1950 CONGRESSIONAL RECORD-SENATE 1'6423
The SPEAKE~. Under the rule, the 1777. A letter from the Attorney General, By Mr. KENNEDY: previous question is ordered. transmitting a letter relative to the case of H. R. 9896. A bill for the relief of Elias Maria Tome Da Silva Lawver, file No. A- Miltiades Iordanopoulos; to the Committee Is a separate vote demanded on any 6008146 CR 25896, requesting that it be with on the Judiciary. amendment? If not, t~e Chair will put drawn from those before the Congress and By Mr. LYNCH: them in gross. returned to the jurisdiction of the Depart H. R. 9897. A bill for the relief of the Balti The amendments were agreed to. ment of Justice; to the Committee on the more & Ohio Railroad Co.; to the Committee The SPEAKER. The question is on Judiciary. on the Judiciary. the engrossment and third- reading of 1778. A letter from the Attorney General, By Mr. RODINO: the bill. transmitting a letter relative to the case of H. R. 9898. A bill for the relief of Sumiko The bill was ordered to be engrossed Henryk Oselka, file No. A-6802109 CR 26013, Yamamoto; to the Committee on the Judi requesting that it be withdrawn from those ciary. and read a third time and was read the befor~ the Congress and returned to the third time. jurisdiction of the Department of Justice; The SPEAKER. The question is on to the Committee on the Judiciary. the passage of the bill. 1779. A letter from the Assistant Secre SENATE The question was taken; and on a di tary of Defense, transmitting a draft of pro vision Wisconsin asked and Labor; without amendment (Rept. No. 3183). ture: We come seeking wide horizons was given permission to extend his re Referred to the Committee of the Whole around our noisy lives. Midst all the marks and include an article. House on the State of the Union. busy shuttles of legislation, as here is Mr. HESELTON asked and was given woven the fabric of law and order, shield permission to revise and extend the re PUBLIC BILLS AND RESOLUTIONS ing the life of our d~mocracy and of free marks he made in Committee of the Under clause 3 of rule XXII, public peoples everywhere, may we not be so Whole and include extraneous matter bills and resolutions were introduced and enmeshed in the immediate mechanics of and tabulations. severally referred as follows: our solemn task as to lose sight of the total pattern shown in the mourit of vi LEAVE OF ABSENCE By Mr. D'EWART: H. R. 9890. A bill authorizing the restora sion. As we have undertaken on-this By unanimous consent, leave of ab tion to tribal ownership of certain lands upon continent a government of, by and for sence was granted to Mr. BRAMBL~TT for the Crow Indian Reservation, Mont., and for the people, may we not lack the spirit .an indefinite period, on account of offi other purposes; to the Committee on Public ual quality and a constant sense of the cial business. Lands. divine sovereignty, without which no By Mr. MILLER of California: ADJOURNMENT such government can long endure. H. R. 9891. A bill to eliminate the retro So make us faithful ministers of this Mr. PRIEST. Mr. Speaker, I move active application of the income tax to em ployees of the United States working in the stricken generation. We ask it in the that the House do now adjourn. dear Redeemer's name. Amen. The motion was agreed to; according possessions or in the Canal Zone; to the Com mittee on Ways and Means. THE JOURNAL ly By Mr. McMILLAN of South Carolina: the House adjourned until tomorrow, H. R. 9892. A bill to exempt from the Dis On request of Mr. O'CoNoR, and by Tuesday, December 12, 1950, at 12 o'clock trict of Columbia Sales Tax Act sales of food unanimous consent, the reading of the noon. for human consumption in hotels, restau Journal of the proceedings of Monday, rants, cafes, bars, and other establishments December 11, 1950, was dispensed with. EXECUTIVE COMMUNICATIONS, ETC. where the sales price of the food furnished an individual patron is more than $1.25; to MESSAGE FROM THE PRESIDENT · Under clause 2 of rule XXIV, execu the Committe on the District of Columbia. A message in writing from the Presi tive communications were taken from By Mr. VINSON: dent of the United States submitting a the Speaker's table and referred as fol H. R. 9893. A bill to authorize certain con struction at military and naval installations, nomination was communicated to the lows: and for other purposes; to the Committee on Senate by Mr. Miller, one of his secre 1774. A communication from the Presi Armed Services. taries. dent of the United States, transmitting a By Mr. BUCHANAN: proposed supplemental appropriation for the H. Res. 880. Resolution providing for the MESSAGE FROM THE HOUSE fiscal year 1951 in the amount of $11,000,000 payment of 6 months' gratuity and $350 fu A message from the House of Repre for the Selective Service System (H. Doc. No. neral expenses to William Earle Griffin, son sentatives, by Mr. Snader, its assistant 735); .to the Committee on Appropriati~ns of Helen M. Griffin, late an employee of the and ordered to be printed. House; to the Committee on House Admin reading clerk, announced that the House 1775. A letter from the Assistant Secre istration. had passed a bill Maryland, a Senator from that mainder of this week for the purpose of ·State, for the term beginning January 3, as follows: t considering· the proposed excess-profits 1951, which were read and ordered to To the PRESIDENT OF THE SENATE OF THE tax legislation. be filed, as follows: UNITED STATES: On request of Mr. LUCAS, and by unan This is to certify that on the 7th day of imous consent, the Committee on Armed STATE OF MARYLAND, November 1950 MILTON R. YOUNG was duly · Services was granted permission to hold Annapolis, Md. chosen by the qualified electors of the State To the PRESIDENT OF THE SENATE OF THE of North Dakota a Senator from said State a session this afternoon. UNITED STATES: to represent said State in the Senate of the On request of Mr. LUCAS, and by unan This is to certify that on the 7th day of United States for the term of 6 years, be imous consent, the Committee on Labor November 1950, JOHN MARSHALL BUTLER was ginning on the 3d day of January 1951. and Public Welfare was granted permis duly chosen by the qualified voters of the Witness His Excellency, our Governor, Fred sion to meet during the session of the State of Maryland, a Senator from said State G. Aandahl, and our seal hereto affixed at Senate today. to represent said State in the Senate of the Bismarck, N. Dak., this 28th day of November United States for a term of 6 years, beginning, A. D. 1950. NATIONAL HISTORICAL PUBLICATION on the 3d day of January 1951. ' FRED G. AANDAHL, COMMITTEE Witness His Excellency, our Governor, Wil Governor. The VICE PRESIDENT. Under sec liam Preston Lane, Jr., and our seal hereto By the Governor: tion 503 of Public Law 754, Eighty-first affixed at Annapolis, this 5th day of Decem [SEAL) THOMAS HALL, ber, in the year of our Lord 1950. Secretary of State. Congress, the President of the Senate is W. PRESTON LANE, Jr, required to appoint a Member of the By the Governor: Mr. CORDON presented the creden Senate to the National Historical Pub [SEAL·J VIVIAN V. SIMPSON, tials of WAYNE MG>RSE, duly chosen by the lication Committee. In pursuance of Secretary of State. qualified electors of the State of Ore that duty the Chair appointed the Sena gon, a Senator from that State for the tor from North Carolina [Mr. HoEY]. Mr. SMITH of North CaroHna pre term beginning January 3, 1951, which sented the credentials of CLYDE R. HOEY, CREDENTIALS were read and ordered to be filed, as duly chosen by the qualified electors of follows: The VICE PRESIDENT laid before the the State of North Carolina, a Senator STA'l'E .OF OREGON, Senate the credentials of WARREN G. from that State, for the term beginning EXECUTIVE DEPARTMENT. MAGNUSON, duly chosen by the qualified January 3, 1951, which were read and CERTiFICATE OF ELECTION electors of the State of Washington, a ordered to be filed, as follows: To All to Whom These Presents Shall Come, Senator from that State, for the term STATE OF NORTH CAROLINA, Greeting: beginning January 3, 1951, which were CITY OF RALEIGH, Know ye, That it appearing from the offi-• read and ordered to be filed, as follows: EXECUTIVE OFFICES, cial canvass of the votes cast at the regular STATE OF WASHINGTON, To the PRESIDENT OF THE SENATE OF THE general election held within ·and for the EXECUTIVE DEPARTMENT, UNITED STATES: State 'of Oregon, on Tuesday, the 7th day of Olympia. This is to certify that on the 7th day of November 1950 A. D., WAYNE MORSE, of Lane To the PRESIDENT OF THE SENATE OF THE ·November 1950, CLYDE R. HOEY was duly County, State of Oregon, received the high UNITED STATES: chosen hy the qualified electors of the State est number of votes cast for the office of This is to certify that on the 7th day of ·of North Carolina a Senator from said State United States Senator in Congress at said November 1950, WARREN G. MAGNUSON was to represent said State in the Senate of the election; duly chosen by the qualified electors of the United States for the term of 6 years, begin Now, therefore, I, Douglas Mc,Kay, Gov. State of Washington a Senator from said ning on the 3d day of January 1951. ernor of the State of Oregon, by virtue and in State to represent said State in the Senate Witness: His Excellency our Governor, W. pursuance of the authority vested in me un of the United States for the term of 6 years, Kerr Scott, and our seal hereto affixed at der the laws of the State of Oregon, do here beginning on the 3d day of January 1951. Raleigh this 28th day of November, in the by grant this certificate of election and de In witness whereof I have hereunto set my year of our Lord 1950. clare said WAYNE MORSE, Of Lane County, hand and caused the seal of the State of W. KERR SCOTT, State of Oregon, to be duly elected to the Washington to be affixed at Olympia this 7th Governor of N9rth Carolina. office of United States Senator in Congress day of December A. D. 1950. By the Governor: for the State of Oregon, for a term of 6 years ARTHUR B. LANGLIE, [SEAL J THAD EURE, beginning on the 3d day of Ja:1uary 1951. Governor of Washington. Secretary of State. In testimony whereof, I have hereunto By the Governor: Mr. MAYBANK presented the creden set my hand and caused the seal of the [SEAL J EARL COE, State of Oregon to be hereto affixed. Done Secretary of State. tials of OLIN D. JOHNSTON, duly chosen at the capitol at Salem, Oreg., this 4th day by the qualified electors of the State of of December A. D. 1950. · The VICE PRESIDENT laid before the South Carolina, a Senator from that DOUGLAS McKAY, Senate the credentials of CHARLES W. State, for the term beginning January 3, Governor. TOBEY, duly chosen by the qualified elec 1951, which were read and ordered to By the Governor: tors of the State of New Hampshire,. a be filed, as follows: · [SEAL) EARL T. NEWBRY, Secretary of State. Senator from that State, for the term STATE OF SOUTH CAROLINA, beginning January 3; 1951, which were OFFICE OF THE GOVERNOR, Mr. JENNER presented the creden read and ordered to be filed, as follows: Columbia, December 7, 1950. tials of HOMER E. CAPEHART, duly chosen THE STATE OF NEW HAMPSHIRE, To the PRESIDENT OF THE SENATE OF THE by the qualified electors of the State of ExECUTIVE DEPARTMENT. UNITED STATES: • Indiana, a Senator from that State, for To the PRESIDENT OF THE SENATE OF THE This is to certify that on the 7th day of · the term beginning January 3, 1951, UNITED STATES: November 1950, OLIN D. JOHNSTON was duly which were read and ordered to be filed, This is to certify that on the 7th day of chosen by the qualified electors of the State November 1950 CHARLES w. TOBEY was duly of South Carolina a Senator from said State as follows: chosen by the qualified electors of the State to represent said State in the Senate of the STATE OF INDIANA, INDIANAPOLIS. of New Hampshire a Senator from said State United States for the term of 6 years, begin To the PRESIDENT OF THE SENATE OF THE to represent said State in the Senate of the ning on the 3d day of January 1951. UNITED STATES: United States for the term of 6 years, begin Witness His Excellency, our Governor, J. This is to certify that on the 7th day of ning on the 3d day of January 1951. Strom Thurmond, and our seal hereto af- November 1950, HOMERE. CAPEHART was duly 1950 CONGRESSIONAL RECORD-SENATE 16425 chosen by the qualified electors of the State The Senator from Michigan [Mr. gaged in any business enterprise competitive of Indiana a Senator from said State to rep::o VANDENBERG] is absent by leave of the to free enterprise; to the ·committee on resent said S'tate in the Senate of the United Senate. Finance. States for the term· of 6 years, beginning on A resolution adopted by the Maryland the 3d day of January 1951. The VICE PRESIDENT. A quorum Action Guild, Baltimore, Md., urging the ap Witness His Excellency, our· Governor, is present. pointment of a congressional committee to Henry F. Schricker, and our seal hereto TRANSACTION OF ROUTINE BUSINESS investigate Communist infi:uence in the Fed affixed at Indianapolis, Ind., this 22d day eral Government, etc.; to the Committee on of November A. D. 1950. ' Mr. O'CONOR. Mr. President, I ask · Foreign Relations. HENRY F. SCHRICKER, unanimous consent that at this time A resolution adopted by the Manresa Club Governor. Senators may introduce bills, submit res of the Church of the Blessed Sacrament, By the Governor: olutions, make insertions in the RECORD, Baltimore, Md., commending the investiga [SEAL) CHARLES F. FLEMING, and transact other routine business, tion on export controls by a subcommittee of Secretary of State. without debate. · the Committee on Interstate and Foreign CALL OF THE ROLL Commerce; to the Committee on Interstate The VICE PRESIDENT. Without ob and Foreign Commerce. • Mr. O'CO~OR . I suggest the absence jection, it is so ordered. A. letter in the nature of a petition from of a quorum. EXECUTIVE COMMUNICATIONS, ETC. the National Council of Jewish Women, Inc., The VICE PRESIDENT. The secre New York, N. Y., signed by Mrs. Irving M. tary will call the roll. The Vice President laid before the Sen Engel, praying for the enactment of legis ate the following letters, which were re lation to repeal the Internal Security Act of The roll was called, and the follow 1950; to the Committee on the Judiciary. ing Senators answered to their names: ferred as indicated: SUSPENSION OF DEPORTATION OF CERTAIN The petition of Vergil D. McMillan, of Aiken . Hill Morse ALIENS Indianapolis, Ind., relating· to civil rights, Brewster Hoey Mundt etc.; to the Committee on the Judiciary. Bricker Holland Murray A letter from the Acting Attorney General, Telegrams in the nature of memorials from Bridges Hunt Neely transmitting, pursuant to law, copies of or'." Leonard Simutis, secretary, 'Lithuanian Butler Ives Nixon ders of the Commissioner of the Immigra ·Roman Catholic Federation, Chicago, . Ill.; Byrd Jenner O'Conor tion and Naturalization Service suspending Cain Johnson, Colo. O'Mahoney ·L. L. Bennett, master, fourth degree Knights Capehart Johnson, Tex. Pepper deportation of certain aliens, together with of Columhm:, of northern Michigan; Peter Carlson Kefauver Robertson a complete statement of the facts and perti M. Robare, grand knight of Knights of Co Chapman Kem Russell nent provisions of law ~s to each alien, and lumbus, of northern Michigan, and Father Chavez Kerr Saltonstall the reasons for ordering such suspension David Spelgate, managing . editor of the Clements Kilgore Schoeppel (with accompanying papers); to the Com northern Michigan edition of Your Sunday Connally Knowland Smith, Maine mittee on the Judiciary. Cordon Langer Smith,N.J. Visitor, all of Marquette, Mich., remonstrat Donnell Leahy Smith,N.C. GRANTING OF STATUS OF PERMANENT RESIDENCE ing against the enactment of legislation pro. Douglas Lehman Stennis TO CERTAIN ALIENS Viding financial aid to Yugoslavia; ordered to Dworshak Long Taft A letter from the Acting Attorney General, lie on the table. Eastland Lucas Taylor Ecton McCarran Thomas, Okla . . transmitting, pursuant to law, copies of the ST. LAWRENCE SEAWAY-RESOLUTION OF Ellender McCarthy Thomas, Utah orders of the Commissioner of the Immigra FARMERS UNION CENTRAL· EXCHANGE, tion and Naturalization Service granting the Flanders McClellan Thye INC., ST. PAUL, MINN. Frear McFarland Tobey application for permanent residence filed by Fulbright McKellar Tydings certain aliens, together with a. complete Mr. THYE. Mr. President, J have re: George McMahon Watkins statement of the facts and pertinent provi ceived a letter from E. A. Syftestad, gen Gillette Magnuson Wherry sions of law as to each applicant, and the Gurney Malone Wiley eral manager of the Farmers Union Cen Hayden Martin · Young reasons for granting the applications (with tral Exchange, · St. Paul, Minn. In his Hendrickson Maybank accompanying papers); to the Committee on Millikin the Judiciary. letter to me he encloses a copy of a reso._ Hickenlooper lution which had been adopted by the Mr. LUCAS. I announce that the AMENDMENT OF AGRICULTURAL ADJUSTMENT stockholders of the Farmers Union Cen:. Senator from New Mexico [Mr. ANDER ACT OF 1938, RELATING TO MARKETING QUOTA tral Exchange, Irie. I mention this for SON] and the Senator from Pennsylvania FOR PEANUTS the reason that it is the third consecutive [Mr. MYERS] are absent on public busi A letter from the Acting Secretary of Agri cuJ_ ture, ti:ansmitting a draft of proposed resolution on the same question, namely, ness, legislation to amend the ·Agricultural Ad: the st. Lawrence seaway, that the Farm The Senator from Connecticut [Mr. justment Act of 1938, as amended (with ac ers Union Central Exchange has adppted. BENTON] is necessarily absent. companying papers); to the Committee on In yesterday's CONGRESSIONAL ~ECORD I The Senator from Rhode Island [Mr. Agriculture and Forestry. ·read the remarks of the .very able and GREEN] is absent by leave of the Senate REPORT ON COOPERATION IN CONTROL AND ·distinguished Senator from Vermont on official business, having been ap ERADICATION OF FOOT-AND-MOUTH DISEASE, [Mr. AIKENl in reference to the St. Law pointed a delegate from the Senate to UNITED STATES-MEXICO • rence seaway. For that reason, I think attend the meeting of the Common A letter from the Assistant Secretary of the resolution is most pertinent, 'and, wealth Parliamentary Association .in Agriculture, transmitting, pursuant to law, a therefore, I ask unanimous consent that Australia. report on cooperation of the United States Mr. Syftestad's letter and the resolution The Senator from Minnesota [Mr. with Mexico in the control and eradication of be appropriately referred and printed in HUMPHREY] is absent because of illness. foot-and-mouth disease, for the month of the RECORD. The Senator from South Carolina October 1950 (with an accompanying report); to the Committee on Agriculture. and For There being no objection, the letter [Mr. JOHNSTON] is absent by leave of the estry. and resolution were referred to the Com Senate. mittee on Foreign Relations and ordered REPORT ON DIVERGENci: BETWEEN PLANT AND The Senator from Alabama [Mr. COMPANY CONCENTRATION, 1947 to be printed in the RECORD, as follows: SPARKMAN] is absent by leave of the Sen FARMERS UNION CENTRAL EXCHANGE, INC., ate on official business as a representa A lett er from the Chairman of the Federal St. Paul, Minn., D ecember 4, 1950. Trade Commission, transmitting a report of Re Great Lakes-St. Lawrence seaway. tive of the United States to the fifth the Commission entitled "The Divergence ·session of the General Assembly of the Between Plant and Company Concentration·, Hon. EDWARD THYE, United Nations. 1947" (with an accompanying r eport); to United States Senator, . · Senate Office Building, Mr. SALTONSTALL. I announce the Committee on Interstate and Foreign Washin gton, D. C. that the Senator from Michigan [Mr. Commerce. MY DEAR SENATOR THYE: We recognize that FERGUSON] is absent . by leave of the PETITIONS AND MEMORIALS the Congress of the United Stat es has many Senate on official business, having been m atters of great importance to consider now appointed as a delegate from the Senate Petitions, etc., were laid before the and immediately after January 1. It is very to attend the meeting of the Commori• Senate and referred as indicated. likely, howeve·r, that t he very important sub wealth Parliamentary Association in By the VICE PRESIDENT: ject of the development of t h e Great Lakes Australia. , A resolution adopted by the National Asso St. Lawrence seaway will again come up for eiation of Independent Tire Dealers, at Chi· ·consideration very soon. The Senator from Massachusetts [Mr. cago, Ill., favoring the enactment of legisla Undoubtedly you are int erested in any LODGE] and the Senator from Delaware tion which would impose Federal income action which the st ockholders of the Farm.. [Mr. WILLIAMS] are necessarily absent. taxes on the profits of all cooperatives en- ers Union Central Exch ange, In c., may hav~ XCVI--1034 - 16426 CONGRESSIONAL RECORD-SENATE DECEMBER 12 taken on this matter; therefore, we enclose I would like ~o point out that these law, -can come only from the_ Secretary of herewith a certified copy of resolutions resolutions, approved by the house of Agriculture. adopted by the stockholders at their annual voting delegates of the Nebraska Farm We feel . that the land-grant colleges meetings on March 15, 1948, March 10, 1949, should be charged with the responsibility and March 2, 1950. Bureau, represents the official policy of ·of research, disseminating of factual infor As to identification of the Farmers Union this State federation on matters of pub ... mation, and the . training of personnel; that Central Exchange, Inc., this is to inform you lie pulicy as it affects agriculture. This the ·son Conservation Service under the. gen that the central exchange ls a wholesale does not mean that all of these resolu eral supervision and with the approval of farm-supply cooperative with headquarters tions will coincide with resolutions of the the local and State association of soil con in St. Paul, Minn., and operates in the States American Farm Bureau Federation, since servation districts should be charged with of Minnesota, Wisconsin, North and South the responsibility of furnishing all technical Dakota, and Montana, . serving farmers with the resolutions adopted by the national services, approval of practices for payment many of their major farm supplies through organization represents the majority arid rates of payment, and the checking of locally owned cooperative associations. opinion of all the States affiliated. At compliance; that the Production and Mar There· are about 500 of these associations any point where the Nebraska resolu keting Administration should be the actual in the respective States serving approxi tions might be in conflict with a state paying agency under any federally subsi- mately 175,000 individual farm families. ment or resolution of the American Farm dized soil-:conservation program. . Yours very truly, Bureau Federation on national policy, VI FARMERS UNION CENTRAL ExCHANGE, INC., the American Farm Bureau resolutions E. A. SYFTESTAD, General ManagtZr. We recommend that PMA make the agri . take precedence over these State reso cultural program more uniform by using lutions. crop acres to set allotments when allotments CERTIFICATE OF RESOLUTIONS PASSED AT There being no objection, the resolu are necessary rather than crop history of the ANNUAL MEETINGS OF STOCKHOLDERS OF tions were referred to the Committee on farm, taking into consideration sound crop FARMERS UNION CEirTRAL EXCHANGE, !NC., Agriculture and Forestry, and ordered to ping and past conservation practices. MARCH 15, 1948, MARCH 10, 1949, AND VII MARCH 2, 1950 be printed in the RECORD, as follows: RESOLUTIONS ADOPTED AT THmTY-FmsT AN We recommend that legislation be enacted MARCH 15, 1948, SEVENTEENTH ANNUAL MEET• enabling a tax not to exceed one-half cent ING OF STOCKHOLDERS, GREAT LAKES-ST, NUAL CONVENTION, NEBRASKA FARM BUREAU FEDERATION, NOVEMBER 22, 1950 a bushel on wheat and one-quarter of a. LAWRENCE SEAWA7 cent a bushel on corn at the producers' "Whereas the Congress of the United States AGRICULTURE market; the moneys raised to be used to has recommitted legislation to create the . I develop new markets and uses for these Great Lakes-St. Lawrence seaway; and We · ask that more emphasis be placed on commodities. ·we recommend that such fund "Whereas this legislation is of great im- the bacteria count for grade A milk instead be administered by a committee appointed by portance to the farmers in general and of the of barn and milk-house requirements. the governor .of the State from a list fur Northwest in particular: Therefore be it nished by the general farm organizations and "Resolved, That we urge our Representa II the dean of the college of agriculture; a. tives and Senators in Congress from these The Nebraska Farm Bureau Federation majority of whom must be producers of the Northwest States to demand that the Con highly resents the abuse of the franking commodities. We further recommend that gress reconsjder this action and that every privilege and the use of . public tax moneys this program be coordinated with.States hav effort be made to speedily enact this act into by any governmental department or agency ing similar programs. law." · ·and particularly the United States Depart vm MARCH 10, 1949, .EIGHTEENTH ANNUAL MEET• ment of Agriculture to promulgate and propagandize any program which has its con We urge the continuation of the practice ING OF STOCKHOLDERS, GREAT LAKES-ST, and the faithful carrying out Of the plan LAWRENCE SEAWAY ception entirely within its framework, but which is not law. · of electing county PMA officials at caucus "Whereas the people of this Nation are We feel that the primary purpose of a de meetings and by secret ballot. entitled to the cheapest and most economical partment of Government is to administer IX transportation possible whether under pri agricultural legislation enacted by Congress We resolve that· the State committee of vate or public ownership or