americans. I never object to real debating of political issues, I do not ob- ject to sincere criticism of the actions of the administration, even in matters of national defense and foreign policy. But I think newspaper publishers and others in a position to influence public opinion should be more responsible than to sabotage our defense efforts by delib- erately misleading the public. We have learned over and over again that appeasement of aggressors does not work. Let us not be fooled again. If you allow a criminal to go without pun- ishment, chances are he will become a habitual offender. That is why this ac- tion in Korea was necessary. We had no other choice. I have mentioned before on these broadcasts that one important phase of our struggle for peace is the attempt to reach the minds of the Russian people with truth. A few ideas have occurred to me along that line. I would like to pass them along to you. For one thing, I think we should take @ more positive approach. The Com- munists tell their people great lies about ‘us—that we have a hundred lynchings a year, for example. I do not think we should devote all our efforts to proving that those things are false. Instead, we should point out some of the crimes that are committed by the leaders in the Soviet Union and its satellites, and by its followers here in the United States. The slave-labor camps in Russia, for exam- ple: Mention what a small return the CONGRESSIONAL RECORD—HOUSE Russians get for their long hours of work. Point out to them the many years during which they have been promised better conditions—how the commissars have regularly said it will be next month, and next month, and next month, like a broken record, and still the glorious day has not arrived. Instead, more weapons are fashioned for the destruction of working men in other countries. A few of these thoughts might start the Rus- sian Ivans wondering if Uncle Joe is really such a great leader. Here is another idea I have. Why cannot we get some folks with wit and humor in place of dry-rot diplomats to work up broadcasts for the Voice of America? Political satire, if properly voiced, should shake off a few apples. Why not have a few college glee clubs sing some snappy Russian songs, sub- stituting words ridiculing Stalin and his Kremlin buddies? SPECIAL ORDER GRANTED Mr. FORD asked and was given per- mission to address the House for 15 min- utes today, following the legislative pro- gram and any special orders heretofore entered. PERSONAL ANNOUNCEMENT Mr. FORD. Mr. Speaker, I ask unani- mous consent to address the House for 1 minute and revise and extend my re- marks. The SPEAKER. Is there objection to the request of the gentleman from Mich- igan? There was no objection. Mr. FORD. Mr. Speaker, yesterday during the debate on one of the national defense measures, the gentleman from Indiana (Mr. Wa.sH] said this, in ref- erence to myself, and I quote: I can point out where the gentleman has failed to vote for the defense of his country. In the Recorp we have today the gen- tleman from Indiana somewhat tem- pered his remarks and said: I could, if necessary, point out where he— Referring to myself— failed to vote for what I consider to be the best interest of the defense of our country. During the colloquy between the gen- tleman from Indiana (Mr. WatsH] and myself, the gentleman from Indiana had this to say: I did not know you from Adam. I will have your record tomorrow and show it in the Recorp if you wish. At this time I request the gentleman from Indiana to produce that record and insert it in the ConcresstonaL Recorp. Subsequent to his insertion I will have a few comments to make about his rec- ord and also an explanation of mine. RECOVERY VERSUS DEFENSE Mr. BOGGS of Delaware. Mr. Speak- er, I ask unanimous consent to address the House for 1 minute, and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Dela- ware? There was no objection. Mr, BOGGS of Delaware. Mr. Speak- er,.I hold in my hand a splendid and timely editorial from the Tuesday, July JULY 26 25, issue of the Wilmington (Del.) Jour- nal-Every Evening. This editorial states in part, “If Eu- rope’s need for military aid is as great as the administration suggests and as. Europe itself contends the United States might well consider seriously the possi- bility of diverting some Marshall plan funds to that more important field.” Pointing out that such a shift of funds would mean that Europeans will have to make certain sacrifices, the editorial con- cludes by saying, “but that’s the un- happy prospect ahead of Americans, too.” Mr. Speaker, we must fully realize that nothing at the present is more important to the United States, and, in fact, to the freedom-loving peoples of the world, than victory in the present war. In or- der to obtain that victory it should be clear to all that our Nation's economy will be subjected to terrific strain. Consequently, Mr. Speaker, it appears that the time is here for us to make, as this editorial states, “a reassessment of our obligations to the rest of the world and decide which things are first.” We must never forget that our first obliga- tion is to the defense of our own Na- tion, our own form of government, and our own people. I therefore urge, Mr. Speaker, that the Committee on Foreign Affairs and the other committees of this body most closely concerned with the problems of war and economic stability give immedi- ate consideration to a reassessment of our obligations and a proper evaluation of the matter of recovery versus defense. The editorial to which I refer follows: Recovery Versus DEFENSE If Europe's need for military sid is as great as the administration suggests and as Europe itself contends the United States might well consider seriously the possibility of diverting some Marshall-plan funds to that more im- portant field. It probably would take an act of Congress to make the transfer legal but in the present emergency the vote on the matter would be pretty nearly unanimous. With the billions upon billions that Amer- ican taxpayers are being called upon to sup- ply for the war in Korea, this country’s econ~ omy is certain to be subjected to 4 back- breaking strain. The time cannot be far off when we will have to make a reassessment of our obligations to the rest of the world and decide which things are first. Insofar as the United States ts concerned nothing is more important than victory in the present war. If we fail to achieve that we shall not only lose face throughout the Orient but give the Soviet new cause for be- lteving that the onward march of commu- nism simply cannot be stopped in either the east or the west. So it is as much to Eu- rope’s ultimate interest as our own that the Korean Reds be decisively defeated. Under the circumstances the states of western Europe can hardly object if some of the money allocated to tts economic recov- ery is now used for purposes of its defense. It will mean, of course, that the Europeans will have to make certain sacrifices, but that’s the unhappy prospect ahead of Amer- icans, too, SPECIAL ORDERS GRANTED Mr. PHILLIPS of California asked and was given permission to address the House for 25 minutes on tomorrow and on Monday next, following the legislative business of the day and any other special orders heretofore entered.
1950 ADDITIONAL $1,500 DEDUCTION FROM TAXABLE INCOME OF MEN IN THE ARMED SERVICES Mr. SCRIVNER. Mr. Speaker, I ask unanimous consent to address the House for 1 minute, and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from Kansas? There was no objection. Mr. SCRIVNER. Mr. Speaker, in the immediate future many young men, and some older ones, who served so long and so honorably in World War II will again be in our Armed Forces. Many of them have just completed their GI training, have begun business or opened professional offices. They have married, acquired homes, started fami- hes. Their obligations are great; their opportunities for the future are dark indeed, with their lives again interrupted by military service. As yet the administration does not recognize the existing situation as war, nor even as a national emergency. Whatever this is in Korea, its effects on the men in service are the same as war. In World War II our military men were granted an additional $1,500 deduction from their taxable income. The Nation felt it was right that making the sacri- fice they did they should have a little less to pay than those who were not fighting the war. In other words, they should not have to fight the war and pay for it too. The men serving during this period— in this what-is-it in Korea—deserve the same—this exemption. Mr. Speaker, for these reasons I have just introduced a bill to give those fight- ing in this conflict that same additional deduction we gave the fighting men of World War II. They deserve it and I hope the bill will get immediate con- sideration. MILITARY AID TO KOREA FROM WESTERN EUROPE Mr. JAVITS. Mr. Speaker, I ask unanimous consent to address the House for 1 minute, and to revise and extend my remarks. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. JAVITS. Mr. Speaker, we just learn from the wires that an announce- ment has been made in the House of Commons that Great Britain will con- tribute ground troops to the fight in Korea; that the British Navy will be put on full war status. The ground troops will be accompanied by tanks and artil- lery to reinforce the American forces, and two fighter-bomber squadrons will also be sent there. Mr. Speaker, this verifies what those of us who fought for the mutual defense assistance program have contended— that the backbone of the military capa- bility of the free peoples still remains in western Europe. We hope this action by Great Britain will be the precedent to induce India, Pakistan, and other Pacific powers, who have not yet responded to the United Nations’ request, to make their contribution to the Korean con- CONGRESSIONAL RECORD—HOUSE flict, For this conflict is for them a life- and-death struggle, a struggle for their very survival. If the United Nations can- not enforce military sanctions against naked military aggression, then every small, every new nation stands in grave peril of being swallowed up and seeing its integrity gone. By their response to the UN they can create the conditions for the beginning of a Pacific pact, and finally the great strength which we are now beginning to see in the Atlantic Pact can be mar- shalled for the security of the Far East. What is so all-important to the free peoples of Asia is that we have shown in our handling of the Atlantic Pact that in arms as in economic aid, we follow the principle of self-help and mutual co- operation. It is our allies we help to do the job, standing on their own with dig- nity and independence. This should be an attitude highly approved by peoples who have so capably settled the issue of colonialism The SPEAKER. The time of the gen- tleman from New York has expired. EXTENSION OF REMARKS Mr. THOMPSON asked and was given permission to extend his remarks and include an article. Mr. BURNSIDE asked and was given permission to extend his remarks in two instances. Mrs. WOODHOUSE asked and was given permission to extend her remarks and include an editorial from the Amer- ican Banker. Mr. LANE asked and was given per- mission to extend his remarks and in- clude extraneous matter. Mr. LICHTENWALTER asked and was given permission to extend his remarks and to include an editorial. Mr. HOFFMAN of Michigan asked and was given permission to extend his re- marks 1n two instances and include cer- tain newspaper articles in each. Mr. BRYSON asked and was given permission to extend his remarks and in- clude newspaper clippings. Mr. PATTERSON (at the request of Mr. Boces of Delaware) was given per- mission to extend his remarks and in- clude extraneous material. Mr. SADLAK asked and was given per- mission to extend his remarks and to include a newspaper article. Mr. LEFEVRE asked and was given permission to extend his remarks and include an editorial. Mr GROSS asked and was given per- mission to extend his remarks, and in- clude a newspaper editorial, Mr. D’EWART asked and was given permission to extend his remarks and include a tabulation. Mr. HOEVEN asked and was given per- mission to extend his remarks in two instances and in each to include extrane- ous matter. Mrs. ST, GEORGE asked and was given permission to extend her remarks in four instances, and to include editorials by Mr. Frank Waldrop. Mr, HORAN asked and was given per- mission to extend his remarks and in- clude a news release. Mr. HESELTON asked and was given permission to extend his remarks in two 11119 instances, in one to include editorials and the text of a bill. Mr. HAGEN asked and was given per- mission to extend his remarks in two instances and in each to include news- paper articles. Mr. BUCHANAN asked and was given permission to extend his remarks and in- clude an editorial and a letter to an editor. Mr. BIEMILLER asked and was given permission to extend his remarks in two separate instances, in each to include extraneous matter. Mr RANKIN asked and was given per mission to revise and extend the remarks he expects to make in the Committee of the Whole today and to include extrane- ous matter therein. EXPANSION OF WESTERN HEMISPHERE PRODUCTION OF ABACA Mr. McSWEENEY. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 717. The Clerk read as follows: Resolved, That immediately upon the adoption of this resolution it shall be in order to move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (8. 3520) to strengthen the com- mon defense by providing for continuation and expansion of Western Hemisphere pro- duction of abacé by the United States. That after general debate, which shall be confined to the bill and continue not to exceed 1 hour, to be equally divided and controlled by the chairman and ranking minority member of the Committee on Armed Services, the bill shall be read for amendment under the 5« minute rule, At the conclusion of the con- sideration of the bill for amendment, the committee shall rise and report the bill to the House with such amendments as may have been adopted and the previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit. Mr. McSWEENEY. Mr. Speaker, be- cause of the nature of the bill S. 3520, in providing for a revolving fund and also providing powers to the President to terminate this operation, I ask unani- mous consent that all points of order against the bill be waived. The SPEAKER. Is there objection to the request of the gentleman from Ohio? There was no objection. Mr. McSWEENEY. Mr. Speaker, I yield 30 minutes to the gentleman from Tilinois [Mr, ALLEN], and yield myself 7 minutes. The SPEAKER. The gentleman from Ohio is recognized. Mr. McSWEENEY. Mr. _ Speaker, House Resolution 717 makes in order the bill S, 3520, which is for the encourage- ment of the production of abacé in the Philippine Islands. I have gone care- fully into the question of abacaé, have gotten all of the information I could from the Library of Congress and also from the Department of Agriculture. I was rather surprised that the propaga- tion of this plant requires so much money but I find that this plant does not re-seed itself; it 1s somewhat similar to 8 banana plant or other tubers. The abacdé plant has to be taken from the ground and divided and the different bulbs planted separately, This makes it
11120 @ very expensive hand operation, and for that reason the amount of money re- quired in order to get the amount of pro- duction that we feel is necessary as a war measure, is rather large. Abaca fiber is similar to what we know as manila hemp. In the old days, espe- cially, it was used for caulking and other purposes, but today it is extensively used by our Navy and is an essential war product. For that reason we are asking you to help us encourage the production of this worth-while product in the Phil- ippines. T have a letter from the Embassy of the Philippines. They are very much inter- ested. They have some suggestions with regard to this bill, but on the whole they feel that it will be of tremendous value not only to business in the Philippines but also because it is so necessary for war uses. It may be of interest to the Mem- bers to know that at one time this pro- duction was carried on under private enterprise, but it was found that the land being devoted to the production of bananas was much more profitable than the land that had been allocated for abacé. For that reason private enter- prise went out of the abac& production and increased their production of ba- nanas. So at this time it means that in order to have this much needed com- modity, we as a Congress must make provision so that we can provide for what we call a war necessity. Iam sure it will also help the economy of the Philippines and help to balance her production and will result in their producing something to sell on the markets of America. Mr. STEFAN. Mr, Speaker, will the gentleman yield? Mr. MCSWEENEY. I yield to the gen- tleman from Nebraska. Mr. STEFAN. In discussing the letter that the gentleman received from the Philippine Embassy, may I say that I think the Philippine people who are en- deavoring to recoup their abacé produc- tion because of the scarcity of that ar- ticle in the United States are very favor- able to the passage of this bill if an amendment could be put in the bill to aid them in their program to help along in the production of abac&, which we need 80 badly. Is the gentleman favorable to that amendment? Mr. McSWEENEY. I think the gen- tleman’s suggestion is a good one. I have gone over this program. I do not think the amendment would be detrimental to the bill. Mr. STEFAN. Has the gentleman read the proposed amendment? Mr. McSWEENEY. Does the gentle- man have it there? Mr. STEFAN. I have it here. Mr. McSWEENEY. I thank the gen- tleman. The Embassy of the Philippines has made the following suggestion: All abacé fiber produced under this act shall be utilized solely to fulfill the objec- tives for stockpiling under the Strategic and Critical Materials Stock Pile Act (60 Stat. 596) as amended, and when the objectives of such act es amended have been fulfilled, report shall be submitted to Congress. Noth- ing herein shal! prevent rotation of such fiber as produced under this act where neces- gary to prevent deterioration, as provided in section 3 (d) of the Strategic and Critical CONGRESSIONAL RECORD—HOUSE Materfals Stock Pile Act (60 Stat. 596) as amended, but such rotation shall be effected only after research and determinations under section 3 (b) of this act, Mr. STEFAN. The gentleman would not oppose an amendment like that? Mr. McSWEENEY. From my limited knowledge, sir, I do not believe we could oppose that because it would help the economy of the Philippines and would in no way jeopardize our position with re- gard to the need for that particular com- modity. Mr. STEFAN. I have a communica- tion from the Munitions Board indicat- ing they are very much interested in this. Mr. McSWEENEY. I appreciate the gentleman's contribution. I feel, though, that should be within the control of the committee, rather than the Rules Com- mittee. As one who has studied this I believe it in no way jeopardizes the good that the bill will render to the Philippine people. . Mr. STEFAN. In connection with the United Fruit program in Central Amer- ica where they have been planting bana- nas on land that had been in abaca, has the gentleman some assurance there will be no destruction of the present abaca& area? Mr. McSWEENEY. No, I have not, but I would not see any reason why there should be. In other words, I think they have allotted land for the production of bananas in sufficient amount to take care of their required production and I can see no reason for an encroachment upon the present abaca land. Mr. STEFAN. I thank the gentleman. Mr. CELLER. Mr. Speaker, will the gentleman yield? Mr. McSWEENEY. I yield to the gen- tleman from New York. Mr. CELLER. In a communication re- ceived from the distinguished Delegate from the Philippines, we have statements to the effect that this bill may unduly aid the United Fruit Co., which seeks to cultivate this product in South Amer- ica, and that there is a direct connection between the United Fruit Co. and the largest cordage manufacturer in the United States, that there is an interlock- ing directorate between the Plymouth Cordage Co., of Plymouth, Mass., which is designated as the largest cordage manufacturer, and the United Fruit Co. Has the gentleman any information on that score? Mr. McSWEENEY. No; I have not with regard to any interlocking directo- rates. Mr. HERTER. Mr. Speaker, if the gentleman will yield, I shall be very glad Jater on in the debate to go into the point that the gentleman raises. Mr. McSWEENEY. I thank the gen- tleman for that contribution. The SPEAKER. The time of the gen- tleman from Ohio has expired. Mr. ALLEN of Illinois. Mr. Speaker, I yield 10 minutes to the gentleman from Massachusetts (Mr. HERTER]. Mr, HERTER. Mr. Speaker, I am in favor of the rule that is now before us, but am taking a few minutes of time to explain the past history of the develop- ment of this particular fiber in Central America. JULY 26 About 20 years ago the United States Department of Agriculture brought from the Philippine Islands a few abacd plants which it tried experimentally to propa- gate in the Republic of Panama. Through the United Fruit Co. in the Republic of Panama and in Honduras and in Costa Rica a number of experi- mental laboratories were established in which all types of tropical vege- tation are grown experimentally in order to find which grow best in those par- ticular climates. That was true of this particular plant. Before the war, in 1937 and 1938, our Navy Department evidenced a great in- terest in the experimental work that was being done on this plant. They asked the fruit company, experimentally, if they could enlarge their plantings in order to try out over larger acreage the growth of this particular fiber. That was done over first 1,000 acres and then 2,000 acres. Those acreages represented the only ones in the Western Hemisphere that grew this particular form of what is generally called manila hemp. It proved to be a godsend during the war period when the Philippines were cut off and there was no other available source of supply. At that time the Government of the United States asked the fruit company if they could extend the acreage of this particular product. This was done in Costa Rica, Honduras, Panama, and Guatemala. It was done by the fruit company at cost to themselves as a part of the war effort. They used their own land, for which they charged nothing. They were glad to make that contribu- tion to the war effort. They acted as agent for the Reconstruction Finance Corporation. When the war ended the fruit company made it very clear that they did not wish to continue with the operation. However, the Munitions Board asked them to continue with the RFC arrangement. T-.is bill is here because of the request of the Government that the fruit com- pany act as managing agent for the ex- tension of the acreage which had already been planted as a precautionary meas- ure against our again being cut off from the supply in the Far East. I have had an opportunity to see the letter which has been referred to from our former colleague representing the Philippine Government in regard to this matter. In that letter he unfortunately made a few misstatements in regard to the fruit company. I have before me a letter from the fruit company which I ask unanimous consent to insert in the Recorp at this point. The SPEAKER. Is there objection to the request of the gentleman from Massachusetts? There was no objection. Mr. HERTER. The letter reads as follows: Unrrep Feurt Co., Boston, Mass., July 25, 1950. The Honorable Cxnistian A. HEATER, House of Representatives, Washington, D. CO. My Dear Mr. Herrrr: You were good enough to show me the report attached to the letter from His Excellency J. M. Elizalde, Ambassador from the Philippines, to you
1950 Gated July 24, 1950, regarding S, 3520 and its companion bill, H R &351, providing for the expansion of the abacd industry in this hemisphere. In section 5 of this report en- titled “Private Interest” there are so many inaccuracies and unwalranted inferences ro- garding the United Fruit Co that I feel that it is necessary in the interest of my company to correct them When the war with Japan cut off the sup- plies of manila hemp in the Philippines, the United Fruit Co had the only seed bed of abacé tn this hemisphere. It had developed at its own cost about 2,000 acres of this plant in the Republic of Panama Upon request of the Government, the com- pany was pleased to undertake the cxpan- sion of the production of manila hemp in Cential Amcrica as a defense measure for the account of the Government and without profit to the company. Accordingly, the company entered into contracts with the Government whereby it turned over at cost its 2,000 acres of abaca, the value of which was inciiculable, and undertook to expand the cultivation of this plant on its lands dn Central America. No charge was made for the use of the company’s Jands on which the abaci was planted The company’s traincd agriculturists, including persons particulaily trained in the cultivation of abaca, were made avallable to the Govern- ment The Government agreed to pay the salaries Of those employees engaged exclu- sively in the abuc&i projects but the advice and seivices of its piincipal agricultural cx perts were given to the Government with- out charge, Also, the company had lJaige facilities in Central America, such as rall- roads, wharves, labor camps, hospitals, water supply, and other necessary facilities which were made available to the Government and which could not have been duplicated by the Government except at enormous cost and great loss of time. In Panama and Costa Rica where the operation first started, the company received no payment whatso- ever for the use of houses, camps, and other facilities of the company used cxclusively in abaca operations. Later, in the develop- ment of projects in Guatemala and Hon- duras, the company received ior the use of such facilities employed exclusively in the abaca operations a rental equal to deprecia- tion. Where the facilities of the company were used jointly by the company and the Government, the Government paid only its pro rata cost of the maintenance and opera- tion of such facilities No charge was made and no reimbursement received for the management of the projects, including the dime of its executives and experts of the general office who devoted a great deal of their time to the skillful direction of the work, The contracts expired on December 31, 19:8, and since the war was over and the company was not interested in the produc- tion of abact as such, it desired to terminate its connection with this business. But upon the insistence of the RFC that the continu- ence of the abacaé projects was of importance in the national defense, the contracts were renewed with some modifications for an addl- tional period of 5 years The only important differences between the new contracts and the old contracts are the following. In ro- turn for its management and direction of the projects, the company is to receive a manage~ ment fee of 15 percent of the net cash profit with a minimum of $1 per month per acre of cultivations from time to time under oper~ ation. This foe also includes compensation for the use of the company’s lands planted to abacé. Salaries of officers of the company and expenses of the general office are not to be reimbursed. Where tools, equipment, ma- chinery, and other fixed assets owned by the company are used exclusively in abac& oper~ ations, the Government pays only the cost of maintenance, operation, and repair plus & CONGRESSIONAL RECORD—HOUSE reasonable allowance for depreciation and insurance. The division of overhead expense of local facilities and personnel jointly used by the company and the Governmont ts to be determined in accordance with formulaa worked out by outside auditcrs and is subject to review ut any time. Contrary to the statements made in the report, the United Fruit Co. does not own a single share of the stock of any cordage com- pany and js in no way interested in the cord- age business. There is not and has not been any interlocking directorate between United Frult Co and the Plymouth Cordage Co, One of cur 25 duectorg was also 2 director of the Plymouth Cordage Co, f10m December 1, 1943, to December 3, 1947 He was not a director of the cordage company at the time the original contracts were made or at the time the contracts were renewed No other director of the United Fruit Co holds a direc- torate jn the Plymouth Cordage Co or any other cordage company, All fiber produced by the projects belongs to the RFC which dis- poses of it as it sees fit, and the company has no control ovei or intervention in the sale or other distribution of the fiber My company is proud of the contribution it was able to make to the war effort in quickly expanding the production of abac& at a time when it was so urgently needed, At a time when its ships had been requisl« tioned, its production curtailed, and its profits severely reduced, it did this without proht and without reimbursement for the services of its executives and experts whose skill and direction contributed so much to the success of the program. We were able to develop -8,000 acres of abacé which supplied precilcally all of the manila fiber that was available to this Nation during the war. My company has no interest in the production of abaca as such and, as a business matter, it would piefer to recover its lands and facili- ties und terminate its connection with the business We have cooperated with the pro- gram for the purpose of national defense, and our willingness to continue to lend our aid and cooperation in connection with this mat- ter is based solely on our desire to be of scivice in the time of national emergency. Sincerely yours, Sam G. BaGGett, Vice President and General Counsel, United Fruit Co. Mr CELLER. Mr. Speaker, will the gentleman yield? Mr. HERTER. I yield to the gentle- man from New York. Mr CELLER Does that letter cover the question that I propounded to the previous speake1 ? Mr. HERTER. It specifically covers that, and I shall be very glad to read that passage In general it rehearses the whole relationship of the fruit company to the Government 1n this operation. Mr. CELLER. I think it would he well to put it in the Recor» at this point. Mr. HERTER. I shall be glad to do that: Contrary to the statements made in the report, the United Fruit Co. does not own & single share of the stock of any cordage com- pauy and is jn. no way interested in the cordage business. There is not and has not been any inteilocking directorate between United Fruit Co. and the Plymouth Cordage Co. One of our 25 directors was also a di- rector of the Plymouth Cordage Co. trom Becember 1, 1943, to December 3, 1947. He was not a director of the cordage company at the time the original contracts wera made or at the time the contracts were re- newed, Mo other director of the United Fruit Co. holds a directorate in the Plym- outh Cordage Co. or any other cordage come 11121 pany. All fiber produced by the projects belongs to the RFC, which disposes of it as it sees fit, and the company has no control over or intervention in the sale or other distribution of the fiber, Mr. CELLER. Mr. Speaker, will the gentleman yield? Mr. HERTER. I yield to the gentle- man from New York. Mr. CELLER, As I understand the remarks of the gentleman, the United Fruit Co. will be the managing agent concerning the disposition of its prod- ucts; 1s that correct? Mr. HERTER. That is true only as far as the preparation of the product is concerned Mr. CELLER. The product is grown, and loans are offered by RFC to the United Fruit Co. for the growing of the product? Mr. HERTER. There are no loans made to the United Fruit Co. The com- pany produces the fiber for the RFC un- der a management contract. The RFC owns and controls the fiber. Mr. CELLER Who will control the allocation of the product? Who will control the sale price of the product? Mr. HERTER The Reconstruction Finance Corporation handles the prod- uct entirely. Mr. CELLER, So that if by chance a cordage company in the United States wants to buy any of this product it must go to the Reconstruction Finance Cor- poration as a condition precedent to purchase? Mr. HERTER, Absolutely. It would go to the Reconstruction Finance Cor- poration, or perhaps the Munitions Board, depending on whether it has been stockpiled. Mr. CELLER' The gentleman is quite convinced that the United Fruit Co. would have no control over either the price at which the product would be sold or the allocation of the product or the division of markets? Mr. HERTER. Absolutely. In fact, the United Fruit Co. would infinitely prefer not to be concerned with this matter, and is doing it entirely as a mat- ter of assisting the Government. Mr. CELLER. What is the compen- sation the United Fruit Co. would re- ceive for this work? Mr. HERTER. The compensation is outlined 1n the letter that is given here. A new contract was drawn up in 1948, when the fruit company did not wish to continue with this business. As I recall it, the compensation is 15 percent of the net cash profit made by the Reconstruc- tion Finance Corporation. Mr. CELLER. All expenses of onera- tion, including the cost of the land, the labor cost, the maintenance cost, and the building cost would be defrayed by the Reconstruction Finance Corporation? Mr HERTER. Not all,no. No cost of land or facilities, such as railroads, docks, housing, hospitals, and so forth, All the management expense is handled entirely by the frult company. This is a difficult and a tricky plant, as nearly all tropical vegetation is, 10 grow. Mr, CELLER. Is that 15 percent of the net profit or 15 percent of the gross profit?