operation; and · and is completely outside its jurisdiction "Whereas it is of grea.t importance to the PMA be elected by delegates from every when it seeks to i~fiuence public opinion county in the State. Said delegates to be people in g· neral and the Northwest in par or establish policies. ticular to establish the Great Lakes-St. Law elected at county caucus meeting by secret rence seaway: Therefore be it III ballot. The above State committee to be "Resolved, That we ask our National Con Recognizing the tremendous damage be elected · on a staggered yearly basis for a gress to enact and rapidly effectuate the com ing done through the spread of brucellosis 3-year term. x pletion o.f this very worthwhile project." to the health of the citizens of Nebrask~ and We request that the entire State shall be a. 114ARCH 2, 1950, NINETEENTH ANNUAL MEET• the great economic loss to the livestock in dustry, we feel that. an aggressive campaign brand area, that all branded cattle sold in ING OF STOCKHOLDERS, GREAT LAKES-ST, the State be inspected by an authorized in LAWRENCE SEAWAY should be instituted to eradicate this and other dise.a.ses from the livestock herds of spector, a record be kept of such sales and a. "We feel that the people in the Northwest the $tate. bill of sale of each consecutive brand follow will be immensely benefited by the Great We believe that the movement of diseased such cattle for use when resold. Each State Lakes-St. Lawrence seaway and urge efforts . cattle into the State or within the State will carry its separate identification. by our President and Congress to effe~t its shou~d be prohibited, except for slaughter. completion." XI I, Ruby M. Heraty, assistant secretary of We urge the members of the Farm Bu That Congress enact legislation to require reau to, help in the passage of legislation to that after 2 years' time no brand be placed on the :Jrarmers Union Central Exchange, Inc., eradicate brucellosis. do hereby certify that the foregoing are true cattle except that when such brand has been and complete copies of· resolutions adopted IV registered in the name of the owner of the at annual meetings of stockholders of - We favor fiood·control by organized drain brand through a State agency and a permit Farmerli Union Central Exchange, Inc., age areas beginning wlth a complete soil and granted by that agency for the use of that March 15, 1948; March 10, 1949; and March water conservation program carried out on brand, no brands be duplicated within any 2, 1950. the farms of the area. We feel that through State, that all marketing agencies be re In witness whereof, I have hereunto set this method there will be less need for large quired to record the brand (or brands) of my hand and affixed the seal of said corpo flood control structures and part of the all cattle reaching the market when such ration this 16th day of November 1950. funds originally intended for such use can be brand, or brands, are not registered in the . RUBY M. HERATY, used to assist farmers in the area in carry name of the seller, and that requirements Assistant Secretary. ing out soll and water conservation on their be established for publishing and posting farms. .We rec9~mend that large dams in public places of all registered brands. RESOLUTIONS OF NEBRASKA FARM when shown to be necessary be used for irri Each State will carry its separate brand BU:?.EAU FEDERATION ·gation and generation of electric power when identification. · Mr. BUTLER. Mr. President, I pre feasible. XII sent for appropriate reference, and ask . We request a more intense research made unanimous consent to have printed in Nebraska Farm Bureau 1s cognizant of the by State veterinarians in regards to the new overlapping functions and duplication of disease referred to as virulant virus affecting the RECORD, an official copy of resolutions effort within the Department of Agriculture. swine and cattle in th~ past year causing in adopted by the thirty-first annual con-· ·We pledge our efforts to secure a clear cut tense or total loss. vention of the Neb:rnska Farm Bureau definition of the responsibil1ties of the vari xm Federation, at Lincoln, Nebr., on Novem: ous agencies within the Department, recog We feel that full parity prices to producers be:;.· 22, 1950. nizing that sue~ definition, under present for agricultural products are fair and just 1950 CONGRESSIONAL RECORD-SENATE 16427
both to the producer and to the consumer State Governments are not able to provide XX VII and we will work toward achieving the goal of pupils with .an opportunity for education We urge that the surfacing of mail routes receiving such prices in the free market place equal to that in other States. provided by the mail route surfacing law be with a minimum of Government interven XX III executed according to the written law. · tion. We further believe that support prices should be flexible to allow supply · and de Nebraska Farm Bureau Federation favors XX'.'III m and to at least partially determine price. legislation in favor of a uniform course of We urge that a uniform detailed audit Neither agriculture nor industry nor labor study throughout all schools in the State . be made of all county commissioner and should look to the Government for guaran of Nebraska for the elementary grades one supervisor financial records showing costs teed profitable incomes, a condition which through eight. by items and purposes. Continuation of would ultimately result in a deterioration of ROADS such a procedure with required compilation, individual initiative and a lower standard of XXIV publication, and dissemination to all other living for all. Rlalizing that Nebraska's roads are one of counties of the information received would We favor support prices on farm products her great problems, we desire an efficiency provide valuable information 'to compare on a variable scale from 75 to 90 percent of program within the highway department. costs of equipment, m aintenance, and ma parity as being a reasonable insurance This includes the questions of business man terials for county boards in bringing down against a disastrous price decline in agricul agement methods, a State highway commis . costs of county government. ture which would· seriously affect the sion, division of responsibilities ( 1. policy XXIX economy of the entire Nation. m aking, 2. administration, and 3. technical We recommend that section 39-703, Re We look upon any program which fosters fields) , separation of nonhighway activity vised Statutes _of Nebraska be strengthened the philosophy of high prices to farmers and from the department, and a more complete to protect our highway and roads from wa cheap food to the consumer or one whereby analysis of costs and disposition of funds. ter being diverted into the road ditch due agricultural producers must look .to Con We desire a highway plan that includes State to leveling and terracing land in any place gressional appropriations for a substantial roads, city and village streets, and county except the natural flow of water. Water part of his farm income as being unsound in roadi;. Such a plan is necessary before flinds now being diverted should be put back into principle and a long step down the road to are macle available, in order to arrive at the the natural channel that enters the high socialism. proper ratio of finances and development in way. Adequate penalty for failure to com XIV the priorities of future expansion of Nebras- ply with the law should be provided. Nebraska Farm Bureau urges any improve ka's road system. · ment in the quality of dairy and poultry (a) We recommend the division of the De xxx products marketed by the producer. We be- . partment of Roads and Irrigation into three We favor uniform per-axle truckloads lieve any cream law or regulation should be parts: (1) Department of Roads, (2) Depart over the State and Nation and · that severe based on a premium paid for a premium ment of Irrigation, (3) Safety Patrol and penalties be invoked for violations. We fur product. We feel that creameries, processors, Motor Vehicle License. ther urge that portable and local private and carriers are just as responsible for poor (b) We recommend that the State high scales be used for checking such loads. quality cream as the producer, therefore we way department be reorganized on a busi XXXI ness-like basis, preferably under a five-man urge our cream stations and creameries to We urge the standardization of traffic reg comply with our State cream regulations. commission selected by districts. The Com mission should be appointed for staggered ulations, traffic signals, and road markers xv terms by the Governor, approved by and over the United States. We recommend that legislation revising responsible to the legislature. Such com :xxu the Nebraska seed law be enacted to reduce mission shall employ a business manager for We endorse the principle of the installa the amount of tolerance of noxious weed the administration of the policy of such com tion of drop inlets through roads where seeds allowed in lots of field seeds offered for mission. We further urge that the legisla needed as a sound method of conserving sale. ture or its legislative council cause a private soil .and water as well as effecting large sav- SCHOOLS a·1dit to be made of the highway department . ings in bridge and road construction and XVI by the time the business manager takes office. maintenance cost. We further urge our Such audit shall show breakdown of costs We recommend an investigation into the State and local road officials and engineers by items and purposes and a system of record in consultation with SCS technicians to leasing of school lands with special emphasis keeping installed such that the breakdown on the fact that school lands should not be thoroughly study the terrain and determine of costs can be easily secured and summa where such drop inlets may be feasibly used subleased. rized and made available periodically. XVII and install them in the.light of such deter (c) We request that the Governor appoint mination. Realizing that the Nebraska school reor a peoples road· c0mmittee to formulate a XXXIII ganization law (L. B. 27) has been in effect long-time road program cognizant of the We believe that all purchases and con such a short time we recommend that it needs of both rural and urban people whose be given a fair trial before any major changes tracts for supplies and contractual services livelihood is vitally dependent on adequate and all sales of such personal property which are made. roads. XVIII has become obsolete and unusable by coun Each organized farm group shall be repre ty governments in amounts exceeding $500 We wish to commend the State Depart sented on the committee with the represent should be subject to competitive bidding in ment of Education for the encouragement ative picked from a list of n ames submitted all counties. · of teaching conservation in our schools. by the organization itself. Rural people shall TAXES XIX be represented on the committee in approxi mate proport ton to their percentage of the XXXIV We feel that normal training should be total population. We do not believe the practice of ex encouraged in our high schools. .. With approximately 90 percent of the roads empting charitable institutions from taxa xx in the State classed as rural roads any pro tion on property owned and used for mone We feel that where the salaries of county gram developed should give adequate atten tary gain is sound policy and are concerned superint endents of · schools are inadequate tion to the problem of getting the farmer out about the effect such exempt ion h as on lo that county boards should investigate the of the mud as well as to the development of cal districts and competing business. We possibility of increasin g the salary of the village and city streets and State highways. urge a serious study be given to the problem county superintendent of schools in order We feel the committee in the study of types and favor the taxation of any such property to attract better qualified personnel. of roads needed and in the specifications rec used for monetary gain. ommended for each type; should consider xxxv XXI the Nebraska _taxpayer's ability to pay. We are opposed to any additional St ate Gasoline used for agricultural purposes is xxv aid to schools except such as may be nec a product used in agricultural production. essary to relieve the present inequalities of The resolutions committee requests that We do not believe in production t axat ion on· agriculture when ot her indµ stry of this our present t ax system. the President of the Nebraska Farm Bureau Federation and the State Farm Bureau Board State h as none. Therefore we favor the XXII call a special meeting of the voting delegates continuation of the principle of the pre ~ent We do not favor the principle of Federal when ever advisable during the session of the law providing for gas t ax refunds for agri aid to schools. We feel that schools are legislature for the purpose of studying the cultural purposes. primarily the responsibilit y of local an d progress . made by the legislature in reor XXXVI State Government s. In the event that said ganizing the highway department and the We insist there be no licensing of farm legislation should be enacted, we strongly road program. t ractors. t :'ieve that such disbursements should ·be XXVI ., XXXVII m ade on a grant-in-aid basis through State We request legislation making it neces We feel that Federal matching of funds is and county governments to insure a m axi sary for the legislature to approve any wasteful and request that the Nebraslca and mum of local control, also such aid sh ould money spent by the highway department for American Farm Bureau take action toward be m ade available on ly where county a n d ctr-high way const ruction. reducing Federal m atching .
. - ~ 16428 CONGRESSIONAL RECORD-SENATE DECEMBER 12 LVI XX XVIII services, \.e feei that agriculture, industry, we favor the continuation of the practice ·and labor should all produce to the limit of We feel that bringing DP's into the United of earmarking State funds for specified pur- their aQility. States is a worthy cause. However, we ask With our young farmers in the· service, it that there be better screening of the DP's, poses. will be necessary to work long hours and no their employers and sponsors. We also ask XXXIX possibility of special overtime compensation. that there be more and better supervision We recommend that the Nebraska Farm We recommend that labor return to a 48· from their sponsors after they have been Bureau Federation go on record in favor of . hour week during the emergency. located in the United States, both as to a. sales and/or income tax. This tax to be a. position and suitability of the individual. partial replacement tax for personal prop XLVIJ erty tax and real-estate tax. We believe that steps should be taken to LVII MISCELLANEOUS ward balancing the bud~et by less duplica We the Associated Women's Committee of tion of governmental bureaus, less waste of the Nebraska Farm Bureau wish to express XL material and money. our deep and sincere thanks to the following Philosopies of communism and other isms We also recollllD.end consolidation of all persons who so greatly contributed to the are far closer to the American people than agencies and departments, resulting in more success of our convention: To Mrs. Herman they sometimes realize. Those individuals efficient management. Kayser for the floral arrangements; and fur that support these philosophies prey upon XL VIII thermore to the Reverend McCamley for tlie and infiltrate our governmental, educational, music; and to Mrs. Gilbert Erickson, who spiritual, and organizational institutions of The last two sessions of the legislature has acted as pianist. There are the wishes of the this Nation under the guise of exercising suspended the school mill levy limit on per Associated Women's Committee. sonal and real property as an emergency freedom of speech and movement. Such in .Lvm dividuals exe~cising these constitutional measure. We feel that it is no longer an privileges ignore another constitutional pro emergency, and we ask that the mm levy We reaJfirm the policies expressed in reso vision providing for the general welfare or limit be restored and we face the school sit lutions adopted in previous annual meetings the country. uation as a permanent condition. At the that are now in effect except insofar as they - In view of this cunning but deliberate at same time we request the excessive property have been modified or supplemented by the tempt to sell den.ocracy and the American tax levy be replaced by some other form of resolutions adopted at this annual meeting. system short, we urge all citiz~ns, all organ taxation. '· REPORTS OF COMMITTEES izations, all institutions, and all. branches of XLIX Government t9 appraise themselves of this Under present world conditions there is an The following reports of committees condition; do all that they can to determine indication we may have compulsory military ·were submitted: who these individuals are; and upon this training. If this condition comes about, we By Mr. GEORGE, from the Committee on determination, we further urge each accord urge that the training be coordinated with Finance: ing to his or its own ability to combat the further education by being given in our col H. R. 9840. A bill to exempt furlough travel evils of this philosophy by exposing their leges under supervision of the Armed Forces. of service personnel from the tax on trans identity .and bringing to the attention of portation of persons; with an amendment everyone the advantages of the American L Dumping of rubbish, beer cans and bottles (R~pt. No. 2620). way of life. By Mr. IDLL, from th~ Committee on Labor XLI on our highways has been causing unsightly highways and a great deal of damage. we and Public Welfare: · We favor retention of and extension of the feel this cannot be controlled by law, but is S. 4229. A bill to extend to certain persons principle of a free medical profession and rather a matter of pride and education. Con who served in the military, naval, or air will continue to actively oppose any move· sequently we recommend that the Associated service on or after June 25, 1950, the benefits toward socialized medicine. Women make this highway beautification one of Public Law No. 16, Seventy-eighth Con As a means to prevent the appearance of of their 1951 projects. gress, as amended; with amendments (Rept. socialized medicine, we recommend that No. 2621). means be provided to educate more men and LI By Mr. O'CONOR, from the Committee on women into the medical profession. We feel We do not approve of the present social the Judiciary: this will provide more competition for prac security for farm laborers in its present form s. 4240. A bill to amend the act incorpo tice which will have a tendency to provide for the reason that it cal!_ be avoided easily rating the American Legion so as to redefine more doctors for rural areas and reduce the and that the laborer can lose his equity so eligibility for membership therein; without burden of overcharging for services. We feel easily. We also do not favor social security amendment (Rept. No. 2623); and that this in turn will relieve the pressure for for farm opera~ors. S. 4241. A bill to amend the act incorpo socialized medicine caused by the high cost rating the American Legion so as to redefine of medical service. LU (a) the powers of said corporation, (b) the XLII We feel that the Postal Department should right to the use of the name "The American We again recommend that each county se pay its own way, but we do not favor any in Legion" and "American Legion"; without lect a person who is interested in legisla crease in rates until the abuses of the frank amendment (Rept. No .. 2624). ing privilege be_rectified. If increase in rates tion and send him or her to Lincoln some INVESTIGATION OF FIELD OF LABOR- time during the coming legislative session are made, we suggest the first raise would be to become acquainted with legislative pro in third class bulk mail to decrease the mall MANAGEMENT RELATIONS-REPORT OF cedure and aid the Nebraska Farm Bureau that is notiread. We oppose any decrease in A COMMITTEE Federation i;i carrying out its legislative pro the size of parcel post packages, for it would Mr. MURRAY. Mr. President, from gram. work a hardship on rural people: the Committee on Labor and Public Wel XLill LIII fare, I eport favorably, without amend We feel that there is a great deal to be We recommend a Missouri Valley Commis ment, the resolution THE NEW YORK TIMES may be. Are we to cut ourselves off from all time, and, by unanimous consent, the [Mr. NEELY asked and obtained leave to contact with one-sixth of the inhabitants of have printed in the RECORD an editorial en the world-from all chances of making our second time, and ref erred as follows: titled "Peiping's Expansionism," published in views known to their.rulers." By Mr. THOMAS of Oklahoma: the New York Times· of December 8, 1950, · My answer to Mr. Attlee's statement is also S. 4246. A bill to provide for the establish which appears in the Appendix.] straightforward. Those are not facts. The ment of a Universal CiviUan Defense Train Chinese peoples' ·government is not a govern ing Corps for the purpose of training high MUST THINK OF OURSELVES-EDITORIAl ment existing in its own right. In spite of school s·tudents in civilian defense, and for FROM THE TOPEKA DAILY CAPITAL Mr. Attlee's doubts on the subject it is purely other purposes; to the Committee on Armed [Mr.' SCHOEPPEL asked and- obtained and simply an arm of the Russian Govern Services. leave to have printed in the RECORD an edi· ment. The so-called rulers of the 400,000,- S. 4247. A bill to authorize t_he sale of cer torial entitled "Must Think of Ourselves," 000 Chinese people are in fact Russian Gov tain vessels under the jurisdiction and con published in ·the Topeka Daily Capital for ernment officials. Neither is it a fact that trol of the Maritime Administration to ship December 6, 1950, which appears in the these foreign rulers command or get the un owning_cooperatives, and for other purposes; Appendix.] contested obedience of the 400,000,000 non to the Committee on Interstate and Foreign Communist Chinese. Temporary dominance Commerce. CHOOSE THE FORTRESS AMERICA-EDI~ is not effective control. The Russians are all By Mr. McCARRAN: TORIAL FROM THE TOPEKA STATE too well aware of their tenuous hold on parts S. 4248. A bill for the relief of Joseph Fleury JOURNAL of the territory we call China. Hence their determined insistence on further betrayal of Paluy; [Mr. SCHOEPPEL asked and obtained the Chinese people by England, United States, S. 4249. A bill for the relief of Sister Car leave to have printed in the RECORD an edi· and other UN countries. Only when this is men Teva Ramos; and torial entitled "Choose the Fortress Ameri accomplished will the Russians themselves S. 4250. A bill for the relief of Klemens ca," published in the Topeka State Journal feel secure or will they in fact be in control Kalman Schlosser; to the Committee on the for December 4, 1950, which appears in the of the mainland territory which we know as Judiciary. Appendix.] China. So long as strong Nationalist forces COMPENSATION TO CERTAIN PAGES THE WAR IN KOREA-LETTER FROM AN exist on Formosa, so long as a million or more organized forces of resistance, Nation Mr. THOMAS of Oklahoma submitted IDAHO PARENT alist or otherwise, exist on the mainland, so the following resolution New Jersey. Mr. Pres .. ident, this morning I received a letter munism. If Mr. Attlee feels that the so by law if they had been retained on such called rulers of these inhabitants must be payroll from the 8th day of October 1950, which I think is of considerable impor contacted to make our views known to these to the 23d day of November 1950': Provided, tance. It comes from the Honorable rulers, then avenues exist apart from such That the above order shall apply only to Charles Edison, former Governor of the false fronts. Let him make our views known those pages who were reinstated on the pay State of New Jersey, and also Assistant at headquarters in Moscow. It seems incred• roll during the month of November 1950. Secretary of the Navy under President ible that, as the price of merely expressing HOUSE BILL REFERRED Roosevelt, In connection with my brief those views, the power to sabotage the reali remarks at this point, I shall ask unani· zation of our views must be strengthened by The bill (H. R. 9184) to provide for the the creation, recognition, and appeasement of separation of subsidy from air-mail pay, mous consent that the letter be printed a fictitious Communist-front called the Chi and for other purposes, was read twice in the body of the RECORD. nese Peoples Government. The security of by its title, and referred to the Commit· Mr. President, the purpose of the let· the United States must not be further eroded tee on Interstate and Foreign Commerce. ter from Mr. Edison to me is simply this: by agreement with any such thinking. He reports that he is troubled by a Sincerely yours, MASONIC ADDRESS BY SENATOR . statement by Mr. Attlee with regard to CHARLES EDISON. MAYBANK recognition of the present Communist ONLY THE FIRST BATTLE-EDITORIAL ,. [Mr. MAYBANK asked and obtained leave government of China, and he quotes Mr. FROM THE NEW YORK TI~ES to have printed in the RiEcoRD an address de Attlee's statement, as it was reported in . livered by him _before Landmark Lodge, No. the press. Then he gives his own com· Mr. NEELY. Mr. President, I ask . 76, Ancient Free Masons, at the one hun unanimous consent to have printed in ments on it. I believe that Mr. Edison's the body of the RECORD a most impor.. dredth anniversary meeting of the lodge, in views are of great value to all of us. He Charleston, S. C., December 11, 1950, which tant editorial entitled "Only the First appears in the Appendix.] has made a very careful study of this Battle,'' which appeared in the New question. Therefore, I now ask unani· York Times of Friday, December· 8. REARMAMENT AND UNITED STATES POL• mous consent that his letter be printed There being no· objection, the editorial ICY IN EUROPE-ADDRESS BY GEN, in full in the body of the RECORD. LUCIUS D. CLAY, RETIR'ED was ordered to be printed in the RECORD, There being no objection, the letter as follows: [Mr. MAYBANK asked and obtained leave was ordered to be printed in the RECORD, to have printed in the RECORD an address ONLY THE FIRST BATTLE as follows:. In the confusion and dismay over the regarding rearmament and United States. WEST ORANGE, N. J., foreign policy, delivered by Gen. L. D. Clay, retreat in Korea one pertinent fact seems to December 7, 1950. be forgotten. The action there represents a United States Army, retired, at the Southern Hon. H. ALEXANDER SMITH, Governors' Conference, Charleston, S. C., policy of international resistance to aggres Committee on Foreign Relations, sion that is just beginning to take shape, November 27, 1950, which appears in the United States Senate, . Appendix.] and those who are ready to write off the . Washington, D. C. policy at this stage would have 'ditched the ADDRESS BY DR. RUTH M. STEESE AT DEAR ALEX: The World-Telegram on De airplane because the first models could not DEDICATION OF SOLDIERS' ;MONUMENT, cember 6, reported Mr. Attlee as saying: "We fiy. The first organized effort to enforce MIFFLINBURG, PA. are asking how we can recognize and have peace has run into trouble, but we should diplomatic relations with the government of be defeatist indeed if we gave up what is [Mr. MARTIN asked and obtained leave China when its policies are in contradiction bound to be a long war in the first battle. to have printed in the RECORD an address with the United Nations objective in Korea The initial test has shown up the aggressors. delivered by Dr. Ruth M. Steese, national and when its nationals are engaged in con· and their fury is the best evidence that even chairman of the committee on historic ftict with our forces. My answer to. such 1n its-weakness the United Nations frightens shrines, of the Dames of the -Loyal Legion of criticism is quite straightforward. The Chi· them. Better than some of its discouraged the United States, at the dedication of the nese peoples government has control of the supporters they see in its attempt to imple· Soldiers' Monument at Mifilinburg, Pa., on mainland territory, which we know as China. ment the collective will a potential power November 11, 1950, which appears in the Ap It commands the obedience of 400,000,000 that could frustrate all their plans if it were pendix.] Chinese who inhabit that territory. not nipped in the bud. 16430 CONGRESSIONAL RECORD-SENATE DECEMBER 12