11122 Mr. HERTER. The net profit made by the Reconstruction Finance Corpo- ration. Mr. CELLER. Has the gentleman considered whether or not that is a rath- er large sum to be obtained from an operation of this sort? Mr. HERTER. My impression is that compared with the over-all operations of the fruit company and considering the difficulties of the operation and the responsibilities involved it is infinitesi- mal. Mr. SMITH of Wisconsin. Mr. Speak- er, will the gentleman yield? Mr, HERTER. I yield. Mr. SMITH of Wisconsin. I know the gentleman has studied this question very closely. I am wondering if he knows why the hemp plants in this coun- try’ are being closed while we are at- tempting in this instance to advance $35,000,000 for the development of the same kind of program overseas. In Wis- consin we have a number of hemp plants. I have one in my own county. Just last Saturday I went by it and sawa big sign in front of the building, ‘Closed; for sale.” Are we going to forget about that war industry we had? What con- sistency is there in this kind of program? Mr. HERTER. I am afraid I am not qualified to answer the gentleman's question. Perhaps somebody from the Committee on Armed Services could an- swer that question. Mr. SMITH of Wisconsin. I should like to have that question answered. Mr. CRAWFORD. Mr. Speaker, will the gentleman yield? Mr. HERTER. I yield to the gentle- man from Michigan, Mr. CRAWFORD. I know the gentle- man wants to be absolutely fair in this whole presentation. The United Fruit Co. gets many benefits, not just 15 per- cent of the net profits. If there are no net profits whatsoever, the United Fruit Co. gets $1 per acre plus other benefits. We paid for dockage facilities and we paid for many things during the war. When bananas were not able to move into the channels of trade the United Fruit Co. benefited from that. I know the gentleman wants the record to be clear on this. I am not going to oppose this bill. This bill should have the amendment which was discussed previ- ously by the two gentlemen. I would like to ask the gentleman if he js not in favor of the amendment. Mr. HERTER. I would personally have no objection to the amendment, insofar as I know what it means, al- though there is one phase of it which I do not know the answer to, but possibly the members of the Committee on Armed Services do, and that is on the question of spoilage. I do not know how often replacements have to be made on ac- count of spoilage. Mr. CRAWFORD. The gentleman pointd out that this is a very delicate and intricate operation and these agree- ments running between the Reconstruc- tion Finance Corporation and the United Fruit Co. are just as delicate and tech- nical as you can imagine. So there is a big story in this for the consumers of twine and rope and for the Army and CONGRESSIONAL RECORD—HOUSE Navy and for the defense of the United States, as well as for the Philippine Islands and Central America, and for these some 42 plants that we built during the last war. The SPEAKER. The time of the gen- tleman from Massachusetts has expired. Mr. McSWEENEY. Mr. Speaker, I yield the gentleman three additional minutes, if he will accept the time. Mr. HERTER. I thank the gentle- man. Mr. Speaker, I would like to make an observation in connection with the state- ment just made by the gentleman from Michigan. The United Fruit Co. would under no circumstances be engaged in this business as a commercial business. It has tried to get out of it and it would like to get out of it again. It is engag- ing in the business solely because the Government of the United States is ask- ing for it, and for that and no other reason whatsoever. If Congress should decide to abolish the whole thing, !t would not hurt the feelings of the United Fruit Co, in the least. They would have their lands and other facilities back. They are doing this in the national interest. I am thoroughly convinced of that, not only from the documents, but from my own conversation with the concern, Mr. CELLER. Mr. Speaker, will the gentleman yield? ° Mr. HERTER. I yield. Mr. CELLER. I believe what the gen- tleman says is perfectly true. I know Mr. Zemurray, who is the head of the United Fruit Co. He is a very distin- guished, patriotic gentleman who would want to aid the war effort in every way, particularly if he can increase the use of this very essential product. But I think we ought to have all the facts, and I know the gentleman wants to give all the facts, Mr. HERTER. I fully agree with the gentleman. Mr. CELLER. Will the United Fruit Co. receive 100 percent of the moneys they expended for, let us say, the rail- roads and docks and roads and bridges and warehouses and administrative buildings which will be erected or have been erected? Mr. HERTER. No. There has been no capital expenditure by the Govern- ment of any kind whatsoever. All of that has been done by the fruit com- pany itself, using its own facilities. Mr. CELLER. So that having used its own money for these constructions, it of course will own these buildings and own these bridges and docks and the United States Government will not have contributed one cent to the construction of those facilities? Mr. HERTER. I do not believe the fruit company will be in any way en- riched by this operation. Mr. CELLER. That is not responsive. It is only partially responsive. Would the Government of the United States be expending any sums of money on these constructions which would be availed of by the United Fruit Co. after this operation is concluded? Mr. HERTER. None that I know of. In fact if the Government of the United JULY 26 States had to carry on this operation by itself, as a governmental operation, and had to build all of its own facilities, it would cost ten times as much. Mr. McSWEENEY, Mr. Speaker, will the gentleman yield? Mr. HERTER. I yield. Mr. McSWEENEY. I was unable to find out from the Department of Agri- culture the exact cost per acre on the production end. These plants are not planted by seed, but I understand that the plants have to be subdivided. Mr. HERTER. That is correct, the plants are subdivided. Mr. McSWEENEY. Yes, the plants have to be subdivided and it is a very expensive operation. Was the gentle- man able to find out what the cost per acre was? I was not able to get that information. Mr. HERTER. Ido not have that fig- ure, either. Mr. McSWEENEY. Mr. Speaker, I yield to the gentleman from Nebraska (Mr. STEFAN] such time as he may re- quire, Mr. STEFAN. Mr. Speaker, I ask unanimous consent to extend my re- marks at this point in the Recorp, and include a statement by J. S. McDaniel. The SPEAKER. Is there objection to the request of the gentleman from Ne- braska? There was no objection. (The statement is as follows:) (The writer of this memorandum sup- ports immediate passage of S. 3520 or H. R. 8361 with amendments designed to support (1) national security, and (2) Philippine economy.) MermogaNnpuM Revative ro 8. 3520 ann H. R. 6351 (IpeNTICAL Brits), ABACA AcT oF 1950 (Introduced by Senator Tyornes, May 1, and Congressman VINSON, May 3: Referred to Armed Services Committees of the Senate and House) Sponsor: Department of Defense (Muni- tions Board). Purpose: To continue and expand produc- tion of abacé (manila fiber) in the Western Hemisphere by the United States Govern- ment. Product description: Abaca is a hard, leaf (miscellaneous) fiber used in the making of marine and other cordage. It is classified by the Munitions Board as a highly strategic and crtical material which cannot be grown in the Unted States. Substitutes are sisal, henequen, jute, synthetic products such as nylon, paper, wire rope, and mechanical means of materlal-handling not requiring manila rope (escalator, etc.). The possibility of substitutes, at various price levels, tends to integrate the problem of abac& and fibers commonly used for other products such as agricultural twines, and, therefore, the matter must properly be con- sidered coordinately and not separately. History of Central American abacé: Abaca is indigenous to the Philippines where, prior to World War II, 95 percent of the world's requirements were produced. Abac&é requires growing conditions—rainfall, suitable land, etc.—such as are found ideal in the Philip- pines, reasonably good in other Southeastern Asia areas and possible, at great relative cost, in Central America. Abacé was introduced into the Western Hemisphere (Panama) in the early 1920's, with the encouragement and help of the United States Government, es a national security measure, By 1941, a relatively amaul
1950 quantity of 3,000 acres was being grown on an experimental basis by the United Frutt Co. Immediately following Pearl Harbor, the plantings were expanded to approxi- mately 30,000 acres to supply United States military requirements. This was by contract between the Reconstruction Finance Cor- poration and the United Fruit Co. Since VJ-day, these plantings have been continued under directive of the President of the United States to the RFC, acting under authority to continue wartime projects for liquidation purposes. The last such direc- tive, it is understood, was issued March 30, 1950, and probably is for a relatively short time, probably not beyond June 30 or July 31, 1950. It is also understood that it is unlikely that turther directives will be issued without action by the United States Con- gress, Abac4’ production in Central America has been disappointing. Because of one difficulty or another, the 30,000 ccres planted has al- ready been reduced to 25,879 acres. Produc- tion was expected to reach 64,908,200 pounds in 19149 but official etatistics show it was cnly 30,229,050 pounds. Now it is planned to abandon or “butcher” harvest apprcximately 60 percent of the existing 26,000 acres. While the cost of producing Central Amer- ican abaca is greatly in excess of Philippine costs, the quality is not considered us good as Philippine abac&, This is evidenced in the fact that prices ccnsumers have been willing to pay for Central American abacit are 1 to 2 cents lower per pound than for Philippine abaci. However, the quality ts adequate for making a reasonably good fin- ished product. The light color oi the Cen- tral American abac&t is due to machine de- cortication. Tight color in Philippine akacé& judicates high quality. But rope made from Central American abac& is weaker in tensile strength than that made trom Philippine abaca Problem: The problem in this situation, particularly in view of the present wording of the proposed legislation, falls into three categories, namely, (1) national security, (2) economtc, and (3) political. 1. National security: This is mentioned first solely because it is the one auproach of the proposed legislation as introduced. From this single viewpoint, it is important (a) to maintain a physical stockpile in the United States and (b) to continue a reason- able production in ncarby areas which can be rapidly expanded (2 years required for expansion to production) in time of emer- gency while the physical stockpile is being utilized. 2. Economic: Production on a subsidy basis, covered in 1 (a) above, should be held to a minimum in order (a) not to have un- necessarily an adverse effect on Philippine economy and (b) so that the “stockpile” (1 (a) above) can be purchased as cheaply as possible through encouraging rehabilita- tion of Philippine abaca where it can be pro- duced at the lowest cost, 3. Political: Any unnecessary United States subsidy production of abacaé in the Western Hemisphere, to the obvious detriment to Philippine economy, or any failure to write this legislation in such manner as (a) to recognize the Philippines’ inherent interest in abacé and (b) to carry out the solemn promises of the United States to assist the Philippines “in the full repair of tho ravages caused by war” (President Roosevelt, Octo. ber 13, 1943) will be considered by the Phil- ippines os a failure by the United States to live up to its international agreements. This will have political repercussions, not only in the Philippines, but in the entire Far East. WORLD SHORTAGE OF ABACA AND RESULTANT EXCESS COST TO UNITED STATES It fs an established fact that there is a shortage of hard fibers in the world today, The following statistics relate to abacd, CONGRESSIONAL RECORD—HOUSE Abaca Philippine production prewar Pounds (1,200,000 bales) ---...-.-... 330, 000, 000 Sumatra production prewar... 10, 000, 000 Central American production Philippine production, 1949_--. 144, 375, 000 Central American production, 1049 22 80, 500, 000 0 “774, 875, 000 Difference, prewar and postwar production ..._ 166, 625, 000 Estimated annual production per acre, 1,500 pounds. New acreage planned in pro- pored legislation for Western Hemisphere (21,000 times 1,500 pounds) ~-.--2- ee eee Balance, requirement — world production out- side Western Hemi- sphere ._.---..-------- 135, 125, 000 New acreage required outside Western Hemisphere, assuming 590,000 acres in that aren as provided in 8. 3520 or H. R. 8351, 90,000 acres (36,000 hectares). NotTre.—There is a world shortage of sisal fiber currently, due in part to the shortage of abaca and the demand for sisal as a sub- stitute for abacd, due to price, et cetera. Assuming that the passage of this legisla- tion will discourage new production world- wide, at least temporarily (discussed herein- after) and that the world shortage and resultant high prices would therefore con- tinue, the cost to the United States of such legislation (exclusive of direct charges of the Western Hemisphere operations) would be as follows: 31, £00, GOO HARD’ FIBER PRICES Prices of abac& (Davao “I” grade, f. 0. b. New York) averaged 7.6 cents per pound United States Currency, 1935-38 average; this price is approximately 26 cents ner pound today. Sisal prices, approximately 4 cents per pound in the decade prior to World War IJ, are now approximately 16 cents 8 pound. Excess costs to United States per year, public and private [Due to world shortages of hard fibers com- puted at 10 cents per pound for abacé and 5 cents per pound for sisal and henequen) U. S. Government stockpile (as- sumed purchases of 30,000,000 pounds annually) : Abaca ...--------- +e 83, 000, 000 Sisal and henequen-._..._. 1, 200, 000 U.S. Navy, abacd purchased (as- sumed purchases of 5,000,000 pounds annually)!.......---- 500, 000 U. 8. Government agencies (armed eervices) : cordage pur- chased (based on 1949)...._. 1, 000, 000 5, 700, 000 SCAP, purchases (based on 1948- 49 fiscal): Abacé& -22- 2 ee - 8,500, 000 Sisal and henequen._.__ - 1,250, 000 Subtotal...--.-.--.--.-- “— 10, 450, 000 ECA procurement authorizations based on current rate); Abacé . 22-200 2002 ee - 8,000,000 Sisal and henequen..._.... 1, 500, 000 Subtotal, purchases from U.S, Government funds. 14, 950, 000 Private purchases, cordages, United States (1949)......___ United States farmers’ purchases, agricultural twine (1949).... 6, 250, 000 Total, excess cost to United States due to world shortage of hard fibers... 29, 200, 000 7Purchases of cordage outside United States, probably at least 5,000,000 pounds annually, should be added, 8, 000, 000 11123 PASSAGE OF 8S. 3520 OR H. R. 8551, AS INTRO~ DUCED AND WITHOUT AMENDMENT, WILL DIS- COURAGE PHILIPPINE ABACA REHABILITATION, ALREADY BTARTED As introduced, the proposed legislation provides only for continuation and expan- sion of Western Hemisphere production of abaca by the United States. Before the war Philippine abacé was exported, in weight, approximately one-third to the United States, one-third to Japan, and one-third to Europe. The United States was the best abacd cus- tomer of the Philippines in dollars becauce it purchased the top grades. Europe pur- chased the intermediate grades and Japan the lower grades. Production on 60,000 acres in Western Hemisphere, at 1,500 pounds per acre, would be 75,000,000 pounds annually, or approxi- mately 75 percent of the United States cord~ age and twine manufacturers’ annual re- auirements. Removal of this market from Philippine exports would naturally deter capital from investing in Philippine abaca. Financing Philippine abacd rehabilitation is required. It is dificult under any circum- stances to get United States capital to move into foreign areas, as evidenced by the Presi. dent's proposals in the point 4 program. Passage of any legislation indicating or inferring a policy of the United States being solely interested in Western Hemisphere abaca would naturally deter capital, pri- vate or public, from flowing into abacéi oute side of the Western Hemisphere. There can be no purpoce served in trying to expand abac&i production by 30,000,000 pounds in the Western Hemisphere—a possi- bility somo United Siates Government per- sonnel believe unattainable—if such efforts would discourage or adversely affect new Philippine abacé production, where at least 135,125,000 pounds additional production its required, even if the objectives of the pro- posed expanded Western Hemisphere pro- duction are maintained. PHILIPPINE ABACA REHABILITATION Philippine abacé rehabilitation is under Way on a large scale. In January of this year the Philippine Government, desirous of promoting the re- habilitation of the abaca industry and recog- nizing the necessity of large-scale, efficient, private enterprise, entered into a contract with private enterprise to clear, plant, and develop 18,500 acres of government land in Mindanao. It is on this island that the Japanese grew abacé so successfully prewar. Work has been under way on thie project for zome months, and the best available personnel in the world has been employed to carry out same, In working out these plans there has been complete cooperation from the President of the Philippines, his Cabinet, the Supreme Court of the Philippines, business interests in the islands, and the American Embassy, all conscious of the importance of Philippine abacé to Philippine economy. The Philippine Government is now con- templating similar arrangements by granting to the Boy Scouts of the Philippines and the University of the Philippines 35,000 acres for abacaé production. Several large private groups are waiting only for action on this proposed abaca legis- lation now under consideration by the United States Congress before proceeding with plans for (a) new plantings and (b) rehabilitation of existing plantings in the Philippines, all patterned on the model contract developed in January last, ABACA IMPORTANT TO P3IILIPPINE ECONOMY So far as Philippine economy is concerned, abacé is of utmost {mportance. In dollar value, it has represented, over the years, 10 to 14 percent of total Philippine exports, It is currently the principal exportable item from the Philippines to hard-currency areas. In 1938, there were over 155,000 farms with
11124 approximately 700,000 acres planted to abac& in the Philippines. Approximately 800,000 Filipinos, of a total population of 16,000,000 were dependent upon abac& as their sole source of cash income. Every President of the Philippine Commonwealth and Republic has agreed that abacé is one of the, if not the most essential, crops grown in the Philip- pines, for social and economic reasons. It is the only commodity produced in the Philip- pines that is practically noncompetitive with production in other areas. AMENDMENTS SUGGESTED TO PROPOSED LEGISLATION Attached hereto is a copy of the proposed legislation as introduced, showing thereon amendments suggested to accomplish the changes indicated above In suggesting these amendments, the following objectives have prevailed. 1. They leave the Munitions Board pro- gram for Western Hemisphere abac& un- changed, 2. They avoid requesting any authority to permit any areas, other than Western Hem- isphere, to participate in the authority or appropriations authorized for Western Hem- isphere abac&; 3. They establish a policy of the United States being interested in an adequate pro- duction of abac& in any or all suitable areas of the world, but without requesting any au- thority for appropriations for such purposes, and 4 They reiterate existing authority for loans, on a reasonable repayment basis, to aid in adequate production of abacd in areas other than the Western Hemisphere Of course, this existing authority is likewise available to the Western Hemisphere now under existing law. These suggested amendments are designed to avoid any statement or inference in any legislation enacted that the United States is solely interested in Western Hemisphere abaca Respectfully submitted J. 8 McDani.. Mr. McCSWEENEY. Mr. Speaker, I yleld 5 minutes to the gentleman from Michigan [Mr. CrawForp]. Mr. CRAWFORD. Mr. Speaker, this is a bill which is of vital interest to the national defense of the United States, not only from the standpoint of the mili- tary operation, but from the standpoint of peacetime operations or industrial op- erations where cordage—that is soft and hard fibers and rope and twine and prod- ucts of that nature—come into the pic- ture. Let us review this very briefly be- cause we have very limited time on this. During the war we did build these plants in the United States for the pur- pose of supplementing the fiber supply. We built plants which produced what I would term soft fiber, which can be used in many operations, but soft fiber, as everyone knows, is no good for the Army and Navy where tensile strength is con- cerned. Mexican hemp has never been, and perhaps never will give as fine re- sults as the fiber from the abac& plant. The best abacé& plant is grown in the southern island of the Philippines, Min- danao, Only about 30 percent of the typhoons which strike the Philippine Islands hit the southern end of the island of Mindanao. That is the natural home of the abac& plant, where you have long tensile strength fiber that grows any- where from 9 to 18 feet in length. That is, the fiber from a single plant will run from 9 to 18 feet, of a very fine color and fine grade and great tensile strength. This bill is an addition to the Federal CONGRESSIONAL RECORD—HOUSE operations carried on by the Federal Treasury in Central America, as pointed out by our friend the gentleman from Massachusetts (Mr. Herter]. During the war period, and prior to the war, we did finance experimental work down there. We did great service for the United Fruit Co., as well as the United Fruit Co,, perhaps giving some service to the United States. These big indus- trial companies do not generally go around making donations to the Federal Treasury where military appropriations are involved. I will have to be shown be- fore I will be convinced that the United Fruit Co. made any donation to the Fed- eral Treasury. This is the statement in the bill: Such surveys and research may be under- taken as are necessary or desirable to obtain the best available land in the Western Hemi- sphere for the production of abacé, the best development of abac&é and development and maintenance of the plantations for the pro- duction of abacé established on such land, and the most economical and practical proc- essing and disposition of such fiber and by- products as result from the production of abac& on such land. An amendment has been mentioned which should go into this bill. Every day we are sustaining and defending the Philippine Republic. There are some 100,000 bales of abaca fiber in the Philip- pines today which should be in the na- tional defense stockpile. What efforts are being made to put that in our stock- pile? That is one of the questions I raised yesterday, and I raise it again to- day. Abacd& production in the Phuilip- pines in 1947 rose to nearly 800,000 bales, They did what they called “butchered the harvest.” That means they har- vested the plants in advance of maturity so as to get the fiber on the world’s mar- ket and get it into our hands to use it to make rope and other products of that nature. In 1948 the production dropped because the previous plants had been butchered. In 1949 it dropped further, and in 1950 it is estimated the produc- tion will go back up to approximately 800,000 bales. The Reconstruction Fi- nance Corporation, for instance, is tak- ing the production from this operation. Instead of putting it into stockpiles they are selling it in the open market. For instance, 3,000 bales were offered just re- cently. Two thousand eight hundred and seventy-five of those bales were picked up by private manufacturers in the United States. But we go out and subsidize these operations for national defense purposes. Why do we not put that prod- uct into the stockpile and use it for na- tional defense? You have got to sus- tain the Philippine economy one way or the other. When you step out of the Philippines you step out of the Far East, Make no mistake about that. This amendment should be in this bill so that this operation will be carried on for the benefit of the United States, reaching into the Philippine Islands. That 1s why I am going to offer the amendment. Mr, CELLER. If the abaca is stock- piled that would remove it from the commercial market, would it not? Mr. CRAWFORD. It certainly would. Mr, CELLER. And that is the pur- pose of the gentleman’s amendment; so we would not injure the economy of the JULY 26 Philippines. We can get this material from the Philippines now without any danger. Mr. CRAWFORD. That is correct. Mr. CELLER. And we can get it cheaper. Mr. CRAWFORD. You get it cheaper in this way, if we will let the Philippine abaca industry live, upon which we must absolutely depend—you will never get a sufficient supply from Central Amer- ica, I do not care if you put out 10 times the amount of this appropriation; you must depend on the Philippines. We must let this Philippine industry live. If we do and put the product on the market we will have abacé at 16 or 18 cents a pound instead of the 26% it brings today. Mr. CELLER. I thoroughly agree with the gentleman and shall support the amendment. Mr. ALLEN of TIlinois. Mr. Speaker, I yield the balance of my time to the gentleman from Michigan [Mr. Forp]. The SPEAKER. The gentleman from Michigan is recognized for 15 minutes. Mr. FORD. Mr. Speaker, I ask unani- mous consent to speak out of order. The SPEAKER. Is there objection to the request of the gentleman from Michigan? There was no objection. Mr. FORD. Mr. Speaker, at the out- sct let me state I yield to no citizen in my devotion to this country and I consider it an outrage that anyone in the House should accuse another of opposing legis- lation for the defense of our country. Yesterday, the gentleman from Indiana LMr. WaLsH), during the general debate on H. R. 9178 stated that he could point out that I had failed to vote for the de- fense of my country. Immediately on the floor of the House I challenged him to prove such a preposterous statement. The gentleman indicated that he would at some later date but at the time he uttered the accusation it was obvious he was talking to hear himself talk with ab- solutely no knowledge whatsoever as to how I had voted on any measure that has come before the House in the Eighty- first Congress. You will note in the printed Recorp today that the gentleman from Indiana during our colloquy frank- ly admitted he did not know me from Adam. For any member to accuse an- other without facts at hand to substan- tiate such a charge is irresponsibility of the worst sort. Earlier during this same speech in which he made the accusation concern- ing my voting record, the gentleman from Indiana patted himself on the back for never condemning any individual without a full and fair hearing or trial. Yet in the same speech, all within a pe- riod of 10 minutes, the gentleman from Indiana openly accused a colleague of voting against the defense of his coun- try when during our colloquy it was ob- vious he knew nothing concerning my voting record. Mind you, my colleagues, the gentleman from Indiana frankly ad- mitted he would have to supply the data from the Rrecorp when I challenged him to back up his statement. I respectfully suggest that the gentleman from Indi- ana be somewhat consistent when he
1950 contends he never accuses or condemns without all the facts at hand. The gentleman's own record in the House is rather interesting. During the first session of the Eighty-first Congress there were approximately 68 highly sig- nificant legislative issues on which there were roll call votes. On 16 of the 68 the gentleman was not recorded. It should interest the House that on these same significant issues I was recorded on 65 out of the 68 roll calls. This is a some- what better record than that of my col- league from Indiana. It should also interest the House that on 42 significant issues in the second ses- sion of the Eighty-first Congress the gentleman from Indiana failed to vote in 12 instances while my own record in- dicates my absence on only 3 occasions out of the 42, Again, if attendance to duty is a criterion, the gentleman from Indiana has a far worse record than I, I also have some other facts that are somewhat interesting. From the begin- ning of the first session of this Congress through June 30 there were 430 roll-call votes. I missed 17 out of the 430 votes, a@ 96-percent record of being on the job. The gentleman from Indiana was not recorded on 260 out of the 430 votes; in other words, he was on the job 40 percent of the time and was absent 60 percent of the time. In the Eighty-first Congress there were 205 votes from the beginning through June 30 on legislative matters, I missed 8 of those votes and was re- corded on 197 occasions. The gentleman from Indiana missed 66 of those votes and was here for 139 roll calls. There were 225 quorum calls from the beginning through June 30. I missed 9 of those roll calls. The gentleman from Indiana missed 104 out of the 225. Mr. Speaker, I ask you, Who is on the job, the gentleman from Indiana or my- self? Those of us who have been selected for this position of responsibility by the vot- ers of our respective districts owe it to ourselves and our constituents to be on the job. The gentleman's record in this regard is obviously inferior to my own. Perhaps if he was more conscientious about his attendance record the gentle- man from Indiana would know accurate- ly the voting record of his colleagues and would not fly off the handle and make such irresponsible statements concern- ing the record of a colleague. Yesterday, after the colloquy between the gentleman and myself, a Member of the House suggested to me that as a test of our loyalty I put my service record of 47 months in World War ITI against the gentleman’s Army record of approxi- mately 13 months, I assure you that that is not a fair and honest basis for any test of loyalty or devotion to our Na- tion’s security and welfare. Many of our fellow citizens served our Nation well and faithfully in a civilian capacity during World War II, perhaps even contributing