The retreat in Korea would be unmiti rlg:):lts and brutal persecution of religion LIKINJ. I now ask unanimous consent gated disaster only if it meant retreat from in Yugoslg.via, demands that aid be given that the Boeing letter, by Mr. Yeasting, the principle we have been trying to estab only on basis of proven need and with in be made a part of m.y remarks at this lish on that heroic battlefield. The free sistahce on reestablishment of decency and world and the United States above all has justice as sole moral justification for any point, in order that its provocative com now invested blood in the United Nations; present or future aid. Otherwise shall be ments may become available to every it will be spent in vain unless this first sacri parties to another betrayal of the real and Senator. fice to international patriotism impels us to trustworthy friends and allies we have be There being no objection, the letter strengthen the instrument forged _for the hind iron curtain. was ordered to be printed in the RECORD, purpose of stopping aggression forever. Mrs. THOMAS R. PATl'ERSON, as follows: Mao Tse-tung ls said to have a 500-year . President, Superior Diocesan BOEING AIRPLANE Co., plan, representing the stages and ages it Council of Catholic Women. Seattle, Wash., December 11, 1.950. will take- to achieve real communism in The VICE PRESIDENT. Are there Hon. HARRY P. CAIN, · China. By any reckoning the 5 years of the United States Senate. United Nations is a short time in which to any further routine matters? If not, Hon. FRANK CARLSON, - realize an idea more revolutionary than the Senate has before it the bill of unusual interest be the average for industry generally through There being no objection, the telegram cause it presents some of the extremely out the last 8 years (aircraft 1.3 percent as was ordered to be printed in the RECORD, complex problems which confront and compared to 5.4 percent for industry in as follows: involve the aircraft industry, and it offers general). · 2. The base period of 1946-49 was a SUPERIOR, WIS., December 11, 1950. several solutions. I have forwarded a copy of the Boeing period of severe depression for the aircraft Senator ALEXANDER WILEY, industry (while th~ same period is generally Washington, D. C.: letter to the chairman of the Senate recognized as having been a prosperous one This organization, appalled by indispu Finance Committee [Mr. GEORGE] and to for industry in general). Instead of having table facts of widespread violation of human its rank ~ ng- minority member [Mr. MIL- a profit for the 4-year period the 15 com- 1950 CONGRESSIONAL RECORD-SENATE 16431 panies had an average annual loss_ of gested relief provisiQns consist of three We do earnestly believe, however, that the $1,200,000. ' points, namely: recommendations of the Aircraft Industries 3. The aircraft industry is extremely com 1. The recent 103s adjustment provision Association for a relief provision based on plex. What was a good airplane yesterday in H. R. 9827. the t axpayer's percentage of average net is totally inadequate today. Speed of flight 2. The growth formula. income to gross receipts during the 14-year has doubled, altitude accessibility has in 3. The World War II credit for the year period 19.36-49, provides a more logical, creased tremendously, the jet engine has in 1945 plus 50 percent thereof. and consistent approach to the problem and creased power availability and the construc Each of these provisions, if adopted, would is fairer and more equitable throughout the tion of airplanes for high speeds and alti do some good for some companies. None entire aircraft industry. tudes has created enormously difficult prob of them would give relief for all companies We think it sound and consistent with the lems extremely expensive to solve. and of necessity all three must be incor excess-profits-tax-law theory to give consid 4. The im")erative need for research and porated or extreme injustice will be done. eration to the taxpayers earning record. In plant improvement require adequate funds The recent loss adjustment provision pro the aircraft industry, equitable consideration from profit. Without extensive research we vides limited relief for some companies but requires that a relatively long period be used canno"t hope to provide the Nation with su it follows the unsound principle of placing in establishing such a record because of the perior aviation leadership; without adequate the companies with the poorest earnings rec long-term contracts involved, the many years funds for necessary plant improvement we ord in the 1946-49 period in a favored posi required to design and develop new models cannot hope to produce new and needed air tion. For example, assume that two compa and bring . them to production stage, and craft with the kind of efficiency and at a cost nies had equal net worth at J anuary 1, 1946. because of the violent fluctuations in earn fair to the Government and the taxpayers. Assume the first company sustained sub ings as between years. We think the 14-year Present-day machinery must be purchased at stantial losses during 1946 and 1947 and period selected is fair and equitable. We do a cost much higher than the original cost of broke even during 1948 and 1949. For com feel that perhaps it would be wise to estab machinery being replaced. parison, assum".l the second company broke lish minimum- and maximum-profit per We are not alone in our recognition of the even in all 4 years. The first company, sus centages. First, this would protect the in need for reasonable relief for the aircraft taining the heavy losses, ends up with a sub terests of the Government from percentages indust ry. In the public hearings before the stantially higher excess profits tax credit than considered too high, and second, it would _House Way s and Means Committee the Sec does the second company, which broke even. be fairer to any companies whose past diffi retary of th·e Treasury stated as follows (p. 77 This assumes that the first company had culties had created percentages abnormally of the committee report) : substantial earnings in 1945 (all aircraft low. "Mr. MARTIN. I have a question or two here manufacturing companies did) and was, The industry recommendation further pro with reference to the national defense. I therefore, able to take advantage of the net vides that the percentage profits should be am,particularly interested in a program that loss carry-back privilege. We are not critical applied to a volume of gross receipts not ex will avoid crippling essential defense indus of the relief thus granted for so far as we ceeding one-half of the highest annual gross tries. Do you have any suggestions for spe are aware no company in the aircraft in receipts of the taxpayer during the 14-year cial relief in the case of the aircraft industry, dustry even with this provision will have period. We agree that some proper limita which suffered a lQss in the period· 1946-48? adequate relief, but it is our belief that this tion on volume to which the full percentage "Secretary SNYDER. That has been among is not a sound approach to the problem. is applied is in order. Study ot this point our worst cases that we have had to consider, The second relief provision. enumerated this past week has convinced me that there and we think that special consideration must above provides for making the growth for is a more equitable means of establishing be given. mula ::'.. S contained in H. R. 9827 available limits. The 50-percent limit may work un "Mr. MARTIN. Have you any suggestions re to the aircraft industry. If this provision due hardship on a company · that previously garding that point? I have not found any were included in the law Boeing would ob never had large volume but has recently or in your statement. tain some relief thereunder as we would be in the future does develop a new model or a "Secretary SNYDER. We did not put that in able to use 85 percent of our 1949 earnings product which is outstanding in perfprmance there because it is a matter that we will have as a base. Again, we are not critical of the Our tax laws should encourage, not dis to talk out with you as a special case. relief so granted but we do not believe it is courage, such developments. Also, in this "Mr. MARTIN. It is very essential that we a truly sound and equitable approach to the industry during a period of emergency every give that consideration; is it not? excess profits tax credit to which Boeing or encouragement should be given to increasing "Secretary SNYDER. There is no question other companies are entitled, primarily for volume of output. Some continuing increase two reasons: in excess-profits-tax credit with increasing about it. We are fully in accord with that." (a) Very few in the aircraft industry actu Admiral Ramsey's testimony further estab -volume will offer such encouragement. On ally come within the concept of what we lished the fact that aircraft-industry profits, the other hand, we think the increase in resulting from Government business, · are believe is intended as the basic principle of credit should not continue in direct rela the growth formula. Historically, the air tion to increasing volume. The taxpayers controlled by the Government through rene craft industry is subject to severe peaks gotiation, price redetermination, and the requirement for research, for privately fi and valleys. At the present time the indus nanced facilities, etc., will tend to increase Vinson-Trammel Act. Just as utility profits try is coming out of a depression valley and are controlled, in the public interest, by State with increasing volume but probably not in and Federal regulatory bodies, so are air on the upswing of the cycle. direct ratio, particularly as extremely high craft-industry profits controlled, also in the (b) Within the industry, the cycle varies volumes are reached. public interest, by the methods mentioned. by several years as between various com It is, .therefore, our belief that the most As to whether the testimony completely panies. The merl.} fact that this provision equitable approach from the standpoint of established the relative soundness, fairness, would only give some of the companies relief the industry and from the standpoint of our and equity of the suggested alternate meth indicates that it is somewhat a happen national interests would be to provide for ods for relief I am not so certain. The time stance if a company obtains relief therefrom. an excess-profits-tax credit based on using limit for the presentation of the actual testi The third relief provision enumerated the taxpayer's profit ratio based on the 14- lnony itself, and the limited time available above permits use of the World War II credit, year period 1936-49 (with minimum and for preparation thereof, are undoubtedly plus 50 percent thereof. As with the _ot:t:er maximum limits) applied to the volume of largely responsible for this. It is our opin provisions, there are some arguments in its business during the taxable year on a re ion, however, and I believe the industry gen favor. But here it must be remembered ducing basis as such volume increases. erally agrees, that the first suggested relief that the World War II earnings credit was For purposes of illustration, the forego provision, based on the application of a 14· based on the years 1936-39. During the ing is reduced to a specific proposal using year average percentage of net income to intervening years there have been inevitable percentages and figures which are considered gross receipts, is more sound and equitable changes in the industry structure. New fair aRd reasonable. than the alternate suggestions. companies h ave entered the picture and PROPOSED BASIS FOR COMPUTING EXCESS-PROFITS• 1 I wish to develop this premise briefiy. Per some of the older companies have had va:r;y TAX CREDIT FOR AIRCRAFT INDUSTRY haps the simplest way to do this is to com ing records.' An arbitrary increase in the World War II credit simply perpetuates any Apply to taxpayer's gross receipts during pare the percentage of net income to gross the ta,xable year the percentages set forth be receipts approach with the other suggested injustices done under that law and fails to recognize changes in the interim. low and to the gross receipts as so adjusted relief provisions now before the Senate Fi apply the t axpayer's percentage of average nance Committee for their consideration. Let All of us in the aircraft industry are con vinced that some relief is vitally necessary. taxable net incom_e to gross receipts in the me say, at the outset, that I favor the per 14-year period 1936-49 provided that such centage of net income to sales approach sug It is our understanding that with respect to the 15 major companies, referred to by later percentages shall not be less than 4 gested by the aircraft industry not because . nor more than 7: it benefits Boeing more as against the other Admiral Ramsey on page 3 of his t estimony, companies, nor because Boeing would fail if each company were· allowed a choice be-· Gross receipts: Percentage tween any of the three relief provisions dis First $100,000,000______100 to receive some benefit, probably in line with Next $150,000,000______· 85 the average of the industry, from the other cussed above they would obtain some bene relief methods. I favor this approach be fit, from one or other. Certainly it would be Next $250,000,000______60 better to be granted some such relief than Next $500,000,000______25 cause, aft er much study, I sincerely believe Over_ $1,000,000,000______5 it to be the most equitable throughout the no relief at all, even if that relief, in our industry and to be premised on by far the opinion at least, is inadequate as we face the The minimum and maximum credits for soundest basic principles. The other sug- problems ahead r - us. ·specific volumes of gross receipts resulting 16432 CONGRESSIONAL RECORD-SENATE DECEMBER 12 from application of the above are set forth It will be noted that with sales of $286,- we have deferred the acquisition of an ad below: 000,000 in 1949 our taxable income was only ditional $10,000,000 of facilities urgently $9,376,000. This abnormally low margin was needed because of the dr~in on our working primarily due to the fa;ct that we were still capital position and the ·uncertainty as to Total gross Minimum Maximum receipts credit credit writing off losses on the Stratocruiser project the future. This $10,000,000 covers ·princi ($7,850,000 in 1949). During the year 1950, pally our need for a flight-test hangar, addi· based on a projection of our puIDlshed earn tional engineering and office area, and addi $100, 000, 000 $4,000,000 $7, 000, 000 ings statement for the first 9 months, our tional warehousing area. At the present 250, 000, 000 9, 100, 000 15, 92-5, 000 500, 000, 000 15, 100, 000 26,425, 000 sales volume should approximate that of 1949 time it further appears that within the next 1, 000, 000, 000 20, 100, 000 35, 175, 000 whereas our taxable income should be a lit 2 years we will be re_quired to expend an 2, 000, 000, 000 22, 100,000 38, 675, 000 tle more than double that of 1949. -in this additional $10,000,000 to $15,000,000 for newer connection it is significant to point out that and heavier equipment to handle the job The Boeing Co. had sales of $286,000,000 very little if any of our income in 1950 is at ahead. in 1949 and should approximate this figure tributable to business obtained since the This means that in a period of 2 or 3 years in 19c0. our average profit rate for the start of the Korean situation. The profits we should spend upward of $25,000,01>0 for 14 years 1936-49 was 5.66 percent. With a on such business will not be reflected to any new plant facilities. While aircraft plant sales volume of $280,000,000 our credit under substantial degree until late 1951. improvements are subject to certification the above formula would be $13,895,300 For purposes of further illustration we will and 5-year amortization, they are likewise whereas under the growth formula our assume then a sale't volume of $280,000,000 for subject to rapid obsolescence and may be credit would be a little under $8,000,000. 1950 and income before taxes of $19,000,000. rendered useless overnight by contract ter I . wish to point out that we consider the The net income after taxes under several of minations. You will note that Boeing's sales larger credit not only equitable but also the excess profits tax credits mentioned above dropped from $421,000,000 to $14,000,000 in necessary if we are to do the job ahead (assuming the_ excess profits tax was in ef 1 year. Furthermore, certification does not of us in the best possible manner. None fect for the full year at rates provided in provide the funds with which to acquire · theless, if in tbe judgment of those writing H. R. 9827) would be as folfows: the facilities. Adequate profits . will help the tax law a credit of $8,000,000 or any provide the needed cash and justify the risk. other amount is all that Boeing is entitled involved. Witl:out adequate profits, some Effec· of the needed facilities cannot be acquired to, we still think that it should be arrived Excess profits Taxab:e To-ta! tax Net in- tive at by a fair and logical approach through tax credit income come tax and our efficiency will sufier thereby. This the application of a formula such as that rate will be the taxpayers' loss since our contracts suggested above, on a more restrictive basis. ----- are subject to price redetermination and We believe you gentlemen are entitled to Percent renegotiation. The higher our efficiency, the $4,005,672 _____ $19, 000, 000 $12, 730, 000 $6, 270, 000 67.0 more money the taxpayers save. know more specifically how the various pro $7,!>70,140 _____ posals would affect Boeing. You are also 19, 000, 000 11, 859, 000 7, 141, 000 62.4 In light of the foregoing, we believe you $13,470,800_ - -- 19, 000, 000 10, 209, 000 8, 791, 000 53. 7 will agree that an excess-profits-tax credit entitled to know what we consider Boeing's $13,895,300_ - -- 19, 000, 000 10, 081, 000 8, 919, 000 53.1 minimum needs to be for the years immedi for Boeing of $4,000,000 or even $8,000,000 Is ately ahead: To this end we are setting forth . not only inequitable in view of the job being below certain basic information and com When considering our contention that done and the problems ahead of us but also putations made therefrom. wHh a sales volume of $280,000,000 we need a would not be for the best interests of the credit of upwards of $13,000,000 we must first Nation. Further, we do not believe that Boeing Airplane Co. (and component corpo rememb3r that the above figures are repre Boeing's position in the industry is peculiar, rations )--ex~ess profits tax data ·sentative of -a high level earnings period. but is, in fact, quite typical of the industry. As previoqsly pointed out the aircraft in Sincerely yours, Excess dustry is subject to violent fluctuations. J. 0. YEASTING, Gross receipts Taxable in- profits Obviously we must strengthen our financial Vice President-Controller. Year (sales) come tax position in good periods of business so that - credit we can withstand the shock when the period Mr. CAIN. Mr. President, our chief of emergency is over, drastically reduce our hope is that any new tax legislation will output, stay in business in order to be ready 1936. ------$2, 292, 772 $241, 091 stimulate production and will make 1937 _ ------5, 545, 439 355, 199 ------ for the next emergency should it come, and greater achievements possible. ·I am 2,006,345 19391938______------_ (68, 855) ------ continue the caliber of research and develop satisfied that the Boeing point of view 11, 846,894 (1, 775, 225) ------ ment that will always assure the United 1940 __ ------19,390, 718 (1, 164, 468) $1, 298, 471 m~ght to be and will be explored and con 194L ______97, 210, 314 20, 874, 994 1, 506, 177 States of America of being the No. 1 air power sidered before any final action on tax 1942_ ------372, 108, 863 35, 920, 518 1, 775, 878 in the world. 1943 __ ------493, 188, 161 31, 921, 408 2, 359, 798 Secondly we , must consider the need for legislz,tion is taken. 1944 __ ------608, 082, 413 27, 083, 408 2, 443, 563 protecting our equity capital. The airci:aft The Boeing Aitplane Co. is a great in 1945_ ------420, 979, 217 22, 695, 796 2, 787, 311 13, 984, 063 industry cannot afford to fall too far behind stitution in its own right. Its first con 1947_1946_ -_____------______(8, 610, 174) ------21, 701, 852 561, 769 ------industry in general in the matter of dividend cern is with the Nation's need. It has 1948 _ ------126, 931, 453 3, 006, 900 ------286, 751, 519 payments. Boeing has just over 1,000,000 tried to be helpful to all Members of the 1949. ------9, 376, 636 ' ------shares of stock outstanding and the dividend Senate. I believe that it has been con TotaL_____ 2, 482, 020, 023 140, 418, 997 payments per share since the formation of structively helpful. the present Boeing Airplane Co. in 1934 are ANNOUNCEMENT OF CALL OF THE Percent taxable income to gross set forth below: 1934 ______CALENDAR ON FRIDAY receipts 1936-49 (percent)--- 5. 66 1935 ______Net worth Dec. 31, 1949 ______$46, 320, 898 Mr. LUCAS. Mr. President, .I desire Excess profits tax credit up.der 1936------1937 ______0.40 ·to announce to the Senate, for the pur H. R. 9827 (as passed by pose of the RECORD, that on Friday of House): 1938------this week the calendar will be called Average earnings ( 85 per 19391940 ______~- --·------_ cent of 3 best ·years 1946- from the beginning, This was agreed 49) ------$3,667,836 1941------~------upon this mornin5 at the Democratic Invested capital method___ $4, 005, 672 19431942------~------______1. 00 conference. I thought I should make Excess profits tax credit under 2.00 the announcement at this time. various relief . provisions as 1944------1945 ______2.00 Mr. WHERRY. Mr. President, I . am proposed: . 1. 00 wondering whether it would make a World War II (1945) credit 1946------1947 ______1. 00 plus 50 percent thereoL_ $4, 180, 966 1948 ______1. 00 great deal of difference to the Senate Growth formula (85 percent 1. 00 and to the majority leader whether the 2.00 of 1949 income)------$7,970,140 1949----~------calendar were called on Friday or on 3.00 Pro:tlt ratio to gross receipts 1950------Monday. I make the inquiry for the as proposed in Admiral The $3 dividend in 1950 represents approxi reason that we have on this side of the Ramsey's testimony with mately 6 percent on our present net worth aisle our so-called calendar committee, assumed gross receipts of and can certainly not be considered "lush" and that committee is not up with the $28J,OOO,OOO (85 percent in light of industry payme:µts in general and calendar. There are certain reports they of 5.66 percent of $280,- further in light of the substandard return would like to study. 000,000) ------$13,470,800 received by our stockholders throughout the Profit ratio to gross receipts years. Mr. LUCAS. I can only say to the ·as proposed herein with Thirdly, we must consider our needs for Srmator from Nebraska that we went on assumed gross receipts of capital equipment. As pointed .out in the record this morning in the conference, $280,000,000 (5.66 percent testimony of Admiral Ramsey, the Boeing and I would have to call anotner confer of adjusted gross receipts Co. in 1950 has committed over $7,500,000 ence in order to undo what was done this Of $:45,500,000) -'------$13, 895, 300 for new capital equipment. Furthermore, morning, It was agreed upon tnis morn- 1950 CONGRESSIONAL RECORD-SENATE 16433 ing in conference. I may say I do not in prohibiting the purchase of stock, it 2734 stems from the widespread merger th~nk the calendar is too heavy, said nothing about assets. activity which has been taking place Mr. WHERRY. I was about to ask - Shortly after the end of World War I since World War II. During the period in regard to that. corporations began to take advantage of 1940-47 more than 2,500 formerly inde Mr.. LUCAS. I feel sure that the two this loophole. If they purchased assets pendent manufacturing and mining Senators on . the Republican side, who in the first instance, dispensing entirely companies disappeared as a result of are always looking after the interests of with the acquisition of stock, they were mergers and acquisitions. It should be the taxpayers, will be ready by that time. obviously acting with perfect legality, emphasized that this is a minimum esti Mr. WHERRY. My reason for sug free from any action by the Federal mate since it is based upon a sample gesting that it be postponed until Mon Trade Commission. Many large corpo drawn principally from reports of acqui day was that the"' two Senators in ques rations adopted the deliberate policy of sitions of the larger corporations, as tion are not ready, and one of them Will purchasing assets when interstate com published in the leading financial man be absent Friday. It would even be a merce, and thus the Federal law, were uals. The asset value of these 2,500 little difficult for us to be ready by Mon involved, and of making stock acquisi firms amounted to $5,200,000,000, or day. If, however, the majority leader tions only when the transaction was con roughly 5.5 percent of the total of all insists upon a call of the calendar on fined within the borders of a single State manufacturing corporations in the coun Friday, we shall do the best we can to and haa no effect on interstate com try., Although data for the last 2 years be ready. I merely made the suggestion merce. are not available, there has been no in order to let the Senator know that · In some cases, however, acquisitions apparent decrease in the intensity of the if it would not cause too great incon of assets , were not feasible, unless the movement. _ venience, it would be greatly appreciated stock could be purchased first; and this These mergers have had the effect of on this side if the call of the calendar raised a problem. If a firm went through strengthening the position of big busi · could be postponed until Monday. this double play, buying up the stock ness in several ways. In the first place, · Mr. LUCAS. I may say to the Senator first and then using the stock to obtain several of the traditionally small-busi that we seldom take up matters of this the assets, was it not violating the law? ness industries have been affected. The kind in conference, but we did so this The Federal Trade Commission thought two leading industries, in terms of num morning, and it was unanimously agreed so. ber of acquisitions, have been.textiles and that we should have the call on Friday; The law certainly did not specify that apparel, and food and kindred prod so I presume we shall have to go through those who broke its provisions could gain ucts-both · predominantly small-busi with it. Then, too, I think an appro immunity from its penalties by subse ness fields. Moreover, in certain small· priation bill will be before the Senate quently purchasing something else not business industries, notably steel drums, probably on Monday. mentioned in the law. Yet, in a 5-to-4 tight cooperage, and wines, virtually all decision, with Justices . Brandeis, Taft, or a substantial part of the industry has Mr. WHERRY. Very well. Holmes, and Stone dissenting, the Court been taken over by large corporations. PREVENTION OF CORPORATIONS FROM held, in 1926, that where a corporation Finally, the outstanding characteristic ACQUIRING ANOTHER CORPORATION had gone through this double play the of the movement has been that of large BY MEANS OF ACQUISITION OF ITS Commission was powerless to take effec corporations buying out small com· · ASSETS tive action. Specifically, the Court held panies. · The Senate resumed the consideration that the Commission's only authority in Thus, the preponderant number of of the bill EFFECTS OF MERGERS ON ECONOMIC Another series shows the percentage ment and creating of monopoly. Thus, CONCENTRATIONS of all working capital of manufacturing in a report dated. July 2, 1914, which ac In appraising the over-all effect of corporations held by 316 large manufac- companied the Clayton Act, the Senate mergers on economic concentration, it. turers. This provides a useful link-to the Judiciary Committee said: must be kept in mind that they tend other series and confirms the general up Broadly stated, the bill, in its treatment of to become cumulative over a period of ward trend in concentration. In 1926 unlawful restraints and monopolies, seeks time. Each year's mergers are super these large manufacturing corporations to prohibit ..md make unlawful certain trade imposed upon an economic structure held 35 percent of the total working cap practices which, as a rule, singly and in ital By 1938 the figure had1risen to 47 themselves, are not covered by the act of of concentration which has been built July 2, 1890 [the Sherman Act] or other up over many years. In other words, percent. existing antitrust acts and thus, by making insofar as the long-range impact on Mr. President, the extent to which the -these practices illegal, to arrest the creation. concentration is concerned, the 2,500 American economy has become concen of trusts, conspiracies, and monopolies in industrial mergers which have taken trated and centralized in the hands of a. their incipiency and before consummation. place between 1940 and 1947 are additive few giant corporations was -strikingly re to the mergers which had tak_en place vealed before this committee in figures This intent to stop practices which re in previous years. In the preceding 20- presented by Dr. Wilfred I. King, pro sult in monopoly is also evident from the year period, from 1919 through 1939, fessor emeritus of economics at New congressional debates on the bill. Thus, approximately 9,000 formerly independ York University. The figures wq.ich he former Senator Walsh, of Montana. ent manufacturing concerns had dis presented reveal an e~traordinary lever stated on the Senate floor: appeared as a result of mergers and ac of concentration. Thus, his fig11res show It was intended [in this bill] to reach the quisitions, making a total of 11,500 that in 1946, the latest year for which practices that were not the practices of things that have developed into trusts and disappearances between 1919 and 1947. such data are available, one-tenth of 1 monopolies, but were practices of trade, The long-range increase in economic percent of th-e total number of all Amer which 1! persevered in and continued and concentration which has taken place in ican .corporations-the giant firms with developed, would eventually result in the · this country can be attributed in con assets of $100,000,000 and over-owned creation of I\ monopoly or trust. siderable part to this great number of 49 percent of the assets of all American mergers and acquisitions. The steel in corporations; 2 percent of the number In 1914 President Wilson, in speaking dustry constitutes one of the few fields of corporations own-ed-78 percent; 8 per of the passage of the Federal Trade Com in which it has been possible to estimate cent of the number owned 89 percent of mission Act and the Clayton Act, stated the extent to which long-term growth the assets; and 12 percent owned 92 per that their purpose was to kill monopoly of large corporations has been due to cent of the assets. They are, of course, in the seed. this cause. Between 1915 and 1945, ap the giant corporations. .At the other end Shortly after World War I, the proximately two-thirds of the growth of of the scale, thinking now, of small con Supreme Coµrt itself gave expression to one company was due to mergers and cerns, 45 percent of the number of car-· this point of view by referring to the acquisitions. The corresponding figures porations-the small firms with assets of unsatisfactory results of dissolving com for other leading steel companies are as $50,000 or less-owned less than 1 per- binations under the Sherman Act, "so follows: One ~ompany, one-third; an cent of the assets. . far as the purpose to maintain free other company, one-sixth; another com The figures presented by Dr. King also competition was concerned," and in that pany, one-fourth; another company, show that in the field of manufacturing connection said that "the Clayton Act one-fifth; another company, one-tenth; alone, the 25 largest corporations in 1948 sought to reach the agreements em another company, two-fifths; and .still owned 27 percent of the total assets of braced in its sphere in their incipiency." another company was the product of· all manufacturing corporations, or a lit It also said that "the Clayton Act, as its the greatest merger in history, involv tle more than an average of i ·percent of title and the history of its enactment ing the consolidation at one fell swoop the assets for each of the 25 e,orpora shows, was intended to supplement the of more than 180 formerly independent tions. That is, each company owned ap purpose and effect of other antitrust companies. proximately f percent of all assets. legislation, principally the Sherman Act As would be expected, the concentra The enactment of the bill will limit of 1890." tion level in the steel industry has further growth of monopoly and thereby Examples of the present ineffective steadily risen. Back in 1860 the four aid in preserving small business as ,an ness of the law: A typical instance of largest producers in the iron and steel important .competitive factor in the the futility of attempting to enforce industry owned 25 percent of -the rolling American economy. · section 7 -as it now stands is the case one mill capacity in the country. At the In order that a full understanding firm which the Federal Trade Commis end of World War I, the top four steel may be had of the background existing sion -in 1944 charged with violating sec producers held more than 55 percent of when the Congress felt comp_elled to en tion 7 by purchasing the stock of a com the steel capacity, and by 1945 the figure act antitrust legislation, certain facts petitor. During the ·course of hear had risen to slightly more than 64 should be recited. ings-which, of course, are the consti percent. Original purpose of the Clayton· Act: tutional right of any accused firm-the The long-term increase in concentra The action by the Supreme Court in ac attorneys announced on November 21, tion in the steel industry is by no means tually breaking up the Standard Oil and 1945, that their firm had just purchased an isolated case. The economy as a Tobacco Trusts in 1911 had convinced the assets of the competitor and accord whole has also shown a similar increase Congress that the Government was al ingly requested the Commission to dis also due in considerable part to mergers ready armed under the Sherman Act miss the complaint. Since the Commis and acquisitions. This long-term in with the power to break up existing mo sion had no alternative but t~ comply, crease is revealed by several independent nopolies. But this was not sUfiicient for it dismissed the complaint in March measures of concentration compiled by the legislative temper of those earlier 1946. various authorities, covering the period days. Congress wanted to go one step Another recent example is provided 1909-42. further and prevent the very creation of by the case of another corporation. Thus, the 200 largest nonfinancial car. monopoly. Instead of waiting until a Through a number of stock acqui-sitions porations increased. their relative im- monopoly had been formed and then try in competing corporations it had be . portance from ownership of one-third ing to dissolve it under the Sherman Act, come in 1945 the largest wholesale gro of the assets of all nonfinancial corpora Congress wanted to prevent the develop cery in the country, with assets of $20,- tions in 1909 to 48 percent in 1929 and to ment of monopoly in the first place--=-to 000,000 and an:QU· 1 sales of $100,000,000. 55 percent in the early thirties. The nip it in the bud. It occupied a leading position in the sharp upward sweep in the 20 years be Whatever the reasons for the ultimate wholesale grocery trade in numerous fore the crash of 1929 is confirmed by shortcomings of these provisions of law, important trade areas, including Chica another series showing that the percen the intent of Congress in passing them go, Baltimore, and Canton, Ohio. Since tage of the total net incomes of all non was quite clear. It was dissatisfied with its acquisitions took the form of the pur financial corporations earned by the 200 the Sherman Act and intended that chase of stock, the Commission issued a largest nonfinancial corporations in these new powers should supplement complaint in 1946, charging a violation creased from 33 percent in 1920 to 43 that aet in such a way as to enable the of section 7. But while the case was in percent in 1929. Government to prevent the very develop- th_e process of being tried, the corpora- .1950 CONGRESSIONAL EECORD-SENATE 16435 tion acquired the assets of its subsidiary believe that the proposed bill will prevent tion 7, even in the case of stock acquisi concerns, which it had previously con sales of this type (p. 7). . tions, to large transactions which would trolled only through stock ownership, We then go on to point out that deci substantially lessen competition, or tend and dissolved the subsidiaries. Again sions of the Supreme Court have made to create a monopoly. In the case of the Commission had no alternative but it abundantly clear that the Clayton International Shoe Company against to dismiss the case, which it did in Feb Act does not apply in bankruptcy or re F.ederal Trade Commission, supra, de ruary 1947. ceivership cases. , Moreover, the Court cided January 26, 1930, the International Reasons for original failure of Con has held, with respect to this specific Shoe Co., having a Nation-wide business gress to include assets: The present im section, that a company does not have purchased the stack of a smaller sho~ potence of section 7 raises the question to be actually in a state of bankruptcy company also having a Nation-wide as to why Congress, in granting the to be exempt frNn" its provisions; it is business. As to a part of the business Commission power to prevent purchases sufficient that it is heading in that direc of the two corporations, they were not of stock, did not also give it the power tion with the probability that bank in direct competition. The Federal to move against acquisitions of assets. ruptcy will ensue. On this specific point Trade Commission sought to order a di Inasmuch as purchases of assets are the Supreme Court, in the case of Inter vestiture of the stock and prevent the more binding and lasting, and thus more national Shoe Co. v. Federal Trade Com merger., The Supreme Court held 'that destructive to competition, the omission mission (280 U. s. 281) said: the merger was not of sufficient size or seems particularly paradoxical. The an A corporation with resources so depleted importance, even thougli there was some swer lies in the fact that at the time and the prospect of rehabilitation so re competition between the two corpora when Congress enacted the Clayton Act, mote that it faced the grave probability of tions, to substantially lessen competition most acqu.isitions took the form of stock a business failure with resulting loss to its or to create a monopoly. The Court purchases. By comparison, acquisitions stockholders and injury to the communities has this to say: of assets were almost unknown. where its plants were operated, we hold that Mere acquisition by one corporation of The economic background behind the the purchase of its capital stock by a com the stock of a competitor even though it re passage of the Clayton Act in 1914 was petitor (there being no other prospective sults in some lessening of competition, is not purchaser), not with a purpose to lessen forbidden; the act deals only with such ac-1 the great merger movement which be competition, but to facilitate the accumu quisitions as probably will result in lessening gan at the very end of the nineteenth la.ted business of the purchaser and with the competition to a substantial degree, Standard century and extended through 1907. effect of mitigating seriously injurious con Fashion Co. v. Magrane-Houston Co. (258 During this period, which wit:nessed the sequences otherwise probably, is not in con U. S. 346, 357); that is to say, to such a birth of such huge consolidations, most templation of law prejudicial to the public, degree as will injuriously affect the public. antt does not substantially (303) lessen com mergers were effected through the pur petition . or restrain commerce within the .The language in the amendment, it chase of stock. intent of the Clayton Act . . To regard such a will be noted, follows closely the purpose Effect of the loophole on antitrust transaction as a violation of law, as this of the Clayton Act as defined by the Su policies: The antitrust laws condemn at Court suggested in United States v. U. S. :preme Court in the International Shoe tempts to control the market by means Steel Corp. (251 U. S. 417, 446-447), would case. of mutual understanding or agreement "seem a distempered view of purchase and among competitors; but if the same ob result." See also Press Ass'n v. United States Fifth. The bill modifies the present law (245. Fed. 91, 93-94) (Id. pp. 302-303). so as to remove any possibility of an jective is achieved through the purchase interpretation that would prohibit in of physical property, it is lawful in the Some might fear that the passage of consequential acquisitions of stock or absence of monopoly, and the antitrust House bill 2734 would have the effect of assets. Section 7, as it now stands, pro agencies are powerless to act. The ex stopping all mergers and acquisitions. hibits a corporation engaged in com istence of the loophole thus places a pre Such is not the case. House bill 2734 merce from acquiring the stock of an mium upon the attainment of monop would not put an end to all future merg other corporation engaged also in com olistic ends by the completely final ers and acquisitions. Its applicability is merce "where the effect of such acquisi method of consolidation, as against the limited in several ways: tion may be to substantially lessen com more vulnerable method of conspiracies First. It applies only to corporations petition between the corporation whose among independent firms. In other in interstate commerce. stock is so acquired and the corporation· ·words, the weaker, less effective, co Second. The bill applies only to acqui making the acquisition." oper~tive methods of eliminating compe sitions which substantially lessen com Since acquisition of a controlling stock tition are prohibited, but the permanent petition or tend to create a monopoly. interest in a rival company necessarily and·more effective method of consolida In other words their effect upon compe eliminates effective competition between tion under a single mal).agement is per tition must be substantial. Any action the acquirin& and the acquired corpora missible. Moreover, the more effective by the Federal Trade Commission de tions, this language, but for limiting in is the enforcement of the law against signed to halt mergers of an inconse terpretations by the courts, might have collusion among competitors, the greater quential nature would not be in accord prevented any use of stock purchases to is the incentive to achieve the same ends ance with the language of the bill and unite small corporations engaged in the through purchase, consolidation, and would not he' upheld by the courts. same line of business even though these merger. Third. · As already mentioned, the bill corporations were so small and their Any antitrust policy, to be effective, would not apply to a company in a failing other competitors so numerous that the .must ,prohibit the achievement of mo or banluupt condition. acquisition would have made no per nopolistic ends, regardless of whether Fourth. The present language of sec ceptible change in the intensity of com they are attained by collusive agreement tion 7 as it relates to mergers by sale of petition in any. line of commerce in among independent firms or by consoli stock is more restrictive than the lan which such corporations were engaged. dation, acquisition, and merger. To guage in the amended bill. Yet no case The. present bill eliminates the test of block off one of these two roads to has been found where a small corpora the lessening of competition between the monopoly, while leaving the other open, tion had any difficulty or was criticized acquiring and the acquired_corporations merely increases the traffic on the latter. by the Federal Trade Commission for retaining only the test of the generai Inapplicability to companies in a fail selling its business by s~lling its stock to effect on competition. ing or bankrupt condition: The argu another small corporation. The small corporations have not had to avoid the Owing in considerable part. to mergers ment has been made that the proposed and acquisit10ns, the Nation is now con bill, if passed, would have the effect of present language of section 7 by selling their assets in place of their stock, when fronted with an extraordinary level of preventing a company which is in a fail economic concentr~t i on. In a report on ing or bankrupt condition from selling they wanted to dispose of their business. Furthermore, the Supreme Court and the concentration of productive facili out. Of- course, that would be a serious ties the Federal Trade Commission situation, and it is entitled to our con the Federal courts have not applied the sideration. In our report accompanying present·strict language of section 7; even found that in 1947 the 113 largest manu- i H. R. 2734, the committee states: · in cases of stock acquisition, so as to pre facturing corporations owned 46 percent The commit tee are in full ·accord wit h the vent a small corporation from selling its of the net capital assets of all manufac- \ proposit ion that any firm in such a condi business or of merging with another turing enterprises, both corporate and tion should be free to dispose of · its stock small business. The Supreme Court has noncorporate. The three largest firms