more than we who were in the various branches of the armed services. What does perplex me, however, is why the gentleman from Indiana should igno~« rantly resort to derogatory and irrespon- sible statements of the kind made yes« terday on the floor of the House CONGRESSIONAL RECORD—HOUSE At the time the gentleman on the floor of the House made the reference to my voting record, as I said before, he had no facts, if ever there were any, to back up his accusation. Subsequently he appar- ently learned my name and checked the record. The gentleman from Indiana now states because I voted for or against certain selected proposals he has proved his point. The Members of the House should know the facts on this after- thought analysis. Let’s start with H. R. 5895, the Mutual Defense Assistance Act of 1949. This bill originally called for an authoriza- tion of $580,495,000 for North Atlantic Pact countries; plus $500,000,000 in for- ward contracting for North Atlantic Pact countries; plus $211,370,000 for Greece and Turkey, and $27,640,000 for Iran, the Republic of Korea, and the Republic of the Philippines. On August 18, 1949, on roll call No. 188, 209 Members of the House including myself voted for the Richards amendment. This amend- ment was approved by a bipartisan vote and it deleted the $500,000,000 for for- ward contracting but left intact the sum of $580,495,000 for military aid to our European allies. Does the gentleman from Indiana honestly contend that all of the 209 Members who voted for the Richards amendment “failed to vote for the defense of their country’’? It is interesting to note that the gen- tleman from Indiana condemns me for my support of the Richards amendment yet, according to the CONGRESSIONAL REc- ORD, my colleague from Indiana was not present and consequently cast no vote whatsoever on the Richards amendment. The record shows his absence at the time the vote was cast and furthermore he neither took the time or made the effort to pair himself cither for or against the proposal. One who condemns another should at least have a record of his own to exhibit, On the same day after the adoption of the Richards amendment a roll-call vote demanded on H. R. 5895 and on that vote Iam recorded in favor of the bill. Again the gentleman from Indiana, who so glibly and ignorantly accuses a colleague was not present. He cast no vote and was not paired one way or another. Two hundred and thirty-eight Members sup- ported the bill by a recorded vote. Inno vote in the Rrcorp on this day do I find an indication of the gentleman’s atti- tude on this bill, yet he feels free to com- ment on my vote on this issue. Subsequently the other body consid- ered H. R. 5895 and reduced the author- ized appropriation for North Atlantic Pact countries to five hundred million dollars but added five hundred million for forward contracting and included seventy-five million for the general area of China, The House and Senate con« ferees approved the appropriation au« thorization of the House—$580,495,000— and added the five hundred million for forward contracting as adopted by the other body. On September 28, 1949, the conference report on this legislation came before the House. After debate the gentleman from Wisconsin [Mr, Smiry] offered a motion to recommit. One hundred and _ nomic aid into Korea? 11125 ported that motion. I supported the motion to recommit because in my esti- mation such a vote was consistent with my vote on the Richards amendment. I ask this question: Does the gentleman from Indiana |Mr. WatsH) suggest that all of the 113 Members who voted to re- commit failed to vote for the defense of their country? On final passage of the conference re- port on H. R. 5895 the centleman from Indiana and I voted the same, namely, for the bill. This was his first affirmative support for the legislation and the sec- ond time during the first session that I had supported such legislation. Ob- viously his blasphemous comment of yes- terday, considering his own record, was not justified. The gentleman from Indiana [Mr. Wash] in his afterthought analysis makes much of my two votes on January 19, 1950, when the House considered and rejected the first bill authorizing eco- nomic aid to Korea. A brief review of the far eastern situation on that date is important to an understanding of why 193 Members of the House rejected this bill. Early in January of this year, just before this vote, both President Truman and Secretary of State Acheson turned their backs on and literally abandoned Formosa contrary to the views of Gen- eral MacArthur, who all along has con- tended we must maintain the integrity of Formosa against the aggression of Red China. With the President and the Sec. retary of State abandoning Formosa at that time was there any justification for pouring sixty million or more in eco- Of course not, This bill, H. R. 5330, proposed only economic aid to Korea, no military equip- ment, only United States dollars for the construction of power plants, fertilizer, and so forth. It was predicted on Jan- uary 19 during the debate on this bill that Communist forces could and would over- run the South Korean Republic when- ever such a military move was to the advantage of the Soviet Union. That prediction, unfortunately, has come to pass, but the recent developments in Korea certainly sustain the position of those who refused to pour United States economic aid into a militarily defenseless nation. The gentleman from Indiana (Mr. WaLsH] wanted the United States to authorize sixty million for South Korean power plants, fertilizers, and so forth, when all our military leaders said the territory could not be defended yet he has the gall to accuse me, and by implication 192 others in the House, for failing to vote for the defense of our country because we rejected this pro- posal. Again, on February 9, 1950, the House was called upon to consider a bill—S, 2319—for Korean economic aid. It was in effect the same bill as H. R. 5330, ex- cept certain United States funds were authorized for the island of Formosa, Frankly, this bill, with the inclusion ot’ aid to Formosa, made sense principally because it was an admission by the State Department under Mr. Acheson that Formosa was not to be abandoned to Stalin and Red China. Prior to this change in attitude, Mr. Acheson and the thirteen Members, including myself, sups__ President had abandoned _ Formosa,
11126 However, with this change in Pacific pol- icy by the administration, I could and did support the legislation, Yes; I did vove to reduce the authorizations, but again in light of our recent military re- verses in South Korea perhaps it would have been wiser to cut back some of the economic aid to the South Korean Re- public. Certainly a vote on February 9 of this year to reduce but not eliminate economic aid to Korea is not a vote against the defense of this Nation, Again, as before, the afterthought anal- ysis of the gentleman from Indiana [Mr. WatsuH ] is in error. A short summary of the ill-founded accusation by the gentleman is in order. Of the eight record votes to which he refers, either directly or indirectly, he and I voted alike on two occasions. I would suggest that in these instances he is like the pot calling the kettle black. On two of the roll calls when the House considered the Mutual Defense Assist- ance Act of 1949, the gentleman from Indiana (Mr. WaLsH] was nowhere to be found. In other words, he cast no vote. The Members can draw their own con- clusions in this instance. On the other four roll calls I voted differently from the gentleman from Indiana for good and sufficient reasons. In no way what- soever, as the record shows, did I or the many others who voted similarly, vote against the defense or national se- curity of this Nation. If anything, we who disapproved of Secretary Acheson's policies and supported those of General MacArthur in light of recent develop- ments, are right and the gentleman from Indiana |[Mr. WaLsH] was quite wrong. In closing, let me say no man in this House or elsewhere is more devoted than myself to our country and the principles for which it stands, At the same time never have I, nor will I ever, accuse another in the manner of the gentleman from Indiana I[Mr. WaLsH]. Each Mem- ber of the Congress has a duty and an obligation to vote on each and every proposal as his or her conscience dic- tates. It is not within the prerogative of the gentleman from Indiana IMr. ‘Watsu] to determine and judge the mer- its or errors in my decisions, particularly when at the time of his comment he was completely ignorant of the facts. The record is now corrected. I thank m. colleagues for their indulgence in permitting me an opportunity to refute the gentleman's irresponsible statement of yesterday. Mr. McSWEENEY. Mr. Speaker, I yield 10 minutes to the gentleman from Indiana {Mr. Watss]. Mr. WALSH. Mr. Speaker, yesterday my committee chairman asked me to make some remarks, and I suggest that the House membership turn to these original remarks and just see what I said. I thought my remarks were re- strained and to the point, but for those Members who were not present I suggest that they see page 10992 of the ConcrREs- SIONAL Recor»; in substance I pointed out that I did not care how any indi- vidual Member of this body voted pre- viously to the present Korean situation. Mr. McCORMACK. Mr, Speaker, will the gentleman yield? CONGRESSIONAL RECORD—HOUSE Mr. WALSH. I yield to the gentle- man from Massachusetts. Mr. McCORMACK. I have read the gentleman’s speech, and there is no jus- tification for the speech made by the gentleman from Michigan. The gentle- man from Michigan IMr. Forp] has read from a manuscript, showing that he made his speech with deliberation and premeditation. In the Massachusetts Legislature, when one undertook to make a speech to kill another member, we called him a “legislative killer.” Mr. WALSH. I thank the gentleman. I was sitting here listening to the de- bate and tending to my business when the gentleman from Michigan obtained the floor and took issue with my position, as he certainly had a right to do. I said earlier in the debate that there seemed to be a great many people that now have 20/20 vision in their hindsight. I think the gentleman from Michigan {Mr. Forp] has 20/20 vision in his hind- sight, and he also has clairvoyant pow- ers, because I have never to this moment commented on his specific voting record in the Recorp of the House, and I really had no serious intention to do so. I did say yesterday that I might do so, or I would, but I did not wish to carry on this fight. However, he decided that it was his job to answer what I still consider was my inoffensive non-personal, trying- to-be-patriotic speech. We had just heard a leading Member of the House blame the present Administration of causing two World Wars, and causing the Korean outbreak. So I sent out and got his record while he was still on the floor. I had that record present. I was upset and so was he. I did not then and do not now like to deal in personalities. In due time I am going to check personally my voting record and my record on attendance. It may not be as good as it should be, but I can ssure you that I have missed few important issues and I am going to point out a few instances why it is not as bad as he claims it to be. Iam a member of the Committee on Armed Services. I was also a member of the Kilday sub- committee which met off and on for more than three months during the first session of the Eighty-first Congress. We seldomly answered quorum calls when testimony was being presented. Any of you who have served under Car. Vinson on the Committee on Armed Services knows what it means to leave a committee session to answer a quorum call. Of course he has been here a long time and it does not make a lot of dif- ference to him. Then with reference to his remarks about my votes on the foreign military- assistance bill, I can tell you very easily where I was. I was on the B-36 sub- committee in California. I was gone for more than 1 week, and the members of the committee, both the minority and the majority are unrecorded on that roll call and several others and numerous quorum calls, That is the reason I did not vote on that bill. How is he re- corded on the Richards amendment to reduce military assistance to our allies? He told you, He is recorded in favor of it, JULY 26 I could also go into personal reasons of fliness and death in my family that pre- vented my attendance during four im- portant votes. But I do not care to go into that. I do not want sympathy, and I do not care to take the time of the House to explain matters that are per- sonal tome. But the point I am trying to make here is that without any reason whatsoever, unless it might have touched a mighty sore spot in some peo- ple’s armor, I was maliciously and—I am using the word considerately—I was ma- liciously singled out for my remarks and attacked. I took the floor, and here is what I said, in substance: I could point out to this Member and other Members their voting record in the past. 1 could, if necessary, point out where he failed to vote for what I consider to be the best interest of the national defense of our country. We may disagree as to what is for the best interest of our country. It seems as though since the Korean situation has occurred that a lot of people are trying to get up here anc apologize for their past votes, for how they voted on certain issues, such as Korean aid and foreign military assistance, which I consider to have been paramount to the success of any future defense of this Nation. I have not attacked this young man on his Korean-aid vote, but he apparently an- ticipated that I was going to. His vote certainly was contrary to mine, and I still personally think his vote was not in the best interest of this country, and he thinks to the contrary. But it happens to be that a majority of the House thinks otherwise. Iam not attacking his motives, nor his patriot- ism. I tried yesterday to answer this young man, whom I admit I had never known, for coming down here in the well of this House and saying that I am neg- lectful of my duty; that I walked out of the Armed Services Committee ses- sion: that I disagreed with the gentle- man from Georgia, Cart Vinson; and now I am having kind words to say for him, I thought yesterday we were go- ing to get all those things out of our system, and we were going to work side by side. I cannot help but notice that there is a great amount of apology from the left side of the aisle for past votes. I do not care personally how you voted. It is what you are going to do in the future. I do not care what we did on the right. We have not always been correct, but I feel our record of prepara- tion for defense needs far less explain- ing. But it is what we are going to do now in these critical hours that counts. So I have no apology to make for my stand or for the remarks I made yester- day. If he thinks I was personaily at- tacking his patriotism, I apologize, be- cause I was not then, and am not now, attacking his motives or his patriotism. But I wish to say that I seriously dis- agree with his powers of vision as to what was to happen in the international situation, as it is reflected in his voting record during the years 1949 and 1950 and prior to the Korean trouble. A great many people had the same difficulty. I wish to say one other thing in closing.