or assets. The committee, however, do not only appl ~ ed the present language of sec- held 100 percent of the net capital assets 1 16436 CONGRESSIONAL RECORD-SENATE DECEMBER 12. in the aluminum industry; 95 percent in been most active in seeking to -correct Mr. DONNELL. Mr. President, will the tin-can industry; 92 percent in lino this glaring loophole in the law. Both the Senator yield for a few questions? leum; 88 percent in copper smelting and Senators have- consistently n.rgued for Mr. O'CONOR. I am very pleased to refining; 78 percent in cigarettes; 72 per such legislation in ·the interest of small yield to the Senator from Missouri. · cent in distilled liquors; 71 percent in business,' and in order to thwart the Mr. DONWLL. First, I should like to plumbing equipment and supplies; 70 growth of monopoly. express my appreciation of the great percent in rubber tires; 68 percent in As would be expecteu from this lengthy care which has been ~videpced by the .biscuits arid crackers; 67 percent in agri legislative history, the record on this bill distinguished Senator in the presenta culture machinery; 64 percent in meat is voluminous, consisting of three printed tion of this extremely important ques products; 57 percent in glass and glass volumes of hearings before subcommit tion. As he recalls, there was a differ ·ware; 56 percent in dairy products; and tees of the House Jtldiciary Committee ence of opinion in the Judiciary Com similar high proportions in other in the Seventy-ninth, Eightieth, and mittee, and I had the privilege of sub industries. Eighty-first Congresses; approximately mitting minority views, which appear In concluding this brief resume of the 700 typewritten pages of transcript of alongside the report of the committee history of the legislation there is one hearings before.the subcommittee of the itself. · particular point which I think warrants Senate Judiciary Committee of the I should like to ask the Senator a few comment. Some may be concerned over Eightieth Congress; a printed volume of questions so as to develop his views its effect on small business that it might hearings before the subcommittee of the somewhat further. · pre.vent two small firms from merging. Senate Judiciary Committee of the I am correct, am I not, in stating that On this point I think it is worth while Eighty-first Congress; three printed re the majority report, on page 2, states to bear in mind the fallowing considera ports of the House Judiciary Committee; that- tions: First, as I have already indicated, one printed report of the Senate Judi The purpose of the proposed legislation is the facts reveal that the great bulk of ciary Committee; and very important to prevent corporations from acquiring an the mergers which have taken place in material printed before· the Temporary other corporation by means of the acquisi recent years have consisted of the ab National Economic Committee in the tion of its assets, where under the present sorption of a small company by a large form of printed hearings and mimeo- law it is prohibited frotr acquiring the stock company; ~he cases of two small com graphs. ' . of said cor!Joration. panies merging are few and far between. Finally, Mr. President, in addition to Mr. O'CONOR. The report so states. Second, the bill is aimed at preventing its repeated approval by congressional Mr. DONNELL. That is the purpose only those mergers which substantially committees, the bill has received wi~ of the bill; is it not? lessen competition or tend to create a spread support from other sources. Mr. O'CONOR. Yes; monopoly. Obviously, those mergers President Truman has specifically rec Mr. DONNELL. Or, as stated else which enable small companies to com ommended its enactment. In the eco where in the report, at page 3: pete more effectively with giant corpora nomic report of the President of January The purpose • • • is to limit future tions generally do not reduce competi 8, 1947, the President, in speaking for increases in the level of economic concen tion but rather intensify it. the need in strengthening of the anti tration resulting from corporate mergers Third, by a specific action, Congress trust laws, stated that-- and acquisitions. has made it abundantly clear that it is Among the steps to be taken ls the exten not the purpose of this law to prevent sion of section 7 of the Clayton Act to pro Mr. O'CONOR. The Senator has, of mergers of this type. Thus, the original hibit mergers by the acquisition of assets as course, correctly read from the report. wording of section 7 of the Clayton Act, well as by the acquisition of stock control. The excerpts, of course, should be read in which, with ·regard to stock, is now on connection with the entire report, which the statute books, prohibits a corpora Similarly, President E,oosevelt, in a emphasiz~~ the fact that the bill is aimed tion from acquiring a competitor "where message to the Congress on April 29, only at acquisitions which substantially the effect may be to substantially lessen 1938, recommended "more rigid scrutiny lessen competition or tend to create a competition between the corporation thro-qgh the Federal Trade Commission monopoly. Witb that qualiflcation the .whose stock is acquired and the corpo of corporate mergers, consolidations, and Senator is entirely correct. ration making the acquisition." Had acquisitions than that now provided by Mr. DONNELL. I agree with the Sen this language been rigidly interpreted, the Clayton Act.'' ator's statement. it would have had the effect of prevent In addition, the measure was unani May I ask the Senator whether or not ing any company from buying the stock mously recommended by the Temporary the majority report at any point asserts, of any competitor, since the acquisition National Economic Committee. Finally, either in haec verba or in substance by one firm of a competitor not only the Federal Trade Commission has been that acquisitions· by one corporation of "substantially lessens" but completely recommending its passage since 1927, assets of another corporation or of other eliminates the competition which had now almost a quarter of a century ago. corporations have caused any great in formerly existed between them. The most recent report of the Federal crease in the level of concentration? In the bill before us this stringent pro . Trade Commission on this ,subject-The Mr. O'CONOR. It does so state, I may hibition has been completely deleted. Merger Movement: A Summary R~port say to the Senator from Missouri, in this Instead of making the test of the law the concludes with - the following words, way: The report showg..:_and charts are effect of an acquisition on competition which· should be constantly borne in available which later on I might, if de between the acquired and the acquiring mind in its consideration: sired, display to the Senate-a trend companies, the proposed bill substitutes No .great stretch of the imagination is re upward in the number of mergers and quired to foresee that if nothing ls done to acquisitions. Such a trend is attributa the more general test of the effect on check the growth Jn concentration, either competition generally in any line of com the giant corporations will ultimately take ble to the fact that the Clayton Act has merce in any section of the country. over the country or the Government will be had this luophole in it for the past 36 And to come within the prohibition of impelled to step in and impose some form years. the bill the effect on that competition of direct regulation. in the public interest. Mr. DONNELL. Mr. President, I call must be "substantial." In either event, collectivism will have tri the ::ittention of the distinguished Sen Lest it be thought that this bill is the umphed over free enterprise and the theory ator to page 3 of the report. The page of competition will have been relegated to contains a portion entitled "The Level result of snap judgment or hurried con the limbo of well-intentioned but ineffective sideration, let me say that over a period ideals. This is a warning which the Com of Economic Concentration." I ask the of years attempts have ·been made to mission has repeated time and again, and Senator whether or not that is the por remedy the existing defect in the law. one which some of those who have the most tion of the report w.hich discusses both Most active in this endeavor have been to gain by the preservation of competition the level of economic concentration and the senior Senator from Wyoming [Mr. seem determined to ignore. the cause, or the facts out of which such O'MAHONEYJ and the junior Senator The Commission believes that the eco economic concentration has arisen? from Tennessee [Mr. KEFAUVER], the lat nomic forces on which it has been basing.its warnings' require that a definite choice be Mr. O'CONOR. That is the section ter having striven for the passage of made. Eit her this country is going down where the point is principally empha amendatory legislation while a member the road to collectivism or it must stand and sized; yes. of the House of Representatives. Over fight for competition as the protector of all Mr; DONNELL. Would the Senator the years the Senator from Wyoming has that is embodied11n free enterprise. have any objection if I asked leave at
• 1950 CONGRESSIONAL RECORD-SENATE 16437 this time for unanimous consent that the Mr. DONNELL. But if the Senator nomic Committee, as I recall, there was portion of the report appearing on page will permit me to inquire further, there considerable testimony with respect ·to 3, beginning with the words, "The level is no express statement in the portion of the progress of mergers. My mind of economic concentration" and ending the report which I have placed in the carries me back to the evidence of the at the conclusion of page 3, be inserted RECORD to the effect that the acquisitions merger that was going on in the distil in the RECORD? by one corporation of assets of another lery industry. My recollection is, and Mr. O'CONOR. I would be delighted corporation or of other corporations it is borne out by a chart which I find to have the Senator do so. have caused any great injuries in the in the report of the Federal Trade Com Mr. DONNELL. Mr. President, I ask level of economic concentrations? mission on the merger movement, the unanimous consent that the matter re Mr. O'CONOR. I may qualify or ma!rn report being dated 1948. The chart f erred to may be printed in the RECORD this additional observation, which is that shows the acquisitions since 1933 by the at this point. the report is not very lengthy, that it Schenley Distilleries Cqrp. This mo The PRESIDING OFFICER. Without covers only a little more than seven nopoly was established almos-:; com objection, that course will be followed. pages, and obviously, with the hundreds pletely by mergers of the kind which The matter referred to is as follows: of pages of testimony that have been the pending bill wo:ild prohibit. I am THE LEVEL OF ECONOMIC CONCENTRATION taken, we could not put everything in sure there are other instances. The purpose of the proposed bill, H. R. 2734, the report. Of coun:e, the history of the concen is to limit future increases in the level of Mr. DONNELL. I now ask the Sena trat:on in the steel industry, not at all economic concentration resulting from cor tor whether or not included in the testi confined to the earlier years, has been porate mergers and acquisitions. The bill mony before the committee was the history of acquisition by the United would accomplish this purpose by enabling article by Drs. John Lintner and J. Keith States Steel Corp. when it started, and the Federal Trade Commission to prevent Butters entitled "Effect of Mergers on by the Republic Steel Corp. and other those acquisitions which substantially lessen Industrial Concentration, 1940-47"? l~ter wrporations, of competing con competition or tend to create a monopoly. Mr. O'CONOR. There was such an Since 1914 the Commission has had the power cerns, so that today in the steel indus to prevent such acquisitions whe? they are article. try there has been built up what amounts effected through the purchase of stock. The Mr. DONNELL. May I inquire of the to a monopolistic situation by which objective of Congress in passing section 7 of Senator from Maryland whether I am the entire production and distribution the Clayton Act has been circumvented by correct in stating that the material in of steel in the United States are directed the acquisition of assets rather than, or in that article was originally prepared as by common consent. addition to, the purchase of stock. The pro a part of the background for a mono Mr. O'C'-'NOR. I may say in fur posed bill would eliminate this practice by graph which is one part of the study of therance of the very pertinent statement extending the application of the Clayton Act Effects of Federal Taxation on Business to acquisitions of assets. by the Senator from Wyoming, that While there exist many differences of opin Mergers, which has been conducted by everything we heard bore out that state ion on other aspects of the monopoly prob the Harvard Graduate School of Busi ment; and, further, that it was not con lem, there is substantial agreement that the ness Administration under a grant from fined to any one particular industry. level of economic concentration is extremely the Merrill Foundation for the Advance The example cited by the Senator deals high. . ment of Financial Knowledge? with the distilled spirits industry. We The extent to which the American economy Mr. O'CONOR. The Senator is cor took typical cases of companies in vari has become concentrated and centralized in rect. the hands of a few giant corporations was ous other lines, such as farm imple strikingly revealed before this Committee in Mr. DONNELL. I call to the Sena ments, manufacturing, steel, and dairy figures presented by Dr. Wilfred I. King, pro tor's attention, for his conveni~nce at products, and found that the situation fessor emeritus of economics at New York this point, the first page of the minority in those industries was roughly similar University. The figures which he presented views submitted by myself, and ask the to that described by the Senator from reveal an extraordinary level of concentra Senator whether the· authors of the Wyoming. tion. Thus, his figures show that in 1946, article referred to, namely, Drs. Lintner Mr. O'MAHONEY. May I ask the the latest year for which such data are avail · and Butters, point out the general rec able, one-tenth of 1 percent of the total Senator what has been going on in the number of all American corporations--the ognition qf the fact that- retail-grocery business, what has been giant firms with assets of $100,000,000 and The high degree of industrial concen going on in the bakery industry, what over-owned 49 percent of the assets of all tration which characterizes our economy to has been going on in retail distribution American corporations; 2 percent of the day stems largely from the two waves of of various kinds? Is not the record be number of corporations owned 78 percent; merger activity in the late nineteenth cen fore the committee and the record before 8 percent of the number owned 89 percent of tury which were typified by the formation of the assets; and 12 percent owned 92 percent the Standard Oil trust in 1879 and, later, of the Federal Trade Commission conclu of the assets. At the other end of the scale, the billion-dollar United States Steel Corp. sive upon the point that mergers are still 45 percent of the number of corporations at the turn of the century. continuing? I take it that those of us the small firn:s with assets of $50,000 or less who sponsor the bill-and I introduced owned less than 1 percent of the assets. Does the Senator coincide with what a similar bill, in several Congresses-do The figures presented by Dr. King also show I have therein described as the general not contend that mergers constitute the that in the field of manufacturing alone, th~ recognition of the language set forth in sole cause· of concentration of economic 25 largest corporations in 1948 owned 27 per the article by Drs. Lintner and Butters? power. They constitute only one cause. cent of the total assets of all manufacturing Mr. O'CONOR. I quite agree with corporations, or a little more than an aver but they constitute so important a cause the Senator from Missouri that that was that the gaping hole in the Clayton Act, age of 1 percent of the assets for each of the the viewpoint expressed by the gentle 25 corporations. in my judgment, should be plugged to The enactment of the bill will limit further men to whom the Senator from Missouri prevent mergers which are designed or· growth of monopoly and thereby aid in pre has referred. which have a tendency to create monop• serving small business as an important com Mr. DONNELL. May I inquire fur oly, and which do substantially lessen petitive factor in the American economy. ther of the Senator whether the article competition; and it should be within the Mr. DONNELL. I · ask the Senator by these gentlemen further points out jurisdiction of the Federal Trade Com ..; from Maryland if in that portion of page that- mission to prohibit such mergers. 3 which is entitled ''The Level of Eco: The major merger movement of the 1920's Mr. DONNELL. Mr. President, will nomic Concentration," there is anywhere still · further increased prevailing levels of the Senator from Maryland yield? set forth any assertion to the effect that concentration. Mr. O'CONOR I am very glad to acquisitions by one corporation of an That appears in the article, does it yield. other corporation or of other corpora not? Mr. DONNELL. Before posing the tions have caused any great injuries in Mr. O'CONOR. Yes. question, let me state that I wish it dis ... the level of economic' concentration? Mr. O'MAHONEY. Mr. President, tinctly understood that in my minority Mr. O'CONOR. I will say to the Sen may I interrupt to make an observation views I am stating that- ator from Missouri that mergers are one at this point? It is true that (a) since 1940 there has of the principal causes of the long-term Mr. DONNELL. Certainly. occurred what Drs. Lintner and Butters term upward trend in concentration which Mr. O'MAHONEY. During the hear "the resurgence of large-scale merger activ has taken place in our economy. ings of the Temporary National Eco- ity in the United St.ates"; (b) according t.o 16438 CONGRESSIONAL RECORD-SENATE DECEMBER 12 them, in "manufacturing and mining alone over $100,000,000 at the time of acquisition played an important role in the extraordi the· :financial manuals list approximately amount to $780,000,000, or only 2.1 percent of narily active merger movement of the 1920's. 2,000 formerly independent companies which the total assets of all firms with assets of over In striking contrast, in the recent merger disappeared as a result of mergers and acqui $100,000,000 at the end of 1946. movement combinations between very large sitions by other companies in the 8-year (b) The corresponding figure .for aJl firms companies have been negligible in number. period, 1940-47"; and (c) to quote further with assets ot over $50,000,000 at the end of from th'e above-mentioned article: "The 19.46 is 2.8 percent. I have correctly quoted, have I not, companies so absorbed held assets, at the (c) The ratio generally used to measure from the article by those two gentlemen? date of sale or merger, estimated by the Fed relative concentration or inequality-when Mr. O'CONOR. The Senator has cor eral Trade Commission to amount to approx computed for the asset distribution of all rectly quoted it. imately $5,000,000,000." companies-increased, on account of .mer Mr. DONNELL. I may state that if gers, by less than 1 percent during the 1940- the Official Reporter per chance should Before posing the question I should 47 period. also like to state that, indeed, the Fed (d) When computed separately for both use, in making his report of this ques- eral Trade Commission, in its 1948 re the 500 and the 1,000 largest manufacturing - tioning, certain words which appear in port on the merger movement, says: companies, however, the index was actually the minority views, I call to the attention reduced by the merger activity of these firms. of the Official Reporter, most respect The importance of external expansion in fully, that where certain italization ap promoting concentration has never been Does the Senator agr~e that is the more clearly revealed than in the acquisition pears, it is noted in the minority views statement by those gentlemen, regard that the emphasis is supplied by me. movement that is taking place at the present less .of whether he agr_ees with it? time-a movement which is strengthening Let me ask, finally, in regard to the ar the position of big business in several ways. Mr. O'CONOR. That is their state ticle by Drs. Lintner and Butters, wheth ment. However, I may say again that a I desire to ask the Senator, if I may, er the Senator will inform us whether statement in rebuttal of that article will those two gentlemen say: whether he observed that Messrs. Lint be made. · ner and Butters developed iJoints, how Mr. DONNELL. Does the Senator To sum up, mergers have been responsible ever, which seem to them "to essentially· for such a small percentage of the total agree that these two gentlemen, Messrs. growth of large firms since 1940 that their reverse the major conclusion on the con Lintner and Bu~ters, furtr~er state in effect on over-all levels of industrial concen tribution of mergers to increasing gen their article : tration has been ·very small. (Senate sub eral concentration." Since particular importance attaches to committee hearings on H. R. 2734, p. 374.) Mr. O'CONOR. I quite agree with the distribution of assets among the largest Mr. O'CONOR. That is the conclu the Senator's statement that that was companies we also compute~ the index of their individual view. concentration for the 500 and the 'l,000 sion reached by the gentlemen in ques ' Mr. DONNELL. Does the Senator largest manufacturing companies as of the tion; yes. agree with this statement: end of 1946. In both instances relative con Mr. DONNELL. Now I should like to The apparent contradiction between many centration was reduced a-s a result of all the ask the Senator another question, Mr. of the findings of MesErs. Lintner and But acquisitions of these companies over the 8- President. We have, of course, the ters and those of the Federal Trade Commis year period. The index fer the 1,000 largest Sherman Act, which was passed in 1890. was reduced from 0.639 to 0.632. For the 500 That is correct; is it not? sion is explained, so Messrs. Lintner and But largest the decrease was substantially ters inform us, for the most part "by the fact greater, from 0.550 to 0.534, or by about 3.. Mr. O'CONOR. That is correct. that the Commission anaiyzed primarily data percent as compared to the-increases oI about Mr. DONNELL. July 2, 1890, as I note on the numbers of mergers whereas our [i.e., 1 percent for all manufacturing and mining from the book, is the date of that act. Messrs. Lintner and Butters'] "analysis also as a whole. It is a fact, is it not, that there has been takes full account of the size of the merged expanding interpretation of the Sher companies." · That appears in their article, does it man Act during many years of the deci Mr. O'CONOR. I must answer in the not? sions of the Supreme Court of the United negative on that point. The junior Sen Mr. O'CONOR.· It does. States? ator from Illinois has some observation Mr. DONNELL. Let me also ask the Mr. O'CONOR. That is true. to make concerning that article. Senator this further question. Do not · Mr. DONNELL. I am wondering Mr. DONNELL. However, will the these two gentlemen say in their article: whether the Senator would care to ex Senator agree that I have correctly In gener-al, our findings indicate that, be press an opinion as to the correctness of quoted those gentlemen? cause of their large absolute size, other _this brief and succinct statement by Mr. factors, such as retained earnings and the . Mr. O'CONOR. Undoubtedly. relative availability of outside capital, have Gilbert Montague; who appeared before Mr. DONNELL. I also ask whether potentially much greater effects on concen the committee, his testimony being re the article by those two gentlemen points _ trations than mergers have had since 1940. ported, so far as this point is concerned, out that-- at page 198: For all manufacturing and mining com Mr. O'CONOR. The statement is cor For many years the Supreme Court has panies during the 8-year period, 1940-47, mer rectly read by the Senator. been expanding its interpretation of the gers were a much less important source of Mr. DONNELL. Is it not correct that Sherman Act. Today that act empowers the growth for large companies than for smaller the concluding two paragraphs of the Attorney General to apply to the court for companies. article by Messrs. Lintner and Butters an injunction ab initio, or criminal sen read as follows?- tence, or divestiture decree in respect of any Mr. O'CONOR. The Senator has cor ~conomic concentration, be it existing or in rectly quoted the article. In conclusion, the Federal Trade Commis cipient, whether a person, firm, or corpora Mr. DONNELL. Does the Senator sion correctly appraised the recent ~ merger tion, or group of them, which has power to movement in describing its outstanding raise prices, or to exclude competition, in from Maryland agree with that state characteristic insofar as its impact on con· . ment of fact by those two gentlemen? any section of the country, even though it centration is concerned as "• • • the ab· is only incipient, and never exercises such Mr. O'CONOR. No; I do not. sorption of s~aller, independent enterprises power. Mr. DONNELL. Let me ask -the Sen by larger concerns." But it drew an This was the unanimous decision of the ator also whether those two gentlemen, erroneous inference as to -the significance Supreme Court in American Tobacco Co. v. Messrs. Lintner and Butters, in their of this characteristic. Rather than promot United States (328 U. S. 781 (1946)), which article also state: ing concentration, this very .characteristic ex reiteratecj the rule that was unanimously plains why the recent merger movement has stated in the final decision of United States · Technical measures of concentration in had such slight effect on over-all levels of the asset holdings of manufacturing· and v. Aluminum Co. of America (148 F. 2d 416 concentration. . (1945)). mining companies show only a slif;ht increase The same characteristic a:lso distinguishes in concentration as a result of merger ac .the recent merger movement from its major Does the Senator care to express him tivity during 1940-47. predecessors, which were characterized by self, either as being in agreement, in Mr. O'CONOR. The article so stated. combinations in which very large corpora whole or in part, or in disagreement with tions acquired other very large corporations. the quoted statement of Mr. Montague? Mr. DONNELL. Let me also ask In fact, the combination of very large com whether the article further states as panies was the dominant characteristic of Mr. O'CONO~. I do not, of course, follows: the great waves of mergers of from 50 to 75 wish to challenge the accuracy of the (a) The total assets"' acquired through years ago which gave ••American industry its statement, but I cannot agree entirely T;:1erger or purchase during the 1940-47 period characteristic twentieth century concentra· with the conclusions reached by Mr. b V all manufacturing firms with assets of tion of control." Such combinations also Montague. It is true that in recent 1950 CONGRESSIONAL RECORD-SEN.ATE 16439 years the Supreme Court has amplified law of the land, there is, generally speak might do if he were not connected with the law; but it is also true that the ing, no justification for so enlarging the such a commission. I mean no reflec Court has pointed out on a number of powers of an administrative body to en tion upon Mr. Kelley in so stating. occasions, as the President of the United able it to perform the duties of the court. Mr. President, will the Senator from States l:as pointed out, and as the Sen- So, Mr. President, in answer to the Maryland yield for a further question? ator from Wyoming and other Senators Senator from Wyoming, I may say, first, Mr. O'CONOR. I am very pleased to have pointed out, that it is desirable- that the powers of the law under the yield. and that is the aim of this bill-to strike Sherman Act should be invoked, when Mr. DONNELL. I ask the Senator at impending combinations in their in- ever there is either an actual or an in whether, in the Sherman Act, there are cipiency, rather than to wait until a cipient or a threatened violation of law; two se.ctions, one of which, section 1, monopoly has been established and then and, in the second place, in answer to reads m part: · , attempt to break it up. the second question of the Senator from Every contract, combination in the form Mr. DONNELL. Mr. President, will Wyoming, there is every reason to rely of trust or other, or conspiracy, or restraint the Senator yield further? upon the courts, rather than to vest in of trade or commerce among the several Mr. O'CONOR. I am very glad to an administrative body this vast power, States or with foreign nations, is declared to yield. which to my mind, in the cases cited, be illegal. Mr. DONNELL. Does not the Senator can be administered properly by the Mr. O'CONOR. That language ap agree with Mr. Montague that today the courts. pears in the act. Sherman Act, under the existing deci- Mr. President, will the Senator from Mr. DONNELL. Does not the Sena sions, I may say, empowers the Attorney · Maryland yield for a further question? tor take the view that the provision of General to apply to the Court for an in- Mr. O'CONOR. I am very glad to section 1, which I have read, declaring junction ab initio, in respect of any eco- yield. illegal every contract, and so forth, in nomic concentration, be it existing or Mr. DONNELL. I .ask the Senator restraint of trade or commerce among incipient? whether .we had the privilege also of the several States or with foreign na Mi. O'CONOR. The Sherman Act, as hearing from Hon. William T. Kelley, tions, includes within its scope any tend it stands today, is not an effective in- general counsel of the Federal Trade ency toward the acquisition of assets strument against mergers and acquisi- Commission, during the hearing before tending to substantially lessen, hinder, tions, unless the merger brings into the our committee. or prevent competition? hands of one company virtually com- Mr. O'CONOR. We did. plete control over an industry, and even Mr. DONNELL. Referring to page 21 Mr. O'CONOR. I find it difficult to there its effectiveness is doubtful. of the hearings, I ask the Senator agree with the Senator. In the Sher Mr. O'~AHONEY. Mr. President, will whether Mr. Kelley said this: man Act cases to which the Senator has referred an essential element of the ille the Senator from Maryland yield so that It was more than 20 years after the pas ! may ask a question of the Sena- sage of the Sherman Act before the Supreme gal monopoly or monopolization charged tor from Missouri, who quoted from Mr. Court fashioned it into an effective instru in these cases is the existence of a com Montague? ment for ,the physical dissolution of indus- bination or conspiracy to acquire and Mr. O'CONOR. I am glad to yield for trial monopoly which had taken the form maintain the power. to exclude competi that purpose. ' of consolidated corporate power. tors to a substantial extent. Mr. O'MAHONEY. Does the Senator Mr. O'CONOR. That is a correct For example, in the Tobacco case, the from Missouri believe that it was the reading of Mr. Kelley's testimony. Court stated that "an indispensable in opinion of Mr. Montague that the power Mr. DONNELL. In other words, I take gredient of each of the offenses charged of the Supreme Court to issue injunc- it the Senator would agree with me and in the formation is a combination or tions to prevent ab initio monopolistic with the statement of Mr. Montague as conspiracy." combinations should be used? to the expanding interpretation of the But while the offense of combination Mr. DONNELL. I have no means of Sherman Act which has been in progress .or conspiracy can, of course, be reached knowing the intent or desire of Mr. during these years, and would agree with under the Sherman Act, that law is in Montague. All I know is what he has Mr. Kelley, whose experience has been effective with respect to mergers and stated as to the effect of decisions; and very vast, I have no doubt, that it was acquisitions. Moreover, I wish again to I was very much struck by the clarity more than 20 years after passage of the emphasize that the method proposed by of thought of Mr. Montague as he gave Sherman Act before the Supreme Court the pending bill is preferable in that it his statement upon the stand. fashioned it into the effective instrument will reach incipient combinations before Mr. O'MAHONEY. He is a very good to which Mr. Kelley refers. they achieve the stature of a monopoly. lawyer. I have known him for many Mr. O'CONOR. In answer to the Sen Mr. DONNELL. :But if the Senator years. I have engaged in debate with ator, I may say that that is a correct will yield further, he does agree, does he him upon occasion. So, may I now, statement of Mr. Kelley's experience not, that the Sherman Act, under the with the indulgence of the Senator from and of his knowledge of the subject. I construction of the Court in these vari Maryland, ask the Senator whether it may add that Mr. Kelley testified very ous cases over the years, would enable is his belief that the power of the strongly in favor of this bill. He does an asset acquisition if it involved any Supreme Court described by Mr. Monta- not feel that the Sherman Act, as it substantial lessening or· hindering or gue should be used to prevent monopo- stands, will halt mergers, even though suppression of competition to be re listic mergers? they substantially lessen competition. In strained by injunction or to be punished · l\ir. DONNELL. In my judgment, it other words, the gentleman to whom the if consummated? should. • Senator refers is a stanch advocate of Mr. O'CONOR. Again I find it diffi Mr. O'MAHONEY. Then, if the Sen- this proposed change in the law, and, as cult to agree with the Senator. ator believes that monopolistic mergers he is general counsel for the Federal Mr. DONNELL. Will the Senator state should be prevented by such injunction, Trade Commission, we think he is in whether or not in the case of Shotkin v. what objection can there be to providing excellent position to voice an opinion as General Electric Company <0 71 Fed. the people with the additional protection to the need of improvement of the law. 2d) 230 U. S.) the Circuit Court of contained in the pending bill? Mr. DONNELL. I may say, if the Sen Appeals of the Tenth ·circuit, decided . Mr. DONNELL. Mr. President, if the ator will permit, that I thoroughly con December 30, 1948, the defendants were Senator from Maryland will permit me, cur in his observation as to the oppor charged under sections 1, 2, 3, 7, and 15 my answer to that, in part, is that the tunity which Mr~ Kelley has of forming of the Sherman Antitrust Act, and the Sherman Act proceeds through the ar: opinion; and I may say that Mr. court said: courts. Injunction is a remedy given by Kelley's. vast experience, of course, is Regardless of the intent of the parties, if a court of equity. The bill at hand very impressive. I might, if I may do so the inherent tendency of the combination, l,mdertakes, however, to enlarge the pow- without presumption, say that I think agreement, or concert is to lessen, hinder, or ers, not of a court but of an adminis- there is a natural human tendency on suppress competition in interstate commerce, trative bqdy, namely, the Federal Trade the part of a person who is connected 1t comes within the sweep of the act. Commission. I have endeavored in my with a governmental commission to look Mr. O'CONOR. That is one of the minority views to point out that where with more favor upon an extension of cases referred to by the Senator from a court can effectively administer the the powei: of the commission than he Missouri which was emphasiz.ed during 16440 CONGRESSIONAL RECORD-_ SENATE DECEMBER 12 the hearings on the bill, and I am confi Missouri do not give any cause f Ol' alarm, Missouri I should like to ]."ef er to the dent that the exact language, which, of because until and unless the sale of charts which I have before me. course, I do not have before me, is as read assets would have the effect of substan Mr. DONNELL. If the Senator would by the Senator from Missouri. tial~y · lessening competition or tending permit me to continue for only a -moment Mr. DONNELL. I assure the Senator to create a monopoly, the provisions of with the particular point to which I re that it is. the proposed measure would not apply f erred, I think it would be more con Mr. President, may I at this point have and the Federal Trade Commission nected in the reading of the RECORD unanimous consent to insert in the REC would not interfere. in other words, the than if it were to follow the line of in ORD certain language from the minority individual, such as has been described by formation which. the Senator , from views which I have filed? the Senator from Missouri, should have Maryland is about to give us. The PRESIDING OFFICER Theodore Roosevelt, ·President of the · about the continued concentration of casions I was accorded the privilege of United States at the beginning of this economic power which has occurred un participating with the committee in the century, in which he foresaw some of der the administration of those with examination of certain.witnesses. the things that were coming. Let me whom the Senator from Wyoming is Mr. BREWSTER. That, I think, is . read just a paragraph fr.om, Theodore more intimately associated and sympa what comes to my mind. I felt that the Roosevelt's seventh annual message. thetic than am I. President, the Commander in Chief, and This message was delivered to the Sen Mr. O'MAHONEY. I know that the the Cabinet must have had very grave ate and the House on the 3d of Decem Senator from Maine is a Senator of wide reasons before they took an action which ber 1907. He was speaking about big intimacy and of great knowledge. I do was so much in conflict with the entire business, national business. He said, not question those attributes of his, nor philosophy certainly of the administra among other things: do I claim any superiority over him. tion hitherto. The records, the plat If a::i incorporation law is not deemed ad Mr. BREWSTER. I shared the forms, the whole policies of the Demo visable- qualms of ·the Senator from Wyoming. cratic Party were against monopoly, and President Theodore Roosevelt believed However, the Senator from Maine enter yet when the President and Mr. Stimson in a Federal charter law. He was one of tained the feeling that the President, and Mr. Knox, the latter two being dis the authorities from whom I drew the the Secretary of War, the Secretary of tinguished Republicans, associated with inspiration tn introduce, as I have in- the Navy, and others in the Cabinet had the Cabinet. secured t~1'.:) adoption of 16446 CONGRESSIONAL RECORD-SENATE DECEMBER 12 that recommendation to the Attorney Mr. O'MAHONEY. Let me read froni However, now, in the ·closing hours t•f General, it seemed to . me very strong Theodore Roosevelt so that there may the session, with a war crisis imminent, evidence that the enforcement of the be no doubt, so that those who will com and with all the possibilities of mobiliza act at that time was calculated to put pliment us by reading the RECORD of tion, which we must consider, it seems to impediments in the way of an all-out what we say will know precisely what me not to be the part of wisdom to press war effort. Theodore Roosevelt said, and not what for action on this issue. It has been my DEFENSE PRODUCTION NOT INVOLVED the Senator and I interpret him as hav-· very earnest hope that the advocates of Mr. O'MAHONEY. Surely it is obvi ing said. This is from Theodore Roose this measure might feel disposed to post ous to the Senator from Maine that the velt's eighth annual message dated at pone the further consideration of it until exchange of letters between the Attor the White House December 8, 1908: somewhat more peaceful times. ney General and the Secretary of War There should be regulation by the Na Mr. O'MAHONEY. Mr. President, I did not have the force and effect of law. tional Government of the great interstate am sure the Senator will not misunder It was merely an administrative decision corporations, including a simple method of stand me when I say that I regard that account keeping, publicity, supervision of argument as merely a defeatist argu that for the purposes of the war the the issue of securit ies, abolition of rebates, terms of the Sherman Act and other and of special privileges. There should be ment, without any real substance. antitrust laws would not be called into short-time franchises for all corporations en I will say to the Senator that every play, Now I say it is clear that a similar gaged in public business, including the cor great President since the turn of the cen letter, if it were necessary, could cover porations which get power from water tury-as a matter of fact, every Presi the Clayton Act, as amended, just as well rights- dent-has pointed with fear and trem as it covered the Clayton Act as it then And so forth. He was going a long bling at this concentration of economic stood upon the statute books. way. power, because they saw in it the com Mr. BREWSTER. That, of course, is Mr. BREWSTER. He went some dis plete elimination . of the competitive true. I presume that all laws can be tance beyond that when he recom economy whi'ch we have liked to believe suspended. Whether or not this bill; if mended the repeal of judicial decisions. has been the mainspring of America. I enacted, would add anything to the believe it has been. I have quoted Pres Mr. O'MAHONEY. Yes. ident Theodore Roosevelt. I can quote problems, whether it would be as easy Mr. BREWSTER. I am sure the Sen- to nullify four laws as it would be to President Taft. in 1910, William How ator recognizes that. · ard Taft sent to the Congress of the nullify three, I do not know. · Mr. O'MAHONEY. The Senator is Mr. O'MAHONEY. I can only say to quite right: United States . a message in which he recommended a natioµ~l incorporation the Senator from Maine that in my opin Mr. BREWSTER. The Senator from ion the passage of the pending bill will Maine is seeking to make the point that law. He was influenced by recognition. add nothing to the problem, but it will he certainly recognizes that the admin of the fact that even at that time, 40 add a great deaf to our purpose if we have istration, if we enter into an all-out years ago, national business was becom the purpose of reestablishing a competi effort within the next few days, which ing so great that it was overpowering tive and a really free economy in the seems quite likely, could just as well the States. State lines mean nothing United States when this emergency is suspend this law if the· pending bill now, Mr. President, to any of the giant passed. corporations which carry on the business Mr. President, I wish to read to the shm.ild become la.w, as others. A COMPETITIVE ECONOMY IS OUR GOAL of the country. Senator a quotation by Henry Luce which Mr. KEFAUVER. Mr. President--r I ran across several years ago in For Mr. O'MAHONEY. Yes, of course. I tune magazine. He was then the head, should like to see the law on the stat . ·Mr. O'MAHONEY. I ask the Senator probably the principal owner, of Time, ute books so that when the .present great to permit me to finish this statement, Life, and Fortune. This is what he said emergency has passed we may have some please. · in that article in Fortune magazine: · hope of returning to a competitive econ I shall read now from a message Business can now unwind at a profit, just omy instead of looking to the sort of which President Taft delivered to Con as it wound up at a profit; and if neither economy that Henry Luce pointed'to in gress on January 7, 1910. Perhaps I shall business nor Government make a move in the article in Fortune magazine-a col · quote somewhat at length from ~t: this direction, if bigness is to remain the lectivist economy. This is our danger, . There has been a marked tendency in busi standard concept of the economy, then the it seems to me. Collectivism is moving ness in this country for 40 years last past American businessman, the American poli tician, and, in short, all American citizens, forward · apace throughout the world, toward combination of capital and plant in must prepare themselves for a different order and industrial collectivism leads inevi manufacture, sales, and transportation. The of things, in which the powers of the Gov tably to political collectivism. That I moving causes have been several. First, it ernment are not limited, in which the right would like to a void. has rendered possible great economy; second, to risk and profit is not clear, and in which Mr. BREWSTER. If there had been by a union of former competit'ors it has re the making, the selling, and even the buying more vigorous enforcement of existing duced the probability of excessive compe of the products of the biggest show on earth law, I might welcome additions. How tition; and, third, if the combination has are all mysteriously directed from abroad. been extensive enough and certain methods ever, if there was any force to the action in the treatment of competitors and custo I can cite to the Senator quotations and the policy adopted by the admin mers have been adopted, the combiners have even from Theodore Roosevelt back as istration in the last war, now, on the secured a monopoly and complete control of far as 1907 and 1908 when he was rec eve of this crisis to attempt to add fur · prices for rates. ommending that we should recognize the ther to the administrative responsibili fact that modern business was becom ties of dissipating any possible concen President Taft was fairly assessing the ing bigger and bigger, and that the solu tration of assets, as this measure pro situation. His mind was not blind to tion was to clothe the Federal Govern poses, seems to the Senator from Maine monopoly. ment with greater supervisory powers, a most unhappy time to have a further In speaking of these combinations, he with greater powers of control. I think mandate by the Congr~ss in this direc further said: that is a danger to be avoided. tion, particularly in the closing hours of If they attempt by use of their prepon Mr. BREWSTER. Would the Senator what must be recognized as a Congress derating capital and by a sale of goods tem from Wyoming also recognize that the which has had at the hands of the people porarily at unduly low prices to drive out of 'same Theodore Roosevelt did distin a suggestion of a somewhat different re business their competitors- guish _between giant corporations as to sponsibility and · control. This post good ones and bad ones? election, "lame duck" Congress seems to Mr. President, why do you suppose the Mr. O'MAHONEY. Certainly. me to be a most unhappy time to press then President of the United States said Mr. BREWSTER. Therefore mere for action on an issue of this character, that? Was it not because he knew, of bigness was not his standard of virtue which, as the Senator from Wyoming his own personal experience, not only as or of vice. That, I think, was very and other Senators well know, has been the Chief Executive of the Nation, but clearly established, as I was a disciple agitated here for a very long time, but as a distinguished and able judge, that of his, along, perhaps, with the Senator ~as not hitherto been favorably consid monopolistic· corporations had been from Wyoming. ered by the Congress. doing precisely that? 1950 CONGRESSIONAL RECORD-· SENATE 16447 . -· . He f.urther said at that ·ti~e: to me from my own State, in the case through the operation of the Smaller or if they attempt, by exclusive contracts of . three small manufacturing plants, War Plants Corporation, that percent with their patrons or threats of nondealing because they cannot get orders from age was greatly changed. By the end except upon such contracts- the Government in this war period; and of the war, the percentage of contracts A system which is in u~e today, where if they are unable to obtain orders, and held by the 100 lr,rgest firms was practi by monopolies further their aims- have to close down, the result will be cally cut in two. I now yield to the Sen to put out of employment approximately or by other methods of a similar character- ator from Wisconsin. 1,500 persons. So in that case, again, . Mr. WILEY. I .am glad to hear the So President Taft said- we find the element of power exercising Senator's statement, but I also saw re-· to use the largeness of their resources and a controlling influence. cently that the plants which had been the extent of their output compared with the The Government is exercising this tooled up 5 years ago were now out of total output as a means of compelling cus power in letting contracts. As I recall date so far as meeting the need of the tom and frightening off competition, then the answer given to the Senator from they disclose a purpose to restrain trade and present '?leapons and other things to to establish monopoly. Minnesota, if the plants receiving con meet the present challenge, whatever it tracts c~mnot, in the interest of national may amount to, and I can readily con There is a devastating analysis of the defense, obtain tools and equipment from ceive that a plant which does not have evils of monopoly. the plants which are unable to obtain the "in" will not get a contract: · There We have before us at this time ·a bill contracts, the national defense, as a re may be good people who own it. If the which proposes the sirraple closing of a sult, will be prejudiced. To me, that pre company which receives the contract gap through which monopoly has been sents a challenge to the entire country, were permitted to buy the tools and escaping. because, if those who, as we might say, other assets of the smaller companies; I have cited decisions which show how have an "in" in Washington, are to get I believe it would be in the public inter perfectly amazing was the illegality the contracts in the event an emergency est; but here, in a time of emergency which was condoned by legalistic opin .. arises which necessitates our spending, and of challenge to our very existence, ions of the Supreme Court. I have as it is contemplated, $75,000,000,000, they are prevented from doing.so. · referr~q to President 'l;'heodore Roosevelt even though we may not actually go to Mr. O'MAHONE;Y. Mr. President, I and to President William Howard Taft. war. it will mean that the only recourse may say in all sincerity that l do not The Senator from Maryland [Mr. left to the three small plants -to which know what greater "in" the Wisconsin O'CoNoRJ in his opening speech referred I have referred will be for them to go · corpor~tions referred to by the Senator to President Woodrow Wilson. As a into bankruptcy; in which event, the could possibly have than the support of matter of fact: -the Clayton Act was receiver would sell the concerns for the distinguished Senator from Wiscon enacted durin~ the administration of whatever he coUld get for them. If the sin, who is now interrogating me. Woodrow Wilson, and 'it carrie.s out pre . plant which gets the contract need& the Mr. WILEY. Will the Senator please cisely the recommendation contained in assets of those smaller companies to pro-· say that "again and again and again"? the me35age of 1907 fro:pi Theodore mote the general welfare, yet, if it would If he will, I shall appreciate it very much. Roosevelt, nainely? ~hat there should be have a tendency toward monopoly,' it Mr. O'MAHONEY. I say it again, an amendment to the antitrust law would be impossible for the company again, and again. I suggest to the Sen which would contain that prohibition. holding the contract to purchase the as ator that all in the world he has to do So there is ·no · partisanship· in con sets of those smaller companies. is to take the names of those three cor nection with this matter. Great Re · In the present state of things, such a porations to the Secretary · of Defense publican leaders have condemned ·mo situation requires serious consideration· and to the head of procurement, and nopoly and have sought to create reme~ on the part of. all. According to reports they will be recognized, or I am no dies to prevent it from taking control which I have heard over the radio and prophet, · · of our entire economy, and a great read in the press, we are likely to have Mr. WILEY. Will the Senator yield Democratic President asked a Demo aii important declaration very soon. again for a moment? cratic Congress to enact such a measure. Again, according to the. statement of Mr. O'MAHONEY. I am glad to yield. 'rhen, when the act ~'/as under interpre Prime Minister Attlee to the President, Mr. WILEY. The Senator just said tation by . the Supreme Court of the if it is true-and I shall not repeat it, that at the beginning of World War II, United States the great Chief Justice .of becaurn -it is of a very serious nature, 95 percent of the contracts were cen that Court, who once was the nomine~ though I ni.ay say it was repeated recent tered in about 100 corporations. of the Republican Party for President; ly on the radio--we are now in the most Mr. O'MAHONEY. That is correct. the late Charles Evans Hughes, took .challenging period of our national his Mr. WILEY. I think the.able Senator precisely the view which I took when I tory. Therefore,. in the case of plants will fip.d that the percentage now is about introduced the companion bill to the wl).ich are capable of producing the the same. House measure, now before us. He took things which are needed in this emer Mr. O;MAHONEY. I think not; but precisely the view which I took when I gency, we should not place obstacles in if so, let us overturn it. Let th~ Senator first recommended the bill. Another their way when they seek government and I join-- great Chief Justice of the Supreme Court contracts for the production of things Mr. WILEY. The Senator has not of the United States, Harlan Fiske Stone, needed by the Government in order to answered my question. I am talking who was Attorney General in the Cabinet meet the emergency. Have I made my about stockholders who have invested their money in c~rtain concerns which, of another Republican Pr~sident, took self clear? exactly the same point of view. Mr. O'MAHONEY. Perfectly clear. by reason of shortages in steel, alumi Mr. WILEY. Mr. President, will the But let me say to the Senator that when num, and other materials, are unable to Senator yield? · obtain what they need; yet a company World War II started, the 100 largest which gets a . Government contract ts Mr. O'MAHONEY. I yield. corporations in the United States, in the able to get those necessary things. The Mr. WILE"?. I wish to preface my first 6 months-and the Senator from people to whom I referred a -few mo question by a few remarks. I think I Montana [Mr. MURRAY] will correct me ments ago, who are citizens of this Re can agree fully with the generality that if I am in error-received ~bout 90 per public, are going to be wiped out, if thi°s power anywhere has a tendency to cor cent of all the defense contracts which measure is passed, for it will be found rupt, whether it be in labor unions or vzere made. that they will be prohibited from selling in the field of money wealth. We have Mr. WILEY. Mr. President, will the their assets to the company which, under even seen it ill the church, at times, as Senator yield for a question at that Government contract, desires to manu history demonstrates. We have seen it point? · facture the things needed by the Govern everywhere. Mr. O'MAHONEY. In a moment. ment. I was very much impressed by the But, I was going to say, through the op Mr. O'MAHONEY. No; I deny the interchange of questionG and comments eration of the Special Committee to Senator's conclusion because, if an ac between the Senator from Wyoming and Study and Survey Problems of Small tual emergency is declared, and I sin.. the Senator from Maine, because this Business Enterprises, of which the Sena cercly believe it ought to be declared-- very day a concrete proposition has come tor from Montana was the head, and Mr. WILEY. Amen. . 