1950 Ido not think it is proper for a fresh- man Congressman to take the floor too often. I have never made a habit of getting up here and loudly expressing my views, as I wanted to listen and ob- serve. A week ago I made my first speech, other than 1-minute remarks, on the floor during this session, I have been here four times since. I wish to apologize for taking the time of this body in these critical hours, but I felt it neces- sary, as a member of the Armed Services Committee, yesterday and last week, to make my remarks known to you Mem- bers. If I hurt any of your feelings, I did not intentionally do so. But I have a very strong conviction about this war and about unanimity and the need for preparation. I think in our Committee on the Armed Services we get more infor- mation about the world conflict than in any committee in the Congress. As a father of children, and as a young man interested in the welfare of the Nation, I can lay aside personal differences and we can lay aside past records and think about the future. I do not propose to get into any more personal controversies with any Member of this House unless they personally, maliciously, and pur- posely attack me, and then, of course, I will take the floor. The SPEAKER pro tempore (Mr. Bonner), The time of the gentleman from Indiana [Mr. WatsH] has expired. Mr. McSWEENEY. Mr. Speaker, I yield 3 minu‘es to the gentleman from New York [Mr. CELuER]. Mr, CELLER. Mr. Speaker, there is no doubt that we must have a plentiful supply of hemp, cordage, and abaca, as indicated in the pending bill, for which a rule has been asked. There is no doubt that for defense purposes we must have a plentiful supply of cordage, but cutting into that requirement is also the requirement that we must unduly dis- turb the economy of the Philippines, The Philippine economy depends greatly upcn the growth of this product and its sale in the United States. If we can have both, that is, if we need not dis- turb the economy of the Philippines and we can get a plentiful supply, why not do it? I believe the amendment that will be offered by the gentleman from Michigan [Mr. CRAWForpD] will carry out those two purposes. It will mean that all abacd that comes from this project in Cen- tral America will be stockpiled, and will not go into commercial channels. The statement has been made that the pro- vision in the pending bill, on page 3, section 3, subdivision (c), will preclude the channeling of the fiber into com- mercial channels, As I read that pro- vision, that is not so. Furthermore, the Munitions Board presently is permitting private sale of this critical material, instead of stock- piling all of it. Iam informed that vast quantities of the subsidized abacd are being sold to private United States man- ufacturers. If we pass this bill as is, without the suggested amendment, we place the imprimatur of our approval upon such sale by the Munitions Board and those who are in control of this sub- sidized abacé, CONGRESSIONAL RECORD—HOUSE ; I herewith insert a letter on this im- portant matter from my friend, the dis- tinguished Ambassador from the Philip- pines and former Delegate to the House, J. M. Elizalde, as follows: EMBASSY OF THE PHILIPPINES, Washington, July 24, 1950. Dear, EMANUEL: I am writing to you in connection with the proposed legislation now pending in Congress which would au- thorize the continuation and expansion of the abacaé production in the Western Hemi- sphere. I am referring to S. 3520 and its corapanion bill, H. R. 8361. I hope you will appreciate my deep con- cern over this matter because of the disas- trous effect that this legislation would have on my country if passed in its present form. In the accompanying statement I have endeavored to state the Philippine views on this subject, the high Nghts of which are as follows: 1, This is not a purely defense measure since it does not provide for the channeling of the entire Central American output into the United States stockpile but instead per- mits its diversion to private manufacturers in competition wiih Philippine abac& (ma- nila hemp). 2. The maintenance and expansion of the abacé industry in the Philippines is essen- tial to the national security of the United States. It has been the main source for the national stockpile and its production can be increased immediately, given the neces- sary assistance. 3. Contrary to the impression created at the hearings, the measure does not provide stockpiling in the ground, that is, a stand- ing abacé reserve in the field for utilization only in an emerrency, because actually it is intended to extract normal yield periodi- cally for sale to private consumers in the open market, 4. The Central American project is a sub- sidtzed operation that has proven costly to the American taxpayers. Experience has shown that abac& produced in Central Amer- ica would cost 27 cents per pound as com- pared with 12 cents for Philippine abaca. 5. The record shows that certain private interests will derive continuing and increas- ing benefits from this project at the expense of the American taxpayers and the Philip- pine-abacaé industry. 6. The abac& industry in the Philippines js one of the main foundations of our econ- omy. It has been our experience that when the abac& industry 15 prosperous there is also general prosperity among the entire Filipino people because of the great number of families who depend upon it for their livelthood. The displacement of the Philip- pine abacé from the United States market will seriously lower the living standards of one-sixth of our population and might well become a serious threat to our security. 7. Before and since World War II despite the critical need by this country for this vital material the Philippine-abac& industry has not received any financial agsistance from the United States. 8. Since no diplomatic representative of the Philippine Government could properly appear at the hearings we were unable to refute misleading and erroneous informa- tion presented at those hearings, 9. It is universally recognized that Philip- pine abac& (Manila hemp) is supertor to Central American abacaé or to any other hard fiber due to the fact that the Philippines has the right kind of soil, the favorable climatic conditions, the processing technique, and the experienced labor so necessary in production of the highest-quality fiber. This explains why this fiber has acquired the trade-name of Manila hemp and is known the world over by that name, 11127 Knowing as I do your personal interest in the welfare of my country I am therefore taking the liberty of suggesting that this measure be amended by inserting a provision to the effect (a) that the entire output of this project be channeled into the stock- Piling program of the United States and that no part of it should move into the com- mercial market, and (b) that the exploita- tion for the production of abacd in Central America be confined to the area of 25,000 acres presently devoted to this purpose and not to provide for its further expansion by utilizing any new area or additional acreage. I would apprectate it if you could see your way clear to giving our Cause your sympa- thetic consideration. Sincerely yours, J. M. ELIZavpg, Hon. EMANUEL CELLER, House of Representatives, Washington, D.C. I believe the amendment is a good one and should be adopted. Mr. Speaker, I ask unanimous con- sent to revise and extend my remarks and te include therein portions of a letter received from the distinguished Ambas- sador from the Philippines, J. M. Eli- zalde. The SPEAKER. Is there objection to the request of the gentleman from New York? There was no objection. Mr. McSWEENEY. Mr. Speaker, I yield 2 minutes to the gentleman from South Dakota [Mr. Case). Mr. CASE ‘of South Dakota. Mr. Speaker, I am sorry that the gentle- man from Indiana and the gentleman from Michigan have both left the floor temporarily. I merely want to make a brief statement which I think should be in the REcorp at this point. I was pres- ent yesterday when the statements were made that have been alluded to. The speech accredited to the gentle- man from Indiana, as it appears in the Record today does not correspond to what he said on the floor of the House yesterday afternoon. I make that as a flat statement on my honor as a Member of the House of Representatives. I am sure that an examination of the original transcript will show this to be the fact. I feel safe in saying that if the gentle- man from Indiana ever becomes more than a freshman Member of this House he will learn that fairness in reporting the statements of what he has previously said and in maintaining the integrity of the Recorp is an attribute much to be valued. Mr. JACOBS, Mr. Speaker, will ‘the gentleman yield? Mr. CASE of South Dakota. I yield. Mr. JACOBS. What the gentleman has just said is correct, but I think the gentleman shculd know a little of the background before he makes that state- ment Therefore an understanding is in order. After the exchange between my col- league, Mr. WALSH, and Mr. Foap, Mich- igan, I met another gentleman from Michigan—and I might say that Iam a friend of both Mr. Forp and My. Pctrsr, to whom I am referring, and we discussed the matter. We both agreed that there were things said which should not have been said. We were right at the back of the center aisle. I do not like to see
11128 my friends fussing among themselves, especially when I know both of them and know they are both gentlemen. Mr. CASE of South Dakota. I think the whole incident may have been un- fortunate but I think the Recorp should not be allowed to stand as indicating that what appears in the Recorp today is an accurate record of what was said yesterday. Mr, JACOBS. Let me say I agree with the gentleman, but it was done pur- suant to an understanding between me, Mr. Porrer, and Mr. WALSH, and I am sure Mr. Porter will confirm it. I asked him to delete a portion. That is why there is a difference between what Mr. WaLsH said and what is printed. Mr. CASE of South Dakota. Then it should not be used by reference today; the printed speech should not have been used by reference today as giving what was actually said yesterday. Mr. JACOBS. I am not going to ar- gue about the ethics of the situation; I simply state that it was pursuant to a conversation that took place between me and Mr, Potrer, of Michigan, that the change was made. Mr. CASE of South Dakota. I want to express appreciation to the gentleman from Ohio {Mr. McSweeney] for yield- ing time permitting this matter to be cleared up. Mr. McSWEENEY. Mr. Speaker, I move the previous question on the reso- lution. The previous question was ordered. The resolution was agreed to. Mr. DURHAM. Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (S. 3520) to strengthen the common defense by providing for con- tinuation and expansion of Western Hemisphere production of abacé by the United States. The motion was agreed to. Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the con- sideration of the bill (S. 3520) for the expansion of Western Hemisphere pro- duction of abacd, with Mr. Lyncu in the Chair. The Clerk read the title of the bill. By unanimous consent, the first read- ing of the bill was dispensed with. The CHAIRMAN. Under the rule, the gentleman from North Carolina (Mr. DurxHAmM) will be recognized for 30 min- utes, and the gentleman from Missouri {Mr. SHort! for 30 minutes. Mr. DURHAM. Mr. Chairman, I yield myself 15 minutes. Mr. Chairman, the purpose of the pro- posed legislation is to strengthen the national defense by authorizing the United States Government to continue its assistance in the development of a source of abac&—Manila fiber—in the Western Hemisphere. Abaca 1s a fibrous plant, indigenous to the Philippines, from which manila hemp is produced. It has been declared to be @ product of strategic importance to the national defense and to be in critical short supply. It is being stockpiled un- CONGRESSIONAL RECORD—HOUSE der the Strategic and Critical Materials Stockpiling Act. . Prior to World War II, practically the entire supply of abac& came from the Philippines. During the war this source became unavailable and the production of cordage of all kinds suffered because of the nonavailability of abacé. The re- action was of a chain nature, in that as abaca became scarce the producers of cordage were forced to use other less desirable types of fibers, which depleted the stocks of those materials. Eventu- ally, all types of cordage, from those re- quired in agriculture to those required for war purposes, were in extremely short supply. To partially offset this shortage, the Reconstruction Finance Corporation, acting under special legis- lation to develop defense industries, be- gan the production of abac& in Central America. Climatic and agricultural con- ditions in that area were satisfactory and the Department of Agriculture had de- veloped sufficient technical knowledge to make such an endeavor feasible. When this program of abac& produc- tion in Central America was undertaken, it was found that the United Fruit Co. was already engaged in the production of bananas in some of those countries and had the physical facilities available to undertake the production of abaca. Through a management contract be- tween RFC, as the agent of our Govern- ment, and the United Fruit Co., this pro- gram was instituted, and at the present time there are approximately 25,000 acres under cultivation. By various laws the Reconstruction Finance Corporation has been required to withdraw from such types of activity, excepting in those areas where they already have projects under way. This bill would permit the Govern- ment, through the Reconstruction Fi- nance Corporation or any other appro- priate agency, to continue cultivation of abacdé in the Western Hemisphere. However, it places a maximum limitation of 50,000 acres which can be planted to abacé, and it further provides for the establishment of a revolving fund, from which fund no more than $35,000,000 can be outstanding at any one time. It further provides that there shall be added to such advances and treated as advances an amount equal to the net value of assets of the program for the production and sale of abaca as held by the Reconstruction Finance Corpora- tion on the effective date of the act, In this connection, it is appropriate to point out that the present abaca pro- gram in Central America entailed an in- vestment of $40,000,000. A total of ap- proximately $28,000,000 has been re- covered by the Government from the product produced. It is estimated that if it should become necesasry to abandon this project, the Government could re- cover approximately all of the remaining obligation of $12,000,000 through the li- quidation of physical assets and by butcher harvesting the 25,000 acres of abac& now under cultivation. There- fore, the continuance by the Government of the production of abacd& in Central America, at current market prices, indi- JULY 26 cates that the project could be continued and expanded on a self-liquidating basis. The availability in Central America of @ ready source of abacd lessens the amount required in the stockpile where it is presently being stored. This is of major importance since Manila fiber, under presently known measures, can be stockpiled or stored for a maximum pe- riod of approximately 3 years, after which it must be rotated, and in the event all of our stockpiling requirements of fiber had to be met from the Philip- pine source, it is possible that the cost of that particular item in the stockpiling program would be greatly increased be- cause of the inability to properly rotate the stocks. The prewar rate of production of abacé in the Philippines was 400,000,000 pounds per year, and there was a ready market for every pound of that fiber. The Philippines had then and have now a@ natural monopoly on this product and can produce, as they did in the past, ap- proximately 95 percent of the world sup- ply. Under present conditions, the Philippine production has dropped to 160,009,000 pounds annually. Our Cen- tral American production is approxi- mately 30,000,000 pounds annually, and very limited acreage in Sumatra pro- duced 6,500,000 pounds in 1949. This is @ total world production of 196,000,000 pounds as against the prewar Philippine production of 400,000,000 pounds. So there can be no dispute that there is a world-wide shortage of abaca. The Department of Defense, the Munt- tions Board, the Department of State, the Reconstruction Finance Corporation and the Cordage Institute are unani- mously in favor of this legislation. Some fear has been expressed by others that the passage of this bilt would be inter. preted by normal financing agencies in the United States as indicating a policy which might deter financing of abaca production in the Philippines. The Sen- ate committee clarified this situation by amending the policy declaration of the bill to provide that it is the policy of the United States to encourage abacaé pro- duction throughout the world. This committee subscribes to that broader statement of policy. The fact that this bill gives financial support to Central American abac& production and not to the Philippines is based entirely upon the premise that this is a defense measure. The Philippines have been and will con- tinue to be the main producers of abac& in the world. Their production, so long as it is available, is the backbone of our cordage industry. However, in the West- ern Hemisphere, the United States is, in effect, going into business for itself to provide insurance against the possibility that some unfortunate and unforeseen circumstance might again deny to us other sources of abacaé. I would also like to point out that while our present abaca production in Central America is limited to four countries—Panama, Cos- ta Rica, Honduras, and Guatemala—this fact should not be construed as being discriminatory against any other Cen- tral American country. The choice of locations for this production is deter-
1950 mined entirely by practical and tech- nical considerations. In no sense st.ould the proposed legis- lation be interpreted to indicate any lack of interest on the part of the United States Government or American industry in the development and utilization of abaca from the Philippines or any other source throughout the world. In approving the proposed legislation, the committee wishes to emphasize that it does so on the basis that the Icgisla- tion is required in the interest of national defense. The committee has fully con- sidered the possibility that the Govern- ment project in Central America might become unduly competitive with Philip- pine abacé and thereby operate to the detriment of the Philippine economy. While there are those who express this fear, the proponents of the bill express the opinion that there will be a ready market for all of the abac& which the Philippines can produce, and that the competitive feature is more fancied than real, The committee takes the position that there are so many intangible con- siderations that no one can accurately forecast the end results of this legisla- tion, but that 1t must be enacted in the interest of national defense. The bill contains certain safeguards which are calculated to prevent unde- sirable results It authorizes the Presi- dent to terminate any contracts for Central American abacé& production, allowing only such additional time as is necessary to hquidate the operation. The committce has added an additional safeguard in that it has amended the bill to provide that the Congress, as well as the President, shall have the authority to terminate the contracts. We hope that our amendment will 1eassure the Philippine Government. The bill re- quires that a report be submitted to the Congress at the close of each fiscal year, and it is the intent of the committee that the matter shall be followed closely in order to determine at the carliest practicable date any effects which may be unduly detrimental to the Philippine economy, and to take such corrective steps as the circumstances may require. At present 1t 1s anticipated that the Re- construction Finance Corporation will act as the agent of the Government in contracting for the Western Hemisphere abaca, production. The Secretary of Defense recommends and the Bureau of the Budget approves the proposed legislation, It was favorably reported to the House by the unanimous vote of the Committee on Armed Services. Mr. ROGERS of Florida. Mr. Chair- man, will the gentleman yield? Mr. DURHAM. I yield. Mr. ROGERS of Florida. I wonder if the gentleman or the committee took into consideration a product known as ramie. Mr, DURHAM. I do not recall that ramie was mentioned in the committee. We were dealing only with abac4, in this special piece of legislation. Mr. ROGERS of Florida. Ramie is a very strong fiber. It has more lasting quality, I understand, than abaca. I wonder, if we introduced a bill, and it did have merit in it, and it had the ap- CONGRESSIONAL RECORD—HOUSE proval of the Munitions Board and oth- ers, the committee would give it con- sideration. Mr. DURHAM. The gentleman very well knows that if it is anything pertain- ing to national defense and will help our national defense we would certainly consider it Mr. ROGERS of Florida. Would the gentleman rather take that procedure than have an amendment offered to the bill at this time? Mr. DURHAM I have already said that I hope the House will adopt this bill as 1t is, without amendment. I do not believe that is necessary. Mr NICHOLSON Mr Chairman, will the gentleman yield? Mr. DURHAM I yield to the gentle- man from Massachusetts Mr NICHOLSON. Would this abaca contract you are proposing hurt or help the Plymouth Cordage Co., which has been doing business for over 100 years? Mr. DURHAM. I am looking for a statement made by the company, in which I am sure the gentleman would be interested, because he is conscien- tious in looking after his constituents. I compliment him for it. I will be very glad to refer the gentle- man to the statement in the hearings in which this legislation is favored by the company. Mr. CRAWFORD Mr. Chairman, will the gentleman yield? Mr, DURHAM. I yield Mr. CRAWFORD. I think the gentle- man has made a very fine statement on this bill Mr, DURHAM. I thank the gentle- man. Mr. CRAWFORD. I am going to ask the gentleman this question, I am go- ing to ask you a technical question which has to do with the operations of the law of commodities. Here is a world-wide product. Mr. DURHAM. The gentleman means the use of this product is world-wide, but it is not grown everywhere through- out the world. Mr. CRAWFORD. The production of this product is highly concentrated in a small arca and the world is dependent upon that small area. That area was practically annihilated by the Japanese. Yet within 5 years after that annihila- tion it comes back to approximately 60 percent of its prewar production. I am referring now to the Philippine Islands and to the total which appears on page 6739 of the hearings, it seems. I do not know why that page number is so high. The United States Government has world-wide operations today and a ter- rific toechold in the Philippines which we must hold. Yet the Government of the United States is starting on a program here which I sincerely believe from the standpoint of the law which governs in the commodity field, unless we amend this bill we are striking a terrifically damaging blow to the small area upon which we must depend for our supplies. Now my question is this: How can this production go ahead under this bill as here presented, without any amendment whatsoever, without seriously affecting the expansion of production in the Phil- ippines and without seriously affecting 11129 the price upward which American peo- ple must pay for this sisa) fiber. Mr. DURHAM. I will endeavor to an- swer the gentleman's question. It is rather broad, and, of course, it is highly technical. I think the answer is this: that you will not get any production out of that acreage which you are planting for 3 years at best. So you only have 30,000,000 pounds annually, which its about all that we recovered down there from what we have already planted. We have a stockpile shortage, and accord- ing to the figures of the American Cordage Institute the cordage industry in this country is consuming 80,000,000 pounds annually, so there is going to be a shortage of this fiber, in my opinion, for the next 10 years. There are five or six reasons why they have not got back unto production in the Philippines. They are all pointed out in the hearings. There are several good reasons for it. On page 6702 you will find five reasons why they have not got- ten back into production, which are sound reasons, in my opinion. Mr. CRAWFORD. The gentleman stated it would be approximately 3 years before we got this new acreage into pro- duction? Mr. DURHAM. That is correct. It takes 3 years from the time it 1s planted before it is harvested. That is one of the great troubles in the Philippines today. They have been going in there and cutting the fiber any time that they can get some growth on it, when they ought to cut 1t about every 18 months. Mr. CRAWFORD. If the gentleman will permit, I think the record shows they are not doing that now. They did butcher their harvest They did butcher their harvest in 1947, when there was no sisal hemp throughout the world, and when there was the pressure on them to do that. Mr. DURHAM I cannot say whether they are doing it at this very hour, but from the information that the commit- tee had that is what we learned. Of course, those small farms were divided up by the Japanese. The Japanese con- trolled most of this fiber production prior to World War IT. Mr. CRAWFORD That is correct. Mr. DURHAM. They were producing 60 percent of all the abaca produced in the Philippines on only 28 percent of the Philippine land under abaca production. Mr. CRAWFORD. Did the gentleman say prior to World War I? Mr. DURHAM. No; prior to World War II. Mr. CRAWFORD. I have to disagree with that, I have studied this very closely, and I cannot agree with that. Mr. DURHAM. ‘They controlled a large percentage of the crop. Mr, CRAWFORD. In Mindanao they did. They went in there illegally and acquired the lands illegally, which they should not have done. Mr. SHORT, Mr. Chairman, I yield myself 10 minutes. Mr. Chairman, I think every Member of this House is indebted to the gentle- man from North Carolina {[Mr. Dur- Ham], who has spent so much time in carefuily considering and weighing every
11130 aspect of the problem we are now deal- ing with. ; As chairman of the Subcommittee of the Armed Services Committee dealing with stockpiling, the gentleman from North Carolina {Mr. DurHam] has given unselfishly and unstintingly of his time and effort, always exercising great pa- tience, clear insight, and sound judg- ment in dealing with the various prob- Jems that come before that subcom- mittee. Of course, this bill is really overdue. I would like to pause long enough to re- mind the Members of the House that we came dangerously near losing the last war due to the shortage of rubber. When the two large battleships of the British Navy were sunk at Singapore in Malay waters, our natural supply of rub- ber from the Orient was cut off. Not until Big Bull Jeffers, president of the Union Pacific at Omaha, was brought to Washington, and finally brought order out of chaos in building synthetic rub- ber plants and we got that industry going, were we assured of victory, be- cause rubber, like steel and oil, is in- dispensable in fighting a modern, mech- anized war. The Government spent over $700,000,- 000 in building synthetic rubber plants. When the war ended there was a natural inclination and desire on the part of some people for the Government to dump or get rid of those plants as quick- ly as possible Fortunately, the Congress of the United States was wiser than the people who expressed that opinion. Under the able chairmanship of the gentleman from Michigan [Mr. SHAFER] in the Eightieth Congress, we passed leg- islation that kept many of those syn- thetic rubber plants in operation and others 1n a stand-by condition. Up until recently, since we have had an advance in the price of rubber, automobile tires are practically the only article or com- modity that one could buy as cheaply as he could before the last war. As the Members of the House know, we are now using more than 200,000 tons of synthetic rubber, mixed with the natural product, annually, which has kept that industry alive, and will stand us in good stead not only in time of peace, and give as good or better product for less money, but which will be absolutely indispen- sable in case the trouble in Korea should spread into a world-wide conflict. Unfortunately, we did not exercise good, sound judgment as far as abacd or Manila hemp is concerned. This fiber is indigenous to the Philippines, and we depended practically altogether on the Philippine supply before the last war. It was not handled properly by the Congress at the end of the last global conflict. The chairman of the subcom- mittee, the gentleman from North Carolina (Mr. DurHam!, has clearly and forcefully pointed out the acute short- age of abacé, which is essential not only to our Navy and other branches of the armed services in time of war, but which is needed very much in our domestic industry, particularly in agriculture, as far as binding twine is concerned. It is most unfortunate that we have not kept those plantations in the different countries of Central America in produc- CONGRESSIONAL RECORD—HOUSE tion and as going concerns, just as we have our synthetic-rubber industry. This bill provides that we shall plant not in excess of 600,000 acres, and that there shall be a revolving fund of not more than $35,000,000. I will admit that is a considerable amount of money, but it certainly is not too much for this essential and strategic material. We spent over $700,000,000 developing our synthetic-rubber industry. While it is a large amount, it is absolutely needed from the standpoint of national defense. Mr NICHOLSON Mr, Chairman, will the gentleman yield? Mr SHORT. I yield Mr. NICHOLSON. If this expendi- ture would just take care of the binding twine, it would be worth while; would it not? Mr. SHORT. I would not go quite that far We are not doing it for our domestic economy; we are doing it chiefly because of the necessity of hav- ing it for the different branches of our armed services, particularly the Naval Establishment. Mr. Chairman, the fears of our friends in the Philippines that the industry will be developed to the extent in Central America that it will destroy the Philip- pine economy are, in my judgment, un- founded This bill will not prevent the production of abacaé in the Philippines; in fact, the United States Government will buy every pound that the Philip- pines can produce. Members realize that the Philippine Islands are 7,000 miles away from the United States. Do not forget that Rus- sia has 270 snorkel submarines and has been assisted by German genius in de- veloping those submarines. They can sail at a deeper depth and greater speed than any other submarine in the world, If we have to depend upon the Philip- pines with this long distance from the continental United States for our supply, we might find ourselves in the same sad predicament that we found ourselves as far as synthetic rubber was concerned when the supply of natural raw rubber was cut off by the fall of Singapore. I ask the Members not to forget that of the 59 tankers hauling oil from Aruba, Curacao, and Venezuela in the early months of World War I, 54 were sunk by Nazi submarines off our Atlantic coast until the coast line all the way from Baltimore to Miami, but more particu- larly down off Cape Hatteras, N. C., was almost a sea, of oil. It is wise that we help our Central American friends as we help our Phil- ippine friends; we want good neighbors near by us, a source of supply that is accessible, This bill 1t not a bill to injure any other country or help any other coun- try; it is a bill to save our own necks, Iam glad the able gentleman from North Carolina has given us such a clear and forceful picture of the problem with which we are dealing. The full com- mitte, as well as the Subcommittee on the Armed Services, unanimously re- ported this bill, and I think not a single Member of the House would want to vote against it. I shall not, therefore, use any more of my time but will reserve JULY 26 the balance. I am glad now to yield 2 minutes to the gentleman from Texas (Mr. THomas], Mr. THOMAS, Mr. Chairman, I ask tnanimous consent to proceed out of order and read a short newspaper article. The CHAIRMAN. Is there objection to the request of the gentleman from Texas? There was no objection. Mr. THOMAS. Mr. Chairman, before I proceed out of order I wish to commend the gentleman from North Carolina and the gentleman from Missouri, and the members of their subcommittee on the fine, outstanding job they have done on stockpiling. And may I take the liberty of saying on behalf of the Subcommittee on Independent Offices of the Appro- priations Committee that handles stock- piling, that we not only have gone along in the past and supplied the necessary funds, but we are going along in the future. We cannot afford to take any chance. As far as this particular item is con- cerned, again we cannot afford to take any chance. If we hurt our beloved friends, the Filipinos, we must make it up to them in some other way. I am sure we will. We are their friends, they are ours, and no one has the slightest intention of hurting them. Mr. Chairman, I have in my hand an article of July 24, in the Houston Post which I want to read. It applies not only to my town but to every town and city in the United States. Mr NICHOLSON. Mr. Chairman, will the gentleman yield? Mr. THOMAS. I yield to the gentle- man from Massachusetts. Mr. NICHOLSON. May I say to the gentleman from Texas that I am grate- ful for what he has said about this bill and about the gentleman from North Carolina and the gentleman from Mis- souri. I heartily agree with everything they have said about this matter. Mr. THOMAS. I thank the gentle- man, This article refers to my city of Hous- ton and reads: Tyrants Rouu The sheriff's department has a list of 123 Houstonians who, it says, are members of the Communist Party and who, as such, are your enemies and mine In the list are the names of 15 Houstonians who, says Sheriff's Captain Loyd Fragter, are prominent (though he adds that none are wealthy). There are also at least 200 more card-holding Reds in Houston. Every one is a potential saboteur; every one is a scab on the United States’ war effort. And every one is protected by United States law. But there’s one way you can help put a stop to this—write to your Con- gressman. His name: ALtsErr THomés, His address: Washington, D. C. Let's change the status of home-front Communists before they get a chance to change ours. Mr. Chairman, may I make the ob- servation that the American people are kind and generous. We know all of that. However, we have some people in our midst that we have given a mile of lati- tude when they should not have had per- haps more than a quarter of an inch. We are the only people on earth who would give them more than a quarter of an inch,
1950 It is as certain as I am standing here today—this is just a little advice; it is not friendly advice, either, to the pro- fessional Communists in this coun- try—as sure as I am standing here to- day, if we have any sabotage of any magnitude and any damage is done, the people of this country will rise up in holy horror and woe be unto the Com- munists. There may be some com- pounds built, and they may be safely put away for the duration. Mr. SHORT. Mr. Chairman, will the gentleman yield? Mr THOMAS. I yield to the gentle- man from Missouri. Mr SHORT. Is that not a strong ar- gument for the passage of thls bill? In other words, wc may need a lot of rope to hang them? Mr. THOMAS. There is something to think about in the gentleman's obser- vation Mr. SHORT. Mr. Chairman, I yield 5 minutes to the Delegate from Hawai (Mr. FARRINGTON], Mr FARRINGTON. Mr. Chairman, I am entirely in sympathy with the pur- pose of this legislation. We who live in the Pacific reahze the importance of protecting supplics essential to national defense The gentleman from Missouri has very aptly pointed out what hap- pened to us as the result of our complete dependence upon the production of rub- ber in Malaya. He also pointed out how our supply of abac& was cut off com- pletely in the last war. In my opinion, it is vital that an arrangement be arrived at which will provide for an adequate stockpiling of this product I am, however, very greatly concerned about the feeling which prevails in the Government of the Philippines that this legislation is going to seriously mjure their abaca industry. Its importance to the Philippines is very manifest when you realize that 155,000 farms are pro- ducing abacé, There are some 800,000 Filipinos who have an intcrest in this industry. It is the cash crop of an enor- mous number of small Filipino farmers. Mr. Chairman, it is important to the national security that we protect these farmers and also preserve their friendly attitude toward this country. I hope, therefore, that it will be pos- sible to achieve the objectives of this legislation, and at the same time pre- serve the friendly relationship with the Filipinos, which is so important to our country, by adopting the amendment that will be offered by the gentleman from Michigan (Mr. CrawForp]. As I understand that amendment, it will re- quire that the production of abaca in Central America under this arrangement be utilized entirely for stockpiling. I cannot see any sound objection to adopt- ing this amendment. It will satisfy the Filipinos that their industry is not going to suffer. I understand that loans that are necessary for certain developments in the abaca industry in the Philippines will be denied if this amendment is not adopted. I feel it is vitally important to our interests in the Pacific that we strengthen our economic ties with the Filipinos rather than weaken them. I think it is particularly important under CONGRESSIONAL RECORD—HOUSE present conditions that we do this. It seems to me that the proposal that will be made by the gentleman from Michi. gan is simple enough and will not injure the main purpose of this bill, and should be adopted. Mr. CRAWFORD. Mr. Chairman, will the gentleman yield? Mr. FARRINGTON. I yield to the gen- tleman from Michigan. Mr. CRAWFORD. It is not only for the protection of the Filipinos. We have in this country millions of consumers of sisal products, and, as in the case of synthetic and natural rubber, which the gentleman from Missouri referred to, we have a duty to preserve and protcct the price structure to our consumers. The elepate from Hawaii has pointed out that there are 155,000 Filipino farmers who are ready to grow sisal or Manila hemp now to deliver in the coming months, not 3 yearsfrom now Iam not talking against this bill. I am talking against the proposal to discourage those people in producing that product, and this amendment will encourage them to go ahead and produce on those 155,000 farms and keep up the production in- stead of being discouraged and driven out by the fact that this subsidized pro- ductio:' in Central America goes mto the open market against those httle pro- ducers and diives them out of business. Mr. FARRINGTON. I might add that I have been told that one of the reasons for this legislation is that a large quan- tity of abacd is at the present time being held in the Philippines. Something like 80,000 bales are said to be held there by three American corporations and not by the Filipino farmers and the plantation operators that produced it. I think we ought to go out and get that abaca. Mr DURHAM. Mr. Chairman, if the gentleman will yield, I may say to the gentleman that we went into that very carefully, and I would lke to read a statement from the Munitions Board relative to those charges: Pursuant to your request, I have attempted to obtain some information relating to an allegation that between 60,000 and 100,000 bales of abacaé fiber are being held in Manila by International Harvester Co. and Columbia Rope Co, anticipating a rise in price. Mr, John Goble, secretary of the Cordage Insti- tute, advises by telephone that this allega- tion is entirely false. Both of these com- panies have replied to an inquiry that they are holding no materials in the Philippines anticipating a rise in price; and, in fact, the only materials there available are the “pipe- line” supplies. Normal pipeline would run around roughly 60,000 bales The Philippine Inspection Service at Manila furnished to the Cordage Institute information about a letter to Mr. McDaniels which letter indi- cates that there were on hand 40,000 bales of abacé in the inspection, grading, packing, and preparation for shipment processes. This is in fact below normal pipeline, which is about 60,000 bales. No materials are being held for any reason other than the normal preparation treatment; the supply is below normal (in fact Columbia has on hand in the Phillippines 552 bales and orders for 766); and there is a ready market, including the stockpile, for any materials which are available. International Harvester Co. and the Columbia Rope Co. are prepared to fur- nish the committee a telegram denying these allegations, I just wanted to elear that up, 11131 Mr FARRINGTON. I thank the gen- tleman for clarifying that point. I hope the gentleman will agree to the amend- ment to be offered by the gentleman from Michigan [Mr. Crawrorp]. Mr. DURHAM. Mr. Chairman, I yield 5 minutes to the gentleman from North Carolina [Mr, DEANE], Mr. DEANE. Mr. Chairman, in the debate involving the pending legislation there may be a feeling on the part of some that we are not doing what we should for the Fhiliippines. May I point out just what the United States is do- ing for the Philippines. First let me say we should approve this legislation without crippling amend- ments because the Committee of the Armed Serviccs in asking the support of the committee is acting in the best in- terests of the American Government. I now refer to what this Government js doing in support of the Philippine do- mestic economy. We are all somewhat familiar, per- haps, with the War Damage Commission and the work that is being done by the Commission in the Philippines today. On June 30, 1950, only 662 private prop- erty claims remained to be approved. These are significant figures. The Com- mission had completed the adjudication of 1,248,000 claims and paid $302,700,000 into the Philippine economy. These set- tled claims were submitted for a total of $1,137,000,000 and approved for $503,- 500,000. The average rate of allowance so far has been 55.73 percent. In accordance with the law, the Com- mission has paid in full all claims ap- proved for $500 or less, and paid $500 plus 30 percent of the approved -re- mainder on the larger claims. With the $400,000,000 authorized by Congress, it is estimated that funds will be adequate to permit the payment of an additional 20 percent. Thus, large claimants will ultimately receive 50 percent of their ap- proved claims. These second payments will be inaugurated in September and concluded in October. Approximately $87,000,000 will be distributed in the Philippines during the remaining months of the calendar year. In the fleld of public property claims the Commission on June 30, 1950, had awarded $55,250,000, all of the funds al- lotted to it by the Department of State for the restoration of public buildings. It had approved 1,876 public projects, of which 1,120 were completed. The re- mainder will be finished before the Com- mission closes its doors. Despite a re- duced staff, construction will continue to be supervised, and the $8,000,000 still unpaid will be disbursed as the buildings are completed. The reason I am pointing out these significant figures is the fact that the American Government, it seems to me, is keeping its promise to the Filipino Government in our desire to stand by our friends there and there is no desire on the part of the Congress to take any- thing away from the Philippines, I am quite sure that there is available to the committee delicate information which, if spoken on the House floor, might indicate that we do not have full confidence in the Filipino economy. At the same time, as we face one emergency
11132 after another, it seems to me the only proper step for us to take is to come to grips with this important subject and be prepared to develop all kinds of strategic processes that are necessary so that we may be sure that we have all critical material we need. The potentialities of the Philippines are of course unlimited. They have great natural resources. At thc same time, it is a young nation. We have seen what has taken place in Korea. What has taken place in Korea could very easily take place in the Philippines, as well as Burma and some of these other great sections of the Far East. For that reason, I trust that the amend- ment that will be offered by the gentle- man from Michigan will not be adopted. Mr. FARRINGTON. Mr. Chairman, will the gentleman yield? Mr. DEANE. I yield to the Delegate from Hawaii. Mr. FARRINGTON. I do not believe that the gentleman intends to suggest that what has taken place in Korea is likely to take place in the Philippines, because the background is entirely dif- ferent. The Filipinos, with almost no exceptions, have been intense in their loyalty to this country. An entirely dif- ferent situation prevails in Korea. Mr. DEANE. I might point out this fact to the distinguished Delegate from Hawaii. Ihave in my hand a letter from a friend of mine in Manila dated July 18. I would like to read a paragraph of that letter: Developments in Korea have created anx- fety in the Philippines. A few of the large American firms have permitted dependents of gataff! members to return, if they wish. None have been ordered to do 50. Momen- tarlly the chief anxiety appears to be a pos- sible shortage of shipping space and its ef- fect upon imports and foodstuffs and capital goods essential for reconstruction. This friend goes on to say: There is a feeling of relief that the United States has taken a strong and a vigorous position, But I feel as we consider this legisla- tion today we must necessarily think in terms of making America strong. ‘If it means we must underwrite certain eco- nomic measures in other sections of the world which may have an impact upon the Filipino economy, it does not neces- sarily follow that we are not going to do what we should or what we will continue to do to try to assist that great section of the world. Mr. LeCOMPTE. Mr. Chairman, will the gentleman yield? Mr. DEANE. I yield. Mr. LeCOMPTE. Does the gentleman have the same feeling expressed by the Ambassador to the Philippines in a letter to many of us, that his apprehension is unfounded and that this bill does not threaten the economy of the Philippines in any way? Mr. DEANE. The letter I have before me is not from the Ambassador of the Philippines, Mr. LECOMPTE. No, but you did get one from the Ambassador, did you not? Mr. DEANE. No, I have not. Mr. LECOMPTE. He wrote to several of us that in a general way, I think, he CONGRESSIONAL RECORD—HOUSE is in favor of this bill, but he did think there should be some amendments made to it. You are not familiar with that? Mr. DEANE. No, I am not. But I would point out that in September and October of last year I spent approxi- mately a week in the Philippines. They are faced with very severe problems in their economic development. I am not convinced in my own mind that at the present time they are in a position to fol- low through and produce the goods and merchandise that would be needed in the event of a serious emergency. Mr. LECOMPTE. I thank the gentle- man for yielding. Mr. SHORT. Mr. Chairman, I yield 6 minutes to the gentleman from Penn- sylvania (Mr. Fu.ton]. Mr. FULTON. Mr. Chairman, we should examine this legislation on Gov- ernment production of Manila hemp to see what it really is. When the United States Government puts up $35,000,000, I believe the committee will agree with me that it is putting up the entire capl- tal of this proposed abacd industry ex- pansion in Central America. So that if there is such a thing as socializing any industry, the Congress will be socializing the abaca industry in Central America, but for the purposes of United States Na~ tional defense. In order to justify such a position it clearly must be shown that this is a de- fense measure and is required for the safety and security of the United States. I am unable to see that this bill in its present form is completely and exclusively a defense measure. The bill as the com- mitte has drawn iu, on page 3, section (c) of section 3 contains the following language: Abaca fiber, produced under this Act, which from time to time is not needed for stock- piling under the Strategic and Critical Ma- terials Stockpiling Act (60 Stat. 596), as amended, may be sold otherwise than for stockpiling under such act. Therefore, this bill as drawn, contem- plates Government competition with private industry, and such Government competition can be used as a precedent for other industry. The only difference in this bill’s treatment of the abacd& industry, as against the steel industry in this country 1s that this is a specialized defense industry down in Central Amer- ica, and the Government intervention is cloaked in the garments of defense. Then, looking a little farther to see what has been the situation previously on abaca production in Central America, we see that during the past few years the Central American output has only moved into the United States national stock- pile at the rate of 10 percent of their total output. Nine-tenths of it went into private commerce. I am glad the gentleman from Michi- gan [Mr. Crawrorp] has offered this amendment, in order to keep this bill from socializing this industry abroad and competing with one of our good friends, the Philippine Republic. Congress should adopt the gentleman’s amendment to in- sure that this government-produced abaca does go into the national stockpile. I believe that is what the gentleman's amendment does, does it not? JULY 26 Mr. CRAWFORD. That is the only purpose of the amendment. Here are what you are doing under this plan: The taxpayers of the United States are simp- ly putting up the money to carry the stocks in the arms of the RFC so that private operators do not have to carry those stocks through purchase in the Philippines, carry insurance, and pay the interest while the stocks are moving to the wheels which convert it into rope, Subparagraph (c) should go out of this bill. It should never have been put in there. It should go out for the protec- tion of the people of the United States— the taxpayers. Mr, FULTON. That is right. Mr. CRAWFORD. Let industry carry its own burden. That is the reason I stand for private industry, but if it chis- els on the taxpayer all the time, then I am not so anxious to defend private en- terprise. Mr. FULTON. I agree with the gen- tleman that we must safeguard private enterprise, because once Congress gives the Government unlimited range in any defense project and does not limit its field simply to defense, we are then sub- sidizing outside competition to private enterprise. Mr. DURHAM. Mr, Chairman, will the gentleman yield? Mr. FULTON. I yield. Mr. DURHAM. So far as I know there is not a private enterprise individual in America opposed to this measure. The Cordage Institute appeared before our committee and they are for it. Under this amendment not a pound would go into the stockpile in 3 years, because you cannot get any production under 3 years, You have got to rotate this every 3 years. Who is going to take it if private enter- prise does not take it? You have gota problem that you cannot solve without turning this into private enterprice. Mr. FULTON. This Government sub- sidy, with $35,000,000 of taxpayers’ money, is going into the production of abaca in Central America. The average cost in the Philippines has been 12 cents @ pound. In Central America where it will be subsidized under this bill, the cost has averaged 27 cents a pound. In addi- tion, as to the Philippine production we have not been using the full amount of it. Mr. CRAWFORD. Of course the pri- vate operators are not objecting to this bill. They want the bill, because the tax- payer carries the burden for them. Why in the world should they object to the bill? Of course they do not. They are all for it. Why would they not be for it? The CHAIRMAN. The time of the gentleman from Pennsylvania (Mr. Fun- TON] has expired, Mr. SHORT. Mr. Chairman, I yield 2 minutes to the gentleman from Ken- tucky (Mr. Morron]. Mr. MORTON. Mr. Chairman, I ask unanimous consent to speak out of order. The CHAIRMAN. Is there objection? There was no objection. Mr. MORTON. Mr. Chairman, as the father of two sons, one of them 18 years of age, as an officer in the United States Naval Reserve, and chiefly as a citizen of this country, the final outpost of free- dom, I find myself deeply concerned in