16448 CONGRESSIONAL RECORD-· SENATE DECEMBER 12 Mr. O'MAHONEY. The priority pow- he was a member of the Judiciary Coin · Comparispn ()/ cer tain corporatfon s, States, ers contained in the Defense Production mittee of the House, was a tower of and citi es-gross revenues and number of Act of 1950 can be used to give those strength in the House in support of this e.mployees, 1942 three companies the precise priorities proposed legislation. which they need. Mr. KEFAUVER. · I thank the Senator. R an k R an k in in Mr. WILEY. Not un,less they can ob- Mr. O'MAHONEY. His bill, as I re- 1942 Corporation or Gross Em· 1928- tain the Government contracts. . call it, which he introduced in the House gross political unit revenues ployees 30, . reve- gross Mr. O'MAHONEY. The allocations several years ago, had the support of a nu es reve- can be used, and if a national emergency majority of the Members of the House nues is declared, as I think it ought to be, committee. This measure has been en - - there will be a ceiling over wages and dorsed, · recommended, and approved (1) General Motors Corp ______$2, 250, 548, 859 314, 144 (3) a ceiling over prices-- ·over and over again by all, who have seen (2) Unite d States Mr. WILEY. Is the senator in favor the progress of concentration. Steel.. ______1, 862, 951, 692 335, 866 (1) (3) American Tele- of that? I was referring a moment ago to vari- phone & T ele- Mr. O'MAHONEY. As I said a mo- · ous Presidents who have recommended graph ______1, 469, 26.1, 216 327, 107 (8) (4) Great Atlantic & ment ago, all in the world the senator action along this line. I ref erred to Pacific Tea Co . . 1, 378, 147, 240 ------(2) from Wisconsin has to do is to take the President Theodore Roosevelt, to Pres (5) General Electric Co ______913, 656, 277 139, 939 (7) names of those three corporations to the ident William Howard Taft, and to (6) P ennsylvania R. Government, and they will, I am sure, President Woodrow Wilson. The same R. System ...... 838, 474, 622 151, 604 (4) receive consideration. recommendation was made by President (7 ~ New York State . . 720, 306, 000 55, 873 (9) (8 New York City. . . 714, 653, 000 1132, 975 ..(5) . I Mr. WILEY. The situation I have pie- Franklin D. Roosevelt. It was also made (9) California ______517, 261, 000 2 29, 010 (14) 1 by President Harry S. Truman. During (10) Standard Oil of tured is merely an illus t ration no t on Y the admini'Stration of President Herbert Indiana ..•...... 464, 558, 256 ------(6) of what has been going on for weeks (11) Illinois ...•••••..•. 368, 572, 000 20, 999 (18) but of what is happening today. Hoover, the latter, noting this great (12) Ohio ...... _...... 358, 380, 000 3 20, 277 (17) (13) New Jersey ______202. 685, 000 13, 898 (15) Mr. O'MAHONEY. am afraid that trend toward monopoly, named a spe North Carolina •.. 132, 662, 000 14, 616 (19) 1 p 4) Chicago ______not enough contracts have been let; but cial research committee on social trends, 15) 114, 763, 000 4 31, 318 (10) of which he appointed Dr. Wesley C. (16) Detroit . __...... •. 104, 981, 0()0 6 23, 758 (11) I may say to the- Senator that the Com- Mitchell; as recall, chairman. There (17) Philadelphia ..••.. 81, 405, 000 6 19, 699 (13) 1 (18) Boston...... •••.•. 77, 620, 000 7 12, 606 . (16) mittee on Appropriations is now in ses- was a chapter in its great report, writ ~1 9) Maryland •.••••.. 76, 887, 000 8 9, 253 (20) sion. I ought to be in the committee· ten by Dr. Charles E. Merriam, of Chi 20) M aine ...... ••••. 40,342,000 96,196 (21) meeting, instead of here. cago, in which there was presented a (21) Los Angeles ______39, 832, 000 10 19, 070 {12) Mr. WILEY. The Senator is more il- table showing a comparison of certain 1 General government, 100,626j ,. public-service enter· luminating here than he would be in corporations in cities and States with prises, 32,349. the Appropriations Committee. ·· respect to gross revenues and"number 2 General government, 28,486; public-servicie enter prises, 524. Mr. O'MAHONEY. The Senator from of employees. The purpose of the table s General government, 18,928; public-service enter· Wisconsin has never heard me in .the was to show how corporations were ob prises, 1,349. 1 General government, 27,807; public-service e~ ter Appropriations Committee. taining greater economic power ·than prises, 3,509. Mr. KEFAUVER. Mr. President, will that of the cities and States themselves. 6 General government, 16,629; public-service enter- prises, 7,129. · the Senator yield? · Mr. President, I ask unanimous con- a General government, 18,696; public-service enter· Mr. WILEY. Let us first get the an- sent to insert this table in the RECORD prises, 1,003. 1 General government, 12,075; public-service enter· swer. . at this point in my remarks. . prises, 531. Mr. O'MAHONEY. No; I said over and There being no objection, the table s General government, 9,176; public-s!)rvice enter prises, 77. over again that in such a case as this, was ordered to be printed in the RECORD, 9 General government, 5,940; public-service enter- in my opinion this law would not be an as follows: prises, 256. · impediment. It would not be an impedi- 10 General government, 10,997; public-service enter· ment. . Comparison of certain corporations, States, prises, 8,073. Mr. WILEY. It would be a repetition and ci ties- wi th respect to gross revenues Notes on public employment: ·Figures exclude schools, and number of employees work relief, and contract-work employment. Unless of what occurred following the dec~ara- otherwise indicated, employment total relates to general . tion of ·world War II. government only • Gross rev· Em· Source: Standard and P oor's, corporation records; and Mr. KEFAUVER. Mr. President, will . Corporation or political unit enues 1 s ployees ' publications of the U. S. Bureau of the Census. the Senator yield? ·Mr. MURRAY. Mr. President, will the Mr. O'MAHONEY. I yield. United States Steel Corpora- Senator yield? tion ______~ _ $1, 201, 377, 367 211, 055 Mr. KEFAUVER. As a matter of fact, Great Atlantic & Pacific T ea Mr. O'MAHONEY. I yield. would not this bill, if enacted into law, Co __ _-______1, 053, 692, 882 40, 000 Mr. MURRAY. Does not the Senator General M otors Corporation.. . 996, 687, 332 172, 938 be of assistance to small business en Pennsylvania Railroad system. 616, 638, 650 166, 607 believe that as a result of our experience terprises, to keep them from being gob N ew York CitY ------~ --- 611, 571, 726 8", 509 in the last war the procurement agen bled up? We all know that .some of the Standard Oil Co. of Indiana ... 465, 752, 175 44, 520 General Electric Co ...... 396, 242, 631 78, 380 cies of the Government will be inclined great corporations, which are the pro American Telephone & Tele- to help the small business concerns ducers of some of our basic products have graph Co ...... 292, 014, 871 324, 343 . which have been referred to by th.e Sen N ew York State. ------272, 940, 372 28, 798 a substantial monopoly ovc- some prod Chicago .. . ••• ___...... 241, 748, 819 41, 983 ator from Wisconsin? ucts. Unfortunately, if those big cor Detroit...... •. • _...... ______154, 619, 790 19, 436 Mr. O'MAHONEY. I think that is L os Angeles. ______152, 166, 523 16, 975 porations are led to think that perhaps Philadelphia ______133, 522, 058 21, 997 correct. by depriving small business of contracts California ______116, 919, 827 17, 495 Mr. MURRAY. We discovered, as re and ::ubcontractors, or by depriving them New Jersey ______91, 068, 090 8, 385 Boston ...... 79, 095, 089 20, 606 sult of the mobilization of small busi of necessary raw materials, they are go Ohio_ ... . . •...... 78, 527, 215 6,426 ness in the war, that we obtained the ing to be able to force them to sell their Illinois. ______------___ __ .. 69, 901, 391 13, 134 North Carolina ..•...... 41, 401, 317 6, 506 greatest production that could have been outfits, then the temptation would be M aryland ....•. .•. ••.•. • __ •. . •. 28, 165, 361 6,962 anticipated. It wa-s really as the result present to do so; whereas, if the small M aine ..•••••••.. •••••••••.••.. 18, 014, 201 2, 500 of production that we won the war, and it er firms had the protecti-0n of this bill, was accomplished by bringing in the it seems to me the temptation would 1 Corporation gross revenues include income from all sources for the year 1930. Figures from annual reports smaller c oncerns to participate in the not be so great for the big corporat ion or from Standard Corporation Records. State figures war-production program. The Smaller to bring about conditions under which are revenue receipts for 1929 and are from U. S. Bureau War Plants Corporation made a great of the Census, Financial Statistir.s of States. City fig the small fellow would be forced to sell ures are revenue receipts for 1928 and are from U. s. con~ribution, because they could aid a out to him. That js to say, strong anti Bureau of the Census, Financial Statistics of Cities. dozen small corporations to join to 2 Figures on municipal and State employees are for trust laws, during a time of great scar 1930 with the exception of the States of New York and gether and take a major contract, and in city or allocation of materials have al New Jersey, which are for 1928. The figures are not that way, through the huge contributions ways been protections to small business, necessarily comparable because some of t he items include only those in t he classified service; some include educa made by small concerns there was won in my opinion. t ional employees and others do not. derful production during the war. Mr. O'MAHONEY. I quite agree with s These figures include a part of county receipts_and receipts of special districts as allocated by the Bureau of Mr. O'MAHONEY. I feel confident the Senator from '!.'ennessee, who, when the Census. that the same result which was obtained 1950 CONGRESSIONAL . RECORD-SENATE . 16449 largely through the leadership of the said that some of those actions were he refers is so general that it confers Senator from Montana during World 'Without strict authority of law. upon the Executive the power to suspend War II will now be optained. I think. Mr. WILEY. The Senator has indeed practically any law? ·the lesson of World War II has been created a situation here which I think Mr. KEFAUVER. In any case in which learned. We are now considering a new calls for earnest consideration by e.very the mobilization effort requires the sus appropriation bill, and I know that the Senator, because. he has said, in sub pension of the antitrust laws, there is a members of the Appropriations Commit stance, that there is no authority in law procedure, established by law, through tee will make that clear to the Defense for the act of .the E.xecutive, and if the which such suspension can be made. Establishment. plant to which I ·have referred does, in This procedure is set forth in the De Mr. MURRAY. The proposed legisla the public interest, something which is fense Production Act. tion which the Senator is now supporting contrary to law and after the show is Mr. WILEY. Mr. President, will the will have nothing other than a beneficial over it is likely to be ·called to the bar Senator yield further? effect on small business concerns; is not of justice, it seems to me we have created Mr. KEFAUVER. I yield. that a fact? a weak situation psychologically which Mr. WILEY. I think a group of people Mr. O'MAHONEY. That is so beyond does not add to the security of our na in my State followed U.1.at procedure. . any doubt. ·The point of the matter may tional defense. They were brought to the bar of justice, be emphasized by the fact that in the Mr. O'MAHONEY. I will say to the and the judge, who was a former Mem study of the Department of Commerce to Senator, in all sincerity, that I believe ber of the Senate, soaked them. which I referred a little while ago nearly :the answers which I have given to him, Mr. KEFAUVER. The act to which I 25 percent of the 18 mergers by acquisi and the answer which was given to him referred was passed only recently, and I tion of assets represented what was by the Senator from Tennessee, were understand that there have been only a known as conglomerate mergers; that is completely apt. I do not believe there is few cases under it. t:> say, corporations buying other corpo any danger such as has been described Mr. WILEY. Perhaps we are referring l'ations dealing in unrelated businesses. by the Senator. to two different situations. For example, the Universal Match Co. The record of the courts in construing Mr. KEFAUVER. If the distinguished purchased a number of candy corpora the Clayton Act as it now stands with Senator from Wisconsin will examine the tions. This widespread entry of corpo respect to the acquisition of stock is clear Defense Production Act, h.e will find that rations into unrelated lines of manufac that the law cannot be.used to cover such a mechanism is provided by law under tUre is, in part, a result of the extra a -case as that which the Senator de which in certain circumstances and in ordinary accumulation of liquid assets· in scribes, and the amendment of the law the interest of the defense effort the anti corporate treasuries because of their op by prohibiting the acquisition of assets trust laws can be suspenqed. erations during the war, and because we as well as stock would not in any way Mr. WILEY. I suggest that the Sen have not taken the steps necessary to increase the difficulties nor increase the ator obtain the statute and put it into prevent this constant concentration concern of the corporations of which the RECORD at this point. I believe it which closes the door to enterprise by the the Senator speaks. would be helpful, particularly to persons citizens of the States which are repre Mr. KEFAUVER. Mr. President, be who are interested at the present time _ sented by every Senator upon this floor; fore the Senator leaves the floor-- and to those who may become interested and by voting against this bill I am con Mr. WILEY. Just a moment, please. in the subject at a future time, so that fident Senators would be voting against If events should occur which we think no one will get his fingers burned. the ~ nterests of their own constituents, to may occur, I think the Senator's state Mr. KEFAUVER. I shall insert in the say, nothing of the competitive .economy ment on the RECORD will be of consider RECORD the section of the Defense Pro in which we all really and sincerely ·be able comfort to people who must make duction Act referred to. . lieve. a decis:lon as to whether they will do so The PRESIDING OFFICER. Is there Mr. WILEY. Mr. President, will the and so. I thank the Senator for his very objection to -the request of the Senator Senator yield? , explicit and illuminating opinion. from Tennessee? The Chair hears none, Mr. O'MAHONEY~ I yield. Mr. O'MAHONEY. The Senator's and it is so ordered. . Mr. WILEY. . As one of the able inquiries have been most helpful. Mr. WILEY. Perhaps the Senator lawyers of this great body I should like Mr. KEFAUVER. Mr. President, be could read it into the RECORD. . to have the Senator's opinion on the -fore the Senator from Wyoming yields Mr. KEFAUVER. I shall put it into record in relation to this matter, be the floor, and · while the Senator from the RECORD as soon as I obtain a copy of cause the bill came from our committee, Wisconsin [Mr . .WILEY] is present, I the act. and while we can agree in large part with should like to make the observation, and Mr. WILEY. I thought the Senator the philosophy expressed and with a ask the Senator from Wyoming if it is was talking about some previous legis great many of the conclusions, I should not correct, that in the Defense Produc lation because I have a distinct recol like to have his opinion on the point I am tion Act, which Congress passed not so lection that in my State an agreement about to mention. If this amendment . long ago, there is provided a detailed had been entered into by and with the to the present law should be enacted, in method for working out exceptions to all consent of the Attorney General, but the Senator's opinion, would the Presi antitrust laws in the event the national that afterward the United States dis-. dent, in case he should declare a state defense effort makes it necessary that it trict court, presided over by a former of emergency to exist, have the power to be done, and would not that act apply Member of this body, held that the At-; suspend ·the operation of the law as equally to matters under the Sherman torney General had no such authority. amended? Act and the Clayton Act? The decision went against the persons Mr. O'MAHONEY. Just as much so ·Mr. O'MAHONEY. Certainly. who had in good faith gone aMad in as President Franklin D. Roosevelt had Mr. KEFAUVER. So that if it be· the interest of what they thought was by the exchange of letters between the comes necessary to work out a f o:rmula the public welfare, and they found Department of Justice and the War De in any particular case in which the ap themselves in the doghouse, so to speak. partment during World War II. plication of an antitrust act, whether it Mr. KEFAUVER. I think that is the Mr. WILEY. That is not the answer be the Clayton Act or the Sherman Act, kind of situation to which this section I was looking for. was thought to be impeding the war ef of the Defense Production Act was ad.· Mr. O'MAHONEY. Of course it is fort, a system has been worked out by dressed. The case to which the Senator not. But the Senator, as a great law law for suspending the operation of such from Wisconsin refers must have arisen yer-and I return his compliment- acts in certain cases, and that system before the passage ·of the Defense Pro'*: knows as well as I do that in a national has been set up in the National Defense duction Act. However, I shall get the emergency we do things in the national Production Act, which Congress recently exact language and insert it in the defense which are necessary to the na passed. RECORD. tional defense, but we do them without Mr. O'MAHONEY. I thank the Sena~ Mr. WILEY. I thank the Senator. sacrificing our loyalty to the principle of tor for calling attention to that fact. Mr. KEFAUVER. Mr. President, while a free economy and political freedom. Mr. KEFAUVER obtained the floor. we are talking about the effect upon the Abraham Lincoln himself did such Mr. WILEY. Mr. President, do I un war effort and how this subject fits into things in order to preserve the Union; derstand the Senator from Tennessee to general defense activities, and while we and the Supreme Court, :;tfter the fact, say that the language of the ·act to which are also discussing the attitude of great 16450 CONGRESSIONAL' RECORD-SENATE DECEMBER 12 statesmen of the past in connection with Subsections Cb) and oly," and it is immaterial that the der could be issued, the 'Stock was · em U.S. 37, 46, n. 14). · tendency is a creeping one rather than one that proceeds 1'-t full gallop; . nor does the ployed by diverse transfers and manipu If, as the minority views assume, the lavr await arrival at the goal before c.ondemn lations to effect a merger of the two com~ present section 7 of the Clayton Act had ing the direction of :the movement. peting corporations. The Court in effect as its sole aim the abolition of the evil of held that even though this merger might Rather than substantiating the minor secret acquisition and holding of stock of have been accomplished for the purpose •a. competitor, Congress might well have ity views, the Columbia Steel Co. case of ousting the Commissiqn of its juris is a vivid illustration of the necessity for merely required the public announce diction under section 7 of the Clayton ment of stock acquisition. There would the proposed amendment of the Clayton Act, the Commission was limited by sec Act The Sherman Act test has been have been no necessity for authorizing tion 11 to an order requiring the dives the Commission to order a divestiture of a measurement of accomplished monop- . titure of the stock, which was no longer oly. The purpose of the Clayton Act is stock. The power was given in an at in existence, and could not require a tempt to provide an effective -means of to reach in their incipiency certain prac divestiture of the assets. ·See also Fed tices which if permitted to persist. might checking a practice leading to monopoly. eral Trade Commission v. Eastman Ko As has been demonstrated, all attempts eventually :ripen into violations of the dak Co. <274 U.S. 619) ~where the Com Sherman Act. As the Court stated in to carry out this purpo~e by the Commis mission was unsuccessful in an attempt sion have been forestalled by the strict Standard Fashion Co.-v. Magrane Hous to accomplish the same result in con ton Co. <258 U.S. 346, 356): interpretation given by the courts to sec nection with a charge of unfair methods tions 7 and 11 of the Clayton Act. The The Clayton Act sought to reach the agree of competition under section 5 of the ments embraced within its sphere in their situation can be remedied only by enact Federal Trade Commission Act. ·1ng specific legislation with regard to the incipiency, and in the section under con It will be seen from the above cases sideration [sec. 3] to determine their legal· acquisition of assets. tty by specific tests of its own which de· that it is impossible for the Commission, Mr. President, the press of the Nation clared illegal contracts of sale made upon no matter how e~peditiously it proceeds, has had considerable to say about this the agreement or understanding that the to is.sue a complaint charging the unlaw proposed legislation, indicating that it purchaser shall not deal in the goods of a ful acquisition of stock and proceed to approves its purpose and recommends its competitor or competitors of the seller, which an order to cease and desist and an order enactment. I have before me editorials may "substantially lessen competition or of divestiture prior to the use of the tend to.create a monopoly." from various newspapers in all sections illegally acquired stock by the holders of the United States; for instance, from The proposed amendment is necessary thereof to effectuate an acquisition of the New Orleans Times-Picayune, the in order to give effect to the underlymg assets. · St. Petersburg O national corporations in any field of en tack. Foremost among these are proposals employees. deavor is hardly the American idea of free to: But the fact that small business still competitive enterprise. But the trend is in 1. Provide for Federal charter of corpora• finds opportunities in the American economy that direction. tions with strict standards of corporate con- does not argue against the steady and per duct. · The Commission makes one pertinent sistent vigilanc~ which the Antitrust Division point, frequently overlooked by those who 2. Prohibit corporate mergers through ac of the Department of Justice alone. can sup find no menace in the concentration and quisition of assets, or require FTC approval ply. size of inqustries: That if we have a pri of such mergers. One of the most devastating things their vate supergovernment of industry it will 3. Revise the patent laws to prohibit at . critics have said of the Republicans is that have to be regulated or contrqlled by a po taching restrictive conditions of manufac they are monopolists at heart, giving only litical supergovernment. Our alternative to ture, sale, or price to patent licenses. lip service to the•true ideal of free enterprise. this development is the maintenance not 4. Make corporation officers and directors The way they act on the modest budget re merely of free enterprise but of free-competi civilly liable for stiff penalties for violation quest of the Antitrust Division and upon the tive enterprise which requires a minimum of of antitrust laws. Kefauver bill, which would amend the Anti regulation. Senator O'MAHONEY, of Wyoming, Demo trust Act to block the purchase of a com crat, and probably the best-informed man in pany's assets if the transaction would tend Congress on business practices, holds that to promote monopoly, will go far to prove [From the St. Petersburg (Fla.) Times of Federal charter is the basic remedy. As he that accusation, or to refute it. February 24, 1947) explained recently, the big, modern corpora Hearings are being held on the antitrust WHAT C')NGREss MAY Do AiloUT MoNOPOLY tion is in a sort of no-man's land, respon appropriation for 1948. President Truman Congress is becoming monopoly conscious sible to nobody, too big to be controlled has asked for $2,500,000 as against the $1,- again. The problem is raised about the en by the States, insufficiently regulated by the 900,000 being spent this year. The 1948 croachments of big business, by big-business Federal Government. Corporations char figure is modest however, as is shown by the men complaining about unrealistic provi tered by States frequently grow to a size fact that the highest antitrust appropriation sions of the antitrust laws, and by business larger than the State which chartered them. in history was the $2,325,000 allow~d in 1942, CONGRESSIONAL RECORD-S"ENATE '16455 and· the cost inflations slnce then make the policies. Horizontal combinations replace For years the Federal Trade Commission 1948 request less in actual purchasing ·power owners with managers, drain profits out of has been pointing to this loophole in the ·than the' 1942 sum. Yet, as the FTC report localities where the. business has been de antimonopoly laws and urging that it be and other ·figures show, the need for anti veloped, reduce communities to a colonial stopped up. The temporary nation.al eco trust enforcement and vital changes in the status, raise prices, and in other ways vic nomic committee, which made the most com law is greater in 1948 than it was in 1942. timize communities. prehensive congressional study pf our econ Most of the mergers reported on by the omy system ·yet, recommended such an [From the Asheville (N. C.) Citizen of March FTC were carried out by our 250 largest amendment. President Truman's council of 18, 1947) n lawyers found a way to achieve the The total number of companies is not the Reasons to be frightened, however, are not same purpose by acquiring a firm's ~assets in important. point. The· important point is lacking. They are clearly and simply de stead of the stock. The Supreme Court, that 5 percent, which is not to be derided tailed in the Federal Trade Commission letter during the twenties, ruled that if such as the bogey of left wingers and collectivists. on the Present Trend of Corporate Mergers a merger has been accomplished there is Five percent is a sizable chunk of our econ and Acquisitions to the Senate. nothing the Federal Trade Commission can omy. The threat of merger and absorption According to the FTC, there have been do about it except to require divestiture of is a very real one to thousands of smaller l,833 mergers between 1940-46, most of them the stock-which, without the assets on businesses throughout the country. since 1944. More than one-third of these which it rests, is, of course, worthless. This Name calling is so silly and futile. It is have been in three indastries-foods, non section of the Clayton Act, then, is a dead always the last resort of a man with a bad electrical machinery, and apparel. These lett er. case or a bad conscience. -fields are tr..i.ditionally small-business fields. Senator O'MAHONEY's bill, sponsored in the Senator ..JOSEPH c. O'MAHONEY, of Wyo Even more alarming is the fact that more House by Representative ESTES KEFAUVER, of ming, is no left-winger. He has been. fight ·than 60 percent of the mergers have been Tennessee, is a simple proposal to amend the · ing· for the ·past 10 years to keep the free- · horizontal combinations; that is, absorptions Clayton Act so that its original purpose enterprise system free by keeping it ·com of concerns in the same business. Hori would be restored. He would make 1llegal petitive. He has had the courage to say that zontal combinations have been the most monopolistic mergers accomplished by acqui the giant corporations are in reality collectiv fruitless of all types of mergers. Practically sition of assets as well as by acquisition of ism-a kind of pri.vate socialism. And being none of them ever result in any gain to con stock. He would give the Federal Trade Com wise in the ways of politics and human be sumers in lower prices or better products. mission power to stop such mergers or to dis havior, he knov:.:> that private socialism will Such profits as they make are the result of solve them should they be illegally made in sooner or later in a democracy become public monopoly control and scarcity high-price the future. socialism. 16456 . CONGRESSIONAL RECORD-SENATE DECEMBER · 12 O'MAHONEY and Representative ESTES KE tions has always caused concern. Big busi danger, too, for any democracy which allows FAUVER, of Tennessee, have a bill before Con ness almost inevitably means big labor unions economic concentration of power to spread gress which would stop one of the loopholes and big government. Where the competi at the expense of small business . . in our antitrust laws. The law, as it stands tion of free enterprise does not police an eco today, says that one corporation may not nomic system, it is inevitable that govern Mr. KEFAUVER. Mr. President, acquire the stock of another ·where that ment should step in to preserve a democracy. there is one matter which I wished par would help to create a monopoly. It says The Federal Trade Commission recently ticularly to mention ·when the sponsor nothing about acquiring the physical assets issued a special report showing that since of the bill, the Senator from Maryland plants and machines--of another corpora- 1940 18,000 companies were swallowed up by [Mr. O'CoNOR], was present, namely, tion. . big corporations through purchase and that I know that in some sections of the Most of the mergers in recent years have merger. One big drug concern, for example, United States, particularly in some cities, been by the latter method. The O'Mahoney absorbed 38 smaller companies, the com Kefauver ·bill would close that gap. panies swallowed including manufacturers of two newspapers might enter into an op If Congress is going to attack the labor baby food, floor wax, paint, spaghetti, and erating arrangement whereby, in order monopoly by law, as the NAM _wants, then insecticides. A loophole in the Clayton Anti to save the expense of operating in two Congress cannot very well ignore the mo-· trust Act permits such a process which Con separate buildings, they would have an , nopoly that exists in many fields of busi gress intended to make illegal. arrangement by which one plant would ness. There seems to me to be little point The Clayton Act passed in 1914. It was print both newspapers, with each one in arguing which monopoly came first. In hailed as the doom of trusts. But trusts following its own editorial policy. dustry-wide bargaining may have grown up haven't been doomed. In fact, the process In this connection I want to point out because of the existence of industry-wide of building bigger and bigger corporations trade associations and industry-wide price has gone on. This is because of a convenient that the measure now before us is less fixing. But like the argument over which loophole in the act. Congress believed that restrictive than the law which is now came first, the chicken or the egg, this is monopolistic corporat& mergers would be ac on the statute books relating to stock ac irrelevant. complished by one corporation purchasing quisitions, owing, particularly to the the capital stock of another. Section 7 pro omission of the word in any "commu "Now is the time," said NAM President hibited this. Bµt this section was bypassed, Bµnting, "to clean out the system-changers and the plain intent of Congress defeated by nity," which now appears in section 7 from the temple of government." As Sen another corporate device: the purchase of of the Clayton Act, and also to the omis ator O'MAHONEY sees it, the. system-changers the physical assets of competitors, rather sion of the phrase "between such cor are those who would monopolize all business than their .capital stock. porations, or any of them, whose stock and thereby prepare the way for the all Company B sells its plant, machines, and or other capital is so acquired," which dominant state. facilities to company A, and it then doesn't also appears in section 7 as it now stands. matter· much whether it sells its stock cer In the case of an operating arrange [From the Raleigh (N. C.) News and Observer tificates or not. The whole thing was legal of April 19, 1947] . ized by a Supreme Court decision in-1926, in ment of that kind or even in. the case the Western Meat Co. case. It was a 5-to-4 of the outright acquisition of a news DESTROYING FREE ENTERPRISE paper, the merger, to be illegal, would The mails are full of pamphlets from the decision, with Justices Brandeis, Taft, Holmes United States Chamber of Commerce and · and Stone all dissenting. Later the loophole have to affect competition in a "se"c~tion the National Association of Manufacturers was ·further widened by another decision, of the county" not a "community," and extolling the American system of free enter also 5 to 4. within such a "section" it would not be prise. It is the only sound system in peace The bipartisan Federal Trade Commission illegal mer.ely because of the elimination times. But neither of those big business or has unanimously recommended, every year of the competition which had previous ganizations points out or even admits the since 1927, that this loophole be plugged. Congress hasn't acted. And the process of ly existed between the acquiring and ac .. existence of the one foe that is doing more quired firms. That, is to say, within the than all else to undermine or shut the door corporate expansion by merger has gone on. to men who would like a chance to build up On March 4, the Federal Trade Commission, section, the merger would have to have a business of their own. Not all the cries in a special report, pointed out with all the the effect of lessening competition gener of the believers in free enterprise of "open urgency at its command, the tremendous ally. 1 doubt whether there are many the door to free enterprise, Richard," is heard growth of corporate agglutination. Presi mergers of this type in the newspaper in in the citadels of monoply. dent Truman in his economic report to Con dustry. I should like to ask the sponsor The Federal Trade Commission recently gress made a specific recommendation for of the bill, in order that we might have issued .a special report showing that, since this amendment to section 7. Congress hasn't acted. The temporary National Eco the legislative history of the matter, to 1940, 18,000 companies were swallowed up by express his opinion on that point. big corporations through purchase and nomic Commission studied the matter care merger. One big drug concern, for example, fully and' made the ·same recommendation: Mr. O'CONOR. I am grateful to the absorbed 38 smaller companies, the com Congress didn't act then either. Senator from Tennessee for affording an panies swallowed including manufacturers o! Now two Congressmen, Senator JOSEPH C. opportunity to make known our position baby food, floor wax, paint, spaghetti, and O'MAHONEY, Democrat, of Wyoming, and in the matter. We agree entirely with insecticides. A loophole in the Clayton Anti Representative ESTES KEFAUVER, Democrat, the statement made by the able Senator trust Act permits such a process which Con of Tennessee, have again introduced a bill to plug the loophole. Only a sense of the from Tennessee, who has been so zealous gress intended to make illegal. and consistent in his advocacy of this The Commission's recommendation to plug way the old American tradition of free com this loophole has been ignored by Congress petition, free enterprise, and individual measure, that this bill, if enacted, would while it seeks to exempt insurance and rail initiative is being endangered will make Con not have adverse effects upon such a pro· roads which violate the antitrust law. gress act now. posal as he describes. As the Senator The Washington correspondent of the Here is how the system works. A Chicago has pointed out, through the change in Christian Science Monitor points out the grocery corporation has just become the the language of the measure, by the situation as it now exists: largest wholesale grocer in the United States, elimination of the words having an effect "There is little chance of permanently re with total assets of $20,000,00.0, and annual sales of· $100,000,000. It did so by acquiring upon competition "'in any community," ducing the size of the Federal Government and particularly by the elimination of in Washington, its bureaucracy, ·and its p'o the assets of three competing corporations. lice powers so long as competition is reduced The Federal Trade Commission brought the phrase "between" the acquiring and and corporations get bigger and bigger. · For suit under the Clayton Act. It wanted to the acquired companies, we feel defi example, if there is one big interstate grocery protect the small grocers of the Nation. But nitely that that danger is avoided, and wholesaler instead of several local ones the it was shown that the big corporation had that no such proposed consolidation or pre~sure for comparable Federal contr~l is surrendered to the three competing corpora acquisition would be violative of the law almost inevitable, and so it goes. There is tions all of the capital stock which it has '\cquired from them, and received in lieu unless in a section of the country it danger, too, for any democracy ·which allows would result in a substantial lessening. economic concentration of power to spread thereof an unconditional transfer of all their at the expense of small business." assets. After that, there was nothing for the of competition in industry · generally. FTC to do. It was· all perfectly legal. It dis It may well be that by effecting a better missed the complaint. arrangement for a more profitable [From the Christian Science Monitor of There is little chance of permanently re undertaking, in ·the manner described March 26, 1947] ducing the size of the Federal Government competition would be stimulated rathe; MERGERS THROUGH A LOOPHOLE in Washington, its bureaucracy and its police powers, so long as competition is reduced than lessened. I thank the Senator. (By Richard L. Strout) and corporations get bigger and bigger. For Mr. KEFAUVER. I thank the Sena r:r:he United States was built by men who example, if there is one big interstate grocery tor from Maryland for his answer. believed in individualism and competitive wholesaler instead of several local ones, the Mr. WILEY. Mr. President, will the e~terprise. For that reason, the concentra pressure for comparable Federal control is Senator yield for a question? · t10n of economic power into great corpora- almost inevitable, and so it goes. There is Mr. KEFAUVER. I yield. 1950 CONGRESSIONAL RECORD-SENATE 16457 Mr. WILEY. I listened rather atten tirely fallacious line of argument which noon, there were-only 156 companies with tively to the question asked by the Sen has been used for many, many years by assets under a million dollars and only ator from Tennessee. · If I may, I should certain special interests who have been .246 companies with assets of from $1,- like now to present a concrete illustra opposing legislation of this kind. I hope 000,000 to $5,000,000, which acquired any tion. Newspapers A and B in a given the Senator from Illinois. will give ·a full additional concerns. Among companies community decide that they want to con exposition of the utter ridiculousness of with assets under $1,000,000, however, solidate. Under the present statute, the the article referred to. there are tens of thousands over $100,000, buying of stock, I take it, might be pro- Mr. DOUGLAS. Is it not true that and yet 156 ·and 246 are singled out. I - hibited, if it would have a tendency to the figures which Dr. Lintner and Dr. have had some figures prepared with a create a monopoly. Buying the assets Butters advance, undoubtedly with the brief, explanatory statement, and I won would be prohibited under the amended .best of motives, · confines this computa dered if the Senator from Tennessee statute. But what would be the result tion of percentage growth to the specific would care to have me put them into the if the newspapers A and B decided they companies which acquired additional RECORD. I believe they will shed some would put their· combined assets into a concerns, rather than the group of com- light on this question. new corporation C? In asking the ques . panies, within a class of a giv~n size, · Mr. KEFAUVER. I should be de tion, I have in mind, of course, the extent from under $1,000,000; from $1,000,000 · lighted if the Senator from Illinois would to which newspapers control public opin to $5,000,000; from $5,000,000 to $10,000,- put the figures in the RECORD. ion. 000; $10,000,000 to $50,000,000; $50,000,- Mr. DOUGLAS. Mr. President, I ask Mr. KEFAUVER. I think in that case 000 to $100,000,000; and over $100,000,- 'unanimous consent that I may be per the application· of the law would be the 000 respectively? mitted to insert a table with a brief state same, with the same limitations that I Mr. KEFAUVER. · I believe the Sena ment in the RECORD at this point. have described above. It certainly would tors' statement is correct. There being no objection, the table not be any more applicable in that case Mr. DOUGLAS. · As we have seen froni was ordered to be printed in the R:EcoRD, than if newspaper A were to purchase the evidence introduced earlier in the after- -as follows: stock and assets of newspaper B. By Relative gains resulting from mergers, 1940-47 both· of them going out of business. and 1. AS PERCENT OF ASSETS OF ALL CORPORATIONS WITHIN A GIVEN SIZE CLASS forming a new corporation, there could be no greater likelihood of violation by [Dollar figures are in millions] the two original newspapers. Total assets in Assets acquired Mr. WILEY. The Senator means, doe~ Total number Average assets Aggregate as 1939 of all cor- as a percent of Asset size class 1 ·he, that it is a qm~stion . of geography? of acquisitions per acquisition ' sets acquired a porations in all assets in group ' group in 1939 6 Mr. KEFAUVER. It_is, in my opinion, a question which comes under the words II III IV v VI of the section as it now exists, but would probably not come under the less restric Per;ent Under $L ••• ·-----·-·-·-·------~ 119 $0. 7 $83.3 $10, 011. 0 0.8 tive provisions of the measure which we $1 to $5------368 1.0 368.0 10, 034. 3 3. 7 are now considering, $10$5 to to $10 $50. ------______254 1.3 330. 2 4, 874. 4 6.8 $50 to $100 ______584 1. 8 1,051. 2 12, 838. 3 8.2 Mr. WILEY. I t:Pa:r;ik the Senator: 227 2.6 590.2 5, 107. 5 11. 6 Mr. KEFAUVER. I yield the floor. Over $100------··----·--- 438 1. 9 832. 2 21, 203. 9 3.9 Mr. DOUGLAS . . Mr. President, I TotaL ______"--·--- 1, 990 1. 7 63, 383. 0 64, 069. 4 5.3 wondered whether the Senator would yield for a question? 2. AS PERCENT OF ASSETS OF ACQUIRING .CORPO• 'percent; those with assets of $5,000,000 Mr. KEFAUVER. I yield with pleas RATIONS ONLY· AS USED BY LINTNER AND to $10,000,0o·o by over 33 percent; those ure to the distinguished Senator from BUTTERS with assets of $10,000,000 to $50,000,000 Illinois. by nearly 19 percent; those with assets · Mr. DOUGLAS. Is the very able Sen Average per centage growth of $50,000,000 to $100,000,000 by nearly ator from Tennessee aware of the use Asset size class of acquiring 14 percent; and those with assets of over which has ·been made by opponents of corporations f '$100,000,000 by only 2.3 percent. These this measure of an article by Drs. John Ia VIII ·:figures are on the basis of the assets of Lintner and·J ..Keith Butters, which ap- · those concerns making acquisitions only. peared in the Review of Economics and Percent However, in terms of all the corporations Statistics for February 1950? $1 to $5·-·····-·------·---·---··--J- 68. l within the various si~e groups, the show 1 Mr. KEFAUVER. I may say to the $5 to $10---··------ 33. 4 ing was quite different. Thus, the ratio $50$10 to $50$100------______18. 7 Senator I am not aware of it, and I shall to . 13. 8 of total assets acquired to total assets of be very much interested in it. I feel Over $100 •••• ·---·--·-'-·------2.3 all corporations within a given size class that the Senate would be very much in showed that corporations with assets of t Effect of Mergers on Industrial Concentration, 1940- terested if the Senator would enlighten 47, by John -Lintner and J. Keith Butters, Review of · $1,000,000 to $5,000,000 gained only 3~7 us upon the subject. Economics and Statistics, February 1950, table 1, p. 38. percent because of mergers; those with 2 Loe. cit., table 5, p. 42. assets of $5,000,000 to $10,000,000 gained Mr. DOUGLAS. As I understand the a Column II times column III. article, it purported to show that in the ' Table 6, pp. 147, 152, Statistics oflncome for 1939, pt. 6.8 percent; $10,000,000 to $50,000,000, 8.2 recent merger movement, small firms 2, Bureau of Internal Revenue, U.S. Treasury Depart percent; $50,000,000 to $100,000,000, 11.6 ment. had .profited or had gained from the 6 Column IV divided by column V. percent; and over. $100,000,000, 3.9 per mergers at a more rapid rate than had 6 The sum of the column comes to · 3,255.l million cent. As a matter of fact, corporations dollars; the difference is due to rounding of the average the larger firms. A table was introduced assets per acquisition. with less than $1,000,000 in assets gained to show that companies with ·assets of 7 Lintner and Butters, loc. cit., table 7, p. 43. only 0.8 of 1 percent. Thus, through a from one to five million dollars which Mr. DOUGLAS. The above table dem subtle error, Lint:per and Butters' figures had acquired other companies had grown onstrates the inadequacy of the Lintner- indicated that small business fared bet at the rate of more than 68 percent; ,· Butters commutations in their article in ter with mergers than big business, which those with assets of from five to ten mil-· the February 1950 Review of Economics the above table refutes and demonstrates lion dollars had only grown at the rate and Statistics. The Lintner-Butters.fig. that the opposite is true. of 33 percent; those with assets of from ures indicated that small business fared Mr. JOHNSON of Texas. Mr. Presi ten to fifty million dollars, at the rate of better than big business in terms of the dent, will the Senator yield? approximately 19 percent; those from assets of the acquiring concerns rather Mr. KEFAUVER. I was going to yield fifty to one hundred million dollars, at . than in terms of the assets of all corpo the floor so that the Senator from Illi the rate. of approximately 14 percent; rations withi.n a given size class. Thus, nois could proceed to make his state- and those with assets of over $100,000,000 according to Lintner and Butters, the ment. • · at the rate of only 2:3 percent. small companies with assets of $1,0M,000 Mr. JOHNSON of Texas. Mr. Presi Mr. KEFAUVER. I had not read the to $5,000,000 · appear to have incrMsed dent, will the Senator from Illinois yield? article, but I ~. m familiar with that en their assets through mergers by over 68 Mr. DOUGLAS. I yield. XCVI-.·1036 16458 CONGRESSIONAL RECORD-SENATE DECEMBER 12 NECESSITY FOR .NATIONAL Is there now a man among us who can with· all the military strength and both PREPAREDNESS look the people in the eye and conscien the physical and -the human· resources Mr. JOHNSON of Texas. Mr: Presi tiously say "Your Government has done behind the iron curtain. We have beeh dent, I shall not detain the Senate long. all that it should have done to make at war for 6 months. We inay well be I very much regret what I personally freedom safe"? at war for 10 or 20 years more. deem to be the necessity for speaking Is there a man here who can with con- Second. Our primary and immediate today. fidence answer the questions goal in- this war is survival. This is a For the past 6 months, since the out Where do we go from here? bleak, disturbing reality. In other wars break of the Korean fighting on June What are we waiting for? we have fought, our goal has been simply 25, I have had an opportunity to devote The people of America who sent us here victory. Now, however, we must make considerable attention to the problems of are patient, but they are not docile. our survival certain before we can hope this Nation's preparedness. During Through the bitter ·experiences of two for victory, because we cannot be con most of that period, as I have tried to world wars they have learned well the fident of survival. make clear, it has been my personal con responsibilities of world leadership. Third. We are not getting ready for viction that a great many of our national Aware as they are of the cost of dis war. We are in a war, but all our' effort preparedness policies have been inade charging that leadership, the American is seemingly directed toward staying out quate. On the basis of such information .people nonetheless realize that. the cost of the war we are in already. This is as I have ha1, I have not believed · we of defaulting that leadership now would adolescent nonsense. were doing enough soon enough. be intolerable. That is why the Ameri What do these facts mean? Experienced and capable men, for can people today want those questions They mean that we must dispense with whom I have only the greatest personal ·answered-Where are we going? What the illusion that time is on our side, and respect, have argued eloquently for the are we waiting for? lay aside the idle hope that actual war policy of "wait and see." For 6 months, · The people know that this Nation can will be delayed if we stubbornly refuse their counsel has prevailed. I am not neither lead the world nor save itself to acknowledge that a state of war ex here to condemn that counsel as insin- until the answers to. those questions are ists. _Time favors those who use it. We . cere or incompetent. But I am here to decided. . are not now using it. express my personal judgment that this Reading their newspapers, listening to Because this is a war of survival, not counsel can be accepted no longer. their radios," the people of America have merely World War II all over again, we I say that the policy of "wait and see'' been unable to find assurance that an must take carefully into account the lim must end, and it must end now. swers to those questions extst. . TI+at is itations of our resources, our capacity, For what are we waiting? What do why the magnificent national unity; de our endurance powers. 'we must plan to we expect to see tomorrow that we can termination, and confidence displayed in conserve our resources so that if this the first days of the Korean crisis 6 struggle shall continue for 20 years, free not see clearly today-or could not see months ago is deteriorating before our on June 25? eyes. dom will survive. For six costly months, this Nation and